<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM ______ TO ______
COMMISSION FILE NUMBER 0-13849
RAMSAY HEALTH CARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 63-0857352
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
COLUMBUS CENTER
ONE ALHAMBRA PLAZA, SUITE 750
CORAL GABLES, FLORIDA 33134
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (305) 569-6993
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __.
-
The number of shares of the Registrant's Common Stock outstanding as of
November 19, 1997, follows:
Common Stock, par value $0.01 per share -10,848,327 shares
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements............................................. 1
Consolidated balance sheets--September 30, 1997 and June 30, 1997
(unaudited)............................................................ 1
Consolidated statements of operations - quarters ended September 30,
1997 and 1996 (unaudited)............................................. 3
Consolidated statements of cash flows - quarters ended September 30, 1997
and 1996 (unaudited)................................................... 4
Notes to consolidated financial statements - September 30, 1997
(unaudited)............................................................ 5
Item 1. Legal Proceedings................................................ 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................. 8
PART II. OTHER INFORMATION
Item 5. Other Information................................................ 14
Item 6. Exhibits and Current Reports on Form 8-K......................... 14
SIGNATURES............................................................... 16
<PAGE>
PART I. FINANCIAL INFORMATION
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30 JUNE 30
1997 1997
-------------- -------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents.................................. $ 4,113,000 $ 1,723,000
Patient accounts receivable, less allowances for doubtful
accounts of $4,166,000 and $4,386,000 at September 30,
1997 and June 30, 1997, respectively...................... 24,933,000 25,802,000
Amounts due from third-party contractual agencies.......... 5,260,000 5,653,000
Other receivables.......................................... 3,123,000 3,139,000
Other current assets....................................... 1,829,000 1,699,000
------------ ------------
Total current assets..................................... 39,258,000 38,016,000
Other assets
Cash held in trust......................................... 827,000 827,000
Cash held for debt expected to be refinanced............... 12,300,000 ---
Cost in excess of net asset value of purchased businesses.. 19,120,000 19,281,000
Other intangible assets.................................... 4,500,000 4,680,000
Unamortized preopening and loan costs...................... 3,582,000 1,837,000
Deferred income taxes...................................... 9,411,000 9,411,000
Other noncurrent assets.................................... 1,296,000 1,155,000
------------ ------------
Total other assets....................................... 51,036,000 37,191,000
Property and equipment
Land....................................................... 5,025,000 5,025,000
Buildings and improvements................................. 71,720,000 71,190,000
Equipment, furniture and fixtures.......................... 23,188,000 22,294,000
------------ ------------
99,933,000 98,509,000
Less accumulated depreciation.............................. 33,706,000 32,527,000
------------ ------------
66,227,000 65,982,000
------------ ------------
$156,521,000 $141,189,000
============ ============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
1
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RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30 JUNE 30
1997 1997
-------------- --------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable............................................. $ 6,120,000 $ 7,284,000
Accrued salaries and wages................................... 6,235,000 6,282,000
Hospital and medical claims payable.......................... 1,750,000 1,975,000
Other accrued liabilities.................................... 4,568,000 5,218,000
Amounts due to third-party contractual agencies.............. 7,123,000 7,075,000
Current portion of long-term debt............................ 695,000 222,000
------------ ------------
Total current liabilities.................................... 26,491,000 28,056,000
Noncurrent liabilities
Other accrued liabilities.................................... 6,419,000 6,617,000
Long-term debt, less current portion......................... 49,375,000 35,632,000
Short term debt expected to be refinanced.................... 12,300,000 11,622,000
Minority interests........................................... 94,000 80,000
------------ ------------
Total noncurrent liabilities............................. 68,188,000 53,951,000
Commitments and contingencies
Class B convertible redeemable preferred stock, Series
1997, $1 par value - authorized 100,000 shares;
issued 100,000 shares (liquidation value of
$2,500,000).................................................. 2,401,000 ---
Class B redeemable preferred stock, Series 1997-A,
$1 par value - authorized 4,000 shares; issued
4,000 shares (liquidation value of $4,000,000)............... 4,001,000 ---
Stockholders' equity
Class B convertible preferred stock, Series C, $1
par value--authorized 152,321 shares; issued
142,486 shares (liquidation value of $7,244,000)............ 142,000 504,000
Class B convertible preferred stock, Series 1996, $1
par value--authorized 100,000 shares; issued
100,000 shares (liquidation value of $3,000,000)............ 3,000,000 3,121,000
Common stock, $.01 par value--authorized
20,000,000 shares; issued 11,167,393 shares at
September 30, 1997 and 11,150,640 shares at June
30, 1997.................................................... 112,000 112,000
Additional paid-in capital................................... 106,249,000 106,332,000
Retained earnings (deficit).................................. (50,164,000) (46,988,000)
Treasury stock--581,550 common shares at
September 30, 1997 and June 30, 1997, at cost............... (3,899,000) (3,899,000)
------------ ------------
55,440,000 59,182,000
------------ ------------
Total stockholders' equity................................. $156,521,000 $141,189,000
============ ============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2
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RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30
---------------------------
1997 1996
------------- ------------
<S> <C> <C>
Provider-based operations....................................... $31,561,000 $31,315,000
Managed care operations......................................... 6,132,000 ---
Investment income and other..................................... 62,000 220,000
----------- -----------
TOTAL REVENUES.................................................. 37,755,000 31,535,000
Expenses:
Salaries, wages and benefits................................... 19,347,000 16,616,000
Managed care provider expenses................................. 2,387,000 ---
Other operating expenses....................................... 11,566,000 11,024,000
Provision for doubtful accounts................................ 1,099,000 889,000
Depreciation and amortization.................................. 1,638,000 1,313,000
Interest and other financing charges........................... 1,320,000 1,545,000
----------- -----------
TOTAL EXPENSES.................................................. 37,357,000 31,387,000
----------- -----------
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEM............... 398,000 148,000
Income taxes.................................................... --- ---
----------- -----------
INCOME BEFORE EXTRAORDINARY ITEM................................ 398,000 148,000
Extraordinary item:
Loss from early extinguishment of debt......................... (3,574,000) ---
----------- -----------
NET INCOME (LOSS)............................................... $(3,176,000) $ 148,000
=========== ===========
Income (loss) per common and dilutive common equivalent share:
Primary:
Before extraordinary item...................................... $ 0.03 $ 0.01
Extraordinary item............................................. (0.34) ---
----------- -----------
$ (0.31) $ 0.01
=========== ===========
Fully diluted:
Before extraordinary item...................................... $ 0.03 $ 0.01
Extraordinary item............................................. (0.34) ---
----------- -----------
$ (0.31) $ 0.01
=========== ===========
Weighted average number of shares outstanding:
Primary........................................................ 10,576,000 8,174,000
Fully diluted.................................................. 10,580,000 8,174,000
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
3
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RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30
----------------------------
1997 1996
------------- -------------
<S> <C> <C>
Cash flows from operating activities
Net income (loss)................................................. $ (3,176,000) $ 148,000
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization.................................... 1,638,000 1,386,000
Loss from early extinguishment of debt........................... 3,574,000 ---
Provision for doubtful accounts.................................. 1,099,000 889,000
Management fees paid in common stock............................. --- 189,000
Cash flows from (increase) decrease in operating assets:
Accounts receivable.......................................... (230,000) (1,343,000)
Amounts due from third-party contractual agencies............ 393,000 2,742,000
Other current assets......................................... (423,000) (583,000)
Other noncurrent assets...................................... (141,000) (60,000)
Cash flows from increase (decrease) in operating liabilities:
Accounts payable............................................. (1,729,000) (683,000)
Accrued salaries, wages and other liabilities................ (526,000) (109,000)
Hospital and medical claims payable.......................... (225,000) ---
Amounts due to third-party contractual agencies.............. 48,000 870,000
------------ -----------
Total adjustments............................................ 3,478,000 3,298,000
------------ -----------
Net cash provided by operating activities.................... 302,000 3,446,000
------------ -----------
Cash flows from investing activities
Expenditures for property and equipment.......................... (1,398,000) (654,000)
Preopening and other costs....................................... (35,000) (23,000)
------------ -----------
Net cash used in financing activities........................ (1,433,000) (677,000)
------------ -----------
Cash flows from financing activities
Payment of loan costs............................................ (2,325,000) (101,000)
Proceeds from exercise of stock options and employee
stock purchase plan.......................................... 47,000 ---
Distributions to minority interests.............................. --- (900,000)
Proceeds from issuance of debt, net of cash held for debt to be
refinanced................................................... 41,100,000 ---
Payments on debt................................................. (38,256,000) (3,428,000)
Payments related to early extinguishment of debt................. (2,229,000) ---
Cost of issuance of Series 1997 preferred stock.................. (100,000) ---
Proceeds from preferred stock issues............................. 5,284,000 ---
Payment of preferred stock dividends............................. --- (91,000)
Cash held in trust............................................... --- 161,000
------------ -----------
Net cash provided by (used in) financing activities...... 3,521,000 (4,359,000)
------------ -----------
Net increase (decrease) in cash and cash equivalents.............. 2,390,000 (1,590,000)
Cash and cash equivalents at beginning of period.................. 1,723,000 7,605,000
------------ -----------
Cash and cash equivalents at end of period........................ $ 4,113,000 $ 6,015,000
============ ===========
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest......................................................... $ 1,034,000 $ 1,254,000
Income taxes..................................................... 458,000 13,000
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
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RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1997
NOTE 1
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation of the interim information are, unless
otherwise discussed in this report, of a normal recurring nature and have been
included. The Company's business is seasonal in nature and subject to general
economic conditions and other factors. Accordingly, operating results for the
quarter ended September 30, 1997 are not necessarily indicative of the results
that may be expected for the year. For further information, refer to the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended June 30, 1997.
NOTE 2
On September 30, 1997, the Company refinanced its existing senior and
subordinated secured notes, its variable rate demand revenue bonds and its
demand note to a corporate affiliate of Paul J. Ramsay, the Company's Chairman
of the Board and a significant shareholder of the Company, with proceeds from a
credit facility consisting of term and revolving credit debt of $38,500,000 (the
"Senior Credit Facility") and the sale of $2,500,000 of Class B Preferred Stock,
Series 1997 (the "Series 1997 Preferred Stock") to a financial institution. In
addition, on September 30, 1997, the Company issued a $17,500,000 subordinated
bridge facility, of which $15,000,000 was purchased by a financial institution
and $2,500,000 was purchased by a corporate affiliate of Mr. Ramsay (the "Bridge
Facility").
Under the terms of the Senior Credit Facility, the Company was provided (a) a
$12,500,000 term loan, (b) a $10,000,000 term loan and (c) a revolving credit
facility (the "Revolver") for an amount up to the lesser of $16,000,000 or the
borrowing base of the Company's receivables (defined as 70% of the Company's
patient accounts receivable, receivables due from managed care customers and
receivables due from customers whose behavioral health operations are managed by
the Company). In addition, on September 30, 1997, the Company entered into an
agreement with a corporate affiliate of Mr. Ramsay pursuant to which the
corporate affiliate purchased 4,000 shares of non-convertible, non-voting Class
B Preferred Stock, Series 1997-A ("Series 1997-A Preferred Stock"), $1.00 par
value, at $1,000 per share. The shares are entitled to cumulative dividends at
a rate of 9% per annum ($360,000 per year) and to a liquidation preference of
$1,000 per share under certain circumstances. The Series 1997-A Preferred Stock
shall be redeemed at a price of $1,000 per share and
5
<PAGE>
dividends on the Series C Preferred Stock, Series 1996 Preferred Stock and
Series 1997-A Preferred Stock (all of which are held by corporate affiliates of
Mr. Ramsay) shall be paid provided (a) the Company's EBITDA (as defined in the
Company's credit documentation) for its fiscal year ending June 30, 1998 is
equal to or greater than $16,500,000, (b) the Company has availability under the
Revolver in excess of $4,000,000, (c) the financial institution syndicates a
portion of the Revolver and (d) the Bridge Facility is refinanced as described
below.
The Bridge Facility, which is unsecured and is due and payable in September
2005, bears interest at rates ranging from 11% to 12.5% through September 1998,
at which time the interest rate increases to 13%. The Bridge Facility is
expected to be refinanced with the proceeds of a private placement of
$17,500,000 8-year senior subordinated notes prior to March 31, 1998.
In connection with the refinancing of the Company's debt on September 30,
1997, the Company also sold to the financial institution, which effected the
refinancing, $2,500,000 of Series 1997 Preferred Stock. The Series 1997
Preferred Stock is non-voting, is senior to the Series C Preferred Stock, the
Series 1996 Preferred Stock and the Series 1997-A Preferred Stock in liquidation
and as to dividends, is convertible, at the option of the holder, into 394,945
shares of Common Stock, is optionally redeemable by the Company at a premium
beginning in September 2000, and is mandatorily redeemable at the earlier to
occur of a change in control of the Company or September 2007. Dividends on the
Series 1997 Preferred Stock are payable quarterly at 9%, or $56,250 per quarter,
unless the Company is unable to meet a fixed charge ratio provided in the Senior
Credit Facility, at which time dividends accrue at 11%.
The Company has pledged substantially all of its real property, receivables
and other assets as collateral for the Senior Credit Facility.
NOTE 3
In April 1995, the Company sold and leased back the land, buildings and fixed
equipment of two of its inpatient facilities. The leases have a primary term of
15 years (with three successive renewal options of 5 years each) and currently
require an aggregate annual minimum rental of approximately $1,620,000, payable
monthly. Effective April 1 of each year, the lease payments are subject to any
upward adjustment (not to exceed 3% annually) in the consumer price index over
the preceding twelve months. Effective April 1995, the Company agreed to lease
an 80-bed facility near Salt Lake City, Utah for four years, with an option to
renew for an additional three years. The lease requires annual base rental
payments of $456,000, payable monthly, and percentage rental payments equal to
2% of the net revenues of the facility, payable quarterly. The Company leases
office space for various other purposes over terms ranging from one to five
years. Annual rent expense related to noncancellable operating leases totals
approximately $4,000,000.
6
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NOTE 4
Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards (SFAS) No. 109. SFAS 109 requires recognition of deferred
tax assets and liabilities for the expected future tax consequences of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. At September
30, 1997, net operating loss carryovers of approximately $26,800,000 (of which
approximately $14,300,000 expires from 2001 to 2002, $5,700,000 expires in 2010
and $6,800,000 expires from 2011 to 2012) and alternative minimum tax credit
carryovers of approximately $1,140,000 are available to reduce future federal
income taxes, subject to certain annual limitations.
NOTE 5
On October 1, 1996, the Company and Ramsay Managed Care, Inc. ("RMCI") entered
into a merger agreement providing for the acquisition of RMCI by a wholly owned
subsidiary of the Company. The transaction was approved by the shareholders of
both companies on April 18, 1997 and became effective on June 10, 1997, at which
time the results of operations of RMCI are included in the Company's statement
of operations. The merger was structured as a tax-free exchange recorded using
the purchase method of accounting and, accordingly, the purchase price was
allocated to the assets purchased and the liabilities assumed based upon their
fair value at the date of acquisition.
In exchange for all of the outstanding shares of RMCI common and preferred
stock, the Company issued 2,135,826 shares of Common Stock (valued based on the
closing price of the Company's Common Stock on June 10, 1997 of $3.00 per share)
and 100,000 shares of Series 1996 Preferred Stock, which are convertible into
1,000,000 shares of Common Stock. In addition, amounts owed by RMCI to the
Company, totalling approximately $7,000,000 on June 10, 1997, were included as a
portion of the consideration for the acquisition of RMCI. The Company also
assumed all liabilities of RMCI as of June 10, 1997, including a $2,750,000
obligation (and related unpaid accrued interest and commitment fees of
approximately $300,000) owed by RMCI to a corporate affiliate of Mr. Ramsay.
This obligation was refinanced in September 1997 (see Note 2 above).
Pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated as
of July 1, 1997, between a wholly owned subsidiary of the Company and Summa
Healthcare Group, Inc. ("Summa"), the Company agreed to acquire Summa for
$300,000 in cash, 250,000 shares of the Company's Common Stock and fully
exercisable warrants to purchase 500,000 shares of the Company's Common Stock,
with an exercise price of $3.25 per share (the fair market value of the
Company's Common Stock on the date of the Merger Agreement) and an expiration
date of July 2007. The principal assets of Summa, whose principal stockholder
is Luis E. Lamela, the Vice Chairman, a director and, effective January 1, 1998,
the Chief Executive Officer of the Company, consist of projects in the specialty
managed care and health services industry. These projects were undertaken by
the Company on October 9, 1997, the effective date of the merger.
7
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ITEM 1. LEGAL PROCEEDINGS
On March 31, 1997, RMCI (now a subsidiary of the Company) sold all of
the issued and outstanding shares of its HMO subsidiary to RoTech Medical
Corporation ("RoTech") pursuant to a Stock Purchase Agreement dated October 30,
1996. On November 4, 1997, RoTech commenced an action in the Circuit Court of
Orange County, Florida against the Company and RMCI. The complaint asserts a
claim for contractual indemnity and a claim of breach of contract. Although
damages are unspecified, it appears that the complaint seeks damages of
approximately $5.8 million, an amount in excess of the purchase price for the
HMO subsidiary. The Company believes that the claims are without merit and
intends to vigorously defend these proceedings.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company's strategy is to maintain and enhance its position as a leading
high-quality provider and manager of specialty managed care and behavioral
healthcare services. The Company's strategic objectives include:
. Pursue Youth Services Opportunities. The Company's youth services division
actively pursues contracts to provide care that address the needs of the
increasing population of at-risk and troubled youth. The division offers
specialized programs for adjudicated and non-adjudicated youth with
developmental disabilities, children and adolescent males and females with
emotional and behavioral disorders, and juvenile offenders.
. Assess Existing Products, Services and Markets. The Company evaluates its
existing products, services, markets and facilities against financial and
quality performance standards. In targeted geographic markets where demand
warrants, the Company's youth services and managed care products will be
expanded. In non-target markets, where economic, competitive, social and/or
legislative factors do not support profitable or strategic delivery of services,
products and facility operations will be phased out or modified to generate
acceptable levels of financial performance.
. Expand Managed Care Business. The Company actively pursues the management
and coordination of behavioral healthcare for populations served under Medicaid
and other government programs and will organize new and expand current systems
which provide care for these beneficiaries.
. Pursue Capitated Behavioral Healthcare Contracts.
. Identify New Product Development Opportunities. The Company intends to
identify new market niches and to apply its expertise to develop products and
specialized programs which serve these markets.
In connection with the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company notes that this Quarterly Report on
Form 10-Q contains forward-looking statements about the Company. The Company is
hereby setting forth cautionary
8
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statements identifying important factors that may cause the Company's actual
results to differ materially from those set forth in any forward-looking
statements or information made by or on behalf of or concerning the Company.
Some of the most significant factors include (i) accelerating changes occurring
in the healthcare industry, including competition from consolidating and
integrated healthcare provider systems and managers of healthcare, the
imposition of more stringent admission criteria by payors, increased payor
pressures to limit lengths of stay, limitations on reimbursement rates and
limitations on annual and lifetime patient health benefits, (ii) federal and
state governmental budgetary constraints which could have the effect of limiting
the amount of funds available to support governmental healthcare programs,
including Medicare and Medicaid, (iii) statutory, regulatory and administrative
changes or interpretations of existing statutory and regulatory provisions
affecting the conduct of the Company's business and affecting current and prior
reimbursement for the Company's services and (iv) the loss of significant
managed care customers or the loss of a significant number of members from the
Company's provider network. There can be no assurance that any anticipated
future results will be achieved. As a result of the factors identified above
and other factors, the Company's actual results or financial or other condition
could vary significantly from the performance or financial or other condition
set forth in any forward-looking statements or information.
RESULTS OF OPERATIONS
Net revenues from provider based operations totaled $31.6 million in the
quarter ended September 30, 1997, compared to $31.3 million in the comparable
quarter of the prior fiscal year. Inpatient revenues from the Company's same
facility behavioral health operations, including youth services, decreased
approximately $1.4 million between periods as youth services revenues, which
increased between periods, are generally less on a per-patient-day basis than
that of acute inpatient revenues, which decreased between periods. Outpatient
revenues decreased $0.5 million and subacute revenues increased $2.5 million
between periods due to a decrease in outpatient visits and an increase in
subacute patient days, respectively, between periods. Also, the incremental
revenues in the current year period associated with a facility opened by the
Company in December 1996 were less than the reduction in revenues between
periods of a facility which was leased to an unaffiliated company on August 1,
1997. These two facilities are hereinafter referred to as the "Other
Facilities."
Net revenues associated with the Company's managed care operations, which were
acquired by the Company on June 10, 1997, totaled $6.1 million. Based on two
additional contracts which became effective September 1, 1997 and cover more
than 250,000 new lives, the Company expects that its managed care revenues will
increase in future quarters.
Salaries, wages and benefits in the quarter ended September 30, 1997 were
$19.3 million, compared to $16.6 million in the comparable quarter of the prior
fiscal year. A decrease in same facility salaries, wages and benefits of $0.4
million (or 2.9%), as well as a $0.4 million decrease related to the Other
Facilities, was offset by a $1.2 million increase in subacute salaries,
wages and benefits (due to the additional patient volume) and $2.2 million of
salaries, wages and benefits related to the Company's managed care operations.
9
<PAGE>
Managed care provider expenses relate to the provider costs, including medical
professionals, inpatient facilities and outpatient centers, associated with
managing and providing the delivery of behavioral healthcare services on behalf
of the Company's managed care customers. The Company provides for claims
incurred but not yet reported based on its past experience, together with
current factors. The overall ratio of managed care provider expenses to the
related revenues was consistent with management's expectations in the quarter
ended September 30, 1997.
Other operating expenses in the quarter ended September 30, 1997 were $11.6
million, compared to $11.0 million in the comparable quarter of the prior fiscal
year. A decrease in same facility other operating expenses of $0.7 million (or
8.7%), as well as a $0.2 million decrease related to the Other Facilities, was
offset by a $0.5 million increase in other operating expenses of the Company's
subacute units (due to the additional patient volume) and $1.0 million of other
operating expenses related to the Company's managed care operations.
The provision for doubtful accounts in the quarter ended September 30, 1997
was $1.1 million, or 3.5% of revenues from provider-based operations, which
compares reasonably to the provision for doubtful accounts of $0.9 million, or
2.8% of revenues from provider-based operations, in the comparable quarter of
the prior fiscal year.
Depreciation and amortization increased from $1.3 million in the comparable
prior year quarter to $1.6 million in the quarter ended September 30, 1997
primarily due to the current period amortization of intangible assets recorded
in connection with the RMCI merger in June 1997.
Interest and other financing charges decreased from $1.5 million in the
comparable prior year quarter to $1.3 million in the quarter ended September 30,
1997 through principal payments made on the Company's former credit facilities
from September 30, 1996 to March 31, 1997. As mentioned previously, the Company
refinanced its credit facilities on September 30, 1997.
The Company did not record a provision for income taxes in the current or
prior year quarter based on an adjustment to the deferred tax valuation
allowance recorded against its deferred tax assets.
The Company's credit facilities which were refinanced on September 30, 1997
included senior and subordinated debt held by a group of life insurance
companies (the "Life Company Debt") which had terms extending through March
2000. In connection with the extinguishment of its former credit facilities, the
Company incurred and paid a $2.2 million prepayment penalty associated with the
Life Company Debt, incurred legal fees of $0.1 million and wrote-off unamortized
loan costs related to this debt of $1.3 million. In accordance with Statement of
Financial Accounting Standards Number 4, this amount is reported as an
extraordinary item in the Company's statement of operations.
10
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FINANCIAL CONDITION
The Company records amounts due to or from third-party contractual agencies
(Medicare, Medicaid and Blue Cross) based on its best estimate, using the
principles of cost reimbursement, of amounts to be ultimately received or paid
under current and prior years' cost reports filed (or to be filed) with the
appropriate intermediaries. Ultimate settlements and other lump sum adjustments
due from and paid to these intermediaries occur at various times during the
fiscal year. At September 30, 1997, amounts due from Medicare, Medicaid and
Blue Cross totaled $3.2 million, $0.9 million and $1.2 million, respectively.
Also, at September 30, 1997, amounts due to Medicare, Medicaid and Blue Cross
totaled $6.0 million, $0.9 million and $0.2 million, respectively. Changes in
these amounts since June 30, 1997 are the result of fiscal intermediary lump sum
adjustments, prior year cost report settlements and current year estimated
settlements recorded during the three months ended September 30, 1997.
In connection with the merger of RMCI in June 1997, the Company recorded cost
in excess of net asset value of purchased businesses of approximately $18.8
million and identifiable intangible assets, which included the value of RMCI's
established clinical protocols and existing managed care contracts, of
approximately $4.7 million. The identifiable intangible assets are expected to
be recovered over periods ranging from four to fifteen years and cost in excess
of net asset value of purchased businesses is expected to be recovered over a
25-year period.
The Company has net deferred tax assets totaling approximately $14.6 million,
which are reduced by a valuation allowance of approximately $5.2 million, at
September 30, 1997. Management has considered the effects of implementing tax-
planning strategies, consisting of the sales of certain appreciated property, as
the primary basis for recognizing deferred tax assets at September 30, 1997.
