<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1997
REGISTRATION NO. 33-93228
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SUN HEALTHCARE GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 85-0410612
<S> <C>
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
</TABLE>
101 SUN LANE
ALBUQUERQUE, NM 87109
(505) 821-3355
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
ROBERT F. MURPHY
SENIOR VICE PRESIDENT, GENERAL COUNSEL
SUN HEALTHCARE GROUP, INC.
101 SUN LANE, N.E.
ALBUQUERQUE, NM 87109
(505) 821-3355
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
William H. Hinman, Jr., Esq.
Shearman & Sterling
555 California Street
San Francisco, CA 94104
(415) 616-1100
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 only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION
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.
<PAGE>
PRELIMINARY PROSPECTUS DATED APRIL 30, 1997
PROSPECTUS
$300,000,000
SUN HEALTHCARE GROUP, INC.
DEBT SECURITIES AND PREFERRED STOCK
---------------------
Sun Healthcare Group, Inc. ("Sun" or the "Company"), a Delaware Corporation,
may offer from time to time, together or separately, (i) debt securities ("Debt
Securities"), which may be either senior debt securities ("Senior Securities"),
senior subordinated debt securities ("Senior Subordinated Securities") or
subordinated debt securities ("Subordinated Securities"), consisting of
debentures, notes, bonds and/or other evidences of indebtedness in one or more
series, which Debt Securities may (or may not) be guaranteed, jointly and
severally, by each of the Subsidiaries specified in the Prospectus Supplement
(as defined) and may (or may not) be convertible into other Debt Securities,
Common Stock, par value $.01 per share ("Common Stock"), of the Company or
Preferred Stock, par value $.01 per share ("Preferred Stock"), or (ii) shares of
Preferred Stock in one or more series, which Preferred Stock may (or may not) be
convertible into Common Stock. The foregoing securities are collectively
referred to as the "Securities." The Securities will be offered at an aggregate
initial offering price not to exceed U.S. $300,000,000, in amounts, at prices
and on terms to be determined at the time of sale.
Certain specific terms of the Securities in respect of which this Prospectus
is being delivered will be set forth in a Prospectus Supplement (the "Prospectus
Supplement"), including (i) in the case of Debt Securities, the title, aggregate
principal amount, denominations (which may be in United States dollars or in any
other currency, currencies or currency unit), maturity, premium (if any),
interest rate (which may be fixed or variable) or method of calculation thereof,
and time of payment of any interest, place or places where principal of (and
premium, if any) and interest on such Debt Securities will be payable, any terms
for redemption at the option of the Company or the holder of such Debt
Securities, any terms for sinking fund payments, any conversion rights, the
rating of the Debt Securities, the nature of the security for repayment of such
Debt Securities, if any, any listing of such Debt Securities on a securities
exchange, the initial public offering price, any original issue discount and any
other terms in connection with the offering and sale of such Debt Securities and
(ii) in the case of Preferred Stock, the designation, stated value and
liquidation preference per share, dividend rate (or method of calculation),
whether dividends shall be cumulative, dates on which dividends shall be payable
and dates from which dividends shall accrue any redemption or sinking fund
provisions, any conversion rights, any listing of such Preferred Stock on a
securities exchange, the initial public offering price and any other terms in
connection with the offering and sale of such Preferred Stock. The Prospectus
Supplement will also contain information, as applicable, about material United
States Federal income tax considerations relating to the Securities in respect
of which this Prospectus is being delivered.
The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company, and senior to all Senior Subordinated
Indebtedness (as defined) and all Subordinated Indebtedness (as defined). The
Senior Subordinated Securities will be subordinated to all existing and future
Senior Indebtedness (as defined) of the Company, and senior to all existing and
future Subordinated Indebtedness (as defined) of the Company. The Subordinated
Securities will be subordinated to all existing and future Senior Indebtedness
(as defined) and Senior Subordinated Indebtedness (as defined) of the Company.
If so specified in the applicable Prospectus Supplement, all or a portion of any
Debt Securities may be issued in temporary or permanent global form.
The Company's Common Stock is listed on The New York Stock Exchange, Inc.
(the "NYSE") under the symbol "SHG." Any Common Stock into which the Securities
are convertible will be listed, subject to notice of issuance, on the NYSE.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 OF THIS PROSPECTUS FOR INFORMATION
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SECURITIES OFFERED
HEREBY.
---------------------
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.
--------------------------
Prior to issuance there will have been no market for the Securities, and
there can be no assurance that a secondary market for the Securities will
develop. This Prospectus may not be used to consummate sales of Securities
unless accompanied by a Prospectus Supplement. Securities may be offered
directly to purchasers or to or through dealers, underwriters or agents
designated from time to time, as set forth in a Prospectus Supplement. Net
proceeds to the Company from such sale will also be set forth in a Prospectus
Supplement. See "Plan of Distribution" for possible indemnification arrangements
for dealers, underwriters and agents.
--------------------------
THE DATE OF THIS PROSPECTUS IS APRIL 30, 1997
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR IN THE PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY
SECURITIES OTHER THAN THE SECURITIES TO WHICH THEY RELATE OR BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS, NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN BY ANYONE OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THEIR RESPECTIVE DATES.
------------------------
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 ("Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at its Regional Offices located
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and 7 World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material can be obtained at prescribed rates from the Public
Reference Section of the Commission, 450 Fifth Street, N.W. Plaza, Washington,
D.C. 20549. The Commission maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of the
site is http://www.sec.gov. In addition, such reports and proxy statements can
be inspected at the offices of The New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments, supplements and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all the information set forth in the Registration Statement, certain
parts of which were omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the
Securities offered hereby, reference is hereby made to the Registration
Statement. Statements contained in this Prospectus as to the contents of certain
documents are not necessarily complete, and, with respect to each such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission, reference is made to the copy of the document so filed. Each such
statement is qualified in its entirety by such reference.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-12040) are incorporated herein by reference:
1. Sun Healthcare Group, Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1996;
2. Sun Healthcare Group, Inc.'s Current Reports on Form 8-K filed February
14, 1997, February 24, 1997, March 28, 1997 and April 14, 1997; and
3. The description of Sun Healthcare Group, Inc.'s capital stock contained
in Sun Healthcare Group, Inc.'s Registration Statement on Form 10 filed
on June 1, 1993, and the description of Sun's Preferred Stock Purchase
Rights contained in its Registration Statement on Form 8-A filed on June
6, 1995, as amended by Form 8-A/A-1 filed on August 17, 1995.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of Amendment No. 1
to the Registration Statement and prior to the date of the termination of the
offering of the Securities offered hereby shall be deemed to be incorporated
herein by reference and to be a part hereof from the date of filing of each such
document. Any statement contained herein or in a document all or a portion of
which is incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of the Registration Statement
or 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 or in the Prospectus Supplement 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 the Registration
Statement or this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon the request of such person, a copy of any of the
documents incorporated by reference herein, except for the exhibits to such
documents (unless such exhibits are specifically incorporated by reference into
such documents). Requests should be directed to 101 Sun Lane, Albuquerque, New
Mexico 87109, Attention: Investor Relations (Telephone: (505) 856-2341).
3
<PAGE>
THE COMPANY
THE FOLLOWING INFORMATION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO,
CONTAINED OR INCORPORATED HEREIN BY REFERENCE. PROSPECTIVE PURCHASERS OF
SECURITIES SHOULD CAREFULLY CONSIDER THE INFORMATION SET FORTH OR REFERRED TO
UNDER THE HEADING "RISK FACTORS." OTHER THAN STATEMENTS OF HISTORICAL FACT,
STATEMENTS CONTAINED IN THIS PROSPECTUS, INCLUDING STATEMENTS AS TO FUTURE
FINANCIAL PERFORMANCE, CONSTITUTE FORWARD-LOOKING STATEMENTS. WHEN USED IN THIS
PROSPECTUS, THE WORDS "BELIEVES," "ANTICIPATES," "INTENDS," "EXPECTS" AND
SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS.
