1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 8-K

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CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: February 17, 1997
(Date of earliest event reported)

CONTOUR MEDICAL, INC.
(Exact name of registrant as specified in its charter)

NEVADA 0-26288 77-0163521
(State or other jurisdiction of (Commission file number) (I.R.S. Employer Identification No.)
incorporation or organization)

3340 SCHERER DRIVE
ST. PETERSBURG, FLORIDA 33716
(Address of principal executive offices)

(813) 572-0089
(Registrant's telephone number, including area code)

Item 2. Acquisition or Disposition of Assets.

On February 17, 1997, Contour Medical, Inc. (the "Company") entered
into an Agreement and Plan of Merger and Reorganization (the "Contour Merger
Agreement") by and among Sun Healthcare Group, Inc., a Delaware corporation
("Sun"), Nectarine Acquisition Corporation, a Nevada corporation and a
wholly-owned subsidiary of Sun ("Sun Merger Sub"), and the Company, pursuant to
which Sun Merger Sub will be merged with and into the Company (the "Contour
Merger").

Subject to the terms and conditions of the Contour Merger Agreement
(including, without limitation, approval by the stockholders of the Company)
upon the effective time of the Contour Merger, Sun will pay $8.50 in cash
and/or Sun common stock, at Sun's election, for each outstanding share of the
common stock (the "Contour Common Stock") of the Company not presently owned by
Retirement Care Associates, Inc., a Colorado corporation and majority
shareholder of the Company ("RCA") (other than shares of Contour Common Stock
held in the treasury of the Company, owned by Sun or Sun Merger Sub or held by
persons who exercise their dissenters' rights under Nevada law). As a result of
the Contour Merger, the Company will become a wholly-owned subsidiary of Sun.

In connection therewith, RCA, which owns 5,222,003 shares of the
Contour Common Stock and 89,250 shares of Contour Series A Preferred Stock ("A
Preferred", together with the Contour Common Stock, "Contour Capital Stock"),
also entered into a Stockholder Stock Option and Proxy Agreement (the "Contour
Option Agreement") by and among Sun and RCA. Pursuant to the Contour Option
Agreement, RCA granted to Sun an irrevocable option to purchase RCA-held
Contour Capital Stock at a price per share of Contour Common Stock equal to
$8.50 and a price per share of A Preferred equal to $4.00 under certain
circumstances. In addition, RCA agreed to vote, and granted to Sun an
irrevocable proxy to vote, all Contour Capital Stock held by RCA in favor of
approval of the Contour Merger Agreement and the Contour Merger and against any
merger, consolidation, sale of assets, reorganization or recapitalization of
the Company with any party other than Sun and its affiliates and against any
liquidation or winding up of the Company.

The foregoing descriptions are qualified in their entirety by
reference to the full texts of the Contour Merger Agreement, attached hereto as
Exhibit 2.1, and the Contour Option Agreement, attached as Exhibit 1.00(a) to
the Contour Merger Agreement, which are incorporated herein by reference.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

c) Exhibits. The following is a list of the Exhibits attached
hereto.

Exhibit No. 2.1 Agreement and Plan of Merger and Reorganization, dated as of
February 17, 1997, among Sun Healthcare Group, Inc.,
Nectarine Acquisition Corporation and Contour Medical, Inc.

Exhibit No. 10.1 Stockholders Stock Option and Proxy Agreement*

Exhibit No. 10.2 Form of Company Affiliate Agreement*

Exhibit No. 99.1 Joint Press Release, dated February 18, 1997, of Sun
Healthcare Group, Inc., Retirement Care Associates, Inc.
and Contour Medical, Inc.

* Contained as an exhibit to the Merger Agreement

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized.

CONTOUR MEDICAL, INC.

By: /s/ Donald F. Fox
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Donald F. Fox
Its President

Dated as of February 17, 1997.

EXHIBIT INDEX

EXHIBIT NO. DESCRIPTION PAGE
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2.1 Agreement and Plan of Merger and Reorganization,
dated as of February 17, 1997, among Sun
Healthcare Group, Inc., Nectarine Acquisition
Corporation and Contour Medical, Inc.

99.1 Joint Press Release, dated February 18, 1997, of
Sun Healthcare Group, Inc., Retirement Care
Associates, Inc. and Contour Medical, Inc.