The ultimate realization of deferred tax assets may be affected by changes in
the underlying values of the properties considered in the Company's tax planning
strategies, which values are dependent upon the operating results and cash flows
of the individual properties. The Company evaluates the realizability of its
deferred tax assets on a quarterly basis by reviewing its tax planning
strategies and the adequacy of its valuation allowance.
As mentioned elsewhere, on September 30, 1997, the Company refinanced its then
existing credit facilities through borrowings totalling $50.0 million.
Consequently, the amounts which were due within one year at June 30, 1997 under
the Company's former credit facilities, totaling $11.6 million, were excluded
from current liabilities at June 30, 1997 since the refinancing resulted in this
amount being outstanding for an uninterrupted period extending beyond one year
from June 30, 1997. In connection with this refinancing, the Company (a) issued
the Series 1997 Preferred Stock and the Series 1997-A Preferred Stock which,
based on the redemption features of these issues, are not reflected as
stockholders' equity in the accompanying balance sheet, (b) wrote off
unamortized loan costs and letter of credit fees related to its former credit
facilities of approximately $1.3 million, (c) incurred loan costs of
approximately $3.4 million and (d) created a cash collateral account to redeem
by December 1, 1997 the remaining $12.3 million of principal (and related
accrued interest) due on its outstanding variable rate demand revenue bonds.
11
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Under the terms of the Senior Credit Facility, the Company was provided (a) a
$12.5 million term loan, payable in 18 quarterly installments ranging from
approximately $0.4 million to $0.9 million, beginning July 1, 1998, (b) a $10
million term loan, payable in 20 quarterly installments of $62,500, beginning
January 1, 1998 and eight quarterly installments of approximately $1.0 million,
beginning January 1, 2003, (c) the Revolver for an amount up to the lesser of
$16 million or the borrowing base of the Company's receivables, as defined in
the Senior Credit Facility, and (d) a $17.5 million unsecured Bridge Facility,
of which $15.0 million was purchased by the financial institution and $2.5
million was purchased by a corporate affiliate of Mr. Ramsay. The Bridge
Facility provides for a contingent payment obligation ("CPO") in the event that
it is not refinanced prior to March 31, 1998. The CPO would be payable (i) upon
the earlier to occur of certain events (each, an "Event"), including a change of
control involving the Company, a public offering by the Company of Common
Stock, the repayment after March 1998 of the Bridge Facility, and September 30,
2002, (ii) by the issuance of shares of Common Stock, as required by the Senior
Credit Facility and (iii) in an amount which is to be determined immediately
prior to an Event, depending on the date of the Event, either (a) by reference
to a percentage of the increase in the aggregate market value for the Company's
Common Stock, calculated on a fully-diluted basis, over a base amount or (b) by
reference to a percentage of the aggregate market value for the Company's Common
Stock, calculated on a fully-diluted basis, on the date of the Event. It is
contemplated that any refinancing of the Bridge Facility would also contain a
CPO based upon a percentage increase in the aggregate market value for the
Company's Common Stock, calculated on a fully-diluted basis, over a base amount.
The Senior Credit Facility permits the Bridge Facility to be refinanced with
subordinated indebtedness provided by a corporate affiliate of Mr. Ramsay on
specified terms, including the provision of a CPO by the Company to a corporate
affiliate of Mr. Ramsay based upon a percentage increase in the aggregate market
value for the Company's Common Stock, calculated on a fully-diluted basis, over
a base amount.
Also, on September 30, 1997, a corporate affiliate of Mr. Ramsay purchased
additional preferred shares in the Company and, under certain limited
circumstances related to an estimated liability, agreed to purchase Common Stock
at a price of $5.17 per share (the 30-day average stock price prior to the
closing). As a result, on September 30, 1997, the Company entered into an
agreement with a corporate affiliate of Mr. Ramsay pursuant to which the
corporate affiliate purchased 4,000 shares of Series 1997-A Preferred Stock at
$1,000 per share. The purchase price, which totaled $4.0 million, was paid by
(i) offset against approximately $0.6 million in dividends accrued through
September 30, 1997 on the Series C Preferred Stock and the Series 1996 Preferred
Stock, (ii) offset against approximately $0.4 million in unpaid accrued interest
and commitment fees on the former demand note owed to a corporate affiliate of
Mr. Ramsay, (iii) $0.25 million in principal due on the former demand note which
was not refinanced with proceeds of the Bridge Facility and (iv) approximately
$2.8 million in cash. Provided certain operating and financing targets are
achieved by September 30, 1998, the Series 1997-A Preferred Stock is mandatorily
redeemable and the Revolver will increase to $20 million.
12
<PAGE>
Proceeds of the refinancing were used as follows: (a) principal repayments of
$27.5 million of 11.6% senior secured notes and $1.4 million of 15.6%
subordinated secured notes held by a group of insurance companies, (b) repayment
of $3.4 million of bank debt created on September 2, 1997 upon the redemption of
one of the Company's variable rate demand revenue bonds, (c) repayment of
approximately $0.9 million of accrued interest on the above obligations, (d)
creation of a cash collateral account in an amount totaling approximately $12.9
million which will be used to redeem $12.3 million of principal due on
outstanding variable rate demand revenue bonds and to pay accrued interest
thereon on their redemption dates of November 3, 1997 and December 1, 1997, (e)
repayment of $2.5 million of the $2.75 million loan to a corporate affiliate of
Mr. Ramsay, (f) payment of a $2.2 million prepayment penalty to the group of
insurance companies holding the senior and subordinated secured notes and (g)
transaction costs totaling approximately $2.8 million. In order to satisfy
these payments, the amount drawn down on the Revolver totaled approximately $8.3
million on September 30, 1997. In addition, the Company drew down an additional
$1.7 million on the Revolver on September 30, 1997, leaving the unused portion
of the Revolver at $6 million.
The Senior Credit Facility and the Bridge Facility require that the Company
meet certain covenants, including (i) the maintenance of certain fixed charge,
interest coverage and leverage ratios, (ii) the maintenance of a minimum level
of EBITDA and tangible net worth (as defined in these agreements) and (iii) a
limitation on capital expenditures. The Company is also required to meet an
adjusted minimum fixed charge ratio, which includes preferred dividends payable
in the calculation thereof, in order to pay dividends on the Series 1997
Preferred Stock. The Company's credit facilities also prohibit the payments of
cash dividends to the common shareholders of the Company.
During the three months ended September 30, 1997, net cash provided by the
operating activities of the Company decreased approximately $3.1 million from
the comparable quarter of the prior year. This decrease is primarily the result
of cost report settlements received from third-party contractual agencies in the
prior year period of $2.7 million, compared to $0.4 million in the current year
period.
The Company's current primary cash requirements relate to its normal operating
expenses and routine capital improvements at its facilities. Also, the State of
Louisiana has taken the position that certain disproportionate share payments
were improperly paid to two of the Company's Louisiana facilities. See Part II.
Other Information, "Item 5. Other Information" below.
On the basis of its historical cash collection experience, its projected cash
needs and the refinancing of the Company's debt on September 30, 1997, the
Company believes that its cash resources and internally generated funds from
future operations will be sufficient to meet its current cash requirements and
future identifiable needs.
13
<PAGE>
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
During fiscal year 1996, the State of Louisiana requested repayment of
disproportionate share payments received by two of the Company's Louisiana
facilities in fiscal years 1995 and 1994 totaling approximately $5.0 million.
The repayment requests related to a) alleged overpayments made to the Company's
former Three Rivers Hospital, which was closed on June 30, 1995, because the
State of Louisiana believed Three Rivers' actual annual inpatient volume was
less than its projection of annual inpatient volume made at the beginning of its
1994 cost reporting year and b) alleged improper teaching hospital payments made
to Three Rivers Hospital and Bayou Oaks Hospital because the State believed
these facilities were not qualifying teaching hospitals at the time these
payments were made. The Company believes that certain of the calculations which
support the State's calculation have not been considered. Further, the Company
believes that, based on its understanding of the rules and regulations in place
at the time the teaching hospital payments were made, payments received as a
result of the teaching classification were appropriate.
The Company believes that this matter may be settled for an amount
significantly less than the State's initial requests. Any settlement of this
matter will be contingent upon the execution of settlement documentation, the
terms of which have not been agreed upon. Further, there can be no assurance
that the Company and the State will agree on a settlement amount or the terms
and conditions of settlement documentation. The Company intends to vigorously
contest any position by the State of Louisiana which the Company considers
adverse and believes that adequate provision has been made in its financial
statements for the estimated amount which might be recovered from the Company as
a result of this matter. Additionally, the Company believes that the resolution
of this matter will not have a material adverse effect on its liquidity.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits required to be filed as part of this Quarterly Report on Form
10-Q are as follows:
Exhibit 3.14 Schedules to Preferred Stock Purchase Agreement dated as of
September 30, 1997 between the Company and General Electric
Capital Corporation (filed as Exhibit 3.11 to the Company's
Annual Report on Form 10-K for the year ended June 30,
1997).
Exhibit 10.110 Employment Agreement dated as of October 1, 1997 by and
between the Company and Luis E. Lamela.
Exhibit 10.111 Schedules to Credit Agreement dated as of September 30,
1997 among the Company, The Lenders from Time to Time Party
Thereto,
14
<PAGE>
General Electric Capital Corporation, as Administrative
Agent, and GECC Capital Markets Group, as Syndication Agent
(filed as Exhibit 10.106 to the Company's Annual Report on
Form 10-K for the year ended June 30, 1997).
Exhibit 10.112 Schedules to Subordinated Note Purchase Agreement dated as
of September 30, 1997 among the Company, as Issuer, General
Electric Capital Corporation and Paul Ramsay Holdings Pty.
Limited, as Purchasers (filed as Exhibit 10.107 to the
Company's Annual Report on Form 10-K for the year ended
June 30, 1997).
Exhibit 11 Computation of Net Income (Loss) per Share
Exhibit 27 Financial Data Schedule
(b) Current Reports on Form 8-K
On August 22, 1997, the Company filed a Current Report on Form 8-K/A to
include the financial statements and pro forma financial information
related to the merger with RMCI.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereupon duly authorized.
RAMSAY HEALTH CARE, INC.
Registrant
/s/ Carol C. Lang
---------------------
Carol C. Lang
Chief Financial Officer
Date: November 19, 1997
16
<PAGE>
EXHIBIT 3.14
_____________________________________________________________________________
SCHEDULES TO
PREFERRED STOCK PURCHASE AGREEMENT
Dated as of September 30, 1997
between
RAMSAY HEALTH CARE, INC.,
as Issuer
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Purchaser
_____________________________________________________________________________
<PAGE>
Schedule 3.03 to Preferred
Stock Purchase Agreement
------------------------
FINANCIAL STATEMENTS
--------------------
1. Historical Financial Statements. Copies of the consolidated balance
-------------------------------
sheet of the Company and its Subsidiaries as of June 30, 1997 and the related
consolidated statements of operations, shareholders' equity and cash flows for
the Fiscal Year then ended, accompanied by the audit report thereon of Ernst &
Young LLP have been furnished by the Company to each Purchaser prior to the date
of this Agreement. Such consolidated financial statements have been prepared in
conformity with GAAP and present fairly in all material respects the
consolidated financial position of the Company as of the date thereof, and the
consolidated results of operations and cash flows of the Company for the Fiscal
Year then ended.
1
<PAGE>
Schedule 3.04 to Preferred
Stock Purchase Agreement
------------------------
CONTINGENT LIABILITIES; RESTRICTED PAYMENTS
-------------------------------------------
1. See Schedule 3.07 to the Senior Credit Agreement.
2. See Schedule 3.14 to the Senior Credit Agreement.
3. See Schedule 3.18 to the Senior Credit Agreement.
4. Obligations under the SocGen Cash Collateral Agreement (as defined in the
Senior Credit Agreement).
1
<PAGE>
Schedule 3.05 to Preferred
Stock Purchase Agreement
------------------------
CERTAIN OPTIONS, ETC.
---------------------
A. Options and Convertible Securities
----------------------------------
1. Stock Option and Purchase Plans/Outstanding Options:
Total Shares Outstanding: 3,140,765
a. Ramsay Health Care, Inc. Amended and Restated 1990 Stock Option
Plan-125,667 outstanding; 125,667 available;
b. Ramsay Health Care, Inc. 1991 Stock Option Plan - 1,478,761 options
outstanding; 1,484,423 available;
c. Ramsay Health Care, Inc. 1993 Stock Option Plan - 337,529
outstanding; 393,930 available;
d. Ramsay Health Care, Inc. 1995 Long Term Incentive Plan - 426,894
outstanding; 500,000 available;
e. Ramsay Health Care, Inc. 1996 Long Term Incentive Plan - 457,500
outstanding; 500,000 available; and
f. Options to purchase Ramsay Health Care, Inc. Common Stock issuable
with respect to the conversion of Ramsay Managed Care, Inc. options
in connection with the merger of Ramsay Managed Care, Inc. with a
wholly owned subsidiary of Ramsay Health Care, Inc. - 314,414
outstanding; 500,000 available under two stock option plans.
2. Stock Purchase Plan:
a. Ramsay Health Care, Inc. 1993 Employee Stock Purchase Plan - 100,000
shares originally authorized.
3. Warrants:
a. Ramsay Health Care, Inc. outstanding warrants to purchase Common
Stock-1,165,498.
1
<PAGE>
4. Preferred Stock
a. 142,486 shares of Class B Preferred Stock, Series C, convertible
into an aggregate of 1,424,860 shares of Common Stock.
b. 100,000 shares of Class B Preferred Stock, Series 1996, convertible
into an aggregate 1,000,000 shares of Common Stock.
c. 100,000 Shares of Class B Preferred Stock, Series 1997, convertible
into an aggregate of 394,945 shares of Common Stock.
2
<PAGE>
Schedule 4.06 to Preferred
Stock Purchase Agreement
------------------------
TRANSACTIONS WITH AFFILIATES AND EMPLOYEES
------------------------------------------
1. See Schedules 3.09(D) and 6.03(1) to the Senior Credit Agreement.
2. Consulting Agreement dated as of February 1, 1997 by and between Summa
Healthcare Group, Inc. and Ramsay Health Care, Inc.
3. Services Agreement dated as of August 12, 1996 by and between Healthlink
Enterprises, Inc. and Ramsay Health Care, Inc.
4. In the ordinary course of business, Ramsay Health Care, Inc. maintains a
cash management system with the other Credit Parties.
5. In the ordinary course of business, Ramsay Health Care, Inc. and certain
of the other Credit Parties engage in lending, borrowing and other
commercial transaction in connection with the joint ventures and other
affiliates listed on Schedule 3.09(B) to the Senior Credit Agreement, all
of which are permitted by (S) 4.06.
6. Employment Agreements with the executive officers of the Company and its
Subsidiaries, copies of which were provided to the Administrative Agent
prior to the Closing Date.
7. 142,486 shares of Class B Preferred Stock, Series C of the Company held by
Ramsay Holdings and Ramsay Hospitals Pty. Limited.
8. 100,000 shares of Class B Preferred Stock, Series 1996 of the Company held
by Ramsay Holdings.
9. 4,000 shares of Class B Preferred Stock, Series 1997 of the Company held
by Ramsay Holdings.
10. RMCI and its affiliates lease the following property from partnerships of
which Dr. Martin Lazoritz (an officer of RMCI) has the following ownership
percentages:
1
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
LOCATION PURPOSE LEASE INCEPTION ANNUAL LAZORITZ
LEASE (EST.) OWNERSHIP
PERCENT
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1276 Minnesota Clinic/Medical 1983 to 5/31/2003 $ 96,264+ 16%
Avenue Practice with option to renew
Winter Park, FL
- -------------------------------------------------------------------------------------
1250 Minnesota FPM 1988-2003 $113,820+ 25%
Avenue (mgd. care) Cost of Living
Winter Park, FL Adjustments
- -------------------------------------------------------------------------------------
Lake Mary, FL Office Clinic 1988-2003 Cost of $ 51,747 33-1/3%
+3,000 sq. ft. Living Adjustments
- -------------------------------------------------------------------------------------
Sand Lake, FL Clinic to 1990-2003 $ 51,264 33-1/3%
serve
Disney
- -------------------------------------------------------------------------------------
</TABLE>
11. Employees and Ramsay Affiliates have been granted the options and warrants
listed on Annex A hereto.
12. Payables of RMCI to Luis E. Lamela and Peter J. Evans in the amounts of
$200,000 and $100,000 respectively, assumed by Borrower in connection with
the merger of RMCI into a wholly owned Subsidiary of the Borrower.
13. Legal representation of the Borrower and its Subsidiaries by Haythe &
Curley, a partner of which is a director of Borrower.
14. Ramsay Health Care, Inc. 1993 Employee Stock Purchase Plan - 100,000 shares
originally authorized.
2
<PAGE>
EXHIBIT 10.110
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT made as of the 1st day of October, 1997 by and between
RAMSAY HEALTH CARE, INC., a Delaware corporation (the "Company"), and LUIS E.
LAMELA (the "Employee").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company wishes to retain the services of the Employee,
and the Employee wishes to serve in the employ of the Company, upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto hereby agree as follows:
1. EMPLOYMENT.
----------
1.1 The Company agrees to employ the Employee, and the Employee
agrees to serve in the employ of the Company, for the term set forth in Section
1.2, in the position and with the responsibilities, duties and authority set
forth in Section 2 and on the other terms and conditions set forth in this
Agreement.
1.2 The term of the Employee's employment under this Agreement
(including any extended term, the "term of this Agreement") shall commence on
the date hereof and shall terminate on December 31, 2000, unless extended or
sooner terminated in accordance with this Agreement.
1.3 As of June 30, 2000 and each subsequent June 30 during the term
of this Agreement (each, an "Automatic Renewal Date"), unless either party shall
have given a notice of non-extension on or prior to such Automatic Renewal Date,
the term of this Agreement shall be extended automatically for a period of one
(1) year to the anniversary of the expiration date of the then-current term of
this Agreement. Once a notice of non-extension shall have been given by either
party, there shall be no further automatic extension of this Agreement.
2. POSITION; DUTIES.
----------------
During the term of this Agreement, the Employee shall serve in the
positions of Vice Chairman of the Board of the Company commencing on October 1,
1997 and Chief
<PAGE>
2
Executive Officer of the Company commencing on January 1, 1998. The Employee
shall perform, faithfully and diligently, such duties, and shall have such
responsibilities, appropriate to such positions, as shall be assigned to him
from time to time by the Board of Directors of the Company. The Employee shall
report directly to the Chairman of the Board of Directors of the Company.
Subject to the Employee's obligations pursuant to the consulting agreement (the
"Consulting Agreement") by and between United HealthCare Services, Inc., a
Minnesota corporation, and Luis Management Corp., a Florida corporation which is
wholly-owned by the Employee, effective as of October 1, 1997, the Employee
shall devote substantially all of his attention to the performance of his duties
and responsibilities hereunder during the normal working hours of executive
employees of the Company. The Employee hereby represents that (i) he is not
bound by any confidentiality agreements or restrictive covenants which restrict
or may restrict his ability to perform his duties hereunder and (ii) his
performance hereunder will not violate the Consulting Agreement or any other
agreement currently in effect to which he is a party.
3. SALARY; BONUS; STOCK OPTIONS.
----------------------------
3.1 Salary. (a) In consideration of the performance by the Employee
------
of the services set forth in Section 2 and his observance of the other covenants
set forth herein, the Company shall pay the Employee, and the Employee shall
accept, (i) for the period from October 1, 1997 to December 31, 1997, a base
salary at the rate of $17,000 per month and (ii) for the remainder of the term
of this Agreement, a base salary at the rate of $400,000 per annum, payable in
accordance with the standard payroll practices of the Company.
(b) The base salary set forth in Section 3.1(a)(ii) above shall be
adjusted annually (but not decreased) on each anniversary date of this Agreement
by multiplying such base salary by a fraction, the numerator of which shall be
the Consumer Price Index for the September preceding the month in which such
adjustment is to be made, and the denominator of which shall be the Consumer
Price Index for the previous September. For purposes hereof, "Consumer Price
Index" shall mean the "Consumer Price Index for all Urban Consumers, Urban Wage
Earners and Clerical Workers-U.S. City Average (1982-84=100)" issued monthly by
the Bureau of Labor Statistics of the United States Department of Labor, or any
successor index thereto appropriately adjusted. The Employee shall be entitled
to such additional increases in base salary as shall be awarded from time to
time by the Board of Directors of the Company in its sole discretion.
<PAGE>
3
3.2 Bonus. (a) In addition to the base salary provided for in
-----
Section 3.1, the Company shall pay to the Employee for each of the fiscal years
ending June 30, 1998 and June 30, 1999, subject to the provisions of Section
3.2(c) hereof, a bonus in an amount equal to the greater of (i) $400,000 or (ii)
five percent (5%) of the increase in "operating income" (as hereinafter defined)
for such fiscal year over operating income for the fiscal year of the Company
ending June 30, 1997.
(b) For purposes of this Section 3.2, "operating income" shall mean
Income (Loss) Before Minority Interests, Income Taxes, Extraordinary Item and
Cumulative Effect of Accounting Change as shown in the audited financial
statements of the Company and its subsidiaries for the applicable fiscal year,
excluding (i) the amount of the bonus determined in accordance with this Section
3.2; (ii) any loss on sales of closed facilities; (iii) charges for asset
impairment; (iv) restructuring charges; and (v) any other charges for write-offs
or reserves relating to periods prior to July 1, 1997.
(c) In the event of the termination of the employment of the Employee
pursuant to Section 6.3 (Due Cause) of this Agreement, the Employee shall not be
entitled to a bonus for the fiscal year of the Company in which such termination
takes place. In the event of the termination of the employment of the Employee
pursuant to Section 6.4 (Other Termination by the Company) or Section 6.6
(Change in Control) of this Agreement, the Employee shall be entitled to a full
bonus for the fiscal year of the Company in which such termination takes place.
In the event of the termination of the employment of the Employee pursuant to
Section 6.1 (Death), Section 6.2 (Disability) or Section 6.5 (Termination by
Employee) of this Agreement, the Employee shall be entitled to a bonus in an
amount equal to the bonus for the full fiscal year determined in accordance with
Section 3.2(a) multiplied by a fraction, the numerator of which is the number of
days in the fiscal year to the date of termination and the denominator of which
is 365. The Employee shall not be entitled to a bonus for any fiscal year of
the Company subsequent to the fiscal year in which the termination of his
employment takes place.
(d) Prior to commencement of the fiscal year of the Company ending
June 30, 2000, the Company, through its Board of Directors, and the Employee
shall in good faith negotiate and agree upon a bonus formula for such fiscal
year and subsequent fiscal years of the Company. Such bonus formula shall
provide the Employee with a bonus opportunity commensurate with the bonus
contemplated by Section 3.2(a) and shall be based upon improvements in operating
income or such different or additional measures as shall reward the Employee for
achievement of annual financial goals of the
<PAGE>
4
Company and accomplishment of annual or longer-term strategic plans of the
Company.
(e) The Company shall pay seventy-five percent (75%) of the bonus
provided for in this Section 3.2 to the Employee not later than the fifteenth
day of the third month following the end of the fiscal year of the Company to
which such bonus relates and the balance of such bonus not later than 105 days
following the end of such fiscal year.
(f) The bonus provided for in this Section 3.2 shall be payable in
cash or, at the election of the Employee, in common stock, par value $.01 per
share (the "Common Stock"), of the Company. For purposes of this Section
3.2(f), the Common Stock shall be valued at the average closing price for the
Common Stock on the NASDAQ Stock Market for the twenty trading days preceding
the date of payment. The election referred to in this Section 3.2(f) shall be
made by the Employee by written notice to the Company, given by him within
thirty (30) days following the end of the fiscal year to which such bonus
relates.
(g) The Employee may elect to defer payment of all or part of the
bonus provided for in this Section 3.2 by filing a written notice of deferral
with the Company prior to commencement of the fiscal year with respect to which
such bonus is payable. Any deferred bonus will bear interest at the rate of
five percent (5%) per annum from the ninetieth day of the fiscal year following
the fiscal year with respect to which such bonus is earned to the date of
payment, compounded annually.
3.3 Stock Options. (a) The Company has granted to the Employee
-------------
options to purchase 105,000 shares (the "Shares") of the Common Stock at an
exercise price of $4.375 per share (the "Options"). Options as to one-third of
the Shares shall become vested and exercisable on the first anniversary of the
date of grant; (ii) Options as to an additional one-third of the Shares shall
become vested and exercisable on the second anniversary of the date of grant;
and (iii) Options as to the balance of the Shares shall become vested and
exercisable on the third anniversary of the date of grant. The Options shall be
otherwise subject to the terms of the Stock Option Plan of the Company pursuant
to which the Options are granted.
(b) It is understood and agreed that the Employee shall continue to
retain options to purchase 83,333 shares of Common Stock granted on June 10,
1997, warrants to purchase 6,666 shares of Common Stock granted on June 10,
1997, options to purchase 125,000 shares of Common Stock granted on January 24,
1996, options to purchase 15,000 shares of Common Stock granted on April 29,
1993, options to purchase 15,000 shares of Common Stock granted on November
<PAGE>
5
5, 1996 and options to purchase 150,000 shares of Common Stock granted on May 8,
1997.
