RHC_4_1_009958_0330/000001/000001

All correspondence to:Computershare Investor Services Pty Limited

GPO Box 7045 SydneyNew South Wales 2001 Australia

1300 855 08061 3 9415 400061 2 8234 5050

www.computershare.com

Enquiries (within Australia)(outside Australia)

Facsimile

Holder Identification Number (HIN)

* 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 incomputing the required majority on a poll.

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 inaccordance 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, 176Cumberland 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 amark 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 thatvotes 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, theChairman 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. TheChairman of the Meeting intends to vote undirected proxies in favour of each of these items.

For Against Abstain*

1.

2.

3.

4.

Approval of terms of issue ofConvertible Adjustable RateEquity Securities

Approval to issue ConvertibleAdjustable Rate EquitySecurities

Ratification of placement

Ratification of institutionalplacement

For Against Abstain*

5.

6.

Amendments to theConstitution relating topreference shares

Financial assistance

1 9 P RR H C

How to complete the Proxy Form

1 Your AddressThis 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 theform. Securityholders sponsored by a broker (in which case your reference number overleaf will commence with an ‘x’) should advise your broker of anychanges. Please note, you cannot change ownership of your securities using this form.

2 Appointment of a ProxyIf 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 issomeone 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 thissection 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 ofthe company. Do not write the name of the issuer company or the registered securityholder in the space.

3 Votes on Items of BusinessYou 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 inaccordance 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 ofsecurities 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 shechooses. If you mark more than one box on an item your vote on that item will be invalid.

4 Appointment of a Second ProxyYou 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 Formmay be obtained by telephoning the company's share registry or you may copy this form.

To appoint a second proxy you must:(a) 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 yourvotes. Fractions of votes will be disregarded.

(b) return both forms together in the same envelope.

5 Signing InstructionsYou must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign.

Joint Holding: where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: to sign under Power of Attorney, you must have already lodged this document with the registry. If you have notpreviously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this formwhen you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by thatperson. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, aSole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Directoror 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 CorporateRepresentative" should be produced prior to admission. A form of the certificate may be obtained from the company's share registry.

Lodgement of a ProxyThis 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 thecommencement of the meeting at 9.30am on Friday 20 May 2005. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Documents may be lodged:IN PERSON

BY MAIL

BY FAX

Registered Office - Level 9, 154 Pacific Highway, St Leonards NSW 2065Share Registry - Computershare Investor Services Pty Limited, Level 2, 60 Carrington Street, Sydney NSW 2000 AustraliaRegistered Office - Level 9, 154 Pacific Highway, St Leonards NSW 2065Share Registry - Computershare Investor Services Pty Limited, GPO Box 242, Melbourne VIC 8060 Australia61 2 8235 8220

RHC_4_1_009958_0330/000001/000002/i

*M000001Q02*

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RAMSAY HEALTH CARE LIMITED

A.B.N 57 001 288 768

NOTICE OF GENERAL MEETINGNotice is hereby given that the General Meeting of members of Ramsay Health CareLimited (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 EquitySecurities (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 ishereby 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 inSchedule 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 domesticand international institutions at the price of $7.35 per share under a placement be ratifiedand 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 14.75 million fully paid ordinary shares to domestic andinternational institutions at the price specified in the Shareholder Update accompanyingthis Notice be ratified and approved for all purposes (including for the purposes of ASXListing Rule 7.4)."

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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:

(a) by deleting from Article 4.5(b) the words:

"to a fixed or a cumulative preferential Dividend at the rate of Dividenddetermined by the Directors"

and by inserting the following words in their place:

"to:

(i) a cumulative or non-cumulative preferential Dividend; and

(ii) at the rate of Dividend,

determined in each case by the Directors before issue";

(b) by inserting both after the words "Dividend" in Article 4.4(a) and after the word"calculation" in Article 4.7(d) the words "and whether the dividend is cumulativeor non-cumulative."

(c) by inserting a new paragraph (ba) after paragraph (b) 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 theacquisition by Ramsay Health Care Investments Pty Limited (Ramsay) of the Affinitygroup of companies, including the Affinity companies listed in the schedule to this Noticeof General Meeting (together, Affinity Companies), under the Share Sale Agreementbetween the Ironbridge Sellers, the Affinity Sellers and the Buyer as defined in that ShareSale Agreement, including any financial assistance by:

1.1 Ramsay Finance Pty Limited (Ramsay Finance) and/or its subsidiaries inconnection with subscription by the Participants (being the lenders under the newsenior debt arrangements, the lenders under the proposed restructured senior debtarrangements and the lenders under the bridging finance arrangements) forredeemable preference shares (RPS) issued by Ramsay Finance and/or itssubsidiaries (whether pursuant to one or more issues of RPS), and the purchase by

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Ramsay from the Participants of those RPS (whether pursuant to one or moretransactions), including:

(a) any loan provided by Ramsay Finance and/or its subsidiaries to Ramsayusing the proceeds of the issue of RPS and any other funding provided byRamsay Finance and/or its subsidiaries to Ramsay to enable Ramsay to payany amount payable by it to all or any of the Participants; and

(b) any redemption or buyback or cancellation by Ramsay Finance and/or itssubsidiaries of any RPS or any resolution to do so or any issue of securitiesby Ramsay Finance and/or its subsidiaries to fund any payment by RamsayFinance and/or its subsidiaries of any dividend or other distribution or anyredemption proceeds or payment, repayment or refinancing of, or inconnection with, any RPS; and

(c) any payment by Ramsay Finance and/or its subsidiaries to Ramsay or anyother person under or in connection with any RPS; and

(d) any intra group documents or arrangements entered into between RamsayFinance and/or its subsidiaries and Ramsay from time to time, including inconnection 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 fullfixed and floating charges, real property mortgages and guarantees, in favour of allor any of the Participants; and

1.3 any or all of the Affinity Companies in connection with the proposed divestment ofsome of the hospitals owned by the Affinity Companies on terms to be finalised inaccordance with the Heads of Agreement between the Company, Ironbridge CapitalPty Limited and CVC Asia Pacific Limited.”

For further information on the above Items, please refer to the ExplanatoryStatement which forms part of this notice of meeting.

Voting Exclusion

In accordance with the ASX Listing Rules, the Company will disregard any votes cast ona resolution:

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• in respect of Item 2 by any person who may participate in the proposed issue anda person who might obtain a benefit, except a benefit solely in the capacity of aholder of ordinary securities, if the resolution is passed. For the avoidance ofdoubt, if a person participates in the CARES offer, that person will be precludedfrom 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 accordancewith the directions on the proxy form; or

• it is cast by the person chairing the General Meeting as proxy for a person who isentitled to vote, in accordance with a direction on the proxy form to vote as theproxy decides.

By Order of the BoardL R RansleyCompany SecretarySt Leonards, 21 April 2005

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1. PROXIES

(a) A member entitled to attend and vote is entitled to appoint a proxy toattend and vote on the member’s behalf. A member entitled to cast two ormore votes may appoint two proxies and may specify the proportion ornumber of votes each proxy is appointed to exercise. If no proportion ornumber is specified, each proxy may exercise half the member’s votes.

(b) A proxy need not be a member of the Company.

(c) Either the original or a facsimile transmission of the proxy form(s) and anypower of attorney or authority under which they are signed must bereceived at the Registered Office or the Share Registry at least 48 hoursprior to the meeting (ie before 9:30 am on Wednesday 18 May 2005) or anyadjournment. Any proxy form received after this deadline, including at themeeting, will be treated as invalid.

• By hand: Registered Office: Level 9, 154 Pacific Highway St LeonardsNSW 2065Share Registry: Level 2, 60 Carrington Street Sydney NSW 2000

• By mail: Registered Office: Level 9, 154 Pacific Highway St LeonardsNSW 2065 AustraliaShare Registry: Computershare Investor Services Pty Limited, GPOBox 242 Melbourne Vic 8060 Australia.

• By facsimile: (02) 8235 8220.

2. 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 producedat the meeting.

