For Against Abstain* 5.

Transcription

1 All correspondence to: Computershare Investor Services Pty Limited GPO Box 7045 Sydney New South Wales 2001 Australia Enquiries (within Australia) (outside Australia) Facsimile Holder Identification Number (HIN) I/We being a member/s of Ramsay Health Care Limited and entitled to attend and vote hereby appoint or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Extraordinary General Meeting of Ramsay Health Care Limited to be held at Shangri-La Hotel, 176 Cumberland Street, The Rocks, Sydney on Friday 20 May 2005 at 9.30am and at any adjournment of that meeting. IMPORTANT: FOR ITEMS 2 TO 4 BELOW If the Chairman of the Meeting is your nominated proxy, or may be appointed by default, and you have not directed your proxy how to vote on Items 2 to 4 below, please place a mark in this box. By marking this box you acknowledge that the Chairman of the Meeting may exercise your proxy even if he has an interest in the outcome of those items and that votes cast by him, other than as proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on Items 2 to 4 and your votes will not be counted in computing the required majority if a poll is called on these items. The Chairman of the Meeting intends to vote undirected proxies in favour of each of these items. 1. Approval of terms of issue of Convertible Adjustable Rate Equity Securities For Against Abstain* 5. Amendments to the Constitution relating to preference shares For Against Abstain* 2. Approval to issue Convertible Adjustable Rate Equity Securities 6. Financial assistance 3. Ratification of placement 4. Ratification of institutional placement * If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll. R H C 1 9 P R RHC_4_1_009958_0330/000001/000001

2 How to complete the Proxy Form 1 Your Address This is your address as it appears on the company s share register. If this information is incorrect, please mark the box and make the correction on the form. Securityholders sponsored by a broker (in which case your reference number overleaf will commence with an x ) should advise your broker of any changes. Please note, you cannot change ownership of your securities using this form. 2 Appointment of a Proxy If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If the individual or body corporate you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the full name of that individual or body corporate in the space provided. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the company. Do not write the name of the issuer company or the registered securityholder in the space. 3 Votes on Items of Business You may direct your proxy how to vote by placing a mark in one of the three boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid. 4 Appointment of a Second Proxy You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company's share registry or you may copy this form. To appoint a second proxy you must: on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded. return both forms together in the same envelope. 5 Signing Instructions You must sign this form as follows in the spaces provided: Individual: Joint Holding: Power of Attorney: Companies: where the holding is in one name, the holder must sign. where the holding is in more than one name, all of the securityholders should sign. to sign under Power of Attorney, you must have already lodged this document with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it. where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place. If a representative of a corporate Securityholder or proxy is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be produced prior to admission. A form of the certificate may be obtained from the company's share registry. Lodgement of a Proxy This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below no later than 48 hours before the commencement of the meeting at 9.30am on Friday 20 May Any Proxy Form received after that time will not be valid for the scheduled meeting. Documents may be lodged: IN PERSON Registered Office - Level 9, 154 Pacific Highway, St Leonards NSW 2065 Share Registry - Computershare Investor Services Pty Limited, Level 2, 60 Carrington Street, Sydney NSW 2000 Australia BY MAIL Registered Office - Level 9, 154 Pacific Highway, St Leonards NSW 2065 Share Registry - Computershare Investor Services Pty Limited, GPO Box 242, Melbourne VIC 8060 Australia BY FAX

3 *M000001Q02* RHC_4_1_009958_0330/000001/000002/i

4 RAMSAY HEALTH CARE LIMITED A.B.N NOTICE OF GENERAL MEETING Notice is hereby given that the General Meeting of members of Ramsay Health Care Limited (Company) will be held on 20 May 2005 at 9.30 am at Shangri-La Hotel Sydney, 176 Cumberland Street, The Rocks, Sydney. BUSINESS Item 1 Approval of terms of issue of Convertible Adjustable Rate Equity Securities To consider and, if thought fit, to pass the following resolution as a special resolution: That approval be and is hereby given to the issue of Convertible Adjustable Rate Equity Securities (CARES) on the terms in Schedule 2 to this Notice." Item 2 Approval to issue Convertible Adjustable Rate Equity Securities To consider and, if thought fit, to pass the following resolution as an ordinary resolution: That for the purposes of ASX Listing Rule 7.1 and all other purposes approval be and is hereby given to the issue of the number of Convertible Adjustable Rate Equity Securities (CARES) specified in the Shareholder Update accompanying this Notice on the terms in Schedule 2 to this Notice or such other terms as are approved by shareholders. Item 3 Ratification of placement To consider and, if thought fit, to pass the following resolution as an ordinary resolution: "That the issue on 2 December 2004 of 5,442,177 fully paid ordinary shares to domestic and international institutions at the price of $7.35 per share under a placement be ratified and approved for all purposes (including for the purposes of ASX Listing Rule 7.4)." Item 4 - Ratification of institutional placement To consider and, if thought fit, to pass the following resolution as an ordinary resolution: "That the issue of up to million fully paid ordinary shares to domestic and international institutions at the price specified in the Shareholder Update accompanying this Notice be ratified and approved for all purposes (including for the purposes of ASX Listing Rule 7.4)."

