1 EXHIBIT 10.2 AMENDMENT NO. 1 TO CERTAIN OPERATIVE AGREEMENTS THIS AMENDMENT NO. 1 TO CERTAIN OPERATIVE AGREEMENTS dated as of September 10, 1999 (this "Amendment") is by and among PROVINCE HEALTHCARE COMPANY, a Delaware corporation (the "Lessee" or the "Construction Agent"); the various parties hereto from time to time as guarantors (subject to the definition of Guarantors in Appendix A to the Participation Agreement (hereinafter defined), individually, a "Guarantor" and collectively, the "Guarantors"); FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not individually (in its individual capacity, the "Trust Company"), except as expressly stated in the Operative Agreements, but solely as the Owner Trustee under the PHC Real Estate Trust 1998-1 (the "Owner Trustee", the "Borrower" or the "Lessor"); the various banks and other lending institutions which are parties to the Participation Agreement from time to time as lenders (subject to the definition of Lenders in Appendix A to the Participation Agreement, individually, a "Lender" and collectively, the "Lenders"); FIRST UNION NATIONAL BANK, a national banking association, as the agent for the Lenders and respecting the Security Documents, as the agent for the Lenders and the Holders, to the extent of their interests (in such capacity, the "Agent"); the various banks and other lending institutions which are parties to the Participation Agreement from time to time as holders of certificates issued with respect to the PHC Real Estate Trust 1998-1 (subject to the definition of Holders in Appendix A to the Participation Agreement, individually, a "Holder" and collectively, the "Holders"). Capitalized terms used but not otherwise defined in this Amendment shall have the meanings set forth in Appendix A to the Participation Agreement. W I T N E S S E T H WHEREAS, the parties to this Amendment are parties to that certain Participation Agreement dated as of March 30, 1998 (as previously or hereinafter amended, modified, extended, supplemented, restated and/or replaced from time to time, the "Participation Agreement"), certain of the parties to this Amendment are parties to that certain Credit Agreement dated as of March 30, 1998 (as previously or hereinafter amended, modified, extended, supplemented, restated and/or replaced from time to time, the "Credit Agreement"), certain of the parties to this Amendment are parties to that certain Trust Agreement dated as of March 30, 1998 (as previously or hereinafter amended, modified, extended, supplemented, restated and/or replaced from time to time, the "Trust Agreement"), certain of the parties to this Amendment are parties to that certain Security Agreement dated as of March 30, 1998 (as previously or hereinafter amended, modified, extended, supplemented, restated and/or replaced from time to time, the "Security Agreement") and certain of the parties to this Amendment are parties to the other Operative Agreements relating to a $35 million synthetic lease facility (the "Facility") that has been established in favor of the Lessee; WHEREAS, the Lessee has requested certain modifications to the Participation Agreement, the Credit Agreement, the Trust Agreement, the Security Agreement and the other Operative Agreements in connection with the Lessee's request to increase the size of the Facility from $35,000,000 to $39,711,538; 2 WHEREAS, the Lessee has requested that the Majority Secured Parties direct the Agent to consent and agree to the replacement of the Incorporated Representations and Warranties, Incorporated Covenants and Additional Incorporated Terms with the corresponding provisions of the Second Amended and Restated Credit Agreement dated as of September 10, 1999 (as hereafter amended, modified, extended, supplemented, restated and/or replaced from time to time, the "New Facility") by and among the Lessee, the Banks and other financial institutions from time to time parties thereto and First Union National Bank, as agent and as issuing bank thereunder; WHEREAS, the Financing Parties have agreed to the requested modifications on the terms and conditions set forth herein; NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Section 6B.9 of the Participation Agreement is hereby amended and restated in its entirety to read as follows: 6B.9. Release of Guarantors. Each Financing Party hereby agrees that (a) the Agent shall be permitted to release any Guarantor from its guaranty obligations under this Section 6B without the consent of any other Financing Party if the release is granted in connection with a disposition by the applicable Credit Party of all the shares of stock or partnership or other equity interest in such Guarantor and such disposition is permitted pursuant to the applicable provisions of the Operative Agreements and the Lessee Credit Agreement, (b) the Agent shall be permitted to release any Guarantor from its guaranty obligations under this Section 6B.9 without the consent of any other Financing Party if the release is requested by the Construction Agent or the Lessee in connection with a dissolution of the Guarantor, subject to the Construction Agent or the Lessee providing to the Agent written representations to the effect that such Guarantor has no business operations and no assets and (c) without further action, any Guarantor which is released from its guaranty obligations pursuant to and in accordance with the provisions of the Lessee Credit Agreement shall automatically, and without further action, be released from its guaranty obligations under the Operative Agreements. 