3. ENTITLEMENT TO VOTE

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For the purposes of the meeting, the Board has determined that a person'sentitlement to vote at the meeting will be the entitlement of that person set out inthe register of shareholders as at 7:00 pm (Sydney time) on Wednesday 18 May2005. Accordingly, transactions registered after that time will be disregarded indetermining shareholder entitled to attend and vote at the meeting.

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EXPLANATORY STATEMENT

These notes explain or otherwise relate to the resolutions set out in the Notice of GeneralMeeting and should be read in conjunction with the Notice of General Meeting.

The Company has announced the acquisition of the Affinity Health business. Theacquisition was funded by borrowings including senior debt and bridging facilities. Toenable the Company to repay those bridging facilities, the Company has announced thefollowing equity and hybrid raisings:

(a) a placement of up to 14.75 million ordinary shares (the Placement) together withan Accelerated Renounceable Entitlement Offer (AREO) of ordinary shares tocurrent shareholders; and

(b) an offer (CARES Offer) of non cumulative, redeemable and convertible preferenceshares (CARES).

The amounts to be raised by the above equity and hybrid raisings will be specified in theShareholder Update accompanying this Notice.

A prospectus for the CARES Offer, which will include the full terms of the CARES anddetails of the CARES Offer, was lodged with ASIC on or around 19 April 2005.Shareholders with an Australian address as at 7.00 p.m. (AEST) on 20 April 2005 (EligibleShareholders) are eligible for a priority allocation over applicants who apply as membersof the general public. The prospectus will be available on the Company's website on thedate of lodging and will be despatched to Eligible Shareholders after that date and maybe obtained by contacting the CARES Offer Information Line on 1300 366 027.

1. APPROVAL OF TERMS OF ISSUE OF CONVERTIBLE ADJUSTABLE RATEEQUITY SECURITIES

2. ISSUE OF CONVERTIBLE ADJUSTABLE RATE EQUITY SECURITIES

Introduction

The Company is proposing to offer CARES which have a non-cumulative dividendentitlement and which, at the option of the Company, are redeemable and convertiblepreference 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 theShareholder Update to this Notice. The terms of the CARES are substantially in the formof schedule 2 to this Notice. In relation to any dividends payable otn the CARES, themargin is to be determined pursuant to a bookbuild process described in the CARESProspectus and will be announced to the market on or about 27 April 2005.

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It is anticipated that the CARES will be issued and allotted in accordance with the CARESProspectus on or about 24 May 2005, but in any event the CARES will be issued andallotted 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 approvedby special resolution of shareholders. That approval is sought by way of the specialresolution set out in item 1. The detailed terms of the CARES which shareholders arebeing 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 approvalof shareholders to the issue of CARES under ASX Listing Rule 7.1 and for all otherpurposes. ASX Listing Rule 7.1 contains a general prohibition on a listed companyissuing equity securities comprising more than the 15% of its issued share capital in any12 month period without shareholder approval. For the reasons mentioned in connectionwith items 3 and 4 below, the Company has no further capacity during the balance of thiscalendar year to place equity securities without shareholder approval. Accordinglyshareholder approval is sought to enable the Company to issue the CARES.

Shareholders should note that if shareholders approve the issue of the CARES, no furthershareholder approval will be necessary upon conversion of the CARES into ordinaryshares. Board recommendation

The Board recommends that shareholders vote in favour of both Items 1 and 2. Ifshareholders do not approve Items 1 and 2, the offer of the CARES will not proceed andthe Company will incur ongoing funding costs over and above that which the Companywould have incurred if the CARES had been issued.

The Board believes the proposed offer of the CARES is in the interests of the Companybecause it:

• provides the Company with an attractive source of funding at a low cost relative toordinary equity;

• diversifies the Company's funding sources and provides an attractive source ofredeemable, subordinated long-term financing;

• provides the Company with flexibility to convert, repurchase or redeem theCARES at a future date and upon certain events; and

• offers shareholders of the Company the opportunity to participate in the offer withpriority over general applicants – for details see prospectus.

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From the perspective of an ordinary shareholder of the Company, the important issues toconsider in relation to an offer of CARES are as follows:

• Notwithstanding that the dividends payable on CARES are non-cumulative, in theevent that the Directors do not pay a dividend on CARES, the Company would beprevented from paying a dividend on shares until such time as two consecutivedividends are paid on CARES.

• Dividends are non-cumulative and therefore the Company is not required to makeup any unpaid dividend in subsequent periods.

• CARES are not debt instruments. If the Company is wound up, Holders of CARESwill rank behind creditors of the Company, but ahead of shares for return of theissue price and the amount of any dividend entitlement which has accrued sincethe previous dividend payment date, and otherwise do not participate in awinding up.

• CARES may be converted to shares by the Company on or after 20 October 2010and at certain other times following specified events. If CARES are converted toshares 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 paidordinary shares to domestic and international institutions at $7.35 per share (Item3).

• In April 2005 the Company undertook a placement of up to 14.75 million ordinaryshares (Item 4). The actual number of shares, the issue price and the amountraised by this placement are set out in the Shareholder Update accompanying thisNotice.

The proceeds of the placement referred to in Item 3 were used to provide the Companywith additional flexibility and financial capacity to pursue its strategy of acquisitions andgreenfield developments in aged care and further investment in enhancements andadditional capacity at existing hospital facilities. The proceeds of the placement referredto 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 Rule7.1 contains a general prohibition on a listed company issuing shares comprising morethan the 15% of its issued share capital in any 12 month period without shareholder

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approval, the Company has no further capacity during the balance of this calendar yearto place shares without shareholder approval.

While the Company has no present plans to raise additional capital by means of a shareplacement, the Company intends to arrange for the dividend payable in October 2005 andthe following three dividends under its Dividend Reinvestment Plan to be underwrittenand may, therefore, need to issue shares to the underwriter. To the extent thatshareholders do not elect to participate in the Dividend Reinvestment Plan, the Companywill 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 ifshareholders ratify the placements referred to in Items 3 and 4. The Company considersit to be more convenient and cost effective that shareholders ratify the placements nowrather than being required to call a further meeting at the time the dividend in October2005 is declared to approve the issue of shares to the underwriter of the DividendReinvestment Plan.

Board recommendation

The Board recommends that shareholders vote in favour of Items 3 and 4. By doing sothere will be no need to seek shareholder approval for the issue of shares to theunderwriter in connection with the Company's Dividend Reinvestment Plan at the timethe dividends are declared.

5. AMENDMENTS TO THE CONSTITUTION TO PERMIT ISSUE OFPREFERENCE SHARES WITH NON-CUMULATIVE DIVIDEND

The Constitution of the Company presently enables the Company to issue preferenceshares. The preference shares which may currently be issued may be redeemable or non-redeemable, 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 non-cumulative dividend to afford greater flexibility to the Company in raising and managingits capital without requiring a special resolution of shareholders to amend theConstitution or to approve the terms. The proposed amendments to the Constitutionallow for that greater flexibility. Specifically the proposed amendments to theConstitution allow for the issue of preference shares, including CARES, with non-cumulative dividend entitlements and which contain voting rights in circumstancesrequired 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, 154Pacific Highway, St Leonards NSW 2065 or from the Company's website atwww.ramsayhealth.com.au.

Board recommendation

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The Board recommends that shareholders vote in favour of Item 5.

6. PARTICULARS OF FINANCIAL ASSISTANCE

The Company has recently acquired the Affinity group of companies as part of itsstrategy of pursuing acquisition opportunities in the healthcare sector. In connectionwith that acquisition, the Company has entered into certain bridging and senior debtarrangements, expects to enter into further restructuring of the financing arrangementsand proposes to enter into additional security arrangements. The bridging finance andsenior debt are already in place, however the restructuring arrangements and provisionof additional security include conditions precedent required by the financiers to besatisfied by the Company. The Company has also entered into a non-binding Heads ofAgreement with Ironbridge Capital Pty Limited and CVC Asia Pacific Limited, underwhich the Company proposes to negotiate the divestment of some of the hospitals ownedby the recently acquired Affinity group companies. In order to satisfy the conditionsprecedent to the financing arrangements and Corporations Act requirements relating tothe provision of any financial assistance by relevant companies in the Ramsay group,including the companies in the recently acquired Affinity group, the Company is callinga 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:

(a) The Company, Ramsay Health Care Investments Pty Limited (Ramsay) andcertain other Ramsay Group Companies (being the Company and itsrelated bodies corporate) have entered into a senior facilities agreement(Existing Senior Facilities Agreement).