5 Item 5 Amendments to the Constitution relating to preference shares To consider and, if thought fit, to pass the following resolution as a special resolution: "That the Constitution of the Company be amended as follows: by deleting from Article 4.5 the words: "to a fixed or a cumulative preferential Dividend at the rate of Dividend determined by the Directors" and by inserting the following words in their place: "to: (i) (ii) a cumulative or non-cumulative preferential Dividend; and at the rate of Dividend, determined in each case by the Directors before issue"; (c) by inserting both after the words "Dividend" in Article 4.4 and after the word "calculation" in Article 4.7(d) the words "and whether the dividend is cumulative or non-cumulative." by inserting a new paragraph (ba) after paragraph in Article 4.9 as follows: "(ba) on a resolution to approve the terms of a buy-back agreement;" Item 6 - Financial assistance To consider and, if thought fit, to pass the following resolution as a special resolution: That the Company approve the giving of any financial assistance in connection with the acquisition by Ramsay Health Care Investments Pty Limited (Ramsay) of the Affinity group of companies, including the Affinity companies listed in the schedule to this Notice of General Meeting (together, Affinity Companies), under the Share Sale Agreement between the Ironbridge Sellers, the Affinity Sellers and the Buyer as defined in that Share Sale Agreement, including any financial assistance by: 1.1 Ramsay Finance Pty Limited (Ramsay Finance) and/or its subsidiaries in connection with subscription by the Participants (being the lenders under the new senior debt arrangements, the lenders under the proposed restructured senior debt arrangements and the lenders under the bridging finance arrangements) for redeemable preference shares (RPS) issued by Ramsay Finance and/or its subsidiaries (whether pursuant to one or more issues of RPS), and the purchase by

6 Ramsay from the Participants of those RPS (whether pursuant to one or more transactions), including: (c) (d) any loan provided by Ramsay Finance and/or its subsidiaries to Ramsay using the proceeds of the issue of RPS and any other funding provided by Ramsay Finance and/or its subsidiaries to Ramsay to enable Ramsay to pay any amount payable by it to all or any of the Participants; and any redemption or buyback or cancellation by Ramsay Finance and/or its subsidiaries of any RPS or any resolution to do so or any issue of securities by Ramsay Finance and/or its subsidiaries to fund any payment by Ramsay Finance and/or its subsidiaries of any dividend or other distribution or any redemption proceeds or payment, repayment or refinancing of, or in connection with, any RPS; and any payment by Ramsay Finance and/or its subsidiaries to Ramsay or any other person under or in connection with any RPS; and any intra group documents or arrangements entered into between Ramsay Finance and/or its subsidiaries and Ramsay from time to time, including in connection with the issue, reissue, redemption or other payment, distribution or dealing with or in connection with RPS; and 1.2 the Affinity Companies granting security interests over their assets, including full fixed and floating charges, real property mortgages and guarantees, in favour of all or any of the Participants; and 1.3 any or all of the Affinity Companies in connection with the proposed divestment of some of the hospitals owned by the Affinity Companies on terms to be finalised in accordance with the Heads of Agreement between the Company, Ironbridge Capital Pty Limited and CVC Asia Pacific Limited. For further information on the above Items, please refer to the Explanatory Statement which forms part of this notice of meeting. Voting Exclusion In accordance with the ASX Listing Rules, the Company will disregard any votes cast on a resolution:

7 in respect of Item 2 by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed. For the avoidance of doubt, if a person participates in the CARES offer, that person will be precluded from voting; and in respect of Items 3 or 4 by: any person who acquired shares the subject of the resolution; or any associate of such a person. However, the Company need not disregard a vote if: it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or it is cast by the person chairing the General Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. By Order of the Board L R Ransley Company Secretary St Leonards, 21 April 2005

8 1. PROXIES (c) A member entitled to attend and vote is entitled to appoint a proxy to attend and vote on the member s behalf. A member entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion or number is specified, each proxy may exercise half the member s votes. A proxy need not be a member of the Company. Either the original or a facsimile transmission of the proxy form(s) and any power of attorney or authority under which they are signed must be received at the Registered Office or the Share Registry at least 48 hours prior to the meeting (ie before 9:30 am on Wednesday 18 May 2005) or any adjournment. Any proxy form received after this deadline, including at the meeting, will be treated as invalid. By hand: Registered Office: Level 9, 154 Pacific Highway St Leonards NSW 2065 Share Registry: Level 2, 60 Carrington Street Sydney NSW 2000 By mail: Registered Office: Level 9, 154 Pacific Highway St Leonards NSW 2065 Australia Share Registry: Computershare Investor Services Pty Limited, GPO Box 242 Melbourne Vic 8060 Australia. By facsimile: (02) CORPORATE REPRESENTATIVES Corporate members must either: Appoint a proxy, as set out above; Appoint a representative; or Appoint an attorney. The instrument of appointment of a representative or attorney must be produced at the meeting. 3. ENTITLEMENT TO VOTE

9 For the purposes of the meeting, the Board has determined that a person's entitlement to vote at the meeting will be the entitlement of that person set out in the register of shareholders as at 7:00 pm (Sydney time) on Wednesday 18 May Accordingly, transactions registered after that time will be disregarded in determining shareholder entitled to attend and vote at the meeting.