2. The second paragraph of Section 12.5 of the Participation Agreement is hereby amended and restated in its entirety to read as follows: Notwithstanding the foregoing and subject to the final sentence of this paragraph, no such termination, amendment, supplement, waiver or modification shall, without the consent of the Agent and, to the extent affected thereby, each Lender and each Holder (collectively, the "Unanimous Vote Matters") (i) reduce the amount of any Note or any Certificate, extend the scheduled date of maturity of any Note, extend the scheduled Expiration Date, extend any payment date of any Note or Certificate, reduce the stated rate of interest payable on any Note, reduce the stated Holder Yield payable on any 2 3 Certificate (other than as a result of waiving the applicability of any post-default increase in interest rates or Holder Yields), modify the priority of any Lien in favor of the Agent under any Security Document, subordinate any obligation owed to any Lender or Holder, reduce any Lender Facility Fees or any Holder Facility Fees payable under the Participation Agreement, extend the scheduled date of payment of any Lender Facility Fees or any Holder Facility Fees or increase the amount or extend the expiration date of any Lender's Commitment or the Holder Commitment of any Holder or the aggregate Commitments of the Lenders or the aggregate Holder Commitments of the Holders, or (ii) terminate, amend, supplement, waive or modify any provision of this Section 12.5 or reduce the percentages specified in the definitions of Majority Lenders, Majority Holders or Majority Secured Parties, or consent to the assignment or transfer by the Owner Trustee of any of its rights and obligations under any Credit Document or release a material portion of the Collateral (except in accordance with Section 8.8) or release any Credit Party from its obligations under any Operative Agreement or otherwise alter any payment obligations of any Credit Party to the Lessor or any Financing Party under the Operative Agreements, or (iii) terminate, amend, supplement, waive or modify any provision of Section 7 of the Credit Agreement, or (iv) permit Advances for Work in excess of the Construction Budget, or (v) eliminate the automatic option under Section 5.3(b) of the Agency Agreement requiring that the Construction Agent pay certain liquidated damages in exchange for the conveyance of a Property to the Construction Agent. Any such termination, amendment, supplement, waiver or modification shall apply equally to each of the Lenders and the Holders and shall be binding upon all the parties to this Agreement. In the case of any waiver, each party to this Agreement shall be restored to its former position and rights under the Operative Agreements, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Notwithstanding any provision to the contrary in any Operative Agreement, any and all increases in the amount and extensions of the expiration date of any Lender's Commitment or the Holder Commitment of any Holder or the aggregate Commitments of the Lenders or the aggregate Holder Commitments of the Holders shall in all cases be a Unanimous Vote Matter and require the consent of the Agent, each Lender and each Holder. 3. Appendix A to the Participation Agreement is hereby amended to modify the following defined terms as follows: "Holder Commitments" shall mean $1,191,346, as such amount may be increased or decreased from time to time in accordance with the provisions of the Operative Agreements; provided, if there shall be more than one (1) Holder, the Holder Commitment of each Holder shall be as set forth in Schedule I to the Trust Agreement as such Schedule I may be amended and replaced from time to time. "Lender Commitments" shall mean $38,520,192, as such amount may be increased or decreased from time to time in accordance with the provisions of the Operative Agreements; provided, if there shall be more than one (1) Lender, the Lender 3 4 Commitment of each Lender shall be as set forth in Schedule 1.1 to the Credit Agreement as such Schedule 1.1 may be amended and replaced from time to time. "Lessee Credit Agreement" shall mean that certain Second Amended and Restated Credit Agreement dated as of September 10, 1999 among the Lessee, the Banks and other financial institutions from time to time parties thereto and First Union National Bank, as agent and as issuing bank thereunder, as hereafter amended, modified, extended, supplemented, restated and/or replaced from time to time. 3A. Notwithstanding anything to the contrary pursuant to the definition of "Applicable Percentage" or any other provision of any Operative Agreement, from September 10, 1999 until the fifth (5th) Business Day after receipt by the Agent of the financial statements for the fiscal quarter ended September 30, 1999 (as delivered pursuant to Section 5.1(b) of the Lessee Credit Agreement), the Applicable Percentage shall be 1.75% for Eurodollar Loans, 0.50% for ABR Loans, 0.375% for the Lender Facility Fee and 0.375% for the Holder Facility Fee. 4. Schedule I to the Trust Agreement is hereby amended and restated in its entirety to read as Schedule I attached hereto. 