EXHIBIT 3.9
Exhibit A to Preferred
Stock Purchase Agreement
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CERTIFICATE OF DESIGNATIONS
OF
PREFERRED STOCK
OF
RAMSAY HEALTH CARE, INC.
Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware
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The undersigned, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President of Ramsay Health Care, Inc.,
a corporation organized and existing under the General Corporation Law of the
State of Delaware (the "Corporation"), on behalf of the Corporation and in
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accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors of the
Corporation by Section 2 of Paragraph (4) of the Amended and Restated
Certificate of Incorporation of the Corporation, and in accordance with the
provisions of Section 151(g) of the General Corporation Law of the State of
Delaware, on September 29, 1997, the Board of Directors of the Corporation
authorized and designated 100,000 of the authorized shares of the Class B
Preferred Stock, $1.00 par value, of the Corporation as Class B Preferred Stock,
Series 1997 and adopted the following resolution in connection therewith:
RESOLVED, that the Board of Directors of the Corporation, in accordance
with Section 151(g) of the General Corporation Law of the State of Delaware and
Section 2 of Paragraph (4) of the Corporation's Amended and Restated Certificate
of Incorporation, hereby authorizes and designates 100,000 shares of Class B
Preferred Stock, par value $1.00 per share, as Class B Preferred Stock, Series
1997 (the "Series 1997 Preferred Stock"), which Series 1997 Preferred Stock
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shall be described and limited as follows:
(a) Definitions. For purposes of this Designation, the following
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definitions shall apply:
"Additional Shares of Common Stock" shall mean all shares of Common Stock,
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par value $0.01 per share (the "Common Stock"), of the Corporation issued
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subsequent to the Issue Date (or, pursuant to subparagraph (f)(v), deemed to be
issued subsequent to the Issue Date) by the Corporation, other than shares of
Common Stock issued or issuable (i) upon conversion of shares of the
Corporation's Class B Preferred Stock, Series C (the "Series C Preferred
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Stock"), shares of the Corporation's Class B Preferred Stock, Series 1996 (the
"Series 1996 Preferred Stock") and shares of Series 1997 Preferred Stock; (ii)
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pursuant to any Options issued under the 1990, 1991 and 1993 Stock Option Plans
and the 1995 and 1996 Long Term Incentive Plans of the Corporation as in effect
on the Issue Date; (iii) pursuant to warrants and other rights to acquire Common
Stock outstanding on the Issue Date and identified on Schedule 3.05 to the
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Preferred Stock Purchase Agreement dated as of the Issue Date between the
Corporation and General Electric Capital Corporation; and (iv) pursuant to the
provisions of Section 3.04 of the Subordinated Note Purchase Agreement dated as
of the Issue Date among the Corporation, General Electric Capital Corporation
and ▇▇▇▇ ▇▇▇▇▇▇ Holdings Pty. Limited or pursuant to the terms and conditions of
any provision of comparable purpose or effect in respect of any issuance of
subordinated indebtedness to a Person other than a Ramsay Affiliate, the
proceeds of which are used to repay in full the indebtedness incurred under such
Subordinated Note Purchase Agreement.
"Applicable Redemption Percentage" shall mean, in the case of a redemption
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of Series 1997 Preferred Stock pursuant to subparagraphs (e)(i) or (iii) hereof
at any time during any Redemption Period set forth below, the Applicable
Redemption Percentage set forth opposite such period:
Applicable Redemption
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Redemption Period Percentage
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On or after September 30, 1997 but
before September 30, 2001 105%
On or after September 30, 2001 but
before September 30, 2002 104.286%
On or after September 30, 2002 but
before September 30, 2003 103.571%
On or after September 30, 2003 but
before September 30, 2004 102.857%
On or after September 30, 2004 but
before September 30, 2005 102.143%
On or after September 30, 2005 but
before September 30, 2006 101.429%
On or after September 30, 2006 but
before September 30, 2007 100.714%
"Board of Directors" shall mean the Board of Directors of the Corporation.
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"Change of Control" shall mean any of the following: (a) any person or
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group of persons (within the meaning of the Exchange Act), other than Ramsay
Affiliates, shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the SEC under the Exchange Act) of issued
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and outstanding shares of capital stock of Borrower having the right to cast 30%
or more of the votes for the election of directors of Borrower under ordinary
circumstances; (b) Ramsay Affiliates shall fail to hold beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the SEC under the Exchange Act)
of that number of the issued and outstanding shares of capital stock of Borrower
having the right to cast at least 4,000,000 votes for the election of directors
of Borrower under ordinary circumstances (such number to be appropriately
adjusted for stock splits, reverse stock splits and similar events involving
such capital stock); or (c) during any period of twelve consecutive calendar
months, individuals who at the beginning of such period constituted the board of
directors of Borrower (together with any new directors whose election by the
board of directors of Borrower or whose nomination for election by the
stockholders of Borrower was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose elections or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office.
"Common Stock Outstanding" shall mean, on any date of determination, the
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number of shares of Common Stock issued and outstanding on such date, plus the
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number of shares of Common Stock issuable on such date upon exercise of all
outstanding Options and conversion of all outstanding Convertible Securities,
whether or not then exercisable or convertible, minus the number of shares of
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Common Stock which the aggregate consideration received by the Corporation for
the total number of shares of Common Stock issuable in respect of such Options
outstanding on such date would purchase at the Conversion Price in effect on
such date.