10 EXPLANATORY STATEMENT These notes explain or otherwise relate to the resolutions set out in the Notice of General Meeting and should be read in conjunction with the Notice of General Meeting. The Company has announced the acquisition of the Affinity Health business. The acquisition was funded by borrowings including senior debt and bridging facilities. To enable the Company to repay those bridging facilities, the Company has announced the following equity and hybrid raisings: a placement of up to million ordinary shares (the Placement) together with an Accelerated Renounceable Entitlement Offer (AREO) of ordinary shares to current shareholders; and an offer (CARES Offer) of non cumulative, redeemable and convertible preference shares (CARES). The amounts to be raised by the above equity and hybrid raisings will be specified in the Shareholder Update accompanying this Notice. A prospectus for the CARES Offer, which will include the full terms of the CARES and details of the CARES Offer, was lodged with ASIC on or around 19 April Shareholders with an Australian address as at 7.00 p.m. (AEST) on 20 April 2005 (Eligible Shareholders) are eligible for a priority allocation over applicants who apply as members of the general public. The prospectus will be available on the Company's website on the date of lodging and will be despatched to Eligible Shareholders after that date and may be obtained by contacting the CARES Offer Information Line on APPROVAL OF TERMS OF ISSUE OF CONVERTIBLE ADJUSTABLE RATE EQUITY SECURITIES 2. ISSUE OF CONVERTIBLE ADJUSTABLE RATE EQUITY SECURITIES Introduction The Company is proposing to offer CARES which have a non-cumulative dividend entitlement and which, at the option of the Company, are redeemable and convertible preference shares in the Company. CARES will be issued at an issue price of $100 each. The number of CARES to be issued and the amount to be raised will be set out in the Shareholder Update to this Notice. The terms of the CARES are substantially in the form of schedule 2 to this Notice. In relation to any dividends payable otn the CARES, the margin is to be determined pursuant to a bookbuild process described in the CARES Prospectus and will be announced to the market on or about 27 April 2005.

11 It is anticipated that the CARES will be issued and allotted in accordance with the CARES Prospectus on or about 24 May 2005, but in any event the CARES will be issued and allotted no later than 3 months after the date of the General Meeting. Regulatory issues CARES may be issued by the Company if the terms of issue of the CARES are approved by special resolution of shareholders. That approval is sought by way of the special resolution set out in item 1. The detailed terms of the CARES which shareholders are being asked to approve are set out in schedule 2 to this Notice. By way of the resolution referred to in item 2, the Company is also seeking the approval of shareholders to the issue of CARES under ASX Listing Rule 7.1 and for all other purposes. ASX Listing Rule 7.1 contains a general prohibition on a listed company issuing equity securities comprising more than the 15% of its issued share capital in any 12 month period without shareholder approval. For the reasons mentioned in connection with items 3 and 4 below, the Company has no further capacity during the balance of this calendar year to place equity securities without shareholder approval. Accordingly shareholder approval is sought to enable the Company to issue the CARES. Shareholders should note that if shareholders approve the issue of the CARES, no further shareholder approval will be necessary upon conversion of the CARES into ordinary shares. Board recommendation The Board recommends that shareholders vote in favour of both Items 1 and 2. If shareholders do not approve Items 1 and 2, the offer of the CARES will not proceed and the Company will incur ongoing funding costs over and above that which the Company would have incurred if the CARES had been issued. The Board believes the proposed offer of the CARES is in the interests of the Company because it: provides the Company with an attractive source of funding at a low cost relative to ordinary equity; diversifies the Company's funding sources and provides an attractive source of redeemable, subordinated long-term financing; provides the Company with flexibility to convert, repurchase or redeem the CARES at a future date and upon certain events; and offers shareholders of the Company the opportunity to participate in the offer with priority over general applicants for details see prospectus.

12 From the perspective of an ordinary shareholder of the Company, the important issues to consider in relation to an offer of CARES are as follows: Notwithstanding that the dividends payable on CARES are non-cumulative, in the event that the Directors do not pay a dividend on CARES, the Company would be prevented from paying a dividend on shares until such time as two consecutive dividends are paid on CARES. Dividends are non-cumulative and therefore the Company is not required to make up any unpaid dividend in subsequent periods. CARES are not debt instruments. If the Company is wound up, Holders of CARES will rank behind creditors of the Company, but ahead of shares for return of the issue price and the amount of any dividend entitlement which has accrued since the previous dividend payment date, and otherwise do not participate in a winding up. CARES may be converted to shares by the Company on or after 20 October 2010 and at certain other times following specified events. If CARES are converted to shares this may result in the interests of shareholders being diluted. 3. RATIFICATION OF PLACEMENT 4. RATIFICATION OF INSTITUTIONAL PLACEMENT The Company has undertaken the following placements: In December 2004 the Company undertook a placement of 5,442,177 fully paid ordinary shares to domestic and international institutions at $7.35 per share (Item 3). In April 2005 the Company undertook a placement of up to million ordinary shares (Item 4). The actual number of shares, the issue price and the amount raised by this placement are set out in the Shareholder Update accompanying this Notice. The proceeds of the placement referred to in Item 3 were used to provide the Company with additional flexibility and financial capacity to pursue its strategy of acquisitions and greenfield developments in aged care and further investment in enhancements and additional capacity at existing hospital facilities. The proceeds of the placement referred to in Item 4 were used to fund, in part, the acquisition of Affinity Health Limited. These placements represent 15 % of the Company's share capital. As ASX Listing Rule 7.1 contains a general prohibition on a listed company issuing shares comprising more than the 15% of its issued share capital in any 12 month period without shareholder