(b) To secure (among other things) the obligations of the Ramsay GroupCompanies under the Existing Senior Facilities Agreement, the followingsecurity interests will be granted in favour of the Participants (being thelenders under the senior debt arrangements and the lenders under certainbridging finance arrangements which the Company has entered into inconnection with the acquisition of the Affinity group of companies) andothers (including the Security Trustee (as defined in the Existing SeniorFacilities Agreement)):

(i) guarantees and new fixed and floating charges from each of theRamsay Group Companies (other than the dormant subsidiaries andthe members of the Affinity group of companies, including theAffinity companies listed in Schedule 1 to this Notice) over:

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(A) all property held by it in VIC, ACT, NT or outside Australia;and

(B) all future acquired property in any state other than QLD andWA and other land acquired within the next 12 months inNSW and TAS;

(ii) a mortgage over the shares acquired directly or indirectly by Ramsayin Affinity Health Holdings Sarl, AH Holdings Sarl and AHHoldings NV (each an overseas incorporated company),

(together, the Initial Securities).

(c) Subsequently, after an expected initial period of approximately sevenweeks, it is anticipated that the financing arrangements under the ExistingSenior Facilities Agreement and the bridging finance arrangements will berestructured, which may involve:

(i) the subscription by the Participants for securities (whether pursuantto one or more issues of securities), such as redeemable preferenceshares (“RPS”) in the capital of Ramsay Finance Pty Limited(Ramsay Finance) and /or its subsidiaries for an aggregatesubscription price of approximately $1.46 billion;

(ii) the Ramsay Group Companies entering into internal documents suchas intercompany loan arrangements (Internal Documents), includingintercompany loans between Ramsay and Ramsay Finance and/or itssubsidiaries under which Ramsay Finance and/or its subsidiarieswould lend the proceeds of issue of any RPS to Ramsay;

(iii) Ramsay acquiring from the Participants any RPS issued by RamsayFinance and/or its subsidiaries to the Participants;

(iv) the signing of a new senior facilities agreement between some or allof the parties to the Existing Senior Facilities Agreement; and/or

(v) the signing of new bridging finance arrangements.

(together, Restructure).

The Restructure may also use a withholding tax compliant structure undersection 128F of the Income Tax Assessment Act 1936 (Cwlth). If theRestructure (if any) does not use such structures, then Ramsay will berequired to gross up payments to the Participants to the extent paymentsare subject to interest withholding tax.

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(d) If the Restructure is implemented by issuing RPS, pursuant to an agreementor agreements for the purchase of RPS in Ramsay Finance and/or itssubsidiaries to be entered into between Ramsay and the Participants,Ramsay would acquire the RPS subscribed for by the Participants for anaggregate purchase price of approximately $1.46 billion (RPS AcquisitionPrice).

(e) If the Restructure is implemented by issuing RPS, the acquisition oracquisitions of RPS by Ramsay would occur on or around the day that therelevant Participants subscribe for RPS to be issued by Ramsay Financeand/or its subsidiaries. The RPS would be fully paid at their time of issue toeach Participant.

(f) Under the proposed terms of purchase of the RPS, Ramsay may elect to paythe RPS Acquisition Price either immediately or at a later date. If Ramsayelects to pay the RPS Acquisition Price at a later date, Ramsay would berequired to pay interest on that RPS Acquisition Price at the rate specified inthe proposed terms of the purchase of the RPS and in connection with theRestructure.

(g) If the Restructure is implemented by issuing RPS, Ramsay would fund theRPS Acquisition Price in connection with the Restructure, and any intereston it, and make payments in respect of the RPS Acquisition Price andrelated interest from its own revenues and by entering into the InternalDocuments.

(h) Regardless of whether or not the Restructure is implemented by the issue ofRPS and the use of the proceeds of issue of the RPS as outlined inparagraphs (c) to (g) above or otherwise, the Ramsay Group Companies(including the Affinity group of companies acquired directly or indirectlyby Ramsay, including those listed in Schedule 1 to this Notice, (AffinityCompanies)) propose to grant security interests over their assets in favourof the Participants in approximately seven weeks (or later in certaincircumstances under part of the bridging finance arrangements or, in thecase of an Affinity Company incorporated in an overseas jurisdiction, insuch longer time period as is necessary for compliance with the laws of thatjurisdiction), including full fixed and floating charges, real propertymortgages and guarantees (New Securities). Changes to the existingfinancial commitments of the Affinity Companies or granting of securitymay also be provided by the Affinity Companies prior to, on or after thattime as part of the restructuring of the existing financing arrangements ofthe Affinity Companies.

(i) Ramsay Finance and/or its subsidiaries may:

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(i) make loans or otherwise provide funding to Ramsay (either directlyor indirectly) by any means, including to enable Ramsay to pay anyamount (in whole or part) payable by Ramsay under the ExistingSenior Facilities Agreement or in connection with the Restructure (ifimplemented) or resolve to do so;

(ii) redeem, buy back or cancel any or all of the issued RPS in accordancewith their terms of issue or resolve to do so (in which event amountswill be payable by Ramsay Finance and/or its subsidiaries to Ramsayor others, which amounts may be paid by way of set off), or issuesecurities to fund any payment by Ramsay Finance and/or itssubsidiaries of any dividend or other distribution or any redemptionproceeds or payment, repayment or refinancing of or in connectionwith RPS or resolve to do so;

(iii) make payments to Ramsay or any other person under or inconnection with the Existing Senior Facilities Agreement or inconnection with the Restructure (if implemented) or any obligationor undertaking to make any such payment, including by set off; and

(iv) enter into any intra group documents or arrangements with Ramsayfrom time to time, including in connection with the issue, reissue,redemption or other payment, distribution or dealing with or inconnection with RPS,

and any funds made available to Ramsay by Ramsay Finance and/or itssubsidiaries 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 enteredinto a non-binding Heads of Agreement with Ironbridge Capital PtyLimited and CVC Asia Pacific Limited (Buyers) (Heads of Agreement)under which the parties will within eight weeks of the date of the documentnegotiate exclusively in good faith for the divestment by Ramsay of anumber of hospitals directly or indirectly owned and operated by theAffinity Companies (Transfer Hospitals). The relevant transactiondocuments to be negotiated are:

(i) an umbrella divestment deed whereby the Company agrees toprocure that its relevant wholly owned subsidiaries will executedivestment asset sale agreements and a divestment share saleagreement;

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(ii) a divestment share sale agreement which will govern the sale of theshares in the company or companies which own the Ringwood,Cotham, VRC North, VRC East, Lady Davidson and Knox hospitals;

(iii) divestment asset sale agreements which will govern the sale of assetswhich comprise of the Prince of Wales, Melbourne Private, NorthWest, The Hills, The Mount, Nepean, JF Moreland and Comohospitals; and

(iv) a corporate services agreement for the provision of corporate servicesby 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 nolater than four months after satisfaction of the conditions precedent underthe Divestment Agreements (including the grant of regulatory approvals inrespect of certain of the Transfer Hospitals). If the conditions precedent(including completion of the acquisition of the Affinity Companies, theapproval of funding by the Buyers’ financiers and the approval by theinvestment committees of the Buyers) are not satisfied within 3 months ofthe date of the Heads of Agreement, the Heads of Agreement willterminate. This period may be extended by agreement. In the event thatthe relevant regulatory consents are not obtained within one year of thedate of the Heads of Agreement, either party may terminate the DivestmentAgreements. 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 ExistingSenior Facilities Agreement and of the terms of any arrangements in connectionwith the Restructure (if implemented) that Ramsay Finance and/or its subsidiariesand, subject to shareholder approval, each Affinity Company grant the NewSecurities. Failure to do this will be an event of default under the Existing SeniorFacilities Agreement. The provision of intercompany loans by Ramsay Financeand/or its subsidiaries to Ramsay is necessary to fund the Restructure, ifimplemented through the issue of RPS. The disposal of certain hospitals pursuantto the Heads of Agreement is the Company’s preferred option to achieverestructuring of the group post acquisition to satisfy certain strategic objectivesand regulatory requirements. The transfer of shares or assets by certain of theAffinity Companies on completion of the Divestment Agreements and theresulting purchase price payments may constitute financial assistance of theCompany’s acquisition of the Affinity Companies.