SUN'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE
FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PROSPECTUS. FACTORS THAT MIGHT
CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED OR
REFERRED TO IN THE SECTION SET FORTH UNDER THE HEADING "RISK FACTORS."
PROSPECTIVE PURCHASERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE
FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PROSPECTUS, WHICH SPEAKS ONLY AS OF
THE DATE HEREOF. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO PUBLICLY
RELEASE THE RESULTS OF ANY REVISIONS TO SUCH FORWARD-LOOKING STATEMENTS WHICH
MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO
REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. UNLESS OTHERWISE INDICATED OR
THE CONTEXT OTHERWISE REQUIRES, ALL REFERENCES TO "SUN" OR THE "COMPANY" INCLUDE
SUN HEALTHCARE GROUP, INC. AND ITS SUBSIDIARIES.
Sun, through its direct and indirect subsidiaries, is a leading provider of
long-term, subacute and related specialty healthcare services. At December 31,
1996, Sun operated 160 long-term and subacute care facilities with 19,321
licensed beds in 19 states in the United States and 75 long-term care facilities
with 3,420 registered beds in the United Kingdom. In addition, Sun provides
rehabilitation therapy, respiratory therapy, temporary therapy staffing
services, and pharmaceutical products and services, to both affiliated and
nonaffiliated facilities in the United States and outpatient therapy in Canada.
Sun's long-term and subacute care facilities provide a broad range of
healthcare services, including nursing care, subacute care, therapy and other
specialized services such as care to patients with Alzheimer's disease. Sun's
long-term and subacute care facility operations have experienced significant
growth since Sun's inception in 1989. This growth has been primarily from
acquisitions of long-term and subacute care facilities. Sun believes its
long-term and subacute care operations provide it with a platform for expanding
its therapy and pharmaceutical businesses to affiliated and nonaffiliated
long-term and subacute care facilities. In addition, Sun believes that its
expertise in operating long-term and subacute care facilities enables it to
provide its therapy and pharmaceutical services more effectively and efficiently
than providers without such operating expertise.
Sun currently offers physical, occupational and speech therapy
("rehabilitation therapy"), through Sundance Rehabilitation Corporation
("Sundance") and respiratory therapy through SunCare Respiratory Services, Inc.,
to patients in affiliated and nonaffiliated long-term and subacute care
facilities. At December 31, 1996, Sun provided rehabilitation and respiratory
therapy services to 911 facilities in 42 states, 759 of which were operated by
nonaffiliated parties and 152 of which were affiliated facilities.
Through CareerStaff Unlimited, Inc. ("CareerStaff"), Sun is a nationwide
provider of temporary therapy staffing. CareerStaff provides therapists skilled
in the areas of physical, occupational and speech therapy primarily to hospitals
and nursing home contract service providers. At December 31, 1996, CareerStaff
provided temporary therapy staffing services in 36 states.
At December 31, 1996, Sun, through Sunscript Pharmacy Corporation
("Sunscript"), operated 18 pharmacies that provided pharmaceutical products and
services to a total of 437 long-term and subacute care facilities in 21 states,
325 of which were operated by nonaffiliated parties and 112 of which were
affiliated facilities. In addition, Sun operated six pharmacies in the United
Kingdom at December 31, 1996.
The Company's principal executive offices are located at 101 Sun Lane, N.E.
Albuquerque, New Mexico 87109, and its telephone number at such address is (505)
821-3355.
4
<PAGE>
RISK FACTORS
Prior to making an investment decision with respect to the Securities
offered hereby, prospective investors should carefully consider the specific
factors set forth under the caption "Risk Factors" in the applicable Prospectus
Supplement pertaining thereto, together with all of the other information
appearing herein or therein, in light of their particular investment objectives
and financial circumstances.
USE OF PROCEEDS
Unless otherwise described in the accompanying Prospectus Supplement, the
net proceeds from the sale of Securities will be used by the Company for general
corporate purposes, which may include refinancings of indebtedness,
acquisitions, capital expenditures, expansion of domestic and international
operations, working capital, minority investments, and repurchases and
redemptions of securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for
the Company and its consolidated subsidiaries for the periods indicated. The
Company to date has not issued Preferred Stock; therefore, the ratios of
earnings to combined fixed charges and preferred stock dividends are unchanged
from the ratios presented here.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------------
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges........................ 1.92 3.34 1.76 1.15 1.64
</TABLE>
The computation of the ratio of earnings to fixed charges is based on
applicable amounts of Earnings of the Company and its consolidated subsidiaries
plus dividends received from less than fifty percent owned affiliates.
"Earnings" consist of income from continuing operations before income taxes and
fixed charges excluding capitalized interest. "Fixed charges" consist of
interest on indebtedness, including amounts capitalized, amortization of debt
discount and expense, an estimated amount of rental expense that it deemed to be
representative of the interest factor and other interest charges.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued in one or more series under an
Indenture (as amended or supplemented from time to time, the "Indenture")
between the Company, the Guarantors (if any) and the Trustee. The term "Trustee"
as used herein with respect to Debt Securities of any particular series shall
mean the Trustee with respect to the Debt Securities of such series as set forth
in the applicable Prospectus Supplement. The Indenture has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part and is
subject to and governed by the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The following summary of certain provisions of the
Indenture and the Debt Securities does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the provisions of the
Indenture, including the definitions therein of certain terms and of those terms
made a part thereof by the Trust Indenture Act. Capitalized terms used but not
defined herein shall have the respective meanings set forth in the Indenture.
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of each series of Debt
Securities offered by any Prospectus Supplement and the extent, if any, to which
such general provisions may apply to the Debt Securities so offered will be
described in the Prospectus Supplement relating to such series of Debt
Securities. Accordingly, for a description of the terms of a particular issue of
Debt Securities reference must be made to both the Prospectus Supplement
relating thereto and the following description.
5
<PAGE>
GENERAL
The Debt Securities will be senior, senior subordinated or subordinated
obligations of the Company as specified in the Prospectus Supplement relating
thereto. The Indenture provides that the Debt Securities may be issued without
limit as to aggregate principal amount, in one or more series, in each case in
such forms and with such terms as are established for the Debt Securities of
such series in or pursuant to Board Resolutions, Officers' Certificates or
indentures supplemental to the Indenture. All Debt Securities of one series need
not be issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of any Holder, for issuances of additional Debt
Securities of such series. The Indenture provides that there may be more than
one Trustee thereunder, each with respect to one or more series of Debt
Securities.
