To Whom It May Concern:

Transcription

1 To Whom It May Concern: On February 2, 2016, a notice was posted which indicated the quarterly report for the quarter ended December 31, 2015 will be filed no later than March 4, 2016, a copy of which is attached. As the system restructuring did not occur until December 21, 2015, this will ensure that the quarterly filing is accurate.

2 [!Dbank. NOTICE REGARDING STATUS OF AMENDMENTS TO 2005 RELATED BOND DOCUMENTS To the Holders of: California Statewide Communities Development Authority Revenue Bonds (Daughters of Charity Health System) Series 2005A (Daughters of Charity Health System - St. Francis Medical Center) Series 2005G (Daughters of Charity Health System - St. Francis Medical Center) Series 2005H (collectively, the "2005 Bonds") CUSIP Numbers*: A83, A91, B25, B33, C40, C57 TIDS NOTICE (THE "NOTICE") CONTAINS IMPORTANT INFORMATION THAT IS OF INTEREST TO THE REGISTERED AND BENEFICIAL OWNERS OF THE ABOVE BONDS. IF YOU RECEIVE THIS NOTICE AND ARE ACTING FOR A BENEFICIAL OWNER, PLEASE SEND TIDS NOTICE TO THE BENEFICIAL OWNER(S) IMMEDIATELY. U.S. Bank National Association serves as master trustee (the "Master Trustee") under that certain Master Trust Indenture dated as of December 1, 2001 (as amended and supplemented, the "Master Indenture") among Daughters of Charity Health System, now known as Verity Health System of California, Inc. ("Verity Health") arid the other members of the Obligated Group thereunder (together with Verity Health, the "Obligated Group") and the Master Trustee. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Master Indenture. As set forth in prior notices, on December 21, 2015 Verity Health, on behalf of the Obligated Group, executed Supplemental Master Indenture No. 20 (the "Supplement"), under which the Obligated Group agreed that it would cause the Master Indenture, the bond indentures for the outstanding 2005 Bonds, the 2005 Bonds and any related agreements or instruments to be amended pursuant to the te1ms of the "Term Sheet Amendments" attached to the Supplement (the "Term Sheet Amendments"). On February 3, 2016, Verity Health delivered to the Master Trustee an executed version of Amended and Restated Supplemental Master Indenture No. 20 (the "Amended Supplement"), a copy of which is attached to this Notice. The Amended Supplement includes, in Schedule A thereof, forms of Second Amendments to Bond Indentures, First Amendments to Loan Agreements and First Amendments to Supplemental Master Indentures relating to the outstanding 2005 Bonds (the "2005 Bond Amendments"). Subject to customary closing conditions, the 2005 Bond Amendments and the Amended Supplement are expected to become effective on February 5, Upon the effectiveness of the 2005 Bond Amendments, the interest rate on each maturity of the outstanding 2005 Bonds will increase by 25 basis points effective as of January 1, Upon such increase, the interest rates on the applicable Series 2005 Bonds will be: usbank.com

3 CUSIP Number* Maturity Date Interest Rate A83 July 1, % A91 July 1, % B25 July 1, % B33 July 1, % C40 July 1, % C57 July 1, % The Master Trustee expects to post an additional notice following the effectiveness of the 2005 Bond Amendments and the Amended Supplement. GENERAL INFORMATION Please contact the Master Trustee using the contact information below if you are a beneficial owner or market participant and would like to receive information about any future conference calls or have general questions regarding these matters. Contact information for the Master Trustee: Sandra Spivey, Vice President U.S. Bank National Association Nevada Financial Center 2300 W. Sahara, Suite 200 Las Vegas, Nevada Phone: (702) sandra.spivey@usbank.com Please be advised that the Master Trustee may conclude that a specific response to particular inquiries from individual beneficial owners of 2005 Bonds or market participants is not consistent with equal and full dissemination of information to all beneficial owners or market participants. Beneficial owners or market participants should not rely on the Master Trustee as their sole source of information. The Master Trustee makes no recommendations and gives no investment advice herein or as to the 2005 Bonds generally. February 4, 2016 U.S. Bank National Association as Master Trustee * The Master Trustee is not responsible for selection or use of CUSIP numbers. They are included solely for the convenience of readers of this Notice. 2

4 Execution Co AMENDED AND RESTATED SUPPLEMENTAL MASTER INDENTURE NUMBER20 By and Between VERITY HEALTH SYSTEM OF CALIFORNIA, INC. and U.S. BANK NATIONAL ASSOCIATION, AS MASTER TRUSTEE Dated as of January I, 2016 and effective as provided herein SUPPLEMENTING THE MASTER INDENTURE OF TRUST DATED AS OF DECEMBER I, 2001 C:\Users\rhelmlinger\Documents\VHS Supp ZO RLH Cmts Ill.DOCX

5 TABLE OF CONTENTS Page Section I. Section 2. Section 3. Section 4. Section 5. Section 6. Section 7. Section 8. Section 9. Section 10. Section 11. Definitions... 3 Amendments to the Master Indenture Implementing the Term Sheet Amendments...,...,... 4 Conditional Amendment to the Master Indenture Implementing the Term Sheet Amendments Good Faith Covenant Name Change Ratification of Master Indenture Severability..., Interpretation,...,, Miscellaneous..., Counterparts Governing Law SCHEDULE A - Forms of Second Amendments to Bond Indentures, First Amendments to Loan Agreements and First Amendments to Supplemental Master Indentures SCHEDULE B - F01m of Acknowledgment by Related Bond Trustee for Series 2005 Related Bonds SCHEDULE C - Quarterly Financial Reporting Requirements -i- C:\Users\rhe1mlinger\Documents\VHS Supp 20 RlH Cmts Ill.DOCX

