0001104659-07-005068.txt : 20070129 0001104659-07-005068.hdr.sgml : 20070129 20070126174349 ACCESSION NUMBER: 0001104659-07-005068 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20070129 DATE AS OF CHANGE: 20070126 GROUP MEMBERS: HOWARD C. LANDIS GROUP MEMBERS: JAMES A. PARSONS GROUP MEMBERS: MICHAEL J. FOSTER GROUP MEMBERS: RFE ASSOCIATES V, L.P. GROUP MEMBERS: RFE ASSOCIATES VI SSBIC, L.P. GROUP MEMBERS: RFE ASSOCIATES VI, LLC GROUP MEMBERS: RFE INVESTMENT PARTNERS VI, L.P. GROUP MEMBERS: RFE MANAGEMENT CORP. GROUP MEMBERS: RFE VI SBIC, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SUN HEALTHCARE GROUP INC CENTRAL INDEX KEY: 0000904978 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 850410612 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-44869 FILM NUMBER: 07557864 BUSINESS ADDRESS: STREET 1: 101 SUN AVENUE N E CITY: ALBUQUERQUE STATE: NM ZIP: 87109 BUSINESS PHONE: 5058213355 MAIL ADDRESS: STREET 1: 101 SUN LANE N E CITY: ALBUQERQUE STATE: NM ZIP: 87109 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RFE Investment Partners V, L.P. CENTRAL INDEX KEY: 0001319564 IRS NUMBER: 061408380 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 36 GROVE STREET CITY: NEW CANAAN STATE: CT ZIP: 06840 BUSINESS PHONE: 203-966-2800 MAIL ADDRESS: STREET 1: 36 GROVE STREET CITY: NEW CANAAN STATE: CT ZIP: 06840 SC 13D/A 1 a07-2735_1sc13da.htm SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D
(Rule 13d-101)

Under the Securities Exchange Act of 1934

(Amendment No. 2)*

Sun Healthcare Group, Inc.

(Name of Issuer)

Common Stock, $0.01 par value per share

(Title of Class of Securities)

866933401

(CUSIP Number)

Michael J. Foster

RFE Management Corp.

36 Grove Street

New Canaan, CT 06840

(203) 966-2800

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

Copies to:

Charles J. Downey III, Esq.

Finn Dixon & Herling LLP

177 Broad Street, 15th Floor

Stamford, CT 06901

(203) 325-5000

January 16, 2007

(Date of Event which Requires Filing of this Statement)

CUSIP NO. 866933401

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities and for any subsequent amendment containing information which would alter disclosures provided in the cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

(Continued on following pages)

CUSIP No. 866933401

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) RFE Investment Partners V, L.P. 06-1408380

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO - Share exchange in connection with a merger

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 2,358,583

			8.	Shared Voting Power 358

			9.	Sole Dispositive Power 2,358,583

			10.	Shared Dispositive Power 358

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 2,358,941

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 5.5%

	14.	Type of Reporting Person (See Instructions) PN

CUSIP No. 866933401

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) RFE VI SBIC, L.P. 06-1516774

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO - Share exchange in connection with a merger

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 2,369,324

			8.	Shared Voting Power 358

			9.	Sole Dispositive Power 2,369,324

			10.	Shared Dispositive Power 358

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 2,369,682

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 5.5%

	14.	Type of Reporting Person (See Instructions) PN

CUSIP No. 866933401

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) RFE Associates V, L.P. 06-1408390

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO - Share exchange in connection with a merger

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.

			8.	Shared Voting Power 2,358,941

			9.	Sole Dispositive Power None.

			10.	Shared Dispositive Power 2,358,941

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 2,358,941

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 5.5%

	14.	Type of Reporting Person (See Instructions) PN

CUSIP No. 866933401

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) RFE Associates VI SBIC, LLC 06-1516773

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO - Share exchange in connection with a merger

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.

			8.	Shared Voting Power 2,369,682

			9.	Sole Dispositive Power None.

			10.	Shared Dispositive Power 2,369,682

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 2,369,682

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 5.5%

	14.	Type of Reporting Person (See Instructions) OO-LLC

CUSIP No. 866933401

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) RFE Investment Partners VI, L.P. 06-1516771

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO - Share exchange in connection with a merger

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.

