AMENDMENT No. 2 dated as of November 1, 1996 (this "Amendment") made
by Ramsay Health Care, Inc. a Delaware corporation (the "Company"), to that
certain Rights Agreement dated as of August 1, 1995, as amended by that certain
Amendment dated as of October 3, 1995 (as so amended, the "Agreement"), between
the Company and First Union National Bank of North Carolina (the "Rights
Agent").
WHEREAS, the Company has determined that the definition of "Acquiring
Person" in the Agreement should be amended to provide an exception for persons
who are eligible to file a statement on Schedule 13G under Rule 13d-1(b) under
the Securities Exchange Act of 1934 who acquire less than 25% of the Common
Shares (as defined in the Agreement), unless and until the conditions set forth
in Rule 13d-1(b) (3) or (4) exist;
WHEREAS, the Company desires to provide certainty to its
shareholders, the securities markets and the Rights Agent in respect of the
terms of the Agreement and to further the purposes and intent of the Agreement;
and
WHEREAS, in order to effect the foregoing, the Company has determined
to amend the Agreement pursuant to Section 27 of the Agreement as set forth
below.
NOW, THEREFORE, effective as of the date hereof, the Agreement is
hereby amended pursuant to Section 27 thereof as follows:
1. Section 1(a) of the Agreement is hereby deleted and replaced with
the following:
"(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
20% or more of the Common Shares of the Company then outstanding, but
shall not include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any Person holding Common
Shares for or pursuant to the terms of any such plan. Notwithstanding
the foregoing, (i) no Person shall become an "Acquiring Person" solely
as the result of (x) an acquisition after the date hereof of Common
Shares by the Company which, by reducing the number of Common Shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 20% (or in the case of a 13G Person (as
hereinafter defined), 25%) or more of the Common Shares of the Company
then outstanding or (y) the acquisition of Beneficial Ownership of 20%
(or in the case of a 13G person, 25%) or more of the Common Shares of
the Company then outstanding in the good faith belief that such
acquisition would not (A) cause such Beneficial Ownership to exceed
20% (or in the case of a 13G Person, 25%) of the Common Shares then
outstanding and such Person relied in good faith in computing the
percentage of its Beneficial Ownership on publicly filed reports or
documents of the Company which are inaccurate or out-of-date or (B)
otherwise cause a Distribution Date to occur; (ii) subject to the
proviso in this clause (ii), no Person (an "Acquiror") shall become an
"Acquiring Person" as a result of the acquisition after the date
hereof by an Acquiror from Xxxx X. Xxxxxx or from any Person who is an
Affiliate or Associate of Xxxx X. Xxxxxx at the time of such
acquisition (collectively, the "Ramsay Persons") of (1) any of the
shares of Class B Preferred Stock currently held by any Ramsay Person
or (2) any Common Shares issued pursuant to options or other rights to
purchase Common Shares currently held by any Ramsay Person; (3) any
Common Shares issued pursuant to the Class B Preferred Stock currently
held by any Ramsay Person or (4) any Common Shares currently held by
any Ramsay Person; provided that, at the time of such acquisition, the
Acquiror (together with all of such Person's Affiliates and
Associates) are not the Beneficial Owners of more than 1% of the
Common Shares of the Company then outstanding and provided further
that, following such acquisition, the Acquiror (together with all of
such Person's Affiliates and Associates) do not become the Beneficial
Owners of an additional 1% or more of the Common Shares of the Company
then outstanding, (iii) subject to the proviso in this clause (iii),
none of the Ramsay Persons shall become an "Acquiring Person" in the
event that any Ramsay Person (together with all other Ramsay Persons)
become the Beneficial Owners after the date hereof of additional
Common Shares; provided that the number of Common Shares of the
Company of which all Ramsay Persons are the Beneficial Owners does not
exceed one Common Share less than 50% of the Common Shares of the
Company then outstanding, and (iv) no Person who or which is eligible
to file a statement with the Securities and Exchange Commission on
Schedule 13G under Rule 13d-1(b), as in effect on November 1, 1996
(the "Amendment Date"), under the Exchange Act (as hereinafter
defined) with respect to such Person's beneficial ownership of Common
Shares (a "13G Person") shall become an "Acquiring Person" after the
Amendment Date if and for so long as such 13G Person, together with
all Affiliates and Associates of such 13G Person, shall not be the
Beneficial Owner of 25% or more of the Common Shares of the Company
then outstanding; provided, however, that if such Person or any such
Person's Affiliates or Associates becomes subject to Rules 13d-1(a)
and 13d-2(a), as in effect on the Amendment Date, pursuant to Rule
13d-1(b) (3) or (4), as in effect on the Amendment Date, then such
Person shall no longer be a "13G Person" and if such Person at such
time would be an Acquiring Person but for this clause (iv), such
Person shall immediately become an Acquiring Person, in each case
without regard to the ten day periods referred to in Rule 13d-1(b) (3)
and (4), as in effect on the Amendment Date. Notwithstanding clause
(i) of the prior sentence, if any Person that is not an Acquiring
Person due to such clause (i) does not reduce its percentage of
Beneficial Ownership of Common Shares to below 20% (or in the case of
a 13G Person, 25%) by 5:00 P.M. New York City time on the tenth
Business Day after notice (including telephonic or facsimile) from the
Company (the date of notice being the first day) that such Person's
Beneficial Ownership of Common Shares so exceeds 20% (on in the case
of a 13G person, 25%), such Person shall, at the end of such ten
Business Day period, become an Acquiring Person (and such clause (i)
shall no longer apply to such Person). For purposes of this
definition, the determination whether any Person acted in "good faith"
shall be conclusively determined by the Board of Directors of the
Company, acting by a vote of those directors of the Company whose
approval would be required to redeem the Rights under Section 23."
2. This Amendment shall be deemded to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State, without regard to any
conflict of laws principles which would apply the laws of any other
jurisdiction.
3. The Agreement, as amended hereby, is hereby ratified, confirmed and
continued in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed as of the date first above written.
RAMSAY HEALTH CARE, INC.
BY /s/ X.X. Xxxxxx
____________________________
Name: Xxxx Xxxxxx
Title: President & C.O.O.