(c) REGISTRATION OF SHARES. The Company shall file a registration
statement under the Securities Act of 1993 on Form S-8 with respect to the
shares of Common Stock covered by the options referred to in Paragraphs (a) and
(b) of this Section 3.3 and a reoffer prospectus with respect to such shares of
Common Stock (as contemplated by General Instruction C to Form S-8) and shall
maintain such registration statement and reoffer prospectus in effect until such
time as the Employee shall have sold or otherwise disposed of all such shares.
The Company shall pay the costs of preparing and filing such registration
statement and reoffer prospectus.
4. EXPENSE REIMBURSEMENT.
---------------------
During the term of this Agreement, the Company shall reimburse the
Employee for all reasonable and necessary out-of-pocket expenses incurred by him
in connection with the performance of his duties hereunder, upon the
presentation of proper accounts therefor in accordance with the Company's
policies and annual budget parameters.
5. BENEFITS.
--------
5.1 Benefit Plans. During the term of this Agreement, the Employee
-------------
will be eligible to participate in all employee benefit plans and programs of
the Company, including, without limitation, group life insurance, disability,
401(k), stock option, stock purchase, group hospitalization, surgical and major
medical insurance plans of the Company, in accordance with the provisions of
such plans and programs as in effect from time to time. The Employee will also
be entitled to participate in other benefit programs made available to senior
executives of the Company.
5.2 Vacation; Sick Days; Leave of Absence. The Employee shall be
-------------------------------------
entitled to five (5) weeks' paid vacation and ten (10) paid sick days per year
and leaves of absence to attend professional and business activities, including
conventions and educational programs, all in accordance with Company policies in
effect from time to time for its executive employees. Any accrued and unused
vacation and sick days will be carried forward to the subsequent year or years.
Upon any termination of the Employee's employment with the Company, the Employee
(or his estate) shall be paid for any vacation and sick days then accrued and
unused.
<PAGE>
6
5.3 Automobile. During the term of this Agreement, the Company shall
----------
provide the Employee with an automobile.
5.4 Disability Insurance. In addition to any other disability
--------------------
insurance which may now or hereafter be provided by the Company under any group
contract or otherwise, the Company shall, during the term of this Agreement pay
directly or reimburse the Employee for premiums payable during the term of this
Agreement on the disability insurance policy described in Exhibit A hereto.
5.5 Club Dues. During the term of this Agreement, the Company shall
---------
pay directly or reimburse the Employee for club dues in such reasonable amount
as shall be approved by the Company in advance on an annual basis.
6. TERMINATION OF EMPLOYMENT.
-------------------------
6.1 Death. In the event of the death of the Employee during the term
-----
of this Agreement, the Company shall pay to the estate or other legal
representative of the Employee (a) the base salary provided for in Section 3
accrued to the date of death and not theretofore paid to the Employee, (b) any
bonus payable pursuant to Section 3.2 and (c) any compensation as would
otherwise have been payable to the Employee from the date of death to the end of
the month in which the Employee's death occurs. Rights and benefits of the
estate or other legal representative of the Employee under the benefit plans and
programs of the Company shall be determined in accordance with the provisions of
such plans and programs. Neither the estate or other legal representative of
the Employee nor the Company shall have any further rights or obligations under
this Agreement, except as provided in Sections 5 and 6.7.
6.2 Disability. If, during the term of this Agreement, the Employee
----------
shall become incapacitated by reason of sickness, accident or other physical or
mental disability and shall be unable to perform his normal duties hereunder
for a cumulative period of three (3) months in any period of six (6) consecutive
months, the employment of the Employee hereunder may be terminated by the
Company or the Employee. In the event of such termination, the Company shall
(a) pay to the Employee any bonus payable pursuant to Section 3.2 and (b) until
the first to occur of the expiration of a period of twenty-four (24) months from
the date of such termination or the death of the Employee, the Company shall pay
to the Employee an amount equal to the excess of the monthly base salary in
effect at the time of such termination over the aggregate monthly benefits
payable to the Employee under any disability plan or policy maintained by the
Company and the disability policy described in Section 5.4. Rights and benefits
of the
<PAGE>
7
Employee under the benefit plans and programs of the Company shall be determined
in accordance with the provisions of such plans and programs. Neither the
Employee nor the Company shall have any further rights or obligations under this
Agreement, except as provided in Sections 5, 6.7, 7, 8, 9 and 10.
6.3 Due Cause. The employment of the Employee hereunder may be
---------
terminated by the Company at any time during the term of this Agreement for Due
Cause (as hereinafter defined). In the event of such termination, the Company
shall pay to the Employee (a) the base salary provided for in Section 3 accrued
to the date of such termination and not theretofore paid to the Employee and (b)
any bonus payable pursuant to Section 3.2. Rights and benefits of the Employee
under the benefit plans and programs of the Company shall be determined in
accordance with the provisions of such plans and programs. For purposes hereof,
"Due Cause" shall mean (i) the Employee's material breach, by willful action or
inaction, of any of the material provisions of this Agreement, or (ii) the
Employee's conviction in a court of law of any felony, or of any crime or
offense concerning money or property of the Company; provided, however, that the
Employee shall be given written notice by a majority of the Board of Directors
of the Company that it intends to terminate the Employee's employment for Due
Cause, which written notice shall specify the act or acts for which the majority
of the Board of Directors of the Company intends so to terminate the Employee's
employment, and the Employee shall then be given the opportunity, within ten
(10) days of his receipt of such notice, to have a meeting with the Board of
Directors of the Company to discuss such act or acts. If the basis of such
written notice is other than an act or acts described in clause (ii), the
Employee shall be given ten (10) days after such meeting within which to cease
or correct the performance (or nonperformance) giving rise to such written
notice and, upon failure of the Employee within such ten (10) days to cease or
correct such performance (or nonperformance) as reasonably determined by the
Board of Directors of the Company, the Employee's employment by the Company
shall automatically be terminated hereunder for Due Cause. Neither the Employee
nor the Company shall have any further rights or obligations under this
Agreement, except as provided in Sections 5, 6.7, 7, 8, 9 and 10.
6.4 Other Termination by the Company. The Company may terminate the
--------------------------------
Employee's employment at any time for whatever reason it deems appropriate or
without reason. In the event of such termination, the Company shall (a) pay to
the Employee any bonus payable pursuant to Section 3.2 and (b) continue to pay
the base salary provided for in Section 3 (at the annual rate then in effect)
until the expiration of a period of twenty-four (24) months from the
<PAGE>
8
date of such termination. Rights and benefits of the Employee under the benefit
plans and programs of the Company shall be determined in accordance with the
provisions of such plans and programs. Neither the Employee nor the Company
shall have any further rights or obligations under this Agreement, except as
provided in Sections 5, 6.7, 7, 8, 9 and 10.
6.5 Termination by the Employee. The Employee may terminate his
---------------------------
employment with the Company during the term of this Agreement upon six (6)
months' prior written notice to the Company. In the event of such termination,
the Company shall pay to the Employee (a) the base salary provided for in
Section 3 accrued to the date of termination and not theretofore paid to the
Employee and (b) any bonus payable pursuant to Section 3.2. Rights and benefits
of the Employee under the benefit plans and programs of the Company shall be
determined in accordance with the provisions of such plans and programs.
Neither the Employee nor the Company shall have any further rights or
obligations under this Agreement, except as provided in Sections 5, 6.7, 7, 8, 9
and 10.
6.6 Change in Control. If, following a change in control of the
-----------------
Company, the employment of the Employee hereunder is terminated for any reason
whatsoever or for no reason, whether by the Employee or by the Company, the
Company shall pay to the Employee (a) severance pay in an amount equal to
thirty-six (36) months' base salary (at the highest annual rate in effect during
the one-year period ending on the date of termination of employment) and (b) any
bonus payable pursuant to Section 3.2. Such severance payment and bonus shall
be paid to the Employee in a cash lump sum on the date of termination of
employment. Rights and benefits of the Employee under the benefit plans and
programs of the Company shall be determined in accordance with the provisions of
such plans and programs. Neither the Employee nor the Company shall have any
further rights or obligations under this Agreement, except as provided in
Sections 5, 6.7, 7, 8, 9 and 10. For purposes of this Agreement, a change in
control of the Company shall be deemed to have occurred if:
(A) a "person" (meaning an individual, a partnership, or other group
or association as defined in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934), other than Ramsay Holdings HSA Limited ("RHHL") or any affiliate
thereof, acquires fifty percent (50%) or more of the combined voting power of
the outstanding securities of the Company having a right to vote in elections of
directors; or
<PAGE>
9
(B) Continuing Directors (as hereinafter defined) shall for any reason
cease to constitute a majority of the Board of Directors of the Company; or
(C) all or substantially all of the business of the Company is
disposed of by the Company to a party or parties other than a subsidiary or
other affiliate of the Company, in which the Company owns less than a majority
of the equity, pursuant to a partial or complete liquidation of the Company,
sale of assets (including stock of a subsidiary of the Company) or otherwise.
For purposes hereof, a sale or disposition of fifty percent (50%) or more of the
assets of the Company to a party or parties (other than a subsidiary or
affiliate of the Company as above described) shall be deemed a disposition of
substantially all of the business of the Company.
For purposes of this Agreement, the term "Continuing Director" shall
mean a member of the Board of Directors of the Company who either was a member
of the Board of Directors on the date hereof or who subsequently became a
Director and whose election was voted for by RHHL or by a Continuing Director
with the acquiescence of RHHL. A Director shall not be considered a Continuing
Director for purposes of this Agreement if his election was voted for by RHHL,
or by a Continuing Director with the acquiescence of RHHL, (i) pursuant to an
agreement with, or at the direction, request or suggestion of, any individual,
firm or corporation in connection with the purchase or other acquisition or
receipt by such individual, firm or corporation of all or any shares of capital
stock of the Company or (ii) in anticipation of the sale or other disposition by
RHHL of all or any of its shares of capital stock of the Company beneficially
owned by RHHL.
6.7 Stock Options. In the event of termination of the Employee's
-------------
employment with the Company: (i) pursuant to Section 6.4 (Other Termination) or
6.6 (Change in Control) of this Agreement, the Company shall cause each stock
option heretofore granted by the Company to the Employee to become fully
exercisable and to remain exercisable until the later of December 31, 2000 or
six (6) months following the date of termination, unless such action, in the
opinion of counsel to the Company, would violate, or adversely affect the status
of such option or the plan (if any) pursuant to which such option was granted
under, Rule 16b-3 under Section 16 of the Securities Exchange Act of 1934; or
(ii) pursuant to Section 6.1 (Death), 6.2 (Disability), 6.4 (Other Termination)
or 6.6 (Change in Control) of this Agreement, the Company shall cause each stock
option heretofore granted by the Company to the Employee to become exercisable
by the Employee or the Employee's estate without regard to the requirement that
the price for the Common Stock shall have equalled or exceeded
<PAGE>
10
$7.00 per share on at least twenty (20) trading days subsequent to the date of
grant.
6.8 NO MITIGATION. The Employee shall be under no obligation to seek
subsequent employment and upon obtaining subsequent employment shall be under no
obligation to offset any amounts earned from such subsequent employment (whether
as an employee, a consultant or otherwise) against any amounts payable to the
Employee by the Company pursuant to the provisions of this Section 6.
7. CONFIDENTIAL INFORMATION.
------------------------
7.1 The Employee shall, during the term of this Agreement and at all
times thereafter, treat as confidential and, except as required in the
performance of his duties and responsibilities under this Agreement, not
disclose, publish or otherwise make available to the public or to any
individual, firm or corporation any confidential material (as hereinafter
defined). The Employee agrees that all confidential material, together with all
notes and records of the Employee relating thereto, and all copies or facsimiles
thereof in the possession of the Employee, are the exclusive property of the
Company and the Employee agrees to return such material to the Company promptly
upon the termination of the Employee's employment with the Company.
7.2 For the purposes hereof, the term "confidential material" shall
mean all information acquired by the Employee in the course of the Employee's
employment with the Company in any way concerning the products, projects,
activities, business or affairs of the Company or the Company's customers,
including, without limitation, all information concerning trade secrets and the
products or projects of the Company and/or any improvements therein, all sales
and financial information concerning the Company, all customer and supplier
lists, all information concerning projects in research and development or
marketing plans for any such products or projects, and all information in any
way concerning the products, projects, activities, business or affairs of
customers of the Company which is furnished to the Employee by the Company or
any of its agents or customers, as such; provided, however, that the term
"confidential material" shall not include information which (a) becomes
generally available to the public other than as a result of a disclosure by the
Employee, (b) was available to the Employee on a non-confidential basis prior to
his employment with the Company or (c) becomes available to the Employee on a
non-confidential basis from a source other than the Company or any of its agents
or customers provided that such source is not bound by a confidentiality
agreement with the Company or any of such agents or customers.
<PAGE>
11
8. INTERFERENCE WITH THE COMPANY.
-----------------------------
The Employee acknowledges that the services to be rendered by him to
the Company are of a special and unique character. The Employee agrees that, in
consideration of his employment hereunder, the Employee will not (a) for a
period of one year commencing on the date of termination of his employment with
the Company, (i) solicit or endeavor to solicit patient referrals, either on his
own account or for any person, firm, corporation or other organization, from (x)
any person, including any physician, clinical psychologist, social worker or
consultant to the Company, who, during the period of the Employee's employment
with the Company, made patient referrals to the Company, or (y) any employee of
the Company, or (ii) solicit or entice or endeavor to solicit or entice away
from the Company any person who was a director, officer, employee or consultant
of the Company, either on his own account or for any person, firm, corporation
or other organization, whether or not such person would commit any breach of his
contract of employment by reason of leaving the service of the Company, or
employ, directly or indirectly, any person who was an employee of the Company or
who by reason of such position at any time is or may be likely to be in
possession of any confidential information or trade secrets relating to the
businesses or products of the Company or (b) at any time, take any action or
make any statement the effect of which would be, directly or indirectly, to
impair the good will of the Company or the business reputation or good name of
the Company or be otherwise detrimental to the interests of the Company,
including any action or statement intended, directly or indirectly, to benefit a
competitor of the Company.
9. INVENTIONS.
----------
Any and all inventions, innovations or improvements ("inventions")
made, developed or created by the Employee (whether at the request or suggestion
of the Company or otherwise, whether alone or in conjunction with others, and
whether during regular hours of work or otherwise) during the period of his
employment with the Company which may be directly or indirectly useful in, or
relate to, the business of the Company, shall be promptly and fully disclosed by
the Employee to the Board of Directors of the Company and shall be the Company's
exclusive property as against the Employee, and the Employee shall promptly
deliver to an appropriate representative of the Company as designated by the
Board of Directors all papers, drawings, models, data and other material
relating to any inventions made, developed or created by him as aforesaid. The
Employee shall, at the request of the Company and without any payment therefor,
execute any documents necessary or advisable in the opinion of the Company's
counsel to direct issuance of patents or
<PAGE>
12
copyrights to the Company with respect to such inventions as are to be the
Company's exclusive property as against the Employee or to vest in the Company
title to such inventions as against the Employee. The expense of securing any
such patent or copyright shall be borne by the Company.
10. EQUITABLE RELIEF.
----------------
In the event of a breach or threatened breach by the Employee of any
of the provisions of Sections 7, 8 or 9 of this Agreement, the Employee hereby
consents and agrees that the Company shall be entitled to an injunction or
similar equitable relief from any court of competent jurisdiction restraining
the Employee from committing or continuing any such breach or threatened breach
or granting specific performance of any act required to be performed by the
Employee under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have. For purposes of Sections 7, 8, 9 and 10
of this Agreement, the term "Company" shall be deemed to include the
subsidiaries and affiliates of the Company.
11. SUCCESSORS AND ASSIGNS.
----------------------
11.1 Assignment by the Company. The Company shall require any
-------------------------
successors (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform if no such
succession had taken place. As used in this Section, "the Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law and this Agreement shall be
binding upon, and inure to the benefit of, the Company, as so defined.
11.2 Assignment by the Employee. The Employee may not assign this
--------------------------
Agreement or any part thereof without the prior written consent of a majority of
the Board of Directors of the Company; provided, however, that nothing herein
shall preclude one or more beneficiaries of the Employee from receiving any
amount that may be payable following the occurrence of his legal incompetency or
his death and shall not preclude the legal representative of his estate from
receiving such amount or from assigning any right hereunder to the person or
persons entitled thereto under his will or, in the case of intestacy, to the
person or persons entitled thereto under the laws of intestacy
<PAGE>
13
applicable to his estate. The term "beneficiaries", as used in this Agreement,
shall mean a beneficiary or beneficiaries so designated to receive any such
amount or, if no beneficiary has been so designated, the legal representative of
the Employee (in the event of his incompetency) or the Employee's estate.
12. GOVERNING LAW.
-------------
This Agreement shall be deemed a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of
Delaware applicable to contracts to be performed entirely within such State. In
the event that a court of any jurisdiction or arbitration panel shall hold any
of the provisions of this Agreement to be wholly or partially unenforceable for
any reason, such determination shall not bar or in any way affect the Company's
right to relief as provided for herein in the courts or arbitration panels of
any other jurisdiction. Such provisions, as they relate to each jurisdiction,
are, for this purpose, severable into diverse and independent covenants.
Service of process on the parties hereto at the addresses set forth herein shall
be deemed adequate service of such process.
13. ENTIRE AGREEMENT.
----------------
This Agreement contains all the understandings and representations
between the parties hereto pertaining to the subject matter hereof and
supersedes all undertakings and agreements, whether oral or in writing, if any
there be, previously entered into by them with respect thereto.
14. AMENDMENT; MODIFICATION; WAIVER.
-------------------------------
No provision of this Agreement may be amended or modified unless such
amendment or modification is agreed to in writing and signed by the Employee and
by a duly authorized representative of the Company other than the Employee.
Except as otherwise specifically provided in this Agreement, no waiver by either
party hereto of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of a similar or dissimilar provision or condition at the same or any
prior or subsequent time, nor shall the failure of or delay by either party
hereto in exercising any right, power or privilege hereunder operate as a waiver
thereof to preclude any other or further exercise thereof or the exercise of any
other such right, power or privilege.
<PAGE>
14
15. ARBITRATION.
-----------
Any controversy or claim arising out of or relating to this Agreement,
or any breach thereof, shall, except as provided in Section 10, be settled by
binding arbitration in accordance with the rules of the American Arbitration
Association then in effect and judgment upon such award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitration shall be held in the area where the Company then has its principal
place of business. The arbitration award may include an award of attorneys'
fees and costs.
16. NOTICES.
-------
Any notice to be given hereunder shall be in writing and delivered
personally or sent by certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or at such other
address as such party may subsequently designate by like notice:
If to the Company:
Ramsay Health Care, Inc.
One Alhambra Plaza
Suite 750
Coral Gables, Florida 33134
Attention: Chairman of the Board
If to the Employee:
Mr. Luis E. Lamela
445 Grand Bay Drive #909
Key Biscayne, Florida 33149
17. SEVERABILITY.
------------
Should any provision of this Agreement be held by a court or
arbitration panel of competent jurisdiction to be enforceable only if modified,
such holding shall not affect the validity of the remainder of this Agreement,
the balance of which shall continue to be binding upon the parties hereto with
any such modification to become a part hereof and treated as though originally
set forth in this Agreement. The parties further agree that any such court or
arbitration panel is expressly authorized to modify any such unenforceable
provision of this Agreement in lieu of severing such unenforceable provision
from this Agreement in its entirety, whether by rewriting the offending
provision, deleting any or all of the offending provision, adding additional
language to this Agreement, or by making such other modifications as it deems
warranted to carry out the intent and agreement of the parties as embodied
herein to
<PAGE>
15
the maximum extent permitted by law. The parties expressly agree that this
Agreement as so modified by the court or arbitration panel shall be binding upon
and enforceable against each of them. In any event, should one or more of the
provisions of this Agreement be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions hereof, and if such provision or provisions are not
modified as provided above, this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions had never been set forth herein.
18. KEY-MAN LIFE INSURANCE.
----------------------
The parties agree that the Company may, in its sole discretion,
maintain key man life insurance policies on the life of the Employee.
19. INDEMNIFICATION.
---------------
The Company and the Employee have heretofore entered into an
Indemnification Agreement dated November 10, 1993 which continues in full force
and effect during the term of this Agreement and thereafter as provided in such
Indemnification Agreement.
20. AUTHORITY.
---------
The Company represents and warrants to the Employee that the execution
and delivery of this Agreement by the Company and the performance by the Company
of its covenants and agreements hereunder have been duly authorized by all
necessary corporate action and that this Agreement has been duly executed and
delivered on behalf of the Company.
21. WITHHOLDING.
-----------
Anything to the contrary notwithstanding, all payments required to be
made by the Company hereunder to the Employee or his beneficiaries, including
his estate, shall be subject to withholding of such amounts relating to taxes as
the Company may reasonably determine it should withhold pursuant to any
applicable law or regulation.
22. SURVIVORSHIP.
------------
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
<PAGE>
16
23. TITLES.
------
Titles of the sections of this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the title of any section.
* * *
<PAGE>
17
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
RAMSAY HEALTH CARE, INC.
By /s/ Remberto G. Cibran
----------------------------
/s/ Luis E. Lamela
------------------------------
Luis E. Lamela
<PAGE>
EXHIBIT 10.111
SCHEDULES TO CREDIT AGREEMENT
DATED
SEPTEMBER 30, 1997
BY AND AMONG
RAMSAY HEALTH CARE, INC.,
THE LENDERS FROM TIME TO TIME PARTY THERETO,
GENERAL ELECTRIC CAPITAL CORPORATION
AND
GECC CAPITAL MARKETS GROUP, INC.
<PAGE>
Schedule 1.01 to
Credit Agreement
----------------
MORTGAGED PROPERTY
------------------
A. OWNED PROPERTIES
----------------
Name of Owner Name of Hospital Location
- ------------- ---------------- --------
Carolina Treatment Coastal Carolina 152 Waccamaw Medical
Center, Inc. Hospital Park Dr.
Conway, SC 29526
(Horry County)
The Haven The Haven Hospital 800 Kirnwood Drive
Hospital, Inc. Desoto, Texas 75115
(Dallas County)
Greenbrier Greenbrier Hospital 201 Greenbrier Blvd.
Hospital, Inc. Covington,
Louisiana 70433
(St. Tammany County)
Great Plains Heartland Hospital 1500 W. Ashland Street
Hospital, Inc. Nevada, Missouri 64772
(Vernon County)
Havenwyck Havenwyck Hospital 1525 University Drive
Hospital, Inc. Auburn Hills,
Michigan 48326
(Oakland County)
HSA of Oklahoma, Meadowlake Hospital 2216 South Van Buren
Inc. Enid, Oklahoma 73703
(Garfield County)
Gulf Coast Gulf Coast 1015 Mar Walt Drive
Treatment Center, Treatment Center Fort Walton, Florida 32548
Inc. (Okaloosa County)
H.C. Partnership Hill Crest Hospital 7009 Fifth Avenue South
Birmingham, Alabama 35212
(Jefferson County)
East Carolina Brynn Marr Hospital 192 Village Drive
Psychiatric Jacksonville, NC 28546
Services Corp. (Onslow County)
<PAGE>
2
Bountiful Benchmark Regional 592 West 1350 South
Psychiatric Hospital Woods Cross, Utah 84087
Hospital, Inc. (Davis County)
<PAGE>
3
MORTGAGED PROPERTY (CONT'D.)
------------------
B. LEASED HOSPITALS
----------------
Name of Lessee Name of Hospital Location
- ------------------- ------------------- ------------------------
Mesa Psychiatric Desert Vista 570 West Brown Road
Hospital, Inc. Hospital Mesa, Arizona 85201
(Maricopa County)
RHCI San Antonio, Mission Vista 14747 Jones Maltsberger
Inc. Hospital San Antonio, Texas 78247-3713
(Bexar County)
Houma Psychiatric Bayou Oaks Hospital 934 Main Street
Hospital, Inc. Houma, Louisiana 70360
(Terrebonne County)
Psychiatric Chestnut Ridge 930 Chestnut Ridge Road
Institute of West Hospital Morgantown, WV 26505
Virginia, Inc. (Monongalia County)
<PAGE>
Schedule 3.02 to
Credit Agreement
----------------
EXECUTIVE OFFICES; OTHER PLACES OF BUSINESS
AND COLLATERAL LOCATIONS; TRADE NAMES
--------------------------------------------
1. RAMSAY HEALTH CARE, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Ramsay Health Care, Inc.
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
And at such other locations as listed below.
Principal Place of Business
- ---------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
2. AMERICARE OF GALAX, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Americare of Galax, Inc.
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Principal Place of Business
- ---------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
<PAGE>
2
3. BETHANY PSYCHIATRIC HOSPITAL, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Bethany Psychiatric Hospital, Inc.
Bethany Healthcare Corp.
Columbia Bethany Hospital
7600 and 7604 N.W. 23rd Street
Bethany, Oklahoma 73008
Principal Place of Business
- ---------------------------
7600 N.W. 23rd Street
Bethany, Oklahoma 73008
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
7600 and 7604 N.W. 23rd Street
Bethany, Oklahoma 73008
4. BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Bountiful Psychiatric Hospital, Inc.
Benchmark Behavioral Health System North
Benchmark Behavioral Health System South
Benchmark Regional Hospital
592 West 1350 South
Woods Cross, Utah 84087
Briarwood Group Home
480 Galetti Way
Sparks Nevada 89431
Benchmark South
175 West 7200 South
Midvale, Utah 84047
<PAGE>
3
Principal Place of Business
- ---------------------------
592 West 1350 South
Woods Cross, Utah 84087
175 West 7200 South
Midvale, Utah 84047
<PAGE>
4
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
592 West 1350 South
Woods Cross, Utah 84087
175 West 7200 South
Midvale, Utah 84047
480 Galetti Way
Sparks Nevada 89431
5. CAROLINA TREATMENT CENTER, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Carolina Treatment Center, Inc.
Coastal Carolina Residential Treatment Center
Coastal Carolina Hospital
152 Waccamaw Medical Park Drive
Conway, South Carolina 29526
Sea Harbor Group Home
2335 Highway 9
Conway, South Carolina 25958
Principal Place of Business
- ---------------------------
152 Waccamaw Medical Park Drive
Conway, South Carolina 29526
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
<PAGE>
5
152 Waccamaw Medical Park Drive
Conway, South Carolina 29526
2335 Highway 9
Conway, South Carolina 25958
6. EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION
Trade Names and Locations of Facilities
- ---------------------------------------
East Carolina Psychiatric Services Corporation
Brynn Marr Behavioral Healthcare System
Brynn Marr Hospital
192 Village Drive
Jacksonville, North Carolina 28546
New Beginnings of Goldsboro
2402 East Ash Street
Goldsboro, North Carolina 27534
Principal Place of Business
- ---------------------------
192 Village Drive
Jacksonville, North Carolina 28546
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
192 Village Drive
Jacksonville, North Carolina 28546
2402 East Ash Street
Goldsboro, North Carolina 27534
7. GREAT PLAINS HOSPITAL, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Great Plains Hospital, Inc.
Heartland Behavioral Health Services
<PAGE>
6
Heartland Hospital
1500 W. Ashland Street
Nevada, Missouri 64772
Principal Place of Business
- ---------------------------
1500 W. Ashland Street
Nevada, Missouri 64772
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1500 W. Ashland Street
Nevada, Missouri 64772
8. GREENBRIER HOSPITAL, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Greenbrier Hospital, Inc.
Greenbrier Hospital
201 Greenbrier Blvd.
Covington, Louisiana 70433
St. Gabriel Home Health
1000 E. Morris Dr.
Hammond, Louisiana 70403
St. Gabriel Home Health
700 Gause Blvd.
Suite 301
Slidell, Louisiana 70458
Principal Place of Business
- ---------------------------
201 Greenbrier Blvd.
Covington, Louisiana 70433
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
<PAGE>
7
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
201 Greenbrier Blvd.
Covington, Louisiana 70433
1000 E. Morris Dr.
Hammond, Louisiana 70403
700 Gause Blvd.
Suite 301
Slidell, Louisiana 70458
<PAGE>
8
9. GULF COAST TREATMENT CENTER, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Gulf Coast Treatment Center, Inc.
Gulf Coast Treatment Center
1015 Mar Walt Drive
Fort Walton, Florida 32548
Gulf Coast Group Home
119 South 10th Street
Ft. Pierce, Florida 34950
Principal Place of Business
- ---------------------------
1015 Mar Walt Drive
Fort Walton, Florida 32548
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1015 Mar Walt Drive
Fort Walton, Florida 32548
119 South 10th Street
Ft. Pierce, Florida 34950
10. HAVENWYCK HOSPITAL, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Havenwyck Hospital, Inc.
Havenwyck Hospital
1525 University Drive
Auburn Hills, Michigan 48326
Principal Place of Business
- ---------------------------
1525 University Drive
Auburn Hills, Michigan 48326
<PAGE>
9
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
<PAGE>
10
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1525 University Drive
Auburn Hills, Michigan 48326
11. H.C. CORPORATION
Trade Names and Locations of Facilities
- ---------------------------------------
H.C. Corporation
Hill Crest Behavioral Health Services
Hill Crest Hospital
7009 Fifth Avenue South
Birmingham, Alabama 35212
Principal Place of Business
- ---------------------------
7009 Fifth Avenue South
Birmingham, Alabama 35212
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
7009 Fifth Avenue South
Birmingham, Alabama 35212
12. H.C. PARTNERSHIP
Trade Names and Locations of Facilities
- ---------------------------------------
H.C. Partnership
Hill Crest Behavioral Health Services
Hill Crest Hospital
7009 Fifth Avenue South
Birmingham, Alabama 35212
Principal Place of Business
- ---------------------------
7009 Fifth Avenue South
<PAGE>
11
Birmingham, Alabama 35212
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
7009 Fifth Avenue South
Birmingham, Alabama 35212
13. HOUMA PSYCHIATRIC HOSPITAL, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Houma Psychiatric Hospital, Inc.
Bayou Oaks Hospital
934 East Main Street
Houma, Louisiana 70360
Mid City Medical Complex
855 Belanger, Suite 209A
Houma, Louisiana 70363
Bayou Oaks Pavilion
197 Elysian Dr.
Houma, Louisiana 70363
Bayou Oaks Clinic
Ridgefield Rentals
1717 Ridgefield Rd.
Thibodaux, Louisiana 70301
Bayou Oaks Clinic
301 W. Airline Hwy.
Suite 104
Laplace, Louisiana 70068
Bayou Oaks Clinic
101 Picciola Pkwy.
Cutoff, Louisiana 70345
<PAGE>
12
Principal Place of Business
- ---------------------------
934 East Main Street
Houma, Louisiana 70360
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
934 East Main Street
Houma, Louisiana 70360
855 Belanger, Suite 209A
Houma, Louisiana 70860
197 Elysian Dr.
Houma, Louisiana 70860
Ridgefield Rentals
1717 Ridgefield Rd.
Thibodaux, Louisiana 70301
301 W. Airline Hwy.
Suite 104
Laplace, Louisiana 70068
101 Picciola Pkwy.
Cutoff, Louisiana 70345
14. HSA HILL CREST CORPORATION
Trade Names and Locations of Facilities
- ---------------------------------------
HSA Hill Crest Corporation
Hill Crest Behavioral Health Services
Hill Crest Hospital
7009 Fifth Avenue South
Birmingham, Alabama 35212
Principal Place of Business
- ---------------------------
<PAGE>
13
7009 Fifth Avenue South
Birmingham, Alabama 35212
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
7009 Fifth Avenue South
Birmingham, Alabama 35212
15. HSA OF OKLAHOMA, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
HSA of Oklahoma, Inc.
Meadowlake Hospital
Meadowlake Behavioral Health System
2216 South Van Buren
Enid, Oklahoma 73703
Principal Place of Business
- ---------------------------
2216 South Van Buren
Enid, Oklahoma 73703
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
2216 South Van Buren
Enid, Oklahoma 73703
16. INTEGRATED BEHAVORIAL SERVICES, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Integrated Behavioral Services, Inc.
One Alhambra Plaza, Suite 750
<PAGE>
14
Coral Gables, Florida 33134
Principal Place of Business
- ---------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
17. MESA PSYCHIATRIC HOSPITAL, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Mesa Psychiatric Hospital, Inc.
Desert Vista Hospital
570 West Brown Road
Mesa, Arizona 85201
Desert Vista Clinic
11225 N. 28th Drive
Phoenix, Arizona 85029
Principal Place of Business
- ---------------------------
570 West Brown Road
Mesa, Arizona 85201
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
570 West Brown Road
Mesa, Arizona 85201
11225 N. 28th Drive
<PAGE>
15
Phoenix, Arizona 85029
18. MICHIGAN PSYCHIATRIC SERVICES, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Michigan Psychiatric Services, Inc.
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Principal Place of Business
- ---------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
19. PSYCHIATRIC INSTITUTE OF WEST VIRGINIA, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Psychiatric Institute of West Virginia, Inc.
Chestnut Ridge Day Treatment Center
Chestnut Ridge Hospital
930 Chestnut Ridge Road
Morgantown, West Virginia 26505
Principal Place of Business
- ---------------------------
930 Chestnut Ridge Road
Morgantown, West Virginia 26505
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
<PAGE>
16
930 Chestnut Ridge Road
Morgantown, West Virginia 26505
20. RAMSAY ACQUISITION CORP.
Trade Names and Locations of Facilities
- ---------------------------------------
Ramsay Acquisition Corp.
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Principal Place of Business
- ---------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
21. RAMSAY CORRECTIONAL SERVICES, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Ramsay Correctional Services, Inc.
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Principal Place of Business
- ---------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
22. RAMSAY LOUISIANA, INC.
<PAGE>
17
Trade Names and Locations of Facilities
- ---------------------------------------
Ramsay Louisiana, Inc.
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Three Rivers Hospital
22050 Crestwood Blvd.
Covington, Louisiana 70443
Principal Place of Business
- ---------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
22050 Crestwood Blvd.
Covington, Louisiana 70443
23. RAMSAY MANAGED CARE, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Ramsay Managed Care, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
And at such other locations as listed in items 29-43 below.
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
<PAGE>
18
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
24. RAMSAY MANAGEMENT SERVICES OF WEST VIRGINIA, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Ramsay Management Services of West Virginia, Inc.
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Principal Place of Business
- ---------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
25. RAMSAY NEW ORLEANS, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Ramsay New Orleans, Inc.
The Pavilion on the Park
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Principal Place of Business
- ---------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
<PAGE>
19
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
26. RAMSAY YOUTH SERVICES, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Ramsay Youth Services, Inc.
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Principal Place of Business
- ---------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
27. RHCI SAN ANTONIO, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
RHCI San Antonio, Inc.
Mission Vista Hospital
14747 Jones Maltsberger
San Antonio, Texas 78247-3713
Mission Vista Pavilion
7220 Louis Pasteur
San Antonio, Texas 78229
Principal Place of Business
- ---------------------------
14747 Jones Maltsberger
San Antonio, Texas 78247-3713
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
<PAGE>
20
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
14747 Jones Maltsberger
San Antonio, Texas 78247-3713
7220 Louis Pasteur
San Antonio, Texas 78229
28. THE HAVEN HOSPITAL, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
The Haven Hospital, Inc.
The Haven Residential Treatment Center
The Haven Hospital
800 Kirnwood Drive
Desoto, Texas 75115
The Haven Mid-City
903 D Medical Center Drive
Arlington, Texas 76012
Principal Place of Business
- ---------------------------
800 Kirnwood Drive
Desoto, Texas 75115
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
800 Kirnwood Drive
Desoto, Texas 75115
903 D Medical Center Drive
Arlington, Texas 76012
29. ARIZONA PSYCHIATRIC AFFILIATES, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
<PAGE>
21
Arizona Psychiatric Affiliates, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
Arizona Psychiatric Affiliates, Inc.
4105 North 20th St., Suite 280
Phoenix, Arizona 85016
Arizona Psychiatric Affiliates, Inc.
Desert Vista Medical Office Bldg., Suite 108
570 West Brown Road
Mesa, Arizona 85201
Arizona Psychiatric Affiliates, Inc.
5757 W. Thunderbird Road, Suite W303
Glendale, Arizona 85306
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
4105 North 20th St., Suite 280
Phoenix, Arizona 85016
Desert Vista Medical Office Bldg., Suite 108
570 West Brown Road
Mesa, Arizona 85201
5757 W. Thunderbird Road, Suite W303
Glendale, Arizona 85306
<PAGE>
22
30. FLORIDA PSYCHIATRIC ASSOCIATES, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Florida Psychiatric Associates, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
Florida Psychiatric Associates, Inc.
8382 Baymeadows Rd., Suite 3
Jacksonville, Florida 32256
Florida Psychiatric Associates, Inc.
102 Park Place Drive, Suite 3
Kissimmee, Florida 34741
Florida Psychiatric Associates, Inc.
4106 W. Lake Mary Blvd., Suite 205
Lake Mary, Florida 32746
Florida Psychiatric Associates, Inc.
Century Professional Plaza
7410 So. US Highway 1, Suite 406
Port St. Lucie, Florida 34952
Florida Psychiatric Associates, Inc.
7300 Sand Lake Commons Blvd., Suite 112
Orlando, Florida 32819
Florida Psychiatric Associates, Inc.
900 East Ocean Blvd., Suite 232
Stuart, Florida 34994
Florida Psychiatric Associates, Inc.
4728 No. Habana Ave., Suite 203
Tampa, Florida 33614
Florida Psychiatric Associates, Inc.
250 Tequesta Dr., Suite 304
Tequesta, Florida 33469
Florida Psychiatric Associates, Inc.
2240 Palm Beach Lakes Blvd., Suite 325
<PAGE>
23
West Palm Beach, Florida 33409
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
8382 Baymeadows Rd., Suite 3
Jacksonville, Florida 32256
102 Park Place Drive, Suite 3
Kissimmee, Florida 34741
4106 W. Lake Mary Blvd., Suite 205
Lake Mary, Florida 32746
Century Professional Plaza
7410 So. US Highway 1, Suite 406
Port St. Lucie, Florida 34952
7300 Sand Lake Commons Blvd., Suite 112
Orlando, Florida 32819
900 East Ocean Blvd., Suite 232
Stuart, Florida 34994
4728 No. Habana Ave., Suite 203
Tampa, Florida 33614
250 Tequesta Dr., Suite 304
Tequesta, Florida 33469
<PAGE>
24
2240 Palm Beach Lakes Blvd., Suite 325
West Palm Beach, Florida 33409
Shurgard Storage Centers
1241 So. Orlando Avenue
Maitland, Florida 32751
(Units: 193 and 219)
Winter Park Business Center Phase II, Ltd.
807 So. Orlando Avenue, Suite G
Winter Park, Florida 32789
31. FLORIDA PSYCHIATRIC MANAGEMENT, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Florida Psychiatric Management, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
809 "O" So. Orlando Ave.
Winter Park, Florida 32789
32. FPM BEHAVIORAL HEALTH, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
FPM Behavioral Health, Inc.
1276 Minnesota Ave.
<PAGE>
25
Winter Park, Florida 32789
FPM Behavioral Health, Inc.
809 "O" So. Orlando Ave.
Winter Park, Florida 32789
FPM Behavioral Health, Inc.
1111 North Shartel Street
Oklahoma City, Oklahoma 73103
FPM Behavioral Health, Inc. Mailing Address
6800 Park Ten Blvd. East ---------------
Suite 130E P.O. Box 7366
San Antonio, Texas 78213 The Woodlands, Texas 77387
FPM Behavioral Health, Inc.
3500 North Causeway, Suite 160
Metairie, Louisiana 70002
FPM Behavioral Health, Inc.
c/o Prudential Health Care
2701 Coltsgate Road, Suite 300
Charlotte, North Carolina 28211
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
809 "O" So. Orlando Ave.
Winter Park, Florida 32789
<PAGE>
26
1111 North Shartel Street
Oklahoma City, Oklahoma 73103
6800 Park Ten Blvd. East Mailing Address
---------------
Suite 130E P.O. Box 7366
San Antonio, Texas 78213 The Woodlands, Texas 77387
3500 North Causeway, Suite 160
Metairie, Louisiana 70002
c/o Prudential Health Care
2701 Coltsgate Road, Suite 300
Charlotte, North Carolina 28211
Shurgard Storage Centers
1241 So. Orlando Avenue
Maitland, Florida 32751
(Units: 193 and 219)
33. FPMBH CLINICAL SERVICES, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
FPMBH Clinical Services, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
<PAGE>
27
34. FPMBH OF ARIZONA, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
FPMBH of Arizona, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
FPMBH of Arizona, Inc. Mailing Address
4105 N. 20th St., Suite 280 ---------------
Phoenix, Arizona 85016 P.O. Box 36008
Phoenix, Arizona 85067
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
4105 N. 20th St., Suite 280
Phoenix, Arizona 85016
809 "O" So. Orlando Ave.
Winter Park, Florida 32789
Sentinel Mini Storage #603
1940 E. Indian School Road
Phoenix, Arizona 85016
(Units: C302, C109, C304 & D11)
35. FPMBH OF TEXAS, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
FPMBH of Texas, Inc.
<PAGE>
28
1276 Minnesota Ave.
Winter Park, Florida 32789
FPMBH of Texas, Inc. Mailing Address
---------------
6800 Park Ten Blvd. East P.O. Box 7366
Suite 130E The Woodlands, Texas 77387
San Antonio, Texas 78213
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
809 "O" So. Orlando Ave.
Winter Park, Florida 32789
6800 Park Ten Blvd. East Mailing Address
---------------
Suite 130E P.O. Box 7366
San Antonio, Texas 78213 The Woodlands, Texas 77387
36. FPM/HAWAII, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
FPM/Hawaii, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
FPM of Hawaii, Inc.
600 Kapiolani Blvd., Suite 402
Honolulu, Hawaii 96813
<PAGE>
29
Vacated premises on June 30, 1997 but lease has not terminated.
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
600 Kapiolani Blvd., Suite 402
Honolulu, Hawaii 96813
Vacated premises on June 30, 1997 but lease has not terminated.
809 "O" So. Orlando Ave.
Winter Park, Florida 32789
37. FPM MANAGEMENT, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
FPM Management, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
<PAGE>
30
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
38. FPM OF LOUISIANA, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
FPM of Louisiana, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
FPM of Louisiana, Inc.
3500 North Causeway, Suite 160
Metairie, Louisiana 70002
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
809 "O" So. Orlando Ave.
Winter Park, Florida 32789
3500 North Causeway, Suite 160
Metairie, Louisiana 70002
39. FPM OF OHIO, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
<PAGE>
31
FPM of Ohio, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
FPM of Ohio, Inc.
P.O. Box 91936
Cleveland, Ohio 55101-3936
FPM of Ohio, Inc.
ECO Professional Building
1206 North Main Street
Suite 106
North Canton, OH 44720
Vacated premises.
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
P.O. Box 91936
Cleveland, Ohio 55101-3936
809 "O" So. Orlando Ave.
Winter Park, Florida 32789
918 Chestnut Ridge Road, Suite 10
Morgantown, West Virginia 26505
40. FPM OF UTAH, INC.
<PAGE>
32
Trade Names and Locations of Facilities
- ---------------------------------------
FPM of Utah, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
41. FPM OF WEST VIRGINIA, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
FPM of West Virginia, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
FPM of West Virginia, Inc.
918 Chestnut Ridge Road, Suite 10
Morgantown, West Virginia 26505
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
<PAGE>
33
1276 Minnesota Ave.
Winter Park, Florida 32789
918 Chestnut Ridge Road, Suite 10
Morgantown, West Virginia 26505
809 "O" So. Orlando Ave.
Winter Park, Florida 32789
42. FPM/SOUTHEAST, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
FPM/Southeast, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
FPM/Southeast, Inc.
c/o Prudential Health Care
2701 Coltsgate Road, Suite 300
Charlotte, North Carolina 28211
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
809 "O" So. Orlando Ave.
Winter Park, Florida 32789
c/o Prudential Health Care
2701 Coltsgate Road, Suite 300
Charlotte, North Carolina 28211
<PAGE>
34
43. UTAH PSYCHIATRIC AFFILIATES, INC.
Trade Names and Locations of Facilities
- ---------------------------------------
Utah Psychiatric Affiliates, Inc.
1276 Minnesota Ave.
Winter Park, Florida 32789
Principal Place of Business
- ---------------------------
1276 Minnesota Ave.
Winter Park, Florida 32789
Chief Executive Office
- ----------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Locations of Collateral and Records
- -----------------------------------
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
1276 Minnesota Ave.
Winter Park, Florida 32789
<PAGE>
Schedule 3.04 to
Credit Agreement
----------------
FINANCIAL STATEMENTS AND PROJECTIONS
------------------------------------
To be attached.
<PAGE>
Schedule 3.05 to
Credit Agreement
----------------
CONTINGENT LIABILITIES; RESTRICTED PAYMENTS
-------------------------------------------
1. See Schedule 3.07.
2. See Schedule 3.14.
3. See Schedule 3.18.
4. Obligations under the SocGen Cash Collateral Agreement.
<PAGE>
Schedule 3.06 to
Credit Agreement
----------------
REAL PROPERTY AND LEASES
------------------------
I. OWNED REAL ESTATE
- -- -----------------
1. East Carolina Psychiatric Services 2. Bountiful Psychiatric Hospital,
Corp. Inc.
Brynn Marr Hospital Benchmark Regional Hospital
192 Village Drive 592 West 1350 South
Jacksonville, North Carolina 28546 Woods Cross, Utah 84087
3. Carolina Treatment Center, Inc. 4. The Haven Hospital, Inc.
Coastal Carolina Hospital The Haven Hospital
152 Waccamaw Medical Park Drive 800 Kirnwood Drive
Conway, South Carolina 29526 Desoto, Texas 75115
5. Greenbrier Hospital, Inc. 6. Great Plains Hospital, Inc.
Greenbrier Hospital Heartland Hospital
201 Greenbrier Blvd. 1500 W. Ashland Street
Covington, Louisiana 70433 Nevada, Missouri 64772
7. Havenwyck Hospital, Inc. 8. HSA of Oklahoma, Inc.
Havenwyck Hospital Meadowlake Hospital
1525 University Drive 2216 South Van Buren
Auburn Hills, Michigan 48326 Enid, Oklahoma 73703
9. Gulf Coast Treatment Center, Inc. 10. H.C. Partnership
Gulf Coast Treatment Center Hill Crest Hospital
1015 Mar Walt Drive 7009 Fifth Avenue South
Fort Walton, Florida 32548 Birmingham, Alabama 35212
11. 1333 University Drive 12. Bayou Oaks Pavilion
Pontiac, Michigan 48342 197 Elysian Drive
Houma, Louisiana 70363
13 Ramsay Louisiana, Inc.
Three Rivers Hospital
22050 Crestwood Blvd.
Covington, Louisiana 70443
<PAGE>
2
II. RAMSAY HEALTH CARE, INC. LEASED HOSPITAL FACILITIES
---------------------------------------------------
1. Houma Psychiatric Hospital, Inc. 2. Mesa Psychiatric Hospital, Inc.
Bayou Oaks Hospital Desert Vista Hospital
934 East Main Street 570 West Brown Road
Houma, Louisiana 70360 Mesa, Arizona 85201
3. Bountiful Psychiatric Hospital, Inc. 4. Psychiatric Institute of West
Benchmark South Virginia, Inc.
175 West 7200 South Chestnut Ridge Hospital
Midvale, Utah 84047 930 Chestnut Ridge Road
Morgantown, West Virginia 26505
5. RHCI San Antonio Inc.
Mission Vista Hospital
14747 Jones Maltsberger
San Antonio, Texas 78247
III. RAMSAY MANAGED CARE, INC. LEASED CLINIC FACILITIES
--------------------------------------------------
1. Florida Psychiatric Associates, Inc. 2. Florida Psychiatric Associates,
1276 Minnesota Avenue Inc.
Winter Park, Florida 32789 7300 Sand Lake Commons Blvd.
Suite 112
Orlando, Florida 32819
3. Florida Psychiatric Associates, Inc. 4. Florida Psychiatric Associates,
8382 Baymeadows Road Inc.
Suite 3 900 East Ocean Blvd.
Jacksonville, Florida 32256 Suite 232
Stuart, Florida 34994
5. Florida Psychiatric Associates, Inc. 6. Florida Psychiatric Associates,
102 Park Place Drive Inc.
Suite 3 4728 No. Habana Avenue
Kissimmee, Florida 34741 Suite 203
Tampa, Florida 33614
7. Florida Psychiatric Associates, Inc. 8. Florida Psychiatric Associates,
4106 W. Lake Mary Blvd. Inc.
Suite 205 250 Tequesta Drive
Lake Mary, Florida 32746 Suite 304
Tequesta, Florida 33469
9. Florida Psychiatric Associates, Inc. 10. Florida Psychiatric Associates,
Century Professional Plaza Inc.
7410 So. US Hwy. 1 2240 Palm Beach Lake Blvd.
Suite 406 Suite 325
Port St. Lucie, Florida 34952 West Palm Beach, Florida 33409
11.Arizona Psychiatric Affiliates 12. Desert Vista Medical Office
4105 No. 20th Street Bldg.
Suite 280 Suite 103
Phoenix, Arizona 85016 570 West Brown Road
Mesa, Arizona 85201
<PAGE>
3
13.Arizona Psychiatric Affiliates, Inc.
5757 W. Thunderbird Road
Suite W303
Glendale, Arizona 85306
IV. LEASED BUSINESS/ADMINISTRATIVE OFFICES
- -- --------------------------------------
1. Ramsay Health Care, Inc. 2. FPMBH of Arizona, Inc.
Columbus Center 4105 North 20th Street
One Alhambra Plaza Suite 280
Suite 750 Phoenix, Arizona 85016
Coral Gables, Florida 33134
3. FPM Behavioral Health, Inc. 4. FPM of West Virginia, Inc.
1276 Minnesota Avenue 918 Chestnut Ridge Road
Winter Park, Florida 32789 Suite 10
Morgantown, West Virginia 26505
5. FPM Behavioral Health, Inc. 6. FPM Southeast, Inc.
809 "O" South Orlando Avenue c/o Prudential Health Care
Winter Park, Florida 32789 2701 Coltsgate Road
Suite 300
Charlotte, North Carolina 28211
7. FPM Behavioral Health, Inc. 8. Florida Psychiatric Associates,
1111 North Shartel Street Inc.
Oklahoma City, Oklahoma 73103 1276 Minnesota Avenue
Winter Park, Florida 32789
9. FPM of Ohio, Inc. 10. Florida Psychiatric Management,
FPM Behavioral Health of Ohio, Ltd. Inc.
ECO Professional Building 815 N.W. 57th Avenue
1206 North Main Street, Suite 106 Suite 207
North Canton, OH 44720 Miami, Florida 33126
Recently vacated premises.
11. FPMBH of Texas, Inc. 12. FPM of Louisiana, Inc.
6800 Park Ten Blvd. 3500 North Causeway, Suite 160
Suite 130E Metairie, Louisiana 70002
San Antonio, Texas 78213
V. GROUP HOMES
- -- -----------
1. Briarwood Group Home
480 Galetti Way
Sparks Nevada 89431
2. Gulf Coast Group Home
119 South 10th Street
Ft. Pierce, Florida 34950
3. Hill Crest Hospital Group Home
<PAGE>
4
7009 Fifth Avenue South
Birmingham, Alabama 35212
4. Sea Harbor Group Home
2335 Highway 9
Conway, South Carolina 25958
VI. LISTING OF LEASES
- --- -----------------
1. FACILITY: CAROLINA TREATMENT CENTER, INC.
--------
COASTAL CAROLINA HOSPITAL
DATE OF LEASE: July 5, 1994
-------------
LESSOR: Carolina Treatment Center, Inc.
------
LESSEE: Transitional Care Ventures (South Carolina), Inc.
------
2. FACILITY: THE HAVEN HOSPITAL, INC.
--------------
THE HAVEN HOSPITAL
DATE OF LEASE: May 13, 1994
--------------
LESSOR: The Haven Hospital, Inc.
--------------
LESSEE: Transitional Care Ventures (North Texas), Inc.
--------------
3. FACILITY: HSA OF OKLAHOMA, INC.
--------------
MEADOWLAKE HOSPITAL
DATE OF LEASE: August 1, 1997
--------------
LESSOR: HSA of Oklahoma, Inc.
--------------
LESSEE: Baptist Healthcare of Oklahoma, Inc.,
--------------
d/b/a Integris Bass Baptist Health Center
DATE OF LEASE: August 11, 1995
--------------
LESSOR: GE Capital Modular Space, a division of
--------------
Transport International Pool, Inc.
LESSEE: Meadowlake Hospital
--------------
DATE OF LEASE: October 1, 1996
--------------
LESSOR: Meadowlake Behavioral Health System
--------------
LESSEE: Meadowlake Area Prevention Resource Center
--------------
4. FACILITY: MESA PSYCHIATRIC HOSPITAL, INC.
--------------
DESERT VISTA HOSPITAL
DATE OF LEASE: November 1, 1994
--------------
LESSOR: Mesa Psychiatric Hospital, Inc.,
--------------
as assignee of Ramsay Health Care, Inc.
LESSEE: Transitional Care Ventures (Arizona), Inc.
--------------
DATE OF LEASE: July 15, 1997
--------------
LESSOR: Mesa Psychiatric Hospital, Inc.
--------------
LESSEE: Youth Development Institute
------
<PAGE>
5
DATE OF LEASE: August 18, 1992
--------------
LESSOR: Mesa Psychiatric Hospital, Inc.
--------------
d/b/a Desert Vista Hospital
LESSEE: Scott Connor, Psy.D.
--------------
DATE OF LEASE: November 21, 1996
--------------
LESSOR: Mesa Psychiatric Hospital, Inc.
--------------
d/b/a Desert Vista Hospital
LESSEE: Jarek Opechowski, M.D.
--------------
DATE OF LEASE: December 26, 1996
--------------
LESSOR: Mesa Psychiatric Hospital, Inc.
--------------
d/b/a Desert Vista Hospital
LESSEE: John Jarvis, M.D. - Desert Psychiatry
--------------
DATE OF LEASE: January 15, 1997
--------------
LESSOR: Mesa Psychiatric Hospital, Inc.
--------------
d/b/a Desert Vista Hospital
LESSEE: Psychiatric Services of the East Valley, P.C.
--------------
DATE OF LEASE: March 18, 1997
--------------
LESSOR: Mesa Psychiatric Hospital, Inc.
--------------
d/b/a Desert Vista Hospital
LESSEE: Metropolitan Psychiatric Physicians, P.C.
--------------
DATE OF LEASE: July 25, 1997
--------------
LESSOR: Mesa Psychiatric Hospital, Inc.
--------------
d/b/a Desert Vista Hospital
LESSEE: Arizona Community Psychiatric Groups, Ltd.
--------------
DATE OF LEASE: September 10, 1997
--------------
LESSOR: Mesa Psychiatric Hospital, Inc.
--------------
d/b/a Desert Vista Hospital
LESSEE: Arizona Psychiatric Affiliates
--------------
5. FACILITY: RHCI SAN ANTONIO, INC.
--------------
MISSION VISTA HOSPITAL
DATE OF LEASE: January 19, 1994
--------------
LESSOR: RHCI San Antonio, Inc.,
--------------
as assignee of Ramsay Health Care, Inc.
LESSEE: Transitional Care Ventures (Texas), Inc.
------
<PAGE>
Schedule 3.07 to
Credit Agreement
----------------
MATERIAL CONTRACTS
------------------
1. All Hospital Leases set forth on Schedule 3.06(II).
2. Executive Office Lease set forth on Schedule 3.06(IV)(1).
3. Management Agreements set forth below:
(a) Mental Health/Substance Abuse Service Agreement dated as of October 1,
1995 by and between FPM Behavioral Health, Inc. and Prudential Health
Care Plan, Inc.;
(b) Mental Health/Substance Abuse Service Agreement dated as of October 1,
1995 by and between FPM Behavioral Health, Inc. and The Prudential
Insurance Company of America;
(c) Agreement dated as of October __, 1992 by and between Florida
Psychiatric Management, Inc. and Disney Worldwide Services, Inc.;
(d) Agreement dated as of October 1, 1995 by and between Florida
Psychiatric Management, Inc. and The School Board of Orange County,
Florida;
(e) Provider Agreement dated as of February 1, 1990 by and between Humana
Health Plan, Inc. and FPMBH of Arizona, Inc. (as [assignee] of Phoenix
South Community Mental Health Center);
(f) Agreement dated as of January 1, 1995 by and between FPM of West
Virginia, Inc. and The Health Plan of the Upper Ohio Valley, Inc.;
(g) Specialty Care Agreement dated as of August 15, 1997 by and between FPM
Behavioral Health, Inc. and Physicians Healthcare Plans, Inc.;
(h) Independent Mental Health Services Corporation (Management Company)
Agreement for Mental Health Services (Capitation) dated as of August 1,
1993,
<PAGE>
2
as amended as of May 1, 1997, by and between Florida Psychiatric
Management, Inc. and Health Options, Inc.; and
(i) Letter Agreement dated August 4, 1997 by and between FPM Behavioral
Health, Inc. d/b/a Benchmark Behavioral Health Systems and PacifiCare
of Utah; and
(j) Letter Agreement dated May 5, 1997 by and between FPM Behavioral
Health, Inc. d/b/a Benchmark Behavioral Health Systems and Talbert
Medical Group.
4. Indebtedness:
------------
(a) Promissory Note dated October 25, 1994 from Ramsay Managed Care, Inc.
to Ramsay Health Care, Inc. for the sum of $6,000,000
(b) Indebtedness of Borrower and certain Credit Parties arising under that
certain Credit Agreement dated as of May 15, 1993, as amended, by and
among Societe Generale New York Branch, Hibernia National Bank, First
Union National Bank of North Carolina, Ramsay Health Care, Inc. and
certain of the subsidiaries of Ramsay Health Care, Inc.
(c) Obligations of certain of the Credit Parties in respect of the
following tax-exempt bond issuances:
(i) Louisiana Public Facilities Authority Variable Rate Demand Revenue
Bonds (Greenbrier Hospital, Inc. Project), Series 1984 in the
original principal amount of $6,500,000;
<PAGE>
3
(ii) Okaloosa County Variable Rate Demand Revenue Bonds (Gulf Coast
Treatment Center, Inc. Project), Series 1984 in the original
principal amount of $5,000,000; and
(iii) Horry County, South Carolina Variable Rate Demand Revenue Bonds
(Carolina Treatment Center, Inc. Project), Series 1984 in the
original principal amount of $5,600,000.
<PAGE>
Schedule 3.08 to
Credit Agreement
----------------
LABOR MATTERS
-------------
1. None.
<PAGE>
Schedule 3.09 to
Credit Agreement
----------------
SUBSIDIARIES, JOINT VENTURES AND AFFILIATES;
OUTSTANDING STOCK; INDEBTEDNESS HELD BY
CREDIT PARTIES; INACTIVE SUBSIDIARIES
--------------------------------------------
A. Active Subsidiaries:
-------------------
Bethany Psychiatric Hospital, Inc., an Oklahoma corporation
Bountiful Psychiatric Hospital, Inc., a Utah corporation
Carolina Treatment Center, Inc., a South Carolina corporation
East Carolina Psychiatric Services Corporation,
a North Carolina corporation
Great Plains Hospital, Inc., a Missouri corporation
Greenbrier Hospital, Inc., a Louisiana corporation
Gulf Coast Treatment Center, Inc., a Florida corporation
(RHCI owns 96% of the capital stock of this corporation
and has the option to purchase the remaining 4% from the
other stockholder)
Havenwyck Hospital, Inc., a Michigan corporation
H.C. Corporation, an Alabama corporation
H.C. Partnership, an Alabama general partnership
(HSA Hill Crest Corporation and H.C. Corporation each
own a 50% partnership interest)
Houma Psychiatric Hospital, Inc., a Louisiana corporation
HSA Hill Crest Corporation, an Alabama corporation
HSA of Oklahoma, Inc., an Oklahoma corporation
Mesa Psychiatric Hospital, Inc., an Arizona corporation
Psychiatric Institute of West Virginia, Inc.,
a Virginia corporation
Ramsay Acquisition Corp., a Delaware corporation
<PAGE>
2
Ramsay Correctional Services, Inc., a Delaware corporation
Ramsay Louisiana, Inc., a Delaware corporation Ramsay Managed Care, Inc., a
Delaware corporation
Ramsay Management Services of West Virginia, Inc.,
a West Virginia corporation
Ramsay New Orleans, Inc., a Delaware corporation
Ramsay Youth Services, Inc., a Delaware corporation
RHCI San Antonio, Inc., a Delaware corporation
The Haven Hospital, Inc., a Delaware corporation
Arizona Psychiatric Affiliates, Inc., a Delaware corporation
Florida Psychiatric Associates, Inc., a Florida corporation
Florida Psychiatric Management, Inc., a Florida corporation
FPM Behavioral Health, Inc., a Delaware corporation
FPM Management, Inc., a Florida corporation
FPM of Louisiana, Inc., a Delaware corporation
FPM of Ohio, Inc., a Delaware corporation
FPM of Utah, Inc., a Delaware corporation
FPM of West Virginia, Inc., a Delaware corporation
FPM/Hawaii, Inc., a Delaware corporation
FPM/Southeast, Inc., a Delaware corporation
FPMBH of Arizona, Inc., a Delaware corporation
FPMBH Clinical Services, Inc., a Delaware corporation
<PAGE>
3
FPMBH of Texas, Inc., a Delaware corporation
Utah Psychiatric Affiliates, Inc., a Delaware corporation
B. Joint Ventures and Affiliates:
-----------------------------
1. Joint Ventures:
--------------
Transitional Care Ventures, Inc., a Delaware
corporation (RHCI owns 60% of the capital stock of
this corporation and has an option to purchase the
remaining 40% of the capital stock)
Transitional Care Ventures (Arizona), Inc., a Delaware
corporation (Transitional Care Ventures, Inc. owns
100% of the capital stock of this corporation)
Transitional Care Ventures (Florida), Inc., a Delaware
corporation (Transitional Care Ventures, Inc. owns
100% of the capital stock of this corporation)
Transitional Care Ventures (North Texas), Inc., a
Delaware corporation (Transitional Care Ventures,
Inc. owns 100% of the capital stock of this
corporation)
Transitional Care Ventures (South Carolina), Inc., a
Delaware corporation (Transitional Care Ventures,
Inc. owns 100% of the capital stock of this
corporation)
Transitional Care Ventures (Texas), Inc., a Delaware
corporation (Transitional Care Ventures, Inc. owns
100% of the capital stock of this corporation)
FPM Behavioral Health of Ohio, Ltd., an Ohio limited
liability company (FPM of Ohio, Inc. owns 51% of the
Membership Interest in this LLC)
Meadowlake/Western Alliance LLC, an Oklahoma limited
liability company (HSA of Oklahoma, Inc. owns 50% of
the Membership Interest in this LLC)
<PAGE>
4
U.B.H. Holdings, L.L.C., a Florida limited liability
company (FPM Behavioral Health, Inc. owns 50% of the
Membership Interest in this LLC)
University Behavioral Health at The University of
South Florida, Ltd., a Florida limited partnership
(FPM Behavioral Health, Inc. holds a 49.5% interest
in this limited partnership and U.B.H. Holdings,
L.L.C. holds a 1% interest and is the General Partner
of this limited partnership)
<PAGE>
5
2. Affiliates:
----------
Ramsay Holdings HSA Limited, an international business
company organized under the laws of Barbados
Paul Ramsay Holdings Pty. Limited, a company of
limited liability organized under the laws of New
South Wales, Australia
Paul Ramsay Hospitals Pty. Limited, a company of
limited liability organized under the laws of New
South Wales, Australia
Paul J. Ramsay, a citizen of Australia, and his corporate Affiliates
Hawaii Psychiatric Associates, Ltd., a Hawaii
professional corporation
C. Outstanding Stock:
-----------------
1. See Annex A attached hereto.
D. Indebtedness:
------------
1. Promissory Note dated October 25, 1994 from Ramsay Managed Care, Inc. to
Ramsay Health Care, Inc. for the sum of $6,000,000
E. Inactive Subsidiaries:
---------------------
Americare of Galax, Inc., a Virginia corporation*
Atlantic Treatment Center, Inc., a Florida corporation
Cumberland Mental Health, Inc., a North Carolina corporation
Flagstaff Psychiatric Hospital, Inc., an Arizona corporation
<PAGE>
6
Health Group of Las Cruces, Inc., a Tennessee corporation
HSA Lynnhaven, Inc., a Florida corporation
HSA Medical Offices of Mesa, Inc., an Arizona corporation
Integrated Behavorial Services, Inc., a Delaware corporation*
Manhattan Psychiatric Hospital, Inc., a Kansas corporation
Michigan Psychiatric Services, Inc., a Michigan corporation*
PsychOptions, Inc., a Delaware corporation
Ramsay Chicago, Inc., a Delaware corporation
Ramsay Nevada, Inc., a Delaware corporation
Ramsay Nursing Home Services, Inc., a Delaware corporation
Ramsay Research and Education Institute, Inc.,
a Delaware corporation
RHCI Concord, Inc., a Delaware corporation
F. Material Subsidiaries
---------------------
Bountiful Psychiatric Hospital, Inc., a Utah corporation
East Carolina Psychiatric Services Corporation,
a North Carolina corporation
Great Plains Hospital, Inc., a Missouri corporation
Greenbrier Hospital, Inc., a Louisiana corporation
Havenwyck Hospital, Inc., a Michigan corporation
H.C. Partnership, an Alabama general partnership
Houma Psychiatric Hospital, Inc., a Louisiana corporation
<PAGE>
7
Mesa Psychiatric Hospital, Inc., an Arizona corporation
Psychiatric Institute of West Virginia, Inc.,
a Virginia corporation
Transitional Care Ventures, Inc., a Delaware corporation
* Corporation has no operations but owns capital stock in certain other
subsidiaries of RHCI.
<PAGE>
Schedule 3.12 to
Credit Agreement
----------------
TAX MATTERS
-----------
A. Federal Tax Identification Numbers:
Company: E.I.N.
- ------- ------
Ramsay Health Care, Inc. 63-0857352
Americare of Galax, Inc. 54-1184424
Bethany Psychiatric Hospital, Inc. 63-0932881
Bountiful Psychiatric Hospital, Inc. 93-0893928
Carolina Treatment Center, Inc. 56-1341136
East Carolina Psychiatric Services Corporation 56-1317433
Great Plains Hospital, Inc. 43-1328523
Greenbrier Hospital, Inc. 72-0990789
Gulf Coast Treatment Center, Inc. 56-1341134
Havenwyck Hospital, Inc. 38-2409580
H.C. Corporation 63-0870528
H.C. Partnership 63-0862148
Houma Psychiatric Hospital, Inc. 74-2373568
HSA Hill Crest Corporation 95-3900761
HSA of Oklahoma, Inc. 74-2373564
Integrated Behavorial Services, Inc. No Federal Tax
Identification
Number
Mesa Psychiatric Hospital, Inc. 93-0925810
Michigan Psychiatric Services, Inc. 38-2423002
<PAGE>
2
Psychiatric Institute of West Virginia, Inc. 62-1241461
Ramsay Acquisition Corp. 65-0780465
Ramsay Correctional Services, Inc. 65-0766335
Ramsay Louisiana, Inc. 51-0343656
Ramsay Managed Care, Inc. 72-1249464
Ramsay Management Services of West Virginia, Inc. 55-0730901
Ramsay New Orleans, Inc. 51-0343671
Ramsay Youth Services, Inc. 65-0766342
RHCI San Antonio, Inc. 74-2611258
The Haven Hospital, Inc. 75-2317114
Arizona Psychiatric Affiliates, Inc. 59-3293505
Florida Psychiatric Associates, Inc. 59-1840843
Florida Psychiatric Management, Inc. 59-3007356
FPM Behavioral Health, Inc. 59-3269144
FPMBH Clinical Services, Inc. 59-3293500
FPMBH of Arizona, Inc. 86-0765291
FPMBH of Texas, Inc. 74-2787524
FPM/Hawaii, Inc. 99-0313009
FPM Management, Inc. 59-2666025
FPM of Louisiana, Inc. 59-3281688
FPM of Ohio, Inc. 59-3310878
<PAGE>
3
FPM of Utah, Inc. 65-0766720
FPM of West Virginia, Inc. 59-3279511
FPM/Southeast, Inc. 59-3281690
Utah Psychiatric Affiliates, Inc. 65-0766718
B. Taxable Years Currently Under Audit:
None.
C. Agreements Extending Assessment Period:
None.
D. Tax Sharing Agreements:
Tax Sharing Agreement dated as of October 25, 1994 by and between
Ramsay Health Care, Inc. and Ramsay Managed Care, Inc.
<PAGE>
Schedule 3.13 to
Credit Agreement
----------------
ERISA PLANS
-----------
I. Pension Plans:
-------------
1. Ramsay Health Care, Inc. Deferred Compensation and Retirement Plan, as
amended (Plan No. 001).
2. Ramsay Managed Care, Inc. Deferred Compensation and Retirement Plan and
Trust (Plan No. 001).
II. Determination Letters:
---------------------
1. Favorable Determination Letter dated April 8, 1996 from Internal Revenue
Service to Ramsay Health Care, Inc.
2. Favorable Determination Letter dated February 23, 1996 from Internal
Revenue Service to Ramsay Managed Care, Inc.
Welfare Plans:
- -------------
A. Ramsay Health Care, Inc.
1. Health - Ramsay Health Care, Inc. Group Health Plan, Plan No. A8971
(Self Insured Plan);
2. Disability - Northwestern National Life Insurance Co. Group Policy No.
GH20492-7
3. Life Insurance - Northwestern National Life Insurance Co. Group Policy
No. GL20492-7
4. HMOs
(a) Louisiana - MedFirst Health Plans (Apex Benefit Plan
(b) Utah - United HealthCare of Utah
(c) North Carolina - BC/BS of North Carolina
<PAGE>
2
(d) West Virginia - The Health Plan of Upper Ohio Valley, Inc.
(e) Arizona - Intergroup of Arizona and Intergroup Point of Service
Interflex Plan
(f) Michigan - Blue Care Network, Blue Traditional, BC/BS of Michigan
and Health Alliance Plan
(g) Alabama - Partners Healthplans (formerly Southeast Health Plan)
(h) Texas - PacifiCare of Texas, Inc.
A. Ramsay Managed Care, Inc.
1. Health and Dental - Ramsay Managed Care, Inc. Group Health Plan, Group
No. 0104 (Self Insured Plan through Poe and Brown Inc.);
2. Term Life, AD&D and Long Term Disability -ReliaStar Life Insurance
Company;
3. HMOs
(a) Utah - United HealthCare of Utah
(b) West Virginia - The Health Plan of Upper Ohio Valley, Inc.
(c) Arizona - Intergroup of Arizona and Intergroup Point of Service
Interflex Plan
(d) Hawaii - Cobra participants (no employees) Kaiser Foundation
Health Plan, Inc.
(e) Texas - PacifiCare of Texas, Inc.
<PAGE>
Schedule 3.14 to
Credit Agreement
----------------
LITIGATION
----------
I. Ramsay Health Care, Inc.
------------------------
A. Professional Malpractice and General Liability Claims
1. Thomas Whitfield Davis v. The Life Center of Galax, et al., Circuit
Court of Grayson County, The State of Virginia, Case No. 95-19.
Improperly filed suit.
B. EEOC or Other Employment-Related Claims
1. Reynold Jennings v. Ramsay Health Care, Inc., arbitration proceeding
in Florida in which former Chief Operating Officer is seeking damages
in an aggregate of $2.3 million dollars, including lost wages,
severance payments and stock options. Case is currently in the
discovery process.
2. Hal McPheeters v. Psych-Options, Inc. and Ramsay Health Care, Inc.
Sex and age discrimination claim filed September 30, 1993. No action
has been taken by the EEOC.
C. Reimbursement Matters
1. Alleged Disproportionate Share Overpayments
The State of Louisiana, Department of Health and Hospitals has made
demands for repayment of disproportionate funds previously paid to Bayou Oaks
and Three Rivers Hospitals in the following amounts: (i) $3,466,333.18 from
Three Rivers Hospital and (ii) $560,613 from Houma Psychiatric Hospital, Inc.
d/b/a Bayou Oaks Hospital. The claim asserts that the hospitals did not meet
the requirements of being paid as a teaching hospital.
In addition the Department of Health and Hospitals have indicated that
they may make a demand on Three Rivers Hospital to repay an additional
$1,556,555 because the
<PAGE>
2
hospital's actual Medicaid census for the fiscal year ended December 31, 1994
did not meet its projected census.
The Company has entered into negotiations to settle the dispute and
submitted an offer of $1,300,000 in late July 1997, an amount counter offered by
the Department of Health and Hospitals in response to the Company's initial
settlement offer.
II. Bethany Psychiatric Hospital, Inc.
----------------------------------
A. Professional Malpractice and General Liability Claims
1. Threat of Claim, Patient X. Daughter of patient participating in drug
study threatened to bring suit because of mother's deteriorating
medical condition.
2. Threat of Claim, Patient Y. Patient claims injury resulting from
assault of other patient while at facility.
III. Bountiful Psychiatric Hospital, Inc.
------------------------------------
A. Professional Malpractice and General Liability Claims
1. Threat of Claim, Patient X. Claim by patient that certain of
hospital's male medical staff made sexual advances toward her.
2. Threat of Claim, Patient Y. Alleged abuse of fourteen year old male
patient by male mental health worker when patient was out of control.
3. Threat of Claim, Patient Z. Female patient alleges rape by male
patient prior to her release on August 1, 1997.
B. EEOC or Other Employment-Related Claims
<PAGE>
3
1. Kristine Fitzgerald v. Benchmark Behavioral Health Systems: EEOC
Charge No. 35-C1-94-0736. Alleged disability discrimination in
connection with termination in November 1993.
2. Timothy A. Cloyd, Utah Industrial Commission, No. 97-0200, and EEOC.
Claim by male employee alleging gender discrimination, sexual
harassment and retaliatory discharge for protesting discriminatory
practices. Claim dismissed by Utah Industrial Commission in February
1997.
IV. Carolina Treatment Center, Inc.
-------------------------------
A. Professional Malpractice and General Liability Claims
1. Threat of Claim, Patient X. Estate of Patient X requested
medical records following suicide of patient approximately two
weeks following release after an extended stay.
V. East Carolina Psychiatric Services Corporation
----------------------------------------------
A. Professional Malpractice and General Liability Claims
1. Edwin David Milligan, Jr. and Edwin David Milligan, III v. East
Carolina Psychiatric Services Corporation, Onslow County, North
Carolina Superior Court. Case No. 95-CVS-1408. Claims resulting from
injuries sustained by adolescent patient during an attempted
elopement. Trial set for November 1997.
VI. Greenbrier Hospital, Inc.
-------------------------
A. Professional Malpractice and General Liability Claims
1. Cooper v. Ramsay Healthcare, et al., 22nd Judicial District Court, St.
Tammany Parish, Louisiana,
<PAGE>
4
Case No. 97-13673. Case was filed on August 15, 1997 against Ramsay
Healthcare, Inc. d/b/a Greenbrier Behavioral Health System, Dr.
Richard Donavan and Martha Tennison asserting negligent diagnosis and
treatment of plaintiff's decedent.
2. Michelle LeDoux v. Marian D'Antonio and Ramsay Health Care, Inc.,
d/b/a Greenbrier Hospital and Greenbrier Counseling Center, 22nd
Judicial District Court for the Parish of St. Tammany, No. 94-13797.
Patient brought claims for failure to diagnose behavioral health
problems and for exceeding boundaries of therapeutic relationship.
Action also brought before Patient's Compensation Fund.
3. Delores Singleton v. Greenbrier Hospital, 22nd Judicial District Court
for the Parish of St. Tammany, State of Louisiana, Civil No. 96-15233.
Patient's claim is for damages arising from injury sustained from fall
in bathroom of facility.
4. Threat of Claim, Patient X. Patient alleges negligent care and has
threatened suit.
5. Elmer and Shirley Hock v. Greenbrier Hospital, 22nd Judicial District
Court for the Parish of St. Tammany, State of Louisiana, Case No. 90-
10755. Plaintiff claims damages for injury sustained from fall in
parking lot.
VII Havenwyck Hospital, Inc.
------------------------
A. Professional Malpractice and General Liability Claims
1. Robert K. Dust, As Next Friend of Robert L. Dust, Minor v. Havenwyck
Hospital, Inc., Circuit Court for the County of Oakland, State of
Michigan, Case No. 96-528965-NO. Plaintiff was injured when
technician pulled door shut, crushing plaintiff's
<PAGE>
5
fingers. Mediation award of $22,500 rejected by hospital.
2. Threat of Claim, Patient X. Patient hit by car one hour following
discharge and claims damages for injuries sustained resulting from
hospital's failure to properly treat Patient.
3. Barbara Burns and Joseph Burns, Her Husband v. Havenwyck Hospital,
Inc., Circuit Court for the County of Oakland, State of Michigan, Case
No. 96-518483-NO. Claim of total disability resulting from a fall on
hospital's grounds. Claim asserts lost wages of $542,000, medical
bills of $20,000 and pain and suffering of $900,000.
B. EEOC or Other Employment-Related Claims
1. Nicanor Castedo, M.D. v. Ramsay Health Care, Inc., Havenwyck Hospital,
Inc. and Robert A. Kercorian, Jointly and Severally, U.S. District
Court, Eastern District of Michigan, Case No. 95CV73080. National
origin discrimination case settled in June 1997 for $50,000.
VIII. H.C. Partnership/HSA Hill Crest Corporation/H.C. Corporation
------------------------------------------------------------
A. Professional Malpractice and General Liability Claims
1. Jackie Secoy, individually and as mother and next friend of Candy
Walton v. Ramsay Health Care, Inc., a corporation, Hill Crest
Hospital; Nebby Boswell, an individual; and Elizabeth Burkett, an
individual, Jefferson County, Alabama Circuit Court, Bessemer
Division, CV 95-341. Patient alleged negligent supervision on an
outing. Patient, who was 14 years old at the time, had sexual
intercourse in bathroom of a restaurant while on the outing.
<PAGE>
6
2. K.C., by and through his next friend, his father, K.C. v. Hill Crest
Hospital, et al., Jefferson County, Alabama Circuit Court, Civil
Action No. CV 96-4204. Matter settled in July 1997.
3. Jeffrey W. Moore, an individual v. Hill Crest Hospital, a partnership,
also known as HC Partnership; Defendant A, being the correct legal
name of Hill Crest Hospital; Defendant B, being the correct legal name
of HC Partnership; Defendants C, D, E, F, G, H, I and J, being the
correct legal names of the Partners of Hill Crest Hospital; Defendants
K, L, M, N, O, P, Q and R, being the correct legal names of the
partners of HC Partnership. Matter settled in July 1997.
4. Janice Davis and Billy Davis v. Hill Crest Hospital, John Doe, who
will be added when the name is ascertained, and XYZ Corporation, who
will be added when the name is ascertained, Circuit Court of Jefferson
County, Alabama, Civil Division No. CV9702388. Case filed on or about
August 25, 1997. Patient alleges injury sustained when another
patient removed a chair from beneath her while sitting down.
B. EEOC or Other Employment-Related Claims
1. Alton R. Woodward, EEOC Charge No. ###-##-####. Alleged race and age
discrimination filed in April 1993.
2. Diane Samuels and Lillie Bradley v. HC Partnership, d/b/a Hill Crest
Hospital, H.C. Corporation, HSA Hill Crest Corp. and Ramsay Health
Care, Inc. - U.S.D.C. (N.D. Ala.) No. 96-6-2-2514-S. Employee alleges
lay off resulted from race discrimination.
3. Threat of Claim, Employee X. Threat of unspecified "cause of action"
by terminated employee.
<PAGE>
7
4. Threat of Claim, Employee Y. Settlement offer sent to terminated
medical director. No response to date.
5. Lanny Jackson, EEOC Charge No. ###-##-####. Claim of wrongful
termination based on racial discrimination and retaliation.
IX. Houma Psychiatric Hospital, Inc.
--------------------------------
A. Professional Malpractice and General Liability Claims
1. Kemple Lovell v. Bayou Oaks Hospital, 32 Judicial District Court,
Parish of Terrebonne, Civ. No. 112196. Case arises out of alleged
negligence on October 9, 1994 when tiles allegedly fell from ceiling
injuring plaintiff's neck and back. There has been no action in this
case since February 1996.
2. Sherry H. Guidry v. Houma Psychiatric Hospital dba Bayou Oaks
Hospital, 32nd Judicial Court for the Parish of Terrebonne, State of
Louisiana, Civil No. 119600. Defendant served with notice of suit on
July 1, 1997 for negligence involving wrist fracture of plaintiff
while patient
3. Kelcie Pepper v. Terrebonne General Medical Center, et al., P.C.F. No.
96-1484. Breach of duty of care claim arising out of delayed
diagnosis for medical/surgical problem. Pending before Medical Review
Panel.
4. Sidera Adams, et al., v. Dr. Brian Matherne, et al., P.C.F. No. 96-
0413. Case pending before Medical Review Panel. No treatment
provided to plaintiff's decedent at facility, but plaintiff's decedent
was evaluated through hospital's assessment center.
<PAGE>
8
5. Threat of Claim, Visitor X. Possible claim for injury to Visitor
while on premises by patient of facility. Claim to date is for
$7,500.
B. EEOC or Other Employment-Related Claims
1. Cynthia Hamilton v. Bayou Oaks Hospital, State of Louisiana,
Department of Labor, Office of Workers' Compensation, District 9,
Docket No. 94-08130. Employee slipped on wet floor during work hours.
Employee is currently receiving workers compensation benefits.
X. HSA of Oklahoma, Inc.
---------------------
A. Professional Malpractice and General Liability Claims
1. Threat of Claim, Patient X. Mother of patient who broke hand while
punching wall threatened suit.
B. EEOC or Other Employment-Related Claims
1. Threat of Claim, Former Employee X. Threatened suit of social worker
who was terminated after ten days.
XI. Mesa Psychiatric Hospital, Inc.
-------------------------------
A. Professional Malpractice and General Liability Claims
1. Threat of Claim, Patient X. Adolescent patient injured while
attempting to avoid admission to facility and injuries sustained while
a patient as a result of an altercation with another patient. Statute
of limitations has run on claim by parents.
XII. Psychiatric Institute of West Virginia, Inc.
--------------------------------------------
<PAGE>
9
A. Professional Malpractice and General Liability Claims
1. Freeman v. The Psychiatric Institute of West Virginia, Inc., d/b/a
Chestnut Ridge Hospital, et al., Circuit Court of Monongalia County,
West Virginia, Civil Action No. 96-C-134. Case was commenced in April
1996 against Chestnut Ridge Hospital and Dr. Louis Tinnin asserting
negligence in elopement and suicide of patient. Case is currently in
the discovery process.
2. James Deems and Melody Deems v. Psychiatric Institute of West
Virginia, Inc., a foreign corporation d/b/a Chestnut Ridge Hospital,
Ruth Smith and Pamela Sullivan, M.D., Circuit Court of Monongalia
County, West Virginia, CV No. 96-C-69. Claim for damages for injuries
sustained following elopement of patient from facility who then threw
himself in front of a moving vehicle. An agreement to settle this
case for $70,000 has been reached.
3. Threat of Claim, Patient X. Threatened suit following dissatisfaction
with adult patient's care by patient's parents.
XII Ramsay Louisiana, Inc.
----------------------
A. Professional Malpractice and General Liability Claims
1. Ralph Singleton, Individually, and on Behalf of the Minor, Amy
Singleton v. Three Rivers Hospital Limited Partnership, Dr. Robert
DeBrandt, Dr. John Pratt and Mark Redmond, 22nd Judicial District
Court of the Parish of St. Tammany, Louisiana, Case No. 94-10309 A.
Claim dismissed as to Three Rivers Hospital Limited Partnership.
2. Dennis Musgrove and Gretchen Musgrove, Individually and on Behalf of
Their Minor Son,
<PAGE>
10
Carther Dewayne Musgrove v. Three Rivers Hospital, Medical Review
Panel Request No. 94 MR 229. Patient claims assault and sexual abuse
by other patients.
<PAGE>
11
B. EEOC or Other Employment-Related Claims
1. Brian Corkern v. Three Rivers Hospital, State of Louisiana, Department
of Labor, Office of Workers' Compensation, District 6, Docket No. 94-
00613. Employee injured while restraining a patient. Counsel for
Employee requested settlement of $50,000.
XIV Ramsay Managed Care, Inc.
-------------------------
A. Professional Malpractice and General Liability Claims
1. Pursuant to the Sale Agreement with RoTech Medical Corporation
concerning the sale of Apex Healthcare, Inc., RoTech deposited
$350,000 of the purchase price received by the Company in connection
with such sale. RoTech delivered a Notice of Claim that it is entitled
to indemnification from the Company under the Purchase Agreement and
wishes to collect from the subject escrow account. The Notice of Claim
sets forth claims in an aggregate of approximately $5.8 million, more
than the $4 million purchase price of Apex, to which amount
indemnification is limited under the Purchase Agreement, and demands
indemnification by the Company of amounts above the escrow account.
B. EEOC or Other Employment-Related Claims
1. Ramsay Managed Care, Inc., et al. v. Oliaii, et al., Circuit Court for
Jefferson County, Alabama, Action No. CV9604050. On July 1, 1996, the
company asserted fraud and breach of fiduciary duty claims against
former officer arising out of efforts of Company to sell stock of a
subsidiary; counterclaim by defendants seeking compensatory damages in
excess of $322,984.35 and punitive damages in an amount to be
determined. Case is currently in the discovery process.
<PAGE>
12
2. John Theos v. Apex Healthcare of LA, Inc., Ramsay Managed Care, Ramsay
Health Care, Inc., RoTech Medical Corporation, Medfirst Health Plans
and Warwick Syphers, Civil District Court for the Parish of Orleans,
Case No. 97-12701. Breach of
<PAGE>
employment contract claim and unfair labor practices.
XV. RHCI San Antonio, Inc.
----------------------
A. Professional Malpractice and General Liability Claims
1. Threat of Litigation, Patient X. Patient claims employee ran over
foot with wheelchair and subsequently lost toe. Claim made for
$200,000 settlement by Patient.
2. Threat of Litigation, Patient Y. Patient became unresponsive during
assessment and subsequently died. Contact from estate attorney.
3. Threat of Litigation, Patient Z. Patient claims employee Kissed her
while on a visit to her home.
4. Threat of Claim, Visitor X. Visitor fractured shoulder in parking
lot.
B. EEOC or Other Employment-Related Claims
1. Cedric P. Johnson v. Mission Vista Hospital and Ramsay Health Care,
Inc., United States District Court for Western District of Texas,
Civil Action No. SA-97-CA-0293. Claim of racial discrimination filed
in June 1997.
2. Nancy Harrison v. Mission Vista Hospital: EEOC Charge No. ###-##-####.
Discrimination claim filed in November 1996.
XVI The Haven Hospital, Inc.
------------------------
A. Professional Malpractice and General Liability Claims
1. Patty B., individually and as Next Friend for Brandon S. v. Moses
Ramos, Jr., Mary Patterson,
<PAGE>
14
Sylvia Turner, Sylvia Turner, M.D., Inc., and The Haven Hospital,
Inc., in the District Court of the 162nd Judicial District of Dallas
County, Dallas, Texas, Case No. 95-158. Complaint alleges numerous
counts but which fall under breach of duty of care. Plaintiffs have
demanded a $500,000 settlement.
2. Threat of Claim, Patient X. Claim for loss of ring and damages
arising from hip fracture as a result of a fall.
3. Threat of Claim, Patient Y. Alleges assault, battery, negligence and
fraud. Requested settlement is $2,000,000.
B. EEOC or Other Employment-Related Claims
1. Kimberly E. Duncan v. The Haven: EEOC Charge No. 310971493.
Disability discrimination claim by former Director of Nursing who was
demoted to be a Charge Nurse and subsequently terminated for failure
to satisfy the requirements of the position. Issued a right to sue
letter by EEOC on June 4, 1997.
<PAGE>
Schedule 3.16 to
Credit Agreement
----------------
PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
--------------------------------------------
1. Registered Trademarks
---------------------
A. PSYCHTRAC
Owner: Florida Psychiatric Management, Inc.
Registration No. 1,799,160
Registration Date: October 19, 1993
<PAGE>
Schedule 3.18 to
Credit Agreement
----------------
CERTAIN ENVIRONMENTAL MATTERS
-----------------------------
1. Matters set forth in the Phase I Environmental Reports ordered by General
Electric Capital Corporation for the following Hospitals:
a. Benchmark Regional
b. Brynn Marr
c. Chestnut Ridge
d. Havenwyck
e. Hill Crest
2. Matters set forth in the Phase I Environmental Reports by Robert Bates &
Associates, Inc. dated March 1993 provided to General Electric Capital
Corporation for the following Hospitals:
a. Coastal Carolina
b. Heartland
c. Meadowlake
d. Greenbrier
e. The Haven
f. Bayou Oaks
<PAGE>
Schedule 3.20 to
Credit Agreement
----------------
DISBURSEMENT AND DEPOSIT ACCOUNTS
---------------------------------
<TABLE>
<CAPTION>
Hospital DESCRIPTION BANK NAME ACCOUNT NUMBER
==========================================================================================================
<S> <C> <C> <C>
Corporate Office: Operating Account Citibank 38761657
Payroll Account Hibernia National Bank 812105728
Depository Account Hibernia National Bank 812105744
Money Market Federated Investors 3494100030
Insurance Trust Hibernia National Bank 98-0004-01-4
Bayou Oaks: Operating Account Citibank 38761657
Payroll Account Hibernia National Bank 812372610
Depository Account Hibernia National Bank 812372602
Benchmark Regional: Operating Account Citibank 38761657
Payroll Account First Security Bank 1340074911
Depository Account First Security Bank 1340074515
Benchmark Operating Account Citibank 38761657
Behavioral: Payroll Account First Security Bank 1340003027
Depository Account First Security Bank 1340003076
Brynn Marr: Operating Account Citibank 38761657
Payroll Account Wachovia Bank of North Carolina 4187-006065
Depository Account Wachovia Bank of North Carolina 4180-005564
Chestnut Ridge: Operating Account Citibank 38761657
Payroll Account Huntington Bank 100090878
Depository Account Huntington Bank 100090860
Coastal Carolina: Operating Account Citibank 38761657
Payroll Account Coastal Federal Savings 09-57-377
Depository Account Coastal Federal Savings 09-57-385
Desert Vista: Operating Account Citibank 38761657
Payroll Account Bank of America 014-738575
Depository Account Bank of America 014-738567
Greenbrier: Operating Account Citibank 38761657
Payroll Account Hibernia National Bank 1-0715190
Depository Account Hibernia National Bank 1-0715336
Gulf Coast Treatment Operating Account Citibank 38761657
Ctr. Payroll Account AmSouth Bank 02796201
Depository Account AmSouth Bank 02796236
Operating Account AmSouth Bank 04767535
The Haven: Operating Account Citibank 38761657
Payroll Account Nations Bank 1861146968
Depository Account Nations Bank 1861146950
Havenwyck: Operating Account Citibank 38761657
Payroll Account Comerica Bank 1191-00046-0
Depository Account Comerica Bank 1197-89107-8
Heartland: Operating Account Citibank 38761657
Payroll Account Nations Bank 450100125962
Depository Account Nations Bank 450100125989
Hill Crest: Operating Account Citibank 38761657
Payroll Account AmSouth 00808792
Depository Account AmSouth 67953026
</TABLE>
<PAGE>
2
<TABLE>
<CAPTION>
Hospital DESCRIPTION BANK NAME ACCOUNT NUMBER
==============================================================================================================
<S> <C> <C> <C>
Meadowlake: Operating Account Citibank 38761657
Payroll Account Security National Bank of Enid 3-353-532
Depository Account Security National Bank of Enid 3-353-521
Mission Vista: Operating Account Citibank 38761657
Payroll Account Nations Bank 7780009852
Depository Account Nations Bank 7780009845
Ramsay Managed Depository Account First Union Nat'l Bank of Fla. 2090001368160
Care: RMCI Group Medical Plan First Union Nat'l Bank of Fla. 2090001645731
FPM Behavioral Commercial Checking-Trade First Union Nat'l Bank of Fla. 2090001645265
Health: Commercial Checking-
Claims Payments First Union Nat'l Bank of Fla. 2090001645278
Payroll Account First Union Nat'l Bank of Fla. 2090001368830
Depository Account First Union Nat'l Bank of Fla. 2090001368827
Florida Psychiatric FPM Depository First Union Nat'l Bank of Fla. 2090001368513
Mgmt: FPM (Special Impress Accounts) First Union Nat'l Bank of Fla. 2090002813096
FPM/Ciminero & Associates First Union Nat'l Bank of Fla. 2199400016396
(Generic) Claims Paid Account First Union Nat'l Bank of Fla. 2090001645281
FPMBH of Arizona: Petty Cash Checking Account Bank of America - Arizona 0001138888
FPM of West Petty Cash Checking Account One Valley Bank 000201-393-2
Virginia:
FPMBH of Texas: Petty Cash Checking Account Nations Bank 1861629161
Florida Psychiatric FPA-MMA First Union Nat'l Bank of Fla. 2540030151872
Associates: FPA-MMA First Union Nat'l Bank of Fla. 2090002095380
Arizona Psychiatric Petty Cash Checking Account Bank of America - Arizona 0001175697
Affiliates:
==============================================================================================================
</TABLE>
<PAGE>
3
BANK NAMES AND ADDRESSES:
- ------------------------
Citibank - Ramsay Health Care, Inc. maintains a zero balance in this account,
which account is used to clear all payments through the other accounts listed
above
Hibernia National Bank
313 Carondelet
New Orleans, Louisiana 70130
Nations Bank
P.O. Box 304
401 E. Austin
Nevada, Missouri 64772
Security National Bank (a/k/a First Security Bank)
201 West Broadway
P.O. Box 1272
Enid, Oklahoma 73702-1272
AmSouth Bank
P.O. Box 11007
Birmingham, Alabama 35288
First Union National Bank of Florida
20 North Orange Avenue - Suite 301
Orlando, Florida 32801
One Valley Bank
496 High Street
Morgantown, West Virginia 26505
or
P.O. Box 698
Morgantown, West Virginia 26507
NationsBank of Texas, N.A.
P.O. Box 2518
Houston, Texas 77252-2518
Bank of America (Arizona)
P.O. Box 29966
Phoenix, Arizona 85038-0966
<PAGE>
4
First Hawaiin Bank
P.O. Box 1959
Honolulu, Hawaii 96805-1959
Federated Investors
P.O. Box 8602
Boston, Massachusetts 02266-8602
Wachovia Bank of North Carolina
146 Western Blvd.
Jacksonville, North Carolina 28546
Huntington Bank
3120 University Avenue
Morgantown, West Virginia 26505
Coastal Federal Savings
112 Waccamaw Medical Park Drive
Waccamaw Medical Park Office
Conway, South Carolina 29626
Bank of America
63 West Main Street
Mesa, Arizona 85201
Comerica Bank
Hamlin Squirrel Road Office
Auburn Hills, Michigan 48326
<PAGE>
Schedule 3.31 to
Credit Agreement
----------------
CERTAIN AGREEMENTS
------------------
A. Licenses:
--------
1. Bethany Psychiatric Hospital, Inc. (Bethany Healthcare Corporation -
Columbia Bethany Hospital) - Oklahoma State Department of Health License
No. 2292;
2. Bountiful Psychiatric Hospital, Inc. (Benchmark North) - Utah Department of
Health License No. 1996HOSP0168;
3. Bountiful Psychiatric Hospital, Inc. (Benchmark South) - Utah Department of
Health License No. 1996HOSP0749;
4. Carolina Treatment Center, Inc. (Coastal Carolina Residential Treatment
Center) - South Carolina Department of Health and Environmental Control
License No. RTC-002;
5. Carolina Treatment Center, Inc. (Coastal Carolina Hospital) - South
Carolina Department of Health and Environmental Control License No. 430;
6. East Carolina Psychiatric Services Corporation (Brynn Marr Hospital) -
North Carolina Department of Human Resources License No. [MHH618];
7. Great Plains Hospital, Inc. (Heartland Behavioral Health Services) -
Missouri Department of Health License No. 323-13, Missouri Department of
Social Services dated March 8, 1996
8. Greenbrier Hospital, Inc. (Greenbrier Hospital) -Louisiana Department of
Health and Hospitals License No. 285;
9. Gulf Coast Treatment Center, Inc. (Gulf Coast Treatment Center) - Florida
Agency for Health Care Administration License No. 4454;
<PAGE>
2
10. Havenwyck Hospital, Inc. (Havenwyck Hospital) -Michigan Department of
Commerce License No. H-91026, Michigan Department of Consumer and Industry
Services License No. 630581, Michigan Department of Social Services License
No. CA63414;
11. H.C. Partnership (Hill Crest Behavioral Health Services) - Alabama State
Board of Health License No. 002496; and
12. HSA of Oklahoma, Inc. (Meadowlake Hospital) - Oklahoma State Department of
Health License No. 2315;
13. Mesa Psychiatric Hospital, Inc. (Desert Vista Hospital) - Arizona
Department of Health Services License No. BH-1072, SH-161 and BH/SH-907;
14. Psychiatric Institute of West Virginia, Inc. (Chestnut Ridge Hospital) -
West Virginia Department of Health and Human Resources License No. 20;
15. Psychiatric Institute of West Virginia, Inc. (Chestnut Ridge Hospital,
Residential Treatment Program) - West Virginia Department of Health and
Human Resources License No. 3640;
16. Psychiatric Institute of West Virginia, Inc. (Chestnut Ridge Hospital) -
West Virginia Department of Health and Human Resources License No. 106;
17. RHCI San Antonio, Inc. (Mission Vista Hospital) -Texas Department of Health
License No. 0319.
18. The Haven Hospital, Inc. (The Haven Residential Treatment Center) - Texas
Department of Protective and Regulatory Services dated May 2, 1995, amended
June 28, 1996;
19. The Haven Hospital, Inc. (The Haven Hospital) - Texas Department of Health
License No. 0312;
B. Accreditations:
--------------
<PAGE>
3
1. Bethany Psychiatric Hospital, Inc. (Bethany Health Center) - JCAHO for
1994-1997;
2. Bountiful Psychiatric Hospital, Inc. (Benchmark North and South) - JCAHO
for 1996-1999;
3. Carolina Treatment Center, Inc. (Coastal Carolina Hospital) - JCAHO for
1996-1999;
4. East Carolina Psychiatric Services Corporation (Brynn Marr Behavioral
Healthcare System)- JCAHO for 1996-1999;
5. Great Plains Hospital, Inc. (Heartland Behavioral Health Services) - JCAHO
for 1996-1999;
6. Greenbrier Hospital, Inc. (Greenbrier Hospital) -JCAHO for 1996-1999;
7. Gulf Coast Treatment Center, Inc. (Gulf Coast Treatment Center) - JCAHO for
1997-2000;
8. Havenwyck Hospital, Inc. (Havenwyck Hospital) - JCAHO for 1994-1997;
9. H.C. Partnership (Hill Crest Hospital) - JCAHO for 1994-1997;
10. HSA of Oklahoma, Inc. (Meadowlake Hospital) - Joint Commission on
Accreditation of Healthcare Organizations (JCAHO) for 1996-1999;
11. Mesa Psychiatric Hospital, Inc. (Desert Vista Hospital) - JCAHO dated
January 31, 1997;
12. Psychiatric Institute of West Virginia, Inc. (Chestnut Ridge Hospital) -
JCAHO for 1994-1997;
13. RHCI San Antonio, Inc. (Mission Vista Hospital) -JCAHO for 1995-1998; and
<PAGE>
4
14. The Haven Hospital, Inc. (The Haven) - JCAHO for 1995-1998.
C. Medicare/Medicaid Provider Numbers:
----------------------------------
Provider Name: Provider No.:
- ------------- -------------
Bayou Oaks Hospital 19-4024
Benchmark North Hospital 46-4007
Benchmark South Hospital 46-4003
Bethany Pavilion Hospital 37-5159
Brynn Marr Hospital 34-4016
Chestnut Ridge Hospital 51-4007
Coastal Carolina Treatment Center 42-4009
Coastal Compass Unit 42-5335
Desert Vista Hospital 03-4008
Desert Vista Compass Unit 03-5230
Greenbrier Hospital 19-4014
Gulf Coast Treatment Center 10-4032
The Haven Hospital 45-4066
The Haven Compass Unit 45-2048
Havenwyck Hospital 23-4023
Heartland Hospital 26-4013
Hill Crest Hospital 01-4000
Meadowlake Hospital 37-4010
<PAGE>
5
Mission Vista Hospital 45-4078
Mission Vista Compass Unit 45-2045
<PAGE>
Schedule 6.03 to
Credit Agreement
----------------
INVESTMENTS
-----------
1. Agreement and Plan of Merger dated as of July 1, 1997 by and among Summa
Healthcare Group, Inc., Ramsay Acquisition Corp. and Ramsay Health Care,
Inc.
2. $350,000 held in escrow pursuant to the Escrow Agreement dated as of
October 30, 1996 by and among Apex Healthcare, Inc., Ramsay Managed
Care, Inc., RoTech Medical Corporation and Haythe & Curley.
3. The following joint ventures:
a. Meadowlake/Western Alliance LLC, an Oklahoma limited liability
company (HSA of Oklahoma, Inc. owns 50% of the Membership Interest
in this LLC).
b. U.B.H. Holdings, L.L.C., a Florida limited liability company (FPM
Behavioral Health, Inc. owns 50% of the Membership Interest in this
LLC).
c. University Behavioral Health at The University of South Florida,
Ltd., a Florida limited partnership (FPM Behavioral Health, Inc.
holds a 49.5% interest in this limited partnership and U.B.H.
Holdings, L.L.C. holds a 1% interest and is the General Partner of
this limited partnership).
<PAGE>
Schedule 6.05 to
Credit Agreement
----------------
TRANSACTIONS WITH AFFILIATES AND EMPLOYEES
------------------------------------------
1. See Schedule 3.09(D)and 6.03(1).
2. Consulting Agreement dated as of February 1, 1997 by and between Summa
Healthcare Group, Inc. and Ramsay Health Care, Inc.
3. Services Agreement dated as of August 12, 1996 by and between Healthlink
Enterprises, Inc. and Ramsay Health Care, Inc.
4. In the ordinary course of business, Ramsay Health Care, Inc. maintains a
cash management system with the other Credit Parties.
5. In the ordinary course of business, Ramsay Health Care, Inc. and certain
of the other Credit Parties engage in lending, borrowing and other
commercial transaction in connection with the joint ventures and other
affiliates listed on Schedule 3.09(B), all of which are permitted by (S)
6.05.
6. Employment Agreements with the executive officers of the Company and its
Subsidiaries, copies of which were provided to the Administrative Agent
prior to the Closing Date.
7. 142,486 shares of Class B Preferred Stock, Series C of the Company held
by Ramsay Holdings and Ramsay Hospitals Pty. Limited.
8. 100,000 shares of Class B Preferred Stock, Series 1996 of the Company
held by Ramsay Holdings.
9. 4,000 shares of Class B Preferred Stock, Series 1997 of the Company held
by Ramsay Holdings.
10. RMCI and its affiliates lease the following property from partnerships
of which Dr. Martin Lazoritz (an officer of RMCI) has the following
ownership percentages:
<PAGE>
2
LOCATION PURPOSE LEASE INCEPTION ANNUAL LAZORITZ
LEASE (EST.) OWNERSHIP
PERCENT
- -------------------------------------------------------------------------------
1276 Minnesota Clinic/Medical 1983 to 5/31/2003 $ 96,264+ 16%
Avenue Practice with option to renew
Winter Park, FL
- --------------------------------------------------------------------------------
1250 Minnesota FPM 1988-2003 $113,820+ 25%
Avenue (mgd. care) Cost of Living
Winter Park, FL Adjustments
- --------------------------------------------------------------------------------
Lake Mary, FL Office Clinic 1988-2003 Cost of $ 51,747 33-1/3%
+3,000 sq. ft. Living Adjustments
- --------------------------------------------------------------------------------
Sand Lake, FL Clinic to 1990-2003 $ 51,264 33-1/3%
serve
Disney
- --------------------------------------------------------------------------------
11. Employees and Ramsay Affiliates have been granted the options and
warrants listed on Annex A hereto.
12. Payables of RMCI to Luis E. Lamela and Peter J. Evans in the amounts
of $200,000 and $100,000 respectively, assumed by Borrower in
connection with the merger of RMCI into a wholly owned Subsidiary of
the Borrower.
13. Legal representation of the Borrower and its Subsidiaries by
Haythe & Curley, a partner of which is a director of Borrower.
14. Ramsay Health Care, Inc. 1993 Employee Stock Purchase Plan -
100,000 shares originally authorized.
<PAGE>
Schedule 6.07 to
Credit Agreement
----------------
LIENS
-----
<TABLE>
<CAPTION>
Debtor Secured Party Jurisdiction File Date Collateral
- ------------------ ----------------- --------------- ------------ -----------
<S> <C> <C> <C> <C>
Carolina AT&T Credit S/S SC 150542A Lease
Treatment 5/17/94
Center
East Carolina American S/S NC 1183468 Lease
Psych Services Business 1/17/95
Credit Corp.
East Carolina American Onslow, Co., NC 95-920 Lease
Psych Services Business 1/13/95
Credit Corp.
East Carolina American Onslow, Co., NC 95-312 Lease
Psych Services Business 1/18/95
Credit Corp.
Gulf Coast SunTrust Bank S/S FL 96000073657 (1)
4/10/96
Havenwyck Eaton Fin. Corp. S/S MICH 45566B Lease
8/3/94
Havenwyck Lease Corp. of S/S MICH D186257 Lease
America 1/21/97
Havenwyck Lease Corp. of S/S MICH D242061 Lease
America 6/6/97
Psych. Inst. of Tokai, Fin. Serv. S/S WV 0433905 Lease
West Virginia 11/13/95
RHCI & Psych. Copel Co Cap. S/S WV 0472474 Lease
Inst. of West 6/10/97
Virginia
RHCI & Psych. Copel Co Cap. Monongalia G., 00252 Lease
Inst. of West WV 6/9/97
Virginia
Ramsay AT&T Credit S/S FL 95000087992 Lease
Managed Care, 5/2/95
Inc.
</TABLE>
(1) All other property, real or personal, tangible or intangible, and all other
causes of action, rights or remedies of the Debtor of whatever nature assigned
or to be assigned to Secured Party or the Assignee of the Secured Party pursuant
to that certain Loan Agreement dated as of October 1, 1984, between the Debtor
and the Secured Party or that certain Trust Indenture dated as of October 1,
1984, between the Secured Party and Sun Bank, National Association, as Trustee,
or any other instrument or agreement executed in connection therewith.
<PAGE>
2
<TABLE>
<S> <C> <C> <C> <C>
Transitional AT&T Credit S/S TX 175295 Lease
Care Ventures 6/3/97
(Texas)
Transitional Pyxis Corp. S/S TX 165039 Lease
Care Ventures 8/24/94
(Texas)
Florida Psych NCR Credit Corp. S/S FL 930000045980 Lease
Mgmt 3/3/93
Florida Psych AT&T Credit S/S FL 95000087993 Lease
Mgmt 5/2/95
FPM AT&T Credit S/S FL 95000087994 Lease
Behavioral 5/2/95
Health
FPM American S/S FL 950000156031 Lease
Behavioral Business 8/7/95
Health Credit Corp.
FPM American S/S FL 970000103585 Lease
Behavioral Business 5/13/97
Health Credit Corp.
RMCI d/b/a American S/S FL 950000095756 Lease
Behavioral Business 5/11/95
Health Credit Corp.
</TABLE>
<PAGE>
Schedule 11.09 to
Credit Agreement
----------------
AUTHORIZED SIGNATURES
---------------------
Borrower and Certain Credit Parties:
- -----------------------------------
Name Title
- ---- -----
Remberto G. Cibran President and Chief
Operating Officer
Carol C. Lang Executive Vice
President and Chief
Financial Officer
Daniel A. Sims Vice President and
Secretary
Other Credit Parties
- --------------------
Name Title
- ---- -----
Remberto G. Cibran President
Carol C. Lang Vice President
Daniel A. Sims Vice President, Secretary
and Treasurer
<PAGE>
EXHIBIT 10.112
SCHEDULES TO SUBORDINATED NOTE PURCHASE AGREEMENT
DATED
SEPTEMBER 30, 1997
BY AND AMONG
RAMSAY HEALTH CARE, INC.,
THE LENDERS FROM TIME TO TIME PARTY THERETO,
GENERAL ELECTRIC CAPITAL CORPORATION
AND
GECC CAPITAL MARKETS GROUP, INC.
<PAGE>
Schedule 5.03 to
Subordinated Note Purchase Agreement
------------------------------------
FINANCIAL STATEMENTS AND PROJECTIONS
------------------------------------
To be attached.
<PAGE>
Schedule 5.04 to
Subordinated Note Purchase Agreement
------------------------------------
CONTINGENT LIABILITIES; RESTRICTED PAYMENTS
-------------------------------------------
1. See Schedule 3.07 to the Senior Credit Agreement.
2. See Schedule 5.13.
3. See Schedule 3.18 to the Senior Credit Agreement.
4. Obligations under the SocGen Cash Collateral Agreement (as defined in
the Senior Credit Agreement).
<PAGE>
Schedule 5.07 to
Subordinated Note Purchase Agreement
------------------------------------
LABOR MATTERS
-------------
1. None.
<PAGE>
Schedule 5.08 to
Subordinated Note Purchase Agreement
------------------------------------
SUBSIDIARIES, JOINT VENTURES AND AFFILIATES;
OUTSTANDING STOCK; INDEBTEDNESS HELD BY
CREDIT PARTIES; INACTIVE SUBSIDIARIES
--------------------------------------------
A. Active Subsidiaries:
-------------------
Bethany Psychiatric Hospital, Inc., an Oklahoma corporation
Bountiful Psychiatric Hospital, Inc., a Utah corporation
Carolina Treatment Center, Inc., a South Carolina corporation
East Carolina Psychiatric Services Corporation,
a North Carolina corporation
Great Plains Hospital, Inc., a Missouri corporation
Greenbrier Hospital, Inc., a Louisiana corporation
Gulf Coast Treatment Center, Inc., a Florida corporation
(RHCI owns 96% of the capital stock of this corporation
and has the option to purchase the remaining 4% from the
other stockholder)
Havenwyck Hospital, Inc., a Michigan corporation
H.C. Corporation, an Alabama corporation
H.C. Partnership, an Alabama general partnership
(HSA Hill Crest Corporation and H.C. Corporation each
own a 50% partnership interest)
Houma Psychiatric Hospital, Inc., a Louisiana corporation
HSA Hill Crest Corporation, an Alabama corporation
HSA of Oklahoma, Inc., an Oklahoma corporation
Mesa Psychiatric Hospital, Inc., an Arizona corporation
Psychiatric Institute of West Virginia, Inc.,
a Virginia corporation
Ramsay Acquisition Corp., a Delaware corporation
<PAGE>
Ramsay Correctional Services, Inc., a Delaware corporation
Ramsay Louisiana, Inc., a Delaware corporation Ramsay Managed Care, Inc., a
Delaware corporation
Ramsay Management Services of West Virginia, Inc.,
a West Virginia corporation
Ramsay New Orleans, Inc., a Delaware corporation
Ramsay Youth Services, Inc., a Delaware corporation
RHCI San Antonio, Inc., a Delaware corporation
The Haven Hospital, Inc., a Delaware corporation
Arizona Psychiatric Affiliates, Inc., a Delaware corporation
Florida Psychiatric Associates, Inc., a Florida corporation
Florida Psychiatric Management, Inc., a Florida corporation
FPM Behavioral Health, Inc., a Delaware corporation
FPM Management, Inc., a Florida corporation
FPM of Louisiana, Inc., a Delaware corporation
FPM of Ohio, Inc., a Delaware corporation
FPM of Utah, Inc., a Delaware corporation
FPM of West Virginia, Inc., a Delaware corporation
FPM/Hawaii, Inc., a Delaware corporation
FPM/Southeast, Inc., a Delaware corporation
FPMBH of Arizona, Inc., a Delaware corporation
FPMBH Clinical Services, Inc., a Delaware corporation
FPMBH of Texas, Inc., a Delaware corporation
Utah Psychiatric Affiliates, Inc., a Delaware corporation
<PAGE>
B. Joint Ventures and Affiliates:
-----------------------------
1. Joint Ventures:
--------------
Transitional Care Ventures, Inc., a Delaware
corporation (RHCI owns 60% of the capital stock of
this corporation and has an option to purchase the
remaining 40% of the capital stock)
Transitional Care Ventures (Arizona), Inc., a Delaware
corporation (Transitional Care Ventures, Inc. owns
100% of the capital stock of this corporation)
Transitional Care Ventures (Florida), Inc., a Delaware
corporation (Transitional Care Ventures, Inc. owns
100% of the capital stock of this corporation)
Transitional Care Ventures (North Texas), Inc., a
Delaware corporation (Transitional Care Ventures,
Inc. owns 100% of the capital stock of this
corporation)
Transitional Care Ventures (South Carolina), Inc., a
Delaware corporation (Transitional Care Ventures,
Inc. owns 100% of the capital stock of this
corporation)
Transitional Care Ventures (Texas), Inc., a Delaware
corporation (Transitional Care Ventures, Inc. owns
100% of the capital stock of this corporation)
FPM Behavioral Health of Ohio, Ltd., an Ohio limited
liability company (FPM of Ohio, Inc. owns 51% of the
Membership Interest in this LLC)
Meadowlake/Western Alliance LLC, an Oklahoma limited
liability company (HSA of Oklahoma, Inc. owns 50% of
the Membership Interest in this LLC)
U.B.H. Holdings, L.L.C., a Florida limited liability
company (FPM Behavioral Health, Inc. owns 50% of the
Membership Interest in this LLC)
University Behavioral Health at The University of
South Florida, Ltd., a Florida limited partnership
<PAGE>
(FPM Behavioral Health, Inc. holds a 49.5% interest
in this limited partnership and U.B.H. Holdings,
L.L.C. holds a 1% interest and is the General Partner
of this limited partnership)
<PAGE>
2. Affiliates:
----------
Ramsay Holdings HSA Limited, an international business
company organized under the laws of Barbados
Paul Ramsay Holdings Pty. Limited, a company of
limited liability organized under the laws of New
South Wales, Australia
Paul Ramsay Hospitals Pty. Limited, a company of
limited liability organized under the laws of New
South Wales, Australia
Paul J. Ramsay, a citizen of Australia, and his corporate Affiliates
Hawaii Psychiatric Associates, Ltd., a Hawaii
professional corporation
C. Outstanding Stock:
-----------------
1. See Annex A attached hereto.
D. Indebtedness:
------------
1. Promissory Note dated October 25, 1994 from Ramsay Managed Care, Inc. to
Ramsay Health Care, Inc. for the sum of $6,000,000
E. Inactive Subsidiaries:
---------------------
Americare of Galax, Inc., a Virginia corporation*
Atlantic Treatment Center, Inc., a Florida corporation
Cumberland Mental Health, Inc., a North Carolina corporation
Flagstaff Psychiatric Hospital, Inc., an Arizona corporation
Health Group of Las Cruces, Inc., a Tennessee corporation
HSA Lynnhaven, Inc., a Florida corporation
<PAGE>
HSA Medical Offices of Mesa, Inc., an Arizona corporation
Integrated Behavorial Services, Inc., a Delaware corporation*
Manhattan Psychiatric Hospital, Inc., a Kansas corporation
Michigan Psychiatric Services, Inc., a Michigan corporation*
PsychOptions, Inc., a Delaware corporation
Ramsay Chicago, Inc., a Delaware corporation
Ramsay Nevada, Inc., a Delaware corporation
Ramsay Nursing Home Services, Inc., a Delaware corporation
Ramsay Research and Education Institute, Inc.,
a Delaware corporation
RHCI Concord, Inc., a Delaware corporation
F. Material Subsidiaries
---------------------
Bountiful Psychiatric Hospital, Inc., a Utah corporation
East Carolina Psychiatric Services Corporation,
a North Carolina corporation
Great Plains Hospital, Inc., a Missouri corporation
Greenbrier Hospital, Inc., a Louisiana corporation
Havenwyck Hospital, Inc., a Michigan corporation
H.C. Partnership, an Alabama general partnership
Houma Psychiatric Hospital, Inc., a Louisiana corporation
Mesa Psychiatric Hospital, Inc., an Arizona corporation
Psychiatric Institute of West Virginia, Inc.,
a Virginia corporation
Transitional Care Ventures, Inc., a Delaware corporation
<PAGE>
* Corporation has no operations but owns capital stock in certain other
subsidiaries of RHCI.
<PAGE>
Schedule 5.11 to
Subordinated Note Purchase Agreement
------------------------------------
TAX MATTERS
-----------
A. Taxable Years Currently Under Audit:
None.
B. Agreements Extending Assessment Period:
None.
C. Tax Sharing Agreements:
Tax Sharing Agreement dated as of October 25, 1994 by and between
Ramsay Health Care, Inc. and Ramsay Managed Care, Inc.
<PAGE>
Schedule 5.12 to
Subordinated Note Purchase Agreement
------------------------------------
ERISA PLANS
-----------
I. Pension Plans:
-------------
1. Ramsay Health Care, Inc. Deferred Compensation and Retirement Plan, as
amended (Plan No. 001).
2. Ramsay Managed Care, Inc. Deferred Compensation and Retirement Plan and
Trust (Plan No. 001).
II. Determination Letters:
---------------------
1. Favorable Determination Letter dated April 8, 1996 from Internal Revenue
Service to Ramsay Health Care, Inc.
2. Favorable Determination Letter dated February 23, 1996 from Internal
Revenue Service to Ramsay Managed Care, Inc.
Welfare Plans:
- -------------
A. Ramsay Health Care, Inc.
1. Health - Ramsay Health Care, Inc. Group Health Plan, Plan No. A8971
(Self Insured Plan);
2. Disability - Northwestern National Life Insurance Co. Group Policy No.
GH20492-7
3. Life Insurance - Northwestern National Life Insurance Co. Group Policy
No. GL20492-7
4. HMOs
(a) Louisiana - MedFirst Health Plans (Apex Benefit Plan
(b) Utah - United HealthCare of Utah
(c) North Carolina - BC/BS of North Carolina
<PAGE>
(d) West Virginia - The Health Plan of Upper Ohio Valley, Inc.
(e) Arizona - Intergroup of Arizona and Intergroup Point of Service
Interflex Plan
(f) Michigan - Blue Care Network, Blue Traditional, BC/BS of Michigan
and Health Alliance Plan
(g) Alabama - Partners Healthplans (formerly Southeast Health Plan)
(h) Texas - PacifiCare of Texas, Inc.
A. Ramsay Managed Care, Inc.
1. Health and Dental - Ramsay Managed Care, Inc. Group Health Plan, Group
No. 0104 (Self Insured Plan through Poe and Brown Inc.);
2. Term Life, AD&D and Long Term Disability -ReliaStar Life Insurance
Company;
3. HMOs
(a) Utah - United HealthCare of Utah
(b) West Virginia - The Health Plan of Upper Ohio Valley, Inc.
(c) Arizona - Intergroup of Arizona and Intergroup Point of Service
Interflex Plan
(d) Hawaii - Cobra participants (no employees) Kaiser Foundation
Health Plan, Inc.
(e) Texas - PacifiCare of Texas, Inc.
<PAGE>
Schedule 5.13 to
Subordinated Note Purchase Agreement
------------------------------------
LITIGATION
----------
I. Ramsay Health Care, Inc.
------------------------
A. Professional Malpractice and General Liability Claims
1. Thomas Whitfield Davis v. The Life Center of Galax, et al., Circuit
Court of Grayson County, The State of Virginia, Case No. 95-19.
Improperly filed suit.
B. EEOC or Other Employment-Related Claims
1. Reynold Jennings v. Ramsay Health Care, Inc., arbitration proceeding
in Florida in which former Chief Operating Officer is seeking damages
in an aggregate of $2.3 million dollars, including lost wages,
severance payments and stock options. Case is currently in the
discovery process.
2. Hal McPheeters v. Psych-Options, Inc. and Ramsay Health Care, Inc.
Sex and age discrimination claim filed September 30, 1993. No action
has been taken by the EEOC.
C. Reimbursement Matters
1. Alleged Disproportionate Share Overpayments
The State of Louisiana, Department of Health and Hospitals has made
demands for repayment of disproportionate funds previously paid to Bayou Oaks
and Three Rivers Hospitals in the following amounts: (i) $3,466,333.18 from
Three Rivers Hospital and (ii) $560,613 from Houma Psychiatric Hospital, Inc.
d/b/a Bayou Oaks Hospital. The claim asserts that the hospitals did not meet
the requirements of being paid as a teaching hospital.
In addition the Department of Health and Hospitals have indicated that
they may make a demand on Three Rivers Hospital to repay an additional
$1,556,555 because the
<PAGE>
hospital's actual Medicaid census for the fiscal year ended December 31, 1994
did not meet its projected census.
The Company has entered into negotiations to settle the dispute and
submitted an offer of $1,300,000 in late July 1997, an amount counter offered by
the Department of Health and Hospitals in response to the Company's initial
settlement offer.
II. Bethany Psychiatric Hospital, Inc.
----------------------------------
A. Professional Malpractice and General Liability Claims
1. Threat of Claim, Patient X. Daughter of patient participating in drug
study threatened to bring suit because of mother's deteriorating
medical condition.
2. Threat of Claim, Patient Y. Patient claims injury resulting from
assault of other patient while at facility.
III. Bountiful Psychiatric Hospital, Inc.
------------------------------------
A. Professional Malpractice and General Liability Claims
1. Threat of Claim, Patient X. Claim by patient that certain of
hospital's male medical staff made sexual advances toward her.
2. Threat of Claim, Patient Y. Alleged abuse of fourteen year old male
patient by male mental health worker when patient was out of control.
3. Threat of Claim, Patient Z. Female patient alleges rape by male
patient prior to her release on August 1, 1997.
B. EEOC or Other Employment-Related Claims
1. Kristine Fitzgerald v. Benchmark Behavioral Health Systems: EEOC
Charge No. 35-C1-94-0736. Alleged
<PAGE>
disability discrimination in connection with termination in November
1993.
2. Timothy A. Cloyd, Utah Industrial Commission, No. 97-0200, and EEOC.
Claim by male employee alleging gender discrimination, sexual
harassment and retaliatory discharge for protesting discriminatory
practices. Claim dismissed by Utah Industrial Commission in February
1997.
IV. Carolina Treatment Center, Inc.
-------------------------------
A. Professional Malpractice and General Liability Claims
1. Threat of Claim, Patient X. Estate of Patient X requested
medical records following suicide of patient approximately two
weeks following release after an extended stay.
V. East Carolina Psychiatric Services Corporation
----------------------------------------------
A. Professional Malpractice and General Liability Claims
1. Edwin David Milligan, Jr. and Edwin David Milligan, III v. East
Carolina Psychiatric Services Corporation, Onslow County, North
Carolina Superior Court. Case No. 95-CVS-1408. Claims resulting from
injuries sustained by adolescent patient during an attempted
elopement. Trial set for November 1997.
VI. Greenbrier Hospital, Inc.
-------------------------
A. Professional Malpractice and General Liability Claims
1. Cooper v. Ramsay Healthcare, et al., 22nd Judicial District Court, St.
Tammany Parish, Louisiana, Case No. 97-13673. Case was filed on August
15, 1997 against Ramsay Healthcare, Inc. d/b/a Greenbrier Behavioral
Health System, Dr. Richard Donavan and Martha Tennison asserting
negligent diagnosis and treatment of plaintiff's decedent.
<PAGE>
2. Michelle LeDoux v. Marian D'Antonio and Ramsay Health Care, Inc.,
d/b/a Greenbrier Hospital and Greenbrier Counseling Center, 22nd
Judicial District Court for the Parish of St. Tammany, No. 94-13797.
Patient brought claims for failure to diagnose behavioral health
problems and for exceeding boundaries of therapeutic relationship.
Action also brought before Patient's Compensation Fund.
3. Delores Singleton v. Greenbrier Hospital, 22nd Judicial District Court
for the Parish of St. Tammany, State of Louisiana, Civil No. 96-15233.
Patient's claim is for damages arising from injury sustained from fall
in bathroom of facility.
4. Threat of Claim, Patient X. Patient alleges negligent care and has
threatened suit.
5. Elmer and Shirley Hock v. Greenbrier Hospital, 22nd Judicial District
Court for the Parish of St. Tammany, State of Louisiana, Case No. 90-
10755. Plaintiff claims damages for injury sustained from fall in
parking lot.
VII Havenwyck Hospital, Inc.
------------------------
A. Professional Malpractice and General Liability Claims
1. Robert K. Dust, As Next Friend of Robert L. Dust, Minor v. Havenwyck
Hospital, Inc., Circuit Court for the County of Oakland, State of
Michigan, Case No. 96-528965-NO. Plaintiff was injured when
technician pulled door shut, crushing plaintiff's fingers. Mediation
award of $22,500 rejected by hospital.
2. Threat of Claim, Patient X. Patient hit by car one hour following
discharge and claims damages for injuries sustained resulting from
hospital's failure to properly treat Patient.
3. Barbara Burns and Joseph Burns, Her Husband v. Havenwyck Hospital,
Inc., Circuit Court for the
<PAGE>
County of Oakland, State of Michigan, Case No. 96-518483-NO. Claim of
total disability resulting from a fall on hospital's grounds. Claim
asserts lost wages of $542,000, medical bills of $20,000 and pain and
suffering of $900,000.
B. EEOC or Other Employment-Related Claims
1. Nicanor Castedo, M.D. v. Ramsay Health Care, Inc., Havenwyck Hospital,
Inc. and Robert A. Kercorian, Jointly and Severally, U.S. District
Court, Eastern District of Michigan, Case No. 95CV73080. National
origin discrimination case settled in June 1997 for $50,000.
VII H.C. Partnership/HSA Hill Crest Corporation/H.C. Corporation
------------------------------------------------------------
A. Professional Malpractice and General Liability Claims
1. Jackie Secoy, individually and as mother and next friend of Candy
Walton v. Ramsay Health Care, Inc., a corporation, Hill Crest
Hospital; Nebby Boswell, an individual; and Elizabeth Burkett, an
individual, Jefferson County, Alabama Circuit Court, Bessemer
Division, CV 95-341. Patient alleged negligent supervision on an
outing. Patient, who was 14 years old at the time, had sexual
intercourse in bathroom of a restaurant while on the outing.
2. K.C., by and through his next friend, his father, K.C. v. Hill Crest
Hospital, et al., Jefferson County, Alabama Circuit Court, Civil
Action No. CV 96-4204. Matter settled in July 1997.
3. Jeffrey W. Moore, an individual v. Hill Crest Hospital, a partnership,
also known as HC Partnership; Defendant A, being the correct legal
name of Hill Crest Hospital; Defendant B, being the correct legal name
of HC Partnership; Defendants C, D, E, F, G, H, I and J, being the
correct legal names of the Partners of Hill Crest Hospital; Defendants
K, L, M, N, O, P, Q and R,
<PAGE>
being the correct legal names of the partners of HC Partnership.
Matter settled in July 1997.
4. Janice Davis and Billy Davis v. Hill Crest Hospital, John Doe, who
will be added when the name is ascertained, and XYZ Corporation, who
will be added when the name is ascertained, Circuit Court of Jefferson
County, Alabama, Civil Division No. CV9702388. Case filed on or about
August 25, 1997. Patient alleges injury sustained when another
patient removed a chair from beneath her while sitting down.
<PAGE>
B. EEOC or Other Employment-Related Claims
1. Alton R. Woodward, EEOC Charge No. ###-##-####. Alleged race and age
discrimination filed in April 1993.
2. Diane Samuels and Lillie Bradley v. HC Partnership, d/b/a Hill Crest
Hospital, H.C. Corporation, HSA Hill Crest Corp. and Ramsay Health
Care, Inc. - U.S.D.C. (N.D. Ala.) No. 96-6-2-2514-S. Employee alleges
lay off resulted from race discrimination.
3. Threat of Claim, Employee X. Threat of unspecified "cause of action"
by terminated employee.
4. Threat of Claim, Employee Y. Settlement offer sent to terminated
medical director. No response to date.
5. Lanny Jackson, EEOC Charge No. ###-##-####. Claim of wrongful
termination based on racial discrimination and retaliation.
IX. Houma Psychiatric Hospital, Inc.
--------------------------------
A. Professional Malpractice and General Liability Claims
1. Kemple Lovell v. Bayou Oaks Hospital, 32 Judicial District Court,
Parish of Terrebonne, Civ. No. 112196. Case arises out of alleged
negligence on October 9, 1994 when tiles allegedly fell from ceiling
injuring plaintiff's neck and back. There has been no action in this
case since February 1996.
2. Sherry H. Guidry v. Houma Psychiatric Hospital dba Bayou Oaks
Hospital, 32nd Judicial Court for the Parish of Terrebonne, State of
Louisiana, Civil No. 119600. Defendant served with notice of suit on
July 1, 1997 for negligence involving wrist fracture of plaintiff
while patient
<PAGE>
3. Kelcie Pepper v. Terrebonne General Medical Center, et al., P.C.F. No.
96-1484. Breach of duty of care claim arising out of delayed
diagnosis for medical/surgical problem. Pending before Medical Review
Panel.
4. Sidera Adams, et al., v. Dr. Brian Matherne, et al., P.C.F. No. 96-
0413. Case pending before Medical Review Panel. No treatment
provided to plaintiff's decedent at facility, but plaintiff's decedent
was evaluated through hospital's assessment center.
5. Threat of Claim, Visitor X. Possible claim for injury to Visitor
while on premises by patient of facility. Claim to date is for
$7,500.
B. EEOC or Other Employment-Related Claims
1. Cynthia Hamilton v. Bayou Oaks Hospital, State of Louisiana,
Department of Labor, Office of Workers' Compensation, District 9,
Docket No. 94-08130. Employee slipped on wet floor during work hours.
Employee is currently receiving workers compensation benefits.
X. HSA of Oklahoma, Inc.
---------------------
A. Professional Malpractice and General Liability Claims
1. Threat of Claim, Patient X. Mother of patient who broke hand while
punching wall threatened suit.
B. EEOC or Other Employment-Related Claims
1. Threat of Claim, Former Employee X. Threatened suit of social worker
who was terminated after ten days.
XI. Mesa Psychiatric Hospital, Inc.
-------------------------------
A. Professional Malpractice and General Liability Claims
<PAGE>
1. Threat of Claim, Patient X. Adolescent patient injured while
attempting to avoid admission to facility and injuries sustained while
a patient as a result of an altercation with another patient. Statute
of limitations has run on claim by parents.
XII Psychiatric Institute of West Virginia, Inc.
--------------------------------------------
A. Professional Malpractice and General Liability Claims
1. Freeman v. The Psychiatric Institute of West Virginia, Inc., d/b/a
Chestnut Ridge Hospital, et al., Circuit Court of Monongalia County,
West Virginia, Civil Action No. 96-C-134. Case was commenced in April
1996 against Chestnut Ridge Hospital and Dr. Louis Tinnin asserting
negligence in elopement and suicide of patient. Case is currently in
the discovery process.
2. James Deems and Melody Deems v. Psychiatric Institute of West
Virginia, Inc., a foreign corporation d/b/a Chestnut Ridge Hospital,
Ruth Smith and Pamela Sullivan, M.D., Circuit Court of Monongalia
County, West Virginia, CV No. 96-C-69. Claim for damages for injuries
sustained following elopement of patient from facility who then threw
himself in front of a moving vehicle. An agreement to settle this
case for $70,000 has been reached.
3. Threat of Claim, Patient X. Threatened suit following dissatisfaction
with adult patient's care by patient's parents.
XII Ramsay Louisiana, Inc.
----------------------
A. Professional Malpractice and General Liability Claims
1. Ralph Singleton, Individually, and on Behalf of the Minor, Amy
Singleton v. Three Rivers Hospital Limited Partnership, Dr. Robert
DeBrandt, Dr. John Pratt and Mark Redmond, 22nd Judicial District
<PAGE>
Court of the Parish of St. Tammany, Louisiana, Case No. 94-10309 A.
Claim dismissed as to Three Rivers Hospital Limited Partnership.
2. Dennis Musgrove and Gretchen Musgrove, Individually and on Behalf of
Their Minor Son, Carther Dewayne Musgrove v. Three Rivers Hospital,
Medical Review Panel Request No. 94 MR 229. Patient claims assault and
sexual abuse by other patients.
B. EEOC or Other Employment-Related Claims
1. Brian Corkern v. Three Rivers Hospital, State of Louisiana, Department
of Labor, Office of Workers' Compensation, District 6, Docket No. 94-
00613. Employee injured while restraining a patient. Counsel for
Employee requested settlement of $50,000.
XIV Ramsay Managed Care, Inc.
-------------------------
A. Professional Malpractice and General Liability Claims
1. Pursuant to the Sale Agreement with RoTech Medical Corporation
concerning the sale of Apex Healthcare, Inc., RoTech deposited
$350,000 of the purchase price received by the Company in connection
with such sale. RoTech delivered a Notice of Claim that it is entitled
to indemnification from the Company under the Purchase Agreement and
wishes to collect from the subject escrow account. The Notice of Claim
sets forth claims in an aggregate of approximately $5.8 million, more
than the $4 million purchase price of Apex, to which amount
indemnification is limited under the Purchase Agreement, and demands
indemnification by the Company of amounts above the escrow account.
B. EEOC or Other Employment-Related Claims
1. Ramsay Managed Care, Inc., et al. v. Oliaii, et al., Circuit Court for
Jefferson County, Alabama,
<PAGE>
Action No. CV9604050. On July 1, 1996, the company asserted fraud and
breach of fiduciary duty claims against former officer arising out of
efforts of Company to sell stock of a subsidiary; counterclaim by
defendants seeking compensatory damages in excess of $322,984.35 and
punitive damages in an amount to be determined. Case is currently in
the discovery process.
2. John Theos v. Apex Healthcare of LA, Inc., Ramsay Managed Care, Ramsay
Health Care, Inc., RoTech Medical Corporation, Medfirst Health Plans
and Warwick Syphers, Civil District Court for the Parish of Orleans,
Case No. 97-12701. Breach of employment contract claim and unfair
labor practices.
XV. RHCI San Antonio, Inc.
----------------------
A. Professional Malpractice and General Liability Claims
1. Threat of Litigation, Patient X. Patient claims employee ran over
foot with wheelchair and subsequently lost toe. Claim made for
$200,000 settlement by Patient.
2. Threat of Litigation, Patient Y. Patient became unresponsive during
assessment and subsequently died. Contact from estate attorney.
3. Threat of Litigation, Patient Z. Patient claims employee Kissed her
while on a visit to her home.
4. Threat of Claim, Visitor X. Visitor fractured shoulder in parking
lot.
B. EEOC or Other Employment-Related Claims
1. Cedric P. Johnson v. Mission Vista Hospital and Ramsay Health Care,
Inc., United States District Court for Western District of Texas,
Civil Action No. SA-97-CA-0293. Claim of racial discrimination filed
in June 1997.
<PAGE>
2. Nancy Harrison v. Mission Vista Hospital: EEOC Charge No. ###-##-####.
Discrimination claim filed in November 1996.
XVI. The Haven Hospital, Inc.
------------------------
A. Professional Malpractice and General Liability Claims
1. Patty B., individually and as Next Friend for Brandon S. v. Moses
Ramos, Jr., Mary Patterson, Sylvia Turner, Sylvia Turner, M.D., Inc.,
and The Haven Hospital, Inc., in the District Court of the 162nd
Judicial District of Dallas County, Dallas, Texas, Case No. 95-158.
Complaint alleges numerous counts but which fall under breach of duty
of care. Plaintiffs have demanded a $500,000 settlement.
2. Threat of Claim, Patient X. Claim for loss of ring and damages
arising from hip fracture as a result of a fall.
3. Threat of Claim, Patient Y. Alleges assault, battery, negligence and
fraud. Requested settlement is $2,000,000.
B. EEOC or Other Employment-Related Claims
1. Kimberly E. Duncan v. The Haven: EEOC Charge No. 310971493.
Disability discrimination claim by former Director of Nursing who was
demoted to be a Charge Nurse and subsequently terminated for failure
to satisfy the requirements of the position. Issued a right to sue
letter by EEOC on June 4, 1997.
<PAGE>
Schedule 5.17 to
Subordinated Note Purchase Agreement
------------------------------------
CERTAIN ENVIRONMENTAL MATTERS
-----------------------------
1. Matters set forth in the Phase I Environmental Reports ordered by General
Electric Capital Corporation for the following Hospitals:
a. Benchmark Regional
b. Brynn Marr
c. Chestnut Ridge
d. Havenwyck
e. Hill Crest
2. Matters set forth in the Phase I Environmental Reports by Robert Bates &
Associates, Inc. dated March 1993 provided to General Electric Capital
Corporation for the following Hospitals:
a. Coastal Carolina
b. Heartland
c. Meadowlake
d. Greenbrier
e. The Haven
f. Bayou Oaks
<PAGE>
Schedule 5.30 to
Subordinated Note Purchase Agreement
------------------------------------
CERTAIN OPTIONS, ETC.
---------------------
A. Options and Convertible Securities
----------------------------------
1. Stock Option and Purchase Plans/Outstanding Options:
Total Shares Outstanding: 3,140,765
a. Ramsay Health Care, Inc. Amended and Restated 1990 Stock Option Plan -
125,667 outstanding; 125,667 available;
b. Ramsay Health Care, Inc. 1991 Stock Option Plan -1,478,761 options
outstanding; 1,484,423 available;
c. Ramsay Health Care, Inc. 1993 Stock Option Plan -337,529 outstanding;
393,930 available;
d. Ramsay Health Care, Inc. 1995 Long Term Incentive Plan - 426,894
outstanding; 500,000 available;
e. Ramsay Health Care, Inc. 1996 Long Term Incentive Plan - 457,500
outstanding; 500,000 available; and
f. Options to purchase Ramsay Health Care, Inc. Common Stock issuable with
respect to the conversion of Ramsay Managed Care, Inc. options in
connection with the merger of Ramsay Managed Care, Inc. with a wholly
owned subsidiary of Ramsay Health Care, Inc. - 314,414 outstanding;
500,000 available under two stock option plans.
2. Stock Purchase Plan:
a. Ramsay Health Care, Inc. 1993 Employee Stock Purchase Plan - 100,000
shares originally authorized.
3. Warrants:
a. Ramsay Health Care, Inc. outstanding warrants to purchase Common Stock -
1,165,498.
<PAGE>
4. Preferred Stock
a. 142,486 shares of Class B Preferred Stock, Series C, convertible into an
aggregate of 1,424,860 shares of Common Stock.
b. 100,000 shares of Class B Preferred Stock, Series 1996, convertible into
an aggregate 1,000,000 shares of Common Stock.
c. 100,000 Shares of Class B Preferred Stock, Series 1997, convertible into
an aggregate of 394,945 shares of Common Stock.
<PAGE>
Schedule 7.03 to
Subordinated Note Purchase Agreement
------------------------------------
INVESTMENTS
-----------
1. Agreement and Plan of Merger dated as of July 1, 1997 by and among Summa
Healthcare Group, Inc., Ramsay Acquisition Corp. and Ramsay Health Care,
Inc.
2. $350,000 held in escrow pursuant to the Escrow Agreement dated as of
October 30, 1996 by and among Apex Healthcare, Inc., Ramsay Managed
Care, Inc., RoTech Medical Corporation and Haythe & Curley.
3. The following joint ventures:
a. Meadowlake/Western Alliance LLC, an Oklahoma limited liability
company (HSA of Oklahoma, Inc. owns 50% of the Membership Interest
in this LLC).
b. U.B.H. Holdings, L.L.C., a Florida limited liability company (FPM
Behavioral Health, Inc. owns 50% of the Membership Interest in this
LLC).
c. University Behavioral Health at The University of South Florida,
Ltd., a Florida limited partnership (FPM Behavioral Health, Inc.
holds a 49.5% interest in this limited partnership and U.B.H.
Holdings, L.L.C. holds a 1% interest and is the General Partner of
this limited partnership).
<PAGE>
Schedule 7.05 to
Subordinated Note Purchase Agreement
------------------------------------
TRANSACTIONS WITH AFFILIATES AND EMPLOYEES
------------------------------------------
1. See Schedule 5.08(D) and 7.03(1).
2. Consulting Agreement dated as of February 1, 1997 by and between Summa
Healthcare Group, Inc. and Ramsay Health Care, Inc.
3. Services Agreement dated as of August 12, 1996 by and between
Healthlink Enterprises, Inc. and Ramsay Health Care, Inc.
4. In the ordinary course of business, Ramsay Health Care, Inc. maintains
a cash management system with the other Credit Parties.
5. In the ordinary course of business, Ramsay Health Care, Inc. and
certain of the other Credit Parties engage in lending, borrowing and
other commercial transaction in connection with the joint ventures and
other affiliates listed on Schedule 5.08(B), all of which are permitted
by (S) 7.05.
6. Employment Agreements with the executive officers of the Company and
its Subsidiaries, copies of which were provided to the Administrative
Agent prior to the Closing Date.
7. 142,486 shares of Class B Preferred Stock, Series C of the Company held
by Ramsay Holdings and Ramsay Hospitals Pty. Limited.
8. 100,000 shares of Class B Preferred Stock, Series 1996 of the Company
held by Ramsay Holdings.
9. 4,000 shares of Class B Preferred Stock, Series 1997 of the Company
held by Ramsay Holdings.
10. RMCI and its affiliates lease the following property from partnerships
of which Dr. Martin Lazoritz (an officer of RMCI) has the following
ownership percentages:
<PAGE>
<TABLE>
<CAPTION>
LOCATION PURPOSE LEASE INCEPTION ANNUAL LAZORITZ
LEASE (EST.) OWNERSHIP
PERCENT
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1276 Minnesota Clinic/Medical 1983 to 5/31/2003 $ 96,264+ 16%
Avenue Practice with option to renew
Winter Park, FL
- -------------------------------------------------------------------------------------
1250 Minnesota FPM 1988-2003 $113,820+ 25%
Avenue (mgd. care) Cost of Living
Winter Park, FL Adjustments
- -------------------------------------------------------------------------------------
Lake Mary, FL Office Clinic 1988-2003 Cost of $ 51,747 33-1/3%
+3,000 sq. ft. Living Adjustments
- -------------------------------------------------------------------------------------
Sand Lake, FL Clinic to 1990-2003 $ 51,264 33-1/3%
serve
Disney
- -------------------------------------------------------------------------------------
</TABLE>
11. Employees and Ramsay Affiliates have been granted the options and
warrants listed on Annex A hereto.
12. Payables of RMCI to Luis E. Lamela and Peter J. Evans in the amounts of
$200,000 and $100,000 respectively, assumed by Borrower in connection
with the merger of RMCI into a wholly owned Subsidiary of the Borrower.
13. Legal representation of the Borrower and its Subsidiaries by
Haythe & Curley, a partner of which is a director of Borrower.
14. Ramsay Health Care, Inc. 1993 Employee Stock Purchase Plan - 100,000
shares originally authorized.
<PAGE>
Schedule 7.06 to
Subordinated Note Purchase Agreement
------------------------------------
LIENS
-----
<TABLE>
<CAPTION>
Debtor Secured Party Jurisdiction File Date Collateral
- ------------------ ----------------- --------------- ------------ -----------
<S> <C> <C> <C> <C>
Carolina AT&T Credit S/S SC 150542A Lease
Treatment 5/17/94
Center
East Carolina American S/S NC 1183468 Lease
Psych Services Business 1/17/95
Credit Corp.
East Carolina American Onslow, Co., NC 95-920 Lease
Psych Services Business 1/13/95
Credit Corp.
East Carolina American Onslow, Co., NC 95-312 Lease
Psych Services Business 1/18/95
Credit Corp.
Gulf Coast SunTrust Bank S/S FL 96000073657 (1)
4/10/96
Havenwyck Eaton Fin. Corp. S/S MICH 45566B Lease
8/3/94
Havenwyck Lease Corp. of S/S MICH D186257 Lease
America 1/21/97
Havenwyck Lease Corp. of S/S MICH D242061 Lease
America 6/6/97
Psych. Inst. of Tokai, Fin. Serv. S/S WV 0433905 Lease
West Virginia 11/13/95
RHCI & Psych. Copel Co Cap. S/S WV 0472474 Lease
Inst. of West 6/10/97
Virginia
RHCI & Psych. Copel Co Cap. Monongalia G., 00252 Lease
Inst. of West WV 6/9/97
Virginia
Ramsay AT&T Credit S/S FL 95000087992 Lease
Managed Care, 5/2/95
Inc.
</TABLE>
- -------------------------
(1) All other property, real or personal, tangible or intangible, and all
other causes of action, rights or remedies of the Debtor of whatever nature
assigned or to be assigned to Secured Party or the Assignee of the Secured Party
pursuant to that certain Loan Agreement dated as of October 1, 1984, between the
Debtor and the Secured Party or that certain Trust Indenture dated as of October
1, 1984, between the Secured Party and Sun Bank, National Association, as
Trustee, or any other instrument or agreement executed in connection therewith.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Transitional AT&T Credit S/S TX 175295 Lease
Care Ventures 6/3/97
(Texas)
Transitional Pyxis Corp. S/S TX 165039 Lease
Care Ventures 8/24/94
(Texas)
Florida Psych NCR Credit Corp. S/S FL 930000045980 Lease
Mgmt 3/3/93
Florida Psych AT&T Credit S/S FL 95000087993 Lease
Mgmt 5/2/95
FPM AT&T Credit S/S FL 95000087994 Lease
Behavioral 5/2/95
Health
FPM American S/S FL 950000156031 Lease
Behavioral Business 8/7/95
Health Credit Corp.
FPM American S/S FL 970000103585 Lease
Behavioral Business 5/13/97
Health Credit Corp.
RMCI d/b/a American S/S FL 950000095756 Lease
Behavioral Business 5/11/95
Health Credit Corp.
================================================================================
</TABLE>
<PAGE>
EXHIBIT 11
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME (LOSS) PER SHARE
Quarter Ended
September 30
------------
1997 1996
------- -------
PRIMARY
Weighted average common shares outstanding........... 10,575,563 8,173,731
Class B convertible preferred stock, Series C........ - - -* - - -*
Class B convertible preferred stock, Series 1996..... - - -* n/a
Class B convertible preferred stock, Series 1997..... - - -* n/a
----------- ---------
TOTAL COMMON AND DILUTIVE
COMMON EQUIVALENT SHARES........................... 10,575,563 8,173,731
=========== =========
Net Income (Loss) Available to Common Shareholders:
Before extraordinary item.......................... $ 268,000** $ 57,000**
Extraordinary item................................. (3,574,000) - - -
----------- ----------
TOTAL............................................. $(3,306,000) $ 57,000
=========== ==========
Net Income (Loss) Per Share:
Before extraordinary item.......................... $ 0.03 $ 0.01
Extraordinary item................................. (0.34) - - -
----------- ----------
TOTAL............................................. $ (0.31) $ 0.01
=========== ==========
FULLY DILUTED
Weighted average common shares outstanding........... 10,580,443 8,173,731
Class B convertible preferred stock, Series C........ - - -* - - -*
Class B convertible preferred stock, Series 1996..... - - -* n/a
Class B convertible preferred stock, Series 1997..... - - -* n/a
----------- ---------
TOTAL COMMON AND DILUTIVE
COMMON EQUIVALENT SHARES........................... 10,580,443 8,173,731
=========== =========
Net Income (Loss) Available to Common Shareholders:
Before extraordinary item.......................... $ 268,000** $ 57,000**
Extraordinary item................................. (3,574,000) - - -
----------- ----------
TOTAL............................................. $(3,306,000) $ 57,000
=========== ==========
Net Income (Loss) Per Share:
Before extraordinary item.......................... $ 0.03 $ 0.01
Extraordinary item................................. (0.34) - - -
----------- ----------
TOTAL............................................. $ (0.31) $ 0.01
=========== ==========
* The Company's convertible preferred stock issues were anti-dilutive in the
quarters ended September 30, 1997 and 1996 and, accordingly, were not
considered in the calculation of earnings (loss) per share in these
quarters.
** Net income before extraordinary item was decreased by dividends related to
the Company's preferred stock issues, totalling $130,000 and $91,000 in the
quarters ended September 30, 1997 and 1996, respectively.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000773136
<NAME> RAMSAY HEALTH CARE, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,113,000
<SECURITIES> 0
<RECEIVABLES> 29,099,000
<ALLOWANCES> 4,166,000
<INVENTORY> 0
<CURRENT-ASSETS> 39,258,000
<PP&E> 99,933,000
<DEPRECIATION> 33,706,000
<TOTAL-ASSETS> 156,521,000
<CURRENT-LIABILITIES> 26,491,000
<BONDS> 49,375,000
6,402,000
3,142,000
<COMMON> 112,000
<OTHER-SE> 52,186,000
<TOTAL-LIABILITY-AND-EQUITY> 156,521,000
<SALES> 0
<TOTAL-REVENUES> 37,755,000
<CGS> 0
<TOTAL-COSTS> 33,300,000
<OTHER-EXPENSES> 1,638,000
<LOSS-PROVISION> 1,099,000
<INTEREST-EXPENSE> 1,320,000
<INCOME-PRETAX> 398,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 398,000
<DISCONTINUED> 0
<EXTRAORDINARY> (3,574,000)
<CHANGES> 0
<NET-INCOME> (3,176,000)
<EPS-PRIMARY> (0.31)
<EPS-DILUTED> (0.31)
</TABLE>