Reference is made to the Prospectus Supplement relating to the Debt
Securities of each series for the following terms, where applicable, of the Debt
Securities of such series: (1) the title of such Debt Securities; (2) whether
the Debt Securities are secured or unsecured including, in such cases where the
securities are secured, a description of the collateral for the securities and
all other terms and conditions relating to the collateral and security; (3) the
aggregate principal amount of Debt Securities and any limit on the aggregate
principal amount of Debt Securities of such series; (4) the Person to whom any
interest on such Debt Securities shall be payable, if other than the Person in
whose name a Debt Security is registered at the close of business on the Regular
Record Date for such interest; (5) the date or dates, or the method by which
such date or dates will be determined, on which the principal of such Debt
Securities is payable; (6) the rate or rates (which may be fixed or variable) at
which such Debt Securities will bear interest, if any, or the method or methods
by which such rate or rates shall be determined, the date or dates from which
such interest will accrue, the Interest Payment Dates on which any such interest
shall be payable and the Regular Record Date for any interest payable on any
Interest Payment Date, or the method or methods by which such date or dates
shall be determined, and the basis upon which interest shall be calculated if
other than that of a 360-day year of twelve 30-day months; (7) the place or
places where the principal of and any premium and interest on such Debt
Securities shall be payable; (8) the period or periods within which, the price
or prices at which, the currency or currencies, currency unit or composite
currency in which, and the other terms and conditions upon which, such Debt
Securities may be redeemed, in whole or in part, at the option of the Company;
(9) the right or obligation, if any, of the Company to redeem, repay, or
purchase such Debt Securities pursuant to any optional redemption, sinking fund
or analogous provisions or at the option of a Holder thereof or otherwise and
the period or periods within which, the price or prices at which, the currency
or currencies, currency unit or composite currency in which, and the other terms
and conditions upon which such Debt Securities shall be redeemed, repaid or
purchased; (10) any restrictions on the Company's ability to merge or
consolidate with or into, or sell, assign, transfer, lease or otherwise dispose
of all or substantially all of its properties as an entirety to, any person or
persons; (11) the right of the Company to defease such Debt Securities or
certain restrictive covenants applicable thereto and certain Events of Default
under certain circumstances (see "--Defeasance or Covenant Defeasance of
Indenture"); (12) if other than in United States dollars, the currency or
currencies, currency unit or composite currency, of payment of principal of and
any premium and interest on such Debt Securities and the equivalent thereof in
United States dollars; (13) any index, formula or other method used to determine
the amount of payments of principal of or any premium and interest on such Debt
Securities; (14) if such Debt Securities will be issuable only in the form of a
global security as described under "--Book-Entry Debt Securities," the
Depository or its nominee with respect to such Debt Securities and the
circumstances under which the global security may be registered for transfer or
exchange or authenticated and delivered in the name of a Person other than the
Depository or its nominee; (15) if other than the principal of or any premium or
interest on such Debt Securities is to be payable, at the election of the
Company or a Holder thereof, in a currency or currencies, currency unit or units
or composite currency or currencies other than that in which such Debt
Securities are denominated or stated to be payable, the terms and conditions
upon which such election may be made; (16) if other than the entire principal
amount thereof, the portion of the principal amount of such Debt Securities
which shall be
6
<PAGE>
payable upon declaration of acceleration or, if applicable, the portion of the
principal amount of such Debt Securities that is convertible in accordance with
the provisions of the Indenture; (17) provisions, if any, granting special
rights to the Holders of such Debt Securities upon the occurrence of such events
as may be specified; (18) any deletions from, modifications of or additions to,
the Events of Default with respect to such Debt Securities, whether or not such
Events of Default apply with respect to such Debt Securities, whether or not
such Events of Default are consistent with the Events of Default set forth
herein; (19) the covenants applicable to such Debt Securities; (20) the relative
ranking and the terms pursuant to which such series of Debt Securities will be
made subordinate and subject in right of payment to the prior payment in full of
all Senior Indebtedness of the Company, and the definition of any such Senior
Indebtedness; (21) the obligation, if any, of the Company to permit the
conversion of such Debt Securities into Common Stock, Preferred Stock or other
Debt Securities and the terms and conditions upon which such conversion shall be
effected (including, without limitation, the initial conversion price or rate,
the conversion period, any adjustment of the applicable conversion price and any
requirements relative to the reservation of any shares for purposes of
conversion); (22) a description of the security, if any, for such series of Debt
Securities; (23) any applicable United States federal income tax consequences,
including whether and under what circumstances the Company will pay additional
amounts on any Debt Securities held by a person who is not a United States
person (as defined herein) in respect of any tax, assessment or governmental
charge withheld or deducted and, if so, whether the Company will have the option
to redeem such Debt Securities rather than pay such additional amounts; (24) any
listing of the Debt Securities on a securities exchange; and (25) any other
specific terms of the offered Debt Securities, including any additional events
of default or covenants provided for with respect to such Debt Securities, and
any terms which may be required by or advisable under applicable laws or
regulations.
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). All material Federal income tax,
accounting and other considerations applicable to Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
SUBORDINATION
The Board Resolutions adopted, Officers' Certificates executed or indentures
supplemental to the Indenture established in connection with any particular
series of Debt Securities may provide that such Debt Securities are subordinated
to other Debt Securities or to other indebtedness of the Company. Such Board
Resolutions, Officers' Certificates or indentures supplemental will state the
terms pursuant to which such series of subordinated Debt Securities will be made
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness of the Company, and the definition of any such Senior
Indebtedness, all of which will be described in the Prospectus Supplement
relating thereto.
GUARANTEES
Sun's obligations under the Debt Securities may (or may not) be fully and
unconditionally guaranteed by certain Subsidiaries of Sun (the "Guarantors").
Each guarantee ("Note Guarantee") of Sun's obligations under Senior Debt
Securities will constitute part of the senior debt of each of the Guarantors and
will rank pari passu with all other unsecured and unsubordinated debt of each
such Guarantor. Each Note Guarantee with respect to Senior Subordinated Debt
Securities will be subordinated to the "Guarantor Senior Indebtedness" (as
defined in the supplemental indenture to the Senior Subordinated Debt Indenture
and described in the Prospectus Supplement applicable to the series of Senior
Subordinated Debt Securities to which such Note Guarantee relates) of the issuer
of such Note Guarantee, and will be senior to any Guarantor Subordinated
Indebtedness (as defined in the supplemental indenture to the Subordinated Debt
Indenture and described in the Prospectus Supplement applicable to the series of
Subordinated Debt Securities to which such Note Guarantee relates) of the issuer
of the Note Guarantee.
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Each Note Guarantee with respect to Subordinated Debt Securities will be
subordinated to the "Guarantor Senior Indebtedness" (as defined in the
supplemental indenture to the Subordinated Debt Indenture and described in the
Prospectus Supplement applicable to the series of Subordinated Debt Securities
to which such Note Guarantee relates) of the issuer of such Note Guarantee on
the same basis as provided above with respect to the subordination of
Subordinated Debt Securities to Senior Indebtedness of Sun.
The Indenture may provide that certain new Subsidiaries of Sun with assets
in excess of an amount to be specified in the Prospectus Supplement that become
Subsidiaries after the Indenture is executed shall become, under certain
circumstances, Guarantors.
The Indenture may also provide that if all or substantially all of the
assets of any Guarantor or all of the capital stock of any Guarantor is sold
(including by issuance or otherwise) by Sun or any of its Subsidiaries in a
transaction constituting an Asset Sale (as defined in the Indenture) that does
not otherwise violate the particular Indenture, then such Guarantor (in the
event of a sale or other disposition of all of the capital stock of such
Guarantor) or the corporation acquiring such assets (in the event of a sale or
other disposition of all or substantially all of the assets of such Guarantor)
shall be released and discharged of its obligations under the Note Guarantee.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of and any premium and interest on any series of Debt Securities will
be payable at the corporate trust office of the Trustee, provided that, at the
option of the Company, payment of interest may be made by check mailed to the
address of the Person entitled thereto in the name of such person as it appears
in the Security Register. Unless otherwise indicated in the applicable
Prospectus Supplement, payment of any installment of interest on Debt Securities
will be made to the Person in whose name such Debt Security is registered at the
close of business on the regular record date of such interest.
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder thereof on the applicable Regular
Record Date and may either be paid to the Person in whose name such Debt
Security is registered at the close of business on a special record date (the
"Special Record Date") for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to the Holder of such Debt Security
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner, all as more completely described in the
Indenture.
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for
other Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations upon surrender of such
Debt Securities at the corporate trust office of the Trustee referred to above.
In addition, subject to certain limitations imposed upon Debt Securities issued
in book-entry form, the Debt Securities of any series may be surrendered for
conversion, if convertible, or registration of transfer thereof at the corporate
trust office of the Trustee referred to above. Every Debt Security surrendered
for conversion, registration of transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer. No service charge will be made
for any registration of transfer or exchange of any Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. If the applicable
Prospectus Supplement refers to any transfer agent (in addition to the Trustee)
initially designated by the Company with respect to any series of Debt
Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that the Company will be required to maintain a
transfer agent in each
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Place of Payment for such series, which shall include the City of New York. The
Company may at any time designate additional transfer agents with respect to any
series of Debt Securities.