"Conversion Price" shall mean, initially, $6.33 per share, as such
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Conversion Price may be adjusted from time to time as provided in paragraph (f).
"Convertible Securities" shall mean any evidence of indebtedness, shares or
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other securities convertible into or exchangeable for shares of Common Stock.
"Effective Price" of Additional Shares of Common Stock shall mean the
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quotient determined by dividing the total number of Additional Shares of Common
Stock issued or sold, or deemed to have been issued or sold by the Corporation
under subparagraph (f)(v), into the aggregate consideration received or deemed
to have been received by the Corporation for such issue under subparagraph
(f)(v).
"Issue Date" shall mean the date of issuance of the shares of Series 1997
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Preferred Stock hereby authorized.
"Market Price" shall mean, for any day, the last sale price regular way,
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or, in case no sale takes place on any such day, the average of the closing bid
and asked prices regular way, for the Common Stock in either case on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading, or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, the last sale price for the shares
of Common Stock on the Nasdaq National Market or the Nasdaq SmallCap Market,
whichever is applicable, or, if such shares
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shall not be included in such markets, the closing bid price in the over-the-
counter market, in each such case averaged over a period of 20 consecutive
business days ending immediately prior to the day as of which the Market Price
is being determined. If at any time the shares of Common Stock are not listed on
any national securities exchange, included in the Nasdaq National Market or the
Nasdaq SmallCap Market or quoted in the over-the-counter market, the Market
Price of the shares of Common Stock shall, subject to the provisions of
subparagraph (f)(viii) below, be deemed to be the higher of (i) the book value
thereof, as determined in accordance with generally accepted accounting
principles consistent with those then being applied by the Corporation by any
firm of independent certified public accountants (which may be the regular
auditors of the Corporation) of recognized national standing selected by the
Board of Directors of the Corporation, as of the last day of the last calendar
month ending prior to the date as of which the determination is to be made, and
(ii) the fair value thereof, as determined in good faith by an independent
brokerage firm of recognized national standing selected by the Board of
Directors of the Corporation, as of a date which is within 15 days preceding the
date as of which the determination is to be made.
"Options" shall mean rights, options or warrants to subscribe for, purchase
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or otherwise acquire shares of Common Stock or Convertible Securities.
"Person" shall mean any individual, sole proprietorship, partnership,
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limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including any instrumentality, division, agency, body or department thereof).
"Ramsay Affiliates" shall mean Persons, exclusive of the Corporation and
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its Subsidiaries, who directly, or indirectly through one or more
intermediaries, are controlled by ▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual with an address
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇. As used in this
paragraph, the term "control" (including the term "controlled by") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Persons, whether through stock
ownership, membership, partnership, voting rights, governing boards, committees,
division or other bodies with one or more common members, directors, trustees,
officers or any managers or otherwise.
"Redemption Price" shall mean $25.00 per share (as such number shall be
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appropriately adjusted for stock splits, reverse stock splits or other similar
events involving the Series 1997 Preferred Stock.
"Required Holders" shall mean holders of Series 1997 Preferred Stock
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holding, in the aggregate, more than 50% of the issued and outstanding shares of
Series 1997 Preferred Stock at any time.
"Sale of the Company" shall mean (i) the sale by the shareholders of the
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Corporation in one or more related transactions of shares of capital stock of
the Corporation then issued and outstanding (including, without limitation,
pursuant to a tender offer for such shares) representing a majority of
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the total number of votes eligible to be cast by all holders of the
Corporation's capital stock for the election of directors of the Corporation
under ordinary circumstances; (ii) the merger or consolidation of the
Corporation with or into any other Person (other than a merger in which the
Corporation is the corporation surviving the merger); (iii) the sale by the
Corporation or any of its Subsidiaries of the capital stock of one or more of
its Subsidiaries, the merger of one or more of the Corporation's Subsidiaries
with and into any Person other than a direct or indirect wholly-owned Subsidiary
of the Corporation or the sale by the Corporation or any of its Subsidiaries of
other assets of the Corporation or any of its Subsidiaries, in one or more
transactions, whether or not related, involving capital stock or assets
representing or aggregating 50% or more of the consolidated book value of the
Corporation's assets as of the Issue Date; or (iv) any recapitalization of the
Corporation shall occur pursuant to which Ramsay Affiliates shall have acquired
beneficial ownership of issued and outstanding shares of capital stock of the
Corporation having the right to cast more than 66-2/3% of the total number of
votes in an election of directors of the Corporation under ordinary
circumstances.
(b) Dividend Rights. From and after the issuance of the Series 1997
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Preferred Stock, the holders of outstanding Series 1997 Preferred Stock shall be
entitled to receive, and shall be paid, when and as declared by the Board of
Directors, out of funds legally available therefor, cumulative cash dividends at
an annual rate of $2.25 per share, payable in arrears quarterly on January 15,
April 15, July 15 and October 15, to stockholders of record on a date not more
than 20 days prior to the date on which such cash dividends are payable, said
dividends to commence accrual on the date of issuance of the applicable shares.