6 AMENDED AND REST A TED SUPPLEMENTAL MASTER INDENTURE NUMBER 20 THIS AMENDED AND RESTATED SUPPLEMENTAL MASTER INDENTURE NO. 20, dated as of January 1, 2016 ("Amended Supplement No. 20"), between VERITY HEALTH SYSTEM OF CALIFORNIA, INC. (formerly known as Daughters of Charity Health System), a nonprofit public benefit corporation incorporated under the laws of the State of California (the "Corporation"), as Obligated Group Representative pursuant to the Master Indenture of Trust, dated as of December 1, 2001 (as previously amended and supplemented and as further amended and supplemented hereby, the "Master Indenture"), between the Corporation, the other Initial Members (as defined therein) and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as master trustee (the "Master Trustee"), and the Master Trustee; WITNESSETH WHEREAS, the Corporation, the other Initial Members and the Master Trustee have entered into the Master Indenture; WHEREAS, Section 6.02 of the Master Indenture provides that the Master Indenture may, with the consent of the Holders of not less than a majority in aggregate Principal Amount of the Obligations then Outstanding, enter into a Related Supplement as the Obligated Group Representative shall deem necessary and desirable for the purpose of modifying, altering, amending, adding to or rescinding any of the tem1s or provisions contained in the Master Indenture; WHEREAS, the Corporation has been appointed the Obligated Group Representative under the Master Indenture and has all requisite corporate power and is authorized under the terms of the Master Indenture to enter into a Related Supplement pursuant to Section 6.02 of the Master Indenture and to request the Master Trustee to enter into such Related Supplement; WHEREAS, on December 21, 2015, the Corporation, as Obligated Group Representative, and the Master Trustee entered into Related Supplement No. 20 ("Supplement No. 20"), under which the Obligated Group agreed to execute an amended version of Supplement No. 20 pursuant to and in accordance with Section 6.04 of the Master Indenture to (i) incorporate the revisions to the Master Indenture covenants included in the 'Term Sheet Amendments" attached to Supplement No. 20 (the "Teffi1 Sheet Amendments") in the form of amendments to the specific relevant Master Indenture sections (the "Teffi1 Sheet Refinements") and (ii) provide that such Term Sheet Refinements shall be effective as of the date that the Master Trustee and the Corporation receive a written notice from the Related Bond Trustee for the Related Bonds, consisting of the California Statewide Communities Development Authority Revenue Bonds (Daughters of Charity Health System), Series 2005A (the "Series A Related Bonds"), 1

7 Series 2005G and Series 2005H (collectively, the "Series 2005 Related Bonds") that the interest rate on the Series 2005 Related Bonds has been increased by 25 basis points as described in the "Phase I Amendments" referenced in the Term Sheet Amendments; WHEREAS, Section 6.04 of the Master Indenture provides that any Related Supplement may provide that the provisions thereof may be amended without the consent of or notice to any of the Holders or pursuant to such terms and conditions as may be specified in such Related Supplement. WHEREAS, Supplement No. 20 provides that Amended Supplement No. 20, including the Term Sheet Refinements set forth therein, shall be executed by the Master Trustee upon its receipt of any of (i) the written consent to such execution by Accepting Bondholders (as defined in Supplement No. 20) that beneficially own at least a majority in outstanding principal amount of the $278,680,000 Series 2005 Related Bonds owned as of December 11, 2015 by the Accepting Bondholders, as determined by a certificate of the applicable Accepting Bondholders to the Master Trustee in connection with such written consent, (ii) an opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., addressed to the Master Trustee, rendered after consultation with the Accepting Bondholders (the delivery of such opinion to be conclusive as to such consultation), to the effect that the Term Sheet Refinements reflect in substance the revisions to the Master Indenture covenants included in the Term Sheet Amendments or (iii) the written consent to such execution by the Holder of Obligation No. 7. WHEREAS, the Corporation has requested the Master Trustee to enter into this Amended Supplement No. 20 in order to implement the Term Sheet Refinements; WHEREAS, the Master Trustee has received, as specified in Supplement No. 20, written consent to the execution by the Master Trustee of this Amended Supplement No. 20 from Accepting Bondholders (as defined in Supplement No. 20) that beneficially own at least a majority in outstanding principal amount of the $278,680,000 Series 2005 Related Bonds owned as of December 11, 2015 by the Accepting Bondholders, as determined by a certificate of the applicable Accepting Bondholders to the Master Trustee in connection with such written consent; WHEREAS, the Obligated Group has received the written consent of the beneficial owners of the California Public Finance Authority Revenue Notes (Verity Health System), Series 20 I SA, to this Amended Supplement No. 20; WHEREAS, all acts and things necessary to constitute this Amended Supplement No. 20 a valid supplemental indenture and agreement according to its terms have been done and performed, and the Corporation, as Obligated Group Representative, has duly authorized the execution and delivery hereof; NOW, THEREFORE, in consideration of the premises, of the acceptance by the Master Trustee of the trusts hereby created, the Corporation, as Obligated Group 2

8 Representative, on behalf of itself and the other Members, covenants and agrees with the Master Trustee, as follows: Section I. Definitions (a) Unless otherwise required by the context, all terms used herein which are defined in the Master Indenture shall have the meanings assigned to them therein. (b) As used in this Amended Supplement No. 20, "Effective Date" shall mean the date that (i) the Master Trustee and the Corporation receive a written notice from the Related Bond Trustee for the Series 2005 Related Bonds that a Second Amendment to Bond Indenture, First Amendment to Loan Agreement and First Amendment to Supplemental Master Trust Indenture in the forms set forth in Schedule A hereto and with respect to each series of the Series 2005 Related Bonds, have been executed and delivered by the paities thereto and (ii) the Master Trustee delivers a written acknowledgment to the Obligated Group Representative in the form attached as Schedule B, which acknowledgment the Master Trustee has been authorized to deliver simultaneously with its receipt of the notice described in clause (i) that (x) as of December 14, 2015, there was no Event of Default under the Master Indenture, the Related Bond Indentures for the Series 2005 Related Bonds or any agreements related such Related Bond Indentures relating to the Obligated Group's calculation of the amount of principal or interest on Indebtedness taken into account by the Obligated Group in calculating Debt Service Requirements and (y) each Officer's Ce1tificate of the Obligated Group Representative delivered to the Master Trustee prior to December 14, 2015 containing or based on a calculation of the amount of principal or interest on Indebtedness was delivered by the applicable officer of the Obligated Group Representative in good faith on advice of the Obligated Group Representative's counsel. (c) As used in this Amended Supplement No. 20, "Phase 2 Interest Rate Increase" shall mean that (i) the interest rate on the Series 2005 Related Bonds has been increased by an additional 25 basis points from the interest rate in effect on the Series 2005 Related Bonds as of the Effective Date and that such interest rate increase is retroactive to January 1, 2016 (which retroactive rate increase may be effected by adding the amount of such back interest to the amount of interest payable on the Series 2005 Related Bonds during the semi-annual interest period ending December 3 1, 2016 or, if the Rate Increase Failure Date is extended beyond December 31, 2016, the semi-airnual interest period ending June 30, 2017), and (ii) the Related Bond Trustee for the Series 2005 Related Bonds has received the legal opinions with respect to such interest rate increase described in the Term Sheet Amendments incorporated into Related Supplement No. 20; (d) As used in this Amended Supplement No. 20, "Rate Increase Failure Date" shall mean June 30, 2016, unless on or prior to such date the Master Trustee and the Corporation receive a written notice from the Related Bond Trustee for the Series 2005 Related Bonds that the Phase 2 Interest Rate Increase has occurred; provided, 3

9 however, that if the Master Trustee and the Corporation receive a written notice from such Related Bond Trustee that the beneficial owners of a majority in principal amount of the Series 2005 Related Bonds then outstanding have approved an extension, the above June 30, 2016 date shall be extended to any date on or prior to December 31, 2016 stated in such notice from such Related Bond Trustee. Section 2. Term Sheet Amendments Amendments to the Master Indenture Implementing the The Master Indenture is hereby an1ended effective the Effective Date as follows: (a) Definition of"accounts." Section 1.01 of the Master Indenture is amended by adding the following defined term: Accounts "Accounts" means collectively, (a) any right to payment of a monetary obligation whether or not earned by performance, that relates to or arises out of any services provided or goods rendered by an Obligated Group Member (including, without limitation, payments made by or through a governmental authority to an individual patient assigned to such Member), (b) without duplication, any 'account' (as defined in the UCC), any accounts receivable, whether in the form of payments for services rendered or goods sold, rents, license fees or othe1wise), any Health-Care-Insurance Receivables (as defined in the UCC) and any Payment Intangibles (as defined in the UCC), (c) all General Intangibles (as defined in the UCC), Intellectual Property (as defined in the UCC), rights, remedies, guarantees, supporting obligations and letter of credit rights relating to or arising out of the foregoing assets described in clauses (a) and (b), (d) all information and data compiled or derived by any Member or to which any Member is entitled in respect of or related to the foregoing assets described in clauses (a) and (b) and ( e) and all proceeds of any of the foregoing. (b) Definition of"amended Supplement No. 20." Section 1.01 of the Master Indenture is amended by adding the following defined te1m: Amended Supplement No. 20 "Amended Supplement No. 20" means the Amended and Restated Supplemental Master Indenture No. 20, dated as of January l, 2016, between the Obligated Group and the Master Trustee. (c) Amendment of Definition of"debt Service Requirement." For the avoidance of doubt, clause ( d) of the definition of Debt Service Requirement in Section 1.01 of the Master Indenture is amended to read as follows: 4

10 ( d) With respect to Indebtedness payable from an Irrevocable Deposit in connection with the refunding and/or defeasance of such Indebtedness, in whole or in part, prior to its scheduled maturity, the amount of principal or interest taken into account during such period shall be assumed to equal only the principal or interest not payable from such Irrevocable Deposit and the investment income from such funds. Under no circumstances shall an Irrevocable Deposit for regularly scheduled debt service requirements, other than in connection with the refunding and/or defeasance of Indebtedness, be excluded from the calculation of Debt Service Requirement. (d) Indebtedness." Substitution of "15% Basket Indebtedness" for "Short-Term (i) Section 1.01 of the Master Indenture is amended by deleting the defined term "Short-Term Indebtedness," and the Master Indenture is amended by substituting the term "l 5% Basket Indebtedness" for the term "Short-Term Indebtedness" in every instance in which the term "Short-Te1m Indebtedness" is used in the Master Indenture. (ii) Section 1.01 of the Master Indenture is amended by inserting therein the following definition: 15% Basket Indebtedness "15% Basket Indebtedness" means all Indebtedness incurred pursuant to Section 3.05(d). (e) Definition of"income Available for Debt Service." The definition of "Income Available for Debt Service" in Section 1.01 of the Master Indenture is amended by adding at the end thereof the following text: (g) at the option of the Obligated Group Representative, -expenses shall not include any management fees earned by the Manager under the Management Agreement to the extent the payment of such management fees is defe11'ed in accordance with, and until the satisfaction of conditions set forth under, the Management Agreement as in effect on December 14, 2015, provided that any management fees so excluded from expenses shall be included as expenses in any period in which such management fees are paid to the Manager. Notwithstanding any contraiy requirements of GAAP: In determining the combined excess ofrevenues over expenses, solely for purposes of the calculation of Income Available for Debt Service for the Fiscal Years ending June 30, 2018, June 30, 2019 and June 30, 2020, respectively, the following revenue and expense recognition methodology (the "QAF Program Modification") shall be applicable: (i) revenues for the applicable Fiscal Year shall include the Applicable Percentage of Qualified QAF Payments, and 5

11 expenses shall include the Applicable Percentage of Associated QAF Expenses, (ii) there shall be deducted from revenues for the applicable Fiscal Year an amount equal to any Discredited QAF Payments included as revenues in a prior Fiscal Year and deducted from expenses an amount equal to the Associated QAF Expenses relating to such Discredited QAF Payments included as expenses in a prior Fiscal Year, and (iii) there shall be excluded from revenues for the applicable Fiscal Year an amount ofrevenues that otherwise would be recognized in the applicable Fiscal Year under GAAP equal to any Previously Credited QAF Payments and there shall be excluded from expenses for the applicable Fiscal Year an amount of expenses that otherwise would be recognized in the applicable Fiscal Year under GAAP equal to any Previously Recognized QAF Expenses. For the avoidance of doubt, the intent of this provision is that (i) to the extent Qualified QAF Payments are included in revenues for purposes of Income Available for Debt Service before such payments are recognized as revenues under GAAP, there shall be included in expenses for purposes of!ncome Available for Debt Service a proportionate amount of any "quality assurance fee" that has been paid or is or will be payable with respect to the applicable Qualified QAF Payments, (ii) the Remaining Percentage of Qualified QAF Payments not included in revenues under the preceding sentence shall not be included in revenues unless and until such payments are recognized as revenues under GAAP, (iii) the Remaining Percentage of Associated QAF Expenses not included in expenses under the preceding sentence shall not be included in expenses unless and until such expenses are required to be recognized as expenses under GAAP, (iv) in no event shall the aggregate amount of revenue included in Income Available for Debt Service in one or more Fiscal Years with respect to a supplemental payment to a Member of the Obligated Group for inpatient or outpatient services provided to Medi-Cal patients, exceed, following the adjustments for Discredited QAF Payments and Previously Credited QAF Payments required hereunder, the amount of such revenue that would be recognized with respect to such supplemental payment under GAAP and (v) in no event shall the aggregate amount of expense included in Income Available for Debt Service in one or more Fiscal Years with respect to a "quality assurance fee" paid or payable by a Member of the Obligated Group be less, following the adjustments for Previously Recognized QAF Expenses required hereunder, than the amount of such expense that would be recognized with respect to such fee undergaap, In detennining the combined excess of revenues over expenses, solely for purposes of the calculation oflncome Available for Debt Service for any Fiscal Year ending on or after June 30, 2021, (i) there shall be deducted from revenues for such Fiscal Year an amount equal to any Discredited QAF Payments included as revenues for a prior Fiscal Year and deducted from expenses an amount equal to the Associated QAF Expenses included as expenses for a prior Fiscal Year, and (ii) there shall be excluded from revenues for such Fiscal Year an amount of revenues that otherwise would be recognized in such Fiscal Year under GAAP equal to any Previously Credited QAF Payments and there shall be excluded from expenses for such Fiscal Year an amount of expenses that otherwise would be 6

12 recognized in such Fiscal Year under GAAP equal to any Previously Recognized QAF Expenses. For purposes hereof: "GAAP" means generally accepted accounting principles. "Applicable Percentage" means, with respect to the Fiscal Year for which the Annual Debt Service Coverage Ratio is calculated, the percentage set forth in the applicable 150 Day Coverage Certificate, which percentage shall not exceed the lesser of (i) 75% or (ii) (A) for purposes of the Annual Debt Service Coverage Ratio with respect to the Fiscal Year ending June 30, 2019, the Applicable Percentage used in determining the Annual Debt Service Coverage Ratio for the Fiscal Year ending June 30, 2018 and (B) for purposes of the Annual Debt Service Coverage Ratio with respect to the Fiscal Year ending June 30, 2020, the Applicable Percentage used in dete1mining the Annual Debt Service Coverage Ratio for the Fiscal Year ending June 30, "Remaining Percentage" means, with respect to a Fiscal Year, I 00% minus the Applicable Percentage for such Fiscal Year. "Qualified QAF Payments" means, with respect to the California program for supplemental payments to hospitals for inpatient or outpatient services provided to Medi-Cal patients funded by the "quality assurance fee" imposed on hospitals, an amount payable to any Member of the Obligated Group pursuant to such program in the Fiscal Year for which Income Available for Debt Service is being calculated, but which amount cannot be recognized under GAAP as revenues in such Fiscal Year solely because the applicable payments have not been approved by the Centers for Medicare and Medicaid Services ("CMS"), provided that such payments have not been disapproved by CMS (for the avoidance of doubt, a supplemental payment shall be considered a Qualified QAF Payment only in the initial Fiscal Year in which such payment would have been recognized under GAAP if not for the absence of approval of such payment by CMS.) "Associated QAF Expenses" means, in relation to particular Qualified QAF Payments or particular Discredited QAF Payments, the amount, if any, of any "quality assurance fee" paid or payable by any Member of the Obligated Group that has not been recognized as an expense under GAAP because such expense, if paid by a Member of the Obligated Group, will be reimbursed to the Obligated Group, or if not yet paid by a Member of the Obligated Group will cease to be payable, or will not be assessed to a Member of the Obligated Group, ifthe applicable Qualified QAF Payments or Discredited QAF Payments are not approved by CMS. "Discredited QAF Payments" means, for a particular Fiscal Year (the "Discrediting Year"), the amount of any Qualified QAF Payments included in revenues in dete1mining "Income Available for Debt Service" for a prior Fiscal 7

13 Year_that are disapproved by CMS during the applicable Discrediting Year.. "Previously Credited QAF Payments" means, as of the date a supplemental payment to a Member of the Obligated Group can be recognized as revenue under GAAP, the amount of such supplemental payment previously included in revenues as a Qualified QAF Payment and not previously deducted from revenues as a Discredited QAF Payment. "Previously Recognized QAF Expenses" means, as of the date a supplemental payment to a Member of the Obligated Group can be recognized as revenue under GAAP and the Associated QAF Expenses are recognized as an expense under GAAP, the amount of such Associated QAF Expenses previously included in expenses and not previously deducted from expenses in connection with Discredited QAF Payments. (f) Amendment of Definition of "Long-Term Indebtedness." The definition of "Long-Term Indebtedness" in Section 1.01 of the Master Indenture is amended as follows: Long-Term Indebtedness "Long-Term Indebtedness" means (i) any Indebtedness that is not designated as 15% Basket Indebtedness and (ii) if a portion of any Indebtedness previously designated as 15% Basket Indebtedness subsequently ceases to be, or ceases to be designated as, 15% Basket Indebtedness, such portion, as of the date it no longer constitutes, or no longer is designated as, 15% Basket Indebtedness (which portion shall, as of such date, be deemed to constitute Long-Tenn Indebtedness and be subject to the limitations on incurrence of Long-Term Indebtedness set forth in the Master Indenture). (g) Definition of "Management Agreement." Section 1.01 of the Master Indenture is amended by adding the following defined term: Management Agreement "Management Agreement" means the Health System Management Agreement entered into on December 14, 2015, between the Obligated Group and Integrity Healthcare, LLC, as manager, as amended from time to time, or any replacement agreement for the management services provided thereunder between the Obligated Group and Integrity Healthcare, LLC or any entity controlled by, controlling or under common control with either Integrity Healthcare, LLC or BlueMountain Capital Management, LLC; provided that, to the extent expressly required herein, for certain purposes hereunder amendments or replacement provisions subsequent to December 14, 2015 to certain provisions of the Health System Management Agreement as in effect on December 14, 2015 shall be disregarded. 8

14 (h) Definition of "Manager." Section 1.01 of the Master Indenture is amended by adding the following defined term: Manager "Manager" means Integrity Healthcare, LLC, any legal successor thereto, or any other entity controlled by, controlling or under common control with either Integrity Healthcare, LLC or BlueMountain Capital Management, LLC that serves as manager under the Management Agreement. (i) Amendment of Definition of "Permitted Liens." The definition of "Permitted Liens" in Section 1.01 of the Master Indenture is amended as follows: (i) clause (m) in such definition is amended to read as follows: (m) Liens on Accounts securing Indebtedness, provided (i) the aggregate principal amount oflndebtedness secured by such Accounts does not exceed fifteen percent (15%) of Total Revenues of the Members for the most recent Fiscal Year for which Obligated Group Financial Statements are available (the then-applicable Fiscal Year on a pmticular calculation date, the "Reference Year" and the amount equal to 15% of Total Revenues of the Members for such Reference Year, the "15% Cap") and (ii) the granting language pursuant to which each Lien under this clause (m) is granted provides that, if, following the granting of such Lien, the amount of Indebtedness secured by such Accounts exceeds the 15% Cap, as it may be revised subsequent to the date the applicable Lien is granted due to a change in the Reference Year, (x) the lien on Accounts granted under this clause (m) shall, without further action by the Obligated Group or any party secured by such Lien, secure only an amountof such Indebtedness that does not exceed the amount of such revised 15% Cap and (y) if separate liens on Accounts are in effect at such time under this clause (m), any such automatic reduction in the amount of Indebtedness so secured shall occur pro rata in accordance with the principal amount of such Indebtedness. (ii) clause ( q) in such definition is amended to read as follows: (q) any other Lien, provided that either (i) the aggregate Book Value of Property subject to Liens created or permitted to exist pursuant to this clause (q) shall not exceed 20% of the aggregate Book Value of all Prope1ty of the Obligated Group or (ii) the aggregate Fair Market Value of Prope1ty subject to Liens created or permitted to exist pursuant to this clause (q) shall not exceed 20% of the aggregate Fair Market Value of all Property of the Obligated Group, in each case calculated at the time the Lien is granted and as of the end of each subsequent calendar quarter while such Lien remains in effect. For purposes of this clause (q), any undrawn cash amount that is available to be drawn by and for the benefit 9

15 of any Member of the Obligated Group as of the applicable calculation date under the terms of any line of credit or similar facility, including without limitation drawdown bonds or notes, incmted in accordance with this Master Indenture and a majority in aggregate principal amount of the lenders, bondholders or noteholders of which are not Affiliates of any Member of the Obligated Group or of the Manager and with respect to which no default or termination event has occurred, all as certified in an Officer's Certificate made at the time of the applicable calculation, shall be treated for purposes of the applicable calculation as though such amount were Property of the applicable Member. In the event that following the granting of such Permitted Lien under this clause (q), such Permitted Lien ceases to be a Permitted Lien due to a change in the Book Value or Fair Market Value of the Property subject to such Lien and/or of the Property of the Obligated Group (a "Lien Noncompliance Event"), the Obligated Group shall be in default of Section 3.04(c) of this Master Indenture, subject to the cure period provided under Section 4.0 I (b) of this Master Indenture. For the avoidance of doubt, notwithstanding the occurrence of a Lien Noncompliance Event, such Lien Noncompliance Event shall not affect the validity of the Lien, or the amount of assets subject to the Lien, established pursuant to the deeds of trust and UCC filings on the property, plant, and equipment at the location of the Obligated Group's St. Louise and St. Francis facilities granted as of December 18, 2015 under this clause ( q) to secure Obligations 16, 17, 18 and 19 or any replacement liens on the property, plant, and equipment at the location of the Obligated Group's St. Louise and St. Francis facilities to secure Obligations issued to refinance Obligations 16, 17, 18 or 19 (this "notwithstanding" sentence to apply solely to the extent that (i) Obligations 16, 17, 18 and 19 and/or any such refinancing Obligations secure bonds or notes the principal amount of which does not exceed in the aggregate $160 million and the maturity date of which is no later than June 30, 2019 and (ii) no Lien on any other Property of the Obligated Group is granted pursuant to this clause (q) to secure Obligations 16, 17, 18 or 19 or any such refinancing Obligations. ) (j) Definition of Series 2005 Related Bonds. Section 1.01 of the Master Indenture is amended by adding the following defined term: Series 2005 Related Bonds "Series 2005 Related Bonds" means the California Statewide Communities Development Authority Revenue Bonds (Daughters of Charity Health System), Series 2005A, Series 2005G and Series 2005H (k) Definition of "UCC." Section 1.01 of the Master Indenture is amended by adding the following defined term: 10

16 "UCC" means the Uniform Commercial Code of the State of California, as amended from time to time. (I) Amount of 15% Basket Indebtedness. Section 3.05(d) of the Master Indenture is hereby amended in its entirety to read as follows: (d) 15% Basket Indebtedness, provided that the aggregate principal amount of 15% Basket Indebtedness incurred pursuant to this Section 3.05(d) and then Outstanding, including the 15% Basket Indebtedness proposed to be incurred, does not exceed, at the time of incurrence, 15% of the Total Revenues for the most recent Fiscal Year for which Obligated Group Financial Statements are available and, provided further that (i) the Obligated Group covenants that the Master Trustee shall receive (A) an Officer's Certificate delivered no more than 150 days after the last day of each Fiscal Year certifying that the aggregate principal amount of 15% Basket Indebtedness Outstanding as of the date of such Officer's Certificate does not exceed 15% of Total Revenues for such previous Fiscal Year, which Total Revenues amount shall be based on the Obligated Group Financial Statements for the applicable Fiscal Year if available on or before the l 50 1 h day after the last day of such Fiscal Year, and otherwise shall be based on the Obligated Group's unaudited financial statements for the applicable Fiscal Year (the "150 Day Basket Indebtedness Certificate"), and (B) if the Total Revenues for the applicable Fiscal Year referenced in a 150 Day Basket Indebtedness Certificate are not based on the Obligated Group Financial Statements for the applicable Fiscal Year, an Officer's Certificate delivered no more than 180 days after the last day of the applicable Fiscal Year certifying that the aggregate principal amount of 15% Basket Indebtedness Outstanding as of the date of such Officer's Ce1tificate does not exceed 15% of' Total Revenues for such previous Fiscal Year, which Total Revenues amount shall be based on the Obligated Group Financial Statements for the applicable Fiscal Year (the "180 Day Basket Indebtedness Certificate") and (ii) failure of the Obligated Group to provide a 150 Day Basket Indebtedness Certificate, or, if required, a 180 Day Basket Indebtedness Certificate, on or before the applicable number of days after the last day of a Fiscal Year shall constitute a covenant default by the Obligated Group under this Master Indenture; (m) Debt Coverage. Section 3.07 (a) and (b) of the Master Indenture are hereby amended to read as follows: (a) Each Member covenants and agrees to fix, charge and collect, or cause to be fixed, charged and collected, rates, fees and charges for the use of its facilities and for the services furnished or to be furnished by the Members so that the Annual Debt Service Coverage Ratio of the Obligated Group as a whole at the end of(i) the Fiscal Year ending on June 30, 2018 is not less than 0.7:1.0 and (ii) each Fiscal Year ending on or after June 30, 2019 is not less than I. I: 1.0. For the 11

17 avoidance of doubt, this covenant shall be inapplicable for the Fiscal Years ending June 30, 2016 and June 30, (b) Within one hundred fifty (150) days after the end of each Fiscal Year the Obligated Group Representative shall compute the Annual Debt Service Coverage Ratio for such Fiscal Year, which shall be based on the Obligated Group Financial Statements for the applicable Fiscal Year if available on or before the ' day after the last day of such Fiscal Year, and otherwise shall be based on the Obligated Group's unaudited financial statements for the applicable Fiscal Year, and promptly furnish to the Master Trustee an Officer's Ce1tificate setting forth the results of such computation and specifying the amount of any deferred management fees excluded as expenses in such computation and the amount of any previously excluded management fees included as expenses in such computation (the "150 Day Coverage Certificate"). If the 150 Day Coverage Certificate for the applicable Fiscal Year is not based on the Obligated Group Financial Statements for the applicable Fiscal Year, within one hundred eighty (180) days after the end of the applicable Fiscal Year the Obligated Group Representative shall compute the Annual Debt Se1vice Coverage Ratio for such Fiscal Year based on the Obligated Group Financial Statements for the applicable Fiscal Year, and promptly furnish to the Master Trustee an Officer's Certificate setting forth the results of such computation and specifying the amount of any deferred management fees excluded as expenses in such computation and the amount of any previously excluded management fees included as expenses in such computation (the "180 Day Coverage Ce1tificate"). The 150 Day Certificate and, if applicable, the 180 Day Certificate for the Fiscal Years ending June 30, 2018, 2019, 2020 and 2021, respectively, shall include (i) except in the case of the Fiscal Year ending June 30, 2021, a description of the Applicable Percentage (as defined in clause (g) of the definition ofincome Available for Debt Service) used in determining the applicable Income Available for Debt Service and (ii) detail as to all adjustments to GAAP made in the applicable calculation pursuant to clause (g) of the definition of Income Available for Debt Service, which detail and adjustments shall also be included in the Obligated Group Financial Statements for the applicable Fiscal Year, along with a confirmation of the applicable calculation by the firm of independent public accountants issuing the applicable audit report. The Obligated Group Representative covenants and agrees that if at the end of any Fiscal Year ending on or after June 30, 2019 the Annual Debt Se1vice Coverage Ratio shall have been less than I. I 0: 1.0, it will promptly employ an Independent Consultant to make recommendations as to a revision of the rates, fees and charges of the Members or the methods of operation of the Members to increase such ratio for subsequent Fiscal Years to the level required or, if in the opinion of the Independent Consultant, the attainment of such level is impracticable, to the highest practicable level. Copies of the recommendations of the Independent Consultant shall be filed with the Master Trustee. Each Member shall, promptly upon its receipt of such recommendations, subject to applicable requirements or restrictions imposed by 12

18 law, revise its rates, fees and charges or its methods of operation or collections and shall take such other action as shall be in conformity with such recommendations, subject to a good faith determination by the Governing Body of the Obligated Group Representative that the implementation of such recommendations would not be in the best interests of the Members. If the Members comply in all material respects with the reasonable recommendations of the Independent Consultant in respect to said rates, fees, charges and methods of operation or collection, the Members will be deemed to have complied with the covenants described under in this Section 3.07 for such Fiscal Year notwithstanding that Annual Debt Service Coverage Ratio shall be less than the level required as described in (a) above; and provided that (1) the Members shall not be excused from taking any action or performing any duty required under the Master Indenture and that no other Event of Default shall be waived by the operation of the provisions of this subsection (b) and (2) in all events the A1mual Debt Service Coverage Ratio at the end of (i) the Fiscal Year ending on June 30, 2018 shall not be less than 0.7:1.0 and (ii) any Fiscal Year ending on or after June 30, 2019 shall be not less than 1.0: 1.0. (n) Payment of Deferred Fees under Management Agreement. Section 3.02 of the Master Indenture is hereby amended by: (i) deleting the word "and" at the end of subsection (d) thereof; (ii) changing the period at the end of subsection ( e) thereof to a semicolon, and inserting the word "and" immediately thereafter; and (iii) subsection (f): inserting immediately after subsection (e) the following new "(f) include and enforce at all times in the Management Agreement, or in the Management Agreement and another enforceable agreement from, or by, the Manager which has the effect of overriding any inconsistent provision of the Management Agreement, and not make any payments to the Manager inconsistent with, a provision under which, commencing in the Fiscal Year ending on June 30, 2019, the payment of any monthly compensation payable to the Manager that is, or would be required to be, deferred under the terms of Section of the Management Agreement, as in effect on December 14, 2015 shall be deferred and paid no earlier than the date on which conditions identical to the conditions set forth in Section 4. l.4(b )(3) of the Management Agreement, as in effect on December 14, 2015 but replacing the phrase "does not result in Days' Cash on Hand going below fifteen (15) days" with the phrase "does not result in Days' Cash on Hand going below twenty (20) days", are satisfied with respect to the applicable payment (the "Payment Conditions"), provided, however, that such Management Agreement and/or agreement 13

19 from, or by, the Manager may permit the payment of such deferred amounts at the end of the Term, as defined in the Management Agreement as in effect on December 14, 2015, i1tespective of whether the Payment Conditions are satisfied." (o) hereby amended: Disclosure Requirements. Section 3.10 of the Master Indenture is (i) by inserting at the end of the introductory lines of subsection (b) thereof the following words "and cause the same to be posted on the Municipal Securities Rulemaking Board's Electronic Municipal Market Access website (together with any successor thereto, "EMMA") no later than the day such delivery is made to the Master Trustee and any Related Bond Issuer": (ii) by inserting at the end of subsection (b)(3) the following sentence: "Such certificate shall inclnde a certification by the Obligated Group Representative that as of the date of such certificate the Liens granted under clause ( q) of the definition of Permitted Liens do not exceed the maximum permitted value of such Liens under such clause ( q)." (iii) following: by inserting immediately following subsection (b)(3) thereof the (4) as soon as practicable, but in no event (i) later than March 4, 2016 in the case of the fiscal quarter ending December 31, 2015 or (ii) more than 45 days after the last day of any subsequent fiscal quaiier, an unaudited consolidating balance sheet, consolidating statement of operations and consolidating statement of changes in net assets for such fiscal quruier and Fiscal Year to date, prepared by the Obligated Group Representative, and, as soon as practicable, but in no event (i) later than Mru ch 4, 2016 in the case of the fiscal quaiier ending December 31, 2015 or (ii) more than 50 days after the last day of each subsequent fiscal quarter during which any Series 2005 Related Bonds remain outstanding, the management discussion and analysis and other information with respect to the applicable fiscal quarter as specified in Schedule C to Amended Supplement No. 20 (the "Supplemental Information"), to the extent not provided in the earlier filing with respect to the applicable fiscal quarter, and a ce1iification by the Obligated Group Representative that, as of the end of such fiscal quarter, any Liens granted under clause (q) of the definition of Permitted Liens do not exceed the maximum permitted value of such Liens under such clause ( q), or, if they do, the amount of such excess and the details of the cure of such excess amount the Obligated Group is undertaking. (iv) By inse1iing immediately following subsection (b) thereof the following subsections (c) and (d): (c) While any Series 2005 Related Bonds remain outstanding, the Obligated Group shall, no later than 10 days following the date on which the 14

20 delivery and posting on EMMA of the Supplemental Information for the preceding fiscal quarter, as described in subsection (b)(4) hereof, is required, conduct a call open to all members of the public, including without limitation beneficial owners of Related Bonds and potential purchasers of Related Bonds, during which one or more senior level executives who oversee the financial and operating performance of the Obligated Group, one or more representatives of the Manager and any other individuals deemed necessary by the Obligated Group Representative and the Manager for an informed presentation of such prior quarter financial statements shall make such presentation and respond to questions relating thereto (each such call, a "Quarterly Investor Call"). The Obligated Group Representative shall cause to be posted on EMMA no later than 7 days prior to the applicable Quarterly Investor Call a notice as to the date and time of such Quarterly Investor Call and the details of how to participate in such Quarterly Investor Call. (d) Until the first Fiscal Year ending on or after June 30, 2017 for which the Annual Debt Service Coverage Ratio is at least 1.1: 1.0, the Obligated Group shall, no later than 10 days prior to the applicable Quarter! y Investor Call provide to the Designated Turnaround Monitor a pe1formance improvement plan progress reporting package addressing the Obligated Group's turnaround performance measured against forecast (including for each pe1formance improvement initiative the applicable savings and/or revenue enhancement realized to date relative to the forecast), which reporting package shall also include the information described in Schedule C to Amended Supplement No. 20, and shall provide reasonable and prompt access by the Designated Turnaround Monitor to the chief financial officer and other officers of the Obligated Group Representative, representatives of the Manager and other individuals reasonably deemed necessary by the Designated Turnaround Monitor for the Designated Turnaround Monitor to have an informed understanding of such reporting package and the financial statements of the Obligated Group and to address issues raised during Quarterly Investor Calls. The "Designated Turnaround Monitor" shall be SOLIC Capital, LLC or an affiliate thereof, or any other individual or entity providing financial advisor or financial consultant services that is designated as such by the Holders of a majority in Principal Amount of the Obligations then Outstanding, and shall be authorized to conduct calls with the investing public, which calls, in the discretion of the Designated Turnaround Monitor, may be conducted simultaneously with a Quarterly Investor Call or separately. The fees of the Designated Turnaround Monitor, to be fixed (unless an Event of Default shall have occun ed and be continuing) at $50,000 per fiscal qumter, beginning with the fiscal quarter begirming Janum y 1, 2016, payable, in the case of the fiscal quarter beginning Janum y 1, 2016, upon the execution of Amended Supplement No. 20, and payable thereafter on a quarterly basis in advance, and the expenses of the Designated Turnaround Monitor, not to exceed $5,000 per quarter, payable within 30 days after invoicing thereof, shall be paid by the Obligated Group directly to the Designated Turnaround Monitor. For the avoidance of doubt, following the first Fiscal Yem ending on or after June 30, 2017 for which the Annual Debt Service Coverage Ratio is at least 1.1:1.0, the 15

21 Obligated Group shall not be required to provide a Designated Turnaround Monitor. (p) Covenant Default Cure Periods. Section 4.0l(b) of the Master Indenture is hereby amended to read as follows: (b) Any Member shall fail duly to observe and perfo1m any other covenant or agreement under this Master Indenture (including covenants or agreements contained in any Related Supplement or Obligation) for a period of30 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Obligated Group Representative by the Master Trustee or to the Obligated Group Representative and the Master Trustee by the Holders of25% in aggregate Principal Amount of Outstanding Obligations except that, if such failure can be remedied but not within such 30-day period, such failure shall not become an Event of Default for so long as the Obligated Group Representative shall diligently proceed to remedy same, and shall remedy same, within a period of 90 days after the date on which!he applicable written notice of the applicable failure was given to the Obligated Group Representative; provided that (i) without limitation, no covenant default under Section 3.04, Section 3.05, Section 3.07 or Section 3.08 shall be deemed curable and (ii) if Liens granted under clause (q) of the Permitted Liens definition exceed the maximum permitted value of Liens granted under such clause (q) of the Permitted Liens definition, the Obligated Group shall have 150 days from the last day of the first fiscal quarter in which the applicable excess occurs to cure such default; Section 3. Conditional Amendment to the Master Indenture Implementing the Term Sheet Amendments. If a Rate Increase Failure Date occurs, Section 3.07 (a) and (b) of the Master Indenture, as amended pursuant to Section 2G) of this Amended Supplement No. 20, shall automatically be further amended, as of such Rate Increase Failure Date, to read as follows: (a) Each Member covenants and agrees to fix, charge and collect, or cause to be fixed, charged and collected, rates, fees and charges for the use of its facilities and for the services furnished or to be furnished by the Members so that the Annual Debt Service Coverage Ratio of the Obligated Group as a whole at the end of each Fiscal Year ending on or afterjune 30, 2018 is not less than 1.1:1.0. (b) Within one hundred fifty (150) days after the end of each Fiscal Year the Obligated Group Representative shall compute the Annual Debt Service Coverage Ratio for such Fiscal Year, which shall be based on the Obligated Group Financial Statements for the applicable Fiscal Year if available on or before the 150'" day after the last day of such Fiscal Year, and otherwise shall be based on the Obligated Group's unaudited financial statements for the applicable Fiscal Year, and promptly furnish to the Master Trustee an Officer's Certificate setting forth the results of such computation (the "150 Day Coverage 16