Neither the Company nor the Trustee shall be required to (i) issue, register
the transfer of or exchange Debt Securities of any series if such security may
be among those selected for redemption, during a period beginning at the opening
of business 15 days before any selection of Debt Securities of that series to be
redeemed and ending at the close of business on the day of mailing of the
relevant notice of redemption; or (ii) register the transfer of or exchange any
Debt Security, or portion thereof, called for redemption in whole or in part,
except the unredeemed portion of any Debt Security being redeemed in part.
COVENANTS
The particular covenants, if any, relating to any series of Debt Securities
will be described in the Prospectus Supplement relating to such series. If any
such covenants are described, the Prospectus Supplement will also state whether
the "covenant defeasance" provisions described below also apply.
EVENTS OF DEFAULT
Under the Indenture, an Event of Default is defined as, with respect to each
series of Debt Securities individually, (unless it is either inapplicable to a
particular series or is specifically deleted or modified for Debt Securities of
a particular series, as described in a Prospectus Supplement), any of the
following: (i) default in the payment of the principal of, or premium, if any,
on any of the Debt Securities of such series when due and payable (at its
maturity, or upon redemption, required purchase, sinking fund payment, scheduled
principal payment or otherwise); (ii) default in the payment of an installment
of interest on any of the Debt Securities of such series when the same becomes
due and payable and any such default continues for a period of days specified in
the Prospectus Supplement; (iii) default in the performance or observance of any
other term, covenant or agreement contained in the Debt Securities of such
series or the Indenture for the benefit of the holders of Debt Securities of
such series (other than a default specified in (i) or (ii) above) for a period
of days to be set forth in a Supplemental Indenture relating to Debt Securities
of such series after written notice of such failure requiring the Company or a
Guarantor (if any) to remedy the same shall have been given (x) to the Company
and such Guarantor (if any) by the Trustee or (y) to the Company and such
Guarantor and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Debt Securities of such series then outstanding; (iv) default or
defaults under one or more agreements, instruments, mortgages, bonds, debentures
or other evidences of Indebtedness under which the Company or any Subsidiary of
the Company then has outstanding Indebtedness in excess of an amount specified
in a Prospectus Supplement relating to Debt Securities of such series,
individually or in the aggregate, and either (a) such Indebtedness is already
due and payable in full or (b) such default or defaults have resulted in the
acceleration of the maturity of such Indebtedness; (v) one or more judgments,
orders or decrees of any court or regulatory or administrative agency of
competent jurisdiction for the payment of money in excess of an amount specified
in a Prospectus Supplement relating to Debt Securities of such series, either
individually or in the aggregate, shall be rendered against the Company or any
Subsidiary of the Company or any of their respective properties and shall not be
discharged and either (a) any creditor shall have commenced an enforcement
proceeding upon such judgment, order or decree or (b) there shall have been a
period of a number of days to be set forth in a Supplemental Indenture relating
to Debt Securities of such series after the date on which any period for appeal
has expired and during which a stay of enforcement of such judgment, order or
decree shall not be in effect; (vi) certain events of bankruptcy, insolvency or
reorganization relating to the Company or any Significant Subsidiary; and (vii)
any other Event of Default set forth in an applicable Prospectus Supplement
relating to the Debt Securities of such series.
The Indenture provides that if an Event of Default specified therein (other
than an Event of Default specified in clause (vi) of the preceding paragraph
with respect to the Company or a significant Guarantor (if any)) shall have
occurred and be continuing with respect to any series of the Debt Securities
issued
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thereunder, the Trustee or the holders of at least 25% in aggregate principal
amount of the outstanding Debt Securities of such series may declare the unpaid
principal amount of the Debt Securities of such series (or, if any of the Debt
Securities are Original Issue Discount Debt Securities, such portion of the
principal amount of the Debt Securities of such series as may be specified by
the terms thereof) and accrued interest, if any, to the date of payment of the
Debt Securities of such series to be immediately due and payable. If an Event of
Default specified in clause (vi) of the preceding paragraph occurs, the amount
specified in the previous sentence of this paragraph shall IPSO FACTO become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder.
After a declaration of acceleration under the Indenture in respect of a
series of Debt Securities, but before a judgment or decree for payment of the
money due has been obtained by the Trustee, the Holders of a majority in
aggregate outstanding principal amount of such series of Debt Securities, by
written notice to the Company, the Guarantor (if any) and the Trustee, may
rescind and annul such declaration and its consequences if (a) the Company or
any Guarantor has paid or deposited with the Trustee a sum sufficient to pay (i)
all sums paid or advanced by the Trustee under the Indenture and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, (ii) all overdue interest, if any, on such series of Debt
Securities, (iii) the principal of and premium, if any, on such series of Debt
Securities which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by such series of Debt
Securities, and (iv) to the extent that payment of such interest is lawful,
interest upon overdue interest and overdue principal at the rate borne by such
series of Debt Securities which has become due otherwise than by such
declaration of acceleration; and (b) all Events of Default with respect to such
series of Debt Securities, other than the non-payment of principal of and any
premium and interest on such series of Debt Securities that have become due
solely by such declaration of acceleration, have been cured or waived.
The Holders of not less than a majority in aggregate outstanding principal
amount of a series of Debt Securities may on behalf of all Holders of such
series of Debt Securities waive any existing Defaults or Events of Default with
respect to such series under the Indenture, except a default in the payment of
the principal of and any premium or interest on any Debt Security of such series
or in respect of a covenant or provision which under the Indenture cannot be
modified or amended without the consent of the holder of each outstanding Debt
Security of such series.
No Holder of Debt Securities of any series has any right to institute any
proceeding with respect to the Indenture or any remedy thereunder, unless the
Holders of at least 25% in aggregate outstanding principal amount of such series
of Debt Securities have made written request, and offered reasonable indemnity,
to the Trustee to institute such proceedings as Trustee under such series and
the Indenture, the Trustee has failed to institute such proceeding within 15
days after receipt of such notice and the Trustee, within such 15-day period,
has not received directions inconsistent with such written request by Holders of
a majority in aggregate outstanding principal amount of such series of Debt
Securities. Such limitations do not apply, however, to a suit instituted by a
Holder of a Debt Security for the enforcement of the payment of the principal of
and any premium or interest on such Debt Security on or after the respective due
dates expressed in such Debt Security.
During the existence of an Event of Default, the Trustee is required to
exercise such rights and powers vested in it under the Indenture and use the
same degree of care and skill in its exercise thereof as a prudent person would
exercise under the circumstances in the conduct of such Person's own affairs.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default shall occur and be continuing, the Trustee
under the Indenture is not under any obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any of the Holders
unless such Holders shall have offered to the Trustee reasonable security or
indemnity. Subject to certain provisions concerning the rights of the Trustee,
the Holders of a majority in aggregate outstanding principal amount of any
series of Debt Securities have the right to direct the time, method, and place
of conducting any
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proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee under the Indenture, in respect of such series.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indentures will provide that neither Company nor any Guarantor (if any)
will consolidate with or merge into any other Person (in a transaction in which
the Company or the Guarantor, as the case may be, is not the surviving
corporation), or convey, transfer or lease its properties and assets
substantially as an entirety to, any Person (a "Successor Person"), unless (i)
the Successor Person (if any) is a corporation, limited liability company,
partnership, trust or other entity organized and existing under the laws of any
domestic jurisdiction and assumes the Company's or the Guarantor's obligations
(if any) on the Debt Securities and under the Indentures and the Note Guarantees
(if any) issued thereunder, (ii) immediately after giving effect to the
transaction, and treating any indebtedness which becomes an obligation of the
Company or any Subsidiary as a result of the transaction as having been incurred
by it at the time of the transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default, shall
have occurred and be continuing and (iii) certain other conditions are met.