In the event that the Corporation fails to declare and pay quarterly dividends
in the full amount provided for herein on any dividend payment date specified
above, then (i) the annual rate at which such dividends shall accrue and be
payable hereunder shall increase to $2.75 per share and (ii) additional
dividends, in an amount equal to the accrued and unpaid dividends on each share
of Series 1997 Preferred Stock multiplied by eleven percent (11%) per annum,
shall accrue from and after such dividend payment and be payable with respect to
each share of Series 1997 Preferred Stock until all accrued and unpaid dividends
shall have been paid. Any reference herein to accrued dividends shall include
the additional dividends payable with respect to the Series 1997 Preferred Stock
pursuant to the preceding sentence. Such dividends shall be prior and in
preference to any declaration of payment of any dividend on any other existing
or future class or series of capital stock of the Corporation, including without
limitation, the Common Stock, the Class A Preferred Stock, par value $1.00 per
share (the "Class A Preferred Stock"), of the Corporation, the Series 1996
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Preferred Stock and the Class B Preferred Stock, Series 1997-A of the
Corporation (the "Series 1997-A Preferred Stock") but shall rank pari passu in
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right of payment with any declaration of payment of dividends on the Series C
Preferred Stock. Such dividends in respect of the Series 1997 Preferred Stock
shall be cumulative and shall accrue whether or not declared by the Board of
Directors. No cash dividends shall be paid with respect to any other existing
or future class or series of capital stock of the Corporation, including without
limitation, the Class A Preferred Stock, the Series 1996 Preferred Stock, the
Series 1997-A Preferred Stock and the Common Stock, but other than the Series C
Preferred Stock, until all dividends accrued on any outstanding shares of the
Series 1997 Preferred Stock, whether or not declared, have been set apart and
fully paid, and no cash dividends shall be paid with respect to the Series C
Preferred Stock unless, concurrently
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therewith, dividends are paid to the same extent on the Series 1997 Preferred
Stock. No accumulation of dividends on the Series 1997 Preferred Stock shall
bear interest.
(c) Liquidation Rights. In the event of liquidation, dissolution or
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winding up of the Corporation, whether voluntary or involuntary, the holders of
the Series 1997 Preferred Stock, by reason of their ownership thereof, shall be
entitled to receive in exchange for and in redemption of each share of Series
1997 Preferred Stock held, prior and in preference to any distribution of any of
the assets or surplus funds of the Corporation to the holders of any other
existing or future class or series of capital stock of the Corporation,
including without limitation, the Common Stock, the Class A Preferred Stock, the
Series C Preferred Stock, the Series 1996 Preferred Stock and the Series 1997-A
Preferred Stock, an amount equal to the Redemption Price, multiplied by the
number of shares held, plus all accrued but unpaid dividends, whether or not
declared, on each such share. All of the preferential amounts to be paid to the
holders of the Series 1997 Preferred Stock under this paragraph (c) shall be
paid or set apart for payment before the payment or setting apart for payment of
any amount for, or the distribution of any assets or surplus funds of the
Corporation to, the holders of any other existing or future class or series of
capital stock of the Corporation, including without limitation, the Common
Stock, the Class A Preferred Stock, the Series C Preferred Stock, the Series
1996 Preferred Stock and the Series 1997-A Preferred Stock, in connection with
such liquidation, dissolution or winding up, whether voluntary or involuntary.
If the assets or surplus funds to be distributed to the holders of the Series
1997 Preferred Stock are insufficient to permit the payment to such holders of
their full preferential amount, the assets and surplus funds legally available
for distribution shall be distributed ratably among the holders of the Series
1997 Preferred Stock in proportion to the full preferential amount each such
holder is otherwise entitled to receive. After the payment or distribution to
the holders of the Series 1997 Preferred Stock of the full preferential amounts
aforesaid, the holders of the Common Stock, Class A Preferred Stock, Series C
Preferred Stock, Series 1996 Preferred Stock and the Series 1997-A Preferred
Stock then outstanding shall be entitled to receive all the remaining assets of
the Corporation, in such order of priority as each shall be entitled pursuant to
the Amended and Restated Certificate of Incorporation of the Corporation or the
Certificate of Designations pursuant to which each was authorized and
designated. Neither the consolidation nor the merger of the Corporation with or
into any other corporation, nor any sale, lease, exchange or conveyance of all
or any part of the property, assets or business of the Corporation shall be
deemed to be a liquidation, dissolution or winding-up of the Corporation within
the meaning of this paragraph (c) unless any such event or occurrence is deemed
to be a liquidation, dissolution or winding-up of the Corporation for the
purposes of the comparable provisions of either of the respective Certificates
of Designations authorizing and designating the Corporation's Series C Preferred
Stock, Series 1996 Preferred Stock and the Series 1997-A Preferred Stock.
(d) Voting Rights. The holders of the Series 1997 Preferred Stock shall
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not be entitled to any voting rights except as hereinafter provided in paragraph
(g) or as otherwise provided by law.
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(e) Redemption.
