Medical Facilities Completes Conversion To Common Share Structure

On May 31, 2011, Medical Facilities Corporation (“Medical Facilities”) completed its conversion to a traditional common share structure.

The Conversion was approved at an annual and special meeting of common shareholders and a special meeting of subordinated note-holders held on May 13, 2011, and the Supreme Court of British Columbia approved the plan of arrangement to effect the Conversion on May 24, 2011.

Under the Conversion, each outstanding income participating security (or IPS) was effectively exchanged for one new common share (the “New Common Shares”) on a one-for-one basis.

The Corporation's 7.50 per cent convertible secured debentures due April 30, 2013 (the “Debentures”) which were convertible into IPSs at a conversion price of $13.10 per Debenture prior to the Conversion, are now convertible into New Common Shares at the same conversion price.

Effective June 1, 2011, the New Common Shares were listed and posted for trading on the Toronto Stock Exchange under the symbol “DR.”

Medical Facilities owns controlling interests in four specialty surgical hospitals, located in South Dakota and Oklahoma, along with an ambulatory surgery center in California.

Goodmans LLP acted as counsel to Medical Facilities with a team that included Neill May, David Nathanson and Chat Ortved (corporate); Jon Northup and Jarrett Freeman (tax); Mark Surchin (banking) and Tom Friedland and Peter Kolla (litigation). James MacInnis of Nathanson, Schachter and Thompson LLP acted as British Columbia counsel. Hodgson Russ LLP acted as US counsel with a team that included Richard Raymer (corporate); Carol Fitzsimmons (tax) and Victoria Saxon (finance).

Michel Deschamps of McCarthy Tétrault LLP acted as counsel to the senior lender, National Bank of Canada.