In the Matter of Foundation Healthcare Limited ACN 002 611 501 [2002] FCA 742

FEDERAL COURT OF AUSTRALIA

In the Matter of Foundation Healthcare Limited

ACN 002 611 501 [2002] FCA 742

CORPORATIONS – arrangements – application for leave to convene meetings of Shareholders and Optionholders to approve Schemes – Schemes involving transfer of shares and options to another company – effective merger – criteria for approval – function of Court – Explanatory Statement requirements – Independent Expert Report – not mandated – including forecast of earnings – whether ASIC consent necessary – other statutory requirements – interaction between Ch 5 and Ch 6 – application approved.

Corporations Act 2001 (Cth) s 411, s 413 Corporations Regulations Reg 5.1.01 Re Parmelia Resources NL (1994) 15 ACSR 392 cited Re Bond Corporation Holdings Ltd (1991) 5 ACSR 304 cited Re Stockbridge Ltd (1993) 11 ACLC 201 cited Re ACM Gold Ltd (1992) 10 ACLC 573 cited Re Jax Marine Pty Ltd (1967) 1 NSWR 145 cited Re NRMA Ltd (2000) 3 ACSR 595 cited Re Theatre Freeholds Ltd (1996) 14 ACLC 1150 cited IN THE MATTER OF FOUNDATION HEALTHCARE LIMITED ACN: 002 611 501 W3008 OF 2002 FRENCH J 11 JUNE 2002 PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY W3008 OF 2002

IN THE MATTER OF FOUNDATION HEALTHCARE LIMITED ACN: 002 611 501

APPLICANT

JUDGE: FRENCH J

DATE OF ORDER: 11 JUNE 2002

WHERE MADE: PERTH

THE COURT ORDERS THAT: 1. The Applicant be at liberty to convene the following meetings of holders of shares (Shareholders) and options to acquire shares in the capital of the Applicant (Optionholders) for the purpose of considering and if thought fit, approving with or without modifications, schemes of arrangement proposed between the Applicant and its Shareholders and between the Applicant and its Optionholders: (a) a meeting of Shareholders of the Applicant who are holders of fully paid ordinary shares in the capital of the Applicant to be held at the Radisson Plaza Hotel, 27 O'Connell Street, Sydney, New South Wales at 10.30am (EST) on 16 July 2002 (Shareholders Meeting); and (b) a meeting of Optionholders of the Applicant who are holders of the options to acquire shares in the capital of the Applicant exercisable on or before 31 December 2003 at an exercise price of 50 cents each to be held at the Radisson Plaza Hotel, 27 O'Connell Street, Sydney, New South Wales at 11.00am (EST) on 16 July 2002 (or as soon as possible after the meeting referred to in (a) has concluded) (Optionholders Meeting), (together the Meetings). The relevant scheme documents are set out in Appendix 2 to the explanatory statement referred to in paragraph 4 below. 2. Each of the Meetings shall be convened, held and conducted: (a) in accordance with the provisions of Part 2G.2 of the Corporations Act (Act) that apply to members of a company and the provisions of the Applicant's constitution that are not inconsistent therewith and that apply to meetings of members; (b) on the basis that a quorum for the purpose of the Optionholders' Meeting shall be 2 Optionholders, present in person or by proxy or attorney, and otherwise as if such Optionholders were a separate class of creditors; and (c) on the basis that Corporations Regulations 5.6.12 to 5.6.36A do not apply to the meetings. 3. Michael Denis Boyd or, failing him, Roger Christian Steinepreis, shall act as chairperson of the Meetings and report the results of those Meetings to this Court. 4. The draft explanatory statement which is made up of: (a) Annexure "PJM-7" to the affidavit of Phillip James MacLeod sworn on 31 May 2002 (excluding Appendix 5 – the Independent Expert's Report); and (b) the Independent Expert's Report which is annexed as "PCW-1" to the affidavit of Peter Christopher Wall sworn on 4 June 2002, being the schemes booklet and explanatory statement required by s 412(1)(a) of the Act (Schemes Booklet), be and is approved (subject to any minor amendments required or approved by the Australian Securities and Investments Commission (ASIC) for the purposes of registration thereof under Section 412(6) of the Act). 5. The Applicant shall (subject to the registration of the explanatory statement by ASIC pursuant to s 412(6) of the Act) dispatch documents in the form of the Schemes Booklet by ordinary pre-paid post (or by airmail to overseas holders) to the Shareholders and Optionholders at their addresses last known to the Applicant on or before 15 June 2002. 6. Leave be given to make application for orders under ss 411(4) and (6) and 413 of the Act following the Meetings, as soon as practicable thereafter (such date to be arranged with the Registrar of the Court) for approval of the Schemes. 7. There be liberty to apply upon the giving of 24 hours' notice to ASIC and, where relevant, the Applicant. 8. An office copy of this order shall be lodged with ASIC as soon as practicable after the order is made. 9. The Explanatory Statement is to contain a statement to the effect that the forecast of earnings in the Independent Expert Report has not been included with the consent of ASIC as the Expert Report was not mandated by Item 8303 of Schedule 8 to the Corporations Regulations.