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(i) Optional Redemption by the Corporation. All of the issued and
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outstanding shares of Series 1997 Preferred Stock shall be redeemable by
the Corporation, at the option of the Corporation, in whole or in part, at
any time on or after the third anniversary of the Issue Date, up to but not
including the tenth anniversary of the Issue Date, at a redemption price
equal to the Redemption Price, multiplied by the number of shares held,
multiplied by the Applicable Redemption Percentage, plus all accrued but
unpaid dividends thereon, whether or not declared, through the date of
redemption.
(ii) Mandatory Redemption by the Corporation. All of the issued and
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outstanding shares of Series 1997 Preferred Stock shall be redeemed by the
Corporation on the tenth anniversary of the Issue Date, if not sooner
redeemed pursuant to any other provision hereof, at a redemption price
equal to the Redemption Price multiplied by the number of shares held, plus
all accrued but unpaid dividends, whether or not declared, through the date
of redemption.
(iii) Mandatory Redemption Upon Change of Control. All of the issued
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and outstanding shares of Series 1997 Preferred Stock shall be redeemable
by the Corporation, at the option of the holders thereof, in whole or in
part, at any time on or after a Change of Control or a Sale of the Company,
at a redemption price equal to the Redemption Price multiplied by the
number of shares held, multiplied by the Applicable Redemption Percentage,
plus all accrued and unpaid dividends thereon, whether or not declared,
through the date of redemption.
(iv) Certain Limitations. If the funds of the Corporation legally
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available for redemption of the Series 1997 Preferred Stock are
insufficient to allow the Corporation to redeem the total number of shares
of Series 1997 Preferred Stock required to be redeemed pursuant to this
paragraph (e), or if applicable law prohibits such redemption, (A) the
Corporation shall use its best efforts to cause such funds to become
available in any manner permitted by Sections 154 and 244 of the Delaware
General Corporation Law, as amended, or any comparable provisions of any
succeeding law, and (B) the holders of shares of Series 1997 Preferred
Stock shall share ratably in all funds not so restricted and legally
available for redemption of such shares. Any shares of Series 1997
Preferred Stock not so redeemed shall remain outstanding and entitled to
all rights and preferences herein, provided that the Corporation shall
immediately redeem any and all such outstanding shares at such time and to
the extent that the Corporation is not restricted from doing so and has
funds legally available therefor.
(v) Notice to Holders. The Corporation shall give notice to each
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holder of Series 1997 Preferred Stock (A) of any redemption pursuant to
subparagraph (e)(i) at least 30 days prior to the date the Corporation
proposes to redeem all or any part of the outstanding shares of Series 1997
Preferred Stock, specifying the number of shares of Series 1997 Preferred
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Stock that the Corporation is calling for redemption and the date fixed for
redemption thereof, and (B) of any Change of Control giving the holders of
shares of Series 1997 Preferred Stock the right to require redemption of
the Series 1997 Preferred Stock pursuant to subparagraph (e)(iii), as soon
as is reasonably practicable before the occurrence thereof, specifying in
reasonable detail the nature thereof and the terms and conditions thereof.
Upon receipt of a notice given pursuant to clause (B) of this subparagraph
(e)(v), each holder of Series 1997 Preferred Stock shall be entitled, at
its option, by giving written notice to the Corporation of such election,
to require the Corporation to redeem all or any part of the outstanding
shares of Series 1997 Preferred Stock held by such holder, on the date such
Change of Control is effected or on any subsequent date as shall be fixed
by such holder in such notice. Each such notice given pursuant to this
subparagraph (e)(v) shall be given by registered mail, return receipt
requested, postage prepaid, shall be effective upon receipt, and shall be
addressed to the Corporation at its principal place of business and to the
holders in accordance with paragraph (h) below.
(vi) Closing. On any date fixed for redemption pursuant to this
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paragraph (e), the Corporation shall pay to each holder of Series 1997
Preferred Stock an amount in cash equal to the aggregate redemption price
for such holder's shares, as specified herein, by wire transfer of
immediately available funds to such account as is designated by such
holder, upon surrender of the certificates representing the shares so
redeemed (properly endorsed or assigned for transfer, if required by the
Corporation). If, on or before the date fixed for redemption, the funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds, for the exclusive benefit of the
holders of the shares of Series 1997 Preferred Stock so called for
redemption, then, on the date fixed for redemption (unless the Corporation
shall default in the payment of the redemption price specified herein),
notwithstanding that any certificates representing the shares of Series
1997 Preferred Stock so called for redemption shall not have been
surrendered for cancellation: (A) the shares of Series 1997 Preferred Stock
represented thereby shall no longer be deemed outstanding, (B) the right
to receive dividends on them shall cease to accrue, and (C) all other
rights with respect to such shares of Series 1997 Preferred Stock shall
forthwith cease and terminate, except the right of each such holder to
receive the amount payable to such holder on such date upon such
redemption, without interest.
(f) Conversion. The holders of the Series 1997 Preferred Stock shall have
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conversion rights as follows:
(i) Right to Convert.