5. Schedule 1.1 to the Credit Agreement is hereby amended and restated in its entirety to read as Schedule 1.1 attached hereto. 6. Exhibit L to the Participation Agreement is hereby amended and restated in its entirety to read as Exhibit L attached hereto. 7. The first paragraph of the Preliminary Statement to the Security Agreement is hereby deleted in its entirety and replaced with the following: Pursuant to the Credit Agreement, the Lenders have severally agreed to make Loans to the Borrower in an aggregate amount not to exceed $38,520,192 upon the terms and subject to the conditions set forth therein, to be evidenced by the Notes issued by the Borrower under the Credit Agreement. Pursuant to the Trust Agreement, the Holders have agreed to purchase the ownership interests of the Trust created thereby in an aggregate amount not to exceed $1,191,346 upon the terms and subject to the conditions set forth therein, to be evidenced by the Certificates issued by the Borrower under the Trust Agreement. The Borrower is, or shall be upon the date of the initial Advance with respect to each Property, the legal and beneficial owner of such Property (except the Borrower may have a ground leasehold interest in certain Properties pursuant to one (1) or more Ground Leases). 8. Each of the undersigned Secured Parties hereby directs the Agent to execute this Amendment to evidence (and execution by the Agent does evidence) the consent and agreement of the Agent, pursuant to Section 28.1 of the Lease, to the representations and warranties, covenants and additional terms contained in the New Facility (which correspond to the Incorporated Representations and Warranties, Incorporated Covenants and Additional Incorporated Terms) becoming, as of the date the New Facility first becomes effective in 4 5 accordance with its terms, the Incorporated Representations and Warranties, Incorporated Covenants and Additional Incorporated Terms for purposes of Section 28.1 of the Lease. 9. This Amendment shall be effective upon satisfaction of the following conditions: (a) execution and delivery of this Amendment by the Lessee, the Guarantors, the Owner Trustee, the Agent and the Majority Secured Parties and execution and delivery of such other documents, agreements or instruments deemed necessary or advisable by the Agent; (b) receipt by the Agent of an officer's certificate of the Lessee (in form and substance reasonably satisfactory to the Agent) certifying that a resolution has been adopted by the Lessee's Board of Directors approving and authorizing the execution, delivery and performance of this Amendment, specifying that no Default (other than a Credit Agreement Default) or Event of Default (other than a Credit Agreement Event of Default) shall have occurred and be continuing, specifying that the representations and warranties of the Lessee set forth in the Participation Agreement are true and correct (except for any such representations and warranties which relate solely to an earlier time) and certifying as to the incumbency of the officers of the Lessee and the Guarantors executing this Amendment; and (c) receipt by the Agent of a legal opinion from counsel for the Lessee and the Guarantors (in form and substance reasonably satisfactory to the Agent). 10. Except as modified hereby, all of the terms and provisions of the Operative Agreements (including Schedules and Exhibits) shall remain in full force and effect. 11. The Lessee agrees to pay all reasonable costs and expenses of the Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable fees and expenses of Moore & Van Allen, PLLC. 12. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and it shall not be necessary in making proof of this Amendment to produce or account for more than one such counterpart. 13. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. [Remainder of Page Intentionally Left Blank] 5 6 IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written. PROVINCE HEALTHCARE COMPANY, as the Construction Agent and as the Lessee By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President Finance BLYTHE-PROVINCE, INC., as a Guarantor By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer BRIM EQUIPMENT SERVICES, INC., as a Guarantor By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer BRIM FIFTH AVENUE, INC., as a Guarantor By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer BRIM HEALTHCARE, INC., as a Guarantor By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer [Signature pages continued] 7 BRIM HOSPITALS, INC., as a Guarantor By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer BRIM OUTPATIENT