13 approval, the Company has no further capacity during the balance of this calendar year to place shares without shareholder approval. While the Company has no present plans to raise additional capital by means of a share placement, the Company intends to arrange for the dividend payable in October 2005 and the following three dividends under its Dividend Reinvestment Plan to be underwritten and may, therefore, need to issue shares to the underwriter. To the extent that shareholders do not elect to participate in the Dividend Reinvestment Plan, the Company will be required to issue shares to the underwriter of the Dividend Reinvestment Plan, and it will only be able to do so if shareholder approval is obtained at the time or if shareholders ratify the placements referred to in Items 3 and 4. The Company considers it to be more convenient and cost effective that shareholders ratify the placements now rather than being required to call a further meeting at the time the dividend in October 2005 is declared to approve the issue of shares to the underwriter of the Dividend Reinvestment Plan. Board recommendation The Board recommends that shareholders vote in favour of Items 3 and 4. By doing so there will be no need to seek shareholder approval for the issue of shares to the underwriter in connection with the Company's Dividend Reinvestment Plan at the time the dividends are declared. 5. AMENDMENTS TO THE CONSTITUTION TO PERMIT ISSUE OF PREFERENCE SHARES WITH NON-CUMULATIVE DIVIDEND The Constitution of the Company presently enables the Company to issue preference shares. The preference shares which may currently be issued may be redeemable or nonredeemable, convertible or not convertible, and with a fixed or cumulative dividend. The Board considers that it should have power to issue preference shares with a noncumulative dividend to afford greater flexibility to the Company in raising and managing its capital without requiring a special resolution of shareholders to amend the Constitution or to approve the terms. The proposed amendments to the Constitution allow for that greater flexibility. Specifically the proposed amendments to the Constitution allow for the issue of preference shares, including CARES, with noncumulative dividend entitlements and which contain voting rights in circumstances required by the Listing Rules. A copy of the Company's current Constitution, together with the proposed amendment, is available (free of charge) by contacting the Company's registered office on Level 9, 154 Pacific Highway, St Leonards NSW 2065 or from the Company's website at Board recommendation

14 The Board recommends that shareholders vote in favour of Item PARTICULARS OF FINANCIAL ASSISTANCE The Company has recently acquired the Affinity group of companies as part of its strategy of pursuing acquisition opportunities in the healthcare sector. In connection with that acquisition, the Company has entered into certain bridging and senior debt arrangements, expects to enter into further restructuring of the financing arrangements and proposes to enter into additional security arrangements. The bridging finance and senior debt are already in place, however the restructuring arrangements and provision of additional security include conditions precedent required by the financiers to be satisfied by the Company. The Company has also entered into a non-binding Heads of Agreement with Ironbridge Capital Pty Limited and CVC Asia Pacific Limited, under which the Company proposes to negotiate the divestment of some of the hospitals owned by the recently acquired Affinity group companies. In order to satisfy the conditions precedent to the financing arrangements and Corporations Act requirements relating to the provision of any financial assistance by relevant companies in the Ramsay group, including the companies in the recently acquired Affinity group, the Company is calling a general meeting to approve the giving of any such financial assistance. As required by section 260B(4) of the Corporations Act 2001 (Cth) you are informed that: 6.1 Particulars of financial assistance proposed to be given The particulars of the financial assistance proposed to be given are as follows: The Company, Ramsay Health Care Investments Pty Limited (Ramsay) and certain other Ramsay Group Companies (being the Company and its related bodies corporate) have entered into a senior facilities agreement (Existing Senior Facilities Agreement). To secure (among other things) the obligations of the Ramsay Group Companies under the Existing Senior Facilities Agreement, the following security interests will be granted in favour of the Participants (being the lenders under the senior debt arrangements and the lenders under certain bridging finance arrangements which the Company has entered into in connection with the acquisition of the Affinity group of companies) and others (including the Security Trustee (as defined in the Existing Senior Facilities Agreement)): (i) guarantees and new fixed and floating charges from each of the Ramsay Group Companies (other than the dormant subsidiaries and the members of the Affinity group of companies, including the Affinity companies listed in Schedule 1 to this Notice) over:

15 (A) (B) all property held by it in VIC, ACT, NT or outside Australia; and all future acquired property in any state other than QLD and WA and other land acquired within the next 12 months in NSW and TAS; (ii) a mortgage over the shares acquired directly or indirectly by Ramsay in Affinity Health Holdings Sarl, AH Holdings Sarl and AH Holdings NV (each an overseas incorporated company), (together, the Initial Securities). (c) Subsequently, after an expected initial period of approximately seven weeks, it is anticipated that the financing arrangements under the Existing Senior Facilities Agreement and the bridging finance arrangements will be restructured, which may involve: (i) (ii) (iii) (iv) (v) the subscription by the Participants for securities (whether pursuant to one or more issues of securities), such as redeemable preference shares ( RPS ) in the capital of Ramsay Finance Pty Limited (Ramsay Finance) and /or its subsidiaries for an aggregate subscription price of approximately $1.46 billion; the Ramsay Group Companies entering into internal documents such as intercompany loan arrangements (Internal Documents), including intercompany loans between Ramsay and Ramsay Finance and/or its subsidiaries under which Ramsay Finance and/or its subsidiaries would lend the proceeds of issue of any RPS to Ramsay; Ramsay acquiring from the Participants any RPS issued by Ramsay Finance and/or its subsidiaries to the Participants; the signing of a new senior facilities agreement between some or all of the parties to the Existing Senior Facilities Agreement; and/or the signing of new bridging finance arrangements. (together, Restructure). The Restructure may also use a withholding tax compliant structure under section 128F of the Income Tax Assessment Act 1936 (Cwlth). If the Restructure (if any) does not use such structures, then Ramsay will be required to gross up payments to the Participants to the extent payments are subject to interest withholding tax.

16 (d) (e) (f) (g) (h) (i) If the Restructure is implemented by issuing RPS, pursuant to an agreement or agreements for the purchase of RPS in Ramsay Finance and/or its subsidiaries to be entered into between Ramsay and the Participants, Ramsay would acquire the RPS subscribed for by the Participants for an aggregate purchase price of approximately $1.46 billion (RPS Acquisition Price). If the Restructure is implemented by issuing RPS, the acquisition or acquisitions of RPS by Ramsay would occur on or around the day that the relevant Participants subscribe for RPS to be issued by Ramsay Finance and/or its subsidiaries. The RPS would be fully paid at their time of issue to each Participant. Under the proposed terms of purchase of the RPS, Ramsay may elect to pay the RPS Acquisition Price either immediately or at a later date. If Ramsay elects to pay the RPS Acquisition Price at a later date, Ramsay would be required to pay interest on that RPS Acquisition Price at the rate specified in the proposed terms of the purchase of the RPS and in connection with the Restructure. If the Restructure is implemented by issuing RPS, Ramsay would fund the RPS Acquisition Price in connection with the Restructure, and any interest on it, and make payments in respect of the RPS Acquisition Price and related interest from its own revenues and by entering into the Internal Documents. Regardless of whether or not the Restructure is implemented by the issue of RPS and the use of the proceeds of issue of the RPS as outlined in paragraphs (c) to (g) above or otherwise, the Ramsay Group Companies (including the Affinity group of companies acquired directly or indirectly by Ramsay, including those listed in Schedule 1 to this Notice, (Affinity Companies)) propose to grant security interests over their assets in favour of the Participants in approximately seven weeks (or later in certain circumstances under part of the bridging finance arrangements or, in the case of an Affinity Company incorporated in an overseas jurisdiction, in such longer time period as is necessary for compliance with the laws of that jurisdiction), including full fixed and floating charges, real property mortgages and guarantees (New Securities). Changes to the existing financial commitments of the Affinity Companies or granting of security may also be provided by the Affinity Companies prior to, on or after that time as part of the restructuring of the existing financing arrangements of the Affinity Companies. Ramsay Finance and/or its subsidiaries may:

17 (i) (ii) (iii) (iv) make loans or otherwise provide funding to Ramsay (either directly or indirectly) by any means, including to enable Ramsay to pay any amount (in whole or part) payable by Ramsay under the Existing Senior Facilities Agreement or in connection with the Restructure (if implemented) or resolve to do so; redeem, buy back or cancel any or all of the issued RPS in accordance with their terms of issue or resolve to do so (in which event amounts will be payable by Ramsay Finance and/or its subsidiaries to Ramsay or others, which amounts may be paid by way of set off), or issue securities to fund any payment by Ramsay Finance and/or its subsidiaries of any dividend or other distribution or any redemption proceeds or payment, repayment or refinancing of or in connection with RPS or resolve to do so; make payments to Ramsay or any other person under or in connection with the Existing Senior Facilities Agreement or in connection with the Restructure (if implemented) or any obligation or undertaking to make any such payment, including by set off; and enter into any intra group documents or arrangements with Ramsay from time to time, including in connection with the issue, reissue, redemption or other payment, distribution or dealing with or in connection with RPS, and any funds made available to Ramsay by Ramsay Finance and/or its subsidiaries may in turn be applied by Ramsay (in whole or in part) towards the payment of the RPS Acquisition Price together with interest. (j) On the date of acquisition of the Affinity Companies, the Company entered into a non-binding Heads of Agreement with Ironbridge Capital Pty Limited and CVC Asia Pacific Limited (Buyers) (Heads of Agreement) under which the parties will within eight weeks of the date of the document negotiate exclusively in good faith for the divestment by Ramsay of a number of hospitals directly or indirectly owned and operated by the Affinity Companies (Transfer Hospitals). The relevant transaction documents to be negotiated are: (i) an umbrella divestment deed whereby the Company agrees to procure that its relevant wholly owned subsidiaries will execute divestment asset sale agreements and a divestment share sale agreement;