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6.3 Effect of the proposed financial assistance on the Company and the otherRamsay Group Companies

Under the New Securities, the Ramsay Group Companies will (among otherthings) assume a joint and several liability to the providers of security for theobligations agreed to under the Existing Senior Facilities Agreement and thebridging finance arrangements and, if implemented, in connection with theRestructure. If Ramsay does not comply with its obligations under the terms ofthe Existing Senior Facilities Agreement, the bridging finance arrangements and, ifimplemented, in connection with the Restructure or if certain other events occurthen:

(a) the Ramsay Group Companies will be obliged to meet the obligations orother liabilities, with the consequent reduction in shareholders’ funds of theamount of money they pay under obligations agreed to under the ExistingSenior Facilities Agreement, the bridging finance arrangements and, ifimplemented, in connection with the Restructure less the money they canrecover from co-guarantors or borrowers; and

(b) the holders of the security will be entitled to enforce the New Securities andapply the proceeds of enforcement in satisfaction of amounts owing byRamsay and others to the Participants and others.

If the Divestment Agreements are agreed and completed, in exchange for a saleprice of in the region of $406 million, the Ramsay Group Companies would ceaseto own the Transfer Hospitals, which it acquired as part of the acquisition of theAffinity Companies.

6.4 Advantages of the proposed financial assistance

The potential benefits for the Ramsay Group Companies as a result of RamsayFinance and/or its subsidiaries and the Affinity Companies giving financialassistance in the manner contemplated in this Explanatory Statement are asfollows:

(a) the Ramsay Group Companies will continue to have access to the financialaccommodation made available under the Existing Senior FacilitiesAgreement and, if implemented, in connection with the Restructure;

(b) if the Restructure is implemented, Ramsay would have access to thefinancial accommodation made available in connection with theRestructure;

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(c) if the Divestment Agreements are agreed and completed as contemplatedby the Heads of Agreement, the Company would have access to thepurchase price received under the Divestment Agreements to pay downpart of the debt incurred under the financing arrangements entered into inconnection with the acquisition of the Affinity Companies; and

(d) the structures which are being used:

(i) will help ensure that the funds obtained reach the appropriateRamsay Group Companies;

(ii) give the Ramsay Group Companies maximum flexibility in obtainingfunding in the future.

6.5 Consideration by Directors

(a) Reasonable Grounds

The directors of the Company have considered the giving of any financialassistance referred to above and have concluded that:

(i) there are reasonable grounds to believe that it is in the best interestsof the Company, Ramsay, Ramsay Finance, the other Ramsay GroupCompanies (including each of the Affinity Companies) and theirrespective shareholders; and

(ii) they are not aware of any reason to believe it would materiallyprejudice the solvency of the Ramsay Group Companies, or theirability to pay their creditors (including the continuing ability ofRamsay to meet its obligations under the terms of the Existing SeniorFacilities Agreement, the bridging finance arrangements and, ifimplemented, in connection with the Restructure).

(b) Financial assistance approval

The Company, Ramsay Finance and the Affinity Companies are seekingapproval from the Company’s shareholders under section 260B(2) of theCorporations Act. It is a condition of the provision of financialaccommodation under the Existing Senior Facilities Agreement and (ifimplemented) in connection with the Restructure, and expected to be acondition of the Divestment Agreements, that there be no financialassistance under section 260A of the Corporations Act . Failure to obtainsuch approval may be or lead to an event of default under the ExistingSenior Facilities Agreement and may prevent completion of the DivestmentAgreements on the terms contemplated by the Heads of Agreement.

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Board recommendation

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

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SCHEDULE 1

AFFINITY GROUP COMPANIES:

Affinity Group Companies ABN/ACNAffinity Health Nominees Pty Limited ACN 109 125 902Affinity Health Holdings Australia Pty Ltd ABN 98 106 992 349Affinity Health Finance Australia Pty Limited ABN 33 107 039 341Affinity Health Limited ABN 53 106 722 347Votraint No 665 Pty Ltd ABN 80 052 336 697Votraint No 664 Pty Ltd ABN 80 052 336 633Australian Medical Enterprises Limited ABN 88 053 639 160Relkban Pty Limited ABN 48 009 634 931Hospitals of Australia Limited ABN 78 002 988 696Relkmet Pty Limited ABN 42 009 634 904C&P Hospitals Holdings Pty Limited ABN 16 106 722 570Affinity Health Foundation Pty Ltd ACN 110 443 617AME Hospitals Pty Ltd ACN 054 813 991Victoria House Holdings Pty Ltd ABN 57 062 450 131Manningham Day Procedure Centre Pty Ltd ACN 112 470 318Logan Hospital Pty Limited ABN 23 106 723 406Attadale Hospital Property Pty Ltd ABN 32 008 756 894AME Properties Pty Ltd ACN 008 897 783Jamison Private Hospital Property Pty Ltd ABN 33 000 520 641Glengarry Hospital Property Pty Ltd ABN 77 008 804 859AME Superannuation Pty Ltd ABN 98 009 322 463Joondalup Hospital Pty Limited ABN 61 106 723 193Port Macquarie Hospital Pty Limited ABN 95 106 723 399Noosa Privatised Hospital Pty Limited ABN 16 106 723 380Melbourne Hospital Pty Limited ABN 25 106 723 415Armidale Hospital Pty Limited ABN 78 106 723 200Mayne Properties Pty Ltd ABN 96 080 971 026AMNL Pty Limited ABN 17 081 051 676Hallcraft Pty Limited ABN 55 008 802 266Rannes Pty Limited ACN 009 642 808Hadassah Pty Ltd ACN 050 124 411Caboolture Hospital Pty Limited ABN 68 106 723 219Affinity Health (FP) Pty Limited ACN 106 723 228P O W Hospital Pty Limited ABN 28 106 723 871HCoA Hospital Holdings (Australia) Pty Ltd ABN 84 079 097 528Hospital Corporation Australia Pty Ltd ABN 48 000 935 946HCoA Operations (Australia) Pty Ltd ABN 85 083 035 661Pruinosa Pty Ltd ABN 21 003 161 699Australian Hospital Care Limited ABN 67 072 273 931Australian Hospital Care Retirement Plan Pty ABN 13 065 515 880

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LtdDabuvu Pty Ltd ABN 91 003 064 355Malahini Pty Ltd ABN 54 005 323 231HCA Management Pty Limited ABN 71 003 058 606HOAIF Pty Limited ABN 34 088 128 750CRPH Pty Ltd ABN 95 001 062 415Hospital Developments Pty Ltd ABN 35 001 270 337Tilemo Pty Ltd ABN 44 003 041 405Hospital Affiliates of Australia Pty Ltd ABN 49 001 679 536PMPH Pty Ltd ABN 16 001 606 855Australian Hospital Care (Knox) Pty Ltd ABN 77 006 564 772Australian Hospital Care (Northpark) Pty Ltd ABN 44 005 644 842Australian Hospital Care (Dorset) Pty Ltd ABN 70 006 243 090Australian Hospital Care Investments Pty Ltd ABN 11 004 699 003AHC Radiology Pty Ltd ABN 68 006 243 081Australian Hospital Care (Masada) Pty Ltd ABN 17 005 014 460Australian Hospital Care (Como) Pty Ltd ABN 96 004 543 891AHC Tilbox Pty Ltd ABN 34 070 075 437Australian Hospital Care (Latrobe) Pty Ltd ABN 81 067 618 562Rehabilitation Holdings Pty Ltd ABN 59 069 962 689Australian Hospital Care 1988 Pty Ltd ABN 39 006 967 193AHC Foundation Pty Ltd ABN 99 072 208 443Health Technologies Pty Ltd ABN 73 007 422 906Australian Hospital Care (Lady Davidson) PtyLtd