SERVICES, INC., as a Guarantor By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer BRIM PAVILION, INC., as a Guarantor By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer BRIM SERVICES GROUP, INC., as a Guarantor By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer CARE HEALTH COMPANY, INC., as a Guarantor By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer [Signature pages continued] 8 MEXIA PRINCIPAL HEALTHCARE LIMITED PARTNERSHIP, as a Guarantor By: Mexia-Principal, Inc., its General Partner By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer MEXIA PRINCIPAL, INC., as a Guarantor By: /s/ Christopher T. Hannon -------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PALESTINE-PRINCIPAL G.P., INC., as a Guarantor By: /s/ Christopher T. Hannon -------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PALESTINE-PRINCIPAL, INC., as a Guarantor By: /s/ Christopher T. Hannon -------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer [Signature pages continued] 9 PALESTINE PRINCIPAL HEALTHCARE LIMITED PARTNERSHIP, as a Guarantor By: Palestine-Principal G.P., Inc., its General Partner By: /s/ Christopher T. Hannon -------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-BELLE GLADE, INC., as a Guarantor By: /s/ Christopher T. Hannon -------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-DOCTORS' HOSPITAL, INC., as a Guarantor By: /s/ Christopher T. Hannon -------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-ELKO, INC., as a Guarantor By: /s/ Christopher T. Hannon -------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-ERIN, L.P., as a Guarantor By: PHC-Tennessee, Inc., its General Partner By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer [Signature pages continued] 10 PHC-EUNICE, INC., as a Guarantor By: /s/ Christopher T. Hannon ------------------------------------------ Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-KNOX, INC., as a Guarantor By: /s/ Christopher T. Hannon ------------------------------------------ Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-LAKE HAVASU, INC., as a Guarantor By: /s/ Christopher T. Hannon ------------------------------------------ Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-LOUISIANA, INC., as a Guarantor By: /s/ Christopher T. Hannon ------------------------------------------ Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-MINDEN, L.P., as a Guarantor By: PHC-Minden G.P., Inc., its General Partner By: /s/ Christopher T. Hannon -------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer [Signature pages continued] 11 PHC-MINDEN G.P., INC., as a Guarantor By: /s/ Christopher T. Hannon ------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-NEVADA, INC., as a Guarantor By: /s/ Christopher T. Hannon ------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-OPELOUSAS, L.P., as a Guarantor By: PHC-Doctors' Hospital, Inc., its General Partner By: /s/ Christopher T. Hannon --------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-PALESTINE, INC., as a Guarantor By: /s/ Christopher T. Hannon ------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-PALESTINE (TRINITY), L.P., as a Guarantor By: PHC-Trinity Valley, Inc., its General Partner By: /s/ Christopher T. Hannon --------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer [Signature pages continued] 12 PHC-TENNESSEE, INC., as a Guarantor By: /s/ Christopher T. Hannon -------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-TRINITY VALLEY, INC., as a Guarantor By: /s/ Christopher T. Hannon -------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PHC-WINDER, INC., as a Guarantor By: /s/ Christopher T. Hannon -------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PRINCIPAL HOSPITAL COMPANY OF NEVADA, INC., as a Guarantor By: /s/ Christopher T. Hannon -------------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PRINCIPAL KNOX, L.L.C., as a Guarantor By: Principal Knox, L.P., its Member By: PHC Knox, Inc., its General Partner By: /s/ Christopher T. Hannon ---------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer [Signature pages continued] 13 PRINCIPAL KNOX, L.P., as a Guarantor By: PHC-Knox, Inc., its General Partner By: /s/ Christopher T. Hannon -------------------------------------- Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer PRINCIPAL-NEEDLES, INC., as a Guarantor By: /s/ Christopher T. Hannon ------------------------------------------ Name: Christopher T. Hannon Title: Vice President/Assistant Treasurer /s/ Debbie Moore --------------------------------------------- Witness /s/ Jada D. Carter --------------------------------------------- Witness [Signature pages continued] 14 FIRST SECURITY BANK, NATIONAL ASSOCIATION, not individually, except as expressly stated herein, but solely as the Owner Trustee under the PHC Real Estate Trust 1998-1, as the Owner Trustee and as the Lessor By: /s/ Val. T. Orton ---------------------------------------- Name: Val T. Orton -------------------------------------- Title: Vice President ------------------------------------ [Signature pages continued] 15 FIRST UNION NATIONAL BANK, as a Holder, as a Lender and