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(A) Each share of Series 1997 Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after
the date of issuance of such share at the office of the Corporation of
or any transfer agent for the Series 1997 Preferred Stock, into that
number of fully paid and nonassessable shares of Common Stock that
results from dividing the Conversion Price per share in effect at
conversion into $25.00 and
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multiplying the quotient obtained by the number of shares of Series
1997 Preferred Stock being converted.
(B) No fractional shares of Common Stock shall be issued upon
conversion of shares of Series 1997 Preferred Stock and if any shares
of Series 1997 Preferred Stock surrendered for conversion by a holder,
in the aggregate, for conversion would otherwise result in a
fractional share of Common Stock, then such fractional share shall be
redeemed by the Corporation at the then effective Conversion Price per
share, payable as promptly as possible when funds are legally
available therefor.
(ii) Mechanics of Conversion. Before any holder of shares of Series
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1997 Preferred Stock shall be entitled to convert such shares into shares
of Common Stock, such holder shall surrender the certificate or
certificates therefor, duly endorsed and accompanied by properly executed
stock powers, at the office of the Corporation or of any transfer agent for
the Series 1997 Preferred Stock, and shall give written notice to the
Corporation at such office of the name or names in which such holder wishes
the certificate or certificates for shares of Common Stock to be issued if
different from the name shown on the books and records of the Corporation.
Said conversion notice shall also contain such representations as may
reasonably be required by the Corporation to the effect that the shares of
Common Stock to be received upon conversion are not being acquired and will
not be transferred in any way which might violate the then applicable
securities laws. The Corporation shall, as soon as practicable thereafter,
issue and deliver at such office to such holder of Series 1997 Preferred
Stock, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder
shall be entitled as aforesaid. Such conversion shall be deemed to have
been made immediately prior to the close of business on the date of such
surrender of the certificate or certificates for the shares of Series 1997
Preferred Stock to be converted, and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock as of such date. All certificates issued upon such conversion
shall contain a legend governing restrictions, if any, upon such shares
imposed by applicable securities laws.
(iii) Adjustment for Subdivisions or Combinations of Common Stock.
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In the event that the Corporation at any time or from time to time after
the Issue Date effects a subdivision or combination of its outstanding
Common Stock into a greater or lesser number of shares without a
proportionate and corresponding subdivision or combination of its
outstanding Series 1997 Preferred Stock, then and in each such event the
Conversion Price shall be decreased or increased proportionately.
(iv) Adjustments for Dividends, Distributions and Convertible
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Securities. In the event that the Corporation at any time or from time to
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time after the Issue Date shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to
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receive, a dividend or other distribution payable in Additional Shares of
Common Stock, Options or Convertible Securities without payment of any
consideration by such holder of such shares of Common Stock, without a
proportionate and corresponding dividend or other distribution to holders
of shares of Series 1997 Preferred Stock, then and in each such event the
maximum number of shares (as set forth in the instrument relating thereto
without regard to any provisions contained therein for subsequent
adjustment of such number) of Common Stock issuable in payment of such
dividend or distribution or upon conversion or exercise of such Convertible
Securities shall be deemed, for purposes of this subparagraph (f)(iv), to
be issued and outstanding as of the time of such issuance or, in the event
such a record date shall have been fixed, as of the close of business on
such record date. In each such event the then applicable Conversion Price
shall be decreased as of the time of such issuance or, in the event such a
record date shall have been fixed, as of the close of business on such
record date, by multiplying the then applicable Conversion Price by a
fraction,
(A) the numerator of which shall be the total number of shares of
Common Stock issued and outstanding or deemed pursuant to the terms
hereof to be issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, as
applicable; and
(B) the denominator of which shall be (x) the total number of
shares of Common Stock issued and outstanding or deemed pursuant to
the terms hereof to be issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date, as
applicable, plus (y) the total number of shares of Common Stock
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issuable in payment of such dividend or distribution or upon
conversion or exercise of such Options or Convertible Securities;
and provided, however, (i) if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Conversion Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Conversion Price shall
be adjusted pursuant to this subparagraph (f)(iv) as of the time of actual
payment of such dividends or distributions; or (ii) if such Convertible
Securities provide, with the passage of time or otherwise, for any decrease or
increase in the number of shares of Common Stock issuable upon conversion or
exercise thereof (or upon the occurrence of a record date with respect thereto),
the Conversion Price computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such decrease or increase becoming
effective, be recomputed to reflect such decrease or increase insofar as it
affects the rights of conversion or exercise of the Convertible Securities then
outstanding; or (iii) upon the expiration of any rights of conversion or
exercise under any unexercised Convertible Securities, the Conversion Price
computed upon the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based thereon, shall,
upon such expiration, be recomputed as if the only additional shares of Common
Stock issued were the shares of such stock, if any, actually issued upon the
conversion or exercise of such Convertible Securities; or (iv) in the event of
issuance of Convertible Securities which expire
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by their terms not more than sixty (60) days after the date of issuance thereof,
no adjustments of the Conversion Price shall be made until the expiration or
exercise of all such Convertible Securities, whereupon such adjustment shall be
made in the manner provided in this subparagraph (f)(iv).
(v) Adjustment of Conversion Price for Diluting Issues.
