J.P. Morgan. Book Entry

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1 New Issue Book Entry RATINGS: Moody's: "A3" Fitch: "A-" (See "RATINGS" herein) In the opinion of Squire Sanders (US) LLP, Bond Counsel, under existing law (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the 2012A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; and (ii) the 2012A Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. Interest on the 2012A Bonds may be subject to certain federal taxes imposed only on certain corporations. For a more complete discussion of tax aspects, see "TAX MATTERS" herein. $166,490,000 HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (FLORIDA) HOSPITAL REVENUE REFUNDING BONDS (TAMPA GENERAL HOSPITAL PROJECT) SERIES 2012A Dated: Date of Delivery Due: October 1, as shown on maturity schedule The Hillsborough County Industrial Development Authority (the "Issuer") is offering $166,490,000 of its Hospital Revenue Refunding Bonds (Tampa General Hospital Project), Series 2012A (the "2012A Bonds"). The 2012A Bonds will be issued as fully registered bonds without coupons, in denominations of $5,000 or any integral multiple thereof. Interest on the 2012A Bonds will be payable semi-annually on each April 1 and October 1, commencing April 1, The 2012A Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). Principal of, premium, if any, and interest on the 2012A Bonds will be payable by The Bank of New York Mellon Trust Company, N.A., as trustee and paying agent (the "Bond Trustee"), to Cede & Co., and such payments will in turn be disbursed to the beneficial owners through their nominees. So long as Cede & Co. is the registered owner of the 2012A Bonds, as nominee for DTC, references herein to the registered owners of the 2012A Bonds shall mean Cede & Co. and shall not mean the beneficial owners of the 2012A Bonds. See "DESCRIPTION OF THE 2012A BONDS Book-Entry-Only System" herein. The 2012A Bonds are subject to redemption as set forth herein. See "DESCRIPTION OF THE 2012A BONDS - Redemption" herein. The 2012A Bonds will be issued and secured under the provisions of a Trust Agreement, dated as of January 1, 2013, between the Issuer and the Bond Trustee (the "Trust Agreement"). Proceeds of the 2012A Bonds will be loaned to Florida Health Sciences Center, Inc. ("Tampa General" or the "Hospital") which operates the facilities known as "Tampa General Hospital" (i) to effect an advance refunding of $12,245,000 of the currently outstanding $61,570,000 Hillsborough County Industrial Development Authority Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Series 2003A (the "Refunded 2003A Bonds") and all of the Hillsborough County Industrial Development Authority Hospital Revenue Bonds (Tampa General Hospital Project) Series 2003B, currently outstanding in the principal amount of $115,650,000 (the "Refunded 2003B Bonds" and collectively with the Refunded 2003A Bonds, the "Refunded Bonds"), (ii) to finance the cost of the 2012 Project as described herein, and (iii) to pay certain costs associated with the issuance of the 2012A Bonds. See "PURPOSE OF THE 2012A BONDS" herein. The 2012A Bonds are payable solely from and secured by (i) payments to be made by Tampa General under a Financing Agreement, dated as of January 1, 2013 (the "Agreement"), between the Issuer and Tampa General, (ii) from the moneys and investments from time to time on deposit to the credit of the funds and accounts (other than the Rebate Account) created under the Trust Agreement, and (iii) in certain circumstances, from funds realized by the exercise of remedies under (a) the Leasehold Mortgage and Security Agreement, dated May 1, 2003, as amended by the First Amendment to Leasehold Mortgage and Security Agreement, dated as of September 1, 2006 (together, the "Leasehold Mortgage"), and (b) the Master Trust Indenture, dated as of May 1, 2003 (as amended, the "Master Indenture"), between Tampa General and The Bank of New York Trust Company of Florida, N.A. now known as The Bank of New York Mellon Trust Company, N.A., as master trustee (the "Master Trustee"). The obligations of Tampa General under the Agreement will be evidenced and secured by Obligation No. 3 issued pursuant to the Master Indenture, as supplemented by Supplemental Indenture for Obligation No. 3, dated as of January 1, 2013 ("Supplement No. 3"). All Obligations issued under the Master Indenture are joint and several obligations of Tampa General and any other member of the Obligated Group secured by a security interest in the Pledged Assets of Tampa General and any other member of the Obligated Group. As additional security for the 2012A Bonds, the Issuer will assign substantially all of its right, title and interest in and to the Agreement and Obligation No. 3 (except for certain rights described herein) to the Master Trustee. See "Security and Source of Payment for the 2012A Bonds" herein. THE 2012A BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER. THE 2012A BONDS WILL NOT BE DEEMED TO CONSTITUTE A DEBT, LIABILITY OR OBLIGATION OF THE ISSUER, HILLSBOROUGH COUNTY, THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF HILLSBOROUGH COUNTY, THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE 2012A BONDS. NONE OF HILLSBOROUGH COUNTY, THE STATE OF FLORIDA NOR ANY POLITICAL SUBDIVISION THEREOF IS DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATED TO LEVY ANY TAX OR TO PLEDGE ANY FORM OF TAXATION WHATEVER FOR THE 2012A BONDS OR TO MAKE ANY APPROPRIATION FOR THE PAYMENT OF THE 2012A BONDS OR FOR THE OPERATION AND MAINTENANCE OF THE 2012 PROJECT OR FOR THE HOSPITAL. NO HOLDER OF THE 2012A BONDS SHALL HAVE THE RIGHT TO COMPEL ANY EXERCISE OF THE TAXING POWER OF HILLSBOROUGH COUNTY, THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF TO PAY DEBT SERVICE ON THE 2012A BONDS. THE ISSUER HAS NO TAXING POWER. The 2012A Bonds are offered subject to prior sale, when, as and if issued by the Issuer and accepted by the Underwriters, subject to the approval of certain legal matters relating to their issuance by Squire Sanders (US) LLP, Bond Counsel. Certain legal matters will be passed upon for the Issuer by its counsel, Morrison & Mills, P.A., Tampa, Florida, for Tampa General by its counsel, Carlton Fields, P.A., Tampa, Florida, and for the Underwriters by their counsel GrayRobinson, P.A., Tampa, Florida. It is expected that delivery of the 2012A Bonds will be made through DTC in New York, New York, on or about February 28, J.P. Morgan SunTrust Robinson Humphrey This Official Statement is dated January 24, 2013 Wells Fargo Securities

2 Maturity (October 1) AMOUNTS, MATURITIES, INTEREST RATES, YIELDS, PRICES, AND INITIAL CUSIP NUMBERS $166,490,000 HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (FLORIDA) HOSPITAL REVENUE REFUNDING BONDS (TAMPA GENERAL HOSPITAL PROJECT) SERIES 2012A $21,180, A Serial Bonds Amount Interest Rate Yield Price 2014 $4,765, % 0.73% AEA ,910, AEB , AEC ,030, AED ,075, AEE ,130, AEF ,185, AEG ,245, AEH ,300, AEJ ,500, AEK ,045, ** 43233AEP7 Initial CUSIP Number* $20,620, % 2012A Term Bonds due October 1, 2028, Yield 3.37%, Price **, CUSIP No AEL6* $13,465, % 2012A Term Bonds due October 1, 2028, Yield 3.61%, Price , CUSIP No AEQ5* $29,900, % 2012A Term Bonds due October 1, 2031, Yield 3.45%, Price **, CUSIP No AER3* $34,610, % 2012A Term Bonds due October 1, 2034, Yield 3.61%, Price **, CUSIP No AEM4* $46,715, % 2012A Term Bonds due October 1, 2043, Yield 4.07%, Price CUSIP No AEN2* * CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standards & Poor's Financial Services LLC on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. CUSIP numbers are included herein solely for the convenience of the purchasers of the 2012A Bonds. Neither the Issuer nor the Underwriters shall be responsible for the selection or correctness of the CUSIP numbers set forth herein. ** Priced to the first optional call date.

3 REGARDING THIS OFFICIAL STATEMENT This Official Statement does not constitute an offering of any security other than the original offering of the 2012A Bonds specifically offered hereby. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, and there shall be no sale of the 2012A Bonds, in any jurisdiction in which it is unlawful to make such offer, solicitation or sale. This Official Statement has been approved by Tampa General and its use and distribution for the purposes set forth above have been authorized by Tampa General and the Issuer. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder, under any circumstances, shall create any implication that there has been no change in the affairs of the Issuer or Tampa General since the date hereof. The Issuer has only furnished information in this Official Statement under the caption "THE ISSUER" and "LITIGATION" (first paragraph only) and is not responsible for any other information contained in this Official Statement. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The 2012A Bonds and Obligation No. 3 have not been registered under the Securities Act of 1933, as amended, nor has the Trust Agreement or the Master Indenture been qualified under the Trust Indenture Act of 1939, as amended, in reliance upon exemptions contained in such acts. The registration or qualification of the 2012A Bonds in accordance with applicable provisions of the securities laws of the states, if any, in which the 2012A Bonds have been registered or qualified, and the exemption from registration or qualification in certain other states, cannot be regarded as a recommendation thereof Neither these states nor any of their agencies have passed upon the merits of the 2012A Bonds or the accuracy or completeness of this Official Statement. Any representation to the contrary may be a criminal offense. i

4 CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT Certain statements included or incorporated by reference in this Official Statement constitute "forward-looking statements." Such statements are generally identifiable by the terminology used such as "forecast," "plan," "expect," "estimate," "budget" or similar words. Such forward-looking statements include, among others, "INVESTMENT CONSIDERATIONS" in the forepart to this Official Statement and "Management Discussion on Recent Financial Performance" and "Pro Forma Debt Service Coverage" in APPENDIX A to this Official Statement. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. TAMPA GENERAL DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN CHANGES TO ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED, OCCUR. All of the statements in this Official Statement with respect to the business and historical operating results of Tampa General are based on information furnished by Tampa General. Any projections or other forecasts contained herein have been prepared by Tampa General and are based on its subjective estimates and assumptions about circumstances and events that have not yet taken place and are subject to material variation. Accordingly, there can be no assurance that any projected or forecasted results will be attained. While the information set forth herein has been obtained from sources believed to be reliable, the Underwriters neither offer an opinion as to nor assume any responsibility for the adequacy, accuracy or completeness of any information contained herein or for the omission of any information relating thereto. ii

5 TABLE OF CONTENTS INTRODUCTORY STATEMENT... 1 THE ISSUER... 3 Disclosure Required by Section (1), Florida Statutes... 4 THE OBLIGATED GROUP... 4 PURPOSE OF THE 2012A BONDS... 5 The Refunding Plan... 5 The 2012 Project... 6 DESCRIPTION OF THE 2012A BONDS... 6 General... 6 Book-Entry-Only System... 6 Redemption... 9 SECURITY AND SOURCE OF PAYMENT FOR THE 2012A BONDS General The Lease The Agreement The Trust Agreement Security Interest in Pledged Assets Revenue Fund Obligation No The Master Indenture Leasehold Mortgage A Bonds Not Secured by Reserve Fund Insurance Related Amendments to the Master Indenture ESTIMATED SOURCES AND USES OF FUNDS ANNUAL DEBT SERVICE REQUIREMENTS ON THE 2012A BONDS INVESTMENT CONSIDERATIONS General Limited Obligations Adequacy of Revenues Impact of Disruptions in the Credit Markets and General Economic Factors Federal Health Care Reform Federal Budget Cuts Nonprofit Health Care Environment Charity Care Payment for Health Care Services Medicare State Legislation Commercial Insurance and Other Third-Party Plans Managed Care and Integrated Delivery Systems Page iii

6 Regulation of Health Care Industry Certain Matters Relating to Enforceability of the Master Indenture Matters Relating to Security for the 2012A Bonds UNDERWRITING RATINGS TAX MATTERS General Risk of Future Legislative Changes and/or Court Decisions Original Issue Discount and Original Issue Premium FINANCIAL ADVISOR FINANCIAL STATEMENTS LEGAL MATTERS CONTINUING DISCLOSURE LITIGATION MISCELLANEOUS APPENDIX A -- General Information Regarding Tampa General Hospital, Including Certain Financial Information APPENDIX B -- Audited Consolidated Financial Statements of Florida Health Sciences Center, Inc. for the Years Ended September 30, 2012 and 2011 APPENDIX C -- Summaries of the Principal Documents APPENDIX D -- Form of Bond Counsel Opinion APPENDIX E -- Form of Continuing Disclosure Agreement iv

7 OFFICIAL STATEMENT $166,490,000 HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (FLORIDA) HOSPITAL REVENUE REFUNDING BONDS (TAMPA GENERAL HOSPITAL PROJECT) SERIES 2012A INTRODUCTORY STATEMENT This Official Statement, including the cover page, Maturity Schedule and the Appendices, is furnished in connection with the issuance by the Hillsborough County Industrial Development Authority (the "Issuer"), a public body corporate politic and a public instrumentality created pursuant to the laws of the State of Florida, of $166,490,000 of its Hospital Revenue Refunding Bonds (Tampa General Hospital Project), Series 2012A (the "2012A Bonds"). Definitions of certain words and terms used but not otherwise defined herein shall have the meanings set forth in the Master Trust Indenture, the Trust Agreement, the Agreement and the Leasehold Mortgage, all hereinafter mentioned. See APPENDIX C "Summaries of the Principal Documents" attached hereto. The 2012A Bonds will be initially issued as fully registered bonds, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York. The Depository Trust Company will act as the securities depository for the 2012A Bonds. The 2012A Bonds will be issued in denominations of $5,000 or integral multiples thereof. Principal and interest on the 2012A Bonds will be payable by the Paying Agent to the Securities Depository which will remit such payments in accordance with its normal procedures, as described herein. See "DESCRIPTION OF THE 2012A BONDS - Book- Entry-Only System" herein. Authorization. The 2012A Bonds are being issued pursuant to Parts II and III of Chapter 159, Florida Statutes, as supplemented and amended, and other applicable provisions of law (collectively, the "Act"), Resolutions adopted by the Issuer on October 30, 2012 and November 29, 2012 (collectively, the "Resolution") and a Trust Agreement, dated as of January 1, 2013 (as the same may be amended or supplemented from time to time, the "Trust Agreement") between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (together with any successor bond trustee under the Trust Agreement, the "Bond Trustee"). Tampa General Hospital. The 2012A Bonds are being issued for the benefit of Florida Health Sciences Center, Inc. ("Tampa General" or the "Hospital"), a Florida not-for-profit corporation that operates the health care facilities known as Tampa General Hospital. The Hospital is exempt from federal income taxation under Section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code") as an organization described in Section 501(c)(3) of the Code and not a private foundation as defined in Section 509(a) of the Code (collectively, a "Tax-Exempt Organization"). Purpose of the 2012A Bonds. Proceeds of the 2012A Bonds will be loaned to the Hospital to (i) effect an advance refunding of $12,245,000 of the outstanding Hillsborough County Industrial Development Authority Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Series 2003A (the "Refunded 2003A Bonds") and all of the Hillsborough County Industrial Development Authority Hospital Revenue Bonds (Tampa General Hospital Project) Series 2003B, currently outstanding in the principal amount of $115,650,000 (the "Refunded 2003B Bonds" and collectively with the Refunded 2003A Bonds, the "Refunded Bonds"), (ii) finance the cost of the 2012 Project as described herein, and (iii) pay certain costs associated with the issuance of the 2012A Bonds. See "THE 2012

8 PROJECT," "PURPOSE OF THE 2012A BONDS" and "ESTIMATED SOURCES AND USES OF FUNDS." Security for the 2012A Bonds. Pursuant to the Financing Agreement, dated as of January 1, 2013 (as the same may be amended or supplemented from time to time, the "Agreement"), between the Issuer and Tampa General, Tampa General agrees to pay when due and payable by the Issuer, the principal of, premium, if any, and interest on the 2012A Bonds. Tampa General's obligations pursuant to the Agreement will be secured by Obligation No. 3 ("Obligation No. 3") issued pursuant to a Master Trust Indenture, dated May 1, 2003 (the "Master Indenture"), between Tampa General and The Bank of New York Trust Company of Florida, N.A. now known as The Bank of New York Mellon Company, N.A., as Master Trustee (the "Master Trustee") as supplemented and amended from time to time and particularly as supplemented by the Supplemental Indenture for Obligation No. 3 dated as of January 1, 2013 ("Supplement No. 3"), between the Master Trustee and Tampa General. The 2012A Bonds will also be secured by the moneys and investments from time to time on deposit to the credit of the funds and accounts created under the Trust Agreement and the assignment by the Issuer of substantially all of its right, title and interest in and to the Agreement and Obligation No. 3 (except for certain rights described herein) to the Bond Trustee. See "SECURITY AND SOURCE OF PAYMENT FOR THE 2012A BONDS," herein and APPENDIX C "Summaries of the Principal Documents." The 2012A Bonds are limited obligations of the Issuer. The 2012A Bonds will not be deemed to constitute a debt, liability or obligation of the Issuer, Hillsborough County, the State of Florida or any political subdivision thereof. Neither the faith and credit nor the taxing power of Hillsborough County, the State of Florida or any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the 2012A Bonds. None of Hillsborough County, the State of Florida or any political subdivision thereof is directly or indirectly or contingently obligated to levy any tax or to pledge any form of taxation whatever for the 2012A Bonds or to make any appropriation for the payment of the 2012A Bonds. No holder of the 2012A Bonds will have the right to compel any exercise of the taxing power of Hillsborough County, the State of Florida or any political subdivision thereof to pay debt service on the 2012A Bonds. The Issuer has no taxing power. See "DESCRIPTION OF THE 2012A BONDS" and "SECURITY AND SOURCE OF PAYMENT FOR THE 2012A BONDS" herein. Security under the Master Indenture. On the date of the delivery of the 2012A Bonds, Tampa General will be the sole member of the Obligated Group created under the Master Indenture. Tampa General is required to remain a Member of the Obligated Group so long as any Obligation remains outstanding. All Obligations issued under the Master Indenture are joint and several obligations of all members of the Obligated Group. There are presently no Restricted Affiliates of Tampa General. See APPENDIX C "Summaries of the Principal Documents Summary of the Master Trust Indenture." Obligations issued under the Master Indenture are secured by a security interest in the Pledged Assets of the Obligated Group (the "Security Interest"). In addition, Obligation No. 3 will be secured by that certain Leasehold Mortgage and Security Agreement, dated May 1, 2003, as amended by First Amendment to Leasehold Mortgage and Security Agreement, dated as of September 1, 2006 (together, the "Leasehold Mortgage"). Pursuant to the Master Indenture, Additional Obligations will not be secured by the Leasehold Mortgage or the reserve fund created under the Master Indenture (the "Reserve Fund") unless specifically provided by a Supplemental Indenture pursuant to which such Obligation is issued. Obligation No. 3 will not be secured by the Reserve Fund. See "SECURITY AND SOURCE OF PAYMENT FOR THE 2012A BONDS Security Interest in Pledged Assets Leasehold Mortgage" herein. 2

9 For a description of certain risks associated with financings utilizing master indentures, see "INVESTMENT CONSIDERATIONS Certain Matters Relating to Enforceability of the Master Indenture" herein. Redemption. The 2012A Bonds are subject to extraordinary, optional and mandatory redemption prior to maturity as described herein. See "DESCRIPTION OF THE 2012A BONDS - Redemption" herein. Bondholders' Risks. For a description of certain risks associated with ownership of the 2012A Bonds, see "INVESTMENT CONSIDERATIONS" herein. Principal Documents. This Official Statement contains descriptions of, among other things, the 2012A Bonds, the Agreement, the Trust Agreement, the Master Indenture, Obligation No. 3, the Continuing Disclosure Agreement and the Leasehold Mortgage. These descriptions do not purport to be comprehensive or definitive. Summaries of the Master Indenture, the Trust Agreement, the Agreement and the Leasehold Mortgage are contained in APPENDIX C to this Official Statement. Definitions of certain words and terms used in this Official Statement are also set forth in APPENDIX C. All references herein to such documents are qualified in their entirety by reference to such document, as amended to date, and references herein to the 2012A Bonds are qualified in their entirety by reference to the forms thereof included in the Trust Agreement. Copies of the Master Indenture, the Trust Agreement, the Agreement, the Leasehold Mortgage and other documents herein described will be available for inspection at the principal corporate trust office of the Bond Trustee after delivery of the 2012A Bonds. See APPENDIX C "Summaries of the Principal Documents." THE ISSUER The Issuer is a public body corporate and politic and a public instrumentality created pursuant to the laws of the State of Florida. The Issuer was created under the constitution of the State of Florida and Part III of Chapter 159, Florida Statutes, as amended (collectively, the "Act"), a Resolution of the Board of County Commissioners of Hillsborough County, Florida adopted October 29, 1971, as amended and supplemented, and other provisions of law. Under the Act, the Issuer is authorized to issue its revenue bonds or other debt obligations for the purpose of financing and refinancing projects for public purposes and for the purpose of fostering the economic development of Hillsborough County, Florida. THE ISSUER IS ACTING AS A CONDUIT ISSUER WITH RESPECT TO THE 2012A BONDS, AND THE 2012A BONDS, TOGETHER WITH INTEREST AND PREMIUM, IF ANY, THEREON, CONSTITUTE LIMITED NONRECOURSE OBLIGATIONS OF THE ISSUER, DO NOT CONSTITUTE OR GIVE RISE TO PECUNIARY LIABILITY OF THE ISSUER, HILLSBOROUGH COUNTY, FLORIDA OR THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF OR A CHARGE AGAINST THE GENERAL CREDIT OR THE TAXING POWER OF ANY OF THEM. THE ISSUER HAS NO TAXING POWER. THE 2012A BONDS AND THE INTEREST AND PREMIUM, IF ANY, THEREON SHALL BE PAYABLE SOLELY FROM THE TRUST ESTATE UNDER THE TRUST AGREEMENT. The Issuer has not participated in the preparation of this Official Statement, other than this section and the section entitled "LITIGATION" (the "Issuer Information"), and makes no representation with respect to the accuracy or completeness of any of the material contained in this Official Statement apart from the Issuer Information. The Issuer is not responsible for providing any purchaser of the 2012A Bonds with any information relating to the 2012A Bonds or the Agreement or any of the parties or transactions referred to in this Official Statement or for the accuracy or completeness of any such information obtained by any purchaser. 3

10 Disclosure Required by Section (1), Florida Statutes Rule 3E , Rules of Government Securities, promulgated by the Florida Department of Banking and Finance, Division of Securities, under Section (1), Florida Statutes ("Rule 3E "), requires the Issuer to disclose each and every default as to the payment of principal and interest with respect to obligations issued or guaranteed by the Issuer after December 31, Rule 3E further provides, however, that if the Issuer, in good faith, believes that such disclosures would not be considered material by a reasonable investor, such disclosures may be omitted. The 2012A Bonds do not constitute a general debt, liability or obligation of the Issuer, but are instead secured by the Trust Estate. The 2012A Bonds are not being offered on the basis of the financial strength of the Issuer. Accordingly, the Issuer, in good faith, and based upon discussions with the Underwriters, believes that disclosure of any such default on bonds with respect to which the Issuer was merely a conduit issuer and which are secured solely by payments under a loan agreement, lease agreement or installment sale agreement, would not be considered material by a reasonable investor in the 2012A Bonds. THE OBLIGATED GROUP On the date of delivery of the 2012 Bonds (the "Closing Date") Tampa General will be the sole Member of the Obligated Group. See APPENDIX C "Summaries of the Principal Documents Summary of the Master Trust Indenture" for provisions regarding parties becoming part of the Obligated Group and withdrawing from the Obligated Group. Tampa General is required to remain a Member of the Obligated Group so long as any Obligation remains outstanding. For over 80 years, Tampa General and its predecessors have provided health care services to residents of Hillsborough County and its surrounding counties. Florida Health Sciences Center, Inc. took over operation at the health care facilities known as Tampa General Hospital in 1997 pursuant to a Lease Agreement with the Hillsborough County Hospital Authority, a governmental entity ("HCHA"). Tampa General is a statutory teaching hospital, accredited by the Joint Commission ("JC") and the Commission on the Accreditation of Rehabilitation Facilities ("CARF"), certified by Medicare and Medicaid, and licensed by the State of Florida. Tampa General has approximately 1.5 million square feet and is licensed for 1,018 beds (959 acute care and 59 rehabilitation care beds). Within its licensed bed complement, Tampa General provides many services, some of which are found nowhere else in West Central Florida. Tampa General serves as the region's only Level I Trauma Center and one of only seven in the State; the only burn center on the West Coast of Florida and one of only three in the State verified by the American Burn Association; one of nine adult head and spinal injury centers in the State; the only State-certified regional perinatal intensive care center in Hillsborough County and one of only 12 in the State; and a major center for solid organ transplants. TGH is currently ranked as the fourth busiest transplant center in the United States for adult heart, kidney, liver, lung and pancreas transplants. The Hospital's Davis Islands facilities (the "Facilities") also serve as a regional referral center for digestive disorders, infectious disease, cardiac services, orthopedics, pediatrics, neonatology, high risk and normal obstetrics, bloodless medicine and surgery and the neurosciences. In addition, over the past several years, the Hospital has expanded it outpatient footprint. Since 2010, the Hospital has increased the number of employed physicians from eight primary care physicians in two off-site locations to 25 specialists and 14 primary care physicians in five locations. Since 1970, the University of South Florida College of Medicine has utilized the Facilities as its primary teaching hospital. There are currently more than 300 full-time equivalent residents assigned to 4

11 Tampa General in the American College of Graduate Medical Education accredited residency programs. In addition to training physicians, Tampa General serves as a clinical site for a number of different university and community college training programs. The University of South Florida College of Nursing and the University of Tampa, Hillsborough Community College and St. Petersburg College all utilize Tampa General as a clinical site for their nursing and other ancillary personnel-training programs. See APPENDIX A "General Information Regarding Tampa General Hospital, Including Certain Financial Information." PURPOSE OF THE 2012A BONDS Proceeds of the 2012A Bonds will be used to refund the Refunded Bonds as described below and to finance the 2012 Project described below. The Refunding Plan Upon delivery of the 2012A Bonds, The Bank of New York Mellon Trust Company, N.A. (the "Escrow Agent"), will enter into an Escrow Deposit Agreement (the "Escrow Agreement") with the Issuer and Tampa General to provide for the advance refunding of the Refunded Bonds. The Escrow Agreement will create an irrevocable escrow deposit trust fund (the "Escrow Fund"). The Refunded Bonds maturing after October 1, 2013 will be redeemed on October 1, 2013 (the "Redemption Date"). The Refunded Bonds maturing on October 1, 2013 will be paid at maturity. Immediately upon the issuance and delivery of the 2012A Bonds (the "Closing"), Tampa General will cause to be deposited certain of the proceeds from the sale of the 2012A Bonds into the Escrow Fund, together with other legally available moneys of Tampa General (the "Escrow Deposit"). The amount of the Escrow Deposit will be invested in direct United States Treasury obligations (the "Refunding Securities") maturing in amounts and bearing interest at rates sufficient, together with any cash held uninvested in the Escrow Fund, to pay the principal amount of the Refunded Bonds and interest accrued to October 1, 2013 (the "Refunding Requirement"). The maturing principal amount of and interest on the Refunding Securities and any cash held in the Escrow Fund are pledged solely for the benefit of the holders of the Refunded Bonds, and will not be available for payment of debt service on the 2012A Bonds. Upon the delivery of the 2012A Bonds, Causey Demgen & Moore P.C. will verify the accuracy of the arithmetical computations of the adequacy of the Refunding Securities to be held in the Escrow Fund to satisfy the Refunding Requirement. Such verification will be based upon schedules provided by the Underwriters. Upon the execution and delivery of the Escrow Agreement, the deposit of the Escrow Deposit in the Escrow Fund and its investment in the Refunding Securities, in reliance on the report of Causey Demgen & Moore P.C. mentioned above and described under "VERIFICATION OF ARITHMETICAL COMPUTATIONS" herein, Squire Sanders (US) LLP, Bond Counsel will render its opinion that the Refunded Bonds are no longer outstanding and no longer secured by the pledge of revenues under the documents pursuant to which they were issued. The Hospital currently anticipates that it will issue additional Obligations in mid to late 2013 to refund $49,325,000, the remaining amount of the Series 2003A Bonds not being advance refunded by the 2012A Bonds. 5

12 The 2012 Project Proceeds of the 2012A Bonds may be used to finance all or a portion of the cost of the upgrade and improvement of the existing Hospital facilities located on the main campus of the Hospital including, without limitation, the update and expansion of the cardiovascular operating room suite and adjacent areas, incorporation of an interoperative MRI unit, renovation of pediatric units, conversion and/or buildout of unused space for patient care, renovation of and equipment for cath labs, and other renovations and capital improvements to the existing hospital facilities (collectively, the "2012 Main Campus Projects"). The 2012 Main Campus Projects are located within the existing Hospital campus located at One, Three, Four, Five and Six Tampa General Circle, Davis Islands, Tampa, Florida Proceeds of the 2012A Bonds in the amount of approximately $3.9 million may also be used to refinance existing debt related to the acquisition, renovation and improvement of corporate and administrative offices for the Hospital, located in a two-story, 48,652 net square foot building at 606 West Kennedy Blvd., Tampa, Florida General DESCRIPTION OF THE 2012A BONDS The 2012A Bonds will be dated as of the date of delivery, will be issued in fully registered form, without coupons, in the denominations of $5,000 each or integral multiples thereof, and will bear interest, computed on the basis of a 360-day year, consisting of twelve 30-day months, at the rates and mature on the dates set forth on the inside cover page of this Official Statement. Interest on the 2012A Bonds will be payable semi-annually on April 1 and October 1 of each year, commencing April 1, Principal of, redemption premium, if any, and interest on the 2012A Bonds will be payable in the manner described under "Book-Entry-Only System" herein. The 2012A Bonds will be subject to redemption as described under "Redemption" herein. Book-Entry-Only System The information in this caption concerning DTC and DTC's book entry system has been obtained from DTC and neither Tampa General, the Issuer nor the Underwriters make any representation or warranty or take any responsibility for the accuracy or completeness of such information. DTC will act as securities depository for the 2012A Bonds. The 2012A Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each maturity of the 2012A Bonds and deposited with DTC. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions, in deposited securities, through electronic computerized book entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly owned 6

13 subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AAA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at Purchases of the 2012A Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for such 2012A Bonds on DTC's records. The ownership interest of each actual purchaser of each 2012A Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2012A Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the 2012A Bonds, except in the event that use of the book-entry system for the 2012A Bonds is discontinued. To facilitate subsequent transfers, all of the 2012A Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the 2012A Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2012A Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such 2012A Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the 2012A Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2012A Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of the 2012A Bonds may wish to ascertain that the nominee holding the 2012A Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of a maturity of the 2012A Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such 2012A Bonds to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the 2012A Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the 2012A Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 7

14 Redemption proceeds, distributions, and interest payments on the Series 2012A Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Issuer or the Bond Trustee on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Bond Trustee, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or the Bond Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the 2012A Bonds at any time by giving reasonable notice to the Issuer or the Bond Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, the 2012A Bonds are required to be printed and delivered. The Issuer may, pursuant to the procedures of DTC, decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, the 2012A Bonds will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE 2012A BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE HOLDER OF THE 2012A BONDS OR REGISTERED OWNERS OF THE 2012A BONDS SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE 2012A BONDS. The Issuer can make no assurances that DTC will distribute payments of principal of, redemption premium, if any, or interest on the 2012A Bonds to the Direct Participants, or that Direct and Indirect Participants will distribute payments of principal of, redemption price, if any, or interest on the 2012A Bonds or redemption notices to the Beneficial Owners of such 2012A Bonds or that they will do so on a timely basis, or that DTC or any of its Participants will act in a manner described in this Official Statement. The Issuer is not responsible or liable for the failure of DTC to make any payment to any Direct Participant or failure of any Direct or Indirect Participant to give any notice or make any payment to a Beneficial Owner in respect to the 2012A Bonds or any error or delay relating thereto. The rights of holders of beneficial interests in the 2012A Bonds and the manner of transferring or pledging those interests is subject to applicable state law. Holders of beneficial interests in the 2012A Bonds may want to discuss the manner of transferring or pledging their interest in the 2012A Bonds with their legal advisors. The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, the 2012A Bond certificates will be printed and delivered. Thereafter, the 2012A Bond certificates may be transferred and exchanged as described in the Trust Agreement. See APPENDIX C "Summaries of the Principal Documents Summary of the Trust Agreement." 8

15 For every transfer of ownership interests in the 2012A Bonds, the Beneficial Owner may be charged a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto. Redemption Mandatory Redemption. The Series 2012A Bonds maturing on October 1 in the years 2028, 2028 (3.50% Interest Rate), 2031, 2034 and 2043 are subject to mandatory redemption prior to maturity, in part by lot, from Mandatory Amortization Requirements (as defined in the Trust Agreement) deposited in the Redemption Account at a redemption price of par plus accrued interest to the redemption date, but without premium, on the redemption dates and in the principal amounts set forth below: *Maturity Date. *Maturity Date. Series 2012A Bonds Maturing October 1, 2028 Year Principal Amount 2025 $4,645, ,070, ,320, * 5,585,000 Series 2012A Bonds Maturing October 1, 2028 (3.50% Interest Rate) Year Principal Amount 2025 $3,335, ,260, ,375, * 3,495,000 *Maturity Date. *Maturity Date. Series 2012A Bonds Maturing October 1, 2031 Year Principal Amount 2029 $9,485, ,960, * 10,455,000 Series 2012A Bonds Maturing October 1, 2034 Year Principal Amount 2032 $10,975, ,530, * 12,105,000 9

16 *Maturity Date. Series 2012A Bonds Maturing October 1, 2043 Year Principal Amount 2042 $22,900, * 23,815,000 If in any fiscal year, Term Bonds are purchased, redeemed or delivered pursuant to the Trust Agreement in excess of the Mandatory Amortization Requirement due in such fiscal year, the excess principal amount of such Term Bonds will be applied to the reduction of the remaining Mandatory Amortization Requirements due, in such years and in such amounts as shall be designated to the Bond Trustee in writing by Tampa General or, in the absence of such designation, pro rata among all remaining Mandatory Amortization Requirements. Extraordinary Redemption. The 2012A Bonds are subject to redemption prior to maturity by the Issuer in whole or in part by lot on any date from the prepayment of Loan Payments payable by Tampa General under the Agreement, at par, plus accrued interest thereon to the redemption date, but without premium, from proceeds received from the damage, destruction or condemnation of Operating Assets, to the extent such funds are not used to rebuild or restore the Operating Assets pursuant to the Agreement. See APPENDIX C "Summaries of the Principal Documents" attached hereto. Optional Redemption. The 2012A Bonds maturing after October 1, 2023 are subject to redemption at the option of the Issuer prior to maturity, on or after October 1, 2023 in whole or in part at any time, in such manner as the Issuer (pursuant to the direction of Tampa General) shall determine, and by lot within a maturity if less than all of the maturity is to be redeemed, at the redemption price equal to the principal amount of the 2012A Bonds to be redeemed, plus accrued interest thereon to the Redemption Date. Purchase in Lieu of Redemption. Upon the written request of Tampa General and the provision of funds therefor, the Issuer is required to purchase 2012A Bonds that would otherwise be subject to optional redemption, as set forth above. The purchase price of any 2012A Bonds so purchased is required to be no less than the redemption prices at the times set forth above under "Optional Redemption." If the Issuer gives notice (in the manner described below under "Redemption Notice") and moneys sufficient to pay the purchase price of the 2012A Bonds to be so purchased is held by the 2012A Bond Trustee, the 2012A Bonds so purchased will be deemed to have been delivered for purchase. Any 2012A Bonds so purchased by the Issuer are required to be resold in such manner as Tampa General directs in writing or, in the absence of such instructions, registered in Tampa General's name. Notice of Redemption. Notice of redemption of the 2012A Bonds to be redeemed will be mailed by the Bond Trustee at least 30 days, but not more than 60 days, prior to the redemption date, by mail, to the registered owner of each 2012A Bond which is called for redemption at the registered owner's address, if any, appearing on the registry books on the fifth day preceding such mailing, but failure to mail any such notice or any defect in such notice shall not be a condition precedent to or affect the validity of any proceedings for the redemption of any other 2012A Bond or portion thereof. Each notice of redemption shall specify (i) the 10

17 redemption date, (ii) the redemption price, (iii) in the case of a partial redemption, the number or other identification of the aggregate principal amount of the 2012A Bonds (or portions thereof) to be redeemed and the portion of the principal amount thereof to be redeemed, and (iv) in the case of a partial redemption, that on or after the redemption date, upon surrender of such 2012A Bond, a new 2012A Bond in a principal amount equal to the unredeemed portion of such 2012A Bond will be issued. The Bond Trustee may mail notice of the mandatory redemption described above, before funds for the redemption of Term Bonds have been deposited with the Bond Trustee. In addition to the foregoing notice, further notice shall be given as set out below and further described in the Trust Agreement, but no defect in any such notice nor any failure to give all or any portion of any notice shall in any manner defeat the effectiveness of a call for redemption with respect to a registered owner as to which notice is given as prescribed above. Each further notice of redemption given shall be sent at least 35 days before the redemption date by registered or certified mail, overnight delivery service or telecopy to all registered securities depositories then in the business of holding substantial amounts of obligations of types such as the 2012A Bonds and to one or more national information services that disseminate notices of redemption of obligations such as the 2012A Bonds. If notice of redemption shall have been given as provided in the Trust Agreement, 2012A Bonds called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption of such 2012A Bonds on such date. If, on the date fixed for redemption, moneys for redemption of all of the 2012A Bonds or portions thereof to be redeemed, plus accrued and unpaid interest thereon to the date fixed for redemption, shall be available for such payment, then from and after the date fixed for redemption, interest on such 2012A Bonds or portions thereof shall cease to accrue such 2012A Bonds or portions thereof shall cease to be entitled to any lien, benefit or security under the Trust Agreement, and the registered owners of such 2012A Bonds or portions thereof shall have no rights in respect thereof except to receive payment of the redemption price thereof and, to the extent provided in the Trust Agreement, to receive 2012A Bonds for any unredeemed portions of the 2012A Bonds. Revocation of Redemption. If, on any day prior to the fifth business day preceding any date fixed for redemption of 2012A Bonds, Tampa General notifies the Bond Trustee in writing that it has elected to revoke its election to redeem such 2012A Bonds because Tampa General has determined that the source of money for such redemption specified in the notice given by Tampa General is not available or for any other reason, the 2012A Bonds shall not be redeemed on such date and any notice of redemption mailed to the Holders shall be null and void. In such event, within five (5) business days after the date on which the Bond Trustee receives notice of such revocation, the Bond Registrar, at the direction of the Bond Trustee, shall cause a notice of such revocation in the name of the Bond Trustee to be mailed to all Holders owning such 2012A Bonds. Selection of 2012A Bonds to be Redeemed or Purchased. If less than all of the 2012A Bonds are to be redeemed or purchased, the 2012A Bonds to be redeemed or purchased will be selected in such amounts and having such maturities (except for mandatory redemption) designated by Tampa General to the Bond Trustee. See APPENDIX C "Summaries of the Principal Documents Summary of the Trust Agreement." 11

18 SECURITY AND SOURCE OF PAYMENT FOR THE 2012A BONDS General Pursuant to the Trust Agreement, the payment of the principal of, redemption premium, if any, and interest on the 2012A Bonds are special obligations of the Issuer payable solely from payments made by Tampa General under the Agreement. Pursuant to the Agreement, Tampa General has agreed to pay to the Bond Trustee, when due and payable by the Issuer under the Trust Agreement, amounts equal to the principal and redemption price of and interest on the 2012A Bonds and all other amounts payable by the Issuer under the Trust Agreement. See APPENDIX C "Summaries of the Principal Documents Summary of the Trust Agreement." Tampa General's obligation to make the payments required by the Agreement will be secured by Obligation No. 3 pursuant to the Master Indenture and Supplement No. 3. Obligation No. 3 and the 2012A Bonds will be secured by a pledge of and lien on the Pledged Assets and will be additionally secured by the Leasehold Mortgage. Pursuant to Obligation No. 3, Tampa General has agreed to pay to the Bond Trustee when due and payable by the Issuer under the Trust Agreement amounts equal to the principal and redemption price of and interest on the 2012A Bonds. Payments made by Tampa General under the Agreement are credited against amounts due under Obligation No. 3. The 2012A Bonds are also secured by the assignment by the Issuer to the Bond Trustee of all its right, title and interest (except for certain rights to indemnification, payments of fees and expenses and receipt of notices, collectively, the "Unassigned Rights") in and to the Agreement and Obligation No. 3 and by the moneys and investments, if any, from time to time on deposit to the credit of the funds and accounts created under the Trust Agreement (other than the Rebate Account). Under the Supplemental Indenture, Tampa General has determined to have Obligation No. 3 relating to the 2012A Bonds secured by the Leasehold Mortgage, but not the Reserve Fund. Tampa General is entitled, under the Master Indenture, to elect whether future Obligations issued thereunder will be secured by the Reserve Fund or the Leasehold Mortgage or both or neither. However, all Obligations issued under the Master Indenture, including Obligation No. 3, are secured by the security interest in the Pledged Assets. The obligations of the members of the Obligated Group to pay all amounts due under Obligation No. 3 and each other Obligation that may be issued by the members of the Obligated Group from time to time under the Master Indenture will be secured on a parity with one another with respect to the Pledged Assets as provided in the Master Indenture. Upon the terms and conditions specified in the Master Indenture, the Master Indenture permits the members of the Obligated Group to issue additional Obligations to parties other than the Bond Trustee, which additional Obligations will not constitute part of the pledged security for the 2012A Bonds, but will be equally and ratably secured under the Master Indenture with Obligation No. 1, Obligation No. 2, Obligation No. 3 and with other Obligations issued thereunder, except as described therein. All Obligations issued under the Master Indenture are joint and several obligations of all members of the Obligated Group, of which Tampa General is currently the only member. The 2012A Bonds are limited obligations of the Issuer. The 2012A Bonds will not be deemed to constitute a debt, liability or obligation of the Issuer, Hillsborough County, the State of Florida or any political subdivision thereof. Neither the faith and credit nor the taxing power of Hillsborough County, the State of Florida or any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the 2012A Bonds. None of Hillsborough County, the State of Florida or any political subdivision thereof is directly or 12

19 indirectly or contingently obligated to levy any tax or to pledge any form of taxation whatever for the 2012A Bonds or to make any appropriation for the payment of the 2012A Bonds. No holder of the 2012A Bonds will have the right to compel any exercise of the taxing power of Hillsborough County, the State of Florida or any political subdivision thereof to pay debt service on the 2012A Bonds. The Issuer has no taxing power. The Lease Substantially all of the land and improvements constituting the Facilities of Tampa General are owned by HCHA and leased to the Hospital pursuant to a Lease Agreement dated as of June 20, 1997, (as amended, the "Lease"), which Lease was effective as of October 1, Under the terms of the Lease, the "Leased Facilities" include the Davis Islands Campus consisting of the land and buildings commonly known as Tampa General Hospital and Harbourside Medical Tower. HCHA also transferred to Tampa General pursuant to the Lease all of Lessor's rights under its Contracts (as defined in the Lease), its licenses, permits and certifications, and all of Lessor's right and title to fixed, major moveable and minor equipment, machinery, furniture, furnishings and motor vehicles, among other things, and the Clinics (as defined in the Lease) (collectively, the "Transferred Assets"). The Lease has an initial term of forty-nine (49) years and may be renewed at the option of the Hospital, assuming it is in material compliance with the Lease, for an additional forty-nine (49) years (the "Lease Term"). Rent under the Lease is Ten Dollars ($10.00) per year and has been prepaid for the initial forty-nine (49) year term which expires on September 30, Tampa General is also required to pay an annual fee of $75,000 to fund HCHA operations. Pursuant to the terms of the Lease, Tampa General has an obligation to provide for the care and treatment of indigent patients. Specifically, Tampa General may not deny admission to the Leased Facilities to any person in need of immediate or emergency medical treatment because of an inability to pay for services rendered and is required to adhere to HCHA's written policies in effect as of January 1, 1997 with respect to the care and treatment of indigent patients. Tampa General has also covenanted in the Lease to provide emergency services and care at the Leased Facilities to "all persons having an emergency medical condition, without regard to race, ethnicity, religion, national origin, citizenship, gender, age, preexisting medical condition, physical or mental handicap, insurance status, economic status or ability to pay." Under the terms of the Lease, defaults include a breach of indigent care obligations, including reporting requirements, which remain uncured after a 30 day response period and a 30 day cure period, a failure to pay rent or any other financial obligation due under the Lease within 30 business days following written demand by HCHA, a failure to observe or perform in any material respect any covenant set forth in the Lease for a period of 30 days after written notice (unless failure cannot be reasonably corrected within such time frame, in which event no default will be deemed to exist if corrective action is taken immediately and diligently pursued by Tampa General until the default is corrected), and the dissolution, liquidation or the filing of a voluntary bankruptcy petition or other specified actions taken to benefit creditors of Tampa General. The failure of Tampa General to cure the above-referenced defaults within the applicable cure periods would cause a reversion of the Leased Facilities and the Transferred Assets as they then exist, to HCHA. A termination of the Lease arising from an uncured event of default would obligate HCHA to assume certain debt of the Hospital, which would include the 2012A Bonds. Tampa General is prohibited from selling all or substantially all of its assets, from assigning or subletting or otherwise transferring the Lease to a for-profit entity or a non-affiliated public charity without the express prior written consent of HCHA, and any permitted assignee of the Lease must agree to the following: operating a general acute-care hospital at the Leased Facilities, which shall include a 13

20 Level I trauma center, a Level II and Level III neonatal intensive care unit, a burn unit, open heart surgery and organ transplant service; continuing Tampa General's participation in the Medicare and Medicaid programs; maintaining an emergency department; and meeting the indigent care and other obligations set forth in the Lease. These restrictions on assignability and use may substantially impair the ability of the Master Trustee, the Bond Trustee or any judgment holder, including a judgment for non-payment of the 2012A Bonds, to enforce such judgment by execution on the assets of Tampa General. Certain other provisions of the Lease are described in APPENDIX A "General Information Regarding Tampa General Hospital, Including Certain Financial Information Lease Agreement." The Agreement The Agreement provides that the Issuer will loan the proceeds of the 2012A Bonds to Tampa General and, in consideration therefor, Tampa General will make payments to the Bond Trustee in such amounts and at such times as are required to provide for timely payment of principal of, premium, if any, and interest on the 2012A Bonds and all other required payments which may be due under the Agreement. Pursuant to the Agreement, Tampa General is required to make payments equal to the principal of and interest on the 2012A Bonds on the business day immediately preceding each interest and principal payment date. The obligation of Tampa General to make Loan Repayments is its direct, general and unconditional obligation, and Tampa General will not be entitled to any abatement or diminution thereof. The loan made pursuant to the Agreement relating to the 2012A Bonds will be evidenced by Obligation No. 3 issued pursuant to the Master Indenture and Supplement No. 3 described below. As a condition to the approval by the Issuer to issue the 2012A Bonds and enter into the Agreement, the Hospital and the Issuer may enter into a separate agreement providing for one or more additional conditions that must be met by the Hospital in connection with the issuance of the 2012A Bonds. Any such agreement will be separate from the Agreement (and the 2012A Bonds) and may be amended or terminated without notice to or the consent of any holder of the 2012A Bonds. No such agreement, if entered into, will have any effect on any right of the holders of 2012A Bonds under the Trust Agreement, the Agreement, the Master Indenture or otherwise. The Trust Agreement Under the Trust Agreement, the 2012A Bonds are limited obligations of the Issuer payable solely from and secured by the Trust Estate, which includes all right, title and interest of the Issuer in and to the Agreement (other than the Unassigned Rights), Obligation No. 3 and all moneys and securities, if any, held by the Bond Trustee in all of the funds or accounts established under the Trust Agreement (other than the Rebate Fund established thereunder). Security Interest in Pledged Assets Tampa General has granted to the Master Trustee a security interest in the "Pledged Assets," which security interest will secure all Obligations issued and outstanding under the Master Indenture. "Pledged Assets" means the Accounts, Deposit Accounts and General Intangibles of the Obligated Group, which as of the date hereof consists only of Tampa General, excluding any assets, the use of which is restricted by the donors thereof to a purpose or purposes inconsistent with the payment of debt service. Revenue Fund As authorized and directed under the Master Indenture, the Master Trustee established a fund entitled the Tampa General Hospital Revenue Fund (the "Revenue Fund"). Upon the occurrence and continuation of any Event of Default under the Master Indenture or any related bond indenture 14

21 (hereinafter, a "Funding Event"), the Obligated Group agrees that (A) each Member of the Obligated Group will begin immediately to deposit with the Master Trustee all cash proceeds of the Pledged Assets as received and (B) it will take all actions required or permitted by law to cause all payors, including Medicare and Medicaid, to make payments due to any Member directly to the Master Trustee for deposit to the credit of the Revenue Fund. Under the Master Indenture, the Master Trustee is directed to deposit all amounts it receives pursuant to this provision to the credit of the Revenue Fund and apply such amounts as provided. The Revenue Fund will be subject to the lien of the Master Indenture in favor of the Master Trustee for the benefit of the holders from time to time of Obligations outstanding under the Master Indenture. In connection with the creation of and deposits to the Revenue Fund, Tampa General agrees that, to the extent necessary to have payors make payments due to Tampa General directly into the Revenue Fund, it will execute such depository or other agreements as shall be necessary. After a Funding Event occurs but until such time as the Master Trustee gives notice of the exercise of remedies under the Master Indenture or the Leasehold Mortgage or both (a "Remedy Notice"), amounts on deposit in the Revenue Fund shall be transferred to pay debt service on Obligations, due and past due and shall otherwise be paid by the Master Trustee to the Obligated Group upon requisition therefor, for operating expenses of the Obligated Group and to pay fees and expenses of the Master Trustee and Bond Trustee. After receipt of a Remedy Notice and prior to any rescission thereof, moneys in the Revenue Fund will be used exclusively to pay debt service on Obligations and fees and expenses of the Master Trustee and Bond Trustee. Upon the cure or waiver of a Funding Event (unless an intervening Funding Event has occurred and remains uncured), the requirement for daily deposits as set forth above will cease, but the Master Trustee will retain any amounts then on deposit to the credit of the Revenue Fund and use such funds for payment of debt service on Obligations, upon receipt of a requisition therefor, for payment to the Obligated Group for its operating expenses and for fees and expenses of the Master Trustee and Bond Trustee. A Funding Event occurs upon the occurrence and continuation of any Event of Default under the Master Indenture or any Related Bond Indenture. Prior to the occurrence of a Funding Event, Tampa General is not required to deposit its revenues with the Master Trustee. Obligation No. 3 Pursuant to the Master Indenture and Supplement No. 3, Tampa General will issue to the Bond Trustee Obligation No. 3 to secure the obligations of Tampa General to make Loan Repayments under the Agreement with respect to the 2012A Bonds. Obligation No. 3 and the 2012A Bonds will be additionally secured by the Leasehold Mortgage but not the Reserve Fund. The Master Indenture Upon issuance of the 2012A Bonds, Tampa General will continue to be the only member of the Obligated Group. Additional Obligations may be issued on a parity with Obligation No. 3 under and in accordance with the terms of the Master Indenture. Simultaneously with the issuance of the 2012A Bonds, Tampa General will issue to the Bond Trustee Obligation No. 3 to secure the obligation of Tampa General to make payments and deposits required under the Agreement and the Trust Agreement with respect to the 2012A Bonds. See APPENDIX C "Summaries of the Principal Documents Summary of the Master Trust Indenture." Payments on the Obligations will be joint and several obligations of the members of the Obligated Group. Notwithstanding uncertainties as to the enforceability of the covenant of each member of the Obligated Group in the Master Indenture to be jointly and severally liable for each Obligation and of the obligation of the members to cause each Restricted Affiliate to make transfers to its members as 15

22 required to enable Tampa General to make payments on the Obligations (as described herein under "INVESTMENT CONSIDERATIONS - Certain Matters Relating to Enforceability of the Master Indenture"), the financial results of the members of the Combined Group will be combined in determining whether various covenants and tests contained in the Master Indenture are met. The Master Indenture imposes certain restrictions on the actions of the members of the Obligated Group and on the Restricted Affiliates for the benefit of all holders of Obligations issued under the Master Indenture. Such terms include, among others, restrictions on Liens on the Property of the members of the Obligated Group, maintenance of certain rates and charges for services provided by the members of the Obligated Group and limitations on the incurrence of indebtedness by the members of the Obligated Group. See APPENDIX C "Summaries of the Principal Documents Summary of the Master Trust Indenture - Particular Covenants of the Obligated Group." In general, only the covenants as to merger and consolidation, entry and withdrawal from the Obligated Group, and preparation of financial statements apply to Restricted Affiliates. The incurrence of indebtedness or the pledge of assets by the Restricted Affiliates is not limited as long as certain tests set forth in the Master Indenture are met. The Master Indenture provides that no member of the Obligated Group shall create or incur or permit to be created or incurred any Lien on any Property of any member of the Obligated Group except Permitted Liens which are broadly defined. See APPENDIX C "Summaries of the Principal Documents Summary of the Master Trust Indenture." The Master Indenture does, however, permit, under certain circumstances, Additional Indebtedness including additional Obligations to be secured by collateral in addition to that generally provided for all Obligations (including Liens on the health care facilities or other Property of any member of the Combined Group, letters or lines of credit or insurance or security interests in rebate, depreciation reserve, debt service reserve, debt service or similar funds), which additional security or Liens need not be extended to secure any other Obligations (including Obligation No. 3). Tampa General has been designated as the Obligated Group Representative for purposes of the Master Indenture. Under the Master Indenture, the Obligations are the joint and several obligations of the Obligated Group which are secured by a pledge of and security interest in the Pledged Assets of the Obligated Group. For a more detailed description of the Master Indenture, including the provisions thereof relating to the Restricted Affiliates, see APPENDIX C "Summaries of the Principal Documents Summary of the Master Trust Indenture" attached hereto. Leasehold Mortgage Under the Supplemental Indenture, Tampa General has determined to have Obligation No. 3 relating to the 2012A Bonds secured by the Leasehold Mortgage. Tampa General is entitled, under the Master Indenture, to elect whether future Obligations issued thereunder will be secured by the Leasehold Mortgage. The Leasehold Mortgage was executed by Tampa General simultaneously with its execution of the Master Indenture. Such Leasehold Mortgage also secures Obligation No. 1 relating to the 2003 Bonds to be outstanding after the refunding of the Refunded Bonds and Obligation No. 2 relating to the Hospital Revenue Bonds (Tampa General Hospital Project), Series 2006 (the "2006 Bonds"). Any holder of the Leasehold Mortgage foreclosing on the Hospital would be subject to the substantial restrictions set forth in the Lease. Furthermore, the right to foreclose under the Leasehold Mortgage includes the right to foreclose on the Leased Facilities only, which does not include all of the Hospital's property or all of the property that may be improved or acquired with proceeds of the 2012A Bonds. See "SECURITY AND SOURCE OF PAYMENT FOR THE 2012A BONDS The Lease" herein. 16

23 In connection with the issuance of the 2003 Bonds, the Hospital obtained a Leasehold Loan Policy in favor of the Master Trustee and a Leasehold Owner's Policy in favor of Tampa General, issued by TICOR Title Insurance Company and insuring, in both cases, up to the amount of $100,000,000. The coverage amount under the Leasehold Owner's Policy does not change, however, the coverage amount under the Leasehold Loan Policy reduces as the principal of the 2003 Bonds has been paid. The Leasehold Loan Policy will terminate when no 2003 Bonds remain outstanding. No additional title insurance coverage is being purchased in connection with the issuance of the 2012A Bonds. 2012A Bonds Not Secured by Reserve Fund Under the Supplemental Indenture, Tampa General has determined not to have Obligation No. 3 relating to the 2012A Bonds secured by the Reserve Fund. Tampa General is entitled, under the Master Indenture, to elect whether future Obligations issued thereunder will be secured by the Reserve Fund. The Reserve Fund was created under the Master Indenture and is held by the Master Trustee. The Reserve Fund secures only Obligation No. 1 relating to the 2003 Bonds which will be outstanding after the refunding of the Refunded Bonds. Insurance Related Amendments to the Master Indenture In connection with the issuance of the 2006 Bonds, the Hospital and the Master Trustee entered into a First Amendment to Master Trust Indenture dated September 28, 2006 (the "MTI Amendment") which addressed insurance requirements under the Master Indenture. The insurance coverage levels currently maintained by the Hospital represent the highest coverage available in the current Florida insurance market at a commercially reasonable premium as determined by the Hospital after consultation with its insurance consultant. Additionally, the Hospital, through its outside insurance broker, continues to monitor the availability and affordability of property insurance (particularly named storm coverage) in the State of Florida. See "Other Financial Considerations Insurance and Litigation" in APPENDIX A "General Information Regarding Tampa General Hospital, Including Certain Financial Information" for details on the Hospital's current and anticipated future property and flood insurance policies with commercial insurance carriers. By acceptance of the Bonds, the holders thereof will be deemed to have consented and agreed to the MTI Amendment which requires the Hospital to insure "against such casualties, contingencies and risks and in amounts not less than is customary in the case of corporations engaged in the same or similar activities and similarly situated and as is adequate to protect its Property and operations." Further, the MTI Amendment removes the percentage restriction on the amount of self-insurance and the requirement that the Hospital obtain any specified minimum required property insurance coverage. The MTI Amendment requires the Hospital to (i) retain biennially an actuarial consultant of national repute to examine and report on the adequacy of the funding of such self-insurance, and (ii) comply with the recommendations of such consultant with respect to the funding of such self-insurance. Similar amendments were previously made to the Leasehold Mortgage. The holders of the 2006 Bonds consented to the MTI Amendment at the time the 2006 Bonds were issued, the principal amount of which was approximately 47% of the then outstanding principal amount of Obligations under the Master Indenture. Subsequent regular principal payments of the 2003 Bonds and the anticipated refunding of a portion of the 2003 Bonds will have reduced the outstanding principal amount of the 2003 Bonds by more than a sufficient amount that the MTI Amendment will be effective not later than the issuance date of the 2012A Bonds. [Balance of page intentionally left blank.] 17

24 ESTIMATED SOURCES AND USES OF FUNDS The proceeds of the sale of the 2012A Bonds, and other available funds, are expected to be used as follows: Sources: Par Amount of the 2012A Bonds $166,490, Net Original Issue Premium 12,902, Available Funds (1) 7,087, Total $186,480, Uses: Escrow Deposit for Refunded Bonds $134,532, Deposit to Construction Fund 50,002, Costs of Issuance and Underwriters' Discount (2) 1,945, Total $186,480, (1) Includes amounts on deposit in the existing Reserve Fund and Principal and Interest Funds allocable to the Refunded Bonds. (2) Includes Underwriters' discount, fees and expenses of bond counsel, counsel to Tampa General, counsel to the Issuer, Issuer's issuance fee, accounting services, printing, rating agencies and miscellaneous expenses. [Balance of page intentionally left blank.] 18

25 ANNUAL DEBT SERVICE REQUIREMENTS ON THE 2012A BONDS Set forth below are the annual debt service requirements for the 2012A Bonds and other Outstanding Bond Debt Service. Period Ending October 1 Outstanding Bond Debt Service (1) Series 2012A Bonds Aggregate Debt Service Principal Interest Total 2013 $17,236, $ -- $4,432, $4,432, $21,668, ,511, ,765, ,490, ,255, ,767, ,510, ,910, ,347, ,257, ,768, ,621, , ,151, ,146, ,767, ,624, ,030, ,111, ,141, ,765, ,623, ,075, ,070, ,145, ,768, ,623, ,130, ,016, ,146, ,769, ,621, ,185, ,960, ,145, ,766, ,623, ,245, ,900, ,145, ,768, ,627, ,300, ,838, ,138, ,765, ,493, ,500, ,773, ,273, ,766, ,021, ,045, ,698, ,743, ,765, ,189, ,980, ,596, ,576, ,765, ,192, ,330, ,247, ,577, ,770, ,190, ,695, ,879, ,574, ,765, ,189, ,080, ,495, ,575, ,765, ,189, ,485, ,094, ,579, ,768, ,188, ,960, ,619, ,579, ,768, ,193, ,455, ,121, ,576, ,770, ,191, ,975, ,599, ,574, ,766, ,186, ,530, ,050, ,580, ,767, ,190, ,105, ,473, ,578, ,769, ,966, ,868, ,868, ,835, ,961, ,868, ,868, ,830, ,964, ,868, ,868, ,833, ,961, ,868, ,868, ,830, ,962, ,868, ,868, ,830, ,964, ,868, ,868, ,832, ,963, ,868, ,868, ,832, ,900, ,868, ,768, ,768, ,815, , ,767, ,767, TOTAL $460,785, $166,490, $144,872, $311,362, $772,147, (1) Reflects refunding of the Refunded Bonds. 19

26 INVESTMENT CONSIDERATIONS The following section is intended only as a summary of certain risk factors attendant to an investment in the 2012A Bonds. In order for potential investors to identify risk factors and make an informed investment decision, potential investors should be thoroughly familiar with this entire Official Statement and the Appendices hereto. Each prospective purchaser of the 2012A Bonds (or a beneficial ownership interest therein) should make an independent evaluation of the information presented in this Official Statement. General As set forth under "SECURITY AND SOURCE OF PAYMENT FOR THE 2012A BONDS," Tampa General is obligated to pay when due the principal of, premium (if any) and interest on, the 2012A Bonds and has pledged for the benefit of the Bond Trustee its Pledged Assets to secure Obligations issued under the Master Indenture. As of the original issuance and delivery of the 2012A Bonds, Tampa General is the sole member of the Obligated Group. The revenues and expenses of Tampa General are subject to, among other things, the capabilities of the management of Tampa General, physicians' confidence in management, the availability of physicians and trained support staff, changes in the population or the economic condition of the service area of Tampa General, the level of and restrictions on federal funding of Medicare and federal and state funding of Medicaid, imposition of government wage and price controls, Tampa General's ability to procure and retain contracts with private health plans and managed care companies, the demand for the services of Tampa General and such future Members of the Obligated Group, competition, rates, government regulations and licensing requirements, inflation, and future economic and other conditions which are unpredictable and may not be quantifiable or determinable at this time. No representation or assurance can be made that revenues will be realized by Tampa General in amounts sufficient to pay the principal of, premium, if any, and interest on the 2012A Bonds. THERE CAN BE NO ASSURANCE THAT THE FINANCIAL CONDITION OF TAMPA GENERAL AND FUTURE MEMBERS OF THE OBLIGATED GROUP OR THE UTILIZATION OF THE HOSPITAL FACILITIES WILL NOT BE ADVERSELY AFFECTED BY ANY OF THESE FACTORS. Some of the identifiable risks that could affect the 2012A Bonds and the future financial condition of Tampa General, which should be considered when making an investment decision regarding the 2012A Bonds, are discussed below. The description of various risks is not, and is not intended to be, exhaustive. Limited Obligations The 2012A Bonds are limited obligations of the Issuer. The 2012A Bonds will not be deemed to constitute a debt of the Issuer, Hillsborough County, the State of Florida or any political subdivision thereof. Neither the faith and credit nor the taxing power of Hillsborough County, the State of Florida or any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the 2012A Bonds. Hillsborough County, the State of Florida and any political subdivision thereof are not directly or indirectly or contingently obligated to levy any tax or to pledge any form of taxation whatever for the 2012A Bonds. No holder of the 2012A Bonds shall have the right to compel any exercise of the taxing power of Hillsborough County, the State of Florida or any political subdivision thereof to pay debt service on the 2012A Bonds. The Issuer has no taxing power. 20

27 Adequacy of Revenues The ability of Tampa General and any other future members of the Obligated Group to make required payments on the 2012A Bonds is subject to, among other things, the capabilities of management of Tampa General and any other future members of the Obligated Group and future economic and other conditions which are unpredictable and which may affect revenues, and, in turn the payment of the principal of, premium, if any, and interest on the 2012A Bonds. Future revenues and expenses of Tampa General and any other future members of the Obligated Group will be affected by events and conditions relating generally to, among other things, demand for Tampa General's services, its ability to provide the services required by patients, physician relationships, design and support of strategic plans, economic developments in Tampa General's service area, Tampa General's ability to control expenses, maintenance of relationships with health maintenance organizations and preferred provider organizations, competition, rates, costs, third-party reimbursement, legislation and governmental regulation. Federal and state funding statutes and regulations are the subject of intense legislative debate and are likely to change, and unanticipated events or circumstances may occur which cause variances from Tampa General's expectations, and the variances may be material. THERE CAN BE NO ASSURANCE THAT THE REVENUES OF TAMPA GENERAL OR UTILIZATION OF TAMPA GENERAL'S FACILITIES WILL BE SUFFICIENT TO ENABLE TAMPA GENERAL TO MAKE THE REQUIRED PAYMENTS UNDER THE AGREEMENT AND ON THE 2012A BONDS. None of the provisions, covenants, terms and conditions of the Master Indenture or the Agreement afford the Trustee any assurance that the principal and interest owing on the 2012A Bonds (which, except for pledged money held under the Master Indenture and the Trust Agreement, constitutes the sole source of funds for the payment of the 2012A Bonds) will be paid, as and when due, if the financial condition of Tampa General deteriorates to a point where Tampa General is unable to pay its debts as they become due or if Tampa General otherwise becomes insolvent. Impact of Disruptions in the Credit Markets and General Economic Factors The disruption of the credit and financial markets in the last several years resulted in volatility in the securities markets, significant losses in investment portfolios, increased business failures and consumer and business bankruptcies. In response to this disruption of the markets, in 2010 Congress enacted and President Obama approved the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). Additional legislation is under active consideration by Congress and regulatory action is being considered by various federal agencies, the Federal Reserve Board and foreign governments which legislation is intended to increase the regulation of financial institutions and domestic and global credit and securities markets. The effects of these legislative, regulatory and other governmental actions, including the Dodd- Frank Act, upon Tampa General and, in particular upon their access to capital markets and their investment portfolios, cannot be predicted. The health care sector has been adversely affected as a direct consequence of the disruption of the credit and financial markets. Patient service revenues and inpatient volumes have not increased as historic trends would otherwise indicate. Increased levels of bad debt and uncompensated care have impacted hospitals ability to provide uncompensated care for elective procedures. The recession has also increased stresses on state budgets, which could potentially result in reductions in Medicaid payment rates or Medicaid eligibility standards, and delays of payment of amounts due under Medicaid and other state or local payment programs. 21

28 Federal Health Care Reform The Patient Protection and Affordable Care Act (the "ACA") and The Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the "Health Care Reform Act") were signed into law by President Obama on March 23, 2010 and March 30, 2010, respectively. The Health Care Reform Act expands access to health insurance, reduces health care spending, expands federal fraud and abuse authorities and transparency requirements, imposes new taxes and fees on health industry sectors, and institutes a variety of other health policy reforms. The changes in the health care industry as a result of the Health Care Reform Act will likely have both positive and negative effects, directly and indirectly, on hospitals. Some of the provisions of the Health Care Reform Act took effect immediately or within a few months of final approval, while others are being phased in over time, up to ten years in certain cases. Because of the complexity of the Health Care Reform Act generally, additional legislation is likely to be considered and enacted over time. The Health Care Reform Act also requires the promulgation of substantial regulations with significant effects on the health care industry. Thus, the health care industry will be subject to significant new statutory and regulatory requirements and consequently to structural and operational changes and challenges for a substantial period of time. Management of Tampa General cannot predict with any reasonable degree of certainty or reliability any interim or ultimate effects of the legislation. A significant component of the Health Care Reform Act is reformation of the sources and methods by which consumers pay for health care for themselves and their families and by which employers procure health insurance for their employees and dependents and, as a consequence, expansion of the base of consumers of healthcare services. One of the primary objectives of the Health Care Reform Act is to provide or make available, or subsidize the premium costs of, health care insurance for some of the millions of currently uninsured (or underinsured) consumers who fall below certain income levels. However, as discussed below, under the Health Care Reform Act that objective may not be achieved in Florida without action by the State of Florida, which may not occur. The Health Care Reform Act proposes to accomplish that objective through various provisions, summarized as follows: (i) The creation of active markets (referred to as exchanges) in which individuals and small employers can purchase health care insurance for themselves and their families or their employees and dependents. Florida Governor Scott had previously stated that Florida would not set up a health insurance exchange. Although Florida has so far not taken significant steps to setup an exchange, Governor Scott has subsequently indicated a willingness to negotiate with the federal government. If a state does not establish an exchange, the federal government will establish one for that state's citizens. (ii) Providing subsidies for premium costs to individuals and families based upon their income relative to federal poverty levels. It is unclear under the law whether the federal premiums subsidies will be available to those who purchase through a federal exchange. (iii) Mandating that American citizens who meet certain income levels, obtain, and certain employers provide, a minimum level of health care insurance, and providing for penalties or taxes on individuals and employers that do not comply with these mandates. (iv) Establishment of insurance reforms that expand coverage generally through such provisions as prohibitions on denials of coverage for preexisting conditions and elimination of lifetime and annual cost caps. 22

29 (v) Expanding access to primary care by increasing payments to providers of such care; (vi) Expanding preventive health services such as cancer screenings, by eliminating patient cost-sharing under both governmental and private plans; (vii) Expansion of existing public programs including expansion of the Medicaid program to a broader population with incomes up to 133% of federal poverty levels. The Medicaid expansion in Florida is subject to state approval. From 2014 through 2016, the federal government would pay all costs of covering people newly eligible under the Florida Medicaid program. This percentage would be reduced to 95% in 2017, 94% in 2018, 93% in 2019, and 90% thereafter. Florida Governor Scott had stated that Florida would not expand its Medicaid program. The Governor has subsequently indicated a willingness to discuss the State's expansion of the Medicaid program. (viii) Expansion of the federal "340B" discount program for prescription drugs for Medicaid patients receiving hospital outpatient services to include a wider range of hospitals. (It previously applied only to hospitals that serve a defined "disproportionate share" of medically indigent persons.) To the extent all or any of those provisions produce the intended result, an increase in utilization of health care services by those who are currently avoiding or rationing their health care can be expected and bad debt expenses may be reduced. Many of the new law's key elements are designed to provide financial incentives to those who can demonstrate they are moving toward a new delivery model that satisfies six key requirements: 1. Compliance with evidence-based utilization protocols (which may be developed locally); 2. Coordination of care in all settings by a primary care practitioner; 3. Avoidance of adverse outcomes (e.g. hospital-acquired infections); 4. Active management of chronic illness; 5. Preventive care and wellness incentives to both patients and providers; and 6. High value of care rendered in comparison to peer providers. 1 Some of the specific provisions of the Health Care Reform Act that may affect hospital operations, financial performance or the financial condition are described below. This listing is not intended to be, nor should be considered as, comprehensive. The Health Care Reform Act is complex and includes a myriad of new programs and initiatives and changes to existing programs, policies, practices and laws, such as: (a) With varying effective dates, the annual Medicare market basket updates for any providers, including hospitals, would be reduced, and adjustments to payment for expected productivity gains would be implemented. 1 These six elements will be applied to reform the Medicare and Medicaid payment systems; however, since the information developed by the federal and state governments will be shared with the public, it is expected that private insurers and health plans will be quick to follow in order to remain competitive. 23

30 (b) Commencing in federal fiscal year 2014, Medicare disproportionate share hospital ("DSH") payments will be reduced initially by 75% and increased thereafter to account for the national rate of consumers who do not have healthcare insurance and are provided uncompensated care. Commencing in 2014, a state's Medicaid DSH allotment from federal funds also will be reduced. (c) Commencing in federal fiscal year 2012, Medicare payments that would otherwise be made to hospitals would be reduced by specified percentages to account for excess and "preventable" hospital readmissions. (d) Commencing in federal fiscal year 2015, Medicare payments to certain hospitals for hospital acquired conditions will be reduced by 1%. Effective for federal fiscal year 2011, federal payments to states for Medicaid services related to hospital-acquired conditions were prohibited. (e) With varying effective dates, a mandated reduction of waste, fraud, and abuse in public programs will be implemented by allowing provider enrollment screening, enhanced oversight periods for new providers and suppliers, and enrollment moratoria in areas identified as being at elevated risk of fraud in all public programs, and by requiring Medicare and Medicaid program providers and suppliers to establish compliance programs. The Health Care Reform Act requires the development of a database to capture and share healthcare provider data across federal healthcare programs for increased penalties for fraud and abuse violations, and increased funding for anti-fraud activities. (f) Effective for tax years commencing immediately after approval, additional requirements for tax exemption will be imposed upon tax-exempt hospitals, including obligations to conduct a community needs assessment every three years; adopt an implementation strategy to meet those identified needs; adopt and publicize a financial assistance policy; limit charges to patients who qualify for financial assistance to not more than the amount generally billed to insured individuals for such care; prohibit the use of "gross charges"; and control the billing and collection processes. Failure to satisfy these conditions may result in the imposition of an excise tax. (g) The establishment of an Independent Payment Advisory Board to develop proposals to improve the quality of care and limitations on cost increases. Those proposals would be automatically implemented if Congress does not act to invalidate them. The Health Care Reform Act also provides for the implementation of various demonstration programs and pilot projects to test, evaluate, encourage and expand new payment structures and methodologies to reduce health care expenditures while maintaining or improving quality of care, including bundled payments under Medicare and Medicaid, and comparative effectiveness research programs that compare the clinical effectiveness of medical treatments and develop recommendations concerning practice guidelines and coverage determinations. Other provisions encourage the creation of new health care delivery programs, such as accountable care organizations, or combinations of provider organizations, that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program. The outcomes of these projects and programs, including their effect on payments to providers and financial performance, cannot be predicted. No assurance can be given as to whether Tampa General's ability to make payments under the Agreement will be adversely affected by any future judicial or administrative interpretation of the Health Care Reform Act, or by any future legislation. The Health Care Reform Act has been the subject of a series of legal challenges with numerous separate lawsuits filed in federal district courts by states and others. The lawsuits raise constitutional challenges to several key components of the Health Care Reform Act, including the law's requirements 24

31 relative to individual and employer coverage requirements, mandated state expansion of Medicaid coverage, and insurance market reforms. The lawsuits charge that certain regulations promulgated by the Department of Health and Human Services under the Health Care Reform Act violate the first amendment to the Constitution of the United States. Additionally, business organizations, States and other entities filed various lawsuits charging that, in enacting the Health Care Reform Act, Congress exceeded its constitutional powers, including the power to regulate interstate commerce and the power to tax. The United States Supreme Court granted certiorari to the United States Court of Appeals for the Eleventh Circuit on three cases. In a decision rendered on June 28, 2012, the Supreme Court provided finality on several of these constitutional challenges by ruling that the individual mandate provisions of the Health Care Reform Act could not be sustained under Congress' powers under the Commerce Clause or the Necessary and Proper Clause of the United States Constitution, but that the individual mandate was constitutional pursuant to Congress' powers under the Taxing Clause of the United States Constitution. The Supreme Court also ruled, however, that the Medicaid expansion provisions of the Health Care Reform Act could not be upheld pursuant to Congress' powers under the Spending Clause to the extent the Health Care Reform Act provided for withholding of all Medicaid payments to states that did not enact necessary changes to implement the expanded Medicaid coverage provided for in the Health Care Reform Act. National Federation of Independent Business, et al. v. Sebelius, Secretary of Health and Human Services, et al., No Management of Tampa General is continually analyzing the Health Care Reform Act and will continue to do so in order to fully assess the effects of the legislation on current and projected operations, financial performance, and the financial condition of the Borrower. However, management of Tampa General cannot predict the interim or long-term effects of the Health Care Reform Act on Tampa General with any reasonable degree of reliability. Federal Budget Cuts The Budget Control Act of 2011 (the "Budget Control Act") mandated significant reductions and spending caps on the federal budget for Fiscal Years 2012 through The Budget Control Act also created a Joint Select Committee on Deficit Reduction (the "Super Committee") to develop a plan to further reduce the federal deficit by $1.5 trillion on or before November 23, As the Super Committee failed to develop such plan by November 23, 2011, a 2% reduction in Medicare spending, among other reductions, could have been triggered to take effect on January 2, However, on January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 ("ATRA") which prevented many-but not all-of the federal spending reductions from going into effect. With the passage of ATRA, the FY2013 spending reductions were reduced by $24 billion, to roughly $85 billion equally divided between defense and non-defense, and postponed for two months. The modified spending reductions are now scheduled to take effect on March 1, 2013, unless changes are made as a result of the enactment of subsequent legislation. Because Congress may make changes to the federal budget in the future, it is impossible to predict the impact any spending cuts that are approved may have upon Tampa General. Similarly, it is impossible to predict whether any automatic reductions to Medicare may be triggered in lieu of other spending cuts that may be proposed by Congress. These reductions could be implemented disproportionately for hospitals and could have an adverse effect on the financial condition of Tampa General. Nonprofit Health Care Environment Tampa General is a not for profit corporation, recognized as exempt from federal income taxation as an organization described in Section 501(c)(3) of the Code. Therefore, Tampa General is subject to 25

32 federal, state and local laws, regulations, rulings and court decisions relating to its organization and operation, including its operation for charitable purposes. At the same time, Tampa General as a whole conducts large-scale complex business transactions and is a major employer in Tampa. There can often be a tension between the rules designed to regulate a wide range of charitable organizations and the dayto-day operations of a complex health care organization. Recently, an increasing number of the operations or practices of health care providers have been challenged or questioned to determine if they are consistent with the regulatory requirements for nonprofit tax-exempt organizations. These challenges, in some cases, are broader than concerns about compliance with federal and state statutes and regulations, such as Medicare and Medicaid compliance, and instead in many cases are examinations of core business practices of the health care organizations. Areas which have come under examination have included pricing practices, billing and collection practices, charitable care methods of providing and reporting community benefit, executive compensation, exemption of property from real property taxation, and others. These challenges and questions have come from a variety of sources, including state attorneys general, the Internal Revenue Service (the "IRS"), labor unions, Congress, state legislatures, and patients, and in a variety of forums, including legislation, regulations, hearings, audits and litigation. These challenges or examinations include the following, among others: Nonprofit Hospitals' 501(c)(3) Status. The Health Care Reform Act added to the Code a new Section 501(r) which applies to charitable hospitals or other charitable organizations whose principal purpose is to provide hospital care. Section 501(r) adds four requirements, in addition to those required under Section 501(c)(3) of the Code, which must be satisfied in order for such organizations to continue to be treated as exempt organizations under Section 501(c)(3) of the Code. First, a "community needs assessment" must be conducted every three years and an "implementation strategy" must be adopted to meet the needs identified in the assessment. Second, written policies regarding financial assistance and emergency medical care must be established, including policies relating to the basis for calculating patient charges and actions to be taken in the event of nonpayment. Third, limits must be established for emergency or other medically necessary care charges to patients eligible for financial assistance. Fourth, certain billing and collection requirements must be met, including a prohibition on "extraordinary collection actions" unless a "reasonable effort" has been made to determine whether the patient is eligible for financial assistance. See also "Federal Health Care Reform and Other Governmental Initiatives" above. Congressional Hearings. In recent years, three congressional committees have conducted hearings and other proceedings inquiring into various practices of nonprofit hospitals and health care providers. Among the legislation proposed or discussed as a result of these hearings and proceedings are: (1) establishment of minimum required levels of charity care to be provided by nonprofit health care providers; (2) periodic review of hospitals' tax-exempt status by the IRS; and (3) greater and more uniform reporting of charitable and community benefit activities. Bond Examinations. IRS officials have recently indicated that more resources will be invested in audits of tax-exempt bonds in the charitable organization sector with specific review of private use. A schedule to the revised Form 990 return (Schedule K), effective for the 2009 tax year and thereafter, is intended to address what the IRS believes is significant noncompliance with recordkeeping and record retention requirements. Schedule K also requires tax-exempt organizations to report on the investment and use of bond proceeds to address IRS concerns regarding compliance with arbitrage rebate requirements and the private use of bond-financed facilities. IRS Examination of Compensation Practices. In February 2009, the IRS issued its Hospital Compliance Project Final Report (the "IRS Final Report") that examined tax-exempt organizations' 26

33 practices and procedures with regard to compensation and benefits paid to their officers and other defined "insiders." The IRS Final Report indicates that the IRS (1) will continue to heavily scrutinize executive compensation arrangements, practices and procedures, and (2) in certain circumstances, may conduct further investigations or impose fines on tax-exempt organizations. Litigation Relating to Billing and Collection Practices. Lawsuits have been filed in federal and state courts alleging, among other things, that hospitals have failed to fulfill their obligations to provide charity care to uninsured patients and have overcharged uninsured patients. Many of these cases have since been dismissed by the courts. A number of cases are still pending in various courts around the country with inconsistent results. While it is not possible to make general predictions, some hospitals and health systems have entered into substantial settlements. Challenges to Real Property Tax Exemptions. Recently, the real property tax exemptions afforded to certain nonprofit health care providers by state and local taxing authorities have been challenged on the grounds that the health care providers were not engaged in charitable activities. These challenges have been based on a variety of grounds, including allegations of aggressive billing and collection practices and excessive financial margins. While management of Tampa General is not aware of any current challenge to the tax exemption afforded to any material real property of Tampa General, there can be no assurance that these types of challenges will not occur in the future. The foregoing are some examples of the challenges and examinations facing nonprofit health care organizations. They are indicative of a greater scrutiny of the charity care, billing, collection and other business practices of these organizations, and may indicate an increasingly more difficult operating environment for health care organizations, including Tampa General. The challenges and examinations, and any resulting legislation, regulations, judgments, or penalties, could have a material adverse effect on Tampa General. Charity Care Hospitals are permitted to acquire tax-exempt status under the Code because the provision of health care historically has been treated as a "charitable" enterprise. This treatment arose before most Americans had health insurance, when charitable donations were required to fund the health care provided to the sick and disabled. Some commentators and others have taken the position that, with the onset of employer health insurance and governmental reimbursement programs, there is no longer any justification for special tax treatment for the health care industry, and the availability for tax-exempt status should be eliminated. Management of Tampa General considers such a dramatic change in the law to be highly unlikely; nevertheless, federal and state tax authorities are beginning to demand that taxexempt hospitals justify their tax-exempt status by documenting their charitable care and other community benefits. As further described above under the caption "Nonprofit Health Care Environment Litigation Relating to Billing and Collection Practices," charity care issues also serve as the basis of certain claims against major hospital systems throughout the United States on behalf of uninsured patients. Many lawsuits filed against nonprofit hospitals raise a number of claims against the hospital defendants, including claims that the defendants, by accepting tax-exempt status, entered into agreements with the federal, state and local governments promising to provide free or reduced care to all those who need it; the uninsured patients are beneficiaries of those agreements and can bring suit on them; the defendants engaged in illegal and oppressive tactics against the uninsured; the defendants engaged in illegal price discrimination by charging the uninsured rates far in excess of the rates charged to such third party payors as Medicare and certain insurers; the defendants violated state consumer fraud statutes; the defendants allowed a portion of their properties to be used by for-profit entities at less than fair value and engaged in 27

34 other inappropriate transactions with doctors and certain insiders; the defendants transferred monies illegally to their affiliates for other than charitable purposes; and the defendants and the American Hospital Association, another named defendant in many of the lawsuits, conspired with the defendants to charge illegal prices to the uninsured. As described above under the caption, "Federal Health Care Reform," the Health Care Reform Act imposes additional requirements for tax-exemption upon taxexempt hospitals, including obligations to adopt and publicize a financial assistance policy; limit charges to patients who qualify for financial assistance to the amounts generally billed to insured patients; and control the billing and collection processes. Additionally, effective for tax years commencing January 1, 2013, tax-exempt hospitals must conduct a community needs assessment and adopt an implementation strategy to meet those identified needs. Failure to complete a community health needs assessment in any applicable three-year period can result in a penalty on the organization of up to $50,000, in addition to possible revocation of status as a section 501(c)(3) organization. The Health Care Reform Act also imposes new reporting and disclosure requirements on hospital organizations. The IRS is required to review information about a hospital's community benefit activities at least once every three years. The Health Care Reform Act requires the Secretary of the Treasury, in consultation with the Secretary of the U.S. Department of Health and Human Services ("HHS"), to submit annually a report to Congress with information regarding the levels of charity care, bad debt expenses, unreimbursed costs of government programs, as well as costs incurred by tax-exempt hospitals for community benefit activities. The Secretary of the Treasury, in consultation with the Secretary of HHS, must conduct a study of the trends in these amounts, and subject a report on such study to Congress not later than five years after the date of enactment of the Health Care Reform Act. These statutorily mandated requirements for periodic review and submission of reports relating to community benefit provided by section 501(c)(3) hospital organizations may increase the likelihood that Congress will consider additional requirements for section 501(c)(3) hospital organizations in the future and may increase IRS scrutiny of particular 501(c)(3) hospital organizations. Payment for Health Care Services Most of the patient service revenues of Tampa General are derived from third-party payors which reimburse or pay for the services and items provided to patients covered by such third parties for such services, including the federal Medicare program, state Medicaid programs, private health plans and insurers, health maintenance organizations, preferred provider organizations and other managed care payors. Many of these third-party payors make payments to Tampa General at rates other than the direct charges of Tampa General, which rates may be determined other than on the basis of the actual costs incurred in providing services and items to such patients. Accordingly, there can be no assurance that payments made under such programs will be adequate to cover Tampa General's actual costs of furnishing health care services and items. In addition, the financial performance of Tampa General could be adversely affected by the insolvency of, or other delay in receipt of payments from, third-party payors which provide coverage for services to their patients. Medicare and Medicaid are the commonly used names for health care reimbursement or payment programs governed by certain provisions of the federal Social Security Act. Medicare is an exclusively federal program and Medicaid is a combined federal and state program. Medicare provides certain health care benefits to beneficiaries who are 65 years of age or older, disabled or qualify for the End-Stage Renal Disease Program. Medicare Part A covers inpatient services and certain other services, and Medicare Part B covers certain physician services, medical supplies and durable medical equipment. Medicaid is designed to pay providers for care given to the medically indigent and others who receive federal aid. Medicaid is funded by federal and state appropriations and is administered by an agency of the applicable 28

35 state. The Centers for Medicare & Medicaid Services ("CMS"), an agency of HHS, administers the Medicare program and works with the states regarding the Medicaid program, as well as other health care programs. Health care providers have been and continue to be affected significantly by changes made in the last several years in federal and state health care laws and regulations, particularly those pertaining to Medicare and Medicaid. The purpose of much of the recent statutory and regulatory activity, has been to reduce the rate of increase in health care costs, particularly costs paid under the Medicare and Medicaid programs. Diverse and complex mechanisms to limit the amount of money paid to health care providers under both the Medicare and Medicaid programs have been enacted, some of which are being implemented and some of which will be or may be implemented in the future. Medicare Gross patient revenues under Medicare and Managed Medicare accounted for approximately 39.8% of Tampa General's gross patient revenues in its fiscal year ended September 30, As a consequence, any adverse development or change in Medicare reimbursement could have a material adverse effect on the financial condition and results of operations of Tampa General. Hospital Services. Medicare Part A pays acute care hospitals for most inpatient services under a payment system known as the "Inpatient Prospective Payment System" or "IPPS." Separate IPPS payments are made for inpatient operating costs and inpatient capital-related costs. Inpatient Operating Costs. Acute care hospitals that are reimbursed on a PPS basis are paid a specified amount toward their operating costs based on the Diagnosis Related Group ("DRG") to which each Medicare patient is assigned, which is determined by the diagnosis and procedures and other factors for each particular inpatient stay. The amount paid for each DRG is established prospectively by CMS based on the estimated intensity of hospital resources necessary to furnish care for each principal diagnosis and is not directly related to a hospital's actual costs. For certain Medicare beneficiaries who have unusually costly hospital stays ("outliers"), CMS will provide additional payments above those specified for the DRG. Outlier payments cease to be available upon the exhaustion of such patient's Medicare benefits or a determination that acute care is no longer necessary, whichever occurs first. There is no assurance that any of these payments will cover the actual costs incurred by a hospital. In addition, revisions to the outlier regulations implemented in order to curb outlier payment abuse may adversely affect hospitals' ability to receive such subsidies. In addition to outlier payments, DRG payments are adjusted for area wage differentials. These change on an annual basis. DRG payments are adjusted each federal fiscal year (which begins October 1) based on the hospital "market basket" index, or the cost of providing health care services. For nearly every year since 1983, Congress has modified the increases and given substantially less than the increase in the "market basket" index. CMS has also implemented a documentation and coding adjustment to account for changes in payments under the new Medicare Severity Diagnosis Related Group, or MS-DRG, system that are not related to changes in case mix. The documentation and coding adjustments for federal fiscal years 2008 and 2009 were reductions to the base payment rate of 0.6% and 0.9% respectively. CMS was given the authority to retrospectively determine if the documentation and coding adjustments for these years were adequate to account for changes in payments not related to changes in case mix. CMS did not implement a documentation and coding adjustment in federal fiscal year 2010, but did elect to phase in such adjustments in fiscal year 2011 and federal fiscal year 2012, as discussed below. The Health Care Reform Act will reduce the annual Medicare market basket updates from federal fiscal year 2010 through federal fiscal year Beginning in federal fiscal year 2012, the Health Care Reform Act also provides that annual Medicare market basket updates will be subject to productivity adjustments, further reducing 29

36 Medicare payments to hospitals. The reductions in market basket updates and the productivity adjustments will have a disproportionately negative effect upon those providers that are relatively more dependent upon Medicare than other providers. Additionally, the reductions in market basket updates will be effective prior to the periods during which insurance coverage and the insured consumer base will expand, which may have an interim negative effect on revenues. The combination of reductions to the market basket updates and the imposition of the productivity adjustments may, in some cases and in some years, result in reductions in Medicare payment per discharge on a year-to-year basis. For further information regarding the Health Care Reform Act and its provisions, see "Federal Health Care Reform" above. As required by the DRA, hospitals that do not participate successfully in Hospital Inpatient Quality Reporting Program (formerly known as the Reporting Hospital Quality Data for Annual Payment Update or RHQDAPU) will receive market basket update less 2.0%. CMS continues to update the quality measures that hospitals must report in order to qualify for the full market basket update. Tampa General participates in Hospital Quality Initiative. For federal fiscal year 2012, CMS increased acute care hospital rates by 1.1%. This increase reflects the following: a market basket increase of 3.0%; a 1.1% increase in response to litigation regarding application of a rural floor and rural floor budget neutrality; a further 2.0% documentation and coding reduction; a 1.0% productivity adjustment reduction; a 0.1% reduction imposed by the Health Care Reform Act; and other adjustments. The Secretary of HHS is required to review annually the DRG categories to take into account any new procedures, reclassify DRGs and recalibrate the DRG relative weights that reflect the relative hospital resources used by hospitals with respect to discharges classified within a given DRG category. There is no assurance that Tampa General will be paid amounts that will adequately reflect changes in the cost of providing health care or in the cost of health care technology being made available to patients. During federal fiscal years , CMS has created new DRGs and revised or deleted others in order to better recognize the severity of illness for each patient. CMS may only adjust DRG weights on a budget-neutral basis. Inpatient Capital Costs. With limited exceptions, hospitals are reimbursed on a fully prospective basis for capital costs (including depreciation and interest) related to the provision of inpatient services to Medicare beneficiaries. Thus, capital costs are reimbursed exclusively on the basis of a standard federal rate (based on average national costs), subject to certain adjustments (such as for disproportionate share, indirect medical education and outlier cases) specific to the hospital. Hospitals are reimbursed at 100% of the standard federal rate for all capital costs. This applies to the standard federal rate before the application of the adjustment factors for outliers, exceptions and budget neutrality. There can be no assurance that the prospective payments for capital costs will be sufficient to cover the actual capital-related costs of Tampa General allocable to Medicare patient stays or to provide adequate flexibility in meeting Tampa General's future capital needs. Disproportionate Share Adjustments. Under PPS, hospitals that serve a disproportionate share of low-income patients may receive an additional DSH. A hospital may be classified as a DSH hospital based upon any of several circumstances related to the number of beds, the hospital's location, and its disproportionate patient percentage. The DSH adjustment is calculated under one of several methods, depending upon the basis for the hospital's classification as a DSH hospital. Under healthcare reform, with the expected decrease in the uninsured population, federal DSH payments will be reduced by 75% commencing in federal fiscal year 2014 and state Medicaid DSH payments are anticipated to be reduced 30

37 quarterly starting in From 2014 to 2020, the estimated total loss of Medicaid DSH funds to states will be $18.1 billion. There is no assurance that Tampa General will receive DSH payments in the future. If Tampa General incurs costs in treating Medicare inpatients that exceed the level of reimbursement to which it is entitled pursuant to the upper limits reimbursement levels established under the Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA"), Tampa General will experience a loss from providing these services that will have to be made up from other revenue sources. However, other third-party payors continue to place limitations on reimbursement payable to hospitals to avoid such "cost-shifting." Hospital outpatient services, including hospital operating and capital costs, are reimbursed on a prospective basis. Several services are specifically excluded from this rule, including certain physician and non-physician practitioner services, ambulance, clinical diagnostic laboratory services and nonimplantable orthotics and prosthetics, physical and occupational therapy, and speech pathology services. Under the Outpatient PPS ("OPPS"), predetermined amounts are paid for designated services furnished to Medicare beneficiaries. CMS classifies outpatient services and procedures that are comparable clinically and in terms of resource use into ambulatory payment classification ("APC") groups. Using hospital outpatient claims data from the most recent available hospital cost reports, CMS determines the median costs for the services and procedures in each APC group. Subsequently, a payment rate is established for each APC. Depending on the services provided, a hospital may be paid for more than one APC for a patient visit. OPPS rates are adjusted annually (on a calendar year schedule) based on the hospital inpatient market basket percentage increase. In the final 2012 OPPS rule, CMS authorizes a market basket increase of 1.9%, reflecting a projected 3.0% market basket increase, offset by a productivity adjustment of 1.0% and a Health Care Reform Act reduction of 0.1%. Hospitals that fail to report data related to fifteen required quality measures will have their market basket percentage increase reduced by 2%, resulting in a negative adjustment of 0.1% for calendar year There can be no assurance that the hospital OPPS rate, which bases payment on APC groups rather than on individual services, will be sufficient to cover the actual costs of Tampa General allocable to patient care. In addition to the APC rate, there is a predetermined beneficiary coinsurance amount for each APC group. CMS projects the overall beneficiary coinsurance for OPPS services to be 21.8% in There can be no assurance that the beneficiary will pay this amount. The OPPS final rule for calendar year 2011 also implemented several provisions of the Health Care Reform Act that may impact the reimbursement and operations of hospitals across the country. These provisions continue to be implemented by CMS in the 2012 OPPS final rule. Some of the specific reforms addressed in the 2011 OPPS final rule and 2012 OPPS final rule that have the potential to impact hospitals are: (i) reduction of the OPPS market basket increase factor by a productivity adjustment (effective 2012) and an additional adjustment for payments to hospital outpatient departments (from 2010 through 2019); (ii) adjustments to the area wage adjustment factor for outpatient department services; and (iii) changes related to payment for graduate medical education and indirect medical education. Both Medicare inpatient and outpatient payments are subject to future revision by Congress and CMS. Specifically, Congress is continuing to review potential Medicare payment reductions as part of a process authorized under the Budget Control Act. Under this process, a bipartisan Congressional "Super Committee" was empowered to recommend federal program changes that would have resulted in a reduction in the federal deficit in the amount of $1.2 trillion over a ten-year period. The Super Committee was required to make its recommendations to Congress by November 23, The Super Committee failed to meet this deadline for making its recommendations. As a result, under the Budget Control Act, 31

38 automatic across-the-board cuts in certain federal programs to meet the $1.2 trillion in targeted savings (referred to as sequestration) are scheduled to take effect beginning on January 1, 2013, absent further Congressional action prior to such date. Medicare providers, including Tampa General, would experience payment reductions under sequestration, although the amount of the reductions would be limited to two percent of total payments. Any reduction in the level of Medicare and/or Medicaid spending or a reduction in the rate of increase of Medicare and/or Medicaid spending from these or other future statutory or regulatory provisions would have an adverse impact on the revenues of Tampa General that are derived from the Medicare and Medicaid programs. Physician Services. Certain physician services are reimbursed on the basis of a national fee schedule called the "resource based-relative value scale" ("RB-RVS"). The RB-RVS fee schedule establishes payment amounts for all physician services, including services of provider-based physicians, and is subject to annual updates. In the RB-RVS system, payments for physician services are determined by the resource costs needed to provide them. The Sustainable Growth Rate ("SGR"), which is a limit on the growth of Medicare payments for physician services, is linked to changes in the U.S. Gross Domestic Product over a ten-year period. SGR targets are compared to actual expenditures in order to determine subsequent physician fee schedule updates. Use of the SGR in determining physician fee schedule updates has been widely criticized as an unworkable formula, and in the absence of continuing Congressional intervention the use thereof will result in a considerable decrease to Medicare physician payments. The Health Care Reform Act includes several changes to Medicare and Medicaid payments for physician services, including the following: make grants to and contract with interdisciplinary "health teams" that support primary care practices who agree to serve as their patients' "medical home" by being accountable for providing integrated, accessible services that meet a large majority of the patient's health needs through a sustained partnership with patients; start reporting to physicians their costs of utilization of resources per episode of care in comparison to their peers, commencing in 2012; integrate reporting requirements concerning the meaningful use of electronic health records into the Physician Quality Reporting System ("PQRS"); establish payment penalties for physicians who fail to file PQRS reports, starting in 2015; develop a system of "value-based payment modifiers" for physicians as early as 2015; require state Medicaid programs to pay primary care physicians not less than 100% of the Medicare payment rate, for 2013 and The 2013 Medicare Physician Fee Schedule (the "2013 MPFS") was released on November 1, Under the 2013 MPFS, family physicians will receive up to a 7% increase in Medicare payments in 2013 and other primary care providers will received 3% to 5% more. Much of the increase in the physician fee schedule reimbursement will come from new added payments for coordinating a patient's care in the 30 days following a hospital or skilled nursing facility stay. Under the rule, providers will for the first time receive a separate payment to help a patient transition back to the community following a discharge. 32

39 Although most of the provisions included in the 2011 MPFS directly affect payments provided under the physician fee schedule, the rule also addresses a number of policies that are not directly related to that payment system. The 2011 MPFS addressed and implemented a number of provisions of the Health Care Reform Act, each of which may impact the reimbursement levels of hospitals, such as: (i) elimination of deductible and coinsurance for most preventive services; (ii) coverage of annual wellness visit providing a personalized prevention plan; (iii) incentive payments to primary care practitioners for primary care services; (iv) incentive payments for major surgical procedures in health professional shortage areas; (v) an update to the Medicare Economic Index ("MEI"); (vi) revisions to the practice expense geographic adjustment; (vii) permitting physician assistants to order post-hospital extended care services; (viii) payment for bone density tests; (ix) increased payments for certified nurse-midwife services; (x) extension of Medicare reasonable cost payments for certain clinical diagnostic laboratory tests furnished to hospital patients in certain rural areas; (xi) amendment to the physician self-referral disclosure requirement related to certain imaging services; (xii) expansion of the Medicare durable medical equipment competitive bidding program; (xiii) identification of misvalued codes under the MPFS; (xiv) adoption of a multiple procedure payment reduction policy for therapy services; (xv) modification of equipment utilization factor and modification of multiple procedure payment policy for advanced imaging services; (xvi) adjustments to the payment schedule for power-driven wheelchairs; and (xvii) reduction of the maximum period for submission of Medicare claims to no more than 12 months. The 2012 MPFS similarly contains provisions implementing the Health Care Reform Act which may impact the reimbursement levels of hospitals, such as: (i) identification and review of potentially misvalued codes; (ii) expansion of the multiple procedure payment reduction policy for advanced imaging services; (iii) methodology for determining the productivity adjustment for ambulatory surgical centers, clinical laboratory services, and the durable medical equipment fee schedule; (iv) revisions to the practice expense methodology; (v) bundling of payments for services provided to outpatients who are later admitted as inpatients and limiting payments for office visits in physician offices owned by hospitals or their subsidiaries to the amount that would be paid if those services were furnished in a hospital, without any compensation for overhead costs (i.e., the 3-day payment window policy); and (vi) hospital discharge care coordination. Provider-Based Standards. CMS made significant changes to the provider-based regulation included in the final OPPS rulemaking for federal fiscal year Generally, CMS eliminated a few requirements for on-site provider-based facilities and clarified some of the provisions of the prior provider-based rules. CMS clarified that prior approval of provider-based status by CMS is not required for an entity to bill as provider-based. Rather, a provider may provide an optional attestation of its status as a provider-based entity. Although such attestation is not required to bill as a provider-based entity, it may provide some overpayment protection in the event that CMS subsequently makes a determination that an entity is not provider-based, assuming accurate representation by the provider to CMS. Any reclassification by CMS may adversely affect the entity's reimbursement under the Medicare program. Based on current regulations, the management of Tampa General believes all of their respective current facilities that bill for services as provider-based entities qualify as "provider-based" under the current regulations. Medicare Advantage. Medicare beneficiaries may obtain Medicare coverage through a managed care Medicare Advantage plan (formerly known as a "Medicare+Choice" plan). A Medicare Advantage plan may be offered by a coordinated care plan (such as an HMO or PPO), a provider sponsored organization ("PSO") (a network operated by health care providers rather than an insurance company), a private fee-for-service plan, or a combination of a medical savings account ("MSA") and contributions to a Medicare Advantage plan. Each Medicare Advantage plan, except an MSA plan, is required to provide benefits approved by the Secretary of HHS. A Medicare Advantage plan will receive a monthly capitated payment from HHS for each Medicare beneficiary who has elected coverage under the plan. Health care providers such as Tampa General must contract with Medicare Advantage plans to treat Medicare 33

40 Advantage enrollees at agreed upon rates or may form a PSO to contract directly with HHS as a Medicare Advantage plan. Covered inpatient and emergency services rendered to a Medicare Advantage beneficiary by a hospital that is an out-of-plan provider (i.e., that has not entered into a contract with a Medicare Advantage plan) will be paid at Medicare fee-for-service payment rates as payment in full. However, the plan may provide incentives to patients to use in-plan providers. The Health Care Reform Act provides that from October 1, 2010 through September 30, 2019, payments under the Medicare Advantage programs will be reduced, which may result in increased premiums or out-of-pocket costs to Medicare beneficiaries enrolled in Medicare Advantage plans. These beneficiaries may terminate their participation in such Medicare Advantage plans and opt for the traditional Medicare fee-for-service program. The reduction in payments to Medicare Advantage plans may also lead to decreased payments to providers by managed care companies operating Medicare Advantage plans. There can be no assurance that the rates negotiated for the treatment of Medicare Advantage enrollees will be sufficient to cover the cost of providing services to such patients. All or any of these outcomes will have a disproportionately negative effect upon those providers with relatively high dependence upon Medicare managed care revenues. For further information regarding the Health Care Reform Act and its provisions, see "Federal Health Care Reform" herein. Medicare Audits. Tampa General receives payments for various services provided to Medicare patients based upon charges or other reimbursement methodologies that are then reconciled annually based upon the preparation and submission of annual cost reports. Estimates for the annual cost reports are reflected as amounts due to/from third-party payors and represent several years of open cost reports due to time delays in the fiscal intermediary's audits and the basic complexity of billing and reimbursement regulations. These estimates are adjusted periodically based upon correspondence received from the fiscal intermediary. Medicare regulations also provide for withholding Medicare payment in certain circumstances if it is determined that an overpayment of Medicare funds has been made. In addition, under certain circumstances, payments may be determined to have been made as a consequence of improper claims subject to the federal False Claims Act (the "Federal False Claims Act") or other federal statutes, subjecting Tampa General to civil or criminal sanctions. Management of Tampa General is not aware of any situation whereby a material Medicare payment is being withheld from Tampa General. Hospitals participating in Medicare are subject from time to time to audits and other investigations relating to various aspects of their operations. Medicare participating hospitals are subject to audits and retroactive audit adjustments with respect to reimbursement claimed under the Medicare program. Medicare regulations also provide for withholding Medicare payment in certain circumstances. Although management of Tampa General does not anticipate or have reason to believe that a substantial withholding or audit adjustment will be made with respect to Tampa General, there can be no assurance that, if such withholdings or audit adjustments were to be assessed, they would not have a material adverse effect on the financial position of Tampa General. Management of Tampa General does not believe that any other type of audit or investigation would result in a liability that would have a material adverse effect on the business, operations, or financial condition of Tampa General. RAC Audits. The MMA established the Medicare Recovery Audit Contractor ("RAC") program initially as a demonstration program to identify improper Medicare payments. CMS contracts with private contractors to conduct RAC audits (the "RAC Contractors"). RAC Contractors are paid on a contingency fee basis, receiving a percentage of the improper overpayments and underpayments they collect from providers. RAC Contractors can retrospectively review claims for up to three years from the date the claim was paid and review provider claims for the following types of services: hospital inpatient and outpatient, 34

41 skilled nursing facility, physician, ambulance and laboratory, as well as durable medical equipment. RAC Contractors use automated software programs to identify potential payment errors in such areas as duplicate payments, fiscal intermediaries' mistakes, medical necessity and coding, and identified significant overpayments for collection in the demonstration states. In accordance with the MMA and the Tax Relief and Health Care Act of 2006 (the "2006 Tax Act"), CMS designated the use of recovery audit contractors to search for improper Medicare payments in Arizona, Florida, California, Massachusetts, New York and South Carolina. While originally part of a demonstration program that was set to expire in 2008, the provisions of the 2006 Tax Act made the RAC program permanent and authorized CMS to expand the program to all 50 states by As required by the 2006 Tax Act, permanent RAC programs have been implemented in all 50 states. The RAC program was expanded through the Health Care Reform Act to Medicare Part C (Medicare Advantage plans), Medicare Part D (prescription drug coverage) and Medicaid. On November 15, 2011, CMS announced new demonstration projects which took effect on January 1, The first such project, the Recovery Audit Prepayment Review demonstration, applies to eleven states, including Florida, and allows RACs to review claims before they are paid to ensure that the applicable provider complied with all Medicare payment rules. The second demonstration project applies to seven states, including Florida, and requires prior authorization for certain medical equipment for all people covered by Medicare who reside in the applicable states. This prior authorization demonstration program will be implemented in two phases. During the first phase, Medicare administrative contractors will conduct prepayment reviews on certain medical equipment claims. The second phase will implement prior authorization in a manner similar to that employed by private-sector health care payers. It is unknown at this time how these new CMS demonstration projects will impact Tampa General. State Legislation Medicaid (Title XIX of the Federal Social Security Act) is a health insurance program for certain low-income and needy individuals that is jointly funded by the federal government and the states. It covers approximately 50 million people, including children, the aged, blind, and/or disabled, and individuals who are eligible to receive federally assisted income maintenance payments. Pursuant to broad federal guidelines, the states and the United States territories (Puerto Rico, Guam, the Virgin Islands, American Samoa, and the Northern Mariana Islands) each (1) establish their own eligibility standards; (2) determine the type, amount, duration, and scope of services; (3) set the payment rates for services; and (4) administer their own programs. Some states operate certain Medicaid programs under a waiver of some of the basic Medicaid requirements. Pursuant to the Medicaid program, the federal government supplements funds provided by the various states for medical assistance to the medically indigent. Payment for such medical and health services is made to hospitals in an amount determined in accordance with procedures and standards established by state law under federal guidelines. In Florida, Medicaid is administered by the Agency for Health Care Administration ("AHCA"). Medicaid is a public health insurance program that primarily serves low-income families with children and Medicaid eligibility is generally based on a combination of financial and categorical eligibility requirements. Most states determine threshold Medicaid eligibility levels by reference to other federal financial assistance programs including Temporary Assistance to Needy Families ("TANF"), which is a low-income assistance program for families with children that was adopted to replace the Aid to Families with Dependent Children program, and Supplemental Security Income ("SSI"), which is a federal program that provides assistance to low-income aged, blind or disabled individuals. Under the Medicaid program, the federal government supplements funds provided by the various states for medical assistance to the medically indigent. Payment for medical and health services is made 35

42 to providers in amounts determined in accordance with procedures and standards established by state law under federal guidelines. Fiscal considerations of both federal and state governments in establishing their budgets will directly affect the funds available to the providers for payment of services rendered to Medicaid beneficiaries. For example, the DRA included Medicaid cuts of approximately $4.8 billion over a five-year period. Currently, Medicaid inpatient hospital payments are generally made under a prospective payment system on a per discharge basis based on diagnosis-related groups ("DRGs"). It is important to note that although the payment systems can be categorized in general terms, the specific methodology varies from state to state. In Florida, Medicaid inpatient hospital payments are made on a per diem basis. Medicaid and Managed Medicaid accounted for approximately 20.2% of Tampa General's gross patient revenues in its fiscal year ended September 30, Florida Medicaid Reform. Florida's Medicaid program has continued to evolve since the initial reforms began on July 1, On July 1, 2007, this reform initiative authorized under a CMS waiver was extended for the counties of Baker, Broward, Clay, Duval and Nassau. On December 15, 2011, the CMS approved AHCA's request for a 3-year waiver extension for the pilot program through June 30, 2014 (the "Pilot Program"). The Pilot Program was structured to move most Medicaid covered individuals in these five counties from a fee-for-service arrangement to a managed care model of service, with certain exceptions. During the 2011 Legislative Session two pieces of legislation passed (House Bill 7107 and House Bill 7109) which authorized AHCA to further expand the use of the managed care networks to additional individuals eligible for Medicaid and allowed for the expansion of reform statewide (the "Statewide Medicaid Managed Care" Program or the "SMMC"). SMMC would expand managed care beyond the Pilot Program to Medicaid recipients statewide and contains two separate components: the Managed Medical Assistance Program for primary and acute care, and Long-term Managed Care Program for residential, home and community-based care. The Medicaid Medically Needy will continue to receive coverage and will be enrolled in qualified managed care plans. An Invitation to Negotiate for the Long-term Managed Care Program was issued by AHCA on July 1, After AHCA chooses the plans that may participate in SMMC, AHCA will begin to modify and transition eligible Medicaid recipients into the program. It is anticipated by AHCA that SMMC will be available in certain areas of the State beginning into the first quarter of 2013 and will be in all areas of the State by October 1, It is unknown at this time what impact SMMC, when implemented, would have on Tampa General. During the 2011 Legislative Session, the State Legislature adopted the Budget which included significant cuts to Medicaid reimbursement rates for healthcare providers. Additionally, during the 2012 Legislative Session, the State Legislature adopted the Budget, which went into effect July 1, The adopted Budget includes, among other changes, reduction of more than $300 million or 5.64% in hospital reimbursement rates, 1.25% reduction in nursing home reimbursement rates, limits on reimbursement for non-pregnant Medicaid patients 21 years or older to six (6) emergency room visits per person/year effective August 1, 2012 ($46.7 million reduction statewide) and general physician visits to two (2) per month per non-pregnant adult Medicaid patient, eliminates payments for preventable hospital errors effective July 1, 2012 ($2.7 million reduction statewide) and an outline for the creation of a plan to convert Medicaid payments to a DRG model by July 1, According to the Florida Hospital Association, the changes in the Medicaid payment formula that took effect on July 1, 2012, are estimated to reduce payments to Tampa General by approximately $1.7 million. It is also unknown at this time what impact Governor Scott's announced "opt out" of the expansion of the Medicaid Program in Florida provided by the Health Care Reform Act. See " Federal Health Care Reform." No assurance can be given that Tampa General can mitigate any such reductions and changes to Medicaid or that Medicaid rates will not be reduced again in the future. 36

43 Medicaid programs vary widely from state to state and are continually being amended and revised. There can be no assurance that Tampa General's patient service revenues will not be adversely affected by any future amendments and revisions to the Medicaid programs. Certificate of Need. Florida law provides for a CON program which applies to the offering or development of certain health care-related projects and institutional health services. The CON program in Florida is administered by the AHCA. Florida's CON program requires, among other things, AHCA's review of proposed establishment of, additions to, conversions of, or substantial changes in, certain health services by or on behalf of Tampa General under certain conditions, and depending upon the type of health care facility; the new construction or establishment of additional facilities; the replacement of existing facilities to be located on different sites; provides for expedited review of certain health-carerelated projects; and exempts certain health-care-related projects from review. In 2004, the Florida Legislature passed revisions to the Florida CON law that the Governor signed into law, effective July 1, 2004 (the "Revised Florida CON Law") (2004 Fla. Laws ch. 383). The Revised Florida CON Law, among other things, generally preserved the requirement of a CON for new construction or establishment of additional health care facilities; exempted from CON review, upon proper application, certain hospitals' establishment of open-heart-surgery programs and the provision of percutaneous coronary intervention for emergency myocardial infarction patients presenting to a hospital lacking an approved adult open-heart-surgery program, if certain criteria are met; exempted from CON approval the addition of beds to certain existing health care facilities; and maintained the requirement that specialty hospitals are subject to CON approval. In 2008, the Florida Legislature passed further revisions to the 2004 Florida CON Law that the Governor signed into law, effective May 19, 2008 (the "2008 Florida CON Law" and together with the 2004 Florida CON Law, the "Florida CON Law") (2008 Florida Laws ch. 29). These revisions limited the criteria that AHCA will apply to CON applications for general hospitals; established application content requirements specific to general hospitals; and established application processing, administrative hearing and judicial review provisions specific to general hospital CON applications. No assurance can be given as to the ability of Tampa General to obtain CON approval for future projects necessary for the maintenance of competitive rates and charges or quality and scope of care. Tampa General has all CONs or letters of exemption required for the operation of their facilities and its current capital projects. No assurance can be given that the Florida CON Law will not be amended or repealed, in whole or in part, following the date of this Official Statement. Utilization Management. In 1984, the Florida legislature enacted the Health Care Access Act of 1984 (the "Health Care Access Act") to provide financial incentives for hospitals and insurers to contain costs. Health Care Reform of The Health Care Reform Act of 1992 established a single agency, AHCA, in order to consolidate Florida State health care financing, data collection and regulatory functions. The data collection and analysis activities of AHCA are financed in part by an annual assessment on hospitals in an amount not to exceed four basis points (.04%) of the gross operating expenses of the hospital for its last fiscal year. Each fiscal year, health care facilities must file comprehensive financial information with AHCA. Health care facilities that fail to comply with AHCA's reporting requirements are subject to fines not exceeding $1,000 per day for each day the facility is in violation. Also pursuant to this Act, set forth in part at Florida Statutes , hospitals are required to enter into a rate agreement with each health insurer which represents 10% or more of the hospital's private pay patients to establish a prospective payment arrangement. 37

44 Florida Indigent Assistance. In 1984, the Florida legislature enacted the Public Medical Assistance Act (the "Assistance Act") to provide a mechanism for funding the provision of health care services to indigent persons. The Assistance Act, currently in Florida Statutes Section et seq., imposes assessments upon each hospital operating in Florida, except hospitals operated by AHCA or the Department of Corrections. Each hospital is assessed 1.5% of its annual net operating revenue for inpatient services and 1.0% of its annual net operating revenue for outpatient services, based on the hospital's actual experience as reported to AHCA. The assessment is payable to and collected by AHCA and is based on annual net operating revenue for the entity's most recently completed fiscal year. Moneys collected by AHCA pursuant to the Assistance Act are deposited into Florida's Public Medical Assistance Trust Fund. Hillsborough County (Florida) Indigent Care. The Hillsborough County Health Care Plan ("HCHCP") was developed to reduce the growth rate in uncompensated care costs. The HCHCP provides health care coverage to otherwise uninsured, low-income people at little cost to enrollees. Individuals with income below one hundred percent (100%) of the Federal Poverty Level and who are not eligible for Medicaid or other health insurance are eligible for HCHCP without any premium contributions. The program offers primary care, inpatient and outpatient surgical services, mental health, dental care, substance abuse services, and home health services. HCHCP contracts on a fee-for-service basis with Tampa General and other Hillsborough County hospitals and providers to provide inpatient and outpatient services to its beneficiaries within a global budget negotiated annually with Hillsborough County. HCHCP accounted for approximately 2.6% of Tampa General's gross patient revenues in its fiscal year ended September 30, Loss of HCHCP revenues could affect Tampa General's level of participation in Florida's Low Income Pool Program (which receives federal matching of funds). Commercial Insurance and Other Third-Party Plans Many commercial insurance plans, including group plans, reimburse their customers or make direct payments to Tampa General for charges at established rates. Generally, these plans pay semiprivate room rates plus ancillary service charges, which are subject to various limitations and deductibles depending on the plan. To the extent allowed by law, patients carrying such coverage are responsible to the hospital for any deficiency between the commercial insurance proceeds and total billed charges. There can be no assurance that patients will make payments of any such deficiencies. Managed Care and Integrated Delivery Systems Many hospitals and health systems, including Tampa General, are pursuing strategies with physicians in order to offer an integrated package of health care services, including physician hospital services, to patients, health care insurers, and managed care organizations ("MCOs"). These integration strategies take many forms, several of which are discussed below. Further, many of these integration strategies are capital intensive and may create certain business and legal liabilities for Tampa General. Even when these activities are conducted by affiliates outside of Tampa General, the start-up capitalization for such developments, as well as operational deficits, may be funded by Tampa General. Depending on the size and organizational characteristics of a particular development, these capital requirements may be substantial. In some cases, Tampa General may be asked to provide a financial guarantee for the debt of a related entity which is carrying out an integrated delivery strategy. In certain of these structures, Tampa General may have an ongoing financial commitment to support operating deficits, which may be substantial on an annual or aggregate basis. 38

45 In many markets, including Tampa, Florida, MCOs, such as HMOs, PPOs, point of service providers ("POS") and consumer-driven care and similar mechanics for arrangement for health care payment / have largely replaced indemnity insurance as the prime source of nongovernmental payment for hospital services. MCOs generally use discounts, risk-transfer mechanisms and other economic incentives to reduce or limit the cost and utilization of health care services, including inpatient hospital care. Payments to Tampa General from MCOs typically are lower than those received from traditional indemnity/commercial insurers. There is no assurance that Tampa General will maintain managed care contracts or obtain similar contracts in the future. Failure to maintain such contracts could reduce Tampa General's market share and net patient services revenues. Conversely, participation may maintain or increase Tampa General's patient base but could result in lower net operating income or operating losses if Tampa General is unable to adequately contain costs. Under a PPO arrangement, there generally are financial incentives for subscribers to use only those hospitals or providers which contract with the PPO. Under most HMO plans, private payers limit coverage to those services provided by selected hospitals. With this contracting authority, private payers, including health plans and HMOs, may direct patients away from nonselected hospitals by denying coverage for services provided by them. Under a POS arrangement, there are financial incentives for subscribers to use a closed panel of hospitals or providers, but subscribers also are able to use hospitals or providers that do not contract with the network. Use of such non-contracting hospitals or providers requires increased financial contribution from the subscribers, typically in the form of increased coinsurance or deductible payments. Nationally, the popularity of POS and PPO plans has increased while the traditional closed panel HMO has lost popularity. Under a consumer directed care arrangement, the consumer generally purchases a high deductible health insurance policy that provides coverage only after the consumer has expended several thousand dollars personally on care. Under federal income tax rules, health savings accounts ("HSAs") provide substantial tax relief for those funds actually spent by consumers on their health care. Therefore, patients and not payors or employers determine where to obtain care, and how much to spend on such care. This may lead to a lessening of importance of private commercial payors. Tampa General has entered into contractual arrangements with PPOs and HMOs pursuant to which Tampa General agrees to perform certain health care services for eligible participants at discounted rates. Most PPOs and HMOs currently pay hospitals on a discounted fee-for-service basis or on a fixed rate or episode per day of care. Tampa General may not have complete information about its actual costs of providing specific types of care, particularly since each patient presents a different mix of services and length of stay. Consequently, the discounts offered to HMOs and PPOs may result in payment at less than actual cost and the volume of patients directed to a hospital may vary significantly from projections. Changes in utilization of certain services may be dramatic and unexpected. As MCOs become more prevalent, hospitals must be capable of attracting and maintaining managed care business, often on a regional basis. There can be no assurance that contracts entered into by Tampa General with MCO payors will be renewed by such payors upon expiration thereof or will not be terminated prior to expiration thereof. As a consequence of such factors, the effect of managed care on Tampa General's financial condition is difficult to predict and may be different in the future than the financial statements for current periods. Commercial managed care accounted for approximately 20.2% of Tampa General's gross patient revenues in its fiscal year ended September 30, State Laws. States are increasingly regulating the delivery of health care services. Much of this increased regulation has centered around the managed care industry. State legislatures have cited their right and obligation to regulate and oversee health care insurance and have enacted sweeping measures 39

46 that aim to protect consumers and, in some cases, providers. A number of states have enacted laws mandating payment of claims within specified time periods, laws regulating access to specialists, and laws generally regulating provider agreements with MCOs. Due to this increased state oversight, Tampa General could be subject to a variety of state health care laws and regulations affecting both MCOs and health care providers. In addition, Tampa General could be subject to state laws and regulations prohibiting, restricting, or otherwise governing preferred provider organizations; third-party administrators, physician-hospital organizations, independent practice associations or other intermediaries; fee-splitting; the "corporate practice of medicine"; selective contracting ("any willing provider" laws and "freedom of choice" laws); coinsurance and deductible amounts; insurance agency and brokerage, quality assurance, utilization review, and credentialing activities; provider and patient grievances; mandated benefits; rate increases; and many other areas. In the event that Tampa General chooses to transact businesses subject to such laws, or is considered by a state in which it operates to be engaging in such businesses, Tampa General may be required to comply with these laws or to seek the appropriate license or other authorization from the State. Such requirements may impose operational, financial, and legal burdens, costs, or risks on Tampa General. Dependence Upon Third-Party Payors. Tampa General's ability to develop and expand its services and, therefore, its profitability, is dependent upon Tampa General's ability to enter into contracts with HMOs and other third-party payors at competitive rates. There can be no assurance that Tampa General will be able to attract or continue to attract third-party payors, and where it does, no assurance that it will be able to contract with such payors on advantageous terms. The inability of Tampa General to contract with a sufficient number of such payors on advantageous terms would have a material adverse effect on Tampa General's operations and financial results. Further, while Tampa General employs a system to control health care service utilization and increase quality, Tampa General cannot predict changes in utilization patterns or such system's effect on health care providers. Physician Contracting and Relations. Tampa General may wish to contract with physician organizations ("POs") (e.g., independent physician associations, physician-hospital organizations, etc.) to arrange for the provision of physician and ancillary services. Because POs are separate legal entities with their own goals, obligations to shareholders, financial status, and personnel, there are risks involved in contracting with POs. The success of Tampa General will be partially dependent upon its ability to attract POs to participate in Tampa General's network, and upon the physicians', including the employed physicians', abilities to perform their obligations and deliver high quality patient care in a cost-effective manner. There can be no assurance that Tampa General will be able to retain the requisite number of physicians, or that such physicians will deliver high quality health care services. Without impaneling a sufficient number and type of providers in Tampa General's network, Tampa General could fail to be competitive, fail to keep or attract payor contracts, or be prohibited from operating until its panel provided adequate access to patients. Such occurrences could have a material adverse effect on the operations or financial condition of Tampa General. Regulation of Health Care Industry General. The health care industry is highly dependent on a number of factors which may limit the ability of Tampa General to meet its obligations under the Agreement, the Trust Agreement, the Master Indenture and the 2012A Bonds. Among other things, participants in the health care industry (such as Tampa General) are subject to significant regulatory requirements of federal, state and local 40

47 governmental agencies and independent professional organizations and accrediting bodies, technological advances and changes in treatment modes, various competitive factors and changes in third-party reimbursement programs. Discussed below are certain of these factors which could have a significant effect on the future operations and financial condition of Tampa General. Health Insurance Portability and Accountability Act. The Health Insurance Portability and Accountability Act of 1996 ("HIPAA") added two prohibited practices, the commission of which may lead to civil monetary penalties: (1) the practice or pattern of presenting a claim for an item or service on a reimbursement code that the person knows or should know will result in greater payment than appropriate, i.e., upcoding, and (2) engaging in a practice of submitting claims for payment for medically unnecessary services. Violation of such prohibited practices could amount to civil monetary penalties of up to $10,000 for each item or service involved. Management of Tampa General is not aware of any violations of the prohibited practices provisions of HIPAA. HIPAA also includes administrative simplification provisions intended to facilitate the processing of health care payments by encouraging the electronic exchange of information and the use of standardized formats for health care information. Congress recognized, however, that standardization of information formats and greater use of electronic technology presents additional privacy and security risks due to the increased likelihood that databases of individually identifiable health information will be created and the ease with which vast amounts of such data can be transmitted. Therefore, HIPAA requires the establishment of privacy and security protections for individually identifiable health information. HHS promulgated privacy regulations under HIPAA that protect patient medical records and other personal health information maintained by health care providers, hospitals, health plans, health insurers, and health care clearinghouses (collectively, "Covered Entities"). Compliance with the privacy regulations was required as of April 14, Tampa General believes that its operations and information systems comply with the HIPAA privacy regulations in all material respects. Security regulations have also been promulgated under HIPAA (the "Security Regulations"). The Security Regulations require Covered Entities to have certain administrative, technical, and physical safeguards in place to ensure the confidentiality, integrity, and availability of all electronic protected health information they create, receive, maintain, or transmit. Additionally, HHS promulgated regulations to standardize the electronic transfer of information pursuant to certain enumerated transactions (the "Code Set Transactions"). Management of Tampa General believes that all of its health care facilities are in substantial compliance with the Security Regulations and the Code Set Transactions. On February 17, 2009, President Obama signed into law the Health Information Technology for Economic and Clinical Health Act (the "HITECH Act"), which is part of the American Recovery and Reinvestment Act of The HITECH Act significantly changes the landscape of federal privacy and security law with regard to individually identifiable health information. The HITECH Act (i) extended the reach of HIPAA and the Security Regulations, (ii) imposed a breach notification requirement on HIPAA covered entities, (iii) limited certain uses and disclosures of individually identifiable health information, (iv) increased individuals' rights with respect to individually identifiable health information and (v) increased enforcement of, and penalties for, violations of privacy and security of individually identifiable health information. Many of the HITECH Act's provisions became effective on February 17, 2010, and other provisions became effective thereafter. Management of Tampa General does not expect that the prohibited practices provisions of the HITECH Act will affect Tampa General in a material respect. 41

48 Any violation of HIPAA, the HITECH Act, or the regulations promulgated under either is subject to HIPAA civil and criminal penalties that include monetary penalties and/or imprisonment. Significantly, the HITECH Act created a tiered approach to the imposition of civil monetary penalties ("CMP") for violations of HIPAA, the HITECH Act, and the regulations promulgated under each that became effective immediately upon President Obama signing the HITECH Act into law on February 17, The new tiered approach provides for CMPs of up to $1.5 million for violations of an identical requirement during a calendar year. Tampa General believes that all of its health care facilities are in substantial compliance with HIPAA, the HITECH Act, and the rules promulgated thereunder. Federal "Fraud and Abuse" Laws and Regulations. The Federal Medicare/Medicaid Anti-Fraud and Abuse Amendments to the Social Security Act (the "Anti-Kickback Law") make it a felony offense to knowingly and willfully offer, pay, solicit or receive remuneration in order to induce business for which reimbursement is provided under the Medicare or Medicaid programs. In addition to criminal penalties, including fines of up to $25,000 and five years' imprisonment, violations of the Anti-Kickback Law can lead to CMP and exclusion from Medicare, Medicaid and certain other state and federal health care programs. The scope of prohibited payments in the Anti-Kickback Law is broad and includes economic arrangements involving hospitals, physicians and other health care providers, including joint ventures, space and equipment rentals, purchases of physician practices and management and personal services contracts. HHS has published regulations which describe certain "safe harbor" arrangements that will not be deemed to constitute violations of the Anti-Kickback Law. The safe harbors described in the regulations are narrow and do not cover a wide range of economic relationships which many hospitals, physicians and other health care providers consider to be legitimate business arrangements not prohibited by the statute. Because the regulations describe safe harbors and do not purport to describe comprehensively all lawful or unlawful economic arrangements or other relationships between health care providers and referral sources, hospitals and other health care providers having these arrangements or relationships may be required to alter them in order to ensure compliance with the Anti-Kickback Law. In addition to current CMP, the Balanced Budget Act of 1997 created a new CMP for cases in which a person contracts with an excluded provider for the provision of health care items or services where the person knows or should know that the provider has been excluded from participation in a federal health care program. Violations will result in damages three times the remuneration involved as well as a penalty of $10,000 per violation. Management of Tampa General believes that its contracts with physicians and other referral sources are in compliance with the Anti-Kickback Law. However, in light of the narrowness of the safe harbor regulations and the scarcity of case law interpreting the Anti-Kickback Law, there can be no assurances that Tampa General will not be found to have violated the Anti-Kickback Law and, if so, whether any sanction imposed would have a material adverse effect on the operations of Tampa General. The Federal False Claims Act. The federal civil FCA provides that any person who "knowingly presents, or causes to be presented" a "false or fraudulent claim for payment or approval" to the United States, and its agents and contractor is liable for a civil penalty ranging from $5,500 to $11,000 per claim, plus three times the amount of damages sustained by the government. Under the FCA's so-called "reverse false claims," liability also could arise for "using" a false record or statement to "conceal," "avoid" or "decrease" an "obligation to pay or transmit money or property to the Government." The FCA also empowers and provides incentives to private citizens (commonly referred to as qui tam relator or whistleblower) to file suit on the government's behalf. The qui tam relator's share of the recovery can be between 15% and 25% in cases in which the government intervenes, and 25% to 30% in cases in which the government does not intervene. The government may use the FCA to prosecute Medicare and other government program fraud in areas such as coding errors, billing for services not provided and submitting false cost reports. 42

49 Recent amendments to the FCA in the Fraud Enhancement and Recovery Act of 2009 ("FERA") and the Health Care Reform Act amend and expand the reach of the FCA. FERA expanded the FCA's reverse false claims provision, imposing liability on any person who "knowingly conceals" or "knowingly and improperly avoids or decreases" an "obligation to pay or transmit money or property to the Government," whether the person uses a false record or statement to do so or not. FERA also clarified that an "obligation" can arise from the retention of an overpayment. Section 6402 of the Health Care Reform Act further addresses the retention of overpayments by defining the term overpayment and the circumstances and timing under which an overpayment need be returned to the government before it becomes an "obligation" under the FCA. FERA and the Health Care Reform Act also amend certain jurisdictional bars to the FCA, effectively narrowing the public disclosure bar and expanding the definition of "original source," thus potentially broadening the field of potential whistleblowers. While Tampa General makes every effort to be in compliance with applicable federal health care program requirements, there can be no assurance that Tampa General will not be subject to an investigation or sanction with respect thereto which could have a material adverse effect on the operations of Tampa General. The State of Florida also has a state false claims act pursuant to which the Department of Legal Affairs of the Office of the Attorney General (the "Department of Legal Affairs") may, after investigation by the Medicaid Fraud Control Unit of the Department of Legal Affairs, bring an action against any person who knowingly presents a false claim for payment or approval. No proof of specific intent to defraud is required. Actions also may be brought by the Florida Department of Financial Services and by a private person. If found liable under this statute, the individual or facility may be liable for a civil penalty of $5,500-$11,000 for each violation, as well as for treble damages. Florida also has numerous provisions prohibiting anti-kickback activity which apply to health care professionals, other providers and provider institutions. Violation of any of Florida's anti-kickback provisions may result in civil penalties, including adverse impacts on licensure. Restrictions on Referrals. Current federal law (known as the "Stark Law" provisions) prohibits providers of "designated health services" from billing Medicare or Medicaid when the patient is referred by a physician or an immediate family member with a financial relationship with the provider, with limited exceptions. "Designated health services" or "DHS" include the following: clinical laboratory services; physical therapy services; occupational therapy services; radiology services, including magnetic resonance imaging, computerized axial tomography scans, and ultrasound services; radiation therapy services and supplies; durable medical equipment and services; parenteral and enteral nutrients, equipment and supplies; prosthetics, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services. The Stark Law also prohibits the furnishing entity from submitting a claim for reimbursement or otherwise billing Medicare or any other person or entity for improperly referred DHS. An entity that submits a claim for reimbursement in violation of the Stark Law must refund any amounts collected and may be (1) subject to a civil penalty of up to $15,000 for each prohibited selfreferred service and (2) excluded from participation in federal health care programs. In addition, a physician or entity that has participated in a "scheme" to circumvent the operation of the Stark Law is subject to a civil penalty of up to $100,000 and possible exclusion from participation in federal health care programs. CMS, the federal agency with primary responsibility for enforcement of the Stark Law has, over the years, published a number of regulations interpreting the Stark Law. CMS, on September 23, 2010, published a self-referral disclosure protocol ("SRDP") pursuant to Section 6409(a) of the Health Care Reform Act. The SRDP sets forth a process to enable providers of services and suppliers to self-disclose actual or potential violations of the Stark Law. Additionally, Section 6409(b) of the Health Care Reform 43

50 Act gives the Secretary of HHS the authority to reduce the amount due and owing for violations under the Stark Law. Portions of the 2011 MPFS also implemented changes from the Health Care Reform Act related to self-referral disclosures. The Health Care Reform Act amended the in-office ancillary services exception to the physician self-referral law as applied to magnetic resonance imaging, computed tomography, and positron emission tomography, to require a physician to disclose to a patient in writing at the time of the referral that the patient may obtain these services from another supplier. CMS now requires, according to the final rule, that the referring physician provide the patient with a list of five alternative suppliers within a 25-mile radius of the physician's office location at the time of the referral who provide the imaging services ordered. Management of Tampa General believes that it is currently in material compliance with the Stark Law provisions. However, in light of the scarcity of case law interpreting the Stark Law provisions, there can be no assurances that Tampa General will not be found to have violated the Stark Law provisions and, if so, whether any sanction imposed would have a material adverse effect on the operations of Tampa General, the financial condition of Tampa General, or the status of Tampa General and certain of its applicable entities as organizations described in Section 501(c)(3) of the Code. Investment in the 2012A Bonds by physicians (and their family members) raises a question as to whether such physician-investors, by such investment, will acquire a "financial relationship" with Tampa General. If such a financial relationship were thus created, under the Stark Law, such physician-investors would be prohibited from referring patients to Tampa General's facilities. Compliance/OIG Investigations. Medicare requires that extensive financial information be reported on a periodic basis and in a specific format or content. These requirements are numerous, technical and complex and may not be fully understood or implemented by billing or reporting personnel. With respect to certain types of required information, the FCA and the Social Security Act may be violated by mere recklessness in the submission of information to the government even without any intent to defraud. New billing systems, new medical procedures and procedures for which there is not clear guidance from CMS may all result in liability. The penalties for violation include criminal or civil liability and may include, for serious or repeated violations, exclusion from participation in the Medicare program. HHS, through the Office of Inspector General (the "OIG"), conducts national investigations of Medicare billings for certain services. The focus of these investigations varies annually according to the OIG Workplan. While Tampa General makes every effort to be in compliance with Medicare billing requirements, there can be no assurance that Tampa General will not be subject to an investigation or sanction with respect thereto. Both federal and state government agencies have increased their investigative and enforcement initiatives. Such initiatives relate to a wide-range of health care operations including billing practices, arrangements between providers and physicians, outliers and cost reports. Patient Transfers. In response to concerns regarding inappropriate hospital transfers of emergency patients based on the patient's inability to pay for the services provided, Congress enacted the Emergency Medical Treatment and Active Labor Act ("EMTALA"). Among other things, EMTALA imposes certain requirements which must be met before transferring a patient to another facility, including conducting a medical screening. Failure to comply with EMTALA can result in exclusion from the Medicare and/or Medicaid programs as well as imposition of civil and criminal penalties. The 44

51 requirements of EMTALA, specifically the treatment of uninsured patients, could adversely affect the financial condition of Tampa General. Accreditation. Tampa General and its operations are subject to regulation and certification by various federal, state and local government agencies and by certain nongovernmental agencies such as The Joint Commission. No assurance can be given as to the effect on current and future operations of Tampa General of existing laws, regulations and standards or the application thereof for certification or accreditation or of any future changes in such laws, regulations and standards. Hurricanes and Other Disasters. The State of Florida is generally susceptible to hurricanes and similar storms in which winds and tidal surges are powerful enough to cause severe destruction. Tampa General, being located in Florida and on an island, is subject to the effects of such hurricanes and similar storms as well as the effects of fires and other disasters. Construction Risks. The costs and construction schedules for the 2012 Project are dependent upon the prices and schedules of the construction manager, the other contractors, subcontractors and suppliers and may vary materially from Tampa General's current estimates. In addition, construction projects similar to the 2012 Project are subject to cost increases and delays due to a variety of causes, including without limitation, weather, labor disputes, availability of materials or supplies, wind, fire or other casualty damages, or environmental problems, unanticipated construction difficulties or other "force majeure" occurrences or events or financial failure to perform by the construction manager, the other contractors, a subcontractor or supplier. Environmental Laws and Regulations. Health care providers are subject to a wide variety of federal, state and local environmental and occupational health and safety laws and regulations which address, among other things, hospital operations, facilities and properties owned or operated by hospitals. Among the types of regulatory requirements faced by hospitals, in addition to others, are (a) air and water quality control requirements, (b) waste management requirements, (c) specific regulatory requirements applicable to asbestos, polychlorinated biphenyls and radioactive substances, (d) requirements for providing notice to employees and members of the public about hazardous materials handled by or located at the hospital, (e) requirements for training employees in the proper handling and management of hazardous materials and wastes, and (f) other requirements. In its role as the owner and operator of properties or facilities, Tampa General may be subject to liability for investigating and remedying any hazardous substances that may have migrated off their property. Typical hospital operations include, but are not limited to, in various combinations, the handling, use, storage, transportation, disposal and discharge of hazardous, infectious, toxic, radioactive, flammable and other hazardous materials, wastes, pollutants or contaminants. As such, hospital operations are particularly susceptible to the practical, financial and legal risks associated with compliance with such laws and regulations. Such risks may (i) result in damage to individuals, property or the environment, (ii) interrupt operations and increase their cost, (iii) result in legal liability, damages, injunctions or fines and (iv) result in investigations, administrative proceedings, penalties or other governmental agency actions. There is no assurance that Tampa General will not encounter such risks in the future, and such risks may result in material adverse consequences to the operations or financial condition of Tampa General. At the present time, management of Tampa General is not aware of any pending or threatened claim, investigation or enforcement action regarding such environmental issues which, if determined adversely to Tampa General, would have a material adverse effect on its operations or financial condition. 45

52 Increased Enforcement Affecting Research. In addition to increasing enforcement of laws governing payment and reimbursement, the federal government has also stepped up enforcement of laws and regulations governing the conduct of clinical trials at hospitals. The Department of Health & Human Services elevated and strengthened its Office of Human Research Protection, one of the agencies with responsibility for monitoring federally funded research. In addition, the National Institutes of Health significantly increased the number of facility inspections that these agencies perform. The Food and Drug Administration ("FDA") also has authority over the conduct of clinical trials performed in hospitals when these trials are conducted on behalf of sponsors seeking FDA approval to market the drug or device that is the subject of the research. Moreover, the Office of Inspector General of the Department of Health & Human Services, in its "Work Plans," has included several enforcement initiatives related to reimbursement for experimental drugs and devices (including kickback concerns). The United States Department of Justice may also become involved in enforcement actions relating to the use of federal funds or submission of information to federal agencies. There have been a number of recent government investigations and settlements involving hospital use of federal grant funding in connection with clinical trials and also a settlement involving the submission of claims to Medicare for services provided in a clinical trial. These agencies' enforcement powers range from substantial fines and penalties to exclusion of researchers and suspension or termination of entire research programs, and errors in billing of the Medicare or Medicaid programs for care provided to patients enrolled in clinical trials that is not eligible for Medicare reimbursement can subject Tampa General to sanctions as well as repayment obligations. Negative Rankings Based on Clinical Outcomes, Cost, Quality, Patient Satisfaction and Other Performance Measures. Health plans, Medicare and Medicaid programs, employers, trade groups and other purchasers of health services, private standard-setting organizations and accrediting agencies increasingly are using statistical and other measures in efforts to characterize, publicize, compare, rank and change the quality, safety and cost of health care services provided by hospitals and health care providers. Published rankings such as "score cards" tiered hospital networks with higher co-payments and deductibles for non-emergent use of lower-ranked providers, "Pay for performance" and other financial and non-financial incentive programs are being introduced to affect the reputation and revenue of hospitals, the members of their medical staffs and other health care providers and to influence the behavior of consumers and providers such as Tampa General. Prevalent currently are measures of quality based on clinical outcomes of patient care, reduction in costs, patient satisfaction and investment in health information technology. Measures of performance set by others that characterize a hospital or a health care provider negatively may adversely affect its reputation and financial condition. Personnel Shortages. In the past, the health care industry has experienced a shortage of personnel to staff health care operations. There continues to be growing demand for nursing and other health care personnel and, in certain communities, the number of nurses and other paraprofessionals entering the profession in such communities is not sufficient to satisfy that demand. Tampa General will compete with other health care providers for nursing and other personnel and a shortage of which could force Tampa General to pay higher salaries and make greater use of temporary nurses and related personnel. A lack of qualified nursing personnel might also result in reduced census or require Tampa General to admit patients requiring a lower level of care, both of which could adversely affect operating results. Technological Changes. Medical research and resulting discoveries have grown exponentially in the last decade. These new discoveries may add greatly to Tampa General's cost of providing services with no or little offsetting increase in federal reimbursement and may also render obsolete certain of Tampa General's health services. The first effect, increased overall expense, may result because the costs of new drugs and devices may not be accounted for in payments received by Tampa General from Medicare, Medicaid or other third-party payors. A second potential effect is that discoveries could render 46

53 obsolete the way that services are currently rendered thereby either increasing expense or reducing revenues. However, any such effect cannot be predicted. Tax Exempt Status of the 2012A Bonds. The tax-exempt status of the 2012A Bonds is based on the continued compliance by the Issuer and Tampa General with certain covenants relating generally to restriction on use of the facilities financed with the 2012A Bonds and the use and investment of the proceeds of the 2012A Bonds. Failure to comply with such covenants could cause interest on the 2012A Bonds to be included in the gross income of the owners for Federal income tax purposes, retroactive to the date of issuance of the 2012A Bonds. The 2012A Bonds are not subject to mandatory redemption or acceleration in such case, nor is any provision made for stepped-up interest. Tax-Exemption for Nonprofit Hospitals. Tampa General is a nonprofit corporation, exempt from federal income taxation as organizations described in Section 501(c)(3) of the Code. As a nonprofit taxexempt organization, Tampa General is subject to federal, state and local laws, regulations, rulings and court decisions relating to its organizations and operations, including its operation for charitable purposes. Malpractice Lawsuits and Legislation. As is the case with most health care facilities, Tampa General is, on occasion, a defendant in various malpractice and other civil actions and is at risk that its exposure will exceed its coverage limits. In recent years the number of malpractice and other civil lawsuits and the dollar amount of patient recoveries have increased nationwide, resulting in increases of insurance premiums. In some areas of the country malpractice insurance may not continue to be available or it may only be available at such great cost as to render such insurance economically unavailable. Accordingly, although Tampa General believes that its present coverage and self-insurance reserves are adequate, there can be no assurance that Tampa General will be adequately insured. In the event that insurance coverage and reserves prove inadequate, Tampa General could be adversely affected. To the extent that insurance coverage and reserves maintained by Tampa General are inadequate to cover judgments against it, Tampa General will be forced to discharge such claims from its own funds and, under certain circumstances, such funds might not be adequate or the use of such funds may result in material adverse consequences to the operations or financial condition of Tampa General. A number of states, including Florida, have been working to stabilize malpractice premiums by limiting jury awards in malpractice cases thereby reducing the likelihood that physicians either will relocate or leave the practice of medicine altogether. For example, Section , Florida Statutes was enacted to provide a plan to limit jury awards and to provide for prompt resolution of medical malpractice claims. Section , Florida Statutes limits noneconomic damages to $500,000 per claimant regardless of the number of practitioner defendants and $500,000 per practitioner regardless of the number of claimants. Nevertheless, physicians in states such as Florida continue to face increasing difficulties in affordability of and access to professional liability coverage. These difficulties have a potentially negative effect on the liability of hospitals in those states as well. In some cases, new and non-traditional insurance vehicles are being started to fill the void created by the diminished availability of traditional coverage. Environmental Laws and Regulations. Health care providers are subject to a wide variety of federal, state and local environmental and occupational health and safety laws and regulations which address, among other things, hospital operations, facilities and properties owned or operated by hospitals. Among the type of regulatory requirements faced by hospitals are (i) air and water quality control requirements, (ii) waste management requirements, (iii) specific regulatory requirements applicable to asbestos, polychlorinated biphenyls and radioactive substances, (iv) requirements for providing notice to employees and members of the public about hazardous material handled by or located on Tampa General's property, (v) requirements for training employees in the proper handling and management of hazardous materials and wastes, and (vi) other requirements. 47

54 Tampa General may be subject to liability for hazardous substances that may have migrated off its properties including remediation thereof. Typical hospital operations include, but are not limited to, in various combinations, the handling, use, storage, transportation, disposal and discharge of hazardous, infectious, toxic, radioactive, flammable and other hazardous materials, wastes, pollutants and contaminants. As such, hospital operations are particularly susceptible to the practical, financial and legal risks associated with compliance with such laws and regulations. Such risks may (i) result in damage to individuals, property or the environment, (ii) interrupt operations and increase their cost, (iii) result in legal liability, damages, injunctions or fines and (iv) result in investigations, administrative proceedings, penalties or other governmental agency actions. There is no assurance that Tampa General will not encounter such risks in the future, and such risks may result in material adverse consequences to the operations or financial condition of Tampa General. At the present time, management of Tampa General is not aware of any pending or threatened claim, investigation or enforcement action regarding operations or such environmental issues, which, if determined adversely, would have a material adverse effect on the financial condition of Tampa General. Antitrust. Enforcement of the antitrust laws against health care providers is becoming more common, and antitrust liability may arise in a wide variety of circumstances including medical staff privilege disputes, third party contracting, physician relations, and joint venture, merger, affiliation and acquisition activities. In some respects, the application of the federal and state antitrust laws to health care is still evolving, and enforcement activity by federal and state agencies appears to be increasing. At various times, health care providers may be subject to an investigation by a governmental agency charged with the enforcement of the antitrust laws, or may be subject to administrative or judicial action by a federal or state agency or a private party. Violation of the antitrust laws could subject the health care provider to criminal and civil enforcement by federal and state agencies, as well as by private litigants. Bond Ratings. There is no assurance that the ratings assigned to the 2012A Bonds will not be lowered or withdrawn at any time, the effect of which could adversely affect the market price for and marketability of the 2012A Bonds. See "RATINGS" herein. Certain Other Risks. In the future, the following factors, among others, may also adversely affect the operation of health care facilities, including Tampa General, or the market value of the 2012A Bonds to an extent that cannot be determined at this time: (1) increased competition from other area hospitals and health care providers; (2) efforts by the federal government, insurers and other governmental agencies to limit the cost of hospital services and to reduce utilization of hospital facilities by such means as preventive medicine, improved occupational health and safety, utilization review, increased competition among health care providers, development and utilization of medical and scientific research and technological advances and outpatient care; (3) future legislation and regulations affecting hospitals, governmental and commercial medical insurance and the health care industry in general, including reductions in federal or state funding of Medicare, Medicaid or other government-financed health care reimbursement programs; (4) cost ceiling limitations or other changes in reimbursement procedures in public or private insurance programs; (5) costs and availability of malpractice insurance and increases in malpractice recoveries; 48

55 (6) increased costs of attracting and retaining or decreased availability of a sufficient number of physicians, nurses and other employees; (7) increased costs resulting from unionization of the employees of Tampa General or the utilization by non-union employees of Tampa General of proceedings available under the National Labor Relations Act; (8) difficulty to otherwise use the facilities and equipment of Tampa General due to the special purpose nature of such property should such alternate use be necessary to raise funds for payment of obligations including the 2012A Bonds; (9) future legislation conditioning tax-exempt status or access to tax-exempt financing on satisfaction of various criteria, such as level of charity care or maintenance of an emergency room, or changing the method of taxing unrelated business income; (10) future medical and scientific advances, the development and requirement of options for health maintenance organizations in labor contracts, state health plans and other health plans, preventive medicine, improved occupational health and safety and improved outpatient care could result in decreased usage of inpatient hospital facilities; (11) the need and inherent challenges to obtain governmental approvals to undertake projects which Tampa General deems necessary to remain competitive and to maintain the quality and scope of care; (12) changes in the cost of paying claims in excess of insurance coverage or the bankruptcy or insolvency of major third party payors; (13) the shift of medical staff loyalties to health systems and facilities other than Tampa General would have an adverse effect, to the extent that each medical staff member has influence in admitting or directing a particular patient, with the patient's consent, to a particular facility; (14) the effect of contract disputes, discrimination claims, personal tort actions, work-related injuries, exposure to hazardous materials, interpersonal torts (such as between employees, between physicians or management and employees, or between employees and patients), and other risk factors that may flow from the relationships between employer and employee or among physicians, patients and employees; (15) increased unemployment or other adverse economic conditions that could increase the proportion of patients who are unable to pay fully for the cost of their care; and (16) the occurrence of natural disasters which may damage Tampa General's facilities, interrupt utility service to Tampa General's facilities, or otherwise impair the operation of Tampa General and the generation of revenues by its facilities. Certain Matters Relating to Enforceability of the Master Indenture The obligations of Tampa General under the Agreement will be limited to the same extent as the obligations of debtors typically are affected by bankruptcy, insolvency and the application of general principles of creditors' rights and as additionally described below. Upon original issuance and delivery of the 2012A Bonds, Tampa General will be the sole member of the Obligated Group, but additional members may be admitted as described under "SECURITY AND SOURCE OF PAYMENT FOR THE 49

56 2012A BONDS" herein and APPENDIX C "Summaries of the Principal Documents Summary of the Master Trust Indenture - Parties Becoming Members of Obligated Group" attached hereto. The accounts of each member of the Obligated Group will be combined for financial reporting purposes and will be used in determining whether various covenants and tests in the Master Indenture, Trust Agreement and the Agreement are met, notwithstanding uncertainties as to the enforceability of certain obligations of a member of the Obligated Group contained in the Master Indenture. Such uncertainties bear on the availability of the assets of the members of the Obligated Group for payment of debt service on the 2012A Bonds and may affect the value of Tampa General's Pledged Assets and other collateral pledged as security for the 2012A Bonds. The joint and several obligations described herein of the members of the Obligated Group to make payments, loans or other transfers of moneys or assets for payment of debt service on the 2012A Bonds (including transfers in connection with voluntary dissolution or liquidation) are, in the opinion of counsel to Tampa General, enforceable under the laws of the State of Florida except to the extent the enforceability of such obligations may be limited as described in the preceding paragraph. In addition, a member of the Obligated Group may not be required to make any payment, loan or other transfer of moneys or assets to provide for the payment of any Obligation or portion thereof, the proceeds of which Obligation were not lent or otherwise disbursed to such member, to the extent that such transfer would render the member insolvent or which would conflict with, not be permitted by or be subject to recovery for the benefit of other creditors of such member under applicable law. There is no clear precedent in the law as to whether such transfers from a member of the Obligated Group to pay debt service on obligations may be voided by a trustee in bankruptcy in the event of a bankruptcy of such member, or by third party creditors in an action brought pursuant to applicable state fraudulent transfer statutes. Under the United States Bankruptcy Code, a trustee in bankruptcy and, under fraudulent transfer statutes of the State, a creditor of a related guarantor, may avoid any obligation incurred by a related guarantor if, among other bases therefor: (i) the guarantor has not received fair consideration or reasonably equivalent value in exchange for the guaranty, and (ii) the guarantor is insolvent or the guaranty renders the guarantor insolvent, as defined in the United States Bankruptcy Code or the State fraudulent transfer statutes, or the guarantor is undercapitalized. If a member of the Obligated Group is considered undercapitalized, its obligation in connection with the Agreement and Obligation No. 3 may be limited to the amount of the proceeds actually received by such member and the joint and several obligations in excess of such amount of proceeds so received and interest thereon may be unenforceable. Application by courts of the tests of "insolvency", "reasonably equivalent value" and "fair consideration" has resulted in a conflicting body of case law. It is possible that, in an action to force a member of the Obligated Group to transfer moneys or assets to pay debt service on an obligation for which it was not the direct beneficiary, a court might not enforce such obligation to make such a transfer in the event it is determined that the member is analogous to a guarantor of the debt of the member who directly benefited from the borrowing and that fair consideration or reasonably equivalent value for such member's guaranty was not received or that such member is insolvent or the incurrence of such obligation has rendered or will render such member insolvent or that at the time of incurrence of such guaranty the guarantor was undercapitalized. The provisions described above also apply to the ability of Tampa General or a Controlling Affiliate, as applicable, to force a Restricted Affiliate to make cash transfers to Tampa General as contemplated by the Master Indenture. 50

57 Matters Relating to Security for the 2012A Bonds The holders of not less than a majority in aggregate principal amount of the outstanding 2012A Bonds may consent to certain amendments to the Trust Agreement or the Master Indenture that could adversely affect the security of the holders of all 2012A Bonds. If additional 2012A Bonds are issued under the Master Indenture, such changes may be effectuated by a majority of all 2012A Bonds Outstanding. Likewise the holders of a majority in aggregate principal amount of Outstanding Bonds under the Trust Agreement may consent to certain amendments to the Trust Agreement that may adversely affect the security of the Bond Trustee, and, derivatively, the security of the holders of the 2012A Bonds. The realization of any rights upon an Event of Default under the Trust Agreement will depend upon the exercise of various remedies specified in the Trust Agreement. Any attempt by the Bond Trustee to enforce such remedies may require judicial action, which is often subject to discretion and delay. Under existing law, certain of the legal and equitable remedies specified in the Trust Agreement may not be readily available. The Lease requires Tampa General's facilities to be used as health care facilities. Consequently, it could be difficult to find a lessee for such facilities, if it were necessary to proceed against such facilities pursuant to a judgment. In addition, certain of Tampa General's leasehold property is subject to deed, subdivision and zoning restrictions and may also be considered essential public property that is not subject to sale. See "SECURITY AND SOURCE OF PAYMENT FOR THE 2012A BONDS The Lease." UNDERWRITING Under a contract of purchase (the "Contract of Purchase") entered into among the Issuer, J.P. Morgan Securities LLC, SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities (collectively, the "Underwriters") and approved by Tampa General, the 2012A Bonds are being purchased for reoffering by the Underwriters at an aggregate purchase price of $178,269, (representing the $166,490, original principal amount of the 2012A Bonds, plus $12,902, of net original issue premium, less $1,122, of underwriting discount). The obligation of the Underwriters to accept delivery of the 2012A Bonds is subject to various conditions contained in the Contract of Purchase. The Contract of Purchase provides that the Underwriters will purchase all of the 2012A Bonds if any from the Series are purchased. The Underwriters intend to offer the 2012A Bonds to the public initially at the offering prices as set forth on the inside cover page of this Official Statement, which may subsequently change without any requirement of prior notice. The Underwriters reserve the right to join with dealers and other underwriters in offering the 2012A Bonds to the public. The Underwriters may offer and sell 2012A Bonds to certain dealers at prices lower than the public offering prices. In connection with this offering, the Underwriters may over-allot or effect transactions which stabilize or maintain the market price of the 2012A Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. J.P. Morgan Securities LLC ("JPMS") has entered into negotiated dealer agreements (each, a "Dealer Agreement") with each of UBS Financial Services Inc. ("UBSFS") and Charles Schwab & Co., Inc. ("CS&Co.") for the retail distribution of certain securities offerings, including the 2012A Bonds, at the original issue prices. Pursuant to each Dealer Agreement, each of UBSFS and CS& Co. will purchase 2012A Bonds from JPMS at the original issue price less a negotiated portion of the selling concession applicable to any 2012A Bonds that such firm sells. 51

58 SunTrust Robinson Humphrey, Inc. ("STRH"), one of the underwriters of the 2012A Bonds, has entered into an agreement (the "Distribution Agreement") with SunTrust Investment Services, Inc. ("STIS") for the retail distribution of certain municipal securities offerings, including the 2012A Bonds. Pursuant to the Distribution Agreement, STRH will share a portion of its underwriting or remarketing agent compensation, as applicable, with respect to the 2012A Bonds with STIS. STRH and STIS are both subsidiaries of SunTrust Banks, Inc. SunTrust Robinson Humphrey is the trade name for certain capital markets and investment banking services of SunTrust Banks and its subsidiaries. Wells Fargo Securities is the trade name for certain securities-related capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Bank, National Association. Wells Fargo Bank, National Association ("WFBNA"), one of the underwriters of the 2012A Bonds, has entered into an agreement (the "Distribution Agreement") with Wells Fargo Advisors, LLC ("WFA") for the distribution of certain municipal securities offerings, including the 2012A Bonds. Pursuant to the Distribution Agreement, WFBNA will share a portion of its underwriting or remarketing agent compensation, as applicable, with respect to the 2012A Bonds with WFA. WFBNA and WFA are both wholly owned subsidiaries of Wells Fargo & Company. RATINGS Moody's Investors Service and Fitch Ratings have assigned their municipal bond ratings of "A3" (stable outlook) and "A-" (stable outlook), respectively, to the 2012A Bonds. Any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same. Certain information and materials not included in this Official Statement were furnished to the rating agencies. The ratings of the 2012A Bonds reflect only the respective view of such organizations. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating agencies if, in the judgment of either or both, circumstances so warrant. Any such downward revision or withdrawal of such ratings or underlying ratings, or any of them, may have an adverse effect on the market price of the 2012A Bonds. General TAX MATTERS In the opinion of Squire Sanders (US) LLP, Bond Counsel, under existing law: (i) interest on the 2012A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; and (ii) the 2012A Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. Bond Counsel expresses no opinion as to any other tax consequences regarding the 2012A Bonds. The opinion on tax matters will be based on and will assume the accuracy of certain representations and certifications, and continuing compliance with certain covenants, of the Issuer and Tampa General contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the 2012A Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. In addition, Bond Counsel has assumed the correctness of, and relied on, the certification of Carlton Fields, P.A., General Counsel to Tampa General, regarding the current status of Tampa General as an organization described in Section 501(c)(3) of the 52

59 Code, which certificate is subject to a number of qualifications and limitations. Bond Counsel has not given any opinion or assurance concerning Section 513(a) of the Code or the effect of any future activities of the Issuer or Tampa General. Failure of Tampa General to maintain its status as an organization described in Section 501(c)(3) of the Code, or to operate the facilities refinanced by the 2012A Bonds in a manner that is substantially related to Tampa General's charitable purpose under Section 513(a) of the Code, may cause interest on the 2012A Bonds to be included in gross income retroactively to the date of the issuance of the 2012A Bonds. Bond Counsel will not independently verify the accuracy of the Issuer's and Tampa General's representations and certifications or the continuing compliance with the Issuer's and Tampa General's covenants and will not independently verify the accuracy of the opinion of Tampa General's counsel. The opinion of Bond Counsel is based on current legal authority and covers certain matters not directly addressed by such authority. It represents Bond Counsel's legal judgment as to exclusion of interest on the 2012A Bonds from gross income for federal income tax purposes but is not a guaranty of that conclusion. The opinion is not binding on the Internal Revenue Service ("IRS") or any court. Bond Counsel expresses no opinion about (i) the effect of future changes in the Code and the applicable regulations under the Code or (ii) the interpretation and the enforcement of the Code or those regulations by the IRS. The Code prescribes a number of qualifications and conditions for the interest on state and local government obligations to be and to remain excluded from gross income for federal income tax purposes, some of which require future or continued compliance after issuance of the obligations. Noncompliance with these requirements by the Issuer or Tampa General may cause loss of such status and result in the interest on the 2012A Bonds being included in gross income for federal income tax purposes retroactively to the date of issuance of the 2012A Bonds. Tampa General and, subject to certain limitations, the Issuer have each covenanted to take the actions required of it for the interest on the 2012A Bonds to be and to remain excluded from gross income for federal income tax purposes, and not to take any actions that would adversely affect that exclusion. After the date of issuance of the 2012A Bonds, Bond Counsel will not undertake to determine (or to so inform any person) whether any actions taken or not taken, or any events occurring or not occurring, or any other matters coming to Bond Counsel's attention, may adversely affect the exclusion from gross income for federal income tax purposes of interest on the 2012A Bonds or the market value of the 2012A Bonds. A portion of the interest on the 2012A Bonds earned by certain corporations may be subject to a federal corporate alternative minimum tax. In addition, interest on the 2012A Bonds may be subject to a federal branch profits tax imposed on certain foreign corporations doing business in the United States and to a federal tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes may have certain adverse federal income tax consequences on items of income, deduction or credit for certain taxpayers, including financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations, and individuals otherwise eligible for the earned income tax credit. The applicability and extent of these and other tax consequences will depend upon the particular tax status or other tax items of the owner of the 2012A Bonds. Bond Counsel will express no opinion regarding those consequences. Payments of interest on tax-exempt obligations, including the 2012A Bonds, are generally subject to IRS Form 1099-TNT information reporting requirements. If a 2012A Bond owner is subject to backup withholding under those requirements, then payments of interest will also be subject to backup withholding. Those requirements do not affect the exclusion of such interest from gross income for federal income tax purposes. 53

60 Bond Counsel's engagement with respect to the 2012A Bonds ends with the issuance of the 2012A Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Issuer, Tampa General or the owners of the 2012A Bonds regarding the tax status of interest thereon in the event of an audit examination by the IRS. The IRS has a program to audit tax-exempt obligations to determine whether the interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the 2012A Bonds, under current IRS procedures, the IRS will treat the Issuer as the taxpayer and the beneficial owners of the 2012A Bonds will have only limited rights, if any, to obtain and participate in judicial review of such audit. Any action of the IRS, including but not limited to selection of the 2012A Bonds for audit, or the course or result of such audit, or an audit of other obligations presenting similar tax issues, may affect the market value of the 2012A Bonds. Prospective purchasers of the 2012A Bonds should consult their own tax advisers regarding pending or proposed federal and state tax legislation and court proceedings, and prospective purchasers of the 2012A Bonds at other than their original issuance at the respective prices indicated on the inside cover of this Official Statement should also consult their own tax advisers regarding other tax considerations such as the consequences of market discount, as to all of which Bond Counsel expresses no opinion. Risk of Future Legislative Changes and/or Court Decisions Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may also be considered by the State legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment of obligations such as the 2012A Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the 2012A Bonds will not have an adverse effect on the tax status of interest on the 2012A Bonds or the market value or marketability of the 2012A Bonds. These adverse effects could result, for example, from changes to federal or state income tax rates, changes in the structure of federal or state income taxes (including replacement with another type of tax), or repeal (or reduction in the benefit) of the exclusion of interest on the 2012A Bonds from gross income for federal or state income tax purposes for all or certain taxpayers. For example, recent presidential and legislative proposals would eliminate, reduce or otherwise alter the tax benefits currently provided to certain owners of state and local government 2012A Bonds, including proposals that would result in additional federal income tax on taxpayers that own tax-exempt obligations if their incomes exceed certain thresholds. Investors in the 2012A Bonds should be aware that any such future legislative actions (including federal income tax reform) may retroactively change the treatment of all or a portion of the interest on the 2012A Bonds for federal income tax purposes for all or certain taxpayers. In such event, the market value of the 2012A Bonds may be adversely affected and the ability of holders to sell their 2012A Bonds in the secondary market may be reduced. The 2012A Bonds are not subject to special mandatory redemption, and the interest rates on the 2012A Bonds are not subject to adjustment in the event of any such change. risks. Investors should consult their own financial and tax advisers to analyze the importance of these Original Issue Discount and Original Issue Premium Certain of the 2012A Bonds ("Discount 2012A Bonds") as indicated on the inside cover of this Official Statement were offered and sold to the public at an original issue discount ("OID"). OID is the excess of the stated redemption price at maturity (the principal amount) over the "issue price" of a Discount 2012A Bond. The issue price of a Discount 2012A Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or 54

61 wholesalers) at which a substantial amount of the Discount 2012A Bonds of the same maturity is sold pursuant to that offering. For federal income tax purposes, OID accrues to the owner of a Discount 2012A Bond over the period to maturity based on the constant yield method, compounded semiannually (or over a shorter permitted compounding interval selected by the owner). The portion of OID that accrues during the period of ownership of a Discount 2012A Bond (i) is interest excluded from the owner's gross income for federal income tax purposes to the same extent, and subject to the same considerations discussed above, as other interest on the 2012A Bonds, and (ii) is added to the owner's tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition of that Discount 2012A Bond. The amount of OID that accrues each year to a corporate owner of a Discount 2012A Bond is taken into account in computing the corporation's liability for federal alternative minimum tax. A purchaser of a Discount 2012A Bond in the initial public offering at the price for that Discount 2012A Bond stated on the inside cover of this Official Statement who holds that Discount 2012A Bond to maturity will realize no gain or loss upon the retirement of that Discount 2012A Bond. Certain of the 2012A Bonds ("Premium 2012A Bonds") as indicated on the inside cover of this Official Statement were offered and sold to the public at a price in excess of their stated redemption price at maturity (the principal amount). That excess constitutes bond premium. For federal income tax purposes, bond premium is amortized over the period to maturity of a Premium 2012A Bond, based on the yield to maturity of that Premium 2012A Bond (or, in the case of a Premium 2012A Bond callable prior to its stated maturity, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on that Premium 2012A Bond), compounded semiannually No portion of that bond premium is deductible by the owner of a Premium 2012A Bond. For purposes of determining the owner's gain or loss on the sale, redemption (including redemption at maturity) or other disposition of a Premium 2012A Bond, the owner's tax basis in the Premium 2012A Bond is reduced by the amount of bond premium that is amortized during the period of ownership. As a result, an owner may realize taxable gain for federal income tax purposes from the sale or other disposition of a Premium 2012A Bond for an amount equal to or less than the amount paid by the owner for that Premium 2012A Bond. A purchaser of a Premium 2012A Bond in the initial public offering at the price for that Premium 2012A Bond stated on the inside cover of this Official Statement who holds that Premium 2012A Bond to maturity (or, in the case of a callable Premium 2012A Bond, to its earlier call date that results in the lowest yield on that Premium 2012A Bond) will realize no gain or loss upon the retirement of that Premium 2012A Bond. Owners of Discount 2012A Bonds and Premium 2012A Bonds should consult their own tax advisers as to the determination for federal income tax purposes of the amount of OID or bond premium properly accruable or amortizable in any period with respect to the Discount 2012A Bonds or Premium 2012A Bonds and as to other federal tax consequences and the treatment of OID and bond premium for purposes of state and local taxes on, or based on, income. 55

62 FINANCIAL ADVISOR Tampa General has retained Hamlin Capital Advisors, LLC, Tampa, Florida (the "Financial Advisor"), as financial advisor in connection with the issuance of the 2012A Bonds. Although the Financial Advisor has assisted in the preparation of this Official Statement, the Financial Advisor was not and is not obligated to undertake, and has not undertaken to make, an independent verification and assumes no responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. FINANCIAL STATEMENTS The consolidated financial statements of Tampa General as of September 30, 2012 and 2011, and for each of the years then ended, appearing in APPENDIX B to this Official Statement, have been audited by KPMG LLP, independent certified public accountants, as stated in their report appearing in APPENDIX B to this Official Statement, which includes an explanatory paragraph that states as discussed in note 1(u) to the consolidated financial statements, Tampa General adopted the provisions of the Accounting Standard Update No , "Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities," as of September 30, LEGAL MATTERS Certain legal matters incident to the issuance of the 2012A Bonds and with regard to the taxexempt status of the interest on the 2012A Bonds (see "TAX MATTERS," herein) are subject to the opinion of Squire, Sanders (US) LLP, Bond Counsel to the Hospital. The signed legal opinion of Bond Counsel, substantially in the form attached hereto as Appendix D, dated and premised on law in effect on the date of issuance of the 2012A Bonds, will be delivered on the date of issuance of the 2012A Bonds. Certain legal matters will be passed upon for Tampa General by its counsel Carlton Fields, P.A., for the Underwriters by its counsel, GrayRobinson, P.A., and certain legal matters pertaining to the Issuer will be passed upon by the Issuer's counsel, Morrison & Mills, P.A. The legal opinions to be delivered concurrently with the delivery of the 2012A Bonds express the professional judgment of the attorneys rendering the opinions regarding the legal issues expressly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of the result indicated by that expression of professional judgment, of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. CONTINUING DISCLOSURE Tampa General has entered into a Continuing Disclosure Agreement (the "Disclosure Agreement") with The Bank of New York Mellon Trust Company, N.A., in its capacity of dissemination agent (the "Trustee") for the benefit of the holders and beneficial owners from time to time of the 2012A Bonds, in accordance with, and as the only obligated person with respect to the 2012A Bonds under, Rule 15c2-12 (the "Rule") of the Securities and Exchange Commission (the "SEC"), to provide or cause to be provided such financial information and operating data of Tampa General (collectively, "Annual Information"), audited financial statements and notices, in such manner, as may be required for purposes of paragraph (b)(5)(i) of the Rule, including specifically the following: 56

63 (a) To the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System ("EMMA"), and to the Trustee: Annual Information for each fiscal year of Tampa General, ending on or after September 30, 2013, not later than the 120th day following the end of each fiscal year, consisting of (i) audited financial statements prepared in accordance with accounting principles applied from time to time in the preparation of Tampa General's annual financial statements, initially generally accepted accounting principles and such related financial and operating data disclosure and management's discussion and analysis, and (ii) information concerning Tampa General's business and properties, selected financial data including comparable to the information as found in APPENDIX A under the captions "Summary of Historical Utilization," "Historical Financial Performance," and "Sources of Revenue." (b) To EMMA, quarterly Information for each fiscal quarter ending on or after March 31, 2013, other than the fourth fiscal quarter of each fiscal year, not later than 60 days after the end of each fiscal quarter, or 90 days after the end of each fourth fiscal quarter, consisting of consolidated unaudited financial statements of Tampa General, prepared in accordance with accounting principles applied from time to time, initially using generally acceptable accounting principles. (c) To EMMA, Tampa General shall give, or cause to be given, notice of the occurrence in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events with respect to the 2012A Bonds, with the exception of the event described in number 15 below, which notice shall be given in a timely manner: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults, if material; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the 2012A Bonds; 7. Modifications to rights of the holders of the 2012A Bonds, if material; A Bond calls, if material (other than scheduled mandatory redemption), and tender offers; A Bond defeasance; 10. Release, substitution, or sale of property securing repayment of the 2012A Bonds, if material; 11. Ratings changes; 12. Bankruptcy, insolvency, receivership, or similar proceeding of Tampa General; 57

64 13. The consummation of a merger, consolidation, or acquisition involving Tampa General or the sale of all or substantially all of the assets of Tampa General, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; 14. Appointment of a successor or additional trustee or paying agent or the change of name of a trustee or paying agent, if material; and 15. Notice of any failure on the part of Tampa General to meet the requirements of the first paragraph above. The Disclosure Agreement, the form of which is included as APPENDIX E, will be executed by Tampa General prior to the issuance of the 2012A Bonds. Tampa General has generally provided continuing disclosure information pursuant to its contractual undertakings since However, a review of filings made pursuant to the prior agreements indicated that certain filings were not timely made, including the March 31, 2012 quarterly report which was due May 30, 2012 and was posted December 10, 2012, the December 31, 2008 quarterly report which was due March 1, 2009 and was posted April 28, 2009, and the annual reports for 2007, 2008 and 2011 which were not filed by the required date; however, all were filed within one week of the required date. Other information, including Management's discussion of performance and certain payor and utilization data, which, although provided to the Bond Trustee and available to holders of Bonds, was not filed with EMMA. Tampa General has brought all filings current, as of the date of this Official Statement and has put in place procedures for future filings that will facilitate future compliance with all disclosure obligations required under the Disclosure Agreement. LITIGATION There is no litigation now pending or, to the knowledge of the Issuer, threatened, against the Issuer seeking to restrain or enjoin the issuance, sale, execution or delivery of the 2012A Bonds or in any way contesting or affecting the validity of the 2012A Bonds, any proceedings of the Issuer taken with respect to the issuance or sale thereof, the pledge or application of any moneys or security provided for the payment of the 2012A Bonds, the use of the proceeds of the 2012A Bonds or the right to his office of any member of the board of the Issuer or any other official of the Issuer. There is no controversy of any nature now pending or, to the knowledge of Tampa General's officers, threatened, against Tampa General or any members thereof, seeking to restrain or enjoin the issuance, sale, execution or delivery of the 2012A Bonds, in any way contesting or affecting the validity of the 2012A Bonds or any proceedings of Tampa General taken with respect to the issuance or sale thereof, the pledge or application of any moneys or security provided for the payment of the 2012A Bonds or the use of the proceeds of the 2012A Bonds. For a description of other litigation affecting Tampa General, see APPENDIX A "General Information Regarding Tampa General, Including Certain Financial Information" attached hereto. MISCELLANEOUS All quotations from, and summaries and explanations of, the Master Indenture, the Trust Agreement, the Agreement and the other documents referred to herein do not purport to be complete, and 58

65 reference is made to said documents for full and complete statements of their provisions. See APPENDIX C "Summaries of the Principal Documents" attached hereto. This Official Statement, including the cover page and the appendices, has been issued by the Issuer and Tampa General. All estimates and other statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Issuer or Tampa General and the purchasers or holders of any of the 2012A Bonds. HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY /s/ Kary Andrews Kary Andrews, Chairman Approved by: FLORIDA HEALTH SCIENCES CENTER, INC., as Obligated Group Representative /s/ Ronald A. Hytoff Ronald A. Hytoff, President and Chief Executive Officer 59

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67 APPENDIX A General Information Regarding Tampa General Hospital, Including Certain Financial Information

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69 TABLE OF CONTENTS OVERVIEW... 1 Mission Statement... 2 Medical Education... 2 Medical Staff... 3 HISTORY AND CORPORATE STRUCTURE... 6 Lease Agreement... 6 Affiliates and Subsidiaries... 7 Governance... 7 Senior Management... 9 Patient Care Services SERVICE AREA AND COMPETITION Population Trends Competitors MAJOR MILESTONES Summary of Selected Financial Statements Summary of Historical Utilization MANAGEMENT DISCUSSION AND ANALYSIS Historical Financial Performance Utilization Revenues Management's Response OTHER FINANCIAL CONSIDERATIONS Sources of Revenue Employment Pension and Other Post Retirement Benefits Community Benefit Litigation and Insurance Electronic Medical Record ("EMR") Fiscal Year Project Description PRO FORMA DEBT SERVICE COVERAGE i

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71 OVERVIEW For more than 80 years, Tampa General Hospital (the "Hospital") and its predecessors have provided health care services to residents of Hillsborough and surrounding counties. Located on Davis Islands, in the city of Tampa (the "Davis Islands Campus"), the Hospital is easily accessible to the entire region via Interstates 75 and 4 and a variety of other surface roads. The Hospital is accredited by the Joint Commission and the Commission on the Accreditation of Rehabilitation Facilities ("CARF"), certified by Medicare and Medicaid, and licensed by the State of Florida (the "State"). The Hospital's nursing program has received Magnet status for nursing excellence from the American Nurses Credentialing Center. The Hospital has approximately 1.5 million square feet and is licensed for 1,018 beds. The allocation of these beds is set forth below in Table 1. Table 1 Licensed Bed Complement Tampa General Hospital Number of Beds Acute Care 855 Adult Psychiatric Care 22 Comprehensive Medical Rehabilitation 59 Level III Neonatal Intensive Care 58 Level II Neonatal Intensive Care 24 Total Licensed Beds 1,018 Within its licensed bed complement, the Hospital provides a vast array of services, some of which are not offered elsewhere in West Central Florida. Specifically, the Hospital is: the region's only Level I Trauma Center and one of only seven in the State; the only burn center on the West Coast of Florida and one of only three burn centers in the State verified by the American Burn Association; one of only nine head and spinal cord injury centers in the State and one of only three designated for pediatric head and spinal cord patients; the only State certified Regional Perinatal Intensive Care Center in Hillsborough County; and one of only 12 in Florida; a center for solid organ transplants and according to the United Network for Organ Sharing ("UNOS"), the Hospital is the fourth busiest transplant center in the United States. The Hospital provides pediatric and adult kidney transplant services as well as adult liver, pancreas, heart, lung and liver transplants. The Hospital also serves as a regional referral center for infectious disease, cardiac services, orthopedics, pediatrics, neonatology, high risk and normal obstetrics, bloodless medicine and surgery and the neurosciences. A-1

72 During the past decade, the Hospital has expanded its physical plant square footage by almost 30%, added 141 licensed beds and invested significant capital in state-of-the-art equipment and information technology. Among the projects that have been completed since 2006 are: construction of the Bayshore Pavilion approximately 300,000 square feet dedicated to emergency medicine and trauma, women's health, neurosurgical and trauma critical care, digestive disorders and cardiac catheterization and interventional radiology procedures; construction of the Jennifer Lee Muma Neonatal Intensive Care Unit, a state-of-the-art 82- bed level II & III neonatal intensive care unit; implementation of Epic, an electronic health record system, including physician order entry allowing the Hospital to meet Stage I Meaningful Use; and opened an outpatient cancer facility with radiation therapy and infusion services. In addition, over the past several years, the Hospital has expanded it outpatient footprint. Since 2010, the Hospital has increased the number of employed physicians from eight primary care physicians in two off-site locations to 25 specialists and 14 primary care physicians in five locations. Plans are underway to open at least three additional primary care physician offices over the next twelve months, bringing the total off-site locations to eight. This strategy is critical to maintaining a number of the Hospital's tertiary programs as well as improving its ability to compete under health care reform. Mission Statement The Hospital is committed to providing residents of West Central Florida with excellent and compassionate healthcare ranging from the simplest to the most complex medical services. As a teaching facility, the Hospital partners with academic and community institutions to support both their teaching and research missions. As the region's leading safety net hospital, the Hospital reaffirms its commitment to providing high quality health services to all residents. Medical Education Since 1970, the Hospital has served as the primary teaching hospital for the USF Health Morsani College of Medicine ("USF College of Medicine"). An affiliation agreement governs the relationship between the Hospital and USF College of Medicine. The purpose of the affiliation agreement is to establish mechanisms for both organizations to work collaboratively to accomplish their respective missions. There are currently full-time equivalent ("FTE") residents assigned to the Hospital in American College of Graduate Medical Education ("ACGME") accredited residency programs. Displayed on Table 2 are the numbers of residents in each of the ACGME approved programs at the Hospital. A-2

73 Table 2 University of South Florida Health Morsani College of Medicine Residents at Tampa General Hospital FY2012 Source: Tampa General Hospital Total Internal Medicine 72.0 Medicine-Pediatrics 10.0 Neurology 19.5 Neurosurgery 14.0 Obstetrics-Gynecology 23.0 Ophthalmology 8.0 Otolaryngology 4.5 Pathology 5.0 Pediatrics 34.0 Physical Medicine & Rehabilitation 2.0 Psychiatry 14.3 Radiology 22.0 Surgery Emergency Medicine 30.0 Total In addition to training physicians, the Hospital serves as a clinical site for a number of different university and community college health training programs. The University of South Florida College of Nursing, the University of Tampa, Hillsborough Community College, and St. Petersburg College all utilize the Hospital as a clinical site for their nursing and other ancillary personnel-training programs. Medical Staff As of September 2012, the Hospital has 1,269 physicians on its medical staff. Slightly more than 22% of the medical staff are full-time faculty at the USF College of Medicine, with the remainder being community physicians. However, many of the community physicians have clinical appointments to the USF College of Medicine and participate in teaching and research activities. The bylaws of the medical staff identify six categories of medical staff status. Displayed on Table 3 are the numbers of community and faculty physicians in the various medical staff categories. In addition to the 1,269 physicians, there are 353 allied health personnel with varying degrees of privileges on staff at the Hospital. [Balance of page intentionally left blank.] A-3

74 Source: Tampa General Hospital Table 3 Hospital Physician Staff by Category Status Community Faculty Grand Total Active Associate Courtesy Provisional Provisional Extended Honorary 101 Grand Total ,269 The medical staff is organized into sixteen departments and within those, sixteen sections. The sixteen departments are anesthesia, emergency medicine, family practice, internal medicine, obstetrics/gynecology, orthopedic surgery, otolaryngology head and neck surgery, neurology, physical medicine and rehabilitation, pediatrics, pathology, plastic surgery, psychiatry, radiology, surgery, and neurosurgery. The average age of the Hospital medical staff is 56 years old and 87% of the physicians on staff are board certified in one or more specialties. As the data in Table 4 indicates, the USF College of Medicine faculty account for approximately 53% of the total fiscal 2012 admissions to the Hospital even though they account for only 22% of the Hospital medical staff. USF physicians are concentrated in the following specialty areas: urology, obstetrics/gynecology, infectious disease, neurology, neurosurgery, pediatrics and general surgery. Community physicians are significant providers of care in the areas of cardiology, orthopedics, nephrology, hospital medicine and cardiovascular surgery. [Balance of page intentionally left blank.] A-4

75 Table 4 Admissions by Physician Specialty Fiscal Year 2012 Specialty Community USF College of Medicine Faculty Community % of Total Faculty % of Total Grand Total Hospital Medicine (Hospitalists) 11,177 4, % 27.0% 15,302 Obstetrics & Gynecology 1,904 3, % 66.5% 5,677 Pediatrics 46 3, % 98.7% 3,488 Neonatal-Perinatal Medicine 0 2, % 100.0% 2,629 Orthopaedic Surgery 2, % 0.1% 2,587 General Surgery 908 1, % 64.5% 2,557 Cardiology % 42.8% 1,483 Neurosurgery 65 1, % 95.6% 1,471 Neurology 12 1, % 98.9% 1,083 Physiatry % 0.0% 910 Pediatric Specialties % 81.2% 857 Vascular Surgery % 100.0% 670 Plastic Surgery % 90.8% 663 Psychiatry % 100.0% 614 Internal Medicine % 2.2% 594 Thoracic & CV Surgery % 0.0% 554 Pulmonary Disease/Critical Care % 50.9% 525 Medicine Urology % 80.5% 522 Nephrology % 0.2% 512 Maternal & Fetal Medicine % 85.0% 433 Infectious Disease % 99.7% 397 Colon & Rectal Surgery % 100.0% 354 Family Medicine % 0.0% 342 Otolaryngology/Head & Neck % 77.7% 305 Surgery Gynecologic Oncology % 100.0% 198 Emergency Medicine % 7.0% 114 Other % 0.0% 61 Ophthalmology % 90.0% 60 Interventional Radiology % 0.0% 36 Gastroenterology % 85.7% 21 Hematology - Oncology % 7.1% 14 Grand Total 21,384 23, % 52.5% 45,033 Source: Tampa General Hospital, data includes normal newborns A-5

76 HISTORY AND CORPORATE STRUCTURE For the majority of its history, the Hospital was operated as an arm of either city or county government. As a public hospital, governing bodies were composed of elected officials or their appointees. On Oct. 1, 1997, Tampa General Hospital underwent a change of control, with a transfer of the assets and liabilities associated with the Hospital's operation from the Hillsborough County Hospital Authority ("HCHA") to Florida Health Sciences Center, Inc. ("FHSC"), which continues to do business as Tampa General Hospital. As part of the transaction, HCHA and FHSC entered into a lease agreement dated as of June 20, 1997, as amended (the "Lease Agreement"), whereby HCHA leases the real property, buildings, and improvements constituting the Davis Islands Campus to FHSC for an annual rental of $10. FHSC is a Florida not for profit corporation and has been determined by the Internal Revenue Service to be exempt from federal income taxation under Section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as an organization described in Section 501(c)(3) of the Code and not a private foundation as defined in Section 509(a) of the Code. Lease Agreement The initial term of the Lease Agreement is 49 years (September 30, 2046 expiration) with an option to renew for an additional 49 years. Certain covenants are incorporated into the Lease Agreement which require FHSC to ensure that the Hospital: continues to provide indigent care to Hillsborough County residents; participates in the Hillsborough County Health Plan (HCHCP); maintains Joint Commission certification; participates in the Medicare and Medicaid programs; provides certain services and specialized programs including: designation as a Level I Trauma Center, Level II and III neonatal intensive care, burn services, open heart surgery and organ transplantation; and participates in graduate medical education. In addition to the foregoing, FHSC has certain reporting and other obligations to HCHA under the Lease Agreement. These obligations include: quarterly reports of indigent care rendered; quarterly reports of the number and amount of awards to minority businesses; annual reports of the results of the Hospital's audit; and annual payment of $75,000 to fund HCHA operations. A-6

77 Affiliates and Subsidiaries FHSC's corporate structure includes two subsidiary organizations. Tampa General Medical Group, Inc. ("TGMG") is a nonprofit subsidiary and will employ physicians after receiving its 501c-3 designation for which application has been made. FHSC is TGMG's sole member. FHSC incorporated Florida Health Sciences Center, Ltd. (the "Captive") on May 10, 2010 under the Companies Law of the Cayman Islands and obtained an Unrestricted Class "B" Insurers License under the provisions of the Cayman Islands Insurance Law. The Captive, a wholly-owned subsidiary of FHSC, provides professional and general liability to FHSC and is expected to provide both to TGMG. The Tampa General Hospital Foundation, Inc. is an affiliate of the Hospital formed for the sole purpose of supporting the Hospital through its fundraising activities. Governance A self-perpetuating Board of Directors (the "Board") governs FHSC. FHSC's bylaws specify that the Board must be composed of a minimum of 11 members and a maximum of 15. The Board must include as ex-officio directors with full voting rights, the Chief of the Hospital Medical Staff, a representative recommended by the President of the University of South Florida, a representative of the Tampa General Hospital Foundation, Inc. and beginning in 2014, the immediate past chairman. Directors, other than ex-officio directors, are limited to two consecutive three-year terms (1), but they are eligible for reelection to the Board after one full year has elapsed from the expiration or termination of their last term. The bylaws set forth the Board's committee structure. Five standing committees are identified in the bylaws. These include the executive committee, finance committee, audit committee, strategic planning, and the quality improvement committee. The Board is also authorized to create one or more additional committees as may be required. The Board of Directors' names, terms and occupations are provided in Table 5. [Balance of page intentionally left blank.] A-7

78 Table 5 Florida Health Sciences Center, Inc. d/b/a Tampa General Hospital Board of Directors (1) Name Office Term Occupation/Company John A. Brabson, Jr. Audit Committee Chair President/CEO Lykes Insurance, Inc. Phillip S. Dingle Fred Dobbins Treasurer/Finance Committee Chair Governance Committee Chair Managing Partner Health Edge Investment Partners LLC Banker SunTrust Richard L. Kouwe Ex-Officio Financial Advisor/ Foundation Representative UBS Financial Services, Inc. Devanand Mangar, M.D. Quality Committee Chair Physician Florida Gulf to Bay Anesthesiology John B. McKibbon, III Chairman/CEO McKibbon Hotel Management, Inc. Eugene H. McNichols Vice Chairman Chairman/CEO McNichols Company Shelton E. Quarles Professional Scout Tampa Bay Buccaneers Dana L. Shires, M.D Physician & Executive LifeLink Foundation, Inc. John T. Sinnott, M.D. Ex-Officio Physician/USF Representative David A. Straz, Jr. Chairman of the Board Philanthropist/Ambassador David A. Straz, Jr. Foundation Joseph W. Taggart Secretary Realtor Taggart Properties John T. Touchton, Jr Investment Advisor Bayshore Capital Erika Wallace Philanthropist Bruce Zwiebel, M.D. Ex-Officio Physician/Chief of Staff Florida Interventional Specialists (1) Directors may serve an additional term (after the first two consecutive terms) if in the sole discretion of the Board it is deemed necessary to "maintain the continuity of the Board in order to ensure the efficient and orderly operation of FHSC." Art. IV, Section 4.2, as amended. A-8

79 Senior Management The Board of Directors delegates the operation of the Hospital to the senior management team. The President and Chief Executive Officer ("CEO") is selected by the Board of Directors. The Board reviews the CEO's performance and compensation annually. The CEO selects all other members of senior management, but the Board reviews and approves compensation for all members of senior management annually. CEO Ron Hytoff has provided consistent leadership since his promotion from Chief Operating Officer to President and Chief Executive Officer in Mr. Hytoff recently announced his retirement. The Board announced on January 2, 2013 that James R. Burkhart will become President and Chief Executive Officer of Tampa General. He will start March 4, 2013 and replace Ronald Hytoff. Mr. Hytoff will continue to provide leadership to the hospital during the transition period. Prior to joining Tampa General, Mr. Burkhart was president and Chief Executive Officer of Shands Jacksonville Medical Center, a private, not-for-profit teaching hospital affiliated with the University of Florida Health Science Center Jacksonville, a position Mr. Burkhart held since He joined the organization as president and administrator in 2003 after serving there as a consultant beginning in Prior to moving to Shands Jacksonville, Mr. Burkhart served as president and principal of Endeavor Health Group, an executive healthcare management consulting firm based in Ft. Lauderdale, Florida. The firm specialized in performance improvement in an array of healthcare facilities. He also worked for 12 years as president of Fort Sanders Park West and Regional Medical Centers in Knoxville, Tennessee. Mr. Burkhart holds a Doctorate of Science, Administration Health Services, and a Master of Hospital and Healthcare Administration from the University of Alabama at Birmingham. He graduated from the University of Tennessee with a BA in Psychology and Biology. Mr. Burkhart is a fellow of the American College of Healthcare Executives. The Hospital currently has a stable senior management team with an average of 11 years of service. A brief description of the backgrounds of key members of the senior management team follows. Ronald A. Hytoff, President and Chief Executive Officer. Mr. Hytoff joined the Hospital as Chief Operating Officer in 1997 and was appointed President and CEO by the Board of Directors in Mr. Hytoff has more than 30 years of hospital management experience. Prior to joining the Hospital, Mr. Hytoff was President and CEO of the University of Louisville Hospital, a 440-bed teaching hospital operated by Humana/Galen and then Columbia/HCA. Before becoming CEO of the University of Louisville Hospital, he served in a variety of other capacities for Humana, including Executive Director of The Wellington Hospital, London, England. Mr. Hytoff received his BA from Northeastern Illinois University and MHA from Georgia State University. Steve L. Short, Executive Vice President and Chief Financial Officer. Mr. Short joined the Hospital in Prior to moving to Tampa, Mr. Short served for five years as the Vice President of Operations and Chief Financial Officer for the University of Louisville Hospital, and for four years as Assistant Vice President of Finance. Before joining the University of Louisville Hospital, Mr. Short worked in various financial positions for Humana and for the State of Arizona. Mr. Short has a BS in Accounting from Arizona State University and a MBA from Indiana University. Deana L. Nelson, MHA, RN, FACHE, Executive Vice President, Chief Operating Officer. Ms. Nelson currently serves as Tampa General Hospital's Executive Vice President and Chief Operating Officer. She joined the Hospital in 1989, and served as the Hospital's Director of Nursing A-9

80 Resources/Orthopedics, Vice President of Patient Services, and Senior Vice President/ Chief Nursing Officer until being promoted to Executive Vice President/Chief Operating Officer in She is responsible for all nursing, clinical, ancillary support, ambulatory, and facilities services. Prior to joining Tampa General, Ms. Nelson worked as a health care consultant for Ernst & Young and Amherst Associates. She began her career as a staff nurse and worked in a variety of locations including Tampa General. Ms. Nelson received a BSN from Bowling Green State University and her MHA from The Ohio State University. Sally H. Houston, MD, FACP, Sr. Vice President & Chief Medical Officer. Dr. Houston started her career at Tampa General Hospital as a resident in internal medicine. She joined the medical staff in 1992 as a member of the USF College of Medicine's Division of Infectious Diseases. She achieved the rank of Associate Professor of Medicine in the Division of Infectious Diseases and was the Associate Dean for Clinical Research. At Tampa General Hospital, Dr. Houston served as the Assistant Hospital Epidemiologist, Chief of the Department of Medicine and was Chief of Staff when she assumed the position of Tampa General Hospital's Chief Medical Officer (CMO) in In her role as CMO, Dr. Houston is responsible for medical staff services, infection prevention, risk management, the Office of Clinical Research, and quality improvement. She also interfaces with the Hospital medical staff in quality improvement initiatives, research, support for undergraduate and graduate medical education, medical staff leadership development, and developing the roles of medical directors. Dr. Houston holds a BS degree with honors and an MD from Vanderbilt University. Janet H. Davis, RN, Sr. Vice President and Chief Nursing Officer. Ms. Davis is responsible for all of the Hospital's nursing staff. She joined the Hospital as the Nurse Manager of Pediatrics in 1992 and was promoted to Director of Medical Surgical Services in She was promoted to Vice President of Acute Care Services in 2003 and named Senior Vice President and Chief Nursing Officer in Prior to joining the Hospital, Ms. Davis worked as a Nurse Manager of the Emergency Department at Deaconess Hospital in St. Louis, and a Trauma Coordinator for St. Louis Children's Hospital. She began her career as a staff nurse and worked in a variety of locations. Ms. Davis has a BS in Nursing and an MS in Policy Analysis from Southern Illinois University in Edwardsville, Illinois. Ms. Davis is currently pursuing her Doctorate in Nursing Practice from Florida State University. Judith M. Ploszek, Sr. Vice President Finance. Ms. Ploszek joined the Hospital in 1998 and is responsible for financial reporting and accounting, decision support services, patient financial services, health information management, reimbursement, and case management. Ms. Ploszek has more than 35 years of health care financial management, accounting and consulting experience. Her career has included public accounting with Arthur Andersen & Co., consulting with Kaufman, Hall & Associates and Ernst & Young LLP, and financial accounting and management positions with three hospital providers, two of which were teaching facilities. While with Kaufman, Hall & Associates, Ms. Ploszek was the primary developer of the original 1988 version of the ENUFF financial model. Ms. Ploszek has a BBA in accounting from the University of Notre Dame and an MBA with a specialization in Finance from the University of Chicago. Chris Roederer, Sr. Vice President Human Resources. Mr. Roederer has responsibility for all human resources, organizational development, employee health and wellness and volunteer services. Prior to joining Tampa General in October 2007, Mr. Roederer served as the Chief Corporate Services Officer at City of Hope National Medical Center in Duarte, California. This role included responsibility for human resources, organizational development, facilities, safety, security, volunteer services, environmental services and dietary services. Other executive leadership positions include: Vice President, Human Resources at H. Lee Moffitt Cancer Center and Research Institute; Executive Compensation Consultant at Hay Corporation; Vice President, Human Resources at Eisenhower Medical Center; and Human A-10

81 Resources Executive with several Humana Hospitals over an eleven year period. He received a BA in Public Relations and a MA in Organizational Communications from Western Kentucky University. Elizabeth Lindsay-Wood, Sr. Vice President and Chief Information Officer. Ms. Lindsay-Wood is responsible for clinical and business application services, technology project management office, connectivity and communication, data analytics and reporting, desktop, mobile, and print services, and information technologies (IT). Ms. Lindsay-Wood was responsible for the implementation of Epic, the Hospital's Electronic Medical Records system. She holds a BS in Management Information Systems from the University of Tampa and a MBA from Troy University. Jean M. Mayer, Sr. Vice President Strategic Services. Ms. Mayer joined the Hospital in 1998 and is responsible for managed care contracting, strategic planning, marketing, community relations, public relations and physician relations. Ms. Mayer has nearly 30 years of public and private health care experience. Prior to her most recent position, Ms. Mayer was the Vice President of Strategic Planning for SSM Health Care, St. Louis, an integrated delivery system of six hospitals and a 100-member physician group. Ms. Mayer also served as Director of Planning and Business Development for DePaul Health Center in St. Louis. Her career also includes approximately 10 years as a health care consultant for a variety of consulting firms including Ernst & Young. Ms. Mayer has a BA in Political Science from the University of Illinois and a MS in Urban and Regional Planning from Florida State University. Patient Care Services The Hospital is designated by the State as a statutory teaching hospital and acts as a regional referral center for West Central Florida. The quality of the Hospital's programs has been recognized by a number of outside organizations. The Hospital was recently designated the number one hospital in Florida by US News & World Report and was recognized among the nation's top 50 hospitals in nine specialties. This is the eighth consecutive year that the Hospital has been recognized for one or more services by US News &World Report. For the seventh year in a row the Hospital was selected as the consumer's choice hospital by the National Research Corporation. This designation is based on a survey of consumers' perception of the Hospital with the best quality and image in the Tampa-St. Pete- Clearwater area. Sixteen of the Hospital's programs have received disease specific certification from the Joint Commission. A brief description of some of the Hospital's patient care services follows. Trauma Center: The Hospital is the only State-designated Level I Trauma Center in West Central Florida providing emergency treatment to adults and children with critical injuries and acute illnesses. The trauma program is supported by the Hospital's aeromedical transport program. Five aeromedical helicopters equipped with advanced life support equipment transport ill or injured patients from 23 surrounding counties. The helicopters are based in various locations within the Hospital's service area. Burn Center: The Hospital is one of only three burn centers in the State verified by the American Burn Association. The burn center is specifically designed and dedicated to treating critically burned patients from initial emergency admission through reconstructive surgery and follow-up care. Transplant Program: The Hospital is the only provider of solid organ transplants for adults in West Central Florida. The Hospital's transplant programs consist of adult kidney, liver, heart, pancreas and lung transplant, as well as pediatric kidney transplant. Women's and Children's Services: The Hospital is currently the only State-designated Regional Perinatal Intensive Care Center ("RPICC") in Hillsborough County. As a regional center, Tampa General provides both normal and high risk obstetrical care. Sick newborns are cared for in the A-11

82 Jennifer Lee Muma Neonatal Intensive Care Unit ("NICU"). This Unit is designated as a level III NICU, the highest rating available, requiring a neonatologist to be in house 24 hours per day, seven days per week to care for critically ill newborns. In addition to services for critically ill newborns, the Hospital's pediatric program is located in a dedicated pediatric wing that includes a 9-bed pediatric intensive care unit, a State-certified school for the education of hospitalized children, and the area's only outpatient pediatric dialysis program. Center for Bloodless Medicine and Surgery: This program is designed to provide state-of-theart medical care for patients who choose not to accept blood transfusions or blood products. The Hospital's physicians and staff are trained in the special needs of these patients. Bloodless care can be applied to nearly every medical and surgical specialty. Cardiovascular Services: A comprehensive set of cardiovascular services ranging from basic diagnostic testing to a dedicated chest pain program in the Hospital's emergency room to cardiac rehabilitation is provided at the Hospital. Services include insertion of ventricular assist devices, coronary bypass surgery, electrophysiology, and biventricular pacing. Digestive Disorders: The Digestive Disorders Center is a referral center for routine and complex disorders of the digestive system. The Hospital provides state-of-the-art diagnostic procedures and innovative treatments and therapies to patients with digestive disorders including diseases of the liver and pancreas. Infectious Disease Services: In addition to providing state-of-the-art patient care, the Hospital provides specialized training, consultation and continuing education in infectious disease care for health professionals. Topics have included terrorism, emerging pathogens, and bacterial resistance. Neuroscience Services: The Hospital's neurologists and neurosurgeons specialize in the diagnosis and treatment of patients with neurological injuries and impairments, including epilepsy and movement disorders, such as Parkinson's and Huntington's diseases. Designated by the State as a Comprehensive Stroke Center, the Hospital's stroke team provides a multi-disciplinary approach to the treatment of stroke, including emergency room protocols and interventions that decrease the likelihood of serious post-stroke disabilities. Orthopedic Services: A multidisciplinary team of physicians, supported by nurses, physician assistants, and physical and occupational therapists, provides total replacement of failed joints including hips, knees, shoulders and elbows. Rehabilitation Services: The Hospital's 59-bed Rehabilitation Center is attached to the main Hospital via an enclosed sky bridge. The center is one of nine designated by the State as an adult and spinal cord and head injury center. The rehabilitation program provides specialized therapy for patients of all ages with head and spinal cord injuries, stroke, amputations, and other neuromuscular disorders. SERVICE AREA AND COMPETITION The Hospital serves a 12-county area extending from Citrus County in the north to Charlotte County in the south. As the data in Table 6 indicates, 70.3% of the Hospital's admissions reside in Hillsborough County (primary service area ("PSA"), while 23.6% reside in the secondary service area ("SSA"). The remaining patients are from other counties within Florida, other states and countries. A-12

83 Table 6 Tampa General Hospital Primary and Secondary Service Area Primary Service Area % Total Tampa General Admits April 2011-March 2012 Hillsborough County 70.3% Secondary Service Area Charlotte.7% Citrus.9% DeSoto.2% Hardee.5% Hernando 1.6% Highlands 1.4% Manatee 1.4% Pasco 5.8% Pinellas 5.2% Polk 5.0% Sarasota.9% Total Secondary Service Area 23.6% All Other 6.1% Total 100.0% Note: Data is based on total admissions excluding normal newborns Source: Agency for Health Care Administration, excludes normal newborns A-13

84 SSA. The map below is included to illustrate the geographic area that is encompassed by the PSA and Primary and Secondary Service Area [Balance of page intentionally left blank.] A-14

85 Population Trends The PSA population is projected to increase by 7.3% between 2012 and 2017, and the SSA population is projected to increase by 4.4% during the same time period. Hillsborough County is expected to experience the largest aggregate increase in population within the combined service areas (92,129), followed by Pasco County (41,562). Table 7 displays the current and projected population of the PSA and SSA counties. Table 7 Current and Projected PSA and SSA Population Actual Change Percent Change Primary Service Area Hillsborough 1,262,623 1,354,752 92, % Secondary Service Area Charlotte 162, ,370 7, % Citrus 144, ,008 7, % DeSoto 35,245 36,335 1, % Hardee 27,882 28, % Hernando 177, ,187 14, % Highlands 100, ,685 3, % Manatee 329, ,213 19, % Pasco 479, ,372 41, % Pinellas 913, ,229-7, % Polk 616, ,643 40, % Sarasota 386, ,450 18, % Total SSA 3,373,824 3,520, , % 12 County Service Area 4,636,447 4,875, , % Source: Nielsen/Claritas Demographics. Population Estimates 2012 and Projected A-15

86 A major driver of future demand for hospital inpatient and outpatient services is the aging population. The Hospital is located within one of the largest concentrations of seniors in the country. More than one million seniors are projected to reside within the service area in 2017 with the largest population of seniors residing in Pinellas County. As Table 8 suggests, the growth of the senior population in the PSA is projected to occur at a rate faster than that of the total population (17.7% between 2012 and 2017). Table 8 PSA and SSA Population Over Actual Change Percent Change Primary Service Area Hillsborough 148, ,733 26, % Secondary Service Area Charlotte 55,718 62,706 6, % Citrus 44,241 50,374 6, % DeSoto 6,329 6, % Hardee 3,725 3, % Hernando 46,483 54,290 7, % Highlands 31,509 34,610 3, % Manatee 74,786 85,528 10, % Pasco 98, ,488 18, % Pinellas 190, ,919 17, % Polk 107, ,447 15, % Sarasota 116, ,729 15, % Total Secondary Service Area 775, , , % 12 County Service Area 924,389 1,052, , % Source: Nielsen/Claritas Demographics. Population Estimates 2012 and Projected Competitors As is the case in many communities, the Hospital competes with both not-for-profit and for-profit health systems in the PSA. The Hospital is the only stand-alone general acute care hospital in the primary service area. H. Lee Moffitt Cancer Center and Research Institute is a 162 bed specialty hospital focusing A-16

87 on cancer and is the only other hospital within the PSA that is not aligned with a system. Four systems, BayCare Health System, Adventist Health System, HCA, and IASIS, operate nine general acute care hospitals in the PSA. Within the BayCare System, the largest facility is St. Joseph's Hospital, located approximately six miles from the Hospital and licensed for 870 beds. St. Joseph's is a major provider of women's and children's services as well as a broad array of tertiary services including cardiac (including open heart surgery), oncology, vascular, and diabetes management services. South Florida Baptist is a 147-bed general acute care facility that is located in eastern Hillsborough County. St. Joseph's Hospital--North is the newest BayCare facility. It opened in 2010 and is currently licensed for 76 beds. BayCare recently broke ground on a hospital to serve southern Hillsborough County. St. Joseph's Hospital South will be licensed for 90 beds and is anticipated to open in In 2011, University Community Health became part of the Adventist Health System. Two hospitals within the PSA are now part of the Adventist System, and they have changed their names from University Community Hospital and University Hospital Carrollwood to Florida Hospital Tampa and Florida Hospital Carrollwood respectively. Florida Hospital Tampa is a 475-bed facility located in the northern part of the PSA, near the University of South Florida campus. Florida Hospital Tampa provides a broad array of services including women's and children's as well as cardiac (including open heart surgery), oncology and rehabilitation. The 120-bed Florida Hospital Carrollwood is the other Adventist Health System hospital and is located in the central part of the PSA. HCA owns two facilities in the PSA: Brandon Regional Medical Center, a 407-bed hospital and South Bay Hospital, a 112-bed facility, both located in the eastern part of the PSA. Brandon Regional Medical Center provides the broader range of services, including open-heart surgery. IASIS operates two facilities in the PSA: Town and Country, a 201-bed community hospital located in the western part of the PSA and Memorial Hospital, a 183-bed hospital located approximately three miles from the Hospital. Both facilities provide general medical surgical care to their immediate communities. The map below delineates the locations of the hospitals within the PSA. Displayed on Table 9 are market share and inpatient discharge data for each of the hospitals in the PSA for the 12 month periods beginning April 2010, April 2011 and April As the data on Table 9 indicate, no significant changes in market share have occurred over the past three years. The Hospital's share increased modestly from 2010 to 2011 and remained steady between 2011 and While the BayCare System has the largest share of the market, the addition of St. Joseph's North did not result in significant increases in overall share for the system. In fact, the overall BayCare System's share in the PSA declined slightly during the three year period. Neither HCA nor the Adventists System has experienced growth in facility share during the three year period. [Balance of page intentionally left blank.] A-17

88 Primary Service Area Competitors [Balance of page intentionally left blank.] A-18

89 Table 9 Inpatient Discharges and Facility Share April through March of: Hospital Name/ System Licensed Beds Tampa General Hospital 1,018 41, % 41, % 42, % H. Lee Moffitt Cancer Ctr & Rsrch Inst 206 8, % 8, % 9, % HCA West Florida Division: Brandon Regional Hospital , % 22, % 22, % South Bay Hospital HCA West Florida Division Subtotal ,690 30, % 17.7% 6,472 28, % 16.6% 6,944 29, % 16.7% Adventist Health System: Florida Hospital- Carrollwood 120 4, % 4, % 4, % Florida Hospital- Tampa Adventist Health System Subtotal ,819 27, % 15.7% 22,024 26, % 15.4% 23,096 27, % 15.7% IASIS Healthcare: Memorial Hospital of Tampa 183 5, % 5, % 6, % Town & Country Hospital 201 4, % 4, % 5, % IASIS Healthcare Subtotal , % 10, % 11, % BayCare : St. Joseph's Hospital, Inc , % 46, % 44, % St. Joseph's Hospital-North % 3, % 5, % South Florida Baptist Hospital 147 6, % 6, % 6, % BayCare Subtotal 1,093 55, % 56, % 55, % TOTAL 3, , % 173, % 176, % Source: Agency for Health Care Administration Excludes normal newborns A-19

90 MAJOR MILESTONES Over the past decade, the Hospital has remained committed to providing excellent and compassionate health care, driven by strategies that include 1) expanding market share and programs in order to be recognized as centers of excellence; 2) recruiting and retaining qualified physicians; 3) providing services of demonstrable quality/safety; 4) strengthening its support for medical education and research; and 5) optimizing fiscal performance. As a result, the Hospital has been recognized for outstanding clinical services and for its market niches on the West Coast of Florida. Further, the Hospital has become a major economic engine in the community and in turn, provides a significant amount of community benefit. Selected major milestones from 2000 through 2012 include the following: 2000: Expanded the transplant program to include pancreas and lung 2004: Opened a new outpatient surgery center, adding eight operating rooms : 2008: Earned distinguished Consumer Choice award from the National Research Corporation Opened the Bayshore Pavilion, including the Cardiovascular, Digestive, Women's, and Emergency &Trauma Centers; and Neuroscience and Trauma Intensive Care Units 2009: Added a fifth aeromedical helicopter Opened a state of the art, 82-bed neonatal intensive care unit expansion Created Tampa General Medical Group ("TGMG") by employing the 2011: transplant physicians and surgeons from the existing and highly successful LifeLink Foundation Ranked as the fourth busiest transplant center in the country Implemented Epic, an Electronic Medical Record ("EMR") System and achieved Stage 1 meaningful use Opened a new primary care office as part of a larger primary care outreach 2012: strategy Recognized by US News & World Report as the number one hospital in Florida By the end of fiscal 2008, the expansion and renovation projects associated with the 2003 and 2006 bond financings were successfully and substantially completed. These projects addressed the significant growth experienced by the Hospital through 2008, and allowed Hospital management to update aging facilities that were incapable of sustaining growth in services and, in turn, introducing cutting edge technology to continue the provision of high quality, tertiary care. A-20

91 Summary of Selected Financial Statements The following summary of Revenues and Expenses for the four years ended September 30, 2012, is derived from Hospital records and excludes unrealized gains(losses) from other revenues and nonoperating net gains(losses). Except for these exclusions, all data are properly reflected in the audited financial statements of the Hospital. The data should be read in conjunction with the audited financial statements, related notes and other financial information included in Appendix B hereto. Summary of Revenues and Expenses Fiscal Year Ended September 30 (dollars in thousands) Operating Revenues: Net patient services revenue $ 819,689 $ 901,765 $ 957,771 $ 921,656 Disproportionate share distributions 30,688 33,502 29,841 26,121 Other revenues 34,150 32,715 29,639 37,791 Total operating revenues 884, ,982 1,017, ,568 Expens es : Salaries and benefits 393, , , ,498 Professional fees 28,600 34,415 39,262 33,924 Medical supplies 208, , , ,511 Purchased services 65,881 71,441 82,699 72,366 Utilities and leases 21,615 20,854 21,106 20,747 Insurance 33,089 26,136 23,845 25,068 Medical professional costs 24,322 28,240 29,827 29,752 Other 39,350 47,589 46,601 43,183 Depreciation and amortization 34,528 35,992 36,817 43,509 Interest 19,438 18,966 18,541 19,155 Total operating expenses 868, ,015 1,008, ,713 Gain from operations 15,873 42,967 9,189 8,855 Non-operating net gains ,916 32,096 16,284 Gain $ 16,287 $ 53,883 $ 41,285 $ 25,139 EBIDA $ 70,253 $ 108,841 $ 96,642 $ 87,803 Including unrealized gains(losses): Gain from operations $ 18,695 $ 44,614 $ 7,227 $ 11,417 Gain $ 38,320 $ 66,539 $ 22,929 $ 48,192 NOTE: Provisions for bad debts of $63,989 and $58,505 for the years ended September 30, 2010 and 2009, respectively, have been reclassified to net patient service revenue to conform with the 2012 and 2011 presentation. A-21

92 The profitability margins, excluding unrealized gains(losses), for the four years ended September 30, 2012 were as follows: Operating margin 1.8% 4.4% 0.9% 0.9% Excess margin 1.8% 5.6% 4.1% 2.6% EBIDA margin 7.9% 11.2% 9.5% 8.9% MADS coverage by EBIDA (x) The following summary of Balance Sheets for the four years ended September 30, 2012, is derived from Hospital records and includes unrealized gains(losses). The data should be read in conjunction with the audited financial statements, related notes and other financial information included in Appendix B hereto. Tampa General Hospital Summary Balance Sheets Fiscal Year Ended September 30 (dollars in thousands) Current Assets $ 284,510 $ 265,663 $ 247,087 $ 282,428 Assets Whose Use is Limited 380, , , ,672 Other Long-Term Assets 12,691 11,825 10,967 10,131 Property, Plant and Equipment, net 384, , , ,278 Total Assets $ 1,062,271 $ 1,155,520 $ 1,176,556 $ 1,251,509 Current Liabilities $ 206,134 $ 211,122 $ 225,424 $ 252,718 Other Liabilities 149, , , ,163 Long-Term Debt, Less Current 375, , , ,945 Net Assets 330, , , ,683 Total Liabilities and Net Assets $ 1,062,271 $ 1,155,520 $ 1,176,556 $ 1,251,509 Key balance sheet indicators for the four years ended September 30, 2012 were as follows: Days cash on hand Cash to debt (%) Debt to capitalization 55.0% 49.4% 47.6% 44.7% Net unrealized gains(losses) in cash $ 22,000 $ 12,655 $ (18,356) $ 23,053 Equivalent days cash on hand (6.8) 8.9 Capital expenditures are guided by a combination of the Hospital's strategic plan, responses to current competitive market forces, regulatory mandates, and current year operating results compared to budgeted expectations. Funds provided by operations have funded capital expenditures of approximately $189 million since Cash and cash equivalents grew by approximately $108 million, excluding net A-22

93 unrealized gains(losses), for the same period. Management uses an investment advisory firm to recommend and manage investment managers for a diverse portfolio. Performance is measured and monitored according to publicly available indices. Investments are made according to a Board approved policy mandating the allocation among fixed income and equities. In 2012, the Board adopted a new investment policy with target allocations for two investment pools. The asset allocation splits the designated funds into a shorter term Reserve Asset pool and a longer term Investment Asset pool. The target balance for the Reserve Asset pool is $150 million with a conservative asset allocation of 65% fixed income and 35% equities. Funds in excess of $150 million are invested in the longer term Investment Asset pool, using an asset allocation of 60% fixed income and 40% equities. Prior to 2012, the allocation policy for all designated funds was that of the Reserve Asset pool. According to policy, the Hospital's portfolio allocations are as follows: Large Cap Small-Mid International Fixed Growth Value Cap Core Equity Income Cash Corporate Assets 15.5% 16.5% 6.0% 8.5% 53.5% 0%-5% Retirement Assets 26.0% 26.0% 12.0% 11.0% 25.0% 0%-5% The Hospital consolidates its beneficial interest in the net assets of Tampa General Hospital Foundation. As of September 30, 2012, the beneficial interest of $5.2 million was recorded as assets limited as to use and net assets. Summary of Historical Utilization The following is a summary of pertinent inpatient utilization and growth indicators for the four years ended September 30, 2012: INPATIENT UTILIZATIO N: Discharges 38,847 38,865 39,449 40,248 Percent change 5.0% 0.0% 1.5% 2.0% Patient days 262, , , ,125 Percent change 5.7% 2.9% -1.0% -0.2% Surgeries 14,171 14,627 14,610 13,513 Percent change 5.7% 3.2% -0.1% -7.5% Percent to total 52% 52% 51% 49% Average daily census Percent change 6.0% 2.9% -1.0% -0.4% Source: Hospital Records, excluding newborns A-23

94 The following is a summary of pertinent outpatient utilization and growth indicators for the four years ended September 30, 2012: OUTPATIENT UTILIZATIO N: Emergency room visits 76,415 78,362 84,140 82,844 Percent change 8.3% 2.5% 7.4% -1.5% Surgeries 12,840 13,483 14,257 14,221 Percent change 1.6% 5.0% 5.7% -0.3% Percent to total 48% 48% 49% 51% Adjusted discharges* 51,606 52,466 54,836 56,373 Percent change 6.5% 1.7% 4.5% 2.8% Source: Hospital Records, excluding newborns * This benchmark is intended to incorporate both inpatient and outpatient activity into one statistic, and is calculated using the ratio of total gross revenue to inpatient gross revenue applied to inpatient discharges. It should be read in conjunction with inpatient discharges. In 2009, the growth in all utilization indicators was directly related to the opening of the Bayshore Pavillion in The economic downturn negatively impacted 2010 inpatient medical management utilization, mitigated by continued growth in all surgeries. In 2010, outpatient utilization began outpacing inpatient growth. In 2011, surgical volume continued to shift to outpatient and average daily census declined due to a reduction in length of stay. The fluctuation in utilization during 2012 was somewhat driven by the assimilation of the EMR and related processes. During the initial months of golive, Management prioritized safety and quality by reducing surgical schedules and strategically placing the emergency room on by-pass. Approximately 52% of the growth in adjusted discharges was realized in the latter six months of Although the pace of growth slowed subsequent to 2008, it has been in line with the marketplace and general industry trends toward higher utilization of outpatient services. This trend toward higher levels of outpatient activity is evident in the shift from inpatient surgeries to outpatient. Inpatient surgery growth peaked in 2008 and flattened through The growth in "adjusted" discharges, the benchmark incorporating both inpatient and outpatient activity, reflects both the surgical shift, and further increases in emergency room and other outpatient activity, and TGMG clinical activity. Since 2008, TGH's Level 1 Trauma Center has been a major referral source for both admissions, representing in excess of 50% of total discharges, and for outpatient activity. It should be noted that outpatients in a bed are not reflected in the average daily census, and represent an average of approximately 50 to 80 additional occupied beds daily. From a competitive perspective, the Hospital's continued growth in a relatively flat market (see Table 9) is remarkable. The Hospital has maintained its facility share given new market entrants and aggressive marketing by Florida Hospital and Baycare. MANAGEMENT DISCUSSION AND ANALYSIS Historical Financial Performance Since 2008, overall growth in net patient services revenues ("NPSR") exceeded the growth in utilization, largely due to aggressive strategic pricing, managed care contracting and strong revenue cycle processes. Similar to utilization trends, total operating revenue growth slowed post 2008 due primarily to the shift to higher outpatient utilization and reductions in Medicaid and disproportionate share funding. A-24

95 Post 2008 expense growth also slowed which was notable given the additional resources needed to operationalize the 300,000 square foot expanded facility; the operating and capital resources needed to the implement the EMR; and the initial employment and subsequent expansion of TGMG physicians. Further, cost containment measures, aggressive capital management, and conservative investment policies have mitigated the lower operating margins, as evidenced by stronger excess and EBIDA margins. Management analyzes selected financial performance indicators utilizing "adjusted" discharges as its statistical benchmark (see Outpatient Utilization). Using this benchmark incorporates an estimate of outpatient activity and volume neutralizes rates of change when used year over year. Acuity is another benchmark employed in order to understand NPSR rates of change per adjusted discharge. Acuity is measured by average case mix index for all inpatient discharges. Case mix index is an important factor which is applied to the base rates for DRG based payors to determine payment for services. The average case mix index for all Medicare patients has consistently exceeded 2.0, which has placed the Hospital in the top 100 highest acuity hospitals in the country. Average case mix indices for the years ended September 30, 2009 through 2012 are as follows: Average case mix index Percent change 5% 3% 2% -3% Fiscal Year 2009: Each of the Bayshore Pavillion projects came on line at different times throughout As such, the following year, 2009, was focused on assimilating the operational changes resulting from the expanded facility and addressing the year's significant growth spurt. In addition, Management obtained approvals for selected renovations projects for the existing facility, and completed the selection and approval processes for the Electronic Medical Record System. For the fiscal year ended September 30, 2009, the operating and excess margins were approximately $15.9 million and $16.3 million, respectively. The following summarizes the key financial results for fiscal year 2009: Net patient services revenue ("NPSR"). Adjusted discharges increased by approximately 7%. NPSR per adjusted discharge ("AD"), or the rate of estimated payment, increased 5%, due to an increase in acuity of 5%, reflecting the significant increases in inpatient surgeries and emergency room admissions. Other revenues. Disproportionate share distributions are received as part of the State of Florida's Medicaid program. The State's Low Income Pool ("LIP") program distributes funding to the Hospital in recognition of the disproportionate level of care provided to indigent patients and to defray some of the costs associated with graduate medical education. The LIP is a federal matching program that provides states with the opportunity to receive additional distributions based upon the difference between Medicaid reimbursement and the amount that would have been received for the same patients using Medicare reimbursement formulas, as defined. The amount recorded in 2009 was in line with that of Other revenues reflect other operating activities such as, but not limited to, grant/research revenues, cafeteria sales, parking fees, rental income, miscellaneous lab revenues, and certain interest income used to offset related operating expenses. A-25

96 Other operating revenues were approximately $2.6 million less than 2008, primarily due to lower investment income. Non-operating net gains reflect primarily investment returns and realized gains(losses) related to the long-term investments held for future use. In 2009, changes in underperforming investment managers resulted in significant realized losses that offset non-operating interest income of approximately $8.0 million. Operating expenses. Salaries and wages. FTEs increased 3% in response to utilization growth. FTEs per adjusted occupied bed ("AOB") declined from 6.1 to 5.9, indicative of higher levels of productivity. The average salary expense increase of 3% was in line with marketplace demand. Medical supply expense. The increase in medical supply per AD of 4% was in line with the growth in surgeries and inflation. Other non-capital costs. In the aggregate, other non-capital costs increased approximately $14.9 million, primarily due to increased funding requirements associated with the affiliation agreement with the USF College of Medicine, and to higher malpractice costs. Capital costs increased in excess of $6.4 million, primarily due to the capitalization of the Bayshore Pavillion in Capital expenditures were kept to a minimum, accounting for only approximately $37.7 million compared to a yearly average of approximately $82 million for the previous four years. Fiscal Year 2010: Management believes that the stagnant growth experienced in 2010 was primarily a delayed impact from the 2008 economic downturn. While total surgeries continued to increase, inpatient surgery growth began to slow and deliveries declined by approximately (2%). The decline in deliveries was nationally recognized as one of the many effects from the downturn. Further, emergency room admissions were relatively flat compared to the prior year. Project planning and resourcing for the EMR implementation began in Management also began investing in off campus property as part of a future strategy to expand and improve upon existing services housed in outdated facilities, such as the Rehabilitation Center. In addition, the Hospital established an offshore captive insurance company, Florida Health Sciences, LTD., in order to mitigate the risks and volatility in insurance costs for malpractice coverage. For the fiscal year ended September 30, 2010, the operating and excess margins were approximately $43.0 million and $53.9 million, respectively. The following summarizes the key financial results for fiscal year 2010: Net patient services revenue ("NPSR"). Adjusted discharges were flat compared to NPSR per AD increased 7%, due to several factors: 1) an increase in acuity of 3%; 2) continued growth in inpatient surgeries; and 3) positive resolution of an Office of Inspector General ("OIG") investigation and retrospective Medicaid rate adjustments, resulting in total settlements of approximately $19.8 million. The OIG investigation found no fault against the Hospital. Other revenues. Disproportionate share distributions increased by $3 million according to legislative mandate. Other operating revenues declined by ($1.4) million primarily due to the closure of the cancer infusion center. Non-operating net gains reflected improved long-term investment performance. A-26

97 Operating expenses. Salaries and wages. FTEs increased 6% primarily in response to the EMR project resourcing and resulting in an increase of 0.4 in FTEs per AOB. Management recognized the conflicting priorities between flat growth and resource ramp up for the EMR and instituted cost controls to reduce overtime. As a result, the average salary expense increased by 2%. Medical supply expense. Medical supply costs per AD declined by (1%) as a result of aggressive and targeted renegotiation of supply contracts. Other non-capital costs. In the aggregate, other non-capital costs increased approximately $15.7 million, primarily due to legal costs to resolve the OIG investigation; facility repairs and maintenance; initial operating costs for the EMR and related training; and increased funding requirements associated with the affiliation agreement with USF. Capital costs increased by approximately $1 million. Capital expenditures of $60.3 million included off campus land and building purchases of $21.9 million and renovation projects of $18.8 million, including approximately half of the NICU expansion ($13.4 million). Fiscal Year 2011: Fiscal year 2011 was characterized by two major initiatives: Electronic Medical Record. The entire fiscal year was dedicated to the various activities needed to implement an organization wide EMR system. The estimated cost of approximately $122 million, included software, licenses and hardware, in addition to resources needed to build and implement the systems, train the organization and renovate the facility. The use of an EMR system was federally mandated to be implemented by all healthcare providers by Tampa General Medical Group. Effective October 1, 2010, TGH took over the clinic operations and employed the specialists formerly known as the LifeLink Foundation. Approximately 20 physicians and 84 clinical and administrative staff became employees of TGH. TGH also assumed the clinical operations and leased the facility housing such. The physicians represent four specialties, cardiology, hepatology, nephrology, and surgery, all of which are dedicated to TGH's transplant programs. TGH continued to experience volume growth in all major utilization indicators, except for inpatient surgeries. Inpatient growth was directly related to an increase of 6% in admissions from the emergency room. Outpatient growth outpaced inpatient growth primarily due to increases in outpatient surgeries and emergency room visits, and the additional clinical activity resulting from the newly incorporated TGMG. For the fiscal year ended September 30, 2011, the operating and excess margins were approximately $9.2 million and $41.3 million, respectively. The following summarizes the key financial results for fiscal year 2011: Net patient services revenue ("NPSR"). Adjusted discharges increased 4.5%. NPSR per AD increased 2%, primarily due to increased inpatient acuity; accelerated cash collections resulting in a 5-day reduction in days in accounts receivable; and the addition of professional fees from the newly incorporated TGMG. A-27

98 Other revenues. Disproportionate share distributions decreased by ($3.7) million according to legislative mandate, and a further reflection of the economic downturn in the State. Other operating revenues remained flat. Non-operating net gains of $32.1 million included investment returns of $23.0 million and $9.4 million related to the recalibration of prior year malpractice claims. Operating expenses. Salaries and wages. FTEs increased 7% primarily in response to the EMR project resourcing and the assumption of TGMG operations, both of which were the primary drivers of the average salary expense increase of 5%. The EMR initiative accounted for approximately 30% of the additional 434 FTEs, a salary increase of approximately $10 million. TGMG salaries accounted for approximately $14.5 million, or one-third of the overall increase in salaries. Benefit costs increased by approximately $11 million in direct proportion to the increase in salaries and wages. Medical supply expense. Medical supply costs per AD increased at a rate lower than expected inflation of approximately 4-5%, and continued to reflect aggressive supply contracting. Other non-capital costs. In the aggregate, other non-capital costs increased approximately $14.8 million, primarily due to consulting and technology related costs for the EMR project. Capital costs were flat. Capital expenditures of $72.3 million included renovation projects of $38.5 million. The remaining half of the NICU expansion was $21.6 million. Fiscal Year 2012: Utilization Fiscal year 2012 was characterized by several key events. On October 1, 2011, the Hospital successfully implemented an enterprise wide EMR via the "big bang" approach, or the simultaneous rollout of the major components of an EMR, most importantly clinical documentation including computerized physician order entry. The assimilation of such a wide reaching change required Management to work with its physicians and staff to delay elective admissions, impacting both surgeries and total admissions during the first six months of the fiscal year. In addition, for the first two weeks of October, the emergency department went on bypass for critical care and trauma patients who would have arrived by ambulance but instead were diverted to other facilities. Reduced patient volumes allowed for a faster transition to an electronic environment for all staff and limited patient care delays. Several USF surgeons left Tampa in 2011, and their replacements have not yet achieved the same levels of utilization as their predecessors, further contributing to a decline in both inpatient and outpatient surgeries. Management fully anticipates that as these physicians become established, surgical volumes will rebound. For one week in August, the Republican National Convention was held in downtown Tampa, less than a mile from the Hospital. Consumer concerns about disrupted traffic patterns caused less demand for the emergency room. In addition, USF physicians experienced a sharp decline in the number of appointments in their outpatient facility located on the Hospital's campus, resulting in reduced elective admissions and surgeries at the Hospital. A-28

99 Revenues The State of Florida has been significantly impacted by the economic downturn. While the Medicaid caseloads have rapidly increased, the general revenue base has contracted. As a result, Florida Medicaid has attempted to narrow the payment gap through across-the-board rate cuts. The cumulative impact of recent Florida Legislative cuts to hospital reimbursement resulted in a reduction of approximately $20 million in Medicaid reimbursement for the Hospital. Health care reform and Value Based Purchasing ("VBP") require strategic refocusing on quality, patient satisfaction and population health management in order to secure reimbursement and clinical demand. Management's Response Management anticipated the above challenges during the fiscal 2012 budgeting cycle and coincidentally initiated operational efforts focused on Revenue Capture and Expense Reduction ("RCER") to mitigate the significant resourcing costs caused by the EMR implementation and the numerous challenges to utilization. The RCER initiative was designed to identify and implement operational and financial improvements across four major functions: technology, supply chain, human resource management, and utilization management of clinical services. The net sustainable financial impact from these improvements was improvement in profitability in excess of $40 million, that Management believes will continue into the future. In addition, Management has strategically planned an expansion of the Hospital's primary care footprint, and opened the first clinic in Brandon, Florida in Additional clinics are planned for 2013 openings. TGMG has expanded to 39 physicians and participates in a pioneer accountable care organization. Further, Management has addressed VBP goals through staff incentives and multidisciplinary clinical process improvements. For the fiscal year ended September 30, 2012, the operating and excess margins were approximately $8.9 million and $25.1 million, respectively. It should be noted that for the sixth months ended March 30, 2012, the Hospital was facing cumulative operating and excess losses of ($11.9) million and ($1.5) million, respectively. The following summarizes the key financial results for fiscal year 2011: Net patient services revenue ("NPSR"). Adjusted discharges increased 2.8%, which was realized in the latter six months of NPSR per AD decreased by (6%) primarily due to a decline in inpatient acuity and the reduction in Medicaid payments. Other revenues. Disproportionate share distributions decreased by ($3.7) million according to legislative mandate, and a further reflection of the economic downturn in the State. Other operating revenues increased by $8.3 million, reflecting two new revenue streams from the achievement of Stage 1 meaningful use and transplant pharmaceutical sales. Non-operating net gains of $16.3 million represented investment returns. Operating expenses. Salaries and wages. FTEs decreased (3%) as the Hospital returned to more normal staffing after the EMR go-live. The average salary and benefits expense increase of 2% was part of a RCER cost containment initiative, in which employee health insurance premiums were increased and merit increases were limited to an average of 1%, with an additional 1% bonus for improvements in patient satisfaction. A-29

100 Medical supply expense. Medical supply costs per AD decreased by (8%) due to a RCER initiative expanding the supply chain contract renegotiations compounded by lower acuity and fewer inpatient surgeries. Other non-capital costs. In the aggregate, other non-capital costs decreased approximately ($18.3) million, primarily due to a significant reduction in consulting fees and training costs after the EMR go-live, and technology related RCER initiatives, including the decommissioning of legacy systems, and reduced transcription and paper costs. Capital costs increased by $7.3 million, primarily due to the shorter useful life associated with EMR investments. Capital expenditures of $56.4 million included EMR related costs of $44.2 million, the renovation of the Hospital's outpatient cancer treatment center for $4.0 million, and the opening of the Brandon primary care clinic for $1.8 million. OTHER FINANCIAL CONSIDERATIONS Sources of Revenue The Hospital benefits from a diverse base of payors, and has collection policies in place to limit the risk of loss from patients with the ability to pay. Sources of revenue for the four years ended September 30, 2012 were as follows: Medicare and Managed Medicare 35.7% 36.3% 37.1% 39.8% Managed Care-Commercial 27.0% 26.0% 24.5% 25.1% Medicaid and Managed Medicaid 16.7% 17.3% 18.4% 20.2% Hillsborough County Healthcare Plan 4.6% 4.0% 3.7% 2.6% Other 16.0% 16.4% 16.3% 12.3% A summary of reimbursement methodologies by payor is as follows: Medicare and Managed Medicare Payor Inpatient Outpatient Other Managed Care-Commercial Medicaid and Managed Medicaid Prospectively based MSDRGs Contractually based primarily DRG Cost reimbursed per diems Prospectively based APCs Assorted fee schedules Fixed amount per line items capped at $1,500 Pass through payments for medical education, organ acquisition, disproportionate share, and bad debts Hillsborough County Healthcare Plan Fixed payment DRG Percent of charges, capped Used in the determination of LIP funding A-30

101 Employment The Hospital is an Equal Opportunity Employer, abiding by federal, state and local employment laws and regulations. All aspects of recruitment and employment are based on merits, competence and qualifications. For each of the four years ended September 30, 2012, the Hospital employed the following number of full-time equivalent employees: Full-time equivalents ("FTEs") 5,632 5,997 6,431 6,237 Percent change 3% 6% 7% -3% Clinical nurse FTEs 1,786 1,869 1,966 1,866 Percent to total 32% 31% 31% 30% None of the employees are represented by a union. Pension and Other Post Retirement Benefits (a) Retirement Plan The Florida Health Sciences Center, Inc. Retirement Plan (the Plan) became effective January 1, The Plan is a noncontributory, single employer, cash balance defined benefit pension plan. All employees are eligible to participate in the Plan as of the beginning of the month following the later of the employee's attainment of age 21 and the completion of one year of service (i.e., generally a plan year during which the employee completes 1,000 hours of service). The Plan provides retirement, disability, and death benefits to plan members and beneficiaries. Furthermore, the Plan provides a health insurance subsidy to participants who had 20 years of service with the Florida Retirement System as of December 31, This subsidy is a monthly supplemental payment that a participant may be eligible to receive if they elect health insurance coverage. The amounts payable by the Plan are reduced by the amount payable by the Florida Retirement System for the subsidy. The minimum subsidy is $30 per month and the maximum is $90 per month. The Plan is underfunded but within the appropriate regulatory requirements. (b) Supplemental Retirement Plan The Supplemental Executive Retirement Plan (SERP) was established effective January 1, The SERP is a nonqualified defined benefit plan limited to certain management or highly compensated employees as defined. Upon vesting, the SERP provides participants with deferred compensation annually, based on 60% of the participants' compensation during the highest five complete calendar years out of the last ten complete calendar years. Certain adjustments are made to the annual benefit based on current and projected years of service and expected benefits payable under the Florida Retirement System, if any, Social Security, and the Florida Health Sciences Center, Inc. Retirement Plan. Only calendar years beginning on or after January 1, 2002 are considered. Vesting is generally effective after a participant completes five years of service with the Center. The SERP also provides for certain death or disability benefits. The SERP is unfunded. (c) Other Postretirement Benefits The defined benefit postretirement plan is intended to provide medical benefits to retirees who were hired prior to January 1, 2001 and had completed 30 or more years of service or who attained age 62 and completed five years of service. In addition, the plan provides benefits to retirees who had completed 20 or more years of service prior to January 1, The postretirement plan is contributory, with retiree A-31

102 contributions adjusted annually based on the projected average plan cost of the Hospital's self-insured health benefit program for the year. The postretirement plan is unfunded. Community Benefit The Hospital provided necessary medical care regardless of the patient's ability to pay for services under Charity Care policy. Qualification for charity care is based on current Federal Poverty Income Guidelines. Patients who do not qualify for charity care and are underinsured may qualify for discounted care. The level of charity care provided at cost for 2011 and 2012 was $84.7 million and $78.0 million, respectively, or 8% of operating expenses for each year. Litigation and Insurance During the normal course of business, the Hospital is involved in litigation with respect to professional liability claims and other matters. In addition, the Hospital is subject to periodic regulatory investigations. The Hospital has purchased insurance coverage to minimize its exposure to such risk. This coverage includes property, directors and officers, vehicles, medical malpractice, and general liability. Each policy has its own deductible and/or self-insurance retention. The Hospital insures its professional and general liability on a claims-made basis through a commercial insurance carrier. Self-insurance retention limits from October 1, 1997 to September 30, 2010 range from $1 million to $5 million. Florida Health Sciences Center, Ltd. ("Captive") was incorporated on May 21, 2010 under the Companies Law of the Cayman Islands and obtained an Unrestricted Class "B" Insurers License under the provisions of the Cayman Islands Insurance Law. The Captive is a wholly owned subsidiary of Florida Health Sciences Center, Inc. d/b/a Tampa General Hospital. The Captive was incorporated to provide excess professional and general liability coverage to the Hospital and TGMG on a claims-made basis. The Captive's liability under this policy is limited to $80 million per claim and in the aggregate. The federal government is investigating the billing practices of numerous hospitals in the United States, including the Hospital, regarding cardiac implants and kyphoplasty. The Hospital is also responding to routine requests from the RACs and MACs. There is no controversy or litigation now pending or, to the knowledge of Management, threatened against the Hospital which, if successful, would materially adversely affect the operations or financial condition of the Hospital. Electronic Medical Record ("EMR") Subsequent to the EMR go-live on October 1, 2011, Management also has achieved the following: HIMSS Level 6: The Healthcare Information and Management Systems Society (HIMSS) created an electronic medical record adoption model with seven levels. In mid 2012, the Hospital achieved HIMSS Stage 6 EMR adoption maturity, an accomplishment shared by less than 10% of all hospitals. Stage 6 requires full physician electronic documentation/charting (using structured templates) and a full complement of radiology PACS systems for medical images. Other requirements from previous stages include: major ancillary systems (pharmacy, lab, radiology); electronic nursing documentation; and closed loop electronic medications administration. A-32

103 Meaningful Use: Through the HITECH Act, the Centers for Medicare & Medicaid Services (CMS) have developed an EMR incentive program termed "Meaningful Use." This program is an incentive for healthcare organizations to invest in EMR technology through certified vendors and support the "meaningful use" of the electronic record to improve quality, safety, efficiency, patient care and maintain privacy. In mid 2012, the Hospital met all of the requirements for Stage 1 Meaningful Use and earned the related incentives awarded by CMS. In 2012, the Hospital recorded other operating revenue of $5.4 million related to the achievement of Meaningful Use in Fiscal Year 2013 For fiscal year 2013, Management budgeted operating and excess margins of $20.9 million and $40.3 million, respectively. Management expects to achieve these results through the continuation of the 2012 RCER initiatives, and the implementations of strategic pricing and a productivity monitoring program. For the two months ended November 30, 2012, Management has reported that operating and excess margins are in excess of budget expectations and prior year's performance. The Hospital filed its Quarterly Report for the quarter ended September 30, 2012 with Municipal Securities Rulemaking Board's Electronic Municipal Market Access System (EMMA) on January 30, Project Description The Hospital plans to issue approximately $160,000,000 of Hillsborough County Industrial Authority Hospital Revenue Refunding Bonds ("Bonds"). The net proceeds will be used to the advance refunding of a portion of the Series 2003 Bonds as well as capital improvement projects. Proceeds of the Bonds (approximately $50,000,000) will be used to finance all or a portion of the cost of a number of critical projects. The vast majority are clinical in nature and support the Hospital's market position as a regional referral center. These projects include: Renovation and expansion of the cardiovascular operating rooms. This project, when completed, will include the addition of three new operating suites, one of which will be outfitted with state-of-the-art interventional radiology equipment. This hybrid operating room will allow the Hospital's physicians to provide a number of innovative cardiovascular procedures that require interventional radiology technology in conjunction with traditional operating suite equipment. In addition to adding operating room capacity, this project will also result in renovation of the six existing cardiovascular operating rooms, renovated waiting rooms in three adjacent areas (cardiothoracic intensive care unit, cardiac surgery and radiology waiting rooms) expanded pre and post surgical holding suites and two negative pressure isolation rooms. Construction of an inter-operative MRI suite. Shelled-in space on the third floor of the Hospital's newest addition, the Bayshore Pavilion, will be renovated to provide an operating room for neurosurgeries that includes an MRI on a track that can be moved in and out of the operating room. The location of the MRI within the surgical area eliminates the need for surgeons to move patients from the main operating rooms to a MRI suite in another part of the building to determine whether they have successfully removed portions of the brain. The Hospital will be one of only a few hospitals nationwide with this capability. A-33

104 Renovation of pediatrics. The current 59-bed pediatric unit was developed in the mideighties and is in need of updating. The current unit does not provide patients with private rooms. The proposed project will increase the number of private rooms by adding pediatric capacity to a floor recently vacated by the Hospital's finance and IT departments. This floor is one floor above the current pediatric unit and after the renovation both floors will be dedicated to pediatrics. Private rooms, pediatric intensive care and an area for adolescent patients will be part of the renovated areas. Replacement of two cardiac catheterization labs. Two of the Hospitals four cardiac catheterization labs are at the end of their useful life and are in need of replacement. Refinance of existing debt on 606 West Kennedy Blvd., Tampa, Florida. In 2010, the Hospital purchased a two-story, 48,652 net square foot building at 606 West Kennedy Blvd., Tampa, Florida The building was renovated and currently houses the Hospital's finance and IT departments. Proceeds of the Bonds may be used to refinance the existing debt used to acquire and renovate the building. PRO FORMA DEBT SERVICE COVERAGE The estimated pro forma impact on Debt Service Coverage of the proposed refinancing and additional borrowing of $50 million for the Project is as follows: Calculation of Maximum Annual Debt Service Coverage Ratio (Dollars in Thousands) Fiscal Year Ended September 30, 2012 Actual Pro Forma (1) Excess of Revenues over Expenses $25,139 $25,139 Adjustment (add): Interest Expense $43,509 $43,509 Depreciation and Amortization $19,155 $19,155 Income Available for Debt Service $87,803 $87,803 Maximum Annual Debt Service $27,644 (2) $25,835 Maximum Annual Debt Service Coverage (times) 3.18x 3.40x (1) September 30, 2012 adjusted for new debt issuance plus the impact of savings on refinancing (2) Includes balloon payment of $3,354,137 in 2014 for 606 W Kennedy long-term obligation without reamortizing as allowed under the MTI A-34

105 APPENDIX B Audited Consolidated Financial Statements of Florida Health Sciences Center, Inc. for the Years Ended September 30, 2012 and 2011

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107 FLORIDA HEALTH SCIENCES CENTER, INC. Consolidated Financial Statements September 30, 2012 and 2011 (With Independent Auditors Report Thereon)

108 FLORIDA HEALTH SCIENCES CENTER, INC. Table of Contents Page Independent Auditors Report 1 Consolidated Financial Statements: Consolidated Balance Sheets 2 Consolidated Statements of Operations and Changes in Unrestricted Net Assets 3 Consolidated Statements of Changes in Net Assets 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6

109 KPMG LLP Suite North Tampa Street Tampa, FL Independent Auditors Report The Board of Directors Florida Health Sciences Center, Inc.: We have audited the accompanying consolidated balance sheets of Florida Health Sciences Center, Inc. (the Center) as of September 30, 2012 and 2011, and the related consolidated statements of operations and changes in unrestricted net assets, changes in net assets, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Center s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Center s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Florida Health Sciences Center, Inc. as of September 30, 2012 and 2011, and the changes in its net assets and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles. As discussed in note 1(u) to the consolidated financial statements, the Center adopted the provisions of Accounting Standard Update No , Presentation and Disclosure of Patient Services Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities, as of September 30, December 4, 2012 Certified Public Accountants KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative ( KPMG International ), a Swiss entity.

110 FLORIDA HEALTH SCIENCES CENTER, INC. Consolidated Balance Sheets September 30, 2012 and 2011 Assets Current assets: Cash and cash equivalents $ 89,851,287 28,824,341 Short-term investments 8,152,166 33,127,933 Current portion of assets limited as to use 9,034,450 8,937,878 Patient accounts receivable, net of allowance for uncollectible accounts of approximately $146,042,000 in 2012 and $137,198,000 in ,215, ,762,316 Inventories 20,615,322 19,216,950 Prepaid expenses and other current assets 17,558,887 32,218,251 Total current assets 282,427, ,087,669 Assets limited as to use, less current portion 499,672, ,749,670 Property and equipment, net 459,277, ,751,659 Other assets 10,131,368 10,967,325 Liabilities and Net Assets $ 1,251,509,006 1,176,556,323 Current liabilities: Accounts payable $ 80,888,550 68,396,934 Accrued expenses 94,476,220 91,516,693 Current installments of long-term debt 7,627,279 5,582,593 Current installments of obligations under capital leases 53,727 61,172 Estimated third-party payor settlements 69,672,520 59,867,081 Total current liabilities 252,718, ,424,473 Long-term debt, excluding current installments 364,912, ,446,938 Obligations under capital leases, excluding current installments 32,346 86,074 Other liabilities 166,163, ,407,785 Total liabilities 783,826, ,365,270 Net assets: Unrestricted 450,654, ,778,462 Temporarily restricted 16,177,758 17,578,766 Permanently restricted 850, ,825 Total net assets 467,682, ,191,053 $ 1,251,509,006 1,176,556,323 See accompanying notes to consolidated financial statements. 2

111 FLORIDA HEALTH SCIENCES CENTER, INC. Consolidated Statements of Operations and Changes in Unrestricted Net Assets Years ended September 30, 2012 and Unrestricted revenues, gains, and other support: Patient service revenue (net of contractual allowances and discounts) $ 970,317,559 1,026,426,930 Provision for bad debts (48,661,315) (68,656,371) Net patient services revenue less provision for bad debts 921,656, ,770,559 Disproportionate share distributions 26,121,039 29,841,124 Other revenue 40,352,902 27,677,531 Total unrestricted revenues, gains, and other support 988,130,185 1,015,289,214 Expenses: Salaries and benefits 480,497, ,057,589 Medical supplies 208,511, ,305,646 Purchased services 72,365,891 82,698,848 Utilities and leases 20,747,108 21,105,853 Insurance 25,067,922 23,845,399 Depreciation and amortization 43,508,694 36,816,557 Professional fees 33,923,642 39,261,520 Interest 19,154,570 18,541,482 Other 72,936,519 76,429,541 Total expenses 976,712,922 1,008,062,435 Operating income 11,417,263 7,226,779 Nonoperating gains (losses): Investment return 36,849,631 6,614,222 Change in professional liability estimate 9,388,329 Contributions (75,000) (300,000) Total nonoperating gains 36,774,631 15,702,551 Revenues, gains, and other support over expenses 48,191,894 22,929,330 Other changes in net assets: Net assets released from restrictions used for property and equipment 3,214,168 5,083,163 Pension-related changes other than net periodic pension cost (529,766) (1,354,775) Increase in unrestricted net assets $ 50,876,296 26,657,718 See accompanying notes to consolidated financial statements. 3

112 FLORIDA HEALTH SCIENCES CENTER, INC. Consolidated Statements of Changes in Net Assets Years ended September 30, 2012 and Unrestricted net assets: Revenue, gains, and other support over expenses $ 48,191,894 22,929,330 Net assets released from restrictions used for property equipment 3,214,168 5,083,163 Pension-related changes other than net periodic pension cost (529,766) (1,354,775) Increase in unrestricted net assets 50,876,296 26,657,718 Temporarily restricted net assets: Net assets released from restrictions: Used for property and equipment (3,214,168) (5,083,163) Used for operations (1,186,062) (999,361) Contributions and other 2,715,413 1,342,830 Increase in beneficial interest in net assets of Tampa General Hospital Foundation 283, ,868 Decrease in temporarily restricted net assets (1,401,008) (3,871,826) Permanently restricted net assets: Increase in beneficial interest in net assets of Tampa General Hospital Foundation 16,363 21,441 Increase in permanently restricted net assets 16,363 21,441 Increase in net assets 49,491,651 22,807,333 Net assets, beginning of year 418,191, ,383,720 Net assets, end of year $ 467,682, ,191,053 See accompanying notes to consolidated financial statements. 4

113 FLORIDA HEALTH SCIENCES CENTER, INC. Consolidated Statements of Cash Flows Years ended September 30, 2012 and Cash flows from operating activities: Increase in net assets $ 49,491,651 22,807,333 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization 43,508,694 36,816,557 Amortization of debt issue costs 206, ,621 Restricted contributions (1,148,818) (2,435,345) Unrealized losses (gains), net (23,051,906) 18,355,659 Realized gains (3,915,528) (12,198,011) Provision for bad debts 48,661,315 68,656,371 Pension-related changes other than net periodic pension cost 529,766 1,354,775 Changes in operating assets and liabilities: Patient accounts receivable (61,114,611) (84,237,875) Inventories (1,398,372) 4,998,547 Prepaid expenses and other current assets 14,699,364 (1,547,649) Accounts payable 5,494,289 (11,646,062) Accrued expenses 2,959,527 7,857,875 Estimated third-party payor settlements 9,805,439 15,505,047 Other liabilities 1,225,742 (11,794,295) Net cash provided by operating activities 85,953,403 52,706,548 Cash flows from investing activities: Purchases of property and equipment (49,433,448) (70,069,513) Increase in assets limited as to use (51,536) (10,289,194) Decrease (increase) in investments 24,975,767 (25,296) Net cash used in investing activities (24,509,217) (80,384,003) Cash flows from financing activities: Proceeds from restricted contributions 1,148,818 2,435,345 Proceeds from issuance of long-term debt 5,875,741 Payments on long-term debt and capital leases (7,426,799) (5,626,651) Payments of debt issue costs (15,000) Net cash used in financing activities (417,240) (3,191,306) Increase (decrease) in cash and cash equivalents 61,026,946 (30,868,761) Cash and cash equivalents at beginning of year 28,824,341 59,693,102 Cash and cash equivalents at end of year $ 89,851,287 28,824,341 Supplemental cash flow information: Cash paid for interest $ 19,272,898 18,658,308 Accounts payable for property and equipment purchases 6,997,327 2,578,062 See accompanying notes to consolidated financial statements. 5

114 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 (1) Summary of Significant Accounting Policies (a) Organization and Basis of Presentation Florida Health Sciences Center, Inc. (the Center), located in Tampa, Florida, is a not-for-profit entity incorporated during 1997 to meet the healthcare needs of the citizens of Hillsborough County and the state of Florida. The Center operates Tampa General Hospital (the Hospital), where it administers a teaching program for interns and residents. The Center incorporated Florida Health Sciences Center, Ltd. (the Captive) on May 21, 2010 under the Companies Law of the Cayman Islands and obtained an Unrestricted Class B Insurers License under the provisions of the Cayman Islands Insurance Law. The Captive, a wholly owned subsidiary of the Center, provides professional and general liability coverage to the Center. Tampa General Hospital Foundation (the Foundation) is a related not-for-profit organization, which supports the Center. The consolidated financial statements of the Center include the operations of the Hospital, the Captive, and the Center s beneficial interest in the net assets of the Foundation. All significant intercompany transaction among those entities have been eliminated during consolidation. On October 1, 1997, control of the operations and all assets and liabilities of the Hospital were transferred from Hillsborough County Hospital Authority (the Authority), a governmental entity, to the Center. The change in control was accomplished through the execution of an agreement between the Authority and the Center, as well as changes granted by the Florida Legislature that provided for the privatization of the Hospital. For financial statement purposes, the change in control was accounted for as a purchase, and accordingly, assets acquired and liabilities assumed were recorded at fair value at the date of acquisition. At the time of change in control, the fair value of liabilities assumed exceeded the fair value of assets acquired on the Hospital financial statements by approximately $15,102,000. The remaining unamortized goodwill balance is included as a component of other assets. In connection with the change in control, the Center entered into a 49-year lease agreement, which can be extended for an additional 49 years, with the Authority to lease the land and buildings on the Davis Islands campus, together with all improvements located thereon, for a nominal annual rental amount of $10. For financial reporting purposes, the fair value of the leased assets of approximately $86,571,000 as of October 1, 1997 was reported as an increase in temporarily restricted net assets for the year ended September 30, 1998, as the leased assets can only be utilized in accordance with the specifications of the lease agreement. During 2012 and 2011, net assets of approximately $2,066,000 and $2,648,000, respectively, were released from restriction, relating to the annual depreciation expense associated with the leased assets. (b) Mission Statement The Hospital is committed to providing the residents of West Central Florida with excellent and compassionate healthcare ranging from the simplest to the most complex medical services. As a teaching facility, the Hospital partners with academic and community institutions to support both their teaching and research missions. As the region s leading safety net hospital, the Hospital reaffirms its commitment to providing high quality health services to all residents. 6 (Continued)

115 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 (c) (d) (e) Cash and Cash Equivalents The Center considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Inventories Inventories consist principally of medical and surgical supplies, drugs, and medicines, and are valued at the lower of cost (first-in, first-out) or market. Assets Limited as to Use Assets limited as to use primarily include assets held by independent bank trustees on behalf of the Center under terms of bond indentures and self-insurance trust agreements, and assets designated for capital improvements and employee health benefits, over which the Center retains control and may, at its discretion, subsequently use for other purposes. Amounts required to meet current liabilities have been reclassified to current assets in the consolidated balance sheets. Earnings on investments include realized and unrealized gains and losses on investments, interest income, and dividends and are included as revenues, gains, and other support over expenses in the consolidated statements of operations and changes in unrestricted net assets, unless the income or loss is restricted by donor or law. Investment income and net gains and losses restricted by donor stipulations are reported as an increase or decrease in temporarily restricted net assets. (f) Property and Equipment Property and equipment, transferred from the Authority on October 1, 1997, was recorded at fair value as determined by an independent appraisal. Other property and equipment acquisitions are recorded at historical cost at the date of acquisition or fair value at the date of donation. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. Depreciation expense is computed using the straight-line method over the estimated useful lives of the related assets ranging from 3 to 40 years. Equipment under capital leases is amortized using the straight-line method over the shorter period of the lease term or the estimated useful life of the equipment. Such amortization is included in depreciation and amortization expense in the accompanying consolidated financial statements. Interest cost on borrowed funds during the construction period is capitalized as a component of the cost of the assets. Gifts of long-lived assets such as land, buildings, or equipment with explicit restrictions that specify how the assets are to be used, and gifts of cash or other assets that must be used to acquire long-lived assets, are reported as restricted support and are recorded at fair value at the time the gift is made. Absent explicit donor stipulations about how long those long-lived assets must be maintained, the Center reports expirations of donor restrictions when the donated or acquired long-lived assets are placed in service. (g) Other Assets Other assets include debt issuance costs of approximately $3,414,000 and $3,606,000 as of September 30, 2012 and 2011, respectively. These amounts include costs capitalized in connection with the issuance of the Series 2003 A and B and Series 2006 bonds (note 7). Debt issuance costs 7 (Continued)

116 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 incurred as part of the Series 2003 A and B bonds are amortized over the term of the related debt using the straight-line method, which approximates the effective interest method, and are included as a component of interest expense. Debt issuance costs incurred as part of the issuance of the Series 2006 bonds are amortized using the effective interest method and are included as a component of interest expense. The debt issuance costs are net of accumulated amortization of approximately $1,659,000 and $1,452,000 as of September 30, 2012 and 2011, respectively. (h) (i) Bond Discounts and Premiums Bond discounts and premiums are being amortized using the effective interest method over the life of the related debt. Amortization of bond discounts and premiums is included as a component of interest expense. Series 2003 bond discount of approximately $982,000 and $1,026,000, and Series 2006 bond premium of $3,737,000 and $4,049,000 are included with the related debt in the consolidated balance sheets as of September 30, 2012 and 2011, respectively. Impairment of Long-Lived Assets Management regularly evaluates whether events or changes in circumstances have occurred that could indicate impairment in the value of long-lived assets. There were no impairment losses recorded during the years ended September 30, 2012 and If there was an indication that the carrying amount of an asset is not recoverable, the Center would estimate the projected undiscounted cash flows, from the use and eventual disposition of the asset, excluding interest, to determine whether an impairment loss exists. The impairment loss, if any, would be determined by comparing the historical carrying value of the asset to its estimated fair value. In addition to consideration of impairment due to the events or changes in circumstances described above, management regularly evaluates the remaining lives of its long-lived assets. If estimates are revised, the carrying value of affected assets is depreciated or amortized over the remaining lives. (j) (k) Estimated Professional Liability, Workers Compensation, and Employee Benefits Cost The Center is self-insured for professional liability, workers compensation, and employee health benefits. The provision for professional liability, workers compensation, and employee health benefit claims includes estimates of the ultimate costs for both reported claims and claims incurred but not reported, based on evaluation of pending claims and past experience. Temporarily and Permanently Restricted Net Assets Temporarily restricted net assets are those whose use is limited by donors to a specific time period or purpose. The majority of temporarily restricted net assets are maintained pursuant to the lease agreement with the Authority, whereby the Center must continue to provide specific patient-care related services, continue to serve as a teaching hospital, and continue to provide certain levels of indigent care throughout the 49-year lease term. Permanently restricted net assets have been restricted by donors to be maintained by the Center in perpetuity, the income from which is expendable to support the Center s operations. 8 (Continued)

117 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 (l) (m) Beneficial Interest in Tampa General Hospital Foundation The Center recognizes its beneficial interest in the net assets of the Foundation. This interest is adjusted to reflect its share of change in the Foundation net assets. Patient Accounts Receivable Receivables are reported net of an allowance for bad debt and contractual adjustment estimates. Although the aggregate amount of receivables may include balances due from patients and third-party payors (including final settlements and appeals), amounts due from third-party payors for retroactive adjustments of items, such as final settlements or appeals, are reported separately in the consolidated financial statements. For receivables associated with services provided to patients who have third-party coverage, the Center analyzes contractually due amounts and provides an allowance for doubtful accounts, if necessary. For receivables associated with self-pay patients, which includes both patients without insurance and patients with deductible and copayment balances due for which third-party coverage exists for part of the bill, the Center records a significant provision for bad debts in the period of service on the basis of its past experience. The difference between the standard rates (or the discounted rates if negotiated) and the amounts actually collected after all reasonable collection efforts have been exhausted is charged off against the allowance for doubtful accounts. The Center s allowance for doubtful accounts for self-pay patients increased from 84% of self-pay accounts receivable as of September 30, 2011 to 87% of self-pay accounts receivable as of September 30, In addition, the Center s self-pay write-offs decreased $15,599,000 from $62,644,000 for the year ended September 30, 2011 to $48,782,000 for the year ended September 30, These changes were the result of negative trends experienced in the write-off and collection of amounts from self-pay patients during the year ended September 30, The Center has not changed its charity care or uninsured discount policies during the years ended September 30, 2011 or The Center does not maintain a material allowance for doubtful accounts from third-party payors, nor did it have significant write-offs from third-party payors. (n) Net Patient Service Revenue Net patient service revenue is recorded in the period in which services are provided and is reported at the net realizable amounts from patients, third-party payors, and others for services rendered, including retroactive adjustments under reimbursement agreements with third-party payors. Pass-through amounts are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods as final settlements are determined. Laws and regulations governing Medicare and Medicaid programs are extremely complex and subject to interpretation. As a result, there is at least a possibility that recorded estimates associated with these programs will change. 9 (Continued)

118 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 The Center recognizes patient service revenue associated with services provided to patients who have third-party payor (managed care, Medicare, Medicaid, other) coverage on the basis of contractual rates for the services rendered. For uninsured patients who do not qualify for charity care, (Uninsured Patients) the Center recognizes revenue on the basis of its standard rates for services provided or on the basis of discounted rates, if negotiated. On the basis of historical experience, a significant portion of the Center s Uninsured Patients will be unable or unwilling to pay for the services provided. Thus, the Center records a significant provision for bad debts related to Uninsured Patients in the period the services are provided. Patient service revenue, net of contractual allowances, and discounts (but before the provision for bad debts), recognized for the year ended September 30, 2012 from these major payor sources, are as follows: Managed care $ 348,141,584 Medicare 333,342,116 Medicaid 206,613,796 Other 70,741,813 Self-pay 11,478,250 $ 970,317,559 (o) Electronic Health Record Incentive Program The Centers for Medicare & Medicaid Services (CMS) have implemented provisions of the American Recovery and Reinvestment Act of 2009 that provide incentive payments for the meaningful use of certified electronic health records (EHR) technology. CMS has defined meaningful use as meeting certain objectives and clinical quality measures based on current and updated technology capabilities over predetermined reporting periods as established by CMS. The Medicare EHR incentive program provides annual incentive payments to eligible professionals, eligible hospitals, and critical access hospitals, as defined, that are meaningful users of certified EHR technology. The Medicaid EHR incentive program provides annual incentive payments to eligible professionals and hospitals for efforts to adopt, implement, upgrade and meaningfully use certified EHR technology. The Center utilizes a grant accounting model to recognize EHR incentive revenues. The Center records EHR incentive revenue ratably throughout the incentive reporting period when it is reasonably assured that it will meet the meaningful use objectives for the required reporting period and that the grants will be received. The EHR reporting period for eligible professionals and hospitals is based on the federal fiscal year, which coincides with the Center s fiscal year of October 1 through September 30. The Center believes that it and its eligible professionals that met meaningful use objectives for the fiscal year ending September 30, 2012 will continue to meet those objectives for the fiscal year ending September 30, EHR incentive revenues are included in other revenues in the accompanying consolidated statements of operations. 10 (Continued)

119 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 (p) Nonoperating Gains and Losses and Revenue, Gains, and Other Support over Expenses Activities deemed by the Center to be a provision of healthcare services are reported as unrestricted revenues, gains and other support, and expenses. Other activities that are peripheral to providing healthcare services are reported as nonoperating gains and losses. The consolidated statements of operations and changes in net assets include revenue, gains, and other support over expenses. Changes in unrestricted net assets that are excluded from revenue, gains, and other support over expenses are consistent with industry practice. Changes in unrestricted net assets consist primarily of pension liability adjustments and contributions of long-lived assets, if any. (q) (r) (s) Disproportionate Share Distributions The State of Florida Agency for Health Care Administration distributes low-income pool and disproportionate share payments to the Center based on its indigent care service level. The Center s policy is to recognize these distributions as revenue when amounts are due and collection is reasonably assured. The receipt of any additional distributions is contingent upon the continued support by the Florida State Legislature. Charity Care The Center provides care to patients who meet certain criteria by reference to established charity care policies. Because the Center does not pursue collection of amounts determined to qualify as charity care, these amounts are not reported as revenue. Partial payments to which the Center is entitled from Medicaid, public assistance, and other programs on behalf of patients that meet the Center s charity care criteria are reported as net patient services revenue. Income Taxes The Center has been recognized by the Internal Revenue Service as a tax-exempt organization described in Section 501(c)(3) of the Internal Revenue Code. Accordingly, income earned in the furtherance of the Center s tax-exempt purpose is exempt from federal and state income taxes. Taxes are not levied in the Cayman Islands for income, profit, capital, or capital gains generated by Florida Health Sciences Center, Ltd. The Center applies Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740, Income Taxes, which clarifies the accounting for uncertainty in income tax position and provides guidance when tax positions are recognized in an entity s financial statements and how the value of these positions are determined. Accounting principles generally accepted in the United States of America require management to evaluate tax positions taken by the Center and recognize a tax liability (or asset) if the Center has taken an uncertain position that more likely than not would not be sustainable upon examination by the Internal Revenue Service. Management has analyzed the tax positions taken by the Center, and has concluded that as of September 30, 2012, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the consolidated financial statements. The Center is subject to routine audits by taxing jurisdictions; however, there are 11 (Continued)

120 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 currently no audits for any tax periods in progress. Management believes it is no longer subject to income tax examinations for years prior to (t) (u) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. New Accounting Pronouncements In August 2010, the FASB issued Accounting Standards Update (ASU) No , Presentation of Insurance Claims and Related Insurance Recoveries. This ASU clarifies that a healthcare entity should not net insurance recoveries against a related claim liability and was effective for the Center for the year ended September 30, The adoption of this accounting standard did not have a material impact on the consolidated financial statements. In July 2011, the FASB issued ASU No , Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities. This ASU clarifies that certain healthcare entities should change the presentation of their statement of operations by reclassifying the provision for bad debts associated with patient service revenue from an operating expense to a deduction from patient service revenue. The Center elected to early adopt this ASU for the year ended September 30, (2) Net Patient Service Revenue The Center has agreements with third-party payors that provide for payments to the Center at amounts different from its established rates. The most significant third-party payors to the Center are the Medicare and Medicaid programs, which account for approximately 35% and 25%, respectively, of the Center s net patient services revenue for both the years ended September 30, 2012 and A summary of the payment arrangements with major third-party payors is as follows: (a) Medicare Inpatient acute care services rendered to Medicare program beneficiaries are paid on a prospectively determined rate per discharge based on the Medicare Severity Diagnosis-related Group (MSDRG) assigned to the patient. Inpatient nonacute services and defined capital and medical education costs related to Medicare beneficiaries are paid based on a cost reimbursement methodology, subject to certain limits and fee schedules. The majority of outpatient services are paid on prospectively determined rates per occurrence based on the ambulatory payment classification assigned to the service provided. The Center also receives a disproportionate share payment from Medicare in addition to its diagnosis-related group payments, based on its level of Medicaid patient volume and low income Medicare beneficiaries. The Center is reimbursed for cost reimbursable items at a tentative rate with final settlement determined after submission of annual cost reports by the Center and audits thereof by the Medicare fiscal intermediary. Final settlement has been determined for 2006 and prior. Differences between 12 (Continued)

121 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 estimated provisions for cost report settlements and final amounts are reflected as net patient services revenue in the fiscal year the cost reports are considered finalized. Changes in such estimates related to prior cost reporting periods resulted in an increase in net patient services revenue of approximately $14,268,000 and $6,963,000 for the years ended September 30, 2012 and 2011, respectively. (b) Medicaid Inpatient and outpatient services rendered to Medicaid program beneficiaries are reimbursed under a cost reimbursement methodology, subject to certain limits. The Center is reimbursed at a tentative rate with final settlement determined after submission of annual cost reports by the Center and audits by the Medicaid fiscal intermediary. The Center has also entered into payment agreements with certain commercial insurance carriers and health maintenance organizations. The basis for payment to the Center under these agreements includes prospectively determined rates per discharge, discounts from established charges, and prospectively determined daily rates. (3) Charity Care The Center provides necessary medical care regardless of the patient s ability to pay for services under its Charity Care policy. Qualification for charity care is based on the current Federal Poverty Income Guidelines (FPG). Underinsured and uninsured patients, who do not meet charity guidelines, may qualify for discounted care. Charity or discount consideration is available only after all third party reimbursement and government sources have been exhausted. Excessive assets or medical expenses may be factored as part of the charity or discount evaluation. The Center ensures that financial counseling communication is clear, concise, and considerate of the patient and family members. In addition, regulatory changes that may have the potential to alter charity classifications are monitored and incorporated into the policy, as necessary. The Center maintains records to identify and monitor the level of charity care. These records include the amount of charges foregone for services and supplies furnished under its charity care policy. The following measures the level of charity care and other community benefits, as defined, at estimated costs for the years ended September 30, 2012 and 2011: Traditional charity care $ 38,029,000 39,435,000 Unreimbursed Medicaid and Medicaid HMO 21,626,000 24,107,000 Unreimbursed Hillsborough County Health Plan 18,374,000 21,146,000 $ 78,029,000 84,688,000 As a percentage of operating expenses 8% 8% 13 (Continued)

122 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 (4) Concentration of Credit Risk of Net Accounts Receivable on the Balance Sheets The Center grants credit without collateral to its patients, most of who are local residents and are insured under third-party payor agreements. The mix of receivables from patients and third-party payors as of September 30 is as follows: Managed care 48% 48% Medicare Medicaid 9 9 Other % 100% The credit risk in other payors is limited due to the large number of insurance companies that provide payments for services. 14 (Continued)

123 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 (5) Assets Limited as to Use and Short-Term Investments Assets limited as to use as of September 30, 2012 and 2011, at fair value, are as follows: Internally designated for capital improvements and employee health benefits: Cash and cash equivalents $ 30,104,603 40,091,242 Equities securities: Domestic stocks 148,991,850 87,649,453 Global stocks 30,867,860 18,252,313 Fixed income securities: Government obligations 36,444,176 26,450,670 Corporate bonds 144,826, ,885,074 Beneficial interest in Tampa General Hospital Foundation 5,150,456 4,850,285 Total internally designated for capital improvements and employee health benefits 396,384, ,179,037 Held by trustee under malpractice self-insurance arrangement: Cash and cash equivalents 11,237,166 7,506,760 Corporate bonds 411,808 3,286,092 Government obligations 21,369,976 22,538,683 Municipal bonds 27,272,066 35,438,934 Mutual funds 18,533,432 14,744,942 Total held by trustee under malpractice self-insurance arrangement 78,824,448 83,515,411 Held by trustee under bond indentures: Cash and cash equivalents 19,359,056 25,994,700 Government obligations 14,138,020 8,998,400 Total held by trustee under bond indentures 33,497,076 34,993,100 Assets limited to use 508,706, ,687,548 Amount required to meet current obligations (9,034,450) (8,937,878) Assets limited to use, less current portion $ 499,672, ,749,670 Short-term investments, stated at fair value, consist of the following as of September 30, 2012 and 2011: Cash and cash equivalents $ 3,130,658 33,127,933 Government bonds 5,021,508 $ 8,152,166 33,127, (Continued)

124 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 Investment income and gains and losses on assets limited as to use, cash equivalents and other investments are comprised of the following for the years ended September 30, 2012 and 2011: Other revenue: Interest income $ 3,180,302 4,087,167 Net realized gains on sale of investments, net 160, ,591 Unrealized gains (losses) on trading investments, net 2,562,488 (1,961,328) Total 5,902,855 2,523,430 Nonoperating gains (losses): Interest income and dividends 12,604,750 11,208,133 Net realized gains on sale of investments, net 3,755,463 11,800,420 Unrealized gains (losses) on trading investments, net 20,489,418 (16,394,331) Total 36,849,631 6,614,222 Total investment return $ 42,752,486 9,137,652 (6) Fair Value Measurements FASB ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. FASB ASC Topic 820 requires investments to be grouped into three categories based on certain criteria as noted below: Level 1: Fair value is determined by using quoted prices for identical assets or liabilities in active markets. Level 2: Fair value is determined by using other than quoted prices that are observable or corroborated for the asset by other independently verifiable market data (e.g., quoted prices for identical assets in inactive markets, quoted prices for similar assets in active markets, observable inputs other than quoted prices, and inputs derived principally from or corroborated by observable market data by correlation or other means). Level 3: Fair value is determined by using inputs based on management assumptions that are not directly observable. Following is a description of the valuation methodologies used for significant assets measured at fair value at September 30, 2012: Cash and cash equivalents: The carrying amounts reported in the consolidated balance sheets approximate the fair value because of the short maturities of these instruments. Investments: Valued at the closing price reported on the active market on which the individual securities are traded, or valued based on quoted prices for similar assets. 16 (Continued)

125 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 Estimates of fair values are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could affect the estimates. The following tables summarize the fair values of the Center s significant financial assets and liabilities as of September 30, 2012 and 2011: September 30, Fair value measurement at reporting date 2012 Level 1 Level 2 Level 3 Cash and cash equivalents $ 89,851,287 89,851,287 Short-term investments: Cash and cash equivalents 8,152,166 8,152,166 Assets limited to use: Cash and cash equivalents 60,700,825 60,700,825 Equity income securities: Domestic stocks 148,991, ,991,850 Global stocks 30,867,860 30,867,860 Mutual funds 18,533,432 18,533,462 Fixed income securities: Government obligations 71,952,172 71,952,172 Corporate bonds 145,237, ,237,857 Municipal bonds 27,272,066 27,272,066 Beneficial interest in Tampa General Hospital Foundation 5,150,456 5,150, ,706, ,046, ,660,379 Total $ 606,709, ,049, ,660, (Continued)

126 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 September 30, Fair value measurement at reporting date 2011 Level 1 Level 2 Level 3 Cash and cash equivalents $ 28,824,341 28,824,341 Short-term investments: Cash and cash equivalents 33,127,933 33,127,933 Assets limited to use: Cash and cash equivalents 73,592,702 73,592,702 Equity income securities: Domestic stocks 87,649,453 87,649,453 Global stocks 18,252,313 18,252,313 Mutual funds 14,744,942 14,744,942 Fixed income securities: Government obligations 57,987,753 57,987,753 Corporate bonds 189,171, ,171,166 Municipal bonds 35,438,934 35,438,934 Beneficial interest in Tampa General Hospital Foundation 4,850,285 4,850, ,687, ,227, ,460,385 Total $ 543,639, ,179, ,460,385 There were no transfers of financial assets or liabilities between Level 1 and Level 2 during the years ended September 30, 2012 and (7) Long-Term Debt Long-term debt consists of the following: Series 2003A and B Bonds, net of unamortized discount of $981,668 and $1,026,289 at September 30, 2012 and 2011, respectively, maturing in various amounts through October 1, 2034, with stated rates of 2.5% to 5.45% $ 180,533, ,588,711 Series 2006 Bonds, net of unamortized premium of $3,737,394 and $4,048,934 as of September 30, 2012 and 2011, respectively, maturing in various amounts through October 1, 2041, with stated rates of 4% to 5.25% 184,187, ,493,934 Note payable, due in monthly installments through 2015 at a stated rate of interest of 6.5%, collateralized by land, with a balloon payment due on November 14, ,733,858 3,946, (Continued)

127 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and Note payable, due in monthly installments through 2015 at a stated rate of interest of 3.25%, collateralized by software $ 4,085,061 Total long-term debt 372,539, ,029,531 Current installments (7,627,279) (5,582,593) Long-term debt, excluding current installments $ 364,912, ,446,938 Effective May 1, 2003, the Hillsborough County Industrial Authority (Florida) issued $210,000,000 aggregate principal amounts of tax-exempt Hospital Revenue Refunding Bonds (2003 Bonds), comprising Series A principal $91,885,000 and Series B principal $118,115,000. A portion of the proceeds of the 2003 Bonds was used to purchase and redeem the Hospital s outstanding Series 1992 Bonds, and the remaining proceeds of the 2003 Bonds were utilized for the expansion, improvement, and further equipping of the healthcare facilities. The 2003 Bonds contain various covenants, including but not limited to the maintenance of a minimum debt service coverage ratio and provides that certain funds be established with a trustee bank (note 5). Management believes the Center is in compliance with such covenants at September 30, On September 28, 2006, the Hillsborough County Industrial Authority (Florida) issued $185,000,000 aggregate principal amounts of tax-exempt Hospital Revenue Refunding Bonds (2006 Bonds). Proceeds of the 2006 Bonds were utilized for the expansion, improvement, and further equipping of the Hospital s healthcare facilities. The 2006 Bonds contain various covenants, including but not limited to the maintenance of a minimum debt service coverage ratio and provides that certain funds be established with a trustee bank (note 5). Management believes the Center is in compliance with such covenants at September 30, The 2006 and 2003 Bonds are secured solely by a pledge of and a security interest in the revenue of the Center. Such pledge and security interest have been assigned to a bank trustee. Stated interest rates on the 2003 Bonds still outstanding range from 4.375% to 5.45%, with an effective interest rate of 5.29% at September 30, 2012, and maturities through October 1, Except for $34,825,000 of serial bonds maturing prior to October 1, 2016, the 2003 Bonds are subject to mandatory redemption by the Center beginning October 1, 2016 at par plus accrued interest. Stated interest rates on the 2006 Bonds range from 4.0% to 5.25%, with an effective rate of 5.0% at September 30, 2012, and maturities through October 1, Except for $10,215,000 of serial bonds maturing prior to October 1, 2017, the 2006 Bonds are subject to mandatory redemption by the Center beginning October 1, 2017 at par plus accrued interest. During fiscal year 2013, the Center plans to issue approximately $160,000,000 of Hillsborough County Industrial Authority Hospital Revenue Refunding Bonds (the Bonds). The net proceeds will be used for potential advance refunding of a portion of the Series 2003 Bonds as well as capital improvement projects of the Center. The issuance of the Bonds and advance refunding of a portion of the Series 2003 Bonds is dependent upon interest rates at the time of planned issuance. 19 (Continued)

128 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 Scheduled maturities of long-term debt as of September 30, 2012 are as follows: Year ending September 30: 2013 $ 7,377, ,724, ,492, ,155, ,475,000 Thereafter 332,560,000 Long-term debt, excluding unamortized premiums (discounts) 369,783,920 Unamortized premium 3,737,394 Unamortized discount (981,668) Long-term debt, including unamortized premiums (discounts) $ 372,539,646 (8) Property and Equipment Property and equipment consist of the following as of September 30, 2012 and 2011: Land $ 46,639,634 43,896,417 Land improvements, buildings, and fixed equipment 428,724, ,507,729 Major moveable equipment 261,610, ,681,561 Other equipment 2,385,544 2,337,250 Items under capital lease obligations: Equipment 5,569,247 5,569,247 Total property and equipment 744,929, ,992,204 Accumulated depreciation and amortization (304,483,043) (261,808,204) Total property and equipment less depreciation and amortization 440,446, ,184,000 Construction in progress 18,831,789 38,567,659 Property and equipment, net $ 459,277, ,751,659 As of September 30, 2012, the estimated cost to complete construction in progress is approximately $39,085,000. Interest expense, net of interest income of approximately $167,000 and $855,000, was capitalized during the years ended September 30, 2012 and 2011, respectively. 20 (Continued)

129 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 (9) Lease Obligations The Center leases certain medical and other support equipment under noncancelable capital and operating leases. Rent expense under noncancelable operating leases was approximately $9,007,000 and $6,058,000 for the years ended September 30, 2012 and 2011, respectively. Future minimum lease payments as of September 30, 2012 are as follows: Capital leases Operating leases Year ending September 30: 2013 $ 56,192 6,776, ,779 4,332, ,524, ,709, ,837 Total leases 88,971 $ 16,736,086 Less amounts representing interest 2,898 Present value of minimum capital lease payments 86,073 Current installments of obligations under capital leases (53,727) Obligations under capital leases, excluding current installments $ 32,346 (10) Pension and Other Postretirement Benefits (a) Retirement Plan The Center established the Florida Health Sciences Center, Inc. Retirement Plan (the Plan), which became effective January 1, The Plan is a noncontributory, single employer, cash balance defined benefit pension plan. The Tampa General Staffing, Inc. Retirement Plan was merged into the Plan effective January 1, All employees are eligible to participate in the Plan as of the beginning of the month following the later of the employee s attainment of age 21 and the completion of one year of service (i.e., generally a plan year during which the employee completes 1,000 hours of service). The Plan provides retirement, disability, and death benefits to plan members and beneficiaries. Furthermore, the Plan provides a health insurance subsidy to participants who had 20 years of service with the Florida Retirement System as of December 31, This subsidy is a monthly supplemental payment that a participant may be eligible to receive if they elect health insurance coverage. The amounts payable by the Plan are reduced by the amount payable by the Florida Retirement System for the subsidy. The minimum subsidy is $30 per month and the maximum is $90 per month. 21 (Continued)

130 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 The actuarially computed net periodic pension cost for the Center s Plan for the years ended September 30, 2012 and 2011 included the following components: Service cost benefits earned during the period $ 23,612,165 22,691,738 Interest cost on projected benefit obligation 9,864,101 9,972,707 Expected return on plan assets (12,983,360) (13,005,046) Net amortization and deferral of unrecognized losses 4,988,603 4,585,146 Net periodic pension cost $ 25,481,509 24,244,545 The following table sets forth the Plan s funded status and amount recognized in other liabilities in the Center s consolidated balance sheets as of September 30, 2012 and 2011 (using a measurement date of September 30): Change in benefit obligation: Benefit obligation at beginning of year $ 233,571, ,458,463 Service cost 23,612,165 22,691,738 Interest cost 9,864,101 9,972,707 Actuarial (gain) loss 18,187,468 (4,496,089) Benefits paid (9,430,010) (9,055,709) Benefit obligation at end of year 275,804, ,571,110 Change in plan assets: Fair value of plan assets at beginning of year 161,669, ,982,130 Actual return on plan assets 28,216, ,494 Employer contributions 26,152,486 21,352,504 Benefits paid (9,430,010) (9,055,709) Fair value of plan assets 206,608, ,669,419 Funded status and accrued benefit costs $ (69,196,778) (71,901,691) The accumulated benefit obligation for the Plan was approximately $250,433,000 and $204,979,000 as of September 30, 2012 and 2011, respectively. Weighted average assumptions used to determine projected benefit obligations as of September 30, 2012 and 2011 were as follows: Discount rate 3.44% 4.33% Rate of compensation increase 3.00% 8.00% 3.00% 8.00% 22 (Continued)

131 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 The actuarial assumptions used in determining net periodic pension costs for the years ended September 30, 2012 and 2011 are as follows: Discount rate 4.33% 4.76% Rate of increase in compensation levels Expected long-term rate of return on plan assets The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual assets categories. The following are deferred pension costs that have not yet been recognized in periodic pension expense but instead are accrued in unrestricted net assets as of September 30, Unrecognized actuarial losses represent unexpected changes in the projected benefit obligation and plan assets over time, primarily due to changes in assumed discount rates and investment experience. Unrecognized prior service cost is the impact of changes in plan benefits applied retrospectively to employee service previously rendered. Deferred pension costs are amortized into annual pension expense over the average remaining assumed service period for active employees: Net prior Net actuarial service cost loss Total Amounts recognized in unrestricted net assets as of September 30, 2012 $ 1,087,079 69,484,193 70,571,272 Amounts in net assets to be recognized during the next fiscal year 236,322 4,144,778 4,381, (Continued)

132 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 Plan Assets The weighted average asset allocation of the Center s pension benefits as of September 30, 2012 and 2011 was as follows: Pension benefits plan assets at September 30 Asset category Cash and cash equivalents 7% 6% Equity securities: Domestic stocks Global stocks Fixed income securities: U.S. Treasury obligations 1 1 Government agencies 1 1 Corporate bonds Total 100% 100% September 30, Fair value measurement at reporting date 2012 Level 1 Level 2 Level 3 Cash and cash equivalents $ 14,488,375 14,488,375 Equity securities: Domestic stocks 122,861, ,861,253 Global stocks 27,476,205 27,476,205 Fixed income securities: Government agencies 2,949,324 2,949,324 Municipal bonds 2,068,414 2,068,414 Corporate bonds 36,764,485 36,764,485 Total $ 206,608, ,775,157 38,832,899 September 30, Fair value measurement at reporting date 2011 Level 1 Level 2 Level 3 Cash and cash equivalents $ 7,695,173 7,695,173 Equity securities: Domestic stocks 102,629, ,629,713 Global stocks 16,834,727 16,834,727 Fixed income securities: Government agencies 1,936,621 1,936,621 Municipal bonds 2,161,315 2,161,315 Corporate bonds 30,411,870 30,411,870 Total $ 161,669, ,096,234 32,573, (Continued)

133 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 The investment objective of the defined benefit plan is to use prudent and reasonable levels of liquidity and investment risk to produce an investment return that provides for payments of benefits to participants and their beneficiaries. The investment objective also incorporates the financial condition of the plan, future growth of active and retired participants, inflation, and the rate of salary increases. The defined benefit plan s investment committee has selected market-based benchmarks to monitor the performance of the investment strategy and performs periodic reviews of investment performance. The investment strategy has a current target allocation policy as follows: 75% equities and 25% fixed income and other securities. The expected long-term rate of return on plan assets is determined based primarily on expectations of future returns for the defined benefit plan s investments based on the target asset allocation. Additionally, the historical returns on comparable equity and fixed income investments are considered in the estimate of the expected long-term rate of return on plan assets. Cash Flows The Center expects to contribute approximately $25,028,000 to the Plan in The benefits expected to be paid in each year from 2013 through 2017 are approximately $12,295,000, $12,980,000, $13,474,000, $13,879,000, and $14,413,000, respectively. The aggregate benefits expected to be paid from 2018 through 2023 are approximately $96,426,000. The expected benefits are based on the same assumptions used to measure the Center s benefit obligations as of September 30, 2012 and include estimated future employee service. (b) Supplemental Retirement Plan Effective January 1, 2002, the Center established the Florida Health Sciences Center, Inc. Supplemental Executive Retirement Plan (SERP). The SERP is a nonqualified defined benefit plan limited to certain management or highly compensated employees as determined by the Center. Upon vesting, the SERP provides participants with deferred compensation annually, based on 60% of the participants compensation during the highest five complete calendar years out of the last ten complete calendar years. Certain adjustments are made to the annual benefit based on current and projected years of service and expected benefits payable under the Florida Retirement System, if any, Social Security, and the Florida Health Sciences Center, Inc. Retirement Plan. Only calendar years beginning on or after January 1, 2002 are considered. Vesting is generally effective after a participant completes five years of service with the Center. The SERP also provides for certain death or disability benefits. 25 (Continued)

134 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 The actuarially computed net periodic pension cost for the Center s SERP for the years ended September 30, 2012 and 2011 included the following components (using a measurement date of September 30): Service cost benefits earned during the period $ 1,914,252 1,664,310 Interest cost on projected benefit obligation 695, ,666 Net amortization and deferral of unrecognized losses 577, ,852 Net periodic pension cost $ 3,187,338 2,745,828 The following table sets forth the SERP s funded status and amount recognized in other liabilities in the Center s consolidated balance sheets as of September 30, 2012 and 2011: Change in benefit obligation: Benefit obligation at beginning of year $ 17,935,700 14,734,325 Service cost 1,914,252 1,664,310 Interest cost 695, ,666 Assumption changes Actuarial gain 3,174,740 1,960,062 Benefits paid (2,054,300) (1,073,663) Benefit obligation at end of year 21,665,520 17,935,700 Fair value of plan assets at end of year Funded status and accrued benefit costs $ (21,665,520) (17,935,700) The accumulated benefit obligation for the SERP was $17,190,211 and $14,294,738 as of September 30, 2012 and 2011, respectively. Weighted average assumptions used to determine projected benefit obligations at September 30, 2012 and 2011 were as follows: Discount rate 2.54% 3.60% Rate of compensation increase 3.00% 8.00% 3.00% 8.00% 26 (Continued)

135 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 The actuarial assumptions used in determining net periodic pension costs for the years ended September 30, 2012 and 2011 are as follows: Discount rate 3.60% 3.83% Rate of increase in compensation levels 3.00% 8.00% 3.00% 8.00% The following are deferred pension costs, which have not yet been recognized in periodic pension expense but instead are accrued in unrestricted net assets as of September 30, Unrecognized actuarial losses represent unexpected changes in the projected benefit obligation and plan assets over time, primarily due to changes in assumed discount rates and investment experience. Unrecognized prior service cost is the impact of changes in plan benefits applied retrospectively to employee service previously rendered. Deferred pension costs are amortized into annual pension expense over the average remaining assumed service period for active employees: Net prior Net actuarial service cost loss Total Amounts recognized in unrestricted net assets as of September 30, 2012 $ (37,791) 10,339,842 10,302,051 Amounts in net assets to be recognized during the next fiscal year (53,987) 631, ,958 Cash Flows The Center does not expect to make any contributions to the SERP in fiscal The benefits expected to be paid in each year from 2013 through 2017 are approximately $8,046,000, $3,096,000, $947,000, $1,281,000, and $493,000, respectively. The aggregate benefits expected to be paid in the five years from 2018 through 2022 are approximately $10,226,000. The expected benefits are based on the same assumptions used to measure the Center s benefit obligations at September 30, 2012 and include estimated future employee service. (c) Other Postretirement Benefits The Center sponsors a defined benefit postretirement plan, which is intended to provide medical benefits to retirees who were hired prior to January 1, 2001 and had completed 30 or more years of service or who attained age 62 and completed five years of service. In addition, the plan provides benefits to retirees who had completed 20 or more years of service prior to January 1, The postretirement plan is contributory, with retiree contributions adjusted annually based on the projected average plan cost of the Center s self-insured health benefit program for the year. The Center accrues the cost of providing postretirement benefits during the active service period of the employee. 27 (Continued)

136 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 The components of net periodic postretirement benefit cost for the years ended September 30, 2012 and 2011 are as follows: Service cost benefits attributed to service during the year $ 112, ,933 Interest cost on accumulated postretirement benefit obligation 197, ,876 Amortization of net gain (loss) (163,641) 61,000 Net periodic postretirement benefit cost $ 147, ,809 The following table sets forth the postretirement plan s funded status and amounts recognized in other liabilities in the Center s consolidated balance sheets as of September 30, 2012 and 2011 (measurement date as of September 30): Change in accumulated benefit obligation: Accumulated benefit obligation at beginning of year $ 4,383,370 7,387,213 Service cost 112, ,933 Interest cost 197, ,876 Retiree contributions 494, ,736 Actuarial loss (gain) 91,846 (3,133,226) Benefits paid (783,363) (937,162) Accumulated benefit obligation at end of year 4,497,330 4,383,370 Change in plan assets: Employer contribution 288, ,426 Employee contribution 494, ,736 Benefits paid (783,363) (937,162) Fair value of plan assets at end of year Funded status and accrued benefit costs $ (4,497,330) (4,383,370) For measurement purposes, a 9.5% and 10.5% annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2012 and 2011, respectively, and the rate was assumed to decrease gradually to 5.5% over the subsequent three years and remain at that level thereafter. The weighted average discount rate used in determining the accumulated postretirement benefit obligation was 5.5% as of September 30, 2012 and 2011, respectively. The weighted average discount rate used in determining the net benefit cost was 4.6% and 5.0% as of September 30, 2012 and 2011, respectively. 28 (Continued)

137 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 The impact of a one-percentage-point change in assumed healthcare cost trend rates as of September 30, 2012 is as follows: 1% Increase 1% Decrease Effect on total of service and interest cost components $ 53,625 (46,501) Effect on postretirement benefit obligation 846,748 (654,265) The following are deferred pension costs that have not yet been recognized in periodic pension expense but instead are accrued in unrestricted net assets as of September 30, Unrecognized actuarial losses represent unexpected changes in the projected benefit obligation and plan assets over time, primarily due to changes in assumed discount rates and investment experience. Deferred pension costs are amortized into annual pension expense over the average remaining assumed service period for active employees. Net actuarial gain recognized in unrestricted net assets as of September 30, 2012 $ (163,641) Net actuarial gain to be recognized during the next year 70,610 Cash Flows The Center expects to contribute approximately $347,000 to its postretirement benefit plan in The benefits expected to be paid in each year from 2013 through 2017 are approximately $346,913, $260,939, $293,725, $236,081, and $241,425, respectively. The aggregate benefits expected to be paid in the five years from 2018 through 2022 are $1,291,783. The expected benefits are based on the same assumptions used to measure the Center s benefit obligations as of September 30, 2012 and include estimated future employee service. (11) Commitments and Contingencies (a) Litigation During the normal course of business, the Center is involved in litigation with respect to professional liability claims and other matters. In addition, the Center is subject to periodic regulatory investigations. The Center has purchased insurance coverage to minimize its exposure to such risk. This coverage includes property, directors and officers, vehicles, medical malpractice, and general liability. Each policy has its own deductible and/or self-insurance retention. The Center insures its professional and general liability on a claims-made basis through a commercial insurance carrier. The Center has secured claims-made coverage continuously from October 1, 1997 through September 30, The Center has renewed its claims-made policy. For claims prior to October 1, 1997, the Authority, as an agency or subdivision of the state of Florida, had sovereign immunity in tort actions. Therefore, in accordance with Chapter , the Center s legal liability was limited by statute to $100,000 per claimant and $200,000 for all claimants per occurrence. Self-insurance retention limits from October 1, 1997 to September 30, 29 (Continued)

138 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and range from $1,000,000 to $5,000,000. On May 21, 2010, the Captive was incorporated to provide excess professional liability and general liability coverage to the Center on a claims made basis. The Captive s liability under this policy is limited to $80,000,000 per claim and in the aggregate. The Center has employed independent actuaries to assist management in estimating the ultimate costs, if any, of the settlement of known claims and incidents, as well as unreported incidents that may be asserted, arising from services rendered to patients. Reported amounts for professional liability were approximately $80,619,000 and $77,685,000 as of September 30, 2012 and 2011, respectively, and are included in accrued expenses and other liabilities on the accompanying consolidated balance sheets. During the year ended September 30, 2011 the Center changed from the actuarially determined 75% confidence level to the expected level. Given the maturity of the plan, the Center believes the expected level is a better estimate of the ultimate outcome than the 75% confidence level previously used. The expected level is a commonly followed industry practice. The net impact to the consolidated statements of operations resulted in a nonoperating gain of approximately $9,388,000 for the year ended September 30, (b) Third-Party Reimbursement Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. The Center is aware of these laws and regulations and, to the best of its knowledge and belief, is in compliance. Compliance with such laws and regulations can be subject to future government review and interpretation, as well as significant regulatory action including fines, penalties, and exclusion from the Medicare and Medicaid programs. (12) Other Funding Sources The Hospital receives funding from various components of the state of Florida s (the State) Medicaid program, including the Low Income Pool program (LIP) and Medicaid per diem rates. The State s LIP program distributes funding to the Hospital in recognition of the disproportionate level of care provided to indigent patients and to defray some of the costs associated with graduate medical education. The LIP is a federal matching program that provides states with the opportunity to receive additional distributions based upon the difference between Medicaid reimbursement and the amount that would have been received for the same patients using Medicare reimbursement formulas, as defined. Medicaid fee for service is paid based on inpatient per diem and outpatient per line rates and may be adjusted based on annual cost report submissions. The total funding amounts from the LIP and trauma programs were $26,100,000 and $29,800,000 during the years ended September 30, 2012 and 2011, respectively, and are reported as disproportionate share distributions in the accompanying consolidated statements of operations. Since July 1, 2001, the Hospital receives trauma funding of approximately $3,500,000 per year from Hillsborough County to supplement the Hospital s reimbursement for trauma services rendered to Hillsborough County residents. 30 (Continued)

139 FLORIDA HEALTH SCIENCES CENTER, INC. Notes to Consolidated Financial Statements September 30, 2012 and 2011 Under the terms of an agreement with the Hillsborough County Health Plan, the Hospital is paid for authorized services provided to eligible recipients based on contracted rates. The contract renews on an annual basis and is currently through June 30, These payments are subject to certain limits (network caps) for each network per contract, including amounts the Hospital must reimburse physicians. For the years ended September 30, 2012 and 2011, approximately $20,600,000 and $17,600,000, respectively, were included in net patient services revenue relating to this contract. (13) Affiliated Organizations The Foundation was established to solicit contributions from the general public on behalf of the Hospital for the funding of capital acquisitions and to support Hospital programs. As of September 30, 2012 and 2011, the Foundation held assets for the Hospital that were temporarily and permanently restricted by donors. The Hospital s interest in the net assets of the Foundation is included in assets limited as to use and amounted to approximately $5,150,000 and $4,850,000 as of September 30, 2012 and 2011, respectively. The University of South Florida Board of Trustees (the University) has an affiliation agreement with the Center. The affiliation agreement establishes the Center as the primary teaching hospital for the University in order to provide healthcare education and training for students, residents, and other healthcare professionals. In accordance with the affiliation agreement, the University assigns physicians and residents to provide the customary services of the Center. For the years ended September 30, 2012 and 2011, the Center paid the University approximately $41,643,000 and $43,806,000, respectively, for these services, which also include the residents salaries and the related malpractice coverage and medical director fees. These amounts are recorded within professional fees and other expenses in the accompanying consolidated statements of operations and changes in unrestricted net assets. (14) Subsequent Events The Center has evaluated events and transactions occurring subsequent to September 30, 2012 as of December 4, 2012, which is the date the consolidated financial statements were available to be issued. 31

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141 APPENDIX C Summaries of the Principal Documents

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143 APPENDIX C SUMMARIES OF THE PRINCIPAL DOCUMENTS This Appendix includes summaries of the Master Trust Indenture, the Trust Agreement, the Financing Agreement and the Leasehold Mortgage. Such summaries do not purport to be comprehensive or definitive and, with respect to the Trust Agreement and Financing Agreement, the forms of such agreements may change prior to execution. Any of these agreements may be amended and/or supplemented from time to time without the consent of or notice to the holders of any outstanding 2012A Bonds. Page Summary of the Master Indenture C-1 Summary of the Trust Agreement C-30 Summary of the Financing Agreement C-50 Summary of the Leasehold Mortgage C-55

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145 Summary of the Master Trust Indenture Definitions For the purposes hereof, unless the context otherwise indicates, the following words and phrases shall have the following meanings: Accounts means, collectively, the respective instruments and accounts of the Members of the Obligated Group, as instruments and accounts are defined in Sections (1)(b) and (1)(uu), Florida Statues, as amended, respectively. Actuarial Consultant means an actuary or actuarial firm of national repute for having the skill and experience necessary to examine and report on the sufficiency of the funding of self insurance funds, which is Independent. Additional Indebtedness means any Indebtedness incurred by any Member of the Obligated Group subsequent to the issuance of Obligation No. 1, under the Master Indenture or incurred by any other Member of the Obligated Group subsequent to or contemporaneously with its becoming a Member of the Obligated Group or by any Member of the Combined Group subsequent to its becoming a Member of the Combined Group. Affiliate means a corporation, partnership, joint venture, association, business trust, governmental unit or similar entity organized under the laws of the United States of America or any state thereof which is directly or indirectly controlled by the Corporation, by any other Affiliate or by any Person which directly or indirectly controls the Corporation or which directly or indirectly controls any other Affiliate. For purposes of this definition, control means the power to direct the management and policies of a Person through the ownership of not less than a majority of its voting securities or the right to designate or elect not less than a majority of the members of its board of directors or other governing board or body, by contract or otherwise. Audited Financial Statements means consolidated or combined financial statements, including consolidating or combining information of the Combined Group for a twelve-month period, or for such other period for which an audit has been performed, prepared in accordance with generally accepted accounting principles, which have been audited and reported upon by independent certified public accountants. Audited Financial Statements shall also include, in an additional information section, unaudited combined financial statements, including consolidating or combining information of the Combined Group for the same twelve-month period from which the accounts of any Affiliate which is not a Member of the Combined Group have been eliminated and to which the accounts of any Member of the Combined Group which is not already included have been added; provided, however, that for purposes of adding the accounts of a Member of the Obligated Group which is not an Affiliate, the balances of such accounts shall be extracted from audited financial statements of such Member of the Combined Group and its affiliates, if any. Authorized Representative shall mean, with respect to the Corporation, the Chairperson, the Treasurer or its chief executive officer or its chief financial officer, and, with respect to any other Member of the Obligated Group, the Chairperson of its Governing Body or its chief executive officer or its chief financial officer, or any other person or persons designated an Authorized Representative of the Corporation or any other Member of the Obligated Group by a resolution of the Governing Body of the Corporation or Officer s Certificate of such Member of the Obligated Group, respectively, signed by the Chairperson of its Governing Body or its chief executive officer or chief financial officer and filed with the Master Trustee. Balloon Long-Term Indebtedness means Long-Term Indebtedness 20% or more of the principal payments of which are due in a single year, which portion of the principal is not required by the documents pursuant to which such Indebtedness is issued to be amortized by redemption prior to such date. Book Value when used in connection with Property, Plant and Equipment or other Property of any Person, means the value of such property, net of accumulated depreciation, as it is carried on the books of such Person in conformity with generally accepted accounting principles, and when used in connection with Property, Plant and Equipment or other Property of the Obligated Group, means the aggregate of the values so determined with respect to such Property, Plant and Equipment or other Property of the Obligated Group determined in such a manner that no portion of such value of Property, Plant and Equipment or other Property is included more than once. Collateral means the Pledged Assets and, to the extent provided in a Supplemental Indenture with respect to any particular Obligation, the Property mortgaged under the Leasehold Mortgage and/or the Reserve Fund. Combined Group means, collectively, each Member of the Obligated Group and each Restricted Affiliate. Completion Indebtedness means any Long-Term Indebtedness incurred by any Member of the Obligated Group for the purpose of financing the completion of facilities for the acquisition, construction or equipping of which Long-Term Indebtedness has theretofore been incurred in accordance with the provisions of the Master Indenture, to the extent necessary to provide a completed and equipped facility of the type and scope contemplated at the time that such Long-Term Indebtedness theretofore incurred was originally incurred, and, to the extent the same shall be applicable, in accordance with the general plans and specifications for such facility as originally prepared with only such changes as have been made in conformance with the documents pursuant to which such Long-Term Indebtedness theretofore incurred was originally incurred. Consultant means a firm or firms which is a professional management consultant of national repute for having the skill and experience necessary to render the particular report required by the provision of the Master Indenture in which such requirement appears and that is Independent. Controlling Affiliate means an Affiliate that is not a Member of the Obligated Group and that controls a Restricted Affiliate. C-1

146 Controlling Affiliate Agreement means the agreement among a Controlling Affiliate and the Obligated Group in the form required under the heading Conditions for Designation of Restricted Affiliates below. Corporate Charter means, with respect to any corporation, the articles of incorporation, certificate of incorporation, corporate charter or other organic document pursuant to which such corporation is organized and existing under the laws of the United States of America or any state thereof. Corporate Trust Office means the office of the Master Trustee at which its principal corporate trust business is conducted, which at the date of the Master Indenture is located in Jacksonville, Florida. Credit Facility means a municipal bond insurance policy, line of credit, letter of credit, standby bond purchase agreement or similar credit enhancement or liquidity facility established in connection with the issuance of indebtedness to provide credit or liquidity support for such indebtedness, or to serve as a surety in lieu of cash or investments in a debt service reserve fund under any Related Bond Indenture. Credit Group means the Members of the Obligated Group and any entity controlled (as such word is defined in the definition of Affiliate herein) directly by any Member of the Obligated Group. Cross-over Date means, with respect to Cross-over Refunding Indebtedness, the last date on which the principal portion of the related Cross-over Refunded Indebtedness is to be paid or redeemed from the proceeds of such Cross-over Refunding Indebtedness. Cross-over Refunded Indebtedness means Indebtedness refunded by Cross-over Refunding Indebtedness. Cross-over Refunding Indebtedness means Indebtedness issued for the purpose of refunding Cross-over Refunded Indebtedness if the proceeds of such Cross-over Refunding Indebtedness are irrevocably deposited in escrow to secure the payment on the applicable redemption date or dates or maturity date of the Cross-over Refunded Indebtedness, and the earnings on such escrow deposit are required to be applied to pay interest on such Cross-over Refunding Indebtedness until the Cross-over Date. Defeasance Obligations means, unless modified by the terms of a particular Supplement, (i) noncallable, nonprepayable Government Obligations, (ii) evidences of ownership of a proportionate interest in specified noncallable, nonprepayable Government Obligations, which Government Obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian, (iii) Defeased Municipal Obligations, (iv) evidences of ownership of a proportionate interest in specified Defeased Municipal Obligations, which Defeased Municipal Obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity as custodian, and (v) the obligations of (A) Federal Home Loan Mortgage Corp., (B) Farm Credit System, (C) Federal Home Loan Banks, (D) Federal National Mortgage Association, (E) Student Loan Marketing Association, (F) Financing Corp., (G) Resolution Funding Corp., and (H) U.S. Agency for International Development. Defeased Municipal Obligations means obligations of state or local government municipal bond issuers rated in the highest rating by S&P and Moody s, provision for the payment of the principal of and interest on which shall have been made or provided for by irrevocable deposit with a trustee or escrow agent of (i) noncallable, nonprepayable Government Obligations, (ii) evidences of ownership of a proportionate interest in specified noncallable, nonprepayable Government Obligations, which Government Obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity as custodian, or (iii) the obligations of (A) Federal Home Loan Mortgage Corp., (B) Farm Credit System, (C) Federal Home Loan Banks, (D) Federal National Mortgage Association, (E) Student Loan Marketing Association, (F) Financing Corp., (G) Resolution Funding Corp., and (H) U.S. Agency for International Development, the maturing principal of and interest on such obligations listed in (i) to (iv) above, when due and payable without any reinvestment thereof, shall provide sufficient money to pay the principal of, redemption premium, if any, and interest on such obligations of state or local government municipal bond issuers, and for which Defeased Municipal Obligations a specific call date has been established or for which the issuer has waived the ability to call such Defeased Municipal Obligations prior to a date certain. Defeased Obligations means Obligations issued under a Supplement that have been discharged as provided under the heading Satisfaction and Discharge of Indenture below, or provision for the discharge of which has been so made, pursuant to the terms of such Supplement. Deposit Accounts mean all deposit accounts of the Obligated Group, as defined under Section (1)(cc), Florida Statutes, excluding deposit accounts created specifically for the purpose of holding proceeds of insurance or condemnation awards with respect to the Property subject to the Leasehold Mortgage as provided under the heading Insurance and Condemnation Proceeds below. Derivative Agreement means, without limitation, (i) any contract known as or referred to or which performs the function of an interest rate swap agreement, currency swap agreement, forward payment conversion agreement or futures contract; (ii) any contract providing for payments based on levels of, or changes or differences in, interest rates, currency exchange rates, or stock or other indices; (iii) any contract to exchange cash flows or payments or series of payments; (iv) any type of contract called, or designed to perform the function of, interest rate floors or caps, options, puts or calls, to hedge or minimize any type of financial risk, including, without limitation, payment, currency, rate or other financial risk; and (v) any other type of contract or arrangement that the Member of the Combined Group entering into such contract or arrangement determines is to be used, or is intended to be used, to manage or reduce the cost of Indebtedness, to convert any element of Indebtedness from one form to another, to maximize or increase investment return, to minimize investment return risk or to protect against any type of financial risk or uncertainty. Derivative Indebtedness means Indebtedness for which a Member of the Combined Group shall have entered into a Derivative Agreement in respect of all or a portion of such Indebtedness. C-2

147 Derivative Period means the period during which a Derivative Agreement is in effect. Escrowed Interest means amounts of interest on Long-Term Indebtedness for which moneys or Defeasance Obligations have been deposited in escrow (the Escrowed Interest Deposit ) which Escrowed Interest Deposit has been determined by an independent accounting firm to be sufficient to pay such Escrowed Interest. Escrowed Principal means amounts of principal on Long-Term Indebtedness for which moneys or Defeasance Obligations have been deposited in escrow (the Escrowed Principal Deposit ) which Escrowed Principal Deposit has been determined by an independent accounting firm to be sufficient to pay such Escrowed Principal. Event of Default means any one or more of those events set forth under the heading Events of Default below. Fiscal Year means the fiscal year of each Member of the Obligated Group, which shall be the period commencing on October 1 of any year and ending on September 30 of such year unless the Master Trustee is notified in writing by the Obligated Group Representative of a change in such period, in which case the Fiscal Year shall be the period set forth in such notice. Fitch means Fitch Ratings Inc., its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Fitch shall be deemed to refer to any other nationally recognized securities rating agency designated by the Obligated Group Representative by notice to the Master Trustee. Funding Event means the occurrence and continuation of any Event of Default under the Master Indenture or under a Related Bond Indenture. General Intangibles means all general intangibles of the Obligated Group, as defined under Section (1)(pp), Florida Statutes, other than software. Governing Body means the board of directors, board of trustees, or other board or group of individuals by, or under the authority of which, corporate powers of such entity are exercised. Government Obligations means direct obligations of, or obligations the timely payment of the principal of and interest on which are fully and unconditionally guaranteed by, the United States of America, including interest strips of obligations issued by the Resolution Funding Corporation, but excluding unit investment trusts and mutual funds. Governmental Restrictions means federal, state or other applicable governmental laws or regulations affecting any Member of the Combined Group and its health care facilities placing restrictions and limitations on the (i) fees and charges to be fixed, charged and collected by any Member of the Combined Group or (ii) the amount or timing of the receipt of such revenues. Guaranty means any obligation of any Member of the Obligated Group guaranteeing in any manner, directly or indirectly, any obligation of any Person that is not a Member of the Obligated Group which obligation of such other Person would, if such obligation were the obligation of a Member of the Obligated Group, constitute Indebtedness under the Master Indenture. For the purposes of the Master Indenture, the aggregate annual principal and interest payments on any indebtedness in respect of which any Member of the Obligated Group shall have executed and delivered its Guaranty shall, so long as no payments are required to be made thereunder and so long as such Guaranty constitutes a contingent liability under generally accepted accounting principles, be deemed to be equal to 20% of the amount which would be payable as principal of and interest on the indebtedness for which a Guaranty shall have been issued during the Fiscal Year for which any computation is being made (calculated in the same manner as the Long-Term Debt Service Coverage Ratio), provided that if there shall have occurred a payment by any Member of the Obligated Group on such Guaranty, then, during the period commencing on the date of such payment and ending on the day which is one year after such other Person resumes making all payments on such guaranteed obligation, 100% of the amount payable for principal and interest on such guaranteed indebtedness during the period for which the computation is being made shall be taken into account. Holder means an owner of any Obligation issued in other than bearer form. Income Available for Debt Service means, as to any period of 12 consecutive calendar months, (i) the excess of revenues (including interest earnings on restricted funds), over expenses before depreciation, amortization and interest expense on Long-Term Indebtedness of the Obligated Group, as determined in accordance with generally accepted accounting principles consistently applied plus (ii) (a) the excess of revenues (including interest earnings on restricted funds) over expenses before depreciation, amortization and interest on Long-Term Restricted Affiliate Indebtedness, of the Restricted Affiliates, as determined in accordance with generally accepted accounting principles consistently applied minus (b) the debt service paid or payable on Long-Term Restricted Affiliate Indebtedness in such 12-month period, plus (iii) the Limited Obligor Income for each Limited Obligor; provided, however, that (1) no determination of Income Available for Debt Service shall take into account any (a) gain or loss resulting from either the extinguishment of Indebtedness or the sale, exchange or other disposition of capital assets not made in the ordinary course of business or (b) unrealized gains and losses on investments of any Member of the Combined Group, or (c) non-recurring, unanticipated gains or losses under generally accepted accounting principles; provided, however, that in the case of such extraordinary losses, such extraordinary losses shall be excluded only to the extent that the Obligated Group or the Restricted Affiliates, as appropriate, has unrestricted cash or short term investments sufficient to pay such loss which shall be certified in an Officer s Certificate or (d) changes in the value of any Derivative Agreement, and (2) revenues shall not include interest earnings or investment income on moneys or securities deposited in escrow funds to the extent that such earnings or income are required by the terms of the agreements creating such escrow funds to be applied to the payment of principal of or interest on Indebtedness and (3) revenues shall include any moneys received (whether in respect to principal or interest) by any Member of the Obligated Group C-3

148 pursuant to any loan agreement or promissory note under which the Member of the Obligated Group has loaned (but not guaranteed) the proceeds of Indebtedness (but not any other source of funds) to any Person, including any Restricted Affiliate. Indebtedness means (i) all indebtedness of Members of the Obligated Group for borrowed money or credit extended, (ii) all installment sales, conditional sales and capital lease obligations incurred or assumed by any Member of the Obligated Group, and (iii) all Guaranties, whether constituting Long-Term Indebtedness or Short-Term Indebtedness. Indebtedness shall not include obligations of any Member of the Obligated Group to another Member of the Obligated Group. The term Indebtedness shall not include trade payables. Independent means that no member, director, officer, trustee, employee or major stockholder of the entity to which such term is applied in the Master Indenture and such entity itself is not an officer, director, trustee, member or employee of any Member of the Combined Group. For the purpose of this definition, major stockholder means the holder or owner of more than ten percent of the outstanding shares of stock of a company. Leasehold Mortgage means the Leasehold Mortgage and Security Agreement from the Corporation to the Master Trustee dated as of May 1, 2003, as amended, modified or supplemented from time to time, pursuant to which the Corporation grants to the Master Trustee a mortgage on and security interest in the Corporation s leasehold interest in the Leased Facilities and certain other tangible assets as additional security for Obligation No. 1 and future Obligations as specified in the applicable Supplemental Indenture. Lien means any mortgage, deed of trust or pledge of, security interest in or encumbrance on any Property of any Member of the Obligated Group which secures any Indebtedness or any other obligation of any Member of the Obligated Group or which secures any obligation of any Person, other than an obligation to any Member of the Obligated Group. Limited Obligor shall mean any Person, other than a Member of the Combined Group, on whose account any Member of the Obligated Group has issued a Guaranty, such Person has executed and delivered such Member of the Obligated Group a Pledged Note and the Obligated Group has demonstrated compliance with the provisions under the heading Limited Obligors below. A Limited Obligor shall cease to be a Limited Obligor from and after the time when such Limited Obligor becomes a Member of the Combined Group. Limited Obligor Income means with respect to each Limited Obligor, as to any period of 12 consecutive calendar months, the lesser of (i) the amount included in the Long-Term Debt Service Requirement relating to any Guaranty by a Member of the Combined Group of any indebtedness of the Limited Obligor or (ii) the Limited Obligor Income Available for Debt Service; provided that if the amount included in the Long-Term Debt Service Requirement for such period is at any time equal to 100% of the debt service on such indebtedness instead of 20%, the Limited Obligor Income for such period shall be equal to zero. Limited Obligor Income Available for Debt Service means, with respect to any Limited Obligor, as to any period of 12 consecutive calendar months, its excess of revenues (including interest earnings on restricted funds), over expenses before depreciation, amortization and interest expense on long-term indebtedness of the Limited Obligor, as determined in accordance with generally accepted accounting principles consistently applied; provided, however, that (1) no determination thereof shall take into account any (a) gain or loss resulting from either the extinguishment of Indebtedness or the sale, exchange or other disposition of capital assets not made in the ordinary course of business or (b) unrealized gains and losses on investments or escrowed principal, or (c) non-recurring, unanticipated gains or losses that are characterized as extraordinary in accordance with generally accepted accounting principles; provided, however, that in the case of such extraordinary losses, such extraordinary losses shall be excluded only to the extent that the Limited Obligor has unrestricted cash or short term investment sufficient to pay such loss which shall be certified in an Officer s Certificate, and (2) revenues shall not include interest earnings or investment income on moneys deposited or securities deposited in escrow funds to the extent that such earnings or income are required by the terms of the agreements creating such escrow funds to be applied to the payment of principal of or interest on Indebtedness of the Limited Obligor. Long-Term Debt Service Coverage Ratio means for any period of time the ratio determined by dividing the Income Available for Debt Service by Maximum Annual Debt Service. Long-Term Debt Service Requirement means, for any period of 12 consecutive calendar months for which such determination is made, the aggregate of the payments to be made in respect of principal and interest (whether or not separately stated) on Outstanding Long-Term Indebtedness of the Obligated Group during such period, also taking into account: (i) with respect to Balloon Long-Term Indebtedness (a) the amount of principal which would be payable in such period if such principal were amortized from the date of incurrence thereof over a period of not to exceed thirty (30) years, as determined by the Obligated Group Representative in an Officer s Certificate, on a level debt service basis at an interest rate equal to the rate borne by such Indebtedness on the date calculated, except that if the date of calculation is within twelve (12) months of the actual maturity of such Indebtedness, the full amount of principal payable at maturity shall be included in such calculation; or (b) principal payments or deposits with respect to Indebtedness secured by an irrevocable letter of credit issued by, or an irrevocable line of credit with, a bank rated in either of the three highest long-term rating categories or the two highest short-term rating categories, in each case without regard to gradations within such categories, by any of Moody s, S&P or Fitch, nominally due in the last Fiscal Year in which such Indebtedness matures may, at the option of the Member of the Obligated Group which issued such Indebtedness, be treated as if such principal payments or deposits were due as specified in any loan agreement issued in connection with such letter of credit, line of credit or insurance policy or pursuant to the repayment provisions of such letter of credit, line of credit or insurance policy, and interest on such Indebtedness after such Fiscal Year shall be assumed to be payable pursuant to the terms of such loan agreement or repayment provisions; or (c) if a Member of the Obligated Group establishes in an Officer s Certificate filed with the Master Trustee an amortization schedule for such Balloon Indebtedness, which amortization schedule provides for payments of principal and interest in each Fiscal Year that are not less than the amounts required to make any actual payments required to be made in such Fiscal Year with a bank or trust company (pursuant to an agreement between such Member of the Obligated Group and such bank or trust company) the amount of principal shown on such amortization schedule net of any C-4

149 amount of principal actually paid on such Balloon Indebtedness during such Fiscal Year (other than from amounts on deposit with such bank or trust company) which deposit shall be made prior to any such required actual payment during such Fiscal Year if the amounts on deposit are intended to be the source of such actual payment, then the amount of principal shown on such amortization schedule; (ii) with respect to Long-Term Indebtedness which is Variable Rate Indebtedness, the interest on such Indebtedness shall be calculated at the rate which is equal to the average of the actual interest rates which were in effect (weighted according to the length of the period during which each such interest rate was in effect) for the most recent twelve-month period immediately preceding the date of calculation for which such information is available (or shorter period if such information is not available for a twelve-month period), except that with respect to new Variable Rate Indebtedness (and the incurrence thereof) the interest rate for such Indebtedness for the initial interest rate period shall be the initial rate at which such Indebtedness is issued and thereafter shall be calculated as set forth above; (iii) with respect to any Credit Facility, to the extent that such Credit Facility has not been used or drawn upon, the principal and interest relating to such Credit Facility shall not be included in the Long-Term Debt Service Requirement; (iv) with respect to any Derivative Indebtedness, the interest on such Indebtedness during any Derivative Period and for so long as the Derivative Agreement remains in full force and effect, shall be calculated by adding (x) the amount of interest payable by a Member of the Obligated Group on such Derivative Indebtedness pursuant to its terms and (y) the amount of interest payable by such Member of the Obligated Group under the Derivative Agreement (excluding any termination payment) and subtracting (z) the amount of interest payable by the provider of the Derivative Agreement (excluding any termination payment) at the rate specified in the Derivative Agreement; provided, however, that from and after the termination of any Derivative Agreement, the amount of interest payable by the Member of the Obligated Group shall be the interest calculated as if such Derivative Agreement had not been executed; provided, however, that Escrowed Interest and Escrowed Principal shall be excluded from the determination of Long-Term Debt Service Requirement. Long-Term Indebtedness means all Indebtedness having a maturity longer than one year incurred or assumed by any Member of the Combined Group, including: (i) money borrowed for an original term, or renewable at the option of the borrower for a period from the date originally incurred, longer than one year; (ii) leases which are required to be capitalized in accordance with generally accepted accounting principles having an original term, or renewable at the option of the lessee for a period from the date originally incurred, longer than one year; (iii) installment sale or conditional sale contracts having an original term in excess of one year; (iv) Short-Term Indebtedness if a commitment by a financial lender exists to provide financing to retire such Short-Term Indebtedness, such commitment provides for the repayment of principal on terms which would, if such commitment were implemented, constitute Long-Term Indebtedness and the Obligated Group shall have caused the Short-Term Indebtedness to be retired, paid, defeased or through a borrowing under such commitment; and (v) the current portion of Long-Term Indebtedness. Master Indenture means this Master Trust Indenture, dated as of May 1, 2003, including any amendments or supplements. Master Trustee means The Bank of New York Trust Company of Florida, N.A. (now The Bank of New York Trust Company, N.A.), a national banking association duly organized under the laws of the United States of America, and its successors in the trust created under the Master Indenture. Maximum Annual Debt Service means the highest Long-Term Debt Service Requirement for any succeeding Fiscal Year. Member of the Combined Group means each Member of the Obligated Group and each Restricted Affiliate. Member of the Obligated Group or Member means the Corporation and any other Person becoming a Member of the Obligated Group pursuant to the provisions under the heading Parties Becoming Members of the Obligated Group below but excluding any entity that ceases to be a Member of the Obligated Group pursuant to the provisions under the heading Withdrawal from the Obligated Group below. Moody s means Moody s Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Moody s shall be deemed to refer to any other nationally recognized securities rating agency designated by the Obligated Group Representative by notice to the Master Trustee. Non-Operating Revenues means non-operating revenues of each Member of the Obligated Group determined in accordance with generally accepted accounting principles. C-5

150 Non-Recourse Indebtedness means any Indebtedness incurred to finance the purchase or improvement of Property which Indebtedness is secured exclusively by a Lien on or pledge of such Property or the revenues or net revenues produced by such Property or both, the liability for which is effectively limited to such Property or revenues subject to such Lien with no recourse, directly or indirectly, to any other Property or revenues of any Member of the Obligated Group. Obligated Group means, collectively, the Members of the Obligated Group. Obligated Group Representative means, initially, the Corporation and thereafter any Member of the Obligated Group as may be designated pursuant to written notice to the Master Trustee executed by all of the Members of the Obligated Group. Obligation means the evidence of particular Indebtedness (or Derivative Agreement as provided under the heading Amount of Indebtedness below) issued under the Master Indenture as a joint and several obligation of the Corporation and each other Member of the Obligated Group. Obligation No. 3 is being issued pursuant to the Master Indenture to evidence and secure the obligations of the Obligated Group with respect to the Hillsborough County Industrial Development Authority Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Series 2012A. requires. Officer s Certificate means a certificate signed by the Authorized Representative of such Member of the Obligated Group, as the context Each Officer s Certificate presented pursuant to the Master Indenture shall state that it is being delivered pursuant to (and shall identify the section or subsection of), and shall incorporate by reference and use in all appropriate instances all terms defined in, the Master Indenture. Each Officer s Certificate shall state (i) that the terms thereof are in compliance with the requirements of the section or subsection pursuant to which such Officer s Certificate is delivered or shall state in reasonable detail the nature of any non-compliance and the steps being taken to remedy such non-compliance and (ii) that it is being delivered together with any opinions, schedules, statements or other documents required in connection therewith. Operating Assets means any or all land, leasehold interests, buildings, machinery, equipment, hardware, and inventory owned or operated by each Member of the Obligated Group and used in its respective trade or business, whether separately or together with other such assets, but not including cash, investment securities and other Property held for investment purposes. Opinion of Bond Counsel means an opinion of Bond Counsel addressed to the Corporation and the Master Trustee to the effect that the action proposed to be taken is authorized or permitted by the laws of the State and by the Master Indenture and will not adversely affect the exclusion of interest on the Related Bonds from the gross income of the beneficial owners thereof for federal income tax purposes or adversely affect the treatment of the Related Bonds for tax purposes under the laws of the State. Opinion of Counsel means an opinion in writing signed by an attorney or firm of attorneys, selected by the Corporation (not an employee of the Corporation or any Affiliate), who may be counsel for any Member of the Obligated Group. Outstanding when used with reference to Indebtedness or Obligations, means, as of any date of determination, all Indebtedness and Obligations theretofore issued or incurred and not paid and discharged other than (i) Obligations theretofore canceled by the Master Trustee or delivered to the Master Trustee for cancellation, (ii) Indebtedness deemed paid and no longer Outstanding under the documents pursuant to which such Indebtedness was incurred, (iii) Defeased Obligations and (iv) Obligations in lieu of which other Obligations have been authenticated and delivered or have been paid pursuant to the provisions of the Supplement regarding mutilated, destroyed, lost or stolen Obligations unless proof satisfactory to the Master Trustee has been received that any such Obligation is held by a bona fide purchaser; provided, however, that for purposes of determining whether the Holders of the requisite principal amount of Obligations have concurred in any demands, direction, request, notice, consent, waiver or other action under the Master Indenture, Obligations or Related Bonds that are owned by any Member of the Obligated Group or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with such Member shall be deemed not to be Outstanding; provided further, however, that for the purposes of determining such concurrence, only such Obligations or Related Bonds which the Master Trustee has actual notice or knowledge are so owned shall be deemed to be not Outstanding. Permitted Liens shall have the meaning given under the heading Limitation on Creation of Liens below. Person includes an individual, association, unincorporated organization, corporation, partnership, joint venture, business trust or a government or an agency or a political subdivision thereof, or any other entity. Pledged Assets mean the Accounts, Deposit Accounts and General Intangibles of the Obligated Group; provided that there shall be excluded from the definition of Pledged Assets any assets, the use of which is restricted by the donors thereof to a purpose or purposes inconsistent with the payment of debt service. Pledged Note means a promissory note executed by a Limited Obligor, as maker, in favor of a Member of the Obligated Group, as payee, evidencing a sum certain liability of such maker to such payee, which is assigned by such payee to the Master Trustee pursuant to the provisions under the heading Limited Obligors below. Property means any and all rights, titles and interests in and to any and all property whether real or personal, tangible or intangible and wherever situated. Property, Plant and Equipment means all Property of the Members of the Obligated Group which is property, plant and equipment under generally accepted accounting principles. C-6

151 Qualified Investments means dollar denominated investments in any of the following: (a) Direct obligations of the United States of America and obligations for which the timely payment of principal and interest is fully guaranteed by the United States of America; (b) Direct obligations of any agency or instrumentality of the United States of America and obligations on which the timely payment of principal and interest is fully guaranteed by any such agency or instrumentality; (c) Certificates of deposit, time deposits or other direct, unsecured debt obligations of any bank (including without limitation the Master Trustee or the Bond Trustee), trust company or savings and loan association if all of the direct, unsecured debt obligations of such institution at the time of purchase of such certificates of deposit, time deposits or obligations, which are rated by a Rating Agency are rated by such Rating Agency in one of the three highest rating categories assigned by such Rating Agency (without regard to any refinement or gradation of rating category by numerical modifier or otherwise), or which certificates of deposit, time deposits or obligations are so secured by a security interest in obligations described in clauses (a) or (b) of this definition; provided, however, that if such certificates of deposit, time deposits or obligations are so secured (1) the Bond Trustee for whose benefit such investments have been acquired shall have a perfected first security interest in the obligations securing such certificates of deposit, time deposits or obligations, (2) the Bond Trustee shall hold or shall have the option to appoint an intermediary bank, trust company or savings and loan association as its agent to hold the obligations securing such certificates of deposit or time deposits, and (3) the Bond Trustee or its appointed agent shall hold such obligations free and clear of the liens or claims of third parties; (d) Certificates of deposit or time deposits of any bank (including the Bond Trustee and the Master Trustee), trust company or savings and loan association which certificates of deposit or time deposits are fully insured by a federally sponsored deposit insurance program; (e) Repurchase Agreements collateralized with securities of the type described in clause (a) or (b) above purchased from any registered broker/dealer subject to the Securities Investors Protection Corporation jurisdiction or any commercial bank, if such broker-dealer s or bank s uninsured and unsecured obligations, or whose parent or guarantor s uninsured, unsecured and unguaranteed obligations which are rated by a Rating Agency are rated by such Rating Agency in one of the two highest rating categories (three highest, if approved by the Obligated Group Representative) assigned by such Rating Agency (without regard to any refinement or gradation of rating category by numerical modifier or otherwise), provided: (i) a master repurchase agreement or specific written repurchase agreement governs the transaction; (ii) the repurchase agreement has a term of 30 days or less or the Bond Trustee is required thereunder to value the collateral securities no less frequently than monthly and to liquidate or cause the custodian to liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two business days of such valuation; (iii) the fair market value of the securities in relation to the amount of the repurchase obligations, including principal and interest, is equal to at least 100%, and either (iv)(a) the securities are held by the Bond Trustee free and clear of any lien or claims of a third party, or (iv)(b)(w) the securities are held by an independent third party free and clear of any lien or claims of a third party (other than as agent hereinafter described), (x) such third party is a Federal Reserve Bank, or a bank which is a member of the Federal Deposit Insurance Corporation and which bank has combined capital, surplus and undivided profits of not less than $50,000,000, (y) the Bond Trustee shall have received written confirmation from such third party that it holds such securities free and clear of any lien or claim, and (z) a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 CFR 306.1, et seq. or 31 CFR et seq. in such securities is created for the benefit of the Bond Trustee; (f) Investment agreements with banks which meet the rating criteria set forth in (c) above or with non-bank financial institutions (i) all of the unsecured, direct long-term debt of such non-bank financial institution which is rated by a Rating Agency is rated by such Rating Agency in one of the three highest rating categories (without regard to any refinement or gradation of rating category by numerical modifier or otherwise) assigned by such Rating Agency for obligations of that nature; (ii) if such non-bank financial institutions have no such outstanding long-term debt which is rated, all of the short-term debt of which is rated by a Rating Agency is rated by such Agency in the highest rating category (without regard to any refinement or gradation of rating category by numerical modifier or otherwise) assigned to short terms indebtedness by such Rating Agency; or (iii) the obligations of such non-bank financial institutions are guaranteed by an entity whose rating or whose claims paying ability is rated by a Rating Agency in one of the three highest rating categories; provided that all such agreements referred to this clause (f) provide that if such banks', non-bank financial institutions' or guarantor's debt no longer satisfies such rating criteria, such bank, institution or guarantor will secure such agreements as soon as reasonably practicable to the extent and in the manner provided in clause (c) above; (g) Shares of a fund registered under the Investment Company Act of 1940, as amended, whose shares are registered under the Securities Act of 1933, as amended, having assets of at least $100,000,000, whose investment assets are obligations which constitute Qualified Investments; (h) Commercial paper which, at the time of purchase, is rated by a Rating Agency in one of the two highest rating categories (without regard to refinements or gradation of rating category by numerical modifier or otherwise) assigned by such Rating Agency for obligations of that nature; (i) Obligations of, or obligations fully guaranteed by, any state of the United States of America or any political subdivision, public instrumentality or public authority of any state, commonwealth or territory of the United States of America, at the time of purchase, are rated by a Rating Agency in one of the three highest rating; categories (without regard to any refinement or gradation of rating category by numerical modifier or otherwise) assigned by such Rating Agency to obligations of that nature; (j) Senior debt obligations of any corporation or trust organized under the laws of any state of the United States of America which securities, at the time of purchase, are rated by a Rating Agency in one of the three highest rating categories (without regard to any refinements or gradation of rating category by numerical modifier or otherwise) assigned by such Rating Agency for obligations of that nature; C-7

152 (k) Obligations which are rated in the highest rating category by a Rating Agency and are issued or incurred by any state, commonwealth or territory of the United States of America or any political subdivision, public instrumentality or public authority of any state, commonwealth or territory of the United States of America, which obligations are fully secured by and payable solely from an escrow fund consisting of cash or direct obligations of, or obligations the timely payment of principal and interest on which are fully guaranteed by, the United States of America, which fund is held by a corporate fiduciary pursuant to an escrow agreement; (l) Bankers acceptances of any bank, including the Bond Trustee and the Master Trustee, if all of the direct, unsecured debt obligations of such institution at the time of purchase of such acceptances which are rated by a Rating Agency are rated by such Rating Agency in one of the three highest rating categories (without regard to any refinement or gradation of rating category by numerical modifier or otherwise) by such Rating Agency; and (m) Forward Purchase Agreements by a financial institution whose obligations are rated by a Rating Agency, or whose parent or guarantor is rated by a Rating Agency, in one or the two highest rating categories (three highest, if approved by the Obligated Group Representative) without regard to any refinement or gradation of rating category by numerical modifier or otherwise provided; (i) securities delivered under the agreement are those described in (a), (b), (h), (i) or (k) above, (ii) the agreement is accompanied by an opinion that the securities delivered will not be considered a party of the bankruptcy estate in the event of a declaration of bankruptcy or insolvency by the financial institution. Related Bond Indenture means any indenture, bond resolution or other comparable instrument pursuant to which a series of Related Bonds is issued. Related Bonds means the revenue bonds or other obligations issued by any state, territory or possession of the United States or any municipal corporation or political subdivision formed under the laws thereof or any constituted authority or agency or instrumentality of any of the foregoing empowered to issue obligations on behalf of any of the foregoing ( governmental issuer ), pursuant to a single Related Bond Indenture, the proceeds of which are loaned or otherwise made available to (i) a Member of the Obligated Group in consideration of the execution, authentication and delivery of an Obligation to or for the order of such governmental issuer, or (ii) any Person other than a Member of the Obligated Group in consideration of the issuance to such governmental issuer (A) by such Person of any indebtedness or other obligation of such Person, and (B) by a Member of the Obligated Group of a Guaranty in respect of such indebtedness or other obligation, which Guaranty is represented by an Obligation. Related Bond Issuer means the issuer of any issue of Related Bonds. Related Bond Trustee means the trustee and its successors in the trusts created under any Related Bond Indenture. Remedy Notice means notice from the Master Trustee regarding the exercise of remedies under the Master Indenture or under the Leasehold Mortgage as provided in subsection (d) under the heading Security for Obligations below. Reserve Fund means the Reserve Account created and established under the Original Resolution and continued in the Master Indenture 1. Reserve Fund Requirement means, with respect to any Obligation issued under the Master Indenture and designated in a Supplemental Indenture to be secured by the Reserve Fund, the amount of money, if any, or available amount of Reserve Product, if any, or a combination thereof equal to the least of the following: (i) ten percent (10%) of the principal amount of such Obligations (except that, in determining such percentage, the issue price (net of pre-issuance accrued interest) shall be substituted for the original stated principal amount if such Obligations (or Related Bonds, as applicable) are sold at an original issue discount or premium exceeding two percent (2%) of their stated redemption price at maturity); (ii) the Maximum Annual Debt Service for such Obligations (or Related Bonds, as applicable) secured by the Reserve Fund; and (iii) 125% of the Long- Term Debt Service Requirement with respect to such Obligations (or Related Bonds) to be secured by the Reserve Fund. Reserve Product means bond insurance, a surety bond or a letter of credit or other credit facility used in lieu of a cash deposit in the Reserve Fund and meeting the terms and conditions of subsection (e) under the heading Security for Obligations below. Reserve Product Provider means a nationally recognized bond insurance provider or a bank or other financial institution providing a Reserve Product, whose claims paying ability (or if a bank or other financial institution, long-term unsecured debt rating) is rated in the highest rating category by S&P and Moody s, and, if rated by A.M. Best & Company, the highest rating category of A.M. Best & Company, in each case without regard to any refinement or gradation of rating category by numerical modifier or otherwise. Restricted Affiliate shall mean any Affiliate of a Member of the Obligated Group that: (1) is either (a) a non-stock membership corporation of which one or more Members of the Obligated Group or Affiliates of Members of the Obligated Group (a Controlling Affiliate ) are the sole members, or (b) a non-stock, non-membership corporation or a trust of which the sole beneficiaries or controlling Persons are one or more Members of the Obligated Group or a Controlling Affiliate, or (c) a stock corporation all of the outstanding shares of stock of which are owned by one or more Members of the Obligated Group or a Controlling Affiliate, and (2) (a) if such Affiliate is a non-stock corporation or a trust, the corporate charter or bylaws, in the case of a non-stock corporation, and the applicable organizational documents, in the case of a trust, shall provide that the net assets of such Affiliate shall be transferred to the Member or Members of the Obligated Group or a Controlling Affiliate that is (are) its sole member(s), beneficiary(ies) or controlling person(s) upon liquidation or dissolution of such Affiliate provided that if such Affiliate is a Tax Exempt Organization, then for so long as the applicable Member of the Obligated Group or a Controlling Affiliate is a Tax Exempt Organization, the organizational documents of such Affiliate and 1 Note that Obligation No. 3 and, therefore, the 2012A Bonds are not secured by the Reserve Fund. C-8

153 applicable law may (A) provide for the naming of another Member of the Obligated Group or a Controlling Affiliate as a substitute beneficiary if the then current beneficiary ceases to be a Tax Exempt Organization and (B) prohibit transfers to organizations that are not Tax Exempt Organizations, and (b) (i) the power to alter, amend or repeal the corporate charter or bylaws or other applicable organizational documents of such Affiliate, or to adopt new bylaws for such entity, will be reserved to the Member or Members of the Obligated Group or the Controlling Affiliate that is its sole member, beneficiary or controlling person and (ii) the Member or Members of the Obligated Group or the Controlling Affiliate that is (are) its sole member(s), beneficiary(ies) or controlling Person(s) shall have the sole right to appoint and dismiss, with or without cause, the members of the board of directors of such Affiliate, and (c) has (i) the legal power, with approval of a majority of its Governing Body but without the consent of any other Person, to transfer to any Member of the Obligated Group or the Controlling Affiliate money required for the payment of Indebtedness of any Member of the Obligated Group, and (ii) the ability under applicable law and its organizational documents, with approval of a majority of the members of its Governing Body, to transfer all assets of such Affiliate remaining after payment of its debts to any Member of the Obligated Group or the Controlling Affiliate provided that if such Affiliate is a Tax Exempt Organization, then for so long as the applicable Member of the Obligated Group or the Controlling Affiliate is a Tax Exempt Organization, the organizational documents of such Affiliate and applicable law may (A) provide for the naming of another Member of the Obligated Group or a Controlling Affiliate as a substitute beneficiary if the then current beneficiary ceases to be a Tax Exempt Organization, and (B) prohibit transfers to organizations that are not Tax Exempt Organizations, and (3) if such Affiliate is organized in any of the other forms mentioned in the definition of Affiliate herein, one or more Members of the Obligated Group or a Controlling Affiliate has the power and authority, by contract or otherwise, to control the operations and assets of such Affiliate, and (4) has satisfied (or a predecessor has satisfied) the requirements set forth in the Master Indenture for becoming a Restricted Affiliate and has not thereafter ceased to satisfy the requirements of clauses (1) and (2) above or satisfied the requirements set forth in the Master Indenture for ceasing to be a Restricted Affiliate. Restricted Affiliate Long-Term Debt Service Requirement has the same meaning as Long-Term Debt Service Requirement with the substitution of Restricted Affiliates for Obligated Group and Restricted Affiliate Long-Term Indebtedness for Long-Term Indebtedness. Restricted Affiliate Long-Term Indebtedness has the same meaning as Long-Term Indebtedness with Restricted Affiliate substituted for Obligated Group. Restricted Affiliate Undertaking means an agreement among each Restricted Affiliate and the Obligated Group, for the benefit of the Master Trustee, in the form required under the heading Conditions for Designation of Restricted Affiliates below. S&P or Standard & Poor s means Standard & Poor s, A Division of The McGraw Hill Companies, its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, S&P shall be deemed to refer to any other nationally recognized securities rating agency designated by the Obligated Group Representative by notice to the Master Trustee. Short-Term Indebtedness means all Indebtedness having a maturity of one year or less, other than the current portion of Long-Term Indebtedness, incurred or assumed by any Member of the Obligated Group, including: (i) money borrowed for an original term, or renewable at the option of the borrower for a period from the date originally incurred, of one year or less; (ii) leases which are capitalized in accordance with generally accepted accounting principles having an original term, or renewable at the option of the lessee for a period from the date originally incurred, of one year or less; and (iii) installment purchase or conditional sale contracts having an original term of one year or less. Subordinated Debt means Indebtedness the payment of which is specifically subordinated to the payment of principal and interest on Obligations satisfying the criteria set forth in Exhibit A to the Master Indenture. Supplement means an indenture supplemental to, and authorized and executed pursuant to the terms of, the Master Indenture. Tax-Exempt Organization means the Corporation, any governmental unit, or a Person organized under the laws of the United States of America or any state thereof which is (i) an organization described in Section 501(c)(3) of the Code or is treated as an organization described in Section 501(c)(3) of the Code and (ii) exempt from federal income taxes under Section 501(a) of the Code, or corresponding provisions of federal income tax laws from time to time in effect, except for unrelated trade or business income as defined in Section 513(a) of the Code. Total Revenues means, with respect to the Obligated Group, as to any period of time, total operating revenues less all deductions from revenues, plus Non-Operating Revenues, as determined in accordance with generally accepted accounting principles consistently applied. Transaction Test means, for purposes of any consolidation, merger, sale or conveyance under the heading Consolidation, Merger, Sale or Conveyance below (a Merger ), a party becoming a Member of the Obligated Group under the heading Parties Becoming Members of the C-9

154 Obligated Group below (an Admission ), a withdrawal from the Obligated Group under the heading Withdrawal from the Obligated Group below (a Withdrawal ), the designation of a Restricted Affiliate under the heading Conditions for Designation of Restricted Affiliates below (a Designation ), or the release of a Restricted Affiliate under the heading Release of Restricted Affiliates below (a Release ), any of the following: (A) (i) an Officer s Certificate of the Obligated Group Representative demonstrating that either of the conditions described in clauses (a)(i) or (ii) under the heading Limitations on Indebtedness below would have been satisfied for the issuance of an additional one dollar ($1.00) of Additional Indebtedness, assuming such Merger, Admission, Withdrawal, Designation or Release, as applicable had occurred at the beginning of the most recent period of 12 full consecutive calendar months for which Audited Financial Statements are available, or (ii) a written report of a Consultant indicating that the forecasted average Long-Term Debt Service Coverage Ratio for the two periods of 12 full consecutive calendar months succeeding the proposed date of such Merger, Admission, Withdrawal, Designation or Release, as applicable is greater than 1.10, and (B) an Officer s Certificate of the Obligated Group Representative demonstrating that the unrestricted fund balance (or excess of assets over liabilities, as the case may be) of the Obligated Group after giving effect to said Merger, Admission, Withdrawal, Designation or Release, as applicable is not less than 70% of the total net assets of the Obligated Group prior to such Merger, Admission, Withdrawal, Designation or Release, as applicable, as reflected in the most recent Audited Financial Statements. Transfer means any act or occurrence the result of which is to dispossess any Person of any asset or interest therein, including specifically, but without limitation, the forgiveness of any debt. Variable Rate Indebtedness means any portion of Indebtedness the interest rate on which has not been established at a fixed or constant rate to maturity. Indebtedness, Authorization, Issuance and Terms of Obligations Amount of Indebtedness. Subject to the terms, limitations and conditions established in the Master Indenture, each Member of the Obligated Group may incur Indebtedness by issuing Obligations under the Master Indenture or by creating Indebtedness under any other document. The principal amount of Indebtedness created under other documents and the number and principal amount of Obligations evidencing Indebtedness that may be created under the Master Indenture are not limited, except as limited by the provisions of the Master Indenture, including any Supplement. Any Member of the Obligated Group proposing to incur Long-Term Indebtedness, whether evidenced by Obligations issued or by evidences of indebtedness issued or guaranties entered into pursuant to documents other than the Master Indenture, shall, at least seven (7) business days prior to the date of the incurrence of such Indebtedness, give written notice of its intention to incur such Indebtedness, including in such notice the amount of Indebtedness to be incurred, to the other Members of the Obligated Group and to the Master Trustee and any such Member, other than the Corporation, proposing to incur such Indebtedness, shall obtain the written consent of the Corporation, which consent shall be evidenced by a resolution of the Corporation s Governing Body filed with the Master Trustee. Each Member of the Obligated Group is jointly and severally liable for each and every Obligation. Additionally, each Member of the Obligated Group may evidence and secure its obligations under one or more Derivative Agreements by issuing Obligations under the Master Indenture. Supplement Creating Indebtedness. The Obligated Group Representative and the Master Trustee may from time to time enter into a Supplement in order to create Indebtedness or secure obligations under a Derivative Agreement under the Master Indenture. Such Supplement shall, with respect to an Obligation evidencing Indebtedness created thereby, set forth the date thereof, and the date or dates on which the principal of and premium, if any, and interest on such Obligation shall be payable, the provisions regarding discharge thereof, and the form of such Obligation and such other terms and provisions as shall conform with the provisions of the Master Indenture. Conditions to Issuance of Obligations under the Master Indenture. Simultaneously with or prior to the execution, authentication and delivery of Obligations pursuant to the Master Indenture: (a) All requirements and conditions to the issuance of such Obligations, if any, set forth in the Supplement or in the Master Indenture shall have been complied with and satisfied, as provided in an Officer s Certificate of the Obligated Group Representative, a certified copy of which shall be delivered to the Master Trustee; (b) The issuer of such Obligations shall have delivered to the Master Trustee an Opinion or Opinions of Counsel to the effect that (1) registration of such Obligations under the Securities Act of 1933, as amended, and qualification of the Master Indenture or the Supplement under the Trust Indenture Act of 1939, as amended, is not required, or, if such registration or qualification is required, that all applicable registration and qualification provisions of said acts have been complied with, and (2) the Master Indenture and the Obligations are valid, binding and enforceable obligations of the Members of the Obligated Group in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance and other laws affecting creditors rights generally and usual equity principles; and (c) The Obligated Group Representative shall have delivered to the Master Trustee a certificate from each of the Persons who is to be a Holder of such Obligation upon the original issuance thereof that such person is not acquiring the interest represented by such Obligation directly or indirectly with the assets of, or in connection with any arrangement or understanding by it in any way involving, any employee benefit plan with respect to which (i) any employee of any Member of the Obligated Group or the Master Trustee, in its individual capacity, is a participant or (ii) any Member of the Obligated Group or the Master Trustee, in its individual capacity, or any of their affiliates is otherwise a party in interest, all within the meaning of the Employee Retirement Income Security Act of 1974, as amended. In lieu of a certificate from each Holder, the Obligated Group Representative may provide to the Master Trustee, an Officer s Certificate setting forth the same certification based upon the best knowledge of the signer thereof. C-10

155 Particular Covenants of the Obligated Group Status of Obligations; Restrictions on Encumbering Assets; Payment of Principal and Interest. (a) All Obligations issued pursuant to the Master Indenture shall be the joint and several obligation of each Member of the Obligated Group secured by a security interest in and lien on the Collateral, as provided. Each Member of the Obligated Group so long as it is a Member, jointly and severally, covenants and agrees that it will promptly pay the principal of, redemption premium, if any, and interest on all Obligations issued and outstanding under the Master Indenture at the place, on the dates and in the manner provided therein and in said Obligations according to the true intent and meaning thereof. To the extent that any Indebtedness or Derivative Agreement which is permitted or required to be issued to the Master Indenture is not in the form of a promissory note, an Obligation in the form of a promissory note may be issued under the Master Indenture and pledged as security for the payment of such Indebtedness or Derivative Agreement in lieu of directly issuing such Indebtedness or Derivative Agreement as an Obligation under the Master Indenture. Nevertheless the parties to the Master Indenture agree that Obligations may be issued to evidence any type of Indebtedness (other than Non-Recourse Indebtedness and Subordinated Indebtedness) or Derivative Agreement, including without limitation any Indebtedness or Derivative Agreement in a form other than a promissory note. Consequently, the Supplemental Master Indenture pursuant to which any Obligation is issued may provide for such supplements or amendments to the provisions of the Master Indenture as are necessary to permit the issuance of such Obligation and as are not inconsistent with the intent of the Master Indenture that, except as otherwise expressly provided in the Master Indenture, all obligations issued under the Master Indenture shall be equally and ratably secured by any Lien created under the Master Indenture. (b) Each Member of the Obligated Group covenants that it will not pledge or grant a security interest in any of its Property, except for Permitted Liens. (c) Pursuant to the provisions under the heading Security for Obligations below, the payment of the Obligations shall be secured equally and ratably by a security interest in and pledge of the Pledged Assets. Additionally, if so provided in a Supplemental Indenture, the payment of the Obligations will be secured by the Leasehold Mortgage and/or the Reserve Fund. Covenants as to Existence, Maintenance of Properties, Etc. Each Member of the Obligated Group covenants as follows: (a) Except as otherwise expressly provided in the Master Indenture, to preserve its corporate or other legal existence and all its rights and licenses to the extent necessary or desirable in the operation of its business and affairs and be qualified to do business in each jurisdiction where its ownership of Property or the conduct of its business requires such qualifications; provided, however, that nothing contained in the Master Indenture shall be construed to obligate it to retain or preserve any of its rights or licenses, no longer used or, in the judgment of its Governing Body, no longer useful in the conduct of its business. (b) At all times to cause its Property to be maintained, preserved and kept in good repair, working order and condition and all needed and proper repairs, renewals and replacements thereof to be made; provided, however, that nothing contained in this subsection shall be construed to (i) prevent it from ceasing to operate any portion of its Property, if in its judgment it is advisable not to operate the same, or if it intends to sell or otherwise dispose of the same as permitted in the Master Indenture and within a reasonable time endeavors to effect such sale or other disposition, but only if such sale or disposition is otherwise permitted in the Master Indenture or (ii) to obligate it to retain, preserve, repair, renew or replace any Property, leases, rights, privileges or licenses no longer used or, in the judgment of management of the Obligated Group Member, no longer useful in the conduct of its business. (c) To do all things reasonably necessary to conduct its affairs and carry on its business and operations in such manner as to comply with any and all applicable laws of the United States and the several states thereof and duly observe and conform to all valid orders, regulations or requirements of any governmental authority relative to the conduct of its business and the ownership of its Properties; provided, nevertheless, that nothing contained in the Master Indenture shall require it to comply with, observe and conform to any such law, order, regulation or requirement of any governmental authority so long as the validity thereof or the applicability thereof to it shall be contested in good faith. (d) To pay promptly when due all lawful taxes, governmental charges and assessments at any time levied or assessed upon or against it or its Property; provided, however, that it shall have the right to contest in good faith any such taxes, charges or assessments or the collection of any such sums and pending such contest may delay or defer payment thereof. (e) To pay promptly or otherwise to satisfy and discharge all of its Indebtedness and all demands and claims against it as and when the same become due and payable, other than any thereof (exclusive of the Obligations created and Outstanding under the Master Indenture) whose validity, amount or collectibility is being contested in good faith. (f) At all times to comply with all terms, covenants and provisions of any Liens at such time existing upon its Property or any part thereof or securing any of its Indebtedness. (g) To procure and maintain all necessary licenses and permits and maintain accreditation of its facilities by the Joint Commission on Accreditation of Healthcare Organizations or other recognized accrediting body applicable to such facilities; provided, however, that it need not comply with this subsection (g) if and to the extent that its Governing Body shall have determined in good faith, evidenced by a resolution of the Governing Body, that such compliance is not in its best interests and that lack of such compliance would not materially impair its ability to pay its Indebtedness when due. (h) So long as the Master Indenture shall remain in force and effect, each Member of the Obligated Group which is a Tax-Exempt Organization at the time it becomes a Member of the Obligated Group agrees that, so long as all amounts due or to become due on any Related Bond C-11

156 have not been fully paid to the holder thereof, it agrees not to take any action or suffer any action to be taken by others, including any action which would result in the alteration or loss of its status as a Tax-Exempt Organization, which, or fail to take any action which failure, in the Opinion of Bond Counsel, would result in the interest on any Related Bond becoming included in the gross income of the holder thereof for federal income tax purposes. Insurance. Each Member of the Obligated Group agrees that it will maintain, or cause to be maintained, insurance (that may include one or more self-insurance programs considered to be adequate) covering such risks, in such amounts and with such deductibles and co-insurance provisions as, in the judgment of its Governing Body are adequate to protect it and its Property and operations against such casualties, contingencies and risks and in amounts not less than is customary in the case of corporations engaged in the same or similar activities and similarly situated; provided, however, that the Members of the Obligated Group shall be required to (i) retain biennially an Actuarial Consultant to examine and report on the adequacy of the funding of such self-insurance; and (ii) comply with the recommendations of such Actuarial Consultant with respect to the funding of such selfinsurance 2. Insurance and Condemnation Proceeds. (a) Amounts that do not exceed 20% of the Book Value of the Property, Plant and Equipment of the Obligated Group received by any Member of the Obligated Group as insurance proceeds with respect to any casualty loss or as condemnation awards may be used in such manner as the recipient may determine, including, without limitation, applying such moneys to the payment or prepayment of any Indebtedness in accordance with the terms thereof and of any pertinent Supplement. (b) Amounts that exceed 20% of the Book Value of the Property, Plant and Equipment of the Obligated Group received by any Member of the Obligated Group as insurance proceeds with respect to any casualty loss or as condemnation awards shall be applied to repair or replace the Property (either with Property serving the same function or with other Property that, in the judgment of the Governing Body, is of equal usefulness) to which such proceeds relate or to the payment or prepayment of Indebtedness in accordance with the terms thereof and of any pertinent Supplement; provided, however, that such amounts may be used in such manner as the recipient may determine, if the recipient notifies the Master Trustee and within 12 months after the casualty loss or taking, delivers to the Master Trustee: (i) (A) An Officer s Certificate of the Obligated Group Representative certifying the forecasted Long-Term Debt Service Coverage Ratio for each of the two Fiscal Years following the date on which such proceeds or awards are forecasted to have been fully applied, which Long-Term Debt Service Coverage Ratio for each such period is not less than 1.10, as shown by pro forma financial statements for each such period, accompanied by a statement of the relevant assumptions including assumptions as to the use of such proceeds or awards, upon which such pro forma statements are based; and (B) if the amount of such proceeds or awards received with respect to any casualty loss or condemnation exceeds 30% of the Book Value of the Property, Plant and Equipment of the Obligated Group, a written report of a Consultant confirming such certification; or (ii) A written report of a Consultant stating the Consultant s recommendations, including recommendations as to the use of such proceeds or awards, to cause the Long-Term Debt Service Coverage Ratio for each of the periods described in subsection (i) of this section to be not less than 1.20, or, if in the opinion of the Consultant the attainment of such level is impracticable, to the highest practicable level. All proceeds of insurance or condemnation awards received with respect to the Property subject to the Leasehold Mortgage shall be deposited into a separate deposit account created specifically for the purpose of holding such proceeds or awards. If any proceeds of insurance or condemnation are received with respect to Property that was financed or refinanced with Related Bonds the interest on which was excludable from the gross income of the recipient thereof, no application of such proceeds as otherwise permitted in the Master Indenture shall occur until there shall have been filed with the Master Trustee an opinion of Bond Counsel to the effect that such application of proceeds, in and of itself, will not adversely affect the federal income tax status of the interest on such Related Bonds. Each Member of the Obligated Group agrees that it will use such proceeds or awards, to the extent permitted by law, only in accordance with the assumptions described in subsection (i), or the recommendations described in subsection (ii), of this Section. Limitations on Creation of Liens. (a) Each Member of the Obligated Group agrees that it will not create or suffer to be created or permit the existence of any Lien on Property owned as of the date of the Master Indenture or thereafter acquired by it other than the Leasehold Mortgage and Permitted Liens. (b) Permitted Liens shall consist of the following: (i) Liens arising by reason of good faith deposits with any Member of the Obligated Group in connection with leases of real estate, bids or contracts (other than contracts for the payment of money), deposits by any Member of the Obligated Group to secure public or statutory obligations, or to secure, or in lieu of, surety, stay or appeal bonds, and deposits as security for the payment of taxes or assessments or other similar charges; (ii) Any Lien arising by reason of deposits with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulation for any purpose at any time as required by law or governmental regulation as 2 This language differs from the original Master Trust Indenture. The parties have executing a First Amendment to Master Trust Indenture and the 2006 bondholders were and the 2012 bondholders will be deemed to have consented to such amendments by virtue of their purchase of the 2006 Bonds or 2012A Bonds, as applicable.. C-12

157 a condition to the transaction of any business or the exercise of any privilege or license, or to enable any Member of the Obligated Group to maintain self-insurance or to participate in any funds established to cover any insurance risks or in connection with workers compensation, unemployment insurance, pension or profit sharing plans or other social security, or to share in the privileges or benefits required for companies participating in such arrangements; (iii) Any judgment lien against any Member of the Obligated Group so long as such judgment is being contested in good faith and execution thereon is stayed; (iv) (A) Rights reserved to or vested in any municipality or public authority by the terms of any right, power, franchise, grant, license, permit or provision of law, affecting any Property; (B) any liens on any Property for taxes, assessments, levies, fees, water and sewer, rents, and other governmental and similar charges and any liens of mechanics, materialmen, laborers, suppliers or vendors for work or services performed or materials furnished in connection with such Property, which are not due and payable or which are not delinquent or which, or the amount or validity of which, are being contested and execution thereon is stayed or, with respect to liens of mechanics, materialmen, laborers, suppliers or vendors, have been due for less than 90 days; (C) easements, rights-of-way, servitudes, restrictions, oil, gas or other mineral reservations and other minor defects, encumbrances, and irregularities in the title to any Property which do not materially impair the use of such Property or materially and adversely affect the value thereof; (D) to the extent that it affects title to any Property, the Master Indenture; and (E) landlord s liens; (v) Any Lien which is existing on the date of authentication and delivery of the initial Obligation issued under the Master Indenture or created on Property of a Member of the Obligated Group prior to such Member becoming a Member of the Obligated Group provided that no such Lien may be increased, extended, renewed or modified to apply to any Property of any Member of the Obligated Group not subject to such Lien on such date or to secure Indebtedness not Outstanding as of the date of the Master Indenture, unless such Lien as so extended, renewed or modified otherwise qualifies as a Permitted Lien under the Master Indenture; (vi) Any Lien securing Non-Recourse Indebtedness permitted by subsection (e) under the heading Limitations on Indebtedness below; (vii) Any Lien on Property acquired by a Member of the Obligated Group if the indebtedness secured by the Lien is Additional Indebtedness permitted under the heading Limitation on Indebtedness below, and if an Officer s Certificate is delivered to the Master Trustee certifying that (A) the Lien and the indebtedness secured thereby were created and incurred by a Person other than the Member of the Obligated Group, and, (B) the Lien was not created for the purpose of enabling the Member of the Obligated Group to avoid the limitations of the Master Indenture on creation of Liens on Property of the Obligated Group; (viii) Any Lien on Property (other than Accounts) and the collateral in an aggregate amount not exceeding 15% of the Book Value of all Property (other than Accounts); (ix) Any Lien in favor of a creditor or a trustee on the proceeds of Indebtedness and any earnings thereon prior to the application of such proceeds and such earnings; (x) Any Lien securing all Obligations provided that with respect to the Reserve Fund and the Leasehold Mortgage only such liens may secure only those Obligations designated to be so secured by Supplemental Indenture on a parity basis; (xi) Any Liens subordinate to the Lien described in clause (x) of this subsection required by a statute under which a Related Bond is issued or given to secure obligations under a Derivative Agreement to the extent not secured by an Obligation; (xii) Liens on moneys deposited by patients or others with any Member of the Obligated Group as security for or as prepayment for the cost of patient care; (xiii) Liens on Property received by any Member of the Obligated Group through gifts, grants or bequests, such Liens being due to restrictions on such gifts, grants or bequests of Property or the income thereon; Group; (xiv) Liens on Property due to rights of third party payors for recoupment of amounts paid to any Member of the Obligated (xv) Rights of the United States of America under Title 42 United States Code Section 291; (xvi) Any Lien on Accounts and the proceeds thereof if such Lien is given or made (A) in connection with a sale, pledge, assignment or transfer permitted by subsection (i) under the heading Limitations on Indebtedness below or subsection (b) under the heading Sale, Lease or Other Disposition of Operating Assets; Disposition of Cash and Investments; Sale of Accounts below; provided, however, that the fair market value, as determined by the Obligated Group Representative, of the Accounts subject to a Lien to secure Indebtedness authorized in said subsection (i) may not exceed the amount of such Indebtedness by more than 15%; (xvii) Any Lien on the unrestricted funds of a Member of the Obligated Group if such Lien is given or made in connection with the investment of such unrestricted funds by such Member of the Combined Group; (xviii) Liens in favor of another Member of the Obligated Group; C-13

158 (xix) Liens created on amounts deposited with Members of the Obligated Group to secure capitated insurance contracts and risk-sharing arrangements with insurers, health maintenance organizations, preferred provider organizations, physician groups and other parties; or (xx) Liens created in connection with a Derivative Agreement, whether or not such Derivative Agreement is secured, in whole or in part, by an Obligation. Anything hereinabove in this Section to the contrary notwithstanding, the Book Value of all Property that may at any time be subject to any Lien (except for Liens permitted by clauses (v) and (x) above) shall not exceed twenty-five percent (25%) of the total net assets of the Obligated Group, determined as of the last day of the most recent complete fiscal year for which Audited Financial Statements have been completed. Limitations on Indebtedness. Each Member of the Obligated Group covenants and agrees that it will not incur any Additional Indebtedness if, after giving effect to all other Indebtedness incurred by the Obligated Group, such Indebtedness could not be incurred pursuant to any one of subsections (a) to (i), inclusive, of this Section. Any Indebtedness may be incurred only in the manner and pursuant to the terms set forth in such subsections. Each Member of the Obligated Group further covenants and agrees that it will not incur any Additional Indebtedness without the written consent of the Obligated Group Representative, as evidenced by an Officer s Certificate or a copy of the resolution of the Obligated Group Representative to be delivered to the Master Trustee prior to the incurrence of such Additional Indebtedness. Trustee: (a) Long-Term Indebtedness may be incurred if prior to incurrence of the Long-Term Indebtedness there is delivered to the Master (i) An Officer s Certificate of the Obligated Group Representative certifying that the Long-Term Debt Service Coverage Ratio for the most recent period of 12 full consecutive calendar months preceding the date of delivery of the certificate of the Obligated Group Representative for which there are Audited Financial Statements available taking all Long-Term Indebtedness incurred after such period and the proposed Long-Term Indebtedness into account as if such Long-Term Indebtedness had been incurred at the beginning of such period, is not less than 1.20; or (ii) (A) an Officer s Certificate of the Obligated Group Representative demonstrating that the Long-Term Debt Service Coverage Ratio for the period mentioned in subsection (a)(i) of this Section, excluding the proposed Long-Term Indebtedness, is at least 1.20 and (B) a certificate of the Obligated Group Representative demonstrating that the forecasted Long-Term Debt Service Coverage Ratio is not less than 1.20 for (x) in the case of Long-Term Indebtedness (other than a Guaranty) to finance capital improvements, each of the two full Fiscal Years succeeding the date on which such capital improvements are forecasted to be in operation or (y) in the case of Long-Term Indebtedness not financing capital improvements or in the case of a Guaranty, each of the two full Fiscal Years succeeding the date on which the Indebtedness is incurred, as shown by pro forma financial statements for the Combined Group for each such period, accompanied by a statement of the relevant assumptions upon which such pro forma financial statements for the Combined Group are based; provided, however, that if a report of a Consultant states that Governmental Restrictions have been imposed which make it impossible for the coverage requirements of this subsection to be met, then such coverage requirements shall be reduced to the maximum coverage permitted by such Governmental Restrictions but in no event less than (b) In addition to, and not in lieu of, Long-Term Indebtedness permitted to be incurred under subsection (a) of this Section, Long-Term Indebtedness may be incurred provided that immediately after giving effect to any Long-Term Indebtedness incurred pursuant to this subsection (b) the aggregate of Long-Term Indebtedness incurred under this subsection (b) shall not exceed 25% of Total Revenues as reflected in the most recent Audited Financial Statements; provided, further, that the aggregate of the principal amount of Indebtedness Outstanding under this subsection (b) and subsection (d) of this Section shall not at any time exceed 25% of Total Revenues as reflected in the most recent Audited Financial Statements. The Obligated Group shall certify in writing to the Master Trustee the calculation of Total Revenues for purposes of this subsection (b). (c) Long-Term Indebtedness incurred for the purpose of refunding any Outstanding Long-Term Indebtedness if, prior to the incurrence of such Long-Term Indebtedness, (i) the Long-Term Indebtedness to be incurred does not constitute Cross-over Refunding Indebtedness there is delivered to the Master Trustee (A) an Officer s Certificate of the Obligated Group Representative demonstrating that either (1) Maximum Annual Debt Service will not increase by more than 15% after the incurrence of such proposed refunding Long-Term Indebtedness and after giving effect to the disposition of the proceeds thereof or (2) the total debt service on all Indebtedness will not increase by more than 15% after the incurrence of such proposed refunding Indebtedness and after giving effect to the disposition of the proceeds thereof and (B) an Opinion of Bond Counsel stating that upon the incurrence of such Proposed Long-Term Indebtedness and application of the proceeds thereof, the Outstanding Long- Term Indebtedness to be refunded thereby will no longer be Outstanding; or (ii) the Indebtedness proposed to be issued is Cross-over Refunding Indebtedness, there is delivered to the Master Trustee a certificate of the Obligated Group Representative stating that the total Maximum Annual Debt Service immediately following the Cross-over Date does not exceed the Maximum Annual Debt Service immediately prior to the issuance of the Cross-over Refunding Indebtedness by more than 15% assuming for the purpose of this test only that no other Additional Indebtedness is incurred between the date of issuance of the Cross-over Refunding Indebtedness and the Cross-over Date. (d) (i) Short-Term Indebtedness may be incurred subject to the limitation that the aggregate of all Short-Term Indebtedness shall not at any time exceed 20% of Total Revenues as reflected in the most recent Audited Financial Statements of the Obligated Group; provided, that the aggregate of the principal amount of Indebtedness Outstanding under this subsection (d)(i) and subsection (b) of this Section shall not at any time exceed 20% of Total Revenues as reflected in the Audited Financial Statements of the Obligated Group for the most recent period of twelve consecutive months for which Audited Financial Statements are available; provided, however, the Obligated Group shall be free of all Short-Term Indebtedness (except for an amount not to exceed 5% of Total Revenues) for a period of not less than 20 consecutive calendar days in each 12-month period unless the tests mentioned in clause (b) are met with respect to any amount in excess of 5% of Total Revenues. The Obligated Group shall certify in writing to the Master Trustee the calculation of Total Revenues for purposes of this subsection (d). C-14

159 (ii) Short-Term Indebtedness may also be incurred if the tests set forth in subsections (a)(i) or (a)(ii) of this Section are met with respect to the incurrence of such Short-Term Indebtedness. For the purpose of calculating compliance with the Long-Term Indebtedness coverage tests set forth in subsections (a)(i) or (a)(ii) of this Section, the Short-Term Indebtedness to be incurred pursuant to this subsection (d)(ii) shall be deemed to be Long-Term Indebtedness. For purposes of this subsection (d) a Guaranty of Short-Term Indebtedness shall be treated in the manner described in the definition of Guaranty herein. For the purpose of calculating compliance with the tests set forth in this subsection (d), Short-Term Indebtedness shall not be taken into account except to the extent provided in subsection (i) hereof. (e) Non-Recourse Indebtedness may be incurred for the purposes of (1) acquiring Property and improving the Property acquired, either simultaneously or subsequent to the acquisition of such Property with Non-Recourse Indebtedness, may be incurred without limit; and (2) Non-Recourse Indebtedness for any other purpose may be incurred in a principal amount not to exceed 10% of Property, Plant and Equipment reflected in the most recent Audited Financial Statements. (f) Completion Indebtedness may be incurred without limitation; provided, however, that prior to the incurrence of Completion Indebtedness, the Obligated Group Representative shall furnish to the Master Trustee: a certificate of an architect estimating the costs of completing the facilities for which Completion Indebtedness is to be incurred; an Officer s Certificate of the Chief Financial Officer of the Member of the Obligated Group for which Completion Indebtedness is to be incurred certifying that the amount of Completion Indebtedness to be incurred will be sufficient, together with other funds, if applicable, to complete construction of the facilities in respect of which Completion Indebtedness is to be incurred; and a certificate from a Consultant to the effect that the Long-Term Indebtedness originally incurred to finance the costs of the construction or acquisition of the facilities in respect of which Completion Indebtedness is to be incurred was estimated prior to the date of incurrence of the original Long-Term Indebtedness to be sufficient, together with other funds, if applicable, to complete the construction of such facilities, but due to certain factors enumerated in the certificate the costs of constructing such facilities exceeded the amount of the original Indebtedness plus other funds, if applicable. limit. (g) (h) Subordinated Debt may be incurred without limit. Indebtedness under a Credit Facility (including a Guaranty of indebtedness under a Credit Facility) may be incurred without (i) Indebtedness secured by Accounts may be incurred in any amount not to exceed at any time 15% of Total Revenues reflected in the most recent Audited Financial Statements and certified in writing to the Master Trustee. Indebtedness incurred pursuant to any one of subsections (b), (d)(i) or (d)(ii) of this Section may be reclassified as indebtedness incurred pursuant to any other of such subsections if the tests set forth in the subsection to which such Indebtedness is to be reclassified are met at the time of such reclassification. Indebtedness containing a put or tender provision pursuant to which the holder of such Indebtedness may require that such Indebtedness be purchased prior to its maturity shall not be considered Balloon Long-Term Indebtedness, solely by reason of such put or tender provision, and the put or tender provision shall not be taken into account in testing compliance with any debt incurrence test pursuant to this Section. Long-Term Debt Service Coverage Ratio; Rate Covenant. (a) Each Member of the Obligated Group covenants to set and covenants to cause each member of the Credit Group (other than the Members of the Obligated Group) to set rates and charges for its facilities, services and products such that the Long-Term Debt Service Coverage Ratio, calculated at the end of each Fiscal Year, will not be less than 1.10; provided, however, that in any case where Long-Term Indebtedness has been incurred to acquire or construct capital improvements, the Long-Term Debt Service Requirement with respect thereto shall not be taken into account in making the foregoing calculation until the first Fiscal Year commencing after the occupation or utilization of such capital improvements unless the Long-Term Debt Service Requirement with respect thereto is required to be paid from sources other than the proceeds of such Long-Term Indebtedness prior to such Fiscal Year. (b) If at any time the Long-Term Debt Service Coverage Ratio required by subsection (a) hereof, as derived from the most recent Audited Financial Statements, is not met, the Corporation covenants to retain a Consultant, within 45 days of such Audited Financial Statements becoming available, to make recommendations to increase such Long-Term Debt Service Coverage Ratio in the following Fiscal Year to the level required or, if in the opinion of the Consultant the attainment of such level is impracticable, to the highest level attainable. Any Consultant so retained shall be required to submit such recommendations to the Obligated Group and the Master Trustee within 45 days after being so retained. So long as a Consultant shall be retained and each Member of the Obligated Group shall follow such Consultant s recommendations to the extent permitted by law, this Section shall be deemed to have been complied with even if the Long-Term Debt Service Coverage Ratio for the following Fiscal Year is below the required level but not if the Debt Service Coverage Ratio is less than 1.00 for such following Fiscal Year. If, at the end of the Fiscal Year during which the Consultant is hired, the Long-Term Debt Service Coverage Ratio is below 1.00, such shall constitute an Event of Default under subsection (b) under the heading Event of Default below for which no additional cure period shall be applicable after written notice of such event is received by the Obligated Group as provided in such subsection. The Obligated Group shall not be required to retain a Consultant to make recommendations pursuant to this Subsection (b) more frequently than biennially. (c) If a report of a Consultant is delivered to the Master Trustee, which report shall state that Governmental Restrictions have been imposed which make it impossible for the coverage requirement in subsection (a) hereof to be met, then such coverage requirement shall be reduced to the maximum coverage permitted by such Governmental Restrictions but in no event less than 1.00 and thereafter, for so long as such Governmental Restrictions are in effect, a report of a Consultant stating that Governmental Restrictions which make it impossible for the coverage requirement in clause (a) hereof to be met are still in effect shall be delivered to the Master Trustee biennially. C-15

160 Sale, Lease or Other Disposition of Operating Assets; Disposition of Cash and Investments; Sale of Accounts. (a) Each Member of the Obligated Group agrees that it will not transfer Operating Assets (including Collateral) except for Transfers of Operating Assets: (i) To any Person if prior to the Transfer there is delivered to the Master Trustee an Officer s Certificate of the Obligated Group Representative stating that such Operating Asset has or will within the next 24 months become inadequate, obsolete, worn out, unsuitable or unnecessary and the sale, lease, removal or other disposition thereof will not impair the structural soundness, efficiency or economic value of the remaining Operating Assets, provided, however, that an Officer s Certificate of the Obligated Group Representative shall not be required to be delivered to the Master Trustee with respect to the Transfer of any such inadequate, obsolete, worn out, unsuitable or unnecessary Operating Asset in any one Fiscal Year having an aggregate Book Value of less than two percent (2%) of the unrestricted net assets of the Obligated Group per the most recent Audited Financial Statements. (ii) To another Member of the Obligated Group without limit. (iii) To any Person provided there shall be delivered to the Master Trustee, prior to such Transfer, an Officer s Certificate certifying the Long-Term Debt Service Coverage Ratio, assuming the disposition of such Operating Assets occurred at the beginning of such period, for the most recent period of twelve (12) full consecutive calendar months preceding the date of delivery of the Officer s Certificate for which the Audited Financial Statements have been reported upon by independent certified public accountants and such Long-Term Debt Service Coverage Ratio is not less than 1.15 and not less than sixty-five percent (65%) of what it would have been had such Transfer not taken place; (iv) To any Person provided that the Member of the Obligated Group proposing to make such Transfer shall receive, as consideration for such Transfer, cash, services or Property, the value of such consideration to be determined by the Obligated Group Representative, equal to the fair market value of the asset so transferred. Each Member of the Obligated Group covenants to maintain records adequate to enable the Master Trustee to ascertain that the provisions of this subsection (iv) have been complied with and to make such records available to the Master Trustee upon written request; provided, however, that the Master Trustee shall have no obligation to monitor compliance with this subsection. (v) To any Person if the aggregate Book Value of the Operating Assets Transferred pursuant to this subsection (v) in the current Fiscal Year does not exceed 10% of the Book Value of all Property of the Obligated Group as shown in the Audited Financial Statements for the most recent Fiscal Year. (vi) To any Person any Operating Assets received subsequent to the date of the Master Indenture and restricted by donor to a particular use which ceases to be consistent with the business and obligations of the Obligated Group Member. (b) Any Member of the Obligated Group will have the right to sell its Accounts: (i) without limitation if such sale, pledge, assignment, or other disposition is without recourse or such Accounts are obligations of private persons and the Obligated Group Representative determines that such Accounts are unlikely to be collected utilizing normal collection procedures and at reasonable cost, (ii) the fair market value, as determined by the Obligated Group Representative, of such Accounts does not exceed 15% of the Total Revenues and the purchase price of such Accounts is not less than 85% of such fair market value if such sale, pledge, assignment or other disposition is with recourse, and, in each case, if such Member of the Obligated Group shall receive as consideration for such sale, pledge, assignment or other disposition cash, services or Property equal to the fair market value of the Accounts so sold, such fair market value to be determined by the Obligated Group Representative. Each Member of the Obligated Group covenants to maintain records adequate to enable the Master Trustee to ascertain that the provisions of this subsection (b)(ii) have been complied with and to make such records available to the Master Trustee upon written request; provided, however, that the Master Trustee shall have no obligation to monitor compliance with this subsection (b)(ii). (c) equivalents to: In addition to other Transfers permitted under this Section, any Member of the Obligated Group may Transfer cash or cash (i) another Member of the Obligated Group without limit, (ii) any Person, if prior to such Transfer, an Officer s Certificate is delivered to the Master Trustee stating that either (a)(1) such Transfer will be a loan evidenced in writing, (2) such loan is for a reasonable term and bears a reasonable interest rate, and (3) such loan is reasonably expected to be repaid in accordance with its terms or (b) taking such Transfer into account as if such Transfer had occurred at the beginning of the most recent period of twelve (12) full consecutive months for which the Audited Financial Statements have been reported upon by an independent certified public accountant, the Long-Term Debt Service Coverage Ratio for such period would not be less than 1.15, C-16

161 (iii) any Person provided that Member of the Obligated Group shall receive as consideration for such Transfer services or Property the fair market value of which is at least equal to the amount of the cash or cash equivalents so transferred, such fair market value to be determined in good faith by management of the Member of the Obligated Group making such Transfer, or (iv) any Person, provided that the aggregate amount of Transfers under this subsection in any Fiscal Year shall not exceed five percent (5%) of the unrestricted cash and cash equivalents as shown in the preceding fiscal year s Audited Financial Statements. The foregoing provisions of the Master Indenture notwithstanding, each Member of the Obligated Group agrees that it will not sell, lease, donate or otherwise dispose of Property (a) which could reasonably be expected at the time of such sale, lease, donation or disposition to result in a reduction of the Long-Term Debt Service Coverage Ratio such that the Obligated Group would be required to retain a Consultant pursuant to the provisions under the heading Long-Term Debt Service Coverage Ratio; Rate Covenant above or (b) if a Consultant has been retained, such action, in the opinion of such Consultant, will have an adverse affect on the Income Available for Debt Service. Consolidation, Merger, Sale or Conveyance. (a) Each Member of the Obligated Group covenants that it will not merge or consolidate with, or sell or convey all or substantially all of its assets to any Person that is not a Member of the Obligated Group unless: (i) Either a Member of the Obligated Group will be the successor corporation, or if the successor corporation is not a Member of the Obligated Group, such successor corporation shall execute and deliver to the Master Trustee (i) an appropriate instrument, satisfactory to the Master Trustee, containing the agreement of such successor corporation to assume the due and punctual payment of the principal of, premium, if any, and interest on all Outstanding Obligations issued under the Master Indenture according to their tenor and the due and punctual performance and observance of all the covenants and conditions of the Master Indenture and any Supplement thereto and (ii) an Opinion of Counsel delivered to the Master Trustee with respect to the sufficiency of such agreement to accomplish such assumption; and (ii) There is delivered to the Master Trustee an Officer s Certificate of the Obligated Group Representative indicating that no Member of the Obligated Group immediately after such merger or consolidation, or such sale or conveyance, would be in default in the performance or observance of any covenant or condition of the Master Indenture; and (iii) If all amounts due or to become due on any Related Bond which bears interest which is not includable in the gross income of the recipient thereof under the Code have not been fully paid to the holder thereof, there shall have been delivered to the Master Trustee an Opinion of Bond Counsel, in form and substance satisfactory to the Master Trustee, to the effect that under then existing law the consummation of such merger, consolidation, sale or conveyance, whether or not contemplated on any date of the delivery of such Related Bond, would not adversely affect the exclusion of interest payable on such Related Bond from the gross income of the holder thereof for purposes of federal income taxation; and (iv) There is delivered to the Master Trustee an Officer s Certificate of the Obligated Group Representative demonstrating compliance with the Transaction Test; provided, however, that compliance with the Transaction Test shall not be required for the merger or consolidation of any two or more Members of the Obligated Group with each other. (b) In case of any such consolidation, merger, sale or conveyance and upon any such assumption by the successor corporation, such successor corporation shall succeed to and be substituted for its predecessor, with the same effect as if it had been named in the Master Indenture as such predecessor or had become a Member of the Obligated Group pursuant to the terms under the heading Parties Becoming Members of the Obligated Group below, as the case may be. Such successor corporation thereupon may cause to be signed, and may issue in its own name Obligations issuable under the Master Indenture; and upon the order of such successor corporation and subject to all the terms, conditions and limitations in the Master Indenture prescribed, the Master Trustee shall authenticate and shall deliver Obligations that such successor corporation shall have caused to be signed and delivered to the Master Trustee. All Outstanding Obligations so issued by such successor corporation under the Master Indenture shall in all respects have the same security position and benefit under the Master Indenture as Outstanding Obligations theretofore or thereafter issued in accordance with the terms of the Master Indenture as though all of such Obligations had been issued under the Master Indenture without any such consolidation, merger, sale or conveyance having occurred. (c) In case of any such consolidation, merger, sale or conveyance such changes in phraseology and form (but not in substance) may be made in Obligations thereafter to be issued under the Master Indenture as may be appropriate. (d) The Master Trustee may accept an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale or conveyance, and any such assumption, complies with the provisions of this Section and that it is proper for the Master Trustee under the provisions contained under the heading Supplements and Amendments below and of this Section to join in the execution of any instrument required to be executed and delivered by this Section. Filing of Audited Financial Statements, Certificate of No Default, Other Information. The Obligated Group covenants that it will: (a) Within 30 days after receipt of the audit report mentioned below but in no event later than one hundred eighty (180) days after the end of each fiscal reporting period for which the Audited Financial Statements are reported upon by independent certified public accountants, file with the Master Trustee a copy of the Audited Financial Statements as of the end of such fiscal reporting period accompanied by the opinion of independent certified public accountants. Such Audited Financial Statements shall be prepared in accordance with generally accepted accounting principles and shall include such statements necessary for a fair presentation of the financial position, results of operations and changes in unrestricted net assets and cash flows as of the end of such fiscal reporting period. C-17

162 (b) Within 30 days after receipt of the audit report mentioned above but in no event later than one hundred eighty (180) days after the end of each fiscal reporting period, file with the Master Trustee an Officer s Certificate stating the Long-Term Debt Service Coverage Ratio for such fiscal reporting period and stating whether, to the best knowledge of the signers, any Member of the Obligated Group is in default in the performance of any covenant contained in the Master Indenture and, if so, specifying each such default of which the signers may have knowledge. (c) If an Event of Default shall have occurred and be continuing, (i) file with the Master Trustee such other financial statements and to the extent permitted by applicable law, such other information concerning its operations and financial affairs (or of any consolidated or combined group of companies, including its consolidated or combined Affiliates, including any Member of the Obligated Group) as the Master Trustee may from time to time reasonably request, excluding specifically donor records, patient records and personnel records and (ii) provide access to its facilities for the purpose of inspection by the Master Trustee during regular business hours or at such other times as the Master Trustee may reasonably request; provided, however, that the Master Trustee shall have no obligation to monitor the Obligated Group s financial affairs or operations, or to inspect the Obligated Group s facilities. (d) Within 30 days after its receipt thereof, file with the Master Trustee a copy of each report which any provision of the Master Indenture requires to be prepared by a Consultant. Parties Becoming Members of the Obligated Group. Persons which are not Members of the Obligated Group and corporations which are successor corporations to any Member of the Obligated Group through a merger or consolidation permitted under the heading Consolidation, Merger, Sale or Conveyance above may, with the prior written consent of the Obligated Group Representative, become Members of the Obligated Group, if: (a) The Person or successor corporation which is becoming a Member of the Obligated Group shall execute and deliver to the Master Trustee an appropriate instrument containing the agreement of such Person or successor corporation (i) to become a Member of the Obligated Group under the Master Indenture and any Supplements and thereby become subject to compliance with all provisions of the Master Indenture and any Supplements pertaining to a Member of the Obligated Group, and the performance and observance of all covenants and obligations of a Member of the Obligated Group under the Master Indenture and (ii) unconditionally and irrevocably guarantee to the Master Trustee and each other Member of the Obligated Group that all Obligations issued and then Outstanding or to be issued and Outstanding under the Master Indenture will be paid in accordance with the terms thereof and of the Master Indenture when due. (b) Each instrument executed and delivered to the Master Trustee in accordance with subsection (a) of this Section, shall be accompanied by an Opinion of Counsel, addressed to and satisfactory to the Master Trustee, to the effect that such instrument has been duly authorized, executed and delivered by such Person or successor corporation and constitutes a valid and binding obligation enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy laws, insolvency laws, other laws affecting creditors rights generally, equity principles and laws dealing with fraudulent conveyances and that such instrument accomplishes the purposes set forth in subsection (a). (c) There shall be filed with the Master Trustee an Officer s Certificate of the Obligated Group Representative demonstrating compliance with the Transaction Test. (d) If all amounts due or to become due on any Related Bond which bears interest which is not includable in the gross income of the recipient thereof under the Code have not been paid to the Holders thereof, there shall be filed with the Master Trustee, (i) an Opinion of Bond Counsel, in form and substance satisfactory to the Master Trustee, to the effect that the consummation of such transaction would not adversely affect the exclusion of the interest on any such Related Bond from the gross income of the holder thereof for purposes of federal income taxation and (ii) an Opinion of Counsel, in form and substance satisfactory to the Master Trustee, to the effect that the consummation of such transaction would not require the registration of the Obligations under the Securities Act of 1933, as amended or the Supplements under the Trust Indenture Act of 1939, as amended, or if such registration is required, that all applicable registration and qualification provisions of said acts have been complied with. (e) There shall be delivered to the Master Trustee an Officer s Certificate certifying that the admission of such Person as a Member of the Obligated Group will not give rise to an Event of Default under the Master Indenture. Withdrawal from the Obligated Group. (a) No Member of the Obligated Group may withdraw from the Obligated Group without the prior written consent of the Obligated Group Representative and unless, prior to the taking of such action, there is delivered to the Master Trustee: (i) If all amounts due on any Related Bonds which bear interest which is not includable in the gross income of the recipient thereof under the Code have not been paid to the holders thereof, there shall be delivered to the Master Trustee an Opinion of Bond Counsel, to the effect that under then existing law such Member s withdrawal from the Obligated Group, whether or not contemplated on any date of delivery of any Related Bond, would not cause the interest payable on such Related Bond to become includable in the gross income of the recipient thereof under the Code; and (ii) An Officer s Certificate of the Obligated Group Representative demonstrating compliance with the Transaction Test. (b) Upon the withdrawal of any Member from the Obligated Group pursuant to subsection (a) of this Section, any guaranty by such Member pursuant to the provisions under the heading Parties Becoming Members of the Obligated Group above shall be released and discharged in full and all liability of such Member of the Obligated Group with respect to all Obligations Outstanding under the Master Indenture shall cease; provided however that unless specifically released by the Obligated Group Representative any obligations of such withdrawing Member to the Obligated Group shall not be released and discharged. (c) A Member of the Obligated Group shall withdraw upon the request of the Obligated Group Representative provided the conditions for voluntary withdrawal set forth in (a) above are met. C-18

163 (d) Anything in this Section to the contrary notwithstanding, Florida Health Sciences Center, Inc. shall remain a Member of the Obligated Group so long as any Obligation remains outstanding. Covenants of the Combined Group. (a) The Members of the Obligated Group agree that they will cause each Restricted Affiliate to comply with all of the covenants and perform all of the obligations set forth in Sections 3.09 through 3.15 of the Master Indenture as if such Restricted Affiliate were a Member of the Obligated Group either directly if the Member of the Obligated Group controls the Restricted Affiliate or by diligently enforcing the Controlling Affiliate Agreement (as defined below) if a Controlling Affiliate controls the Restricted Affiliate. (b) The Obligated Group agrees to cause the Restricted Affiliates that are controlled by one or more Members of the Obligated Group to transfer funds or other assets to the Member of the Obligated Group that is its sole member, beneficiary or controlling person to the extent permitted by law and by the documents governing the Restricted Affiliate Indebtedness for the purpose of allowing the Obligated Group to satisfy its debt service requirements applicable to all Obligations. (c) Each Member of the Obligated Group agrees that it will diligently enforce the provisions of each Controlling Affiliate Agreement to cause each Controlling Affiliate to cause the Restricted Affiliate controlled by it to transfer funds or other assets to the Obligated Group to the extent permitted by law and by the documents governing the Restricted Affiliate Indebtedness for the purpose of allowing the Obligated Group to satisfy its debt service requirements applicable to all Obligations. Anything in this Section to the contrary notwithstanding, any Restricted Affiliate Undertaking may contain provisions that (i) require that each Member of the Obligated Group expend its funds in excess of a reasonable operating reserve (not to exceed 60 days of operating expenses) to satisfy the debt service requirements of Obligations as a precondition to the Restricted Affiliate transferring its funds in excess of a reasonable operating reserve (not to exceed 60 days of operating expenses) to the Obligated Group for payment of debt service on Obligations; and (ii) require each Member of the Obligated Group to expend all of its funds for such payments as a precondition to the Restricted Affiliate transferring all of its funds to the Obligated Group for such payments; and (iii) treat any funds transferred by the Restricted Affiliate to the Obligated Group as an advance or loan to the Obligated Group by the Restricted Affiliate. Conditions for Designation of Restricted Affiliates. Any Affiliate that has satisfied the definition of Restricted Affiliate may become a Restricted Affiliate upon delivery to the Master Trustee of the following documents: (a) An Officer s Certificate from the Obligated Group Representative to the effect that the Obligated Group Representative consents to such Person becoming a Restricted Affiliate; (b) A written undertaking for the benefit of the Master Trustee duly authorized and executed by such Affiliate evidencing the agreement of such Affiliate to observe and perform the obligations that the Obligated Group has covenanted to cause Restricted Affiliates to observe and perform under the Master Indenture (a Restricted Affiliate Undertaking ); (c) Evidence of appropriate action of the Governing Body of such Affiliate authorizing such undertaking; (d) If the Restricted Affiliate is controlled by a Controlling Affiliate and not by a Member of the Obligated Group, a copy of an agreement between the Obligated Group Representative and such Controlling Affiliate in which the Controlling Affiliate agrees to exercise all powers and authority it may have over the Restricted Affiliate to cause the Restricted Affiliate to comply with the provisions under the heading Covenants of Combined Group above (a Controlling Affiliate Agreement ). (e) An Opinion of Counsel to the effect that the conditions contained in the Master Indenture relating to designation of a Restricted Affiliate have been satisfied and an opinion of Counsel to the effect that (i) the Restricted Affiliate Undertaking and the Controlling Affiliate Agreement (if applicable) have been duly authorized, executed and delivered by such Restricted Affiliate and the Controlling Affiliate, as the case may be, and constitute the legal, valid and binding agreement of the Restricted Affiliate and the Controlling Affiliate, respectively, enforceable in accordance with their terms and (ii) the transfer of funds or assets by Restricted Affiliates to the Members of the Obligated Group, or the Controlling Affiliate, as the case may be, in the form of loans, advances, grants, gifts or other transfers as contemplated by subsection (b) under the heading Covenants of Combined Group above is permissible under the applicable laws of Florida; provided that such opinion may be qualified by stating that the validity and enforceability of such agreement and the validity of such transfers of funds may be limited by applicable bankruptcy, insolvency and other laws affecting the enforcement of creditors rights generally, and by stating other customary legal exceptions. Release of Restricted Affiliates. A Restricted Affiliate shall be released from its obligations and status as a Restricted Affiliate only upon compliance with the following conditions: (a) The Master Trustee shall have received (i) an Officer s Certificate from the Obligated Group Representative consenting to the release of such Person from its status as a Restricted Affiliate and (ii) an Officer s Certificate of the Obligated Group Representative demonstrating compliance with the Transaction Test; provided, that the term Combined Group shall be substituted for the term Obligated Group for purposes of the Transaction Test. (b) The Master Trustee receives an Officer s Certificate of the Person requesting such release stating that all conditions precedent provided for under the Master Indenture relating to the release of such Person as a Restricted Affiliate have been complied with and that, were such Person released as a Restricted Affiliate on the date of such Officer s Certificate, no Event of Default would then exist under the Master Indenture, nor to such officer s knowledge, would there then exist any event which with the passage of time or giving of notice, or both, would or might become an Event of Default. C-19

164 Upon compliance with the conditions contained in subsections (a) and (b), the Master Trustee shall execute any documents reasonably requested by the released Person to evidence the termination of such Person s status as a Restricted Affiliate under the Master Indenture. Limited Obligors. (a) Any Person shall become a Limited Obligor upon delivery to the Master Trustee of the following: (i) An Officer s Certificate from the Obligated Group Representative to the effect that the Obligated Group Representative consents to such Person becoming a Limited Obligor; (ii) An opinion of Counsel to the effect that a Pledged Note (i) has been duly authorized, executed and delivered by the Limited Obligor and (ii) constitutes the legal, valid and binding obligation of the Limited Obligor, enforceable in accordance with its terms, subject only to and limited by the then existing law relating to bankruptcy and insolvency and other customary and standard legal exceptions, and an opinion of Counsel to the applicable Member of the Obligated Group to the effect that the Pledged Note has been validly assigned by the applicable Member of the Obligated Group to the Master Trustee; and (iii) The duly executed Pledged Note made by such Person. (b) Any Person shall be released from its obligations and status as a Limited Obligor only upon the condition that the Master Trustee shall have received an Officer s Certificate from the Obligated Group Representative certifying that (i) the related Guaranty has been paid or terminated, and (ii) immediately after the release of such Person, no Event of Default will then exist under the Master Indenture, nor to such officer s knowledge, would there then exist any event which, with the passage of time or the giving of notice or both, would or might become an Event of Default. (c) Upon compliance with the conditions contained in subsection (b) above, the Master Trustee shall surrender the Pledged Note to the released Person, duly marked canceled and shall execute such other documents reasonably requested by such Person to evidence the termination of such Person s status as a Limited Obligor. Security for Obligations. (a) Security Interest in Pledged Assets. The Corporation grants in favor of the Master Trustee a security interest in the Pledged Assets, which security interest shall secure all Obligations issued and outstanding under the Master Indenture. The Corporation has made or promptly following the execution of the Master Indenture will make all filings necessary under the UCC to perfect the Security Interest to the extent that the same can be perfected by filing and has covenanted to continue such filings so long as any Obligations remain outstanding. The Corporation also agrees that, to the extent permitted by law, it will cause each future Member whose business is of a type that generates the items that are subject to the Security Interest, as a condition to its becoming a Member, (i) to execute an agreement similar in tenor to that of the Corporation above and file all documents in all offices necessary to perfect the interests so granted above to the extent the same can be perfected by such filing. Additionally, the Corporation agrees to execute and deliver to the Master Trustee, and to cause any financial institution, with whom the Corporation has a depository relationship with respect to any of the Pledged Assets, to execute and deliver to the Master Trustee, an account control agreement or other depository agreement as necessary to evidence and perfect the security interest granted in the Master Indenture by the Corporation to the Master Trustee. Without the written consent of the Master Trustee or as otherwise permitted in the Master Indenture, the Corporation shall not deposit any of the Pledged Assets revenues with any financial institution that refuses to execute any such agreement. The Master Indenture constitutes a Security Agreement for purposes of Chapter 679, Florida Statutes. All of the Collateral is located in the State of Florida. (b) Leasehold Mortgage. The Corporation represents that, either prior to or simultaneously with its execution of the Master Indenture, it has executed the Leasehold Mortgage and will promptly cause the same to be filed in the office or offices required by law. Such Leasehold Mortgage shall secure only those obligations as are designated to be so secured in a Supplemental Indenture. (c) Opinion of Counsel. The Corporation shall cause to be delivered to the Master Trustee an Opinion of Counsel, which may be counsel to the Corporation, to the effect that (i) dated as of the date of delivery of Obligation No. 1, (a) the Security Interest was validly created pursuant to the Master Indenture or the Leasehold Mortgage, as applicable and upon the filing of the same, will be perfected to the extent that the same can be perfected by filing and (b) a mortgage Lien on the Property to be Mortgaged was validly created pursuant to the Leasehold Mortgage, and (ii) not later than the 14 th day following completion of all legal documentation and filings for the creation and funding of the Revenue Fund, that the Master Trustee has a valid Lien on the moneys and investments on deposit in the Revenue Fund. (d) Revenue Fund. (i) The Master Trustee is authorized and directed to establish a fund to be entitled the Tampa General Hospital Revenue Fund (the Revenue Fund ). If a Funding Event shall occur, the Obligated Group agrees that (A) each Member of the Obligated Group will begin immediately to deposit with the Master Trustee all cash proceeds of the Pledged Assets as received and (B) it will take all actions required or permitted by law to cause all payors, including Medicare and Medicaid, to make payments due to any Member directly to the Master Trustee for deposit to the credit of the Revenue Fund. The Master Trustee is directed to deposit all amounts it receives pursuant to this subsection to the credit of the Revenue Fund and apply such amounts as hereinafter provided. The Revenue Fund shall be subject to the lien of the Master Indenture in favor of the Master Trustee for the benefit of the holders from time to time of Obligations outstanding under the Master Indenture. In connection with the creation of and deposits to the Revenue Fund, the Corporation agrees that, to the extent necessary to have payors make payments due to the Corporation directly into the Revenue Fund, it will execute such depository or other agreements as shall be necessary. C-20

165 (ii) Until such time as the Master Trustee gives a Remedy Notice, amounts on deposit in the Revenue Fund shall be transferred to pay amounts due under Obligations, due and past due and shall otherwise be paid by the Master Trustee to the Obligated Group upon requisition therefor for operating expenses of the Obligated Group and to pay fees and expenses of the Master Trustee and Bond Trustee. After receipt of a Remedy Notice and prior to any rescission thereof, moneys in the Revenue Fund shall be used exclusively to pay amounts due under Obligations and fees and expenses of the Master Trustee and Bond Trustee. (iii) Upon the cure or waiver of a Funding Event (unless an intervening Funding Event shall have occurred and remains uncured) the requirement for daily deposits as set forth above shall cease, but the Master Trustee shall retain any amounts then on deposit to the credit of the Revenue Fund and use such funds for payment of debt service on Obligations, upon receipt of a requisition therefore, for payment to the Obligated Group for its operating expenses and for fees and expenses of the Master Trustee and Bond Trustee. (e) Product. 3 Reserve Fund; Designation of Reserve Fund Requirements; Application of Moneys In The Reserve Fund; Approval of Reserve (i) The Reserve Fund created and established under the Original Resolution is continued and required to be maintained. Prior to the issuance of any Obligation, the Obligated Group Representative shall designate whether such Obligation (and Related Bonds, as applicable) shall be secured by the Reserve Fund. The Reserve Fund shall secure only such Obligations designated to be so secured by a Supplemental Indenture. Any Obligation for which the Obligated Group Representative fails to designate a Reserve Fund Requirement or designates a Reserve Fund Requirement of zero shall not be secured by the funds on deposit in the Reserve Fund and the holders of such Obligation(s) shall have no right to payment from or lien with respect to such fund. Funds on deposit in the Reserve Fund shall be used solely to pay the Obligations (or Related Bonds, as applicable) for which it is being maintained when other funds of the Obligated Group are insufficient therefore. (ii) If the Obligated Group shall have determined, or be required, to fund the Reserve Fund with respect to an Obligation (or Related Bonds, as applicable), the Obligated Group shall, at the time of issuance of such Obligation, either fund the Reserve Fund Requirement in cash and securities or a Reserve Product issued by a Reserve Product Provider meeting the requirements set forth in the Master Indenture, or a combination of cash, investments and Reserve Product equal to the Reserve Fund Requirement. Any Reserve Product supplied to meet, in whole or in part, the Reserve Fund Requirement must name the Master Trustee as the beneficiary thereof for the benefit of the holders of such Obligation (or Related Bonds, as applicable) with respect to which such policy was issued, and must provide for payment of any deficiency with respect to payment of such Obligation (or Related Bonds, as applicable), up to the policy limits provided in such Reserve Product, on any interest or principal payment date (provided adequate notice is given) to the extent such deficiency cannot be cured by funds in any other account held pursuant to the Master Indenture and available for such purpose. The Reserve Product may require the application of any cash in the Reserve Fund to cure any such deficiency before a payment under the Reserve Product is required. (iii) In no event shall the use of a Reserve Product be permitted if it would cause any existing rating on any Related Bonds thereof to be lowered, suspended or withdrawn. (iv) If a disbursement is made from the Reserve Fund, either from cash, Qualified Investments or under a Reserve Product, or the amount on deposit in or credited to the Reserve Fund shall be less than the Reserve Fund Requirement due to a decline in value of any Qualified Investment therein in accordance with subsection (xii) below, the Obligated Group, shall be obligated to reinstate the Reserve Fund Requirement (including the maximum limits of any Reserve Product) by transferring to the Master Trustee in whole or in not more than twelve monthly installments, for deposit into the Reserve Fund, an amount equal to the Reserve Fund Requirement plus amounts necessary to reimburse the Reserve Product Provider for previous disbursements made pursuant to such Reserve Product, or a combination of such alternatives, provided that the Reserve Product Provider shall be reimbursed for amounts drawn under the Reserve Product prior to cash funding the Reserve Fund. (v) If one or more accounts in the Reserve Fund have been funded with cash or Qualified Investments and no Event of Default shall have occurred and be continuing under the Master Indenture, the Obligated Group may (x) instruct the Master Trustee to withdraw from the applicable account in the Reserve Fund the amounts on deposit therein in excess of the Reserve Fund Requirement, or (y) at any time in its discretion, substitute a Reserve Product meeting the requirements of the Master Indenture, for the cash and Qualified Investments in any such account, and in either case, the Obligated Group may then withdraw such excess cash, or cash and Qualified Investments, as the case may be, from such account and apply them to any lawful purpose, so long as (i) the same does not adversely affect any rating by a securities rating agency then in effect for any Related Bonds with respect to Obligations secured by the Reserve Fund and (ii) the Obligated Group delivers to the Master Trustee an opinion of Bond Counsel that such actions will not, in and of themselves, adversely affect the exclusion from gross income of interest on the applicable Related Bonds (other than taxable Related Bonds) for federal income tax purposes. (vi) If the Reserve Fund is funded with both a Reserve Product and cash or Qualified Investments, the cash and proceeds from the sale of the Qualified Investments shall be applied fully prior to drawing on the Reserve Product. If the Reserve Fund is funded with more than one Reserve Product, draws on the Reserve Products shall be made pro rata. (vii) It shall be the responsibility of the Master Trustee to maintain adequate records, verified with the Reserve Product Provider, as to the amount available to be drawn at any given time under the Reserve Product. 3 Note that Obligation No. 3 and, therefore, the 2012A Bonds are not secured by the Reserve Fund. C-21

166 (viii) Anything provided in the Master Indenture to the contrary notwithstanding, there may be no optional prepayment of Obligations (or optional redemption of Related Bonds) secured by the Reserve Fund or distribution of funds to the Obligated Group from amounts held under the Master Indenture and the Master Indenture shall not terminate until all amounts owed to the Reserve Product Provider have been paid in full. (ix) Moneys held for the credit of the Reserve Fund shall be invested and reinvested at the written request of the Obligated Group Representative. Such investments or reinvestments shall mature not later than the respective dates, as estimated by the Obligated Group, that the moneys held for the credit of the Reserve Fund will be needed. (x) Obligations so purchased as an investment of moneys in any such Fund or Account shall be deemed at all times to be a part of such Fund or Account, and shall at all times, for the purposes of the Master Indenture, be valued on each principal payment date at the market value thereof on the date of valuation. The Master Trustee, at the written direction of the Obligated Group Representative or when required to pay debt service on the Obligations (or the related Bonds as the case may be), shall sell at the best price obtainable any obligations so purchased whenever it shall be necessary or desirable to do so in order to provide moneys to meet any payment or transfer from such Funds or Accounts. The Master Trustee shall not be liable or responsible for any loss resulting from any such investments or reinvestments made at the request of the Obligated Group Representative or made in investments described in clause (d) of the definition of Investment Obligations. (xi) All income and profits derived from the investment of moneys in the Reserve Fund shall be retained in the Reserve Fund to the extent necessary to make the amount then on deposit therein equal to the Reserve Fund Requirement. Any balance remaining in or accruing to the Reserve Fund may be used to pay debt service on the Obligations secured by the Reserve Fund (or may be transferred to the Related Bond Trustee and used to pay debt service on the Related Bonds, as applicable), and shall then be transferred to the Obligated Group to be used for any lawful purpose. Notwithstanding the foregoing, any investment proceeds necessary to make payments to the United States Treasury under Section 148 of the Internal Revenue Code of 1986, as amended, may be transferred by the Master Trustee to the Related Bond Trustee for such purposes. (xii) For the purpose of determining the amount on deposit in the Reserve Fund Qualified Investments in which money in such fund or account is invested shall be valued at the lesser of (i) the cost of such Qualified Investments, and (ii) the market value of such obligations, exclusive of accrued interest, if any. For the purpose of the Master Indenture, the market value shall be determined as follows: Inc.; (i) The value of the securities shall be computed on the basis of the closing bid price quoted by Interactive Data Systems, (ii) the valuation of the securities shall be performed by a nationally recognized and accepted pricing service whose valuation method consists of the composite average of various bid price quotes on the valuation date; or (iii) the valuation of the collateral shall be based on the lower of two dealer bids on the valuation date. The dealers or their parent holding companies must be rated at least investment grade by S&P and Moody s in addition, the dealers must be market makers in the securities being valued; (iv) any Reserve Product provided in accordance with the provisions of the Master Indenture shall be valued at the face amount thereof, less any unreinstated disbursements made therefrom, without regard to the then current credit rating of the Reserve Product Provider; and (v) the valuation of certificates of deposit and bankers acceptances shall be the face amount thereof, plus accrued interest; (vi) as to any investment not specified above, the value therefor shall be established by prior agreement between the Obligated Group and the Master Trustee. The Master Trustee shall value the Qualified Investments in the Reserve Fund on the last day of each Fiscal Year and on the date of any withdrawal therefrom. In addition, the Qualified Investments shall be valued by the Master Trustee at any time requested by the Obligated Group Representative on reasonable notice to the Master Trustee (which period of notice may be waived or reduced by the Master Trustee); provided, however, that the Master Trustee shall not be required to value the Qualified Obligations more than once in any calendar month pursuant to such requests. Default and Remedies Events of Default. Event of Default, as used in the Master Indenture, shall mean any of the following events: (a) The Members of the Obligated Group shall fail to make any payment due and owing with respect to any Obligations issued and Outstanding under the Master Indenture when and as the same shall become due and payable, whether at maturity, by proceedings for redemption, by acceleration or otherwise, in accordance with the terms thereof, of the Master Indenture or of any Supplement; C-22

167 (b) Any Member of the Combined Group shall fail duly to perform, observe or comply with any covenant or agreement on its part under the Master Indenture for a period of 30 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Members of the Obligated Group by the Master Trustee, or to the Members of the Obligated Group and the Master Trustee by the Holders of at least 25% in aggregate principal amount of Obligations then Outstanding; provided, however, that if said failure be such that it cannot be corrected within thirty (30) days after the receipt of such notice, it shall not constitute an Event of Default if corrective action is instituted within such 30-day period and diligently pursued until the Event of Default is corrected; (c) An event of default shall occur under a Related Bond Indenture or upon a Related Bond or under the Leasehold Mortgage; (d) (i) Any Member of the Combined Group shall fail to make any required payment with respect to any Indebtedness (other than Subordinated Indebtedness, Non-Recourse Indebtedness or Obligations issued and Outstanding under the Master Indenture), which Indebtedness is in an aggregate principal amount greater than one percent (1%) of Total Revenues for the most recent Fiscal Year whether such Indebtedness exists as of the date of the Master Indenture or shall thereafter be created, and any period of grace with respect thereto shall have expired, or (ii) there shall occur an event of default as defined in any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any Indebtedness, which Indebtedness (other than the Obligations) is in an aggregate principal amount greater than one percent (1%) of Total Revenues for the most recent Fiscal Year whether such Indebtedness exists as of the date of the Master Indenture or shall thereafter be created, which event of default shall not have been waived by the holder of such mortgage, indenture or instrument, and as a result of such failure to pay or other event of default such Indebtedness shall have been accelerated; provided, however, that such default shall not constitute an Event of Default within the meaning of this Section if within 30 days (i) written notice is delivered to the Master Trustee, signed by the Obligated Group Representative, that such Member of the Combined Group is contesting the payment of such Indebtedness and within the time allowed for service of a responsive pleading if any proceeding to enforce payment of the Indebtedness is commenced, any Member of the Combined Group in good faith shall commence proceedings to contest the obligation to pay such Indebtedness and if a judgment relating to such Indebtedness has been entered against such Member of the Combined Group (A) the execution of such judgment has been stayed or (B) sufficient moneys are escrowed with a bank or trust company for the payment of such Indebtedness; (e) The entry of a decree or order by a court having jurisdiction in the premises for an order for relief against any Member of the Combined Group, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of such Member under the United States Bankruptcy Code or any other applicable federal or state law, or appointing a receiver, liquidator, custodian, assignee, or sequestrator (or other similar official) of such Member or of any substantial part of its Property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 90 consecutive days; and (f) The institution by any Member of the Combined Group of proceedings for an order for relief, or the consent by it to an order for relief against it, or the filing by it of a petition or answer or consent seeking reorganization, arrangement, adjustment, composition or relief under the United States Bankruptcy Code or any other similar applicable federal or state law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, custodian, assignee, trustee or sequestrator (or other similar official) of such Member of the Combined Group or of any substantial part of its Property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due. Acceleration; Annulment of Acceleration. (a) Upon the occurrence and during the continuation of an Event of Default under the Master Indenture, the Master Trustee may and, upon the written request of (i) the Holders of not less than 25% in aggregate principal amount of Obligations Outstanding or (ii) any Person exercising the right given to such Person under any Supplement to require acceleration of the Obligations issued pursuant to such Supplement, the Master Trustee shall, by notice to the Members of the Obligated Group declare all Obligations Outstanding immediately due and payable, whereupon such Obligations shall become and be immediately due and payable, anything in the Obligations or in any other section of the Master Indenture to the contrary notwithstanding; provided, however, that if the terms of any Supplement give a Person the right to consent to acceleration of the Obligations issued pursuant to said Supplement, the Obligations issued pursuant to such Supplement may not be accelerated by the Master Trustee unless such consent is properly obtained pursuant to the terms of such Supplement. In the event Obligations are accelerated there shall be due and payable on such Obligations an amount equal to the total principal amount of all such Obligations, plus all interest accrued thereon to the date of acceleration and, to the extent permitted by applicable law, which accrues to the date of payment. (b) At any time after the principal of the Obligations shall have been so declared to be due and payable and before the entry of final judgment or decree in any suit, action or proceeding instituted on account of such default, if (i) the Obligated Group has paid or caused to be paid or deposited with the Master Trustee money sufficient to pay all matured installments of interest and interest on installments of principal and interest and principal or redemption prices then due (other than the principal then due only because of such declaration) of all Obligations Outstanding; (ii) the Obligated Group has paid or caused to be paid or deposited with the Master Trustee money sufficient to pay the charges, compensation, expenses, disbursements, advances, fees and liabilities of the Master Trustee; (iii) all other amounts then payable by the Obligated Group under the Master Indenture shall have been paid or a sum sufficient to pay the same shall have been deposited with the Master Trustee; and (iv) every Event of Default (other than a default in the payment of the principal of such Obligations then due only because of such declaration) shall have been remedied or waived pursuant to the provisions under the heading Waiver of Event of Default below, then the Master Trustee may, and upon the written request of Holders of not less than 25% in aggregate principal amount of the Obligations Outstanding or any Person exercising the right given to such Person in any Supplement, shall, annul such declaration and its consequences with respect to any Obligations or portions thereof not then due by their terms. No such annulment shall extend to or affect any subsequent Event of Default or impair any right consequent thereon. Additional Remedies and Enforcement of Remedies. (a) Upon the occurrence and continuance of any Event of Default, the Master Trustee may, and upon the written request of the Holders of not less than 25% in aggregate principal amount of the Obligations Outstanding, or any Person exercising the right given to such Person in any Supplement, together with indemnification of the Master Trustee to its satisfaction therefor, shall, proceed forthwith to protect and enforce its rights and the rights of the Holders under the Master Indenture by such suits, actions or proceedings as the Master Trustee, being advised by counsel, shall deem expedient, including but not limited to: C-23

168 (i) Obligations; (ii) Enforcement of the right of the Holders to collect and enforce the payment of amounts due or becoming due under the Suit upon all or any part of the Obligations; (iii) Civil action to require any Person holding moneys, documents or other property pledged to secure payment of amounts due or to become due on the Obligations to account as if it were the trustee of an express trust for the Holders; (iv) (v) (vi) Civil action to enjoin any acts or things, which may be unlawful or in violation of the rights of the Holders; Enforcement of rights as a secured party under the Uniform Commercial Code of the State of Florida; and Enforcement of any other right of the Holders conferred by law or by the Master Indenture. (b) Regardless of the happening of an Event of Default, the Master Trustee, if requested in writing by the Holders of not less than 25% in aggregate principal amount of the Obligations then Outstanding, or any Person exercising the right given to such Person any Supplement, shall, upon being indemnified to its satisfaction therefor, institute and maintain such suits and proceedings as it may be advised shall be necessary or expedient (i) to prevent any impairment of the security under the Master Indenture by any acts which may be unlawful or in violation of the Master Indenture, or (ii) to preserve or protect the interests of the Holders, provided that such request and the action to be taken by the Master Trustee are not in conflict with any applicable law or the provisions of the Master Indenture and, in the sole judgment of the Master Trustee, are not unduly prejudicial to the interest of the Holders not making such request. Application of Moneys after Default. During the continuance of an Event of Default, subject to the expenditure of moneys to make any payments required to permit any Member of the Obligated Group to comply with any requirement or covenant in any Related Indenture to cause Related Bonds the interest on which, immediately prior to such Event of Default, is excludable from the gross income of the recipients thereof for federal income tax purposes under the Code to retain such status under the Code, all moneys received by the Master Trustee pursuant to any right given or action taken under the provisions of this Article shall be applied, after the payment of any compensation, expenses, disbursements and advances then owing to the Master Trustee pursuant to Section 5.05 of the Master Indenture, as follows: (a) Unless the principal of all Outstanding Obligations shall have become or have been declared due and payable: First: To the payment to the Persons entitled thereto of all installments of interest then due on Obligations in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon to the Persons entitled thereto, without any discrimination or preference; and Second: To the payment to the Persons entitled thereto of the unpaid principal installments of any Obligations which shall have become due, whether at maturity or by call for redemption, in the order of their due dates, and if the amounts available shall not be sufficient to pay in full all Obligations due on any date, then to the payment thereof ratably, according to the amounts of principal installments due on such date, to the Persons entitled thereto, without any discrimination or preference. (b) If the principal of all Outstanding Obligations shall have become or have been declared due and payable, to the payment of the principal and interest then due and unpaid upon Obligations without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Obligation over any other Obligation, ratably, according to the amounts due respectively for principal and interest, to the Persons entitled thereto without any discrimination or preference. (c) If the principal of all Outstanding Obligations shall have been declared due and payable, and if such declaration shall thereafter have been rescinded and annulled under the provisions of this Article or the respective Supplement, then, subject to the provisions of subsection (b) of this Section in the event that the principal of all Outstanding Obligations shall later become due or be declared due and payable, the moneys shall be applied in accordance with the provisions of subsection (a) of this Section. Whenever the Master Trustee shall apply moneys pursuant to this Section, it shall fix the date upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such dates shall cease to accrue. The Master Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date, and shall not be required to make payment to the Holder of any unpaid Obligation until such Obligation shall be presented to the Master Trustee for appropriate endorsement of any partial payment or for cancellation if fully paid. Whenever all Obligations and interest thereon have been paid under the provisions of this Section and all expenses and charges of the Master Trustee have been paid, any balance remaining shall be paid to the Person entitled to receive the same; if no other Person shall be entitled thereto, then the balance shall be paid to the Members of the Obligated Group, their respective successors, or as a court of competent jurisdiction may direct. Notwithstanding the foregoing, any amounts received by the Master Trustee, from the exercise of its rights under the Leasehold Mortgage that are not Pledged Assets shall be applied in respect solely of the Obligations secured by the Leasehold Mortgage. Holders Control of Proceedings; Conflicting Directions. If an Event of Default shall have occurred and be continuing, notwithstanding anything in the Master Indenture to the contrary, the Holders of not less than a majority in aggregate principal amount of Obligations then Outstanding shall have C-24

169 the right, at any time, by an instrument in writing executed and delivered to the Master Trustee and accompanied by indemnity satisfactory to the Master Trustee, to direct the method and place of conducting any proceeding or action to be taken in connection with the enforcement of the terms and conditions of the Master Indenture or for the appointment of a receiver or any other proceedings under the Master Indenture, provided that such direction is not in conflict with any applicable law or the provisions of the Master Indenture, and is not unduly prejudicial to the interest of any Holders not joining in such direction, and provided further, that the Master Trustee shall have the right to decline to follow any such direction if the Master Trustee in good faith shall determine that the proceeding so directed would involve it in personal liability, and provided further that nothing in this Section shall impair the right of the Master Trustee in its discretion to take any other action under the Master Indenture which it may deem proper and which is not inconsistent with such direction by the Holders. With respect to actions which may be taken by Holders of less than a majority in aggregate principal amount of Obligations pursuant to any provision of the Master Indenture, if the Master Trustee receives conflicting directions, then the directions of Holders of the greater percentage of aggregate principal amount of Obligations shall control, subject to the exceptions described in the immediately preceding paragraph. Waiver of Event of Default. (a) No delay or omission of the Master Trustee or of any Holder to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein. Every power and remedy given under this heading Default and Remedies to the Master Trustee and the Holders, respectively, may be exercised from time to time and as often as may be deemed expedient by them. (b) The Master Trustee may waive any Event of Default which in its opinion shall have been remedied before the entry of final judgment or decree in any suit, action or proceeding instituted by it under the provisions of the Master Indenture, or before the completion of the enforcement of any other remedy under the Master Indenture. (c) Notwithstanding anything contained in the Master Indenture to the contrary, the Master Trustee, upon the written request of the Holders of not less than a majority of the aggregate principal amount of Obligations then Outstanding, shall waive any Event of Default under the Master Indenture and its consequences; provided, however, that, except under the circumstances set forth in subsection (b) under the heading Acceleration; Annulment of Acceleration above, a default in the payment of the principal of, premium, if any, or interest on any Obligation, when the same shall become due and payable by the terms thereof or upon call for redemption, may not be waived without the written consent of the Holders of all the Obligations (with respect to which such payment default exists) at the time Outstanding. (d) In case of any waiver by the Master Trustee of an Event of Default under the Master Indenture, the Members of the Obligated Group, the Master Trustee and the Holders shall be restored to their former positions and rights under the Master Indenture, respectively, but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon. Appointment of Receiver. Upon the occurrence of any Event of Default, unless the same shall have been waived as provided in the Master Indenture, the Master Trustee shall be entitled as a matter of right if it shall so elect, (i) forthwith and without declaring the Obligations to be due and payable, (ii) after declaring the same to be due and payable, or (iii) upon the commencement of an action to enforce the specific performance of the Master Indenture or in aid thereof or upon the commencement of any other judicial proceeding to enforce any right of the Master Trustee or the Holders, to the appointment of a receiver or receivers of any or all of the Property of the Obligated Group with such powers as the court making such appointment shall confer. Each Member of the Obligated Group, respectively, consents and agrees, and will if requested by the Master Trustee consent and agree at the time of application by the Trustee for appointment of a receiver of its Property, to the appointment of such receiver of its Property and that such receiver may be given the right, power and authority, to the extent the same may lawfully be given, to take possession of and operate and deal with such Property and the revenues, profits and proceeds therefrom, with like effect as the Member of the Obligated Group could do so, and to borrow money and issue evidences of indebtedness as such receiver. Notice of Default. The Master Trustee shall, within 10 business days after it has actual knowledge of the occurrence of an Event of Default, mail, by first class mail, to all Holders as the names and addresses of such Holders appear upon the books of the Master Trustee, notice of such Event of Default unless such Event of Default shall have been cured before the giving of such notice; provided that, except in the case of default in the payment of the principal of or premium, if any, or interest on any of the Obligations and the Events of Default specified in subsections (e) and (f) under the heading Events of Default above, the Master Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or any responsible officer of the Master Trustee in good faith determines that the withholding of such notice is in the interests of the Holders. The Master Trustee Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default: (i) The Master Trustee undertakes to perform such duties and only such duties as are specifically set forth in the Master Indenture, and no implied covenants or obligations shall be read into the Master Indenture against the Master Trustee; and (ii) In the absence of bad faith on its part, the Master Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Master Trustee and conforming to the requirements of the Master Indenture; but in the case of any such certificates or opinions which by any provision of the Master Indenture are specifically required to be furnished to the Master Trustee, the Master Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of the Master Indenture. C-25

170 (b) In case an Event of Default has occurred and is continuing, the Master Trustee shall exercise such of the rights and powers vested in it by the Master Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of the Master Indenture shall be construed to relieve the Master Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this Subsection shall not be construed to limit the effect of Subsection (a) or (b) of this Section; (ii) the Master Trustee shall not be liable for any error of judgment made in good faith by a chairman or vice-chairman of the board of directors, the chairman or vice-chairman of the executive committee of the board of directors, the president, any vice president (however designated), the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller and any assistant controller or any other officer or employee of the Master Trustee customarily performing functions similar to those performed by any of the above designated officers or with respect to a particular matter, any other officer or employee to whom such matter is referred because of his knowledge of and familiarity with the particular subject, unless it shall be proved that the Master Trustee was negligent in ascertaining the pertinent facts; (iii) the Master Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Obligations relating to the time, method and place of conducting any proceeding for any remedy available to the Master Trustee, or exercising any trust or power conferred upon the Master Trustee, under the Master Indenture, except under the circumstances set forth in subsection (c) under the heading Waiver of Event of Default above requiring the consent of the Holders of all the Obligations at the time Outstanding; and (iv) no provision of the Master Indenture shall require the Master Trustee to expend or risk its own funds or otherwise incur any financial or other liability, directly or indirectly, in the performance of any of its duties under the Master Indenture, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (d) Whether or not therein expressly so provided, every provision of the Master Indenture relating to the conduct or affecting the liability of or affording protection to the Master Trustee shall be subject to the provisions of this Section. Certain Rights of Master Trustee. Except as otherwise provided under the heading Certain Duties and Responsibilities above: (a) The Master Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. (b) Any request, direction or statement of any Member of the Obligated Group mentioned in the Master Indenture shall be sufficiently evidenced by an Officer s Certificate and any action of the Governing Body may be sufficiently evidenced by a copy of a resolution certified by the secretary or an assistant secretary of the Member of the Obligated Group to have been duly adopted by the Governing Body and to be in full force and effect on the date of such certification and delivered to the Master Trustee. (c) Whenever in the administration of the Master Indenture the Master Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action under the Master Indenture, the Master Trustee (unless other evidence be specifically prescribed in the Master Indenture) may, in the absence of bad faith on its part, rely upon an Officer s Certificate. (d) The Master Trustee may consult with counsel or an independent auditor and the written advice of such counsel or independent auditor or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it under the Master Indenture in good faith and in reliance thereon. (e) The Master Trustee shall be under no obligation to exercise any of the rights or powers vested in it by the Master Indenture whether on its own motion or at the request or direction of any of the Holders pursuant to the Master Indenture which shall be in the opinion of the Master Trustee likely to involve expense or liability not otherwise provided for in the Master Indenture, unless one or more Holders or such Holders making such request shall have offered and furnished to the Master Trustee reasonable security or indemnity satisfactory to the Master Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction or otherwise in connection with the Master Indenture. (f) The Master Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note or other paper or document, but the Master Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Master Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of any Member of the Obligated Group, personally or by agent or attorney. (g) The Master Trustee may execute any of the trusts or powers under the Master Indenture or perform any duties under the Master Indenture either directly or by or through agents or attorneys and the Master Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it under the Master Indenture. C-26

171 Right to Deal in Obligations and Related Bonds and With Members of the Combined Group. The Master Trustee may in good faith buy, sell or hold and deal in any Obligations and Related Bonds with like effect as if it were not such Master Trustee and may commence or join in any action which a Holder or holder of a Related Bond is entitled to take and may otherwise deal with Members of the Combined Group with like effect as if the Master Trustee were not the Master Trustee; provided, however, that if the Master Trustee has or shall acquire any conflicting interest, it shall, within 90 days after ascertaining that it has such conflicting interest, either eliminate such conflicting interest or resign as Master Trustee. Removal and Resignation of the Master Trustee. The Master Trustee may resign on its motion; or may be removed at any time by an instrument or instruments in writing signed by the Holders of not less than a majority of the principal amount of Obligations then Outstanding or if no Event of Default shall have occurred and be continuing, by an instrument in writing signed by the Obligated Group Representative. No such resignation or removal shall become effective unless and until a successor Master Trustee (or temporary successor trustee as provided below) has been appointed and has assumed the trusts created by the Master Indenture. Written notice of such resignation or removal shall be given to the Members of the Obligated Group and to each Holder by first class mail at the address then reflected on the books of the Master Trustee and such resignation or removal shall take effect upon the appointment and qualification of a successor Master Trustee. A successor Master Trustee may be appointed by the Obligated Group Representative or, if no such appointment is made by the Obligated Group Representative within 30 days of the date notice of resignation or removal is given, the Holders of not less than a majority in aggregate principal amount of Obligations Outstanding. In the event a successor Master Trustee has not been appointed and qualified within 60 days of the date notice of resignation is given, the Master Trustee, any Member of the Obligated Group or any Holder may apply to any court of competent jurisdiction for the appointment of a temporary successor Master Trustee to act until such time as a successor is appointed as above provided. Unless otherwise ordered by a court or regulatory body having competent jurisdiction, or unless required by law, any successor Master Trustee shall be a trust company or bank having the powers of a trust company as to trusts, qualified to do and doing trust business in one or more states of the United States of America and having an officially reported combined capital, surplus, undivided profits and reserves aggregating at least $50,000,000, if there is such an institution willing, qualified and able to accept the trust upon reasonable or customary terms. Every successor Master Trustee howsoever appointed under the Master Indenture shall execute, acknowledge and deliver to its predecessor and also to each Member of the Obligated Group an instrument in writing, accepting such appointment under the Master Indenture, and thereupon such successor Master Trustee, without further action, shall become fully vested with all the rights, immunities, powers, trusts, duties and obligations of its predecessor, and such predecessor shall execute and deliver an instrument transferring to such successor Master Trustee all the rights, powers and trusts of such predecessor. The predecessor Master Trustee shall execute any and all documents necessary or appropriate to convey all interest it may have to the successor Master Trustee. The predecessor Master Trustee shall promptly deliver all material records relating to the trust or copies thereof and, on request, communicate all material information it may have obtained concerning the trust to the successor Master Trustee. Each successor Master Trustee, not later than ten (10) days after its assumption of the duties under the Master Indenture, shall mail a notice of such assumption to each registered Holder. Supplements and Amendments Supplements Not Requiring Consent of Holders. Each Member of the Obligated Group, when authorized by resolution or other action of equal formality by its Governing Body, and the Master Trustee may, without the consent of or notice to any of the Holders, enter into one or more Supplements for one or more of the following purposes: (a) To cure any ambiguity or formal defect or omission in the Master Indenture. (b) To correct or supplement any provision in the Master Indenture which may be inconsistent with any other provision in the Master Indenture, or to make any other provisions with respect to matters or questions arising under the Master Indenture and which shall not adversely affect the security for the Obligations. (c) To grant or confer ratably upon all of the Holders any additional rights, remedies, powers or authority that may lawfully be granted or conferred upon them subject to the provisions under the heading Supplements Requiring Consent of Holders below. (d) To qualify the Master Indenture under the Trust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time in effect. (e) To create and provide for the issuance of Indebtedness as permitted under the Master Indenture. (f) To obligate a successor to any Member of the Obligated Group or any additional Member of the Obligated Group as provided under the heading Parties Becoming Members of the Obligated Group above. (g) To comply with the provisions of any federal or state securities law. Supplements Requiring Consent of Holders. (a) Other than Supplements referred to under the heading Supplements Not Requiring Consent of Holders above and subject to the terms and provisions and limitations contained under this heading Supplements and Amendments and not otherwise, the Holders of not less than a majority in aggregate principal amount of Obligations then Outstanding shall have the right, from time to time, anything contained in the Master Indenture to the contrary notwithstanding, to consent to and approve the execution by each Member of the Obligated Group, when authorized by resolution or other action of equal formality by its governing Body, and the Master Trustee of such Supplements as shall be deemed necessary and desirable for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, C-27

172 any of the terms or provisions contained in the Master Indenture; provided, however, nothing in this Section shall permit or be construed as permitting a Supplement which would: (i) Effect a change in the times, amounts or currency of payment of the principal of, premium, if any, and interest on any Obligation or a reduction in the principal amount or redemption price of any Obligation or the rate of interest thereon, without the consent of the Holder of such Obligation; (ii) Permit the preference or priority of any Obligation over any other Obligation, without the consent of the Holders of all Obligations then Outstanding; or (iii) Reduce the aggregate principal amount of Obligations then Outstanding the consent of the Holders of which is required to authorize such Supplement without the consent of the Holders of all Obligations then Outstanding. (b) If at any time each Member of the Obligated Group shall request the Master Trustee to enter into a Supplement pursuant to this Section, which request is accompanied by a copy of the resolution or other action of its Governing Body certified by its secretary or if it has no secretary, its comparable officer, and the proposed Supplement and if within such period, not exceeding three years, as shall be prescribed by each Member of the Obligated Group following the request, the Master Trustee shall receive an instrument or instruments purporting to be executed by the Holders of not less than the aggregate principal amount or number of Obligations specified in subsection (a) of this Section for the Supplement in question which instrument or instruments shall refer to the proposed Supplement and shall specifically consent to and approve the execution thereof in substantially the form of the copy thereof as on file with the Master Trustee, thereupon, but not otherwise, the Master Trustee may execute such Supplement in substantially such form, without liability or responsibility to any Holder, whether or not such Holder shall have consented thereto. (c) Any such consent shall be binding upon the Holder giving such consent and upon any subsequent Holder of such Obligation and of any Obligation issued in exchange therefor (whether or not such subsequent Holder thereof has notice thereof), unless such consent is revoked in writing by the Holder of such Obligation giving such consent or by a subsequent Holder thereof by filing with the Master Trustee, prior to the execution by the Master Trustee of such Supplement, such revocation and, if such Obligation is transferable by delivery, proof that such Obligation is held by the signer of such revocation in the manner permitted under the heading Evidence of Acts of Holders below. At any time after the Holders of the required principal amount or number of Obligations shall have filed their consents to the Supplement, the Master Trustee shall make and file with each Member of the Obligated Group a written statement to that effect. Such written statement shall be conclusive that such consents have been so filed. (d) If the Holders of the required principal amount of the Obligations Outstanding shall have consented to and approved the execution of such Supplement as provided in the Master Indenture, no Holder shall have any right to object to the execution thereof, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Master Trustee or any Member of the Obligated Group from executing the same or from taking any action pursuant to the provisions thereof. (e) In the event that a Master Obligation is issued in connection with a new issue of Related Bonds, the underwriter or underwriters of such Related Bonds shall be permitted to vote such Related Bonds in favor of an amendment to the Master Indenture if the nature of the amendment is disclosed in any offering document used in connection with sales of such Related Bonds. Satisfaction and Discharge of Indenture Satisfaction and Discharge of Indenture. If (i) the Obligated Group Representative shall deliver to the Master Trustee for cancellation all Obligations theretofore authenticated (other than any Obligations which shall have been mutilated, destroyed, lost or stolen and which shall have been replaced or paid as provided in the Supplement) and not theretofore canceled, or (ii) all Obligations not theretofore canceled or delivered to the Master Trustee for cancellation shall have become due and payable and money sufficient to pay the same shall have been deposited with the Master Trustee, or (iii) all Obligations that have not become due and payable and have not been canceled or delivered to the Master Trustee for cancellation shall be Defeased Obligations, and if in all cases the Members of the Obligated Group shall also pay or cause to be paid all other sums payable under the Master Indenture by the Members of the Obligated Group or any thereof, then the Master Indenture shall cease to be of further effect, and the Master Trustee, on demand of the Members of the Obligated Group and at the cost and expense of the Members of the Obligated Group, shall execute proper instruments acknowledging satisfaction of and discharging the Master Indenture. Each Member of the Obligated Group, respectively, agrees to reimburse the Master Trustee for any costs or expenses theretofore and thereafter reasonably and properly incurred by the Master Trustee in connection with the Master Indenture or such Obligations. Concerning the Holders Evidence of Acts of Holders. (a) In the event that any request, direction or consent is requested or permitted under the Master Indenture of the Holders of any Obligation securing an issue of Related Bonds, the registered owners of such Related Bonds then outstanding shall be deemed to be such Holders for the purpose of any such request, direction or consent in the proportion that the aggregate principal amount of Related Bonds then outstanding held by each such owner of Related Bonds bears to the aggregate principal amount of all Related Bonds then outstanding; provided however that if any portion of such Related Bonds is secured by a Credit Facility that is also secured by a separate Obligation issued under the Master Indenture, the principal amount of the Obligation that secures the Related Bonds deemed outstanding for purposes of any such request, direction or consent shall be reduced by the amount of Related Bonds that are secured by such Credit Facility for the purpose of any such request, direction or consent and the Holders of the Related Bonds that are secured by such Credit Facility shall not be consulted or counted. 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173 (b) As to any request, direction, consent or other instrument provided by the Master Indenture to be signed and executed by the Holders, such action may be in any number of concurrent writings, shall be of similar tenor, and may be signed or executed by such Holders in person or by agent appointed in writing. (c) Proof of the execution of any such request, direction, consent or other instrument or of the writing appointing any such agent and of the ownership of Obligations, if made in the following manner, shall be sufficient for any of the purposes of the Master Indenture and shall be conclusive in favor of the Master Trustee and the Members of the Obligated Group, with regard to any action taken by them, or either of them, under such request, direction or consent or other instrument, namely: (i) The fact and date of the execution by any person of any such writing may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments in such jurisdiction, that the person signing such writing acknowledged before him the execution thereof, or by the affidavit of a witness of such execution; and (ii) The ownership of Related Bonds may be proved by the registration books for such Related Bonds maintained pursuant to the Related Bond Indenture. (d) Nothing in this Section shall be construed as limiting the Master Trustee to the proof specified in this Section, it being intended that the Master Trustee may accept any other evidence of the matters stated in this Section which it may deem sufficient. (e) Any action taken or suffered by the Master Trustee pursuant to any provision of the Master Indenture upon the request or with the assent of any person who at the time is the Holder of any Obligation, shall be conclusive and binding upon all future Holders of the same Obligation. (f) In the event that any request, direction or consent is requested or permitted under the Master Indenture of the Holders of an Obligation that constitutes a Guaranty, for purposes of any such request, direction or consent, the principal amount of such Obligation shall be deemed to be the stated principal amount of such Obligation. Obligations or Related Bonds Owned by Members of Obligated Group. In determining whether the Holders of the requisite aggregate principal amount of Obligations have concurred in any demand, direction, request, notice, consent, waiver or other action under the Master Indenture, Obligations or Related Bonds that are owned by any Member of the Obligated Group or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with such Member shall be disregarded and deemed not to be Outstanding or outstanding under the Related Bond Indenture, as the case may be, for the purpose of any such determination, provided that for the purposes of determining such concurrence only such Obligations or Related Bonds which the Master Trustee has actual notice or knowledge are so owned shall be so disregarded and deemed not to be outstanding. Obligations or Related Bonds so owned that have been pledged in good faith may be regarded as Outstanding or outstanding under the Related Bond Indenture, as the case may be, for purposes of this Section, if the pledgee shall establish to the satisfaction of the Master Trustee the pledgee s right to vote such Obligations or Related Bonds and that the pledgee is not a person directly or indirectly controlling or controlled by or under direct or indirect common control with any Member of the Obligated Group. In case of a dispute as to such right, any decision by the Master Trustee taken upon the advice of counsel shall be full protection to the Master Trustee. Instruments Executed by Holders Bind Future Holders. At any time prior to (but not after) the Master Trustee takes action in reliance upon evidence, as provided under the heading Evidence of Acts of Holders above, of the taking of any action by the Holders of the percentage in aggregate principal amount of Obligations specified in the Master Indenture in connection with such action, any Holder of such an Obligation or Related Bond that is shown by such evidence to be included in Obligations the Holders of which have consented to such action may, by filing written notice with the Master Trustee and upon proof of holding as provided under the heading Evidence of Acts of Holders above, revoke such action so far as concerns such Obligation or Related Bond. Except upon such revocation any such action taken by the Holder of an Obligation or Related Bond in any direction, demand, request, waiver, consent, vote or other action of the Holder of such Obligation or Related Bond which by any provision of the Master Indenture is required or permitted to be given shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Obligation or Related Bond, and of any Obligation or Related Bond issued in lieu thereof, whether or not any notation in regard thereto is made upon such Obligation or Related Bond. Any action taken by the Holders of the percentage in aggregate principal amount of Obligations specified in the Master Indenture in connection with such action shall be conclusively binding upon each Member of the Obligated Group, the Master Trustee and the Holders of all of such Obligations or Related Bonds. Rights of the Credit Facility Provider. Notwithstanding anything in the Master Indenture to the contrary, in the event that a Credit Facility is in full force and effect as to any series of Related Bonds, the Credit Facility provider is not insolvent and no default of the Credit Facility exists on the part of the Credit Facility provider, then the said Credit Facility provider, in place of the owner of the Obligations to which such Related Bonds relate shall have the power and authority to give any written consents and exercise any and all other rights which the owner of that Obligation would otherwise have the power and authority to make, give or exercise, including, but not limited to, the exercise of remedies provided under the heading Defaults and Remedies above and the giving of written consents to Supplements when required under the heading Supplements Requiring Consent of Holders above, and such consent shall be deemed to also constitute the consent of the owners of all of those Related Bonds which are secured by such Credit Facility. Notwithstanding anything in the Master Indenture to the contrary, all beneficial owners of registered Related Bonds adversely affected by any amendments or supplements under the heading Supplements Requiring Consent of Holders above shall be required to join with the Credit Facility provider in consent to such amendments or supplements. The Authorized Representative of the Obligated Group Representative may execute and deliver any contracts or agreements with Credit Facility providers to carry out the provisions of the Master Indenture or to clarify the rights of such Credit Facility provider with respect to any Related Bonds. C-29

174 Summary of the Trust Agreement Granting Clauses The Issuer, in order to secure the payment of the principal of and interest on and redemption premiums, if any, with respect to the Bonds according to their tenor and effect, and to insure the performance and observance by the Issuer of all the covenants expressed or implied in the Trust Agreement and in the Bonds, has given, granted, pledged and assigned and does by these presents give, grant, pledge and assign to the Bond Trustee, and to its successors in the trust created under the Trust Agreement, and to them and their assigns forever (the security described in these Granting Clauses being referred to in the Trust Agreement as the Trust Estate ): I. All right, title and interest of the Issuer in and to Obligation No. 3 and all rights under the Master Indenture as owner of Obligation No. 3. II. All rights, title and interest of the Issuer in the Financing Agreement upon its execution and delivery, and all amendments, modifications and renewals thereof reserving, however, the Issuer s Unassigned Rights (as defined below) relating to receipt of notices, consents, reimbursement of its costs and to indemnification pursuant to the terms of the Financing Agreement. III. All rights, title and interest in and to all moneys and securities from time to time held by the Bond Trustee under the terms of the Trust Agreement (except the Rebate Fund), and in any and all other property of every name and nature from time to time after the date of the Trust Agreement by delivery or by writing of any kind, given, granted, pledged and assigned as and for additional security under the Trust Agreement, by the Issuer or by anyone in its behalf or with its written consent, to the Bond Trustee, which is authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms of the Trust Agreement. Definitions All interest, profits, earnings, products and proceeds of any of the foregoing. IV. All terms used in the Trust Agreement in capitalized form and not otherwise defined in the Trust Agreement shall have the meanings ascribed to such terms in the Master Indenture and the Financing Agreement. In addition, as used in the Trust Agreement unless some other meaning is plainly intended: Act means Parts II and III of Chapter 159, Florida Statutes, and other applicable provisions of law, under which the Issuer was created. Affiliate means any Affiliate as defined in Section 1.01 of the Master Indenture. Authorized Denomination means $5,000 or integral multiples thereof. Bond Obligation means, as of the date of computation, the sum of the principal amount of all Bonds then outstanding. Bond Registrar means the Bond Trustee, or any other registrar appointed by the Issuer, from time to time, under the provisions of Section 2.04 of the Trust Agreement (relating to authentication of bonds). Bond Trustee means The Bank of New York Mellon Trust Company, N.A., a national banking association, duly organized under the laws of the United States of America, having the authority to exercise corporate trust powers, and having its designated corporate trust office in Jacksonville, Florida, as the initial Bond Trustee, and its successor or successors later appointed in the manner provided in the Trust Agreement. Bond Year means the annual period beginning on the first day of October of each year and ending on the last day of September of the following year; provided, however, that the initial Bond Year shall commence on the date of delivery of the Bonds and shall end on September 30, 2013; and provided, further, that when such term is used to describe the period during which deposits are to be made to amortize principal and interest on the Bonds maturing or becoming subject to redemption, interest and principal maturing or becoming subject to redemption on October 1 of any year shall be deemed to mature or become subject to redemption on the last day of the preceding Bond Year. Bondholder, Holder of Bonds, Owner of Bonds, Holder or Owner, or similar words, mean the registered owner of any Bond as shown on the registration books maintained by the Bond Registrar as of the time and date of determination and, if coupon bonds are subsequently issued under the provisions of the Trust Agreement, the bearer of any coupon bond not registered as to principal. Bonds means the Bonds issued under the Trust Agreement. Business Day means any day except (i) Saturday or Sunday or (ii) any day on which banking institutions located in the states of New York or Florida are required or authorized to close, or (iii) any day on which the New York Stock Exchange is closed. C-30

175 Code means the Internal Revenue Code of 1986, as amended, and all regulations promulgated thereunder. Completion Date means the date of completion of the acquisition and construction of the Project, as that date shall be certified as provided under the heading Completion of the Project and Disposition of Construction Fund Balance below. Construction Fund means the Hillsborough County Industrial Development Authority Hospital Revenue Bonds (Tampa General Hospital Project) Construction Fund created and so designated under the heading Creation of Construction Fund below. Consultant shall have the meaning ascribed to that term in the Master Indenture. Cost or cost as applied to the Project shall embrace, without intending thereby to limit or restrict any proper definition of such word under the Act, all costs of acquisition and construction and all obligations and expenses incurred by or on behalf of the Issuer or the Hospital with respect to the Project as set forth under the Trust Agreement and Section 4.03 of the Financing Agreement (relating to disbursements from Construction Fund). Costs of Issuance or Issuance Costs means all costs and expenses of issuance of the Bonds, including, but not limited to: (i) underwriters discount and fees; (ii) counsel fees, including, without limitation, bond counsel, and special tax counsel fees, as well as counsel fees for the Issuer or the Hospital related to the issuance of the Bonds; (iii) financial advisor fees related to the issuance of the Bonds; (iv) rating agency fees related to the issuance of the Bonds; (v) trustee fees and trustee counsel fees related to the issuance of the Bonds; (vi) paying agent and certifying and authenticating agent fees related to issuance of the Bonds; (vii) accounting fees and expenses related to the issuance of the Bonds; (viii) printing costs of the Bonds and of the preliminary and final official statements related to the issuance of the Bonds; (ix) costs incurred in connection with the required public approval process, including publication costs and costs of any public hearing associated with the financing proceedings; (x) costs of feasibility studies necessary to the issuance of the Bonds; and (xi) costs of any Credit Facility for the Bonds; provided, however, that for purposes of determining compliance with the limitation on the financing of Issuance Costs under the Code, Issuance Costs shall be limited to those costs treated as costs of issuance under Treasury Regulations (b). Credit Facility means any credit facility, credit enhancement facility or credit or reimbursement agreement or bond insurance, provided by or on behalf of a Member of the Obligated Group with one or more banks, insurance companies or other financing or lending institutions, or the letter of credit, line of credit or other credit enhancement to be issued as provided thereunder, permitting the advance of funds, the proceeds of which will be used to pay all or a part of the principal, interest and premium, if any, on the Bonds, as approved by subsequent ordinance or resolutions of the Issuer prior to the sale of any Series of Bonds secured by a Credit Facility. Default or Event of Default means any occurrence or event specified under the heading Events of Default below. Depositary means one or more other banks or trust companies designated by the Issuer that shall have qualified with all state and federal requirements concerning the receipt of Issuer funds. DTC means The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, and its successors and assigns. Escrow Deposit Trust Fund means the Escrow Deposit Trust Fund created under that certain Escrow Deposit Agreement between the Authority, the Hospital and The Bank of New York Mellon Trust Company, N.A., dated as of January 1, Escrow Obligations means any combination of the following: (i) Government Obligations, or (ii) non-callable, non-prepayable receipts, certificates or other similar documents evidencing ownership of future principal or interest payments due on Government Obligations which were stripped by the United States Department of Treasury and are held in a custody or trust account by a commercial bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than twenty-five million dollars ($25,000,000), or (iii) non-callable obligations issued by any state of the United States or any political subdivision, public instrumentality or public authority of any state, which obligations are (a) fully secured by and payable solely from Government Obligations, or (b) the time of investment, are rated AAA by S&P and Aaa by Moody s, or (iv) Resolution Funding Corp ( REFCORP ) bonds and strips. Event of Default shall have the meaning ascribed to that term under the heading Events of Default below. Federal Bankruptcy Code means the United States Bankruptcy Code, 11 U.S.C. Sections , as amended. Financing Agreement means the Financing Agreement dated as of the date of the Trust Agreement between the Issuer and the Obligated Group, as amended from time to time. Fiscal Year means any period of twelve (12) consecutive months adopted by the Hospital as its fiscal year for financial reporting purposes. Fitch means Fitch Ratings, Inc., a Delaware corporation, its successors and assigns, and if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Fitch shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer with the approval of the Hospital Agent by written notice to the Bond Trustee. C-31

176 Governing Body means the board of directors, board of trustees or similar body which, pursuant to law or charter documents, acts as the governing body of the particular Member of the Obligated Group. Government Obligations means (i) direct, non-callable obligations of the United States of America, or (ii) non-callable and non-prepayable obligations of agencies of the United States, the payment of the principal and interest on which when due are unconditionally guaranteed by the United States of America. Guaranty, guaranteed or similar words shall have the meaning ascribed to them in the Master Indenture. Holder means a person in whose name a Bond is registered in the registration books provided for in Sections 2.02 and 2.04 of the Trust Agreement (relating to form and number of bonds and authentication of bonds, respectively) and, if coupon bonds are subsequently issued under the provisions of the Trust Agreement, the bearer of any coupon bond not registered as to principal. Hospital means Florida Health Sciences Center, Inc., a Florida not-for-profit corporation, and any successor or successors thereto. Hospital Representative means the President and Chief Executive Officer or such other person designated by him. Indebtedness shall have the meaning ascribed to such term in the Master Indenture. Interest Payment Date means, with respect to the Bonds, the first day of October and the first day of April of each year, commencing April 1, Issuance Fund means the Hillsborough County Industrial Development Authority Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Issuance Fund created and so designated under the heading Issuance Fund below. Issuer means the Hillsborough County Industrial Development Authority, a governmental unit created pursuant to the Act, and its successors and assigns. Issuer Representative means a person designated at the time to act on behalf of the Issuer by a written instrument furnished to the Bond Trustee containing the specimen signature of such person and signed on behalf of the Issuer by the Chairman or the Secretary of the Issuer. Land means the lands on which the Operating Assets are located, as more particularly described in Exhibit B to the Master Indenture, together with easements appurtenant thereto, and such other lands and interests therein as may be added by the Hospital from time to time by supplemental trust agreement. Letter of Instructions means the Rebate Instructions being delivered by bond counsel concurrently with the delivery of the Bonds. Lien means any mortgage, pledge or lease of, security interest in or lien, charge, restriction or encumbrance on any Property of the Person involved including those in favor of, or which secures any obligation to, any Person other than a Member of the Obligated Group, or a capitalized lease under which a Member of the Obligated Group is lessee. Loan Payments means the payments required to be made by the Obligated Group pursuant to Obligation No. 3 and the Hospital pursuant to Section 3.03(a) of the Financing Agreement. Mandatory Amortization Requirement means the amount of money required to be applied in any given Bond Year to the redemption of a portion of the Term Bonds prior to their maturity. Master Indenture means the Master Trust Indenture, dated as of May 1, 2003, by and between the Hospital and The Bank of New York Trust Company of Florida, N.A., a national banking association, duly organized under the laws of the United States of America, having the authority to exercise corporate trust powers, as master trustee for the benefit of the owners from time to time of all indebtedness issued thereunder and secured thereby, as amended and supplemented from time to time in accordance with its terms. Master Trustee means the Master Trustee under the Master Indenture. Maturity Date means, when used with respect to any Bond, the date on which the principal of such Bond becomes due and payable as therein provided or provided under the Trust Agreement, whether at the stated maturity or by declaration of acceleration or call for redemption from Mandatory Amortization Requirements or otherwise. Member or Members means the Hospital and each additional Member which is added to and has not subsequently been removed from the Obligated Group pursuant to the Master Indenture. Moody s means Moody s Investors Service Inc., its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Moody s shall be deemed to refer to any other nationally recognized securities rating agency designated by the Hospital, with written notice to the Bond Trustee. C-32

177 Obligated Group means the Hospital and any other Member which may from time to time be added to and not removed from the Obligated Group pursuant to the terms of the Master Indenture. Obligated Group Representative means, initially, the Hospital and thereafter such other Member of the Obligated Group as may be so designated from time to time pursuant to the Master Indenture. Obligation shall have the meaning ascribed to that term in the Master Indenture. Obligation No. 3 means Obligation No. 3, issued, authenticated and delivered under the Master Indenture and Supplement No. 3 which was delivered to the Issuer as evidence of the Hospital s obligation to repay the Loan and which was assigned by the Issuer to the Bond Trustee as security for the Bonds. Officer s Certificate with reference to the Issuer means a certificate in writing signed by on behalf of the Issuer by the Chairman or the Secretary of the Issuer and with reference to the Hospital or any other Member of the Obligated Group means a certificate in writing signed by the Obligated Group Representative. Operating Assets means Operating Assets as defined in Section 1.01 of the Master Indenture. Opinion of Bond Counsel means a written opinion of counsel experienced in matters relating to the validity of, and the tax exemption of interest on, obligations of states and their political subdivisions, selected by the Issuer and reasonably acceptable to the Obligated Group. Opinion of Counsel means a written opinion of Counsel who may be (except as otherwise specifically provided in the Financing Agreement or the Trust Agreement) counsel for the Issuer or any Member of the Obligated Group and reasonably acceptable to the Bond Trustee. Outstanding or Bonds Outstanding or Outstanding Bonds means all Bonds which have been authenticated and delivered by the Bond Trustee under the Trust Agreement, except: (a) Bonds canceled after purchase in the open market or because of payment at or redemption prior to maturity; (b) Bonds for the payment or redemption of which cash funds or Governmental Obligations or any combination thereof shall have been theretofore irrevocably set aside in a special account with the Bond Trustee (whether upon or prior to the maturity or redemption date of any such Bonds) in accordance with the provisions of Article XIV of the Trust Agreement (relating to defeasance); provided, however, that, if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given, or waiver of such notice satisfactory in form to Bond Counsel shall have been filed with Bond Trustee; and (c) Bonds which are deemed paid pursuant to Section 5.05 of the Trust Agreement (relating to bonds called for redemption) or in lieu of which other Bonds have been authenticated under Section 2.08 of the Trust Agreement (relating to mutilated, destroyed or lost bonds). In determining whether the holders of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under the Trust Agreement, the Bonds owned by the Issuer, the Hospital or any Affiliate of the Hospital or the Issuer will be disregarded and deemed not to be Outstanding; provided, however, that for purposes of determining whether such request, demand, authorization, direction, notice, consent or waiver has been given, only Bonds which a Responsible Officer of the Bond Trustee actually knows to be so owned will be disregarded. Paying Agent means the Bond Trustee as the initial Paying Agent and any other Depositary designated by the Issuer in the Trust Agreement or by subsequent resolution, to serve as a Paying Agent or place of payment for the Bonds issued under the Trust Agreement that shall have agreed to arrange for the timely payment of the principal of, interest on and redemption premium, if any, with respect to the Bonds to the registered owners thereof, from funds made available therefor pursuant to the Trust Agreement, and any successors duly designated. Person means any natural person, firm, joint venture, association, partnership, business trust, corporation, public body, agency or political subdivision thereof or any other similar entity, including the Issuer and each Member of the Obligated Group. Primary Obligor means the Person who is primarily obligated on an Obligation which is guaranteed by another Person. Principal Account means the account in the Sinking Fund so designated under the heading Creation of Funds and Accounts below. Bonds. Project means the 2012 Project and, to the extent the context requires, the facilities financed or refinanced with proceeds of the Refunded Property means, when used in connection with a particular Person or group of Persons, any and all rights, titles and interests of such Person or group of Persons in and to any and all property whether real or personal, tangible or intangible, and wherever situated. Property, Plant and Equipment means all Property of the Members of the Obligated Group which is considered property, plant and equipment of such Members under generally accepted accounting principles. Qualified Investments means Qualified Investments as defined in the Master Indenture. C-33

178 Rating Agency means Fitch, Moody s, Standard & Poor s or such other entity as may then be providing a rating for the Bonds. Record Date means (i) when Bonds bear interest at a fixed rate, the close of business on the fifteenth (15th) day (whether or not a Business Day) of the month next preceding an interest payment date with respect to such Bonds, or (ii) when Bonds are in default, the close of business on a special record date for the payment of such defaulted interest established by the Bond Registrar not less than fifteen (15) days preceding such special record date. Redemption Account means the account in the Sinking Fund so designated under the heading Creation of Funds and Accounts below. Refunded Bonds means that portion of the Issuer s Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Series 2003A and Hospital Revenue Bonds (Tampa General Hospital Project) Series 2003B set forth in the Trust Agreement. Refunded Bonds Trustee means The Bank of New York Mellon Trust Company, N.A., as successor. Related Bonds shall have the meaning ascribed to that term in the Master Indenture; however, no Related Bond shall be entitled to a lien on any of the funds or accounts held by the Bond Trustee pursuant to the Trust Agreement. Required Payments means the payments required to be made by the Obligated Group pursuant to Obligation No. 3 and pursuant to Section 3.03(b) and (c) of the Financing Agreement (relating to Loan Payments). Responsible Officer means, when used with respect to the Bond Trustee, any vice president, assistant vice president, senior associate or other officer of the Bond Trustee within the corporate trust office specified in the Trust Agreement (or any successor corporate trust office) having direct responsibility for the administration of the Trust Agreement. Revolving Fund Account means the account created within the Construction Fund as so designated under the heading Creation of Construction Fund below. S&P means Standard & Poor s Ratings Services, a division of The McGraw-Hill Companies, a corporation organized and existing under the laws of the State of New York, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, S&P shall be deemed to refer to any other nationally recognized securities rating agency designated by the Hospital, with written notice to the Bond Trustee. Serial Bonds means the bonds of any series which are stated to mature in consecutive annual installments. Series means any portion of the Bonds of an issue authenticated and delivered in a single transaction, payable from substantially the same source of revenue and identified pursuant to the supplemental trust agreement authorizing such Bonds as a separate Series of Bonds, regardless of variations in maturity, interest rate, Mandatory Amortization Requirements or other provisions, and any Bonds thereafter authenticated and delivered in lieu of or in substitution of a Series of Bonds issued pursuant to the Trust Agreement. Sinking Fund means the Sinking Fund established under the heading Creation of Funds and Accounts below, which includes the Interest Account, the Principal Account and the Redemption Account. State means the State of Florida. Supplement No. 3 means Supplemental Indenture for Obligation No. 3 to the Master Indenture, by and among the Hospital and the Master Trustee, as master trustee under the Master Indenture which Supplement No. 3 authorizes the issuance of Obligation No. 3. Tax-Exempt Organization means any governmental unit, or a Person organized under the laws of the United States of America or any state thereof which is (i) an organization described in Section 501(c)(3) of the Code or is treated as an organization described in Section 501(c)(3) of the Code and is not a private foundation under Section 509(a) of the Code, and (ii) exempt from federal income taxes under Section 501(a) of the Code, or corresponding provisions of federal income tax laws from time to time in effect, except for income from an unrelated trade or business as defined in Section 513(a) of the Code. Term Bonds means bonds of any series, other than Serial Bonds, maturing on one principal maturity date and the principal of which is payable from Mandatory Amortization Requirements. Trust Estate means those rights and security interests described in the Granting Clauses set forth above, excluding Unassigned Rights. Unassigned Rights means the