as the Agent By: /s/ Ann M. Dodd ---------------------------------------- Name: Ann M. Dodd -------------------------------------- Title: Senior Vice President ------------------------------------- [Signature pages continued] 16 BANK OF AMERICA, N.A., formerly NationsBank of Tennessee, N.A., as a Holder and as a Lender By: /s/ Elizabeth L. Knox ---------------------------------------- Name: Elizabeth L. Knox -------------------------------------- Title: Senior Vice President ------------------------------------- [Signature pages continued] 17 KEY CORPORATE CAPITAL, INC., as a Lender By: ---------------------------------------- Name: --------------------------------------- Title: -------------------------------------- [Signature pages continued] 18 U.S. BANK NATIONAL ASSOCIATION, as a Lender By: /s/ Forrest Vollrath ----------------------------------------- Name: Forrest Vollrath --------------------------------------- Title: Vice President -------------------------------------- [Signature pages continued] 19 CREDIT SUISSE FIRST BOSTON, as a Holder and as a Lender By: /s/ William S. Lutkins ---------------------------------------- Name: William S. Lutkins --------------------------------------- Title: Vice President -------------------------------------- By: /s/ Thomas G. Muoio ---------------------------------------- Name: Thomas G. Muoio --------------------------------------- Title: Vice President -------------------------------------- [Signature pages continued] 20 PARIBAS, formerly Banque Paribas, as a Holder and as a Lender By: /s/ Glenn E. Mealey ------------------------------------------ Name: Glenn E. Mealey ---------------------------------------- Title: Managing Director --------------------------------------- By: /s/ Rosine K. Matthews ------------------------------------------ Name: Rosine K. Matthews ---------------------------------------- Title: Vice President --------------------------------------- [Signature pages continued] 21 MELLON BANK, N.A., as a Lender By: /s/ Thomas E. Constantine ---------------------------------------- Name: Thomas E. Constantine --------------------------------------- Title: Banking Officer --------------------------------------- [Signature pages continued] 22 NATIONAL CITY BANK OF KENTUCKY, as a Lender By: /s/ Roderic M. Brown ---------------------------------------- Name: Roderic M. Brown -------------------------------------- Title: Vice President ------------------------------------- [Signature pages continued] 23 AMSOUTH BANK, as a Lender By: /s/ Cathy M. Wind ---------------------------------------- Name: Cathy M. Wind --------------------------------------- Title: Vice President -------------------------------------- [Signature pages continued] 24 FIRST AMERICAN NATIONAL BANK, as a Lender By: /s/ Sandy Hamrick ------------------------------------------ Name: Sandy Hamrick ---------------------------------------- Title: Senior Vice President --------------------------------------- [Signature pages continued] 25 FLEET NATIONAL BANK, as a Lender By: -------------------------------------- Name: ------------------------------------- Title: ----------------------------------- [Signature pages continued] 26 LEHMAN COMMERCIAL PAPER INC., as a Lender By: /s/ Michele Swanson ---------------------------------------- Name: Michele Swanson --------------------------------------- Title: Authorized Signatory -------------------------------------- [Signature pages continued] 27 CREDIT LYONNAIS NEW YORK BRANCH, as a Lender By: ---------------------------------------- Name: --------------------------------------- Title: -------------------------------------- [Signature pages continued] 28 UNION BANK OF CALIFORNIA, N.A., as a Lender By: /s/ Virginia Hart ---------------------------------------- Name: Virginia Hart -------------------------------------- Title: Vice President ------------------------------------- [Signature pages end] 29 SCHEDULE I HOLDER COMMITMENTS Holder Commitment ----------------- Amount Percentage ------ ---------- FIRST UNION NATIONAL BANK $ 350,000 29.37853% c/o First Union Capital Markets Group 301 South College Street, 6th Floor Charlotte, North Carolina 28288-0166 Attention: Ms. Jane O. Hurley Capital Markets Services Telephone: (704) 383-3812 Telecopy: (704) 383-7989 PARIBAS $ 350,000 29.37853% 1200 Smith Street, Suite 3100 Houston, Texas 77002 Attention: Mr. Glenn Mealey Director Telephone: (713) 659-4811 Telecopy: (713) 659-5234 BANK OF AMERICA, N.A. $ 350,000 29.37853% TN1-100-04-17 One NationsBank Plaza Nashville, Tennessee 37239-1697 Attention: Ms. Elizabeth L. Knox Senior Vice President Telephone: (615) 749-3918 Telecopy: (615) 749-4951 CREDIT SUISSE FIRST BOSTON $ 141,346 11.86441% Eleven Madison Avenue New York, New York 10010-3629 Attention: Mr. William Lutkins Vice President Telephone: (212) 325-9705 Telecopy: (212) 325-8319 TOTAL $1,191,346 100.00000% 30 Schedule 1.1 Tranche A Tranche B Commitment Commitment ---------- ---------- Name and Address of Lenders Amount Percentage Amount Percentage - --------------------------- ------ ---------- ------ ---------- FIRST UNION NATIONAL BANK $4,021,046 11.912515% $567,677 11.912515% c/o First Union Capital Markets Group 301 South College Street, 6th Floor Charlotte, North Carolina 28288-0166 Attention: Ms. Jane O. Hurley Capital Markets Services Telephone: (704) 383-3812 Telecopy: (704) 383-7989 PARIBAS $2,981,319 8.832279% $420,892 8.832279% 1200 Smith Street, Suite 3100 Houston, Texas 77002 Attention: Mr. Glenn Mealey Director Telephone: (713) 659-4811 Telecopy: (713) 659-5234 CREDIT LYONNAIS NEW YORK BRANCH $2,757,289 8.168582% $389,264 8.168582% 1301 Avenue of the Americas New York, New York 10019 Attention: Mr. Henry Reukauf Assistant Treasurer Telephone: (212) 261-7394 Telecopy: (212) 261-3440 BANK OF AMERICA, N.A. $2,757,289 8.168582% $389,264 8.168582% TN1-100-04-17 One NationsBank Plaza Nashville, Tennessee 37239-1697 Attention: Ms. Elizabeth L. Knox Senior Vice President Telephone: (615) 749-3918 Telecopy: (615) 749-4951 AMSOUTH BANK $2,297,741 6.807151% $324,387 6.807151% 333 Union Street, Suite 200 Nashville, Tennessee 37201 Attention: Ms. Cathy Wind Vice President Telephone: (615) 291-5268 Telecopy: (615) 291-5257 FLEET NATIONAL BANK $2,297,741 6.807151% $324,387 6.807151% MAOFD07B One Federal Street Boston, Massachusetts 02110 Attention: Ms. Maryann S. Smith Vice President Telephone: (617) 346-4613 Telecopy: (617) 346-4666 31 Tranche A Tranche B Commitment Commitment ---------- ---------- Name and Address of Lenders Amount Percentage Amount Percentage - --------------------------- ------ ---------- ------ ---------- KEY CORPORATE CAPITAL, INC. $2,297,741 6.807151% $324,387 6.807151% 525 Vine Street, 6th Floor Cincinnati, Ohio 45202-3121 Attention: Mr. Charlie Shoop Assistant Vice President Telephone: (513) 762-8292 Telecopy: (513) 762-8450 LEHMAN COMMERCIAL PAPER, INC. $2,297,741 6.807151% $324,387 6.807151% 3 World Financial Center, 10th Floor New York, New York 10285 Attention: Ms. Michelle Swanson Telephone: (212) 526-0330 Telecopy: (212) 528-0819 NATIONAL CITY BANK OF KENTUCKY $2,297,741 6.807151% $324,387 6.807151% 101 South Fifth Street Louisville, Kentucky 40202 Attention: Mr. Roderic M. Brown Vice President Telephone: (502) 581-4369 Telecopy: (502) 581-4424 UNION BANK OF CALIFORNIA, N.A. $2,297,741 6.807151% $324,387 6.807151% 445 South Figueroa Street, 16th Floor Los Angeles, California 90071 Attention: Mr. Albert W. Kelley Vice President Telephone: (213) 236-4284 Telecopy: (213) 236-7814 CREDIT SUISSE FIRST BOSTON $2,288,462 6.779661% $323,077 6.779661% Eleven Madison Avenue New York, New York 10010-3629 Attention: Mr. William Lutkins Vice President Telephone: (212) 325-9705 Telecopy: (212) 325-8319 FIRST AMERICAN NATIONAL BANK $1,723,306 5.105364% $243,290 5.105364% First American Center Nashville, Tennessee 32737-0203 Attention: Sandy Hamrick Senior Vice President Telephone: (615) 748-2191 Telecopy: (615) 748-8480 MELLON BANK, N.A. $1,723,306 5.105364% $243,290 5.105364% One Mellon Bank Center, Room 151-0370 Pittsburgh, Pennsylvania 15258 Attention: Mr. Scott Hennessee Vice President Telephone: (412) 234-4458 Telecopy: (412) 236-0287 32 Tranche A Tranche B Commitment Commitment ---------- ---------- Name and Address of Lenders Amount Percentage Amount Percentage - --------------------------- ------ ---------- ------ ---------- U.S. BANK N.A. $ 1,716,346 5.084746% $ 242,308 5.084746% 601 Second Avenue South Minneapolis, Minnesota 55402-4302 Attention: Mr. Forest Vollrath Vice President Telephone: (612) 973-0630 Telecopy: (612) 973-0829 TOTAL $33,754,807 100.000000% $4,765,385 100.000000% 33 EXHIBIT L FORM OF COMPLIANCE CERTIFICATE THIS CERTIFICATE is given pursuant to Section 8.3(s) of the Participation Agreement, dated as of March 30, 1998, among Province Healthcare Company (the "Company"), the various parties thereto from time to time, as the guarantors (the "Guarantors"), First Security Bank, National Association, as the Owner Trustee under the PHC Real Estate Trust 1998-1, certain banks and other financial institutions from time to time parties thereto as holders of certificates issued with respect to the PHC Real Estate Trust 1998-1 (the "Holders"), certain banks and other financial institutions from time to time parties thereto as lenders (the "Lenders"), and First Union National Bank, as the agent for the Lenders and the Holders, to the extent of their interests and as Issuing Bank (as amended, modified, supplemented or restated from time to time, the "Participation Agreement"). Capitalized terms used herein but not defined herein shall have the meanings provided in Appendix A of the Participation Agreement or in the Lessee Credit Agreement, as the case may be. The undersigned hereby certifies that: 1. I am the duly elected [CHIEF EXECUTIVE OFFICER] [CHIEF FINANCIAL OFFICER] [VICE PRESIDENT-FINANCE] [VICE PRESIDENT-CONTROLLER] of the Company and am making this certification in my official capacity as such. 2. Enclosed with this Certificate are copies of the financial statements of the Company and its Subsidiaries as of ____________, and for the [_______-MONTH PERIOD] [YEAR] then ended, required to be delivered under Section [5.1(A)] [5.1(B)] of the Lessee Credit Agreement. Such financial statements are true and accurate in all material respects and fairly present in all material respects the financial condition of the Company and its Subsidiaries on a consolidated basis as of the date indicated and the results of operations of the Company and its Subsidiaries on a consolidated basis for the period covered thereby (subject, in the case of interim statements, to the absence of footnote disclosures and normal and reasonable year-end adjustments). 