18 (ii) (iii) (iv) a divestment share sale agreement which will govern the sale of the shares in the company or companies which own the Ringwood, Cotham, VRC North, VRC East, Lady Davidson and Knox hospitals; divestment asset sale agreements which will govern the sale of assets which comprise of the Prince of Wales, Melbourne Private, North West, The Hills, The Mount, Nepean, JF Moreland and Como hospitals; and a corporate services agreement for the provision of corporate services by the Company, (together, Divestment Agreements). The proposed purchase price for the Transfer Hospitals is in the region of $406 million on a cash free and debt free basis. Completion will occur no later than four months after satisfaction of the conditions precedent under the Divestment Agreements (including the grant of regulatory approvals in respect of certain of the Transfer Hospitals). If the conditions precedent (including completion of the acquisition of the Affinity Companies, the approval of funding by the Buyers financiers and the approval by the investment committees of the Buyers) are not satisfied within 3 months of the date of the Heads of Agreement, the Heads of Agreement will terminate. This period may be extended by agreement. In the event that the relevant regulatory consents are not obtained within one year of the date of the Heads of Agreement, either party may terminate the Divestment Agreements. This period may be extended by agreement. 6.2 Reasons for the proposal for financial assistance It is a condition of the provision of financial accommodation under the Existing Senior Facilities Agreement and of the terms of any arrangements in connection with the Restructure (if implemented) that Ramsay Finance and/or its subsidiaries and, subject to shareholder approval, each Affinity Company grant the New Securities. Failure to do this will be an event of default under the Existing Senior Facilities Agreement. The provision of intercompany loans by Ramsay Finance and/or its subsidiaries to Ramsay is necessary to fund the Restructure, if implemented through the issue of RPS. The disposal of certain hospitals pursuant to the Heads of Agreement is the Company s preferred option to achieve restructuring of the group post acquisition to satisfy certain strategic objectives and regulatory requirements. The transfer of shares or assets by certain of the Affinity Companies on completion of the Divestment Agreements and the resulting purchase price payments may constitute financial assistance of the Company s acquisition of the Affinity Companies.

19 6.3 Effect of the proposed financial assistance on the Company and the other Ramsay Group Companies Under the New Securities, the Ramsay Group Companies will (among other things) assume a joint and several liability to the providers of security for the obligations agreed to under the Existing Senior Facilities Agreement and the bridging finance arrangements and, if implemented, in connection with the Restructure. If Ramsay does not comply with its obligations under the terms of the Existing Senior Facilities Agreement, the bridging finance arrangements and, if implemented, in connection with the Restructure or if certain other events occur then: the Ramsay Group Companies will be obliged to meet the obligations or other liabilities, with the consequent reduction in shareholders funds of the amount of money they pay under obligations agreed to under the Existing Senior Facilities Agreement, the bridging finance arrangements and, if implemented, in connection with the Restructure less the money they can recover from co-guarantors or borrowers; and the holders of the security will be entitled to enforce the New Securities and apply the proceeds of enforcement in satisfaction of amounts owing by Ramsay and others to the Participants and others. If the Divestment Agreements are agreed and completed, in exchange for a sale price of in the region of $406 million, the Ramsay Group Companies would cease to own the Transfer Hospitals, which it acquired as part of the acquisition of the Affinity Companies. 6.4 Advantages of the proposed financial assistance The potential benefits for the Ramsay Group Companies as a result of Ramsay Finance and/or its subsidiaries and the Affinity Companies giving financial assistance in the manner contemplated in this Explanatory Statement are as follows: the Ramsay Group Companies will continue to have access to the financial accommodation made available under the Existing Senior Facilities Agreement and, if implemented, in connection with the Restructure; if the Restructure is implemented, Ramsay would have access to the financial accommodation made available in connection with the Restructure;

20 (c) (d) if the Divestment Agreements are agreed and completed as contemplated by the Heads of Agreement, the Company would have access to the purchase price received under the Divestment Agreements to pay down part of the debt incurred under the financing arrangements entered into in connection with the acquisition of the Affinity Companies; and the structures which are being used: (i) (ii) will help ensure that the funds obtained reach the appropriate Ramsay Group Companies; give the Ramsay Group Companies maximum flexibility in obtaining funding in the future. 6.5 Consideration by Directors Reasonable Grounds The directors of the Company have considered the giving of any financial assistance referred to above and have concluded that: (i) (ii) there are reasonable grounds to believe that it is in the best interests of the Company, Ramsay, Ramsay Finance, the other Ramsay Group Companies (including each of the Affinity Companies) and their respective shareholders; and they are not aware of any reason to believe it would materially prejudice the solvency of the Ramsay Group Companies, or their ability to pay their creditors (including the continuing ability of Ramsay to meet its obligations under the terms of the Existing Senior Facilities Agreement, the bridging finance arrangements and, if implemented, in connection with the Restructure). Financial assistance approval The Company, Ramsay Finance and the Affinity Companies are seeking approval from the Company s shareholders under section 260B(2) of the Corporations Act. It is a condition of the provision of financial accommodation under the Existing Senior Facilities Agreement and (if implemented) in connection with the Restructure, and expected to be a condition of the Divestment Agreements, that there be no financial assistance under section 260A of the Corporations Act. Failure to obtain such approval may be or lead to an event of default under the Existing Senior Facilities Agreement and may prevent completion of the Divestment Agreements on the terms contemplated by the Heads of Agreement.