			8.	Shared Voting Power 2,369,682

			9.	Sole Dispositive Power None.

			10.	Shared Dispositive Power 2,369,682

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 2,369,682

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 5.5%

	14.	Type of Reporting Person (See Instructions) PN

CUSIP No. 866933401

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) RFE Associates VI, LLC 06-1516769

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO - Share exchange in connection with a merger

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.

			8.	Shared Voting Power 2,369,682

			9.	Sole Dispositive Power None.

			10.	Shared Dispositive Power 2,369,682

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 2,369,682

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 5.5%

	14.	Type of Reporting Person (See Instructions) OO-LLC

CUSIP No. 8669334-1

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) RFE Management Corp. 22-2465998

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO - Share exchange in connection with a merger

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.

			8.	Shared Voting Power 4,728,623

			9.	Sole Dispositive Power None.

			10.	Shared Dispositive Power 4,728,623

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 4,728,623

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 11.0%

	14.	Type of Reporting Person (See Instructions) CO

CUSIP No. 866933401

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Michael J. Foster

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO - Share exchange in connection with a merger

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.

			8.	Shared Voting Power 4,728,623

			9.	Sole Dispositive Power None.

			10.	Shared Dispositive Power 4,728,623

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 4,728,623

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 11.0%

	14.	Type of Reporting Person (See Instructions) IN

CUSIP No. 866933401

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) James A. Parons

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO - Share exchange in connection with a merger

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.

			8.	Shared Voting Power 4,728,623

			9.	Sole Dispositive Power None.

			10.	Shared Dispositive Power 4,728,623

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 4,728,623

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 11.0%

	14.	Type of Reporting Person (See Instructions) IN

CUSIP No. 866933401

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Howard C. Landis

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO - Share exchange in connection with a merger

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.

			8.	Shared Voting Power 4,728,623

			9.	Sole Dispositive Power None.

			10.	Shared Dispositive Power 4,728,623

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 4,728,623

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 11.0%

	14.	Type of Reporting Person (See Instructions) IN

Statement on Schedule 13D

This Amendment No. 2 to Statement on Schedule 13D relates to the beneficial ownership of common stock, par value $0.01 per share (the “Common Stock”), of Sun Healthcare Group, Inc., a Delaware corporation (the “Company”). This Amendment No. 2 to Schedule 13D is being filed on behalf of the Reporting Persons (as defined below) and amends and supplements the Schedule 13D filed by the Reporting Persons on December 13, 2005, as heretofore amended. Unless otherwise defined herein, all capitalized terms used herein shall have the respective meanings given such terms in the Schedule 13D.

ITEM 4. PURPOSE OF TRANSACTION.

Item 4 is hereby supplemented by the addition of the following:

See Item 6 for a description of (i) an amendment to certain Rule 10b5-1 Plans adopted by each of RFE Investment Partners V and RFE VI SBIC and (ii) an agreement to which each of RFE Investment Partners V and RFE VI SBIC is a party.

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.

The first sentence of Items 5(a) and (b) is hereby amended and restated in its entirety as follows:

(a) and (b) The approximate percentages of shares of Common Stock reported as beneficially owned by the Reporting Persons is based upon 42,881,195 shares of Common Stock outstanding, as represented by the Company in the Agreement (as defined below). Amounts reported as being beneficially owned by the Reporting Persons include a portion of 1,432 restricted stock units held by Michael J. Foster on behalf of RFE Investment Partners V and a portion of 1,433 restricted stock units held by Michael J. Foster on behalf of RFE VI SBIC. Such restricted stock units were granted on December 9, 2005 and vest in 25% installments on each of December 9, 2006, 2007, 2008 and 2009 (the 25% vested portion of each restricted stock unit, or 358 shares, is reflected in this Schedule 13D as being beneficially owned as of the date hereof).

Item 5(c) is hereby supplemented as follows:

(c) During the sixty (60) days preceding January 24, 2007, the following transactions in the Common Stock have been effected by the Reporting Persons.

Date	Reporting Person	No. Shares	Price	Nature of Transaction
1/16/07	RFE Investment Partners V	292,000	$13.3347	Sale by Broker under Rule 10b5-1 Plan
1/16/07	RFE VI SBIC	292,000	$13.3347	Sale by Broker under Rule 10b5-1 Plan
1/17/07	RFE Investment Partners V	40,000	$13.0828	Sale by Broker under Rule 10b5-1 Plan
1/17/07	RFE VI SBIC	40,000	$13.0828	Sale by Broker under Rule 10b5-1 Plan
1/18/07	RFE Investment Partners V	68,500	$12.5541	Sale by Broker under Rule 10b5-1 Plan
1/18/07	RFE VI SBIC	68,500	$12.5541	Sale by Broker under Rule 10b5-1 Plan
1/19/07	RFE Investment Partners V	31,250	$12.5159	Sale by Broker under Rule 10b5-1 Plan

1/19/07	RFE VI SBIC	31,250	$12.5159	Sale by Broker under Rule 10b5-1 Plan
1/23/07	RFE Investment Partners V	167,750	$12.2842	Sale by Broker under Rule 10b5-1 Plan
1/23/07	RFE VI SBIC	167,750	$12.2842	Sale by Broker under Rule 10b5-1 Plan

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

Item 6 is hereby amended and restated in its entirety as follows:

Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the Reporting Persons have entered into an agreement attached hereto as Exhibit A, with respect to the joint filing of this statement and any amendment or amendments hereto.

The Stockholders Agreement was entered into as of May 16, 2005 and amended on July 7, 2005 and on September 16, 2005 by the Company, RFE Investment Partners V, RFE VI SBIC (together with RFE Investment Partners V, the “RFE Entities”), DFW Capital Partners, L.P. (“DFW”), certain other stockholders of PMC, and James A. Parsons, acting as Stockholders’ Agent. Certain terms and conditions of the Stockholders Agreement are described in Item 4 above.

The Registration Rights Agreement was entered into as of May 16, 2005 and amended on July 7, 2005, by the Company, RFE Investment Partners V, RFE VI SBIC, DFW, certain other stockholders of PMC and James A. Parsons, acting as Stockholders’ Agent. Certain terms and conditions of the Registration Rights Agreement are described in Item 4 above.

The Escrow Agreement was entered into as of December 9, 2005 by the Company, James A. Parsons, acting as Stockholder Agent, and U.S. Trust Company of California, acting as Escrow Agent. Certain terms of the Escrow Agreement are described in Item 3 above.

On December 8, 2006, each of RFE Investment Partners V and RFE VI SBIC entered into a Rule 10b5-1 Plan (each, a “Rule 10b5-1 Plan”), in the form filed as Exhibit E to this Schedule 13D, relating to the proposed sale of shares of Common Stock by Jefferies & Company, Inc. (the “Broker”). Each such Rule 10b5-1 Plan provides that the Broker may sell up to 600,000 shares of Common Stock per calendar quarter (subject to reduction in order to comply with the volume limitations contained in the Registration Rights Agreement), at prices specified in each Rule 10b5-1 Plan. The maximum number of shares proposed to be sold under each such Rule 10b5-1 Plan is 2,531,435 shares (for each of RFE Investment Partners V and RFE VI SBIC). The term of each Rule 10b5-1 Plan commences no earlier than 30 days after the date of the final prospectus filed with respect to the Company’s proposed public offering of Common Stock, and continues until the earliest of the earliest to occur of (i) the date on which the Broker is required to suspend or terminate sales under the Rule 10b5-1 Plan, (ii) the date on which the Broker receives notice of the dissolution of the selling stockholder, (iii) the date on which the Company or any other person publicly announces a tender or exchange offer with respect to the Common Stock or a merger, acquisition, reorganization, recapitalization or comparable transaction affecting the securities of the Company as a result of which the Common Stock is to be exchanged or converted into shares of another company, (iv) the date on which the Broker receives notice of the commencement or impending commencement of any proceedings in respect of or triggered by the selling stockholder’s bankruptcy or insolvency, and (v) the date that the aggregate number of shares of Common Stock sold pursuant to the Rule 10b5-1 Plan reaches 2,531,435 shares, unless, in each case, earlier terminated in accordance with the terms thereof.

As reported in the Company’s Current Report on Form 8-K dated January 15, 2007, RFE Entities entered into an Agreement dated as of January 17, 2007, with the Company, DFW, Steelhead Investments Ltd. (“Steelhead”) and, for purposes of Sections 3 and 4 thereof, the RFE Entities (the “Agreement”). The RFE Entities entered into the Agreement in order to clarify certain matters arising out of DFW’s sale to Steelhead of shares of Common Stock. The Agreement clarifies that the aggregate Pro Rata Limit of the RFE Entities for purposes of the volume limitations under the Registration Rights Agreement is 2.947% of the total number of shares of Common Stock then outstanding. See Exhibit G attached to this Amendment No. 2.

As a result of the execution of the Agreement, each of the RFE Entities and the Broker entered into amendments to the Rule 10b5-1 Plans clarifying that the respective Pro Rata Limit of RFE Investment Partners V is 1.471% and the respective Pro Rata Limit of RFE VI SBIC is 1.476%, for a total of 2.947%. See Exhibit F attached to this Amendment No. 2.

Except as described above, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 above or between such persons and any other person with respect to any securities of the Company.

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.

Exhibit A Agreement of Reporting Persons, dated December 9, 2005, among the Reporting Persons (previously filed).

Exhibit B Power of Attorney (previously filed).

Exhibit C Stockholders Agreement, dated as of May 16, 2005, Amendment No. 1 to the Stockholders’ Agreement, dated as of July 7, 2005, and Amendment No. 2 to the Stockholders’ Agreement, dated as of September 16, 2005, each by and among the Company and the stockholders named therein (filed as Appendix C to the Company’s Proxy Statement filed with the Commission on September 22, 2005, and incorporated herein by reference).

Exhibit D Registration Rights Agreement, dated as of May 16, 2005 and Amendment No. 1 to the Registration Rights Agreement, dated as of July 7, 2005, each by and among the Company and the stockholders named therein (filed as Appendix D to the Company’s Proxy Statement filed with the Commission on September 22, 2005, and incorporated herein by reference).

Exhibit E Form of Rule 10b5-1 Plan between each of RFE Investment Partners V and RFE VI SBIC and Jefferies & Company, Inc. (Exhibits thereto to be furnished to the Securities and Exchange Commission upon request) (previously filed).

Exhibit F Forms of amendment to each Rule 10b5-1 Plan.

Exhibit G Agreement, dated as of January 17, 2007, by and between the Company, DFW Capital Partners, L.P., Steelhead Investments Ltd. and, for purposes of Sections 3 and 4 of the Agreement only, RFE Investment Partners V and RFE VI SBIC (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 15, 2007 and incorporated herein by reference).

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: January 24, 2007

Entities:

RFE Investment Partners V, L.P.
RFE VI SBIC, L.P.
RFE Associates V, L.P.
RFE Associates VI SBIC, LLC
RFE Investment Partners VI, L.P.
RFE Associates VI, LLC
RFE Management Corp.

	By:	/s/ James A. Parsons
		James A. Parsons, as
		General Partner or
		Managing Member or as
		Attorney-in-fact for the
		above-listed entities

Individuals:

Michael J. Foster
James A. Parsons
Howard C. Landis

	By:	/s/ James A. Parsons
		James A. Parsons,
		Individually and as
		Attorney-in-fact for the
		above-listed individuals

INDEX TO EXHIBITS

		Page
EXHIBIT A	Agreement of Reporting Persons, dated December 13, 2005, among the Reporting Persons (previously filed).

EXHIBIT B	Power of Attorney (previously filed).

EXHIBIT C	Stockholders Agreement, dated as of May 16, 2005, Amendment No. 1 to the Stockholders’ Agreement, dated as of July 7, 2005, and Amendment No. 2 to the Stockholders’ Agreement, dated as of September 16, 2005, each by and among the Company and the stockholders named therein (filed as Appendix C to the Company’s Proxy Statement filed with the Commission on September 22, 2005, and incorporated herein by reference).

EXHIBIT D	Registration Rights Agreement, dated as of May 16, 2005 and Amendment No. 1 to the Registration Rights Agreement, dated as of July 7, 2005, each by and among the Company and the stockholders named therein (filed as Appendix D to the Company’s Proxy Statement filed with the Commission on September 22, 2005, and incorporated herein by reference)

EXHIBIT E	Form of Rule 10b5-1 Plan between each of RFE Investment Partners V and RFE VI SBIC and Jefferies & Company, Inc. (Exhibits thereto to be furnished to the Securities and Exchange Commission upon request). (Previously filed).

Exhibit F	Forms of amendment to each Rule 10b5-1 Plan.	28

Exhibit G	Agreement, dated as of January 17, 2007, by and between the Company, DFW Capital Partners, L.P., Steelhead Investments Ltd. and, for purposes of Sections 3 and 4 of the Agreement only, RFE Investment Partners V and RFE VI SBIC (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 15, 2007 and incorporated herein by reference).

EX-99.(F) 2 a07-2735_1ex99df.htm EX-99.(F)

Exhibit F

Forms of Amendment to Rule 10b5-1 Plan

Amendment No. 1 to Rule 10b5-1 Sales Plan

This Amendment No. 1 (this “Amendment”), dated as of January 22, 2007, to the Rule 10b5-1 Sales Plan dated December 8, 2006 (the “Plan”) between RFE VI SBIC, L.P. (“Seller”) and Jefferies & Company, Inc. (“Broker”), acting as agent for Seller.

A. The Plan was entered into between Seller and Broker for the purpose of establishing a trading plan with respect to the Common Stock of Sun Healthcare Group, Inc. (the “Issuer”) that complies with the requirements of Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

B. Seller wishes to clarify the “Pro Rata Limit” under the Plan as a result of a recent transfer by DFW Capital Partners, L.P. which has resulted in a revised computation of the Pro Rata Limit for purposes of Seller’s agreements with the Issuer.

The parties hereto confirm and agree that, effective immediately, the term Pro Rata Limit in the Plan is hereby amended and restated to read in its entirety as follows: “For all purposes of the Plan, the term “Pro Rata Limit” shall be defined as follows: “For purposes hereof, the “Pro Rata Limit” of Client shall be equal to a number of shares of Stock equal to (x) the number of Outstanding Shares multiplied by (y) Client’s Pro Rata Percentage. For purposes hereof, “Client’s Pro Rata Percentage” shall be equal to 1.4763%.”

Except as amended hereby, the Plan shall remain in full force and effect in accordance with its terms. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall be governed by and construed in accordance with the internal laws of the State of New York and may be modified or amended only by a writing signed by the parties hereto.

IN WITNESS WHEREOF, the undersigned have signed this Sales Plan as of the date first written above.

RFE VI SBIC, L.P.		JEFFERIES & COMPANY, INC.

By:	RFE Associates VI SBIC, L.L.C.,	By:	/s/ Charles C. Baber
	its General Partner
By:	RFE Investment Partners VI, L.P.,	Print Name:	Charles C. Baber
	its Sole Member
By:	RFE Associates VI, L.L.C., its	Title:	Managing Director
	General Partner

By:	/s/ Michael J. Foster
	Name: Michael Foster
	Title: Managing Member

Amendment No. 1 to Rule 10b5-1 Sales Plan

This Amendment No. 1 (this “Amendment”), dated as of January 22, 2007, to the Rule 10b5-1 Sales Plan dated December 8, 2006 (the “Plan”) between RFE INVESTMENT PARTNERS V, L.P. (“Seller”) and Jefferies & Company, Inc. (“Broker”), acting as agent for Seller.

The parties hereto confirm and agree that, effective immediately, the term Pro Rata Limit in the Plan is hereby amended and restated to read in its entirety as follows: “For all purposes of the Plan, the term “Pro Rata Limit” shall be defined as follows: “For purposes hereof, the “Pro Rata Limit” of Client shall be equal to a number of shares of Stock equal to (x) the number of Outstanding Shares multiplied by (y) Client’s Pro Rata Percentage. For purposes hereof, “Client’s Pro Rata Percentage” shall be equal to 1.471%.”

IN WITNESS WHEREOF, the undersigned have signed this Sales Plan as of the date first written above.

RFE INVESTMENT PARTNERS V, L.P.		JEFFERIES & COMPANY, INC.

By:	/s/ Michael J. Foster	By:	/s/ Charles C. Baber
	Name: Michael Foster
	Title: General Partner	Print Name:	Charles C. Baber

		Title:	Managing Director

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