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(A) If at any time or from time to time after the Issue Date, the
Corporation issues or sells, or is deemed by the provisions of this
subparagraph (f)(v) to have issued or sold, Additional Shares of
Common Stock for an Effective Price less than the Conversion Price for
the Series 1997 Preferred Stock in effect on the date of and
immediately prior to such issue, or the Corporation issues or sells,
or is deemed by the provisions of this subparagraph (f)(v) to have
issued or sold, Additional Shares of Common Stock for an Effective
Price less than the Market Price in effect on the date of and
immediately prior to such issue, then and in each such case the then
existing Conversion Price for the Series 1997 Preferred Stock shall be
reduced, as of the opening of business on the date of such issue or
sale, to the lower of the prices determined as follows:
(1) by multiplying the Conversion Price for the Series 1997
Preferred Stock in effect immediately prior to the time of such
issue or sale by a fraction (a) the numerator of which shall be
the sum of (i) the number of shares of Common Stock Outstanding
immediately prior to such issue or sale plus (ii) the number of
shares of Common Stock which the aggregate consideration received
(or by the provisions hereof deemed to have been received) by the
Corporation for the total number of Additional Shares of Common
Stock so issued or sold would purchase at such Conversion Price
for the Series 1997 Preferred Stock and (b) the denominator of
which shall be the number of shares of Common Stock Outstanding
at the close of business on the date of such issue or sale after
giving effect to such issue or sale of Additional Shares of
Common Stock; and
(2) by multiplying the Conversion Price for the Series 1997
Preferred Stock in effect immediately prior to the time of such
issue or sale by a fraction (a) the numerator of which shall be
the sum of (i) the number of shares of Common Stock Outstanding
immediately prior to such issue or sale multiplied by the Market
Price immediately prior to such issue or sale plus (ii) the
----
aggregate consideration received (or by the provisions hereof
deemed to have been received) by the Corporation for the total
number of Additional Shares of Common Stock so issued or sold,
and (b) the denominator of which shall be the product of (i) the
number of shares of Common Stock Outstanding at the close of
business on the date of such issue or sale after giving effect to
such issue or sale of Additional Shares of Common Stock,
multiplied by (ii) the Market Price immediately prior to such
---------- --
issue or sale.
11
(B) For the purpose of making any adjustment required under this
subparagraph (f)(v), the consideration received by the Corporation for
any issue or sale of securities shall (1) to the extent it consists of
cash, be computed at the net amount of cash received by the
Corporation prior to deduction of any expenses payable by the
Corporation and any underwriting or similar commissions, compensation
or concessions paid or allowed by the Corporation in connection with
such issue or sale, (2) to the extent it consists of property other
than cash, be computed at the fair value of that property as
determined by appraisers selected by the Board of Directors of the
Corporation and reasonably acceptable to the Required Holders, and (3)
if Additional Shares of Common Stock, Convertible Securities or
Options to purchase either Additional Shares of Common Stock or
Convertible Securities are issued or sold together with other stock or
securities or other assets of the Corporation for a consideration
which covers both, be computed (as provided in clauses (1) and (2)
above) as the portion of the consideration so received that may be
reasonably determined in good faith by the Board of Directors to be
allocable to such Additional Shares of Common Stock, Convertible
Securities or Options.
(C) For the purpose of the adjustment required under this
subparagraph (f)(v), if at any time or from time to time after the
Issue Date, the Corporation issues or sells any Options or Convertible
Securities (other than Options or Convertible Securities specified in
the definition of "Additional Shares of Common Stock"), then in each
case the Corporation shall be deemed to have issued at the time of the
issuance of such Options or Convertible Securities the maximum number
of Additional Shares of Common Stock (as set forth in the instruments
relating thereto, giving effect to any provision contained therein for
a subsequent upward adjustment of such number) issuable upon exercise
or conversion thereof and to have received as consideration for the
issuance of such shares an amount equal to the total amount of the
consideration, if any, received by the Corporation for the issuance of
such Options or Convertible Securities plus, in the case of such
Options, the minimum amounts of consideration, if any (as set forth in
the instruments relating thereto, giving effect to any provision
contained therein for a subsequent downward adjustment of such
consideration), payable to the Corporation upon the exercise of such
Options and, in the case of Convertible Securities, the minimum
amounts of consideration, if any, payable to the Corporation (other
than by cancellation of liabilities or obligations evidenced by such
Convertible Securities). No further adjustment of the Conversion
Price for the Series 1997 Preferred Stock, adjusted upon the issuance
of such Options or Convertible Securities, shall be made as a result
of the actual issuance of Additional Shares of Common Stock on the
exercise of any such Options or the conversion of any such Convertible
Securities. If any such Options or the conversion privilege
represented by any such Convertible Securities shall expire without
having been exercised and fewer than the maximum number of Additional
Shares of Common Stock deemed issued thereunder upon issuance
12
thereof shall have actually been issued thereunder, or more than the
minimum consideration deemed to have been received by the Corporation
upon issuance thereof shall have been actually received by the
Corporation, then the Conversion Price for the Series 1997 Preferred
Stock adjusted upon the issuance of such Options or Convertible
Securities shall be readjusted to the Conversion Price for the Series
1997 Preferred Stock which would have been in effect had an adjustment
been made on the basis that the only Additional Shares of Common Stock
so issued were the Additional Shares of Common Stock, if any, actually
issued or sold on the exercise of such Options or rights of conversion
of such Convertible Securities, and such Additional Shares of Common
Stock, if any, were issued or sold for the consideration actually
received by the Corporation upon such exercise, plus the
consideration, if any, actually received by the Corporation for the
granting of all such Options, whether or not exercised, plus the
consideration received for issuing or selling the Convertible
Securities actually converted plus the consideration, if any, actually
received by the Corporation (other than by cancellation of liabilities
or obligations evidenced by such Convertible Securities) on the
conversion of such Convertible Securities.
