EXECUTION COPY
AMENDMENT NO. 1 TO THE
STOCKHOLDERS STOCK OPTION AND PROXY AGREEMENT
THIS AMENDMENT NO. 1 to the STOCKHOLDERS STOCK OPTION AND PROXY
AGREEMENT, dated as of February 17, 1997 (the "AGREEMENT," capitalized terms
used but not otherwise defined herein are used herein as therein defined), among
SUN HEALTHCARE GROUP, INC., a Delaware corporation ("PARENT"), and RETIREMENT
CARE ASSOCIATES, INC., a Colorado corporation, ("STOCKHOLDER"), is made as of
this 25th day of November, 1997 by and among Parent and each Stockholder.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Parent, Merger Sub, and the Company desire to amend the
Merger Agreement as provided in Amendment No. 2 thereto dated of even date
herewith; and
WHEREAS, in connection therewith Parent and Stockholder desire to
amend the Agreement as provided herein.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
SECTION 1: AMENDMENT TO AGREEMENT. The Agreement is hereby amended
as follows:
(a) Section 1.01 of the Agreement is hereby amended by (i)
replacing the phrase "120th" with the phrase "14th" therein and (ii) adding
the following phrase at the end thereof: "or terminated or terminable
pursuant to Section 9.01(h) thereof."
(b) The following is hereby inserted as a new Article V thereto and
the succeeding Articles and Section are hereby appropriately renumbered:
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ARTICLE V
REGISTRATION RIGHTS
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SECTION 5.01. SHELF REGISTRATION. (a) In the event that Parent pays
for the Shares being purchased by delivery of shares of Parent Common Stock,
Parent shall, within three months following the Closing, file with the
Securities and Exchange Commission (the "COMMISSION") a shelf registration
statement on an appropriate form under Rule 415 under the Securities Act, or
any similar rule that may be adopted by the Commission (a "SHELF REGISTRATION
STATEMENT"), relating to the resale of the Parent Shares by the Stockholder
from time to time in accordance with the methods of distribution set forth in
such Shelf Registration Statement and shall use its best efforts to cause
such Shelf Registration Statement to be declared effective under the
Securities Act as soon as practicable thereafter; PROVIDED, HOWEVER, that
Stockholder shall not be entitled to have the Parent Shares held by it
covered by such Shelf Registration Statement unless Stockholder is in
compliance with Section 5.02(f) hereof.
(b) Parent shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be usable by the Stockholders until the
earliest to occur of the following: (A) the two year anniversary of the
Closing; (B) the earliest time at which all the Parent Shares covered by the
Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement; and (C) the earliest time at which, in the written
opinion of independent counsel to Parent, all outstanding Parent Shares held
by persons that are not affiliates of Parent may be resold without
registration under the Securities Act pursuant to Rule 144(k) under the
Securities Act or any successor provision thereto (in any such case, such
period being called the "EFFECTIVENESS PERIOD"). Parent shall be deemed not
to have used its best efforts to keep the Shelf Registration Statement
effective during the requisite period if Parent voluntarily takes any action
that would result in Stockholders of Parent Shares covered thereby not being
able to offer and sell any such Parent Shares during that period, unless (i)
such action is required by applicable law, (ii) the continued effectiveness
of the Shelf Registration Statement would require Parent to disclose a
material financing, acquisition or other corporate transaction, and the Board
of Directors shall have determined in good faith that such disclosure is not
in the best interests of Parent and its stockholders, or (iii) the Board of
Directors shall have determined in good faith that there is a valid business
purpose for such suspension.
SECTION 5.02. REGISTRATION PROCEDURES. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) Parent shall take such action as may be necessary so that (i)
any Shelf Registration Statement and any amendment thereto and any prospectus
forming part thereof and any amendment or supplement thereto (and each report
or other document incorporated therein by reference in each case) complies in
all material respects with the Securities Act and the Exchange Act, and the
respective rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue
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statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Shelf Registration Statement, and
any amendment or supplement to such prospectus, does not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements, in the light of the circumstances under which
they were made, not misleading.
(b) Parent shall advise the Stockholder:
(i) when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf Registration
Statement or any post-effective amendment thereto has become effective;
(ii) upon the issuance by the Commission of any stop order
suspending effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose;
(iii) upon the receipt by Parent of any notification with
respect to the suspension of the qualification of the securities included
therein for sale in any jurisdiction or the initiation of any proceeding
for such purpose; and
(iv) upon the happening of any event that requires the making of
any changes in the Shelf Registration Statement or the prospectus so that,
as of such date, the Shelf Registration Statement and the prospectus do not
contain an untrue statement of a material fact and do not omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in light of the
circumstances under which they were made) not misleading (which advice
shall be accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made).
(c) Parent shall, during the Effectiveness Period, deliver to
Stockholder with respect to a Shelf Registration Statement, without charge,
as many copies of the prospectus (including each preliminary prospectus)
included in such Shelf Registration Statement and any amendment or supplement
thereto as Stockholder may reasonably request; and Parent consents (except
during the continuance of any event described in Section 5.02(b)(iv)) to the
use of the prospectus or any amendment or supplement thereto by Stockholder
in connection with the offering and sale of the Parent Shares covered by the
prospectus or any amendment or supplement thereto during the Effectiveness
Period.
(d) Prior to any offering of Parent Shares pursuant to any Shelf
Registration Statement, Parent shall register or qualify or cooperate with
the Stockholder and its counsel in connection with the registration or
qualification of such Parent Shares for offer and sale under the securities
or blue sky laws of such jurisdictions as any such Stockholders reasonably
request in writing and do any and all other acts or things necessary or
advisable to enable the offer and
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sale in such jurisdictions of the Parent Shares covered by such Shelf
Registration Statement; PROVIDED, HOWEVER, that in no event shall Parent be
obligated to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to so
qualify but for this Section 5.02(d), (ii) file any general consent to
service of process in any jurisdiction where it is not as of the date hereof
then so subject or (iii) subject itself to taxation in any jurisdiction if it
is not so subject.
(e) Upon the occurrence of any event contemplated by Section
5.02(b)(iv) above, Parent shall promptly prepare a post-effective amendment
to any Shelf Registration Statement or an amendment or supplement to the
related prospectus or file any other required document so that, as thereafter
delivered to purchasers of the Parent Shares included therein, the prospectus
will not include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Parent notifies
the Stockholder of the occurrence of any event contemplated by Section
5.02(b)(iv) above, the Stockholder shall suspend the use of the prospectus
until the requisite changes to the prospectus have been made.
(f) Parent may require Stockholder with respect to a Shelf
Registration Statement to furnish to Parent such information regarding the
Stockholder and the distribution of Parent Shares held by the Stockholder as
may be required by applicable law or regulation for inclusion in such Shelf
Registration Statement and Parent may exclude from such registration the
Parent Shares of any Stockholder that fails to furnish such information
within a reasonable time after receiving such request.
(g) Parent will use its best efforts to cause the Parent Shares to
be listed on the New York Stock Exchange or other stock exchange or trading
system on which the Parent Common Stock primarily trades on or prior to the
effective date of any Shelf Registration Statement hereunder."
SECTION 2. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder
hereby represents and warrants to Parent that: Stockholder has all necessary
power and authority (corporate or otherwise) to execute and deliver this
Amendment, to perform its obligations under the Agreement as amended hereby
and to consummate the transactions contemplated hereby. The execution and
delivery of this Amendment by Stockholder and the consummation by Stockholder
of the transactions contemplated by the Agreement as amended hereby have been
duly and validly authorized by all necessary action (corporate or otherwise)
on the part of Stockholder. This Amendment has been duly executed and
delivered by Stockholder and, assuming the due authorization, execution and
delivery by Parent, constitutes the legal, valid and binding obligation of
Stockholder, enforceable against Stockholder in accordance with its terms.
(b) REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.
Parent and Merger Sub hereby jointly and severally represent and warrant to
Stockholder that: Parent and
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Merger Sub have all necessary corporate power and authority to execute and
deliver this Amendment, to perform their respective obligations under the
Agreement as amended hereby and to consummate the transactions contemplated
hereby. The execution and delivery of this Amendment by Parent and Merger
Sub and the consummation by Parent and Merger Sub of the transactions
contemplated by the Merger Agreement as amended hereby have been duly and
validly authorized by all necessary corporate action (other than stockholder
approval as described in the Merger Agreement). This Amendment has been duly
executed and delivered by Parent and Merger Sub and, assuming the due
authorization, execution and delivery by the Company, constitutes the legal,
valid and binding obligation of Parent and Merger Sub, enforceable against
Parent and Merger Sub in accordance with its terms.
SECTION 3. EFFECT ON AGREEMENT. Except as otherwise specifically
provided herein, the Agreement shall not be amended but shall remain in full
force and effect.
SECTION 4. COUNTERPARTS. This Amendment may be signed in one or
more counterparts, each of which shall be an original but all of which, taken
together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first written above.
SUN HEALTHCARE GROUP, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President for Financial
Services and Chief Financial Officer
RETIREMENT CARE ASSOCIATES, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
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Name: Xxxxxxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