3. The undersigned has reviewed the terms of the Lessee Credit Agreement and has made, or caused to be made under the supervision of the undersigned, a review in reasonable detail of the transactions and condition of the Company and its Subsidiaries during the accounting period covered by such financial statements. 4. The examination described in Paragraph 3 above did not disclose, and the undersigned has no knowledge of the existence of; any Default or Event of Default as of the date of this Certificate [, EXCEPT AS SET FORTH BELOW. DESCRIBE HERE OR IN A SEPARATE ATTACHMENT ANY EXCEPTIONS TO PARAGRAPH 4 ABOVE BY LISTING, IN REASONABLE DETAIL, THE NATURE OF THE DEFAULT OR EVENT OF DEFAULT, THE PERIOD DURING 34 WHICH IT EXISTED AND THE ACTION THAT THE COMPANY HAS TAKEN OR PROPOSES TO TAKE WITH RESPECT THERETO.] 5. Attached to this Certificate as Attachments A and B, respectively, are a Covenant Compliance Worksheet and an Interest Rate Calculation Worksheet reflecting the computation of the financial covenants set forth in [ARTICLE VI] of the Lessee Credit Agreement as of the last day of the period covered by the financial statements enclosed herewith. [remainder of page intentionally left blank] 35 IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the ______ day of _____________, _______. PROVINCE HEALTHCARE COMPANY By: ------------------------------------ Name: ----------------------------------- Title: ---------------------------------- 36 ATTACHMENT A COVENANT COMPLIANCE WORKSHEET RATIO OF CONSOLIDATED ADJUSTED DEBT TO ANNUALIZED CONSOLIDATED Not greater than: EBITDAR (SECTION 6.9 OF THE LESSEE CREDIT AGREEMENT) 5.0 to 1.0 1. Consolidated Adjusted Debt as of the measurement date (a) Consolidated Debt as of the measurement date $___________ (b) Facility Rent Expense for two immediately preceding fiscal quarters then ending $___________ (c) Multiply line 1(b) by two $___________ (d) Multiply line 1(c) by eight $___________ (e) Consolidated Adjusted Debt $___________ 2. Annualized Consolidated EBITDAR for two immediately preceding fiscal quarters then ending (a) Consolidated Net Income for two immediately preceding fiscal quarters then ending $___________ (b) The sum of the following for such period: Interest Expense $___________ Taxes $___________ Depreciation $___________ Amortization $___________ Facility Rent Expense $___________ Minority Interests(1) $___________ (c) Add lines 2(a) and 2(b) $___________ (d) Annualized Consolidated EBITDAR (multiply line 2(c) by two(2)) 3. Ratio of Consolidated Adjusted Debt to Annualized Consolidated EBITDAR: (divide line 1(e) by line 2(d)) $___________ - ----------------------- (1) To extent issuer of minority interest is obligated to pay debt service on loans from Affiliates before making distributions. (2) Do not multiply losses of an extraordinary nature, included in Consolidated Net Income in line 2(a) above, by two. 37 Not greater than: RATIO OF CONSOLIDATED ADJUSTED SENIOR DEBT TO 4.0 to 1.0 through 12/31/00 ANNUALIZED CONSOLIDATED EBITDAR (SECTION 6.10 OF 3.75 to 1.0 through 6/30/01 THE LESSEE CREDIT AGREEMENT) 3.50 to 1.0 thereafter 1. Consolidated Adjusted Senior Debt (a) Consolidated Adjusted Debt (from prior page) $___________ (b) Subordinated Debt $___________ (c) Consolidated Adjusted Senior Debt subtract line 1(b) from 1(a) $___________ 2. Annualized Consolidated EBITDAR (from prior page) $___________ 3. Ratio of Consolidated Adjusted Senior Debt to Annualized Consolidated EBITDAR (divide line 1(c) by line 2) $___________ 38 ANNUALIZED JOINT VENTURE EBITDAR (SECTION 6.11 OF THE Not greater than: LESSEE CREDIT AGREEMENT) 20% of Annualized Consolidated EBITDAR 1. Annualized Joint Venture EBITDAR for two immediately preceding fiscal quarters then ending (a) Consolidated Net Income for Non-Wholly Owned Consolidated Subsidiaries for two immediately preceding fiscal quarters then ending $___________ (b) The sum of the following for Non-Wholly Owned Consolidated Subsidiaries for such period Interest Expense $___________ Taxes $___________ Depreciation $___________ Amortization $___________ Facility Rent Expense $___________ Minority Interests(3) $___________ Total 1(b) $___________ (c) Add lines 1(a) and 1(b) $___________ (d) Annualized Joint Venture EBITDAR: (multiply line 1(c) by two(4)) $___________ 2. Annualized Consolidated EBITDAR (from calculations for Section 6.9) $___________ 3. Maximum Permitted Annualized Joint Venture EBITDAR (multiply line 2 by .2) $___________ - --------------------- (3) To extent issuer of minority interest is obligated to pay debt service on loans from Affiliates before making distributions. (4) Do not