(D) Except as expressly provided herein, no adjustment in the
Conversion Price of any share of Series 1997 Preferred Stock shall be
made in respect of the issue of Additional Shares of Common Stock
unless the consideration per share for such Additional Shares of
Common Stock issued or sold or deemed to be issued or sold by the
Corporation is less than the Conversion Price for such share of Series
1997 Preferred Stock or the Market Price, in each case, in effect on
the date of, and immediately prior to, such issue or sale.
(vi) Reorganizations, Mergers, Consolidations, or Sales of Assets. If
------------------------------------------------------------
at any time or from time to time there shall be a capital reorganization of
the Common Stock (other than a subdivision, combination, reclassification,
or exchange of shares provided for elsewhere in this paragraph (f)) or a
merger or consolidation of the Corporation with or into another
corporation, or the sale of all or substantially all of the Corporation's
properties and assets to any other person which is effected so that holders
of Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock, then, as a part of such reorganization, merger,
consolidation, or sale, provision shall be made so that the holders of the
Series 1997 Preferred Stock shall thereafter be entitled to receive upon
conversion of the Series 1997 Preferred Stock, the number of shares of
stock, securities or assets of the Corporation, or of the successor
corporation resulting from such merger or consolidation or sale, to which a
holder of Common Stock deliverable upon conversion would have been entitled
in connection with such capital reorganization, merger, consolidation or
sale. In any such case, appropriate adjustment shall be made in the
application of the provisions of this paragraph (f) with respect to the
rights of the holders of the Series 1997 Preferred Stock after the
reorganization, merger, consolidation or sale to the end that the
provisions of this paragraph (f) (including
13
adjustment of the Conversion Price then in effect and the number of shares
purchasable upon conversion of the Series 1997 Preferred Stock) shall be
applied thereafter with as nearly an equivalent effect as may be
practicable.
(vii) No Adjustment. No adjustment to the Conversion Price shall be
-------------
made if such adjustment would result in a change in the Conversion Price of
less than 5%. Any adjustment of less than 5% which is not made shall be
carried forward and shall be made at the time of and together with any
subsequent adjustment which, on a cumulative basis, amounts to an
adjustment of 5% or more in the Conversion Price.
(viii) Certificate as to Adjustments. Upon the occurrence of each
-----------------------------
adjustment or readjustment of the Conversion Price pursuant to this
paragraph (f), the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and cause
independent public accountants selected by the Corporation to verify such
computation and prepare and furnish to each holder of Series 1997 Preferred
Stock a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is
based (including, without limitation, any determination of the Market Price
made pursuant to the second sentence of the definition thereof). The
Corporation shall, upon the written request at any time of any holder of
Series 1997 Preferred Stock, furnish or cause to be furnished to such
holder a like certificate setting forth (i) such adjustments and
readjustment, (ii) the Conversion Price at that time in effect, and (iii)
the number of shares of Common Stock and the amount, if any, of other
property which at that time would be received upon the conversion of Series
1997 Preferred Stock.
(ix) Objections. The Required Holders shall have the right to object
----------
to any adjustment of the Conversion Price or other matter set forth in a
certificate furnished to the holders pursuant to subparagraph (f)(viii)
hereof (including, without limitation, any determination of the Market
Price made pursuant to the second sentence of the definition thereof) by
giving written notice (an "Objection Notice") to the Corporation specifying
----------------
the nature of their objection within 30 days following receipt of any such
certificate pursuant to subparagraph (f)(viii) hereof and, unless such
objection is resolved by agreement of the Corporation and the Required
Holders within fifteen days thereafter, the Corporation and the Required
Holders shall each have the right to subject the disputed determination to
separate firms of independent public accountants of recognized national
standing (or, in the case of a determination of the Market Price made by an
independent brokerage firm, to separate independent brokerage firms) for a
joint resolution of such objection (neither of which shall be the firm of
independent public accountants regularly retained by the Corporation or
verifying the computation of the Corporation pursuant to subparagraph
(f)(viii) or the independent brokerage firm determining the Market Price
pursuant to the second sentence of the definition thereof). If such firms
cannot jointly resolve such objection, then, unless otherwise directed by
agreement of the Corporation and the Required Holders, such firms shall
choose another firm of independent public accountants of recognized
national standing, which firm shall resolve such objection. In such case,
the (A) Market Price, (B) adjustments
14
or readjustment required by this paragraph (f), (C) Conversion Price in
effect and (D) number of shares of Common Stock and the amount, if any, of
other property which at that time would be received upon the conversion of
Series 1997 Preferred Stock, as so determined, shall be conclusive and
binding on the Corporation, all of the holders of Series 1997 Preferred
Stock and all persons claiming under or through any of them. In the event
that an Objection Notice is given pursuant to this subparagraph (f)(ix),
the cost of the independent public accountants (or independent brokerage
firm) selected by the Corporation shall be borne solely by the Corporation,
the cost of the independent public accountants (or independent brokerage
firm) selected by the Required Holders shall be borne solely by the
Required Holders, and the cost of any independent public accountants (or
independent brokerage firm) chosen by the Corporation's and the Required
Holders' independent public accountants (or independent brokerage firms) to
resolve any objection shall be borne one-half each by the Required Holders
and the Corporation.