21 Board recommendation The Board recommends that shareholders vote in favour of Item 6.

22 SCHEDULE 1 AFFINITY GROUP COMPANIES: Affinity Group Companies ABN/ACN Affinity Health Nominees Pty Limited ACN Affinity Health Holdings Australia Pty Ltd ABN Affinity Health Finance Australia Pty Limited ABN Affinity Health Limited ABN Votraint No 665 Pty Ltd ABN Votraint No 664 Pty Ltd ABN Australian Medical Enterprises Limited ABN Relkban Pty Limited ABN Hospitals of Australia Limited ABN Relkmet Pty Limited ABN C&P Hospitals Holdings Pty Limited ABN Affinity Health Foundation Pty Ltd ACN AME Hospitals Pty Ltd ACN Victoria House Holdings Pty Ltd ABN Manningham Day Procedure Centre Pty Ltd ACN Logan Hospital Pty Limited ABN Attadale Hospital Property Pty Ltd ABN AME Properties Pty Ltd ACN Jamison Private Hospital Property Pty Ltd ABN Glengarry Hospital Property Pty Ltd ABN AME Superannuation Pty Ltd ABN Joondalup Hospital Pty Limited ABN Port Macquarie Hospital Pty Limited ABN Noosa Privatised Hospital Pty Limited ABN Melbourne Hospital Pty Limited ABN Armidale Hospital Pty Limited ABN Mayne Properties Pty Ltd ABN AMNL Pty Limited ABN Hallcraft Pty Limited ABN Rannes Pty Limited ACN Hadassah Pty Ltd ACN Caboolture Hospital Pty Limited ABN Affinity Health (FP) Pty Limited ACN P O W Hospital Pty Limited ABN HCoA Hospital Holdings (Australia) Pty Ltd ABN Hospital Corporation Australia Pty Ltd ABN HCoA Operations (Australia) Pty Ltd ABN Pruinosa Pty Ltd ABN Australian Hospital Care Limited ABN Australian Hospital Care Retirement Plan Pty ABN

23 Ltd Dabuvu Pty Ltd ABN Malahini Pty Ltd ABN HCA Management Pty Limited ABN HOAIF Pty Limited ABN CRPH Pty Ltd ABN Hospital Developments Pty Ltd ABN Tilemo Pty Ltd ABN Hospital Affiliates of Australia Pty Ltd ABN PMPH Pty Ltd ABN Australian Hospital Care (Knox) Pty Ltd ABN Australian Hospital Care (Northpark) Pty Ltd ABN Australian Hospital Care (Dorset) Pty Ltd ABN Australian Hospital Care Investments Pty Ltd ABN AHC Radiology Pty Ltd ABN Australian Hospital Care (Masada) Pty Ltd ABN Australian Hospital Care (Como) Pty Ltd ABN AHC Tilbox Pty Ltd ABN Australian Hospital Care (Latrobe) Pty Ltd ABN Rehabilitation Holdings Pty Ltd ABN Australian Hospital Care 1988 Pty Ltd ABN AHC Foundation Pty Ltd ABN Health Technologies Pty Ltd ABN Australian Hospital Care (Lady Davidson) Pty ABN Ltd The Victorian Rehabilitation Centre Pty Ltd ABN Australian Hospital Care (MPH) Pty Ltd ABN Australian Hospital Care (Pindara) Pty Ltd ABN Australian Hospital Care (The Avenue) Pty Ltd ABN Australian Hospital Care (Spare) Pty Ltd ABN Australian Hospital Care (Ringwood) Pty Ltd ABN Australian Hospital Care (MSH) Pty Ltd ABN Australian Hospital Care (Allamanda) Pty Ltd ABN ehealth Technologies Ltd ACN PT Affinity Health Indonesia