ABN 53 079 309 550

The Victorian Rehabilitation Centre Pty Ltd ABN 61 069 962 698Australian Hospital Care (MPH) Pty Ltd ABN 75 076 204 012Australian Hospital Care (Pindara) Pty Ltd ABN 51 005 288 095Australian Hospital Care (The Avenue) Pty Ltd ABN 12 072 759 338Australian Hospital Care (Spare) Pty Ltd ABN 27 006 035 549Australian Hospital Care (Ringwood) Pty Ltd ABN 22 005 649 678Australian Hospital Care (MSH) Pty Ltd ABN 40 005 489 752Australian Hospital Care (Allamanda) Pty Ltd ABN 89 075 580 013eHealth Technologies Ltd ACN 092 443 251PT Affinity Health Indonesia

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SCHEDULE 2

TERMS OF ISSUE OF CARES

The terms used in these Terms of Issue are set out in clause 8 below. References toclauses and paragraphs are to clauses and paragraphs of these Terms of Issue.

1. FACE VALUE

The issue price of each CARES will be $100.

2. DIVIDENDS

2.1 Dividends

Subject to these terms, including without limitation clauses 2.2 and 2.3, the Holderof each CARES is entitled to a Dividend in respect of each Dividend Period (theDividend Entitlement) calculated in accordance with the following formula:

Dividend = 365

Nx100$xDR

where:

N is the number of days in that Dividend Period.

DR is the Dividend Rate for that Dividend Period calculated in accordance withthe 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 Dateexpressed as a decimal, and which will be taken to be 0.30.

2.2 Change in Corporate Tax Rate

If, on a Dividend Payment Date, the Australian corporate tax rate applicable to thefranking account of the Company from which the Dividend will be franked (Ti)differs from the Australian corporate tax rate on the Allotment Date (T), theDividend Entitlement will be adjusted in accordance with the following formula:

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Dividend Entitlement x )1()1(

TTi

−−

where:

Ti is the Australian corporate tax rate applicable to the franking account of theCompany from which the Dividend will be franked at the Dividend PaymentDate, expressed as a decimal; and

T has the same meaning as in clause 2.1.

2.3 Fully franked dividend

If any Dividend is not franked to 100% under Part 3-6 of the Tax Act (or anyprovisions that revise or replace those Parts), the Dividend will be adjusted inaccordance with the following formula:

Dividend

1 – [Ti x (1 – f)]

where:

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:

(a) the Directors, at their discretion, declaring the Dividend or OptionalDividend to be payable or otherwise resolving to pay the Dividend orOptional Dividend as the case may be; and

(b) there being funds legally available for the payment of a Dividend or anOptional Dividend.

2.5 Non-cumulative Dividends

The entitlement of a Holder to the payment of a Dividend is non-cumulative sothat if because of the provisions of clause 2.4, a Dividend is not paid in respect of aDividend Period or the Dividend paid in respect of a Dividend Period is less thanthe Dividend Entitlement for that Dividend Period, the Holder has no claim inrespect of that Dividend Entitlement or the balance of that Dividend Entitlement.

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2.6 Calculation of dividends

All calculations of Dividends will be rounded to four decimal places. For thepurposes of making any Dividend payment in respect of a Holder's total holdingof 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:

(a) 20 October 2005 and thereafter on 20 April and 20 October in each year untilthe CARES are converted, redeemed, bought back, or cancelled; and

(b) the conversion or exchange date determined under clause 3.

2.8 Record Dates

(a) A Dividend is only payable to those persons registered as Holders on theRecord Date for that Dividend.

(b) An Optional Dividend is only payable to those persons registered asHolders on the Record Date for that Optional Dividend.

(c) In the case of the Dividend payable under clause 2.7(b) the Dividend is onlypayable 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 Dividendpayable to a Holder the amount of any withholding or other tax, duty or levyrequired by law to be deducted in respect of such amount. If any such deductionhas been made and the amount of the deduction accounted for by the Company tothe relevant revenue authority and the balance of the amount payable has beenpaid to the Holder concerned, then the full amount payable to such Holder isdeemed to have been duly paid and satisfied by the Company. The Companymust pay the full amount required to be deducted to the relevant revenueauthority within the time allowed for such payment.

2.10 Restrictions in case of non-payment

If the Dividend Entitlement on CARES in respect of a Dividend Period is not paidor otherwise satisfied in full within 20 Business Days after the Dividend PaymentDate for that Dividend Period, the Company must not without approval of aSpecial Resolution passed at a separate meeting of Holders:

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(a) declare or pay a cash dividend or make any distribution on any issued sharein the Company over which CARES rank in priority for participation inprofits; or

(b) redeem, reduce, cancel, buyback or acquire for any consideration any issuedshare in the Company (other than CARES),

until such time as:

(c) a Dividend is paid in respect of two consecutive Dividend Periods equal tothe Dividend Entitlements for those Dividend Periods; or

(d) an Optional Dividend is paid to Holders in accordance with clause 2.11; or

(e) all CARES have been converted, redeemed, bought back or cancelled.

2.11 Payment of an Optional Dividend

Without derogating from the fact that the Dividend Entitlement is non-cumulativeand that the Directors are under no obligation to declare or resolve to pay aDividend, if at any time:

(a) the Directors declare, and fix a date for payment of, a Dividend other than aDividend payable in respect of a Dividend Period under clause 2.7; and

(b) the amount of that Dividend equals the aggregate amount of the Shortfall inrespect of the two immediately preceding Dividend Periods,

then once that Dividend (the Optional Dividend) is paid it will be treated as if ithad been paid for the purposes of clause 2.10 so that the restrictions on theCompany in clause 2.10(a) and (b) 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 Sharebut these rights do not take effect until 5.00pm Sydney time on the conversion datefor that Ordinary Share. At that time:

(a) all other rights and restrictions conferred on CARES under these Terms ofIssue will no longer have effect (except for rights relating to a Dividendpayable on or before the conversion date and any rights to any allotment ofadditional Ordinary Shares under clause 3.6 which will subsist); and

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(b) each CARES will rank equally with all other fully paid Ordinary Sharesthen on issue and the Company will issue a statement that the holder ofthose shares holds a share so ranking.

The taking effect of the rights of a CARES under this clause and the allotment ofadditional Ordinary Shares under clause 3.6 is, for the purposes of these Terms ofIssue, together termed "conversion". Conversion does not constitute cancellation,redemption, the buyback or termination of a CARES or an issue, allotment orcreation of a new share (other than the additional shares allotted under clause 3.6).

3.2 Conversion or exchange events

The Company may elect to:

(a) convert or exchange all or some of the CARES by giving notice to theHolders:

(i) at least 21 Business Days (but no more than 6 months) before:

(A) 20 October 2010; or

(B) any Dividend Payment Date after 20 October 2010; or

(ii) after the occurrence of a Regulatory Event; or

(b) convert all or some of the CARES by giving notice to Holders after theoccurrence of a Change in Control Event.

3.3 Conversion or exchange notice

(a) Where the Company gives a conversion or exchange notice under clause 3.2the Company:

(i) must, in the case of a notice under clause 3.2(a), state in that noticewhether CARES will be converted or exchanged (or whether acombination of those actions will be taken), failing which theCompany is taken to have elected to and must convert the CARESinto Ordinary Shares; and

(ii) may state in that notice that the conversion or exchange of all orsome of the CARES under clause 3.2 is conditional on some act orevent occurring or not occurring.