DEFEASANCE OR COVENANT DEFEASANCE OF INDENTURE
Unless otherwise indicated in a Prospectus Supplement, the Company may, at
its option and at any time, terminate the obligations of the Company and the
Guarantors (if any) with respect to any series of outstanding Debt Securities
("defeasance"). Such defeasance means that the Company and the Guarantors (if
any) shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Debt Securities of such series, except for (i)
the rights of Holders of such series of outstanding Debt Securities to receive
payment in respect of the principal of and any premium and interest on such Debt
Securities when such payments are due, (ii) the Company's obligations to issue
temporary Debt Securities of such series, register the transfer or exchange of
any Debt Securities of such series, replace mutilated, destroyed, lost or stolen
Debt Securities of such series and maintain an office or agency for payments in
respect of the Debt Securities of such series, (iii) the rights, powers, trusts,
duties and immunities of the Trustee and (iv) the defeasance provisions of the
Indenture. In addition, unless otherwise indicated in a Prospectus Supplement,
the Company and the Guarantors (if any) may, at its option and at any time,
elect to terminate their obligations with respect to certain covenants that are
set forth in the Indenture or in a Prospectus Supplement, and any omission to
comply with such obligations shall not constitute a Default or an Event of
Default with respect to such series of Debt Securities ("covenant defeasance").
In the event covenant defeasance occurs, certain events (not including non-
payment, bankruptcy and insolvency events) described under "--Events of Default"
will no longer constitute an Event of Default with respect to the Debt
Securities of such series.
In order to exercise either defeasance or covenant defeasance with respect
to any series of Debt Securities, (i) the Company must irrevocably deposit with
the Trustee, in trust, for the benefit of the Holders of Debt Securities of such
series, funds in such currency or currencies, currency unit or composite
currency in which such Debt Securities are payable or with respect to Debt
Securities denominated United States dollars, U.S. Government Obligations (as
defined in the Indenture), or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants or a nationally recognized commercial or investment banking firm, to
pay and discharge the principal of and any premium and interest on the
outstanding Debt Securities of such series to redemption (on any date after such
date to be specified in a supplemental indenture relating to the Debt Securities
of such series) or maturity (such date being referred to as the "Defeasance
Redemption Date"), if at or prior to electing either defeasance or covenant
defeasance, the Company has delivered to the Trustee an irrevocable notice to
redeem all of the outstanding Debt Securities of such series, on the Defeasance
Redemption Date; (ii) in the case of defeasance, the Company shall have
delivered to the Trustee an opinion of counsel independent to the Company in the
United States stating that (A) the Company has
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received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of the Indenture, there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based
thereon such opinion of independent counsel in the United States shall confirm
that, the Holder of the outstanding Debt Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred; (iii) in the case of covenant defeasance, the
Company shall have delivered to the Trustee an opinion of independent counsel in
the United States to the effect that the Holders of the outstanding Debt
Securities of such series will not recognize income, gain or loss for Federal
income tax purposes as a result or such covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not occurred;
(iv) no Default or Event of Default with respect to such series shall have
occurred and be continuing on the date of such deposit or, insofar as certain
events of bankruptcy, insolvency or reorganization of the Company or any
subsidiary are concerned, at any time during the period ending on the 91st day
after the date of deposit; (v) such defeasance or covenant defeasance shall not
cause the Trustee to have a conflicting interest with respect to any securities
of the Company; (vi) such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default under, any material agreement
or instrument to which the Company, any subsidiary or any guarantor is a party
or by which it is bound; (vii) such defeasance or covenant defeasance shall not
result in the trust arising from such deposit constituting an investment company
within the meaning of the Investment Company Act of 1940, as amended, unless
such trust shall be registered under such Act or exempt from registration
thereunder; (viii) the Company shall have delivered to the Trustee an opinion of
independent counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally; (ix) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of the Debt Securities of such series, or any
guarantee over the other creditors of the Company or any Guarantor (if any) with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company, any Guarantor (if any) or others; (x) no event or condition shall exist
that would prevent the Company from making payments of the principal of,
premium, if any, and interest on the Debt Securities on the date of such deposit
or at any time ending on the 91st day after the date of such deposit; and (xi)
the Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent under the
Indenture to either defeasance or covenant defeasance, as the case may be, have
been complied with.
SATISFACTION AND DISCHARGE
Unless otherwise indicated in a Prospectus Supplement, the provisions of the
Indenture applicable to any series of Debt Securities will be discharged and
will cease to be of further effect (except as to surviving rights or
registration of transfer or exchange of Debt Securities of such series, as
expressly provided for in the Indenture or a Supplemental Indenture) as to all
outstanding Debt Securities of such series when (i) either (a) all the Debt
Securities of such series theretofore authenticated and delivered (except lost,
stolen or destroyed Debt Securities which have been replaced or paid and Debt
Securities for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust) have been delivered to the Trustee for
cancellation or (b) all Debt Securities of such series not theretofore delivered
to the Trustee for cancellation (i) have become due and payable, (ii) will
become due and payable at their maturity within one year or (iii) are to be
called for redemption within one year under arrangements satisfactory to the
Trustee, and the Company has irrevocably deposited or caused to be deposited
with the Trustee funds in an amount sufficient to pay and discharge the entire
Indebtedness on the Debt Securities of such series not theretofore delivered to
the Trustee for cancellation, for principal of and any premium and interest on
the Debt Securities of such series to the date of deposit together with
irrevocable instructions from the
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Company directing the Trustee to apply such funds to the payment thereof at
maturity or redemption, as the case may be; (ii) the Company has paid all other
sums payable under the Indenture by the Company; and (iii) the Company has
delivered to the Trustee an Officers' Certificate and Opinion of Counsel stating
that (i) all conditions precedent under the Indenture relating to the
satisfaction and discharge of the Indenture applicable to Debt Securities of
such series have been complied with and (ii) such satisfaction and discharge
will not result in a breach, violation or default under the Indenture or any
other material agreement to which the Company, any Guarantor (if any) or any
Significant Subsidiary is a party or by which such entities may be bound.
MODIFICATION OF THE INDENTURE
Unless otherwise indicated in a Prospectus Supplement, modifications and
amendments of the Indenture may be made by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
outstanding Debt Securities of each series affected by such modification of
amendment; provided that no such modification or amendment, without the consent
of the Holder of each Debt Security affected thereby may (i) change the stated
maturity of the principal of, or any installment of principal of or interest on,
any Debt Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or reduce
the amount of the principal of an Original Issue Discount Security that would be
due and payable upon a declaration of acceleration of the maturity thereof
pursuant to the terms of the Indenture, or change any place of payment where, or
the coin or currency, currency unit or units or composite currency or currencies
in which, any Security or any premium or interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or after
the stated maturity thereof; (ii) reduce the percentage in principal amount of
the outstanding Debt Securities of any series, the consent of whose Holders is
required for any such Supplemental Indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this Indenture
or certain defaults thereunder and their consequences) provided for in the
Indenture; (iii) modify any of the provisions relating to Supplemental
Indentures, waiver of past defaults or waiver of certain covenants, except to
increase any such percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the Holder of each
outstanding Debt Security affected thereby; (iv) modify or change any provisions
of any supplemental indenture affecting the ranking or subordination of a Debt
Security thereunder in a manner adverse to the holder of such Debt Security; or
(v) make such other changes as may require such consent pursuant to any
Supplemental Indenture.