24 SCHEDULE 2 TERMS OF ISSUE OF CARES The terms used in these Terms of Issue are set out in clause 8 below. References to clauses and paragraphs are to clauses and paragraphs of these Terms of Issue. 1. FACE VALUE The issue price of each CARES will be $ DIVIDENDS 2.1 Dividends Subject to these terms, including without limitation clauses 2.2 and 2.3, the Holder of each CARES is entitled to a Dividend in respect of each Dividend Period (the Dividend Entitlement) calculated in accordance with the following formula: Dividend = DR x $100 x N 365 where: N is the number of days in that Dividend Period. DR is the Dividend Rate for that Dividend Period calculated in accordance with the following formula: (MR + Margin) x (1-T) where: MR is the Market Rate for that Dividend Period. Margin is the Margin for the Dividend Period. T is the prevailing Australian corporate tax rate applicable on the Allotment Date expressed as a decimal, and which will be taken to be Change in Corporate Tax Rate If, on a Dividend Payment Date, the Australian corporate tax rate applicable to the franking account of the Company from which the Dividend will be franked (Ti) differs from the Australian corporate tax rate on the Allotment Date (T), the Dividend Entitlement will be adjusted in accordance with the following formula:

25 Dividend Entitlement x (1 Ti) (1 T) where: Ti is the Australian corporate tax rate applicable to the franking account of the Company from which the Dividend will be franked at the Dividend Payment Date, expressed as a decimal; and T has the same meaning as in clause Fully franked dividend If any Dividend is not franked to 100% under Part 3-6 of the Tax Act (or any provisions that revise or replace those Parts), the Dividend will be adjusted in accordance with the following formula: where: Dividend 1 [Ti x (1 f)] Ti has the same meaning as in clause 2.2; and f is the Franking Rate applicable to that Dividend. 2.4 Payment of Dividend The payment of a Dividend and any Optional Dividend is subject to: the Directors, at their discretion, declaring the Dividend or Optional Dividend to be payable or otherwise resolving to pay the Dividend or Optional Dividend as the case may be; and there being funds legally available for the payment of a Dividend or an Optional Dividend. 2.5 Non-cumulative Dividends The entitlement of a Holder to the payment of a Dividend is non-cumulative so that if because of the provisions of clause 2.4, a Dividend is not paid in respect of a Dividend Period or the Dividend paid in respect of a Dividend Period is less than the Dividend Entitlement for that Dividend Period, the Holder has no claim in respect of that Dividend Entitlement or the balance of that Dividend Entitlement.

26 2.6 Calculation of dividends All calculations of Dividends will be rounded to four decimal places. For the purposes of making any Dividend payment in respect of a Holder's total holding of CARES, any fraction of a cent will be disregarded. 2.7 Dividend Payment Dates Subject to this clause 2, Dividends will be payable in arrears on: 20 October 2005 and thereafter on 20 April and 20 October in each year until the CARES are converted, redeemed, bought back, or cancelled; and the conversion or exchange date determined under clause Record Dates (c) A Dividend is only payable to those persons registered as Holders on the Record Date for that Dividend. An Optional Dividend is only payable to those persons registered as Holders on the Record Date for that Optional Dividend. In the case of the Dividend payable under clause 2.7 the Dividend is only payable to those Holders whose CARES are converted or exchanged. 2.9 Withholding Obligations The Company will be entitled to deduct from any Dividend or Optional Dividend payable to a Holder the amount of any withholding or other tax, duty or levy required by law to be deducted in respect of such amount. If any such deduction has been made and the amount of the deduction accounted for by the Company to the relevant revenue authority and the balance of the amount payable has been paid to the Holder concerned, then the full amount payable to such Holder is deemed to have been duly paid and satisfied by the Company. The Company must pay the full amount required to be deducted to the relevant revenue authority within the time allowed for such payment Restrictions in case of non-payment If the Dividend Entitlement on CARES in respect of a Dividend Period is not paid or otherwise satisfied in full within 20 Business Days after the Dividend Payment Date for that Dividend Period, the Company must not without approval of a Special Resolution passed at a separate meeting of Holders:

27 declare or pay a cash dividend or make any distribution on any issued share in the Company over which CARES rank in priority for participation in profits; or redeem, reduce, cancel, buyback or acquire for any consideration any issued share in the Company (other than CARES), until such time as: (c) (d) (e) a Dividend is paid in respect of two consecutive Dividend Periods equal to the Dividend Entitlements for those Dividend Periods; or an Optional Dividend is paid to Holders in accordance with clause 2.11; or all CARES have been converted, redeemed, bought back or cancelled Payment of an Optional Dividend Without derogating from the fact that the Dividend Entitlement is non-cumulative and that the Directors are under no obligation to declare or resolve to pay a Dividend, if at any time: the Directors declare, and fix a date for payment of, a Dividend other than a Dividend payable in respect of a Dividend Period under clause 2.7; and the amount of that Dividend equals the aggregate amount of the Shortfall in respect of the two immediately preceding Dividend Periods, then once that Dividend (the Optional Dividend) is paid it will be treated as if it had been paid for the purposes of clause 2.10 so that the restrictions on the Company in clause 2.10 and shall no longer apply. 3. CONVERSION AND EXCHANGE 3.1 Meaning of conversion Each CARES confers all of the rights attaching to one fully paid Ordinary Share but these rights do not take effect until 5.00pm Sydney time on the conversion date for that Ordinary Share. At that time: all other rights and restrictions conferred on CARES under these Terms of Issue will no longer have effect (except for rights relating to a Dividend payable on or before the conversion date and any rights to any allotment of additional Ordinary Shares under clause 3.6 which will subsist); and