(b) A conversion or exchange notice given under clause 3.2 is irrevocable andmay include any other information the Company considers necessary toeffect the conversion or exchange in an orderly manner.

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3.4 Conversion or exchange date

The conversion or exchange date will be:

(a) in the case of a notice given by the Company in accordance withclause 3.2(a)(i)(A), 20 October 2010; and

(b) in the case of a notice given by the Company in accordance with clause 3.2(a)(i)(B), the next Dividend Payment Date;

(c) in the case of a notice given by the Company in accordance with clause3.2(a)(ii), the last Business Day of the month following the month in whichthe exchange notice was served by the Company unless the Companydetermines an earlier exchange date as notified in the exchange noticehaving regard to the best interest of the Holders and the relevant event;

(d) in the case of a notice given by the Company in accordance withclause 3.2(b) the earlier of:

(i) the last Business Day of the second week following the date theCompany sends the notice to the Holder; or

(ii) the closing date of the takeover bid, or the completion of the schemeof arrangement (as applicable) so long as that date falls after the dateon which the Company sends the notice to the Holder.

3.5 Restrictions on conversion and exchange

(a) The Company cannot elect to convert or exchange only some CARES if, asat the date of the conversion or exchange notice, that conversion orexchange would result in CARES left on issue having an aggregate FaceValue of less than $50 million.

(b) On an exchange or conversion of some but not all of the CARES, theCompany must endeavour to treat Holders on an approximatelyproportionate and equal basis, but may discriminate to take account of theeffect on marketable parcels and other factors.

3.6 Conversion and additional Ordinary Shares

(a) Each CARES the subject of a conversion notice will convert on the date ofconversion into one Ordinary Share and upon conversion, each CARES willentitle the Holder to be allotted an additional number of Ordinary Sharesequal to one less than the Conversion Ratio for that conversion providedthat if the Conversion Ratio is greater than 400, the Conversion Ratio shallbe 400.

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(b) The Conversion Ratio is an amount (including any fractions) calculated inaccordance with the following formula:

]CDxVWAP[VWAPValueFace

−

where:

CD means the Conversion Discount; and

VWAP means the VWAP during the Reference Period for that conversion.

(c) Where the total number of additional Ordinary Shares to be allotted onconversion to a Holder in respect of the total number of CARES of thatHolder being converted at that time includes a fraction, that fraction will bedisregarded.

3.7 Adjustments to VWAP

For the purposes of calculating VWAP in clause 3.6(b):

(a) where, on some or all of the Business Days in the Reference Period,Ordinary Shares have been quoted on the ASX as cum dividend or cum anyother distribution or entitlement and CARES will convert into OrdinaryShares after the date those Ordinary Shares no longer carry that entitlement,then the VWAP on the Business Days on which those CARES have beenquoted cum dividend or cum entitlement shall be reduced by an amount(Cum Value) equal to:

(i) (in the case of a dividend or other distribution), the amount of thatdividend or distribution including, if the dividend is franked, theamount that would be included in the assessable income of arecipient of the dividend or distribution who is a natural personunder the Tax Act;

(ii) (in the case of an entitlement which is traded on ASX on any of thoseBusiness Days), the volume weighted average price of all suchentitlements sold on ASX during the Reference Period on theBusiness Days on which those entitlements were traded; or

(iii) (in the case of an entitlement not traded on the ASX during theReference Period), the value of the entitlement as reasonablydetermined by the Directors; and

(b) where, on some or all of the Business Days in the Reference Period,Ordinary Shares have been quoted ex dividend, ex distribution or ex

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entitlement, and the CARES will convert into Ordinary Shares which wouldbe entitled to receive the relevant dividend, distribution or entitlement, theVWAP on the Business Days on which those Ordinary Shares have beenquoted ex dividend, ex distribution or ex entitlement shall be increased bythe Cum Value.

3.8 Adjustment to the Conversion Ratio for a takeover or scheme of arrangement

In the case of conversion as a result of a Change in Control Event, VWAP in theformula in clause 3.6(b) will be the lesser of:

(a) 95% of the Offer Price; and

(b) VWAP plus 50% of the amount calculated by subtracting that VWAP fromthe Offer Price.

3.9 Discretion in adjustment of conversion mechanism

Where:

(a) the Ordinary Shares are reconstructed, consolidated, divided or reclassifiedinto a lesser or greater number of securities;

(b) the Company undertakes a bonus issue or makes a pro rata offer to holdersof Ordinary Shares to subscribe for, or purchase, securities in the Companyor in any other body corporate in a way which, in the reasonable opinion ofthe Directors, has a diluting or concentrative effect on the value of OrdinaryShares; or

(c) any other similar event occurs in relation to the Company that may have adiluting or concentrative effect on the value of the Ordinary Share,

and the Directors determine that any such occurrence would, in the reasonableopinion of the Directors, affect the relative values of the CARES and the OrdinaryShares, the Directors may:

(d) make such alterations to the definition of VWAP or to the ConversionDiscount as the Directors reasonably consider appropriate or necessary tomaintain that relativity; or

(e) extend an entitlement to the Holders of CARES to participate in suchdistribution or pro rata offer based upon the number of Ordinary Shares towhich those Holders would have been entitled if their CARES had beenconverted on a date nominated by the Directors and adapting the formulain clause 3.6 as the Directors reasonably consider appropriate to maintainthe relativity.

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An alteration under paragraph (e) will be binding on and must be notifiedto the Holders of CARES.

3.10 Redemption of CARES

If the Company determines to redeem CARES and gives an exchange notice to theHolders notifying that their CARES are to be redeemed on the relevant exchangedate, the Company shall redeem every CARES which the Company has elected toredeem and identified in the exchange notice. For each CARES that is beingredeemed, an amount equal to the Face Value will be paid by the Company to therelevant Holders in cash on the relevant exchange date.

3.11 Buyback of CARES

(a) Each Holder of CARES from time to time agrees with the Company onterms as set out in the Buy-Back Agreement that, upon the Companydetermining to buy back CARES (which it is able to do at its sole option)and giving an exchange notice to the Holders notifying that their CARESare to be bought back, those Holders will be deemed to have sold to theCompany the CARES which the Company has elected to buyback andidentified in the exchange notice on the terms of the Buy-Back Agreement.

(b) The Buy-Back Agreement will take effect upon, and will have no force oreffect until, the happening of the last to occur of the following events:

(i) the Company giving an exchange notice to each Holder that it hasdetermined to buy back the CARES identified in the exchange notice;and

(ii) the Company obtaining all consents (if any) to the buy back whichare required to be obtained from the Company's shareholders or anyregulatory authority or other person pursuant to and in the mannerrequired by any applicable law or by the Listing Rules of any stockexchange on which CARES are quoted.

(c) On the relevant exchange date, the Company shall buy back every CARESwhich the Company has elected to buyback and identified in the exchangenotice under the terms of the Buy-Back Agreement. For each CARES thathas been bought back an amount equal to the Face Value will be paid by theCompany to the relevant Holder in cash on the relevant exchange date.

3.12 Cancellation of CARES

If the Company:

(a) determines to cancel CARES;

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(b) obtains all consents (if any) to the cancellation of CARES which are requiredto be obtained from the Company shareholders or any regulatory authorityor other person pursuant to and in the manner required by any applicablelaw or by the Listing Rules of any stock exchange on which the CARES arequoted;

(c) gives an exchange notice to the Holders notifying that their CARES are tobe cancelled,

on the relevant exchange date, the Company shall cancel every CARES which theCompany has elected to cancel and identified in the exchange notice. For eachCARES that has been cancelled, an amount equal to the Face Value will be paid bythe Company to the relevant Holders in cash on the relevant exchange date.

4. CARES GENERAL RIGHTS

4.1 CARES rights ranking

CARES rank equally amongst themselves in all respects.

4.2 Preferential dividend

Until conversion, CARES rank in priority to Ordinary Shares for the payment ofdividends.

4.3 Return of capital

Until conversion, if there is a return of capital on a winding up of the Company,Holders will be entitled to receive out of the assets of the Company available fordistribution to shareholders, in respect of each CARES held, a cash payment equalto the sum of:

(a) the amount of any Dividend Entitlement calculated on a daily basis(assuming a 365 day year) throughout the period from and including thedate of the preceding Dividend Payment Date to the date of commencementof the winding up; and

(b) the Face Value,

before any return of capital is made to holders of Ordinary Shares or any otherclass of shares ranking behind CARES.

CARES do not confer on their Holders any right to participate in profits orproperty except as set out in these Terms of Issue.

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4.4 Shortfall on winding up

If, upon a return of capital or a winding up, there are insufficient funds to pay infull the amounts referred to in clause 4.3 and the amounts payable in respect ofany other shares in the Company ranking as to such distribution equally withCARES on a winding up of the Company, the Holders and the holders of any suchother shares will share in any distribution of assets of the Company in proportionto the amounts to which they respectively are entitled.

4.5 Participation in surplus assets

Until conversion, CARES do not confer on their Holders any further right toparticipate in the surplus assets of the Company on a winding up.

4.6 Restrictions on other issues

Until all CARES have been converted, redeemed, cancelled or bought back theCompany must not, without approval of a Special Resolution passed at a separatemeeting of Holders, issue shares ranking in priority to the CARES or permit thevariation of any rights of any existing shares to shares ranking equally with or inpriority to the CARES, but the Directors are at all times authorised to issue furtherCARES, preference shares or other securities ranking equally with or behind anyexisting CARES.

4.7 Takeovers and schemes of arrangement

If a takeover bid is made for Ordinary Shares, acceptance of which isrecommended by the Directors, or the Directors recommend a scheme ofarrangement under Part 5.1 of the Corporations Act in respect of the OrdinaryShares which will result in a person having a relevant interest in more than 50% ofthe Ordinary Shares, the Directors will use reasonable endeavours to procure thatequivalent takeover offers are made to Holders or that they are entitled toparticipate in the scheme of arrangement under Part 5.1 of the Corporations Act ora similar transaction.

4.8 Participation in new issues

Until conversion, CARES confer no rights to subscribe for new securities in theCompany or to participate in any bonus or rights issues.

4.9 Further assurances

If the Company decides to convert or exchange CARES under these Terms ofIssue, the Holder must:

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(a) vote in favour (subject to compliance with the law and to the extent that theHolder is entitled to do so) or otherwise abstain from any requiredresolution;

(b) provide all documentation and execute any authorisation or powernecessary; and

(c) take all other action necessary or desirable, to effect the conversion orexchange.

4.10 Sale of shares on exchange

Each Holder irrevocably offers to sell all or some of its CARES on the exchangedate to the Company for their Face Value if the Company elects to buy back theCARES under these Terms of Issue.

4.11 Appointment of agent

Each Holder irrevocably appoints the Company (and any person authorised by theCompany for this purpose) as its agent to execute any document the Companyconsiders necessary or desirable to give effect to clauses 4.9 and 4.10, includingany share transfer or buyback agreement.

5. VOTING RIGHTS

5.1 Right to vote

CARES do not entitle their Holders to vote at any general meeting of the Companyexcept in the following circumstances:

(a) on a proposal:

(i) to reduce the share capital of the Company;

(ii) that affects rights attached to the CARES;

(iii) to wind up the Company; or

(iv) for the disposal of the whole of the property, business andundertaking of the Company;

(b) on a resolution to approve the terms of a buyback agreement;

(c) during a period in which a Dividend is in arrears; or

(d) during the winding up of the Company.

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For this purpose, a Dividend will be in arrears only if, at the time of the meeting, aDividend has been declared but has not been paid in full by the relevant DividendPayment Date.

5.2 Voting rights

On a poll, each CARES confers on its Holder on a resolution on which the Holdersare entitled to vote, one vote.

6. QUOTATION ON ASX

The Company must use all reasonable endeavours and furnish all suchdocuments, information and undertakings as may be reasonably necessary inorder to procure, at its own expense, quotation of CARES on ASX and allconverted CARES and additional Ordinary Shares issued under clause 3.6 on eachof the stock exchanges on which other Ordinary Shares of the Company arequoted on the date of conversion.

7. AMENDMENTS TO THE TERMS OF ISSUE

Subject to complying with all applicable laws, the Company may without theauthority, assent or approval of Holders amend or add to these Terms of Issue ifsuch amendment or addition is, in the opinion of the Company:

(a) of a formal, minor or technical nature;

(b) made to correct a manifest error;

(c) made to comply with any law, ASX Listing Rules or the listing or quotationrequirements of any stock exchange on which the Company proposes toseek quotation of the CARES; or

(d) effected in accordance with clause 3.9,

and is not likely (taken as a whole and in conjunction with all other modifications,if any, to be made contemporaneously with that modification) to be materiallyprejudicial to the interests of the Holders.

8. INTERPRETATION AND DEFINITIONS

8.1 Interpretation

(a) Unless the context otherwise requires, if there is any inconsistency betweenthe provisions of these Terms of Issue and the Constitution, then, to themaximum extent permitted by law, the provisions of these Terms of Issuewill prevail.

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(b) If a calculation is required under these Terms of Issue, unless the contraryintention is expressed, the calculation will be performed to four decimalplaces.

(c) Definitions and interpretation under the Constitution will also apply tothese Terms of Issue.

(d) Unless otherwise specified, the Directors may exercise all powers of theCompany under these Terms of Issue that are not, by the Corporations Actor by the Constitution, required to be exercised by the Company in generalmeeting.

(e) Notices may be given by the Company to Holder in the manner prescribedby the Constitution that the giving of notices to members of the Companyand the relevant provisions of the Constitution apply with all necessarymodification to notices to Holders.

(f) The terms "takeover bid", "relevant interest" and "arrangement" when usedin these Terms of Issue have the meaning given in the Corporations Act.

(g) A reference to a statute, ordinance, code, or other law includes regulationsand other instruments under it and consolidations, amendments, re-enactments or replacements of any of them.

8.2 Definitions

The following expressions shall have the following meanings:

Allotment Date means the date on which the CARES are issued.

ASX means Australian Stock Exchange Limited (ABN 98 008 624 691).

Bank Bill Swap Rate means, for a Dividend Period, the rate, expressed as apercentage per annum, calculated as the average mid-rate for bills of a term of 180days which average rate is displayed on Reuters page designated BBSW (or anypage which replaces that page) on the first day of that Dividend Period, or if thereis a manifest error in the calculation of that average rate or that average rate is notdisplayed by 10.30am (Sydney time) on that day, the rate specified in good faith bythe Company at or around that time on that date having regard, to the extentpossible, to:

(a) the rates otherwise bid and offered for bills of that term or for funds of thattenor displayed on that page BBSW (or any page which replaces that page)at that time on that day; and

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(b) if bid and offer rates for bills of that term are not otherwise available, therates otherwise bid and offered for funds of that tenor at or around thattime.

Business Day has the meaning given in the Listing Rules.

Buy-Back Agreement means an agreement under which the Company buys backCARES in the form contained in the schedule to these Terms of Issue.

CARES Register means the register of holders of CARES kept pursuant to theCorporations Act and the Listing Rules.

Change in Control Event means the occurrence of any of the following events:

(a) a takeover bid is made to acquire all or some of the Ordinary Shares and theoffer is, or becomes, unconditional and:

(i) the bidder has a relevant interest in more than 50% of the OrdinaryShares on issue; or

(ii) the Directors issue a statement recommending acceptance of theoffer; or

(b) a court approves the convening of a meeting to consider a scheme ofarrangement under Part 5.1 of the Corporations Act which, whenimplemented, will result in a person having a relevant interest in theCompany of more than 50%.

Company means Ramsay Health Care Limited (ABN 57 001 288 768).

Constitution means the constitution of the Company.

conversion has the meaning set out in clause 3.1.

conversion date has the meaning given in clause 3.4.

conversion notice means a notice given by the Company to Holders under clause3.2 where the Company elects to convert all or some of the CARES.

Conversion Discount means 2.5%.

Conversion Ratio means the number calculated in accordance with the formula inclause 3.6(b).

Dividend means a dividend in respect of the CARES.

Dividend Entitlement has the meaning set out in clause 2.1.

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Dividend Payment Date means each date on which a Dividend is payable inaccordance with clause 2.7 whether or not a Dividend is paid on that date.

Dividend Period means for a CARES:

(a) the period from (but not including) the Allotment Date until (but notincluding) the following Dividend Payment Date; and

(b) thereafter the period from (and including) the Dividend Payment Date untilbut not including the following Dividend Payment Date.

exchange, in relation to a CARES, means the Company at its option redeeming,buying back or cancelling that CARES for its Face Value.

exchange date has the meaning given in clause 3.4.

exchange notice means a notice given by the Company to Holders under clause3.2 where the Company elects to exchange all or some of the CARES.

Face Value means $100.

Franking Rate, in relation to a Dividend, means the franking percentage (withinthe meaning of Parts 3-6 of the Tax Act or any provisions that revise or replacethose Parts) of the Dividend, expressed as a decimal.

Holder at any time means any person entered in the CARES Register at that time.

Listing Rules means the Listing Rules of ASX.

Margin expressed as a percentage per annum is:

(a) for the period up to (but not including) 20 October 2010, [x.xx%]; and

(b) for the period on or after 20 October 2010, [x.xx%] plus 2.00%.

Market Rate for a Dividend Period means the Bank Bill Swap Rate for thatDividend Period expressed as a percentage per annum.

Offer Price means:

(a) in the case of an off market bid (within the meaning of the CorporationsAct) or a scheme of arrangement under part 5.1 of the Corporation Act;

(i) the cash consideration offered as at the conversion date in respect ofeach Ordinary Share under the bid or scheme of arrangement; plus

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(ii) if that consideration includes any amount which is not cash, thevalue of the non-cash consideration as determined by anindependent expert appointed by the directors (who shall act as anexpert) proposed at the time of announcement of the scheme ofarrangement or the bid or, if the non-cash consideration has beenincreased since the announcement, the date of the most recentincrease prior to the date when the conversion notice is given; or

(b) in the case of a market bid (within the meaning of the Corporations Act) thecash price offered under the bid as at the conversion date.

Ordinary Share means an ordinary share in the capital of the Company.

Optional Dividend has the meaning given to that term in clause 2.11.

Record Date means, for a Dividend or Optional Dividend, the date prior to itspayment which is determined by the Company in accordance with the ListingRules.

Regulatory Event means if the Directors resolve (having obtained an opinion fromreputable legal counsel or a tax or accounting adviser) that a change in any law,interpretation, ruling issued by any relevant governmental body (including onerelating to taxation) or accounting standard (or interpretation by an accountingstandard setting body) has occurred (or is announced) and that change will:

(a) materially increase the net costs to the Company of having CARES on issue;

(b) affect whether CARES can be franked or whether the Holders are entitled tofranking credits;

(c) affect whether CARES are classified as debt or equity for tax or accountingpurposes; or

(d) impose additional requirements that the Directors consider unacceptable.

Reference Period means the period of 20 Business Days immediately precedingbut not including:

(a) for a conversion other than on a Change in Control Event, the conversiondate for that conversion; or

(b) for a conversion on a Change in Control Event, the date of announcement ofthe takeover bid or scheme of arrangement.

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Shortfall at any time means the amount by which the Dividends paid for the twoDividend Periods immediately preceding that time is less than the DividendEntitlements for those two Dividend Periods.

Special Resolution means a resolution passed at a separate meeting of Holders byat least 75% of the votes validly cast by Holders in person or by proxy and entitledto vote on the resolution.

Tax Act means:

(a) the Income Tax Assessment Act 1936 or the Income Tax Assessment Act1997 as the case may be as amended or replaced and a reference to anysection of the Income Tax Assessment Act 1936 includes a reference to thatsection as rewritten in the Income Tax Assessment Act 1997;

(b) any other Act setting the rate of income tax payable; and

(c) any regulation promulgated thereunder.

VWAP means, in respect of a Reference Period, the arithmetic average of the dailyvolume weighted average sale price of Ordinary Shares sold on the ASX duringthat period but does not include any transaction defined in the ASX Market Rulesas "special", crossings prior to the commencement of normal trading, crossingsduring the after hours adjust phase or any overseas trades or the exercise ofoptions over Ordinary Shares).

8.3 Business day

Where these Terms of Issue require any payment or calculation to be made, or aconversion or exchange date falls, on a day that is not a Business Day (the OriginalDate), that payment or calculation must be made, or the conversion or exchangemust occur, on the first Business Day following that date (the Substituted Date)and where this clause applies in respect of the payment of a Dividend Entitlement:

(a) the Dividend Payment Date for that Dividend Entitlement is the SubstitutedDate instead of the Original Date;

(b) the Dividend Period for the Dividend Entitlement goes until but does notinclude the Substituted Date rather than the Original Date; and

(c) the Dividend Period for the next Dividend Entitlement starts from theSubstituted Date instead of the Original Date.

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Schedule

Buy-Back Agreement

1. Agreement

(a) This agreement is entered into between the Company and the Holders forthe time being of CARES and shall come into force and effect upon thehappening of the last to occur of the following events:

(i) the Company giving an Exchange Notice to Holders that it hasdetermined to buy back the CARES identified in the ExchangeNotice; and

(ii) the Company obtaining all consents (if any) to the Buy-Back whichare required to be obtained from the Company's shareholders or anyregulatory authority or other person pursuant to and in the mannerrequired by any applicable law or by the Listing Rules of any stockexchange on which the CARES are quoted.

(b) The terms and conditions set out in this agreement are of no force and effectunless and until the agreement has become effective under clause 1(a).

2. Buy-Back

Each Seller agrees to sell to the Buyer the Buy-Back Shares on the terms set out inthis agreement

3. Consideration

The Buyer will pay to each Seller in respect of each Buy-Back Share an amountequal to the Face Value of each Buy-Back Share (namely, $100)

4. Completion

The Buy-Back will be effected on the date specified in the Exchange Notice as thedate for completion of the Buy-Back, which will be determined in accordance withthe Terms of Issue, by the Buyer paying the amount determined under clause 3 tothe Seller and the Seller delivering to the Buyer a duly executed transfer of theBuy-Back Shares.

5. Appointment of attorney

By virtue of its holding of the Buy-Back Shares, each Seller irrevocably appointsany director or officer or duly authorised attorney of the Company (each anAttorney) as the true and lawful attorney of the Seller to execute a transfer to the

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Buyer in registrable form of the Buy-Back Shares (or such other document bywhich title to the Buy-Back Shares may be vested in the Buyer) and to give anynecessary direction to any other person or take any other action which may berequired to facilitate the transfer to the Buyer of the Buy-Back Shares, and agreesthat in exercising this power of attorney Rome or any Attorney shall be entitled toact in the interests of the Company (or a nominee) as the Buyer of the Buy-BackShares.

6. Definitions and interpretation

All words and expressions used in this agreement which are defined in the Termsof Issue have the same meaning in this agreement.

Buy-Back means in relation to the CARES, the purchase of theCARES from the Holder for the time being by theBuyer pursuant to this agreement

Buy-Back Shares means the CARES referred to in the Exchange Noticewhich are the subject of the Buy-Back under thisagreement

Buyer means the Company or any permitted transferee of theBuy-Back Shares nominated by the Company to be thepurchaser of the Buy-Back Shares.

Exchange Notice means a notice given by the Company to Holders fromtime to time under clause 3.2 of the Terms of Issue

Seller means each Holder from time to time to whom theCompany gives an Exchange Notice which indicatesthat CARES are to be bought back by the Company

Terms of Issue means the terms of issue of the CARES of which thisSchedule forms a part.