multiply losses of an extraordinary nature, included in Consolidated Net Income in line 1(a) above, by two. 39 MINIMUM NEW WORTH Not less than $173,624,000, plus 85% of (SECTION 6.12 OF THE LESSEE CREDIT AGREEMENT) Consolidated Net Income (but excluding any net loss) from July 1, 1999, plus 90% of increases in the stated capital and additional paid in capital accounts of Company resulting from the issuance of equity securities or other capital investments after the Amendment Effective Date 1. $173,624,000 $173,624,000 2. Consolidated Net Income (excluding any net loss) for all periods from and after July 1, 1999 $___________ 3. Multiply line 2 by .85 $___________ 4. Increases in the stated capital and additional paid in capital accounts of Company resulting from the issuance of equity securities or other capital investments after the Amendment Effective Date $___________ 5. Multiply line 4 by .9 $___________ 6. Required Minimum Net Worth (add lines 1, 3, and 5) $___________ 7. Consolidated Net Worth at Measurement Date $___________ 40 FIXED CHARGE COVERAGE RATIO (SECTION 6.13 OF THE Not less than or equal to: LESSEE CREDIT AGREEMENT) 1.2 to 1.0 1. Annualized Consolidated EBITDAR (from calculation for Section 6.9) $___________ 2. Fixed Charges (a) Scheduled Principal Payments $___________ (b) The sum of the following for the two fiscal quarters then ending: Interest Expense (payable in cash) $___________ Facility Rent Expense $___________ Cash Taxes $___________ (c) Multiply line 2(b) by two $___________ (d) Actual Capital Expenditures for four fiscal quarters then ending $___________ (e) Fixed Charges: add lines 2(a), 2(c) and 2(d) $___________ 3. Ratio of Annualized Consolidated EBITDAR to Fixed Charges (divide line 1 by line 2(e)) 41 CAPITALIZED EXPENDITURES (SECTION 6.14 OF THE Not greater than 7.5% of LESSEE CREDIT AGREEMENT) Consolidated Net Revenues for the four fiscal quarters then ending 1. Capital Expenditures for four fiscal quarters then ending(5) $___________ 2. Consolidated Net Revenues for such period $___________ 3. Maximum Permitted Capital Expenditures (multiply line 2 by 0.075) $___________ - ------------------ (5) The definition of Capital Expenditures also excludes aggregate capital expenditures incurred by the Company and its Subsidiaries on or prior to May 31, 2001 at Havasu Samaritan Regional Hospital, not to exceed $25,000,000. 42 ANNUALIZED NON-LANDLORD CONSENT EBITDAR Not greater than: (SECTION 6.15 OF THE LESSEE CREDIT AGREEMENT) 10% of Annualized Consolidated EBITDAR 1. Annualized Non-Landlord Consent EBITDAR for two immediately preceding fiscal quarters then ending (a) Consolidated Net Income, attributable to all Facility Leased Properties of the Company or any Subsidiary for which a Landlord Consent has not been delivered by the Agent, for two immediately preceding fiscal quarters then ending $___________ (b) The sum of the following, attributable to all Facility Leased Properties of the Company or any Subsidiary for which a Landlord Consent has not been delivered by the Agent, for such period Interest Period $___________ Taxes $___________ Depreciation $___________ Amortization $___________ Facility Rent Expense $___________ Minority Interests(6) $___________ (c) Add lines 1(a) and 1(b) $___________ (d) Annualized Non-Landlord Consent EBITDAR (multiply line 1(c) by two(7)) $___________ 2. Annualized Consolidated EBITDAR (from calculations for Section 6.9) $___________ 3. Maximum Permitted Annualized Non-Landlord Consent EBITDAR (multiply line 2 by 0.1) $___________ - --------------------- (6) To the extent issuer of minority interest is obligated to pay debt service on loans from Affiliates before making distributions. (7) Do not multiply losses of an extraordinary nature, included in Consolidated Net Income in line 1(a) above, by two. 43 PARKVIEW REGIONAL HOSPITAL/EBITDAR TO FACILITY Not less than 1.75 RENT EXPENSE (SECTION 6.16 OF THE LESSEE CREDIT AGREEMENT) to 1.00 at any time 1. EBITDAR of Parkview Regional Hospital for the period of determination $___________ 2. Facility Rent Expense of Parkview Regional Hospital for the period of determination $___________ 3. Ratio of EBITDAR to Facility Rent Expense for Parkview Regional Hospital (divide line 1 by line 2) $___________ 44 ATTACHMENT B INTEREST RATE CALCULATION WORKSHEET8 RATIO OF CONSOLIDATED ADJUSTED DEBT TO ANNUALIZED CONSOLIDATED EBITDAR 1. Consolidated Adjusted Debt (from calculation for Section 6.9) $___________ 2. Annualized Consolidated EBITDAR (from calculation for Section 6.9) $___________ 3. Ratio of Consolidated Adjusted Debt to Annualized Consolidated EBITDAR (divide line 1 by line 2) $___________ 4. Applicable Percentage Eurodollar ___________% ABR ___________% - -------------- (8) From the Amendment Effective Date until the fifth Business Day after receipt by the Agent of the financial statements for the fiscal quarter ended September 30, 1999 pursuant to Section 5.1(b) of the Lessee Credit Agreement, the Applicable Percentage shall be 1.75% for Eurodollar Loans, 0.50% for ABR Loans, 0.375% for the Lender Facility Fee and 0.375% for the Holder Facility Fee.