Modifications and amendments of the Indenture may be made by the Company and
the Trustee without the consent of any Holder of Debt Securities when authorized
by a resolution of its Board of Directors for any of the following purposes: (i)
to evidence the succession of another Person or Persons to the Company or the
Guarantors (if any) and the assumption by any such successor of the covenants of
the Company or the Guarantors (if any) in the Indenture and in the Debt
Securities as obligor under the Indenture; (ii) to add to the covenants of the
Company or the Guarantors (if any) for the benefit of the Holders of all or any
series of Debt Securities or to surrender any right or power conferred upon the
Company or the Guarantors (if any) in the Indenture; (iii) to add additional
Events of Default; (iv) to add any Note Guarantee or release any Note Guarantee
pursuant to the provisions thereof, (v) to release any Note Guarantee from a
Guarantor that has ceased to be a Subsidiary of Sun, (vi) to evidence the
acceptance of appointment by a successor trustee and (vii) to comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the Trust Indenture Act of 1939, as amended. (viii) to add or
change any provisions of the Indenture to such extent as shall be necessary to
permit or facilitate the issuance of Debt Securities in bearer form, registrable
or not registrable as to principal, and with or without interest coupons, or to
permit or facilitate the issuance of Debt Securities in an uncertificated form;
(ix) to add to, change or eliminate any of the provisions of the Indenture in
respect of one or more series of Securities, PROVIDED that any such addition,
change or elimination (1) shall neither (A) apply to any Debt Security of any
series created prior to the execution of any Supplemental Indenture
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and entitled to the benefit of such provision nor (B) modify the rights of the
Holder of any such Debt Security with respect to such provision or (2) shall
become effective only when there is no such Debt Security outstanding; (x) to
establish the form or terms of Debt Securities of any series as permitted by the
Indenture, including the provisions and procedures relating to the Debt
Securities convertible into Common Stock, Preferred Stock or other Debt
Securities; (xi) to evidence and provide for the acceptance of appointment under
the Indenture by a successor Trustee with respect to the Debt Securities of one
or more series and to add to or change any of the provisions of the Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
under the Indenture by more than one Trustee; (xii) to secure the Debt
Securities or add to the collateral securing such Debt Securities; or (xiii) to
cure any ambiguity, to correct or supplement any provision in the Indenture
which may be inconsistent with any other provision in the Indenture, or to make
any other provisions with respect to matters or questions arising under the
Indenture, PROVIDED that such action shall not adversely affect the interests of
the Holders of Debt Securities of any series in any material respect.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into other Debt Securities, Common Stock or Preferred Stock will be
set forth in the applicable Prospectus Supplement relating thereto. Such terms
will include whether such Debt Securities are convertible into other Debt
Securities, Common Stock or Preferred Stock, the conversion price (or manner of
calculation thereof), the conversion period, provisions as to whether conversion
will be at the option of the Holders or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such Debt Securities.
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depository identified in the applicable
Prospectus Supplement relating to such series. In such a case, one or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal amount of the outstanding Debt
Securities of the series to be represented by such Global Security or
Securities. Global Securities may be issued in either registered or bearer form
and in either temporary or permanent form. The specific terms of the depository
arrangement with respect to a series of Debt Securities will be described in the
applicable Prospectus Supplement relating to such series.
THE TRUSTEE
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee thereunder will perform only such duties as are
specifically set forth in the Indenture. If an Event of Default has occurred and
is continuing, the Trustee will exercise such rights and powers vested in it
under the Indenture and use the same degree of care and skill in its exercise as
a prudent person would exercise under the circumstances in the conduct of such
person's own affairs.
The Indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the Trustee thereunder,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received by it in respect of any
such claims, as security or otherwise. The Trustee is permitted to engage in
other transactions; PROVIDED, HOWEVER, that if it acquires any conflicting
interest (as defined), it must eliminate such conflict or resign.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by the laws of the
State of New York, without regard to the principles of conflicts of law.
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DESCRIPTION OF PREFERRED STOCK
Certain terms of any series of Preferred Stock offered by any Prospectus
Supplement will be described in the Prospectus Supplement relating to such
series of Preferred Stock. A Certificate of Designation relating to a particular
series of Preferred Stock will be filed with the Commission at or prior to the
sale of the shares of such series of Preferred Stock. Sun's Certificate of
Incorporation (the "Sun Certificate") authorizes the issuance of up to 5,000,000
shares of preferred stock, par value of $.01 per share, none of which is
currently outstanding. Of the 5,000,000 shares of the Company's authorized
preferred stock, the Company has reserved for issuance 1,000,000 shares of its
Series A Preferred Stock pursuant to the Company's Stockholders' Rights Plan. A
description of the Series A Preferred Stock has been incorporated herein by
reference to the Company's Registration Statement on Form 8-A. See
"Incorporation of Certain Documents By Reference." The Company may issue 450,001
shares of Series F Convertible Preferred Stock in connection with the Company's
acquisition of Retirement Care Associates, Inc. See the Company's Current Report
on Form 8-K filed February 24, 1997. The Company's preferred stock may be issued
from time to time in one or more series, without stockholder approval. Subject
to limitations prescribed by law, the Board of Directors is authorized to
determine the voting powers (if any), designation, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, for each series of preferred stock that may be issued,
and to fix the number of shares of each such series. Thus, the Board of
Directors, without stockholder approval, could authorize the issuance of
preferred stock with voting, conversion and other rights that could adversely
affect the voting power and other rights of holders of Common Stock or other
series of preferred stock or that could have the effect of delaying, deferring
or preventing a change in control of the Company. See "Description of Common
Stock."
The Preferred Stock shall have the dividend, liquidation, conversion and
voting rights set forth in a Prospectus Supplement relating to a particular
series of the Preferred Stock. In addition, the applicable Prospectus Supplement
will describe the following terms of the series of Preferred Stock in respect of
which this Prospectus is being delivered: (1) the designation and stated value
per share of such Preferred Stock and the number of shares offered; (2) the
amount of liquidation preference per share; (3) the initial public offering
price at which such Preferred Stock will be issued; (4) the dividend rate (or
method of calculation), the dates on which dividends shall be payable and the
dates from which dividends shall commence to cumulate, if any; (5) any
redemption or sinking fund provisions; (6) any conversion rights into Common
Stock; (7) any voting rights; and (8) any additional voting, dividend,
liquidation, redemption, sinking fund and other rights, preferences, privileges,
limitations and restrictions.
DESCRIPTION OF COMMON STOCK
Sun has 100,000,000 shares of authorized Common Stock, $.01 par value per
share. A description of the Company's Preferred Stock Purchase Rights, which are
attached to and trade with the Common Stock, is incorporated by reference
herein. See "Incorporation of Certain Documents By Reference." The holders of
shares of Common Stock have one vote per share on all matters to be voted upon
by stockholders. Subject to any preferences, voting powers, qualifications and
special or relative rights or privileges of any holders of preferred stock,
holders of Common Stock are entitled, among other things, to dividends if, when
and as declared from time to time by the Board of Directors out of assets
legally available therefor after payment of debts and expenses. Sun's ability to
pay dividends is restricted by the terms of its existing credit facility and
agreements governing certain outstanding indebtedness of the Company. With the
exception of the rights issued pursuant to the Company's Stockholders' Rights
Plan, holders of shares of Common Stock have no preemptive or other rights to
subscribe for additional shares. The Common Stock is neither redeemable nor
convertible, and there are no sinking fund provisions. Upon the voluntary or
involuntary liquidation of Sun, holders of Common Stock are entitled to receive
all remaining assets of Sun available for distribution to stockholders after
payment of preference amounts owed to holders of any preferred stock.
15
<PAGE>
All of the outstanding shares of Common Stock are fully paid and
nonassessable.
The shares of Common Stock do not have cumulative voting rights, which means
that the holders of more than 50% of the shares voting can elect all the
directors if they so choose, and, in such event, the holders of the remaining
shares cannot elect any directors. No stockholder owns more than 50% of the
outstanding Common Stock.
CERTAIN PROVISIONS OF THE SUN CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE
GENERAL CORPORATION LAW
The Sun Certificate provides for a board of directors with three classes
consisting as nearly as possible of one-third of the directors. Each director
serves for a term of three years and until his or her successor is elected and
qualified. Directors may be removed with or without cause by the affirmative
vote of the holders of a majority of the outstanding shares entitled to vote. A
classified board of directors could make it more difficult for stockholders,
including those holding a majority of the outstanding shares, to force an
immediate change in the composition of a majority of the board of directors.
Staggered terms moderate the pace of changes in the board of directors by
extending the minimum time required to elect a majority of directors to two
years.
The Sun Certificate provides that any action required or permitted to be
taken by stockholders shall be taken only at a duly called special or annual
meeting of the stockholders. Stockholders have no authority to take action by
written consent unless approved in advance by Sun's Board of Directors. The Sun
Certificate also provides that special meetings of the common stockholders of
Sun may be called only by the Chairman, President or a majority of Sun's Board
of Directors.
The Sun Certificate limits the personal liability of each Sun director to
Sun or its stockholders for monetary damages for breach of his fiduciary duty as
a director except to the extent such limitation of liability is not permitted
under the Delaware General Corporation Law (the "DGCL"). The DGCL provides that
the liability of a director may not be limited (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) for liability for payment of dividends or stock
purchases or redemptions in violation of the DGCL or (iv) for any transaction
from which the director derived an improper personal benefit.
In addition, Sun's Bylaws provide that Sun shall indemnify any and all of
its directors, or former directors, to the fullest extent permitted by law
against claims and liabilities to which such persons may become subject. The
DGCL provides that indemnification is permissible only when the director acted
in good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct was unlawful. The
DGCL also permits indemnification in respect of any claim, issue, or matter as
to which such person shall have been adjudicated to be liable to the corporation
to the extent that the Delaware Court of Chancery or the court in which such
action or suit was brought has determined upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity.
Section 203 of the DGCL, which is currently applicable to Sun, prohibits
certain publicly held Delaware corporations from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person or entity became an interested
stockholder, unless, among other exemptions (i) the business combination is
approved by the board of directors prior to the date the interested stockholder
attained such status, and authorized by the holders of two-thirds of the
outstanding voting stock not owned by the interested stockholders or (ii) the
interested stockholder acquired 85% or more of the outstanding voting stock of
Sun in the transaction in which the person or entity became an interested
stockholder. For purposes of Section 203, a "business combination" is defined
broadly to include mergers, asset sales and other transactions resulting in a
financial benefit to
16
<PAGE>
the interested stockholder. Subject to certain exceptions, an "interested
stockholder" is a person or entity who, together with affiliates and associates,
owns or within the three years immediately preceding a business combination did
own 15% or more of the corporation's outstanding voting stock.
TRANSFER AGENT
The transfer agent and registrar for the Common Stock is Boatmen's Trust
Company located in St. Louis, Missouri.
PLAN OF DISTRIBUTION
The Company may offer the Securities directly to purchasers or to or through
underwriters, dealers or agents. Any such underwriter(s), dealer(s), or agent(s)
involved in the offer and sale of the Securities in respect of which this
Prospectus is delivered will be named in the Prospectus Supplement. The
Prospectus Supplement with respect to such Securities will also set forth the
terms of the offering of such Securities, including the purchase price of such
Securities and the proceeds to the Company from such sale, any underwriting
discounts and other items constituting underwriters' compensation, any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers and any securities exchanges on which such Securities may be
listed.
If underwriters are used in an offering of Securities, the name of each
managing underwriter, if any, and any other underwriters and the terms of the
transaction, including any underwriting discounts and other items constituting
compensation of the underwriters and dealers, if any, will be set forth in the
Prospectus Supplement relating to such offering and the Securities will be
acquired by the underwriters for their own accounts and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
Any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time. It is anticipated
that any underwriting agreement pertaining to any Securities will (i) entitle
the underwriters to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters may be required to make in
respect thereof, (ii) provide that the obligations of the underwriters will be
subject to certain conditions precedent and (iii) provide that the underwriters
will be obligated to purchase all Securities offered in a particular offering if
any such Securities are purchased.
If a dealer is used in an offering of Securities, the Company will sell such
Securities to the dealer, as principal. The dealer may resell such Securities to
the public at varying prices to be determined by such dealer at the time of
resale. The name of the dealer and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
If an agent is used in an offering of Securities, the agent will be named,
and the terms of the agency will be set forth, in the Prospectus Supplement
relating thereto. Unless otherwise indicated in such Prospectus Supplement, an
agent will act on a best efforts basis for the period of its appointment.
If more than ten percent of the net offering proceeds, not including
underwriting compensation, of any offering are intended to be paid to members of
the National Association of Securities Dealers, Inc. ("NASD") participating in
the offering or associated or affiliated persons of such members, or members of
the immediate family of such persons, the offering will be conducted in
accordance with Section 44(c)(8) of Article III of the Rules of Fair Practice of
the NASD, and the price of the securities (in the case of Preferred Stock) will
be no higher, or the yield on the securities (in the case of Debt Securities)
will be no lower, than that recommended by a Qualified Independent Underwriter
meeting certain standards.
Dealers and agents named in a Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act) of the Securities
described therein and, under agreements which may be entered into with the
Company, may be entitled to indemnification by the Company against certain civil
17
<PAGE>
liabilities, including liabilities under the Securities Act. Underwriters,
dealers and agents may engage in transactions with, or perform services for, the
Company in the ordinary course of business.
Offers to purchase Securities may be solicited, and sales thereof may be
made, by the Company directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with respect
to any resales thereof. The terms of any such offer will be set forth in the
Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other agents of the Company to solicit offers by certain
institutional investors to purchase Securities from the Company pursuant to
contracts providing for payment and delivery at a future date. Institutional
investors with which such contracts may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such purchasers must be
approved by the Company. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (i) the purchase of
the Securities shall not at the time of delivery be prohibited under the laws of
any jurisdiction to which such purchaser is subject and (ii) if the Securities
are also being sold to underwriters, the Company shall have sold to such
underwriters the Securities not subject to delayed delivery. Underwriters and
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
The anticipated date of delivery of any series of Securities will be set
forth in the Prospectus Supplement relating to each offering.
LEGAL MATTERS
The validity of the Securities offered will be passed upon for the Company
by Shearman & Sterling, San Francisco, California.
EXPERTS
The consolidated financial statements and schedules of Sun Healthcare Group,
Inc. and subsidiaries included in Sun's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated by reference in this Prospectus and
elsewhere in the registration statement and the financial statements of Golden
Care, Inc. for the year ended December 31, 1994 included in Sun's Current Report
on Form 8-K filed with the Securities and Exchange Commission on March 28, 1997
and incorporated by reference in this Prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following sets forth expenses, other than underwriting fees and
commissions, expected to be borne by the Registrant, in connection with the
distribution of the securities being registered:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $ 103,449
Blue Sky fees and expenses...................................... 20,000
NASD fee........................................................ 30,500
Rating agency fees.............................................. 150,000
Legal fees and expenses......................................... 400,000
Printing........................................................ 500,000
Accounting fees and expenses.................................... 300,000
Miscellaneous................................................... 296,051
---------
TOTAL....................................................... $1,800,000*
---------
---------
</TABLE>
- ------------------------
* All amounts listed above, except for the registration and NASD fees, are
estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") authorizes
a court to award or a corporation's Board of Directors to grant indemnification
to directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Act").
Sun's Certificate of Incorporation limits the personal liability of
directors to Sun or its stockholders for monetary damages for breach of their
fiduciary duty as a director except to the extent such limitation of liability
is not permitted under the DGCL. The DGCL provides that the liability of a
director may not be limited (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law,
(iii) for liability for payments of dividends or stock purchases or redemptions
in violation of the DGCL or (iv) for any transaction from which the director
derived an improper personal benefit.
In addition, Sun's Bylaws provide that Sun shall indemnify any and all of
its directors, or former directors, to the fullest extent permitted by law
against claims and liabilities to which such persons may become subject. The
DGCL provides that indemnification is permissible only when the director acted
in good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct was unlawful. The
DGCL also permits indemnification in respect of any claim, issue, or matter as
to which such person shall have been adjudicated to be liable to the corporation
to the extent that the Delaware Court of Chancery or the court in which such
action or suit was brought has determined upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity. Sun has also entered into
indemnification agreements with certain of its officers and with its directors,
and also provides insurance coverage to such parties.
II-1
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
1.1(a)(3) Form of Debt Underwriting Agreement
1.1(b)(3) Form of Preferred Stock Underwriting Agreement
4.1(2) Form of Indenture for Debt Securities
5.1(2) Opinion of Shearman & Sterling regarding legality of securities
12.1(1) Statement Regarding Computation of Ratios
23.1(1) Consent of Arthur Andersen LLP
23.2(2) Consent of Shearman & Sterling (contained in Exhibit 5.1)
24.1(1) Powers of Attorney for Andrew L. Turner, Robert A. Levin, James R. Tolbert, Martin G. Mand, Warren
C. Schelling and Robert Woltil
25.1(4) Statement of Eligibility of Trustee on Form T-1 with respect to the Securities
</TABLE>
- ------------------------
(1) Filed herewith
(2) To be filed by amendment
(3) To be incorporated by reference from Form 8-K
(4) To be filed in accordance with the rules and regulations of the Commission
under Section 305(b)(2) of the Trust Indenture Act of 1939.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a) 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. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(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;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, that are incorporated by reference in the
Registration Statement;
(b) That for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new Registration
II-2
<PAGE>
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.
(c) 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 Registrant hereby undertakes that, for the 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 section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each 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 this Registration Statement shall be
deemed to be a new Registration Statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses is incurred or paid by a director, officer or controlling
person of the Registrant 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 Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
2. The undersigned Registrant hereby undertakes:
(a) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or
(4) or 497(b) under the Securities Act of 1933 shall be deemed to be part of
this registration statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
The undersigned Registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the Trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to be
signed on its behalf by the undersigned, thereunto duly authorized, in
Albuquerque, New Mexico on the 30th day of April, 1997.
SUN HEALTHCARE GROUP, INC.
By: _______/s/ ANDREW L. TURNER*______
Andrew L. Turner
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
has been signed below by the following person in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ --------------------------------------------------- ----------------
<C> <S> <C>
/s/ ANDREW L. TURNER* Chairman of the Board, President, and Chief
Andrew L. Turner Executive Officer April 30, 1997
Senior Vice President Financial Services and Chief
/s/ ROBERT D. WOLTIL* Financial Officer and Director (Principal April 30, 1997
Robert D. Woltil Financial Officer)
/s/ WILLIAM C. WARRICK Vice President and Corporate Controller (Principal
William C. Warrick Accounting Officer) April 30, 1997
John E. Bingaman Director April 30, 1997
Zev Karkomi Director April 30, 1997
/s/ ROBERT A. LEVIN*
Robert A. Levin Director April 30, 1997
Mark G. Wimer Director April 30, 1997
/s/ JAMES R. TOLBERT*
James R. Tolbert Director April 30, 1997
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ --------------------------------------------------- ----------------
<C> <S> <C>
Lois E. Silverman Director April 30, 1997
R. James Woolsey Director April 30, 1997
/s/ MARTIN G. MAND*
Martin G. Mand Director April 30, 1997
/s/ WARREN C. SCHELLING*
Warren C. Schelling Director April 30, 1997
*By: /s/ WILLIAM C. WARRICK
William C. Warrick
ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NUMBER
- ------------ ------------------------------------------------------------------------------------------ -----------
<C> <S> <C>
1.1(a)(3) Form of Debt Underwriting Agreement.......................................................
1.1(b)(3) Form of Preferred Stock Underwriting Agreement............................................
4.1(2) Form of Indenture for Debt Securities.....................................................
5.1(2) Opinion of Shearman & Sterling regarding legality of securities...........................
12.1(1) Statement Regarding Computation of Ratios.................................................
23.1(1) Consent of Arthur Andersen LLP............................................................
23.2(2) Consent of Shearman & Sterling
24.1(1) Powers of Attorney for Andrew L. Turner, Robert A. Levin, James R. Tolbert, Martin G.
Mand, Warren C. Schelling and Robert Woltil.............................................
25.1(4) Statement of Eligibility of Trustee on Form T-1 with respect to the Securities
</TABLE>
- ------------------------
(1) Filed herewith
(2) To be filed by amendment
(3) To be incorporated by reference from Form 8-K
(4) To be filed in accordance with the rules and regulations of the Commission
under Section 305(b)(2) of the Trust Indenture Act of 1939.
<PAGE>
EXHIBIT 12.1
SUN HEALTHCARE GROUP, INC.
RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS OF DOLLARS, EXCEPT RATIO)
(UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
EARNINGS: 1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Earnings before income taxes and extraordinary
items....................................... $ 7,258 $ 22,710 $ 36,807 $ 12,794 $ 52,466
Add Fixed Charges (excluding portion
capitalized)................................ 7,891 9,634 39,742 65,444 75,553
--------- --------- --------- --------- ---------
Earnings available for fixed charges............ $ 15,149 $ 32,344 $ 76,549 $ 78,238 $ 128,019
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
FIXED CHARGES:
Interest charges (including portion
capitalized)................................ $ 925 $ 379 $ 14,253 $ 24,668 $ 28,371
Estimated interest factor on rental expense... 6,966 9,293 29,194 43,615 49,654
--------- --------- --------- --------- ---------
Total fixed charges............................. $ 7,891 $ 9,672 $ 43,447 $ 68,283 $ 78,025
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
RATIO OF EARNINGS TO FIXED CHARGES.............. 1.92 3.34 1.76 1.15 1.64
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 of our report dated
February 27, 1997 included in Sun Healthcare Group Inc.'s Annual Report on Form
10-K for the year ended December 31, 1996 and our report dated March 5, 1997 on
the financial statements of Golden Care Inc. for the year ended December 31,
1994 included in Sun Healthcare Group, Inc.'s Current Report on Form 8-K filed
with the Securities and Exchange Commission on March 28, 1997, and to all
references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Albuquerque, New Mexico
April 28, 1997
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints each of Robert
Murphy, Robert D. Woltil and William C. Warrick, as his attorney-in-fact to sign
this Registration Statement on his behalf individually and in the capacity
stated below and to file all supplements, amendments and post-effective
amendments to this Registration Statement, and any and all instruments or
documents filed as a part of or in connection with this Registration Statement
or any amendment or supplement thereto, and any such attorney-in-fact may make
such changes and additions to this Registration Statement as such attorney-in-
fact may deem necessary or appropriate.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ --------------------------------------------------- ----------------
<C> <S> <C>
/s/ ANDREW L. TURNER Chairman of the Board, President, and Chief
Andrew L. Turner Executive Officer April 29, 1997
John E. Bingaman Director April 29, 1997
Zev Karkomi Director April 29, 1997
/s/ ROBERT A. LEVIN
Robert A. Levin Director April 29, 1997
Mark G. Wimer Director April 29, 1997
/s/ JAMES R. TOLBERT
James R. Tolbert Director April 29, 1997
Lois E. Silverman Director April 29, 1997
R. James Woolsey Director April 29, 1997
/s/ MARTIN G. MAND
Martin G. Mand Director April 29, 1997
/s/ WARREN C. SCHELLING
Warren C. Schelling Director April 29, 1997
Senior Vice President Financial Services and Chief
/s/ ROBERT D. WOLTIL Financial Officer and Director (Principal April 29, 1997
Robert D. Woltil Financial Officer)
</TABLE>