(x) Notices of Record Date. In the event of any taking by the
----------------------
Corporation of a record of the holders of any class of securities of the
Corporation other than Series 1997 Preferred Stock for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, any Convertible Securities or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right, the
Corporation shall mail to each holder of Series 1997 Preferred Stock at
least twenty (20) days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose
of such dividend, distribution or rights, and the amount and character of
such dividend, distribution or rights.
(xi) Reservation of Stock Issuable Upon Conversion. The Corporation
---------------------------------------------
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock solely for the purpose of effecting the
conversion of the shares of Series 1997 Preferred Stock such number of its
shares of Common Stock as shall from time to time be sufficient to effect
the conversion of all outstanding shares of the Series 1997 Preferred
Stock; and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of Series 1997 Preferred Stock, the Corporation will
take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose.
(g) Protective Provisions. In addition to any other rights provided by
---------------------
law, so long as any Series 1997 Preferred Stock shall be outstanding, the
Corporation shall not, without first obtaining the affirmative vote or written
consent of the holders of not less than 66-2/3% of such outstanding shares of
Series 1997 Preferred Stock, (i) amend or repeal any provision of, or add any
provision to, the Corporation's Certificate of Incorporation or Bylaws, as
amended, or file any certificate of designations, preferences and rights of any
series of Preferred Stock, par value $1.00 per share, of the Corporation, if
such action would alter or change the preferences, rights, privileges or powers
15
of, or the restrictions provided for the benefit of, any Series 1997 Preferred
Stock; or (ii) effect any stock split, reverse stock split or similar event
involving the Series 1997 Preferred Stock.
(h) Notices. Any notice required by the provisions hereof to be given to
-------
the holders of shares of Series 1997 Preferred Stock shall be deemed given if
deposited in the United States Postal Service, registered mail, return receipt
requested, postage prepaid and addressed to each holder of record at his address
appearing on the books of the Corporation. For so long as General Electric
Capital Corporation or any entity controlled by or under common control with it
shall be the beneficial owner of any shares of the Series 1997 Preferred Stock,
a copy of any such notice shall also be given to King & Spalding, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
16
CONSENT AND AGREEMENT
---------------------
For $10 and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the undersigned, Ramsay Holdings
HSA Limited and ▇▇▇▇ ▇▇▇▇▇▇ Holdings Pty. Limited, the holders of all of the
issued and outstanding shares of Class B Preferred Stock, Series C, par value
$1.00 per share ("Series C Stock"), of Ramsay Health Care, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇ ▇▇▇▇▇▇ Hospitals Pty. Limited ("Ramsay
Hospitals"), the holder of all the issued and outstanding shares of Class B
Preferred Stock, Series 1996, par value $1.00 per share ("Series 1996 Stock"),
of the Company (collectively, the "Stockholders"), each hereby consents and
agrees, on its own behalf and on behalf of its successors and assigns, for the
benefit of the holders from time to time of Series 1997 Preferred Stock (as
hereinafter defined), notwithstanding the terms of the Certificate of
Designation of the Series C Stock filed with the Secretary of State of the State
of Delaware (the "Secretary") on June 29, 1993 (the "Series C Certificate"),
including, without limitation, subparagraph (f) of the Series C Certificate and
notwithstanding the terms of the Certificate of Designation of the Series 1996
Stock filed with the Secretary on March 12, 1997 (the "Series 1996
Certificate"), including, without limitation, subparagraph (f) of the Series
1996 Certificate, (i) to the creation by the Company of Class B Preferred Stock,
Series 1997, par value $ 1.00 per share (the "Series 1997 Preferred Stock"),
(ii) to the issuance of 100,000 shares of the Series 1997 Preferred Stock, (iii)
to the execution, delivery, performance and filing of all agreements,
certificates and other documents in connection therewith, including, without
limitation, the filing with the Secretary of the Certificate of Designations for
the Series 1997 Preferred Stock, to which this Consent and Agreement is attached
(the "Series 1997 Certificate of Designations") and (iv) that the Series 1997
Preferred Stock is senior to each of the Series C Stock and the Series 1996
Stock in liquidation and the holders of the Series 1997 Preferred Stock are
entitled to receive dividends prior to the holders of the Series 1996 Stock as
provided in the Series 1997 Certificate of Designations.
This Consent and Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
2
IN WITNESS WHEREOF, this Consent and Agreement has been duly executed
by the parties hereto as of the 30th day of September, 1997.
RAMSAY HOLDINGS HSA LIMITED
By:_______________________________________________
Name:
Title:
▇▇▇▇ ▇▇▇▇▇▇ HOLDINGS PTY. LIMITED
By:_______________________________________________
Name:
Title:
▇▇▇▇ ▇▇▇▇▇▇ HOSPITALS PTY. LIMITED
By:_______________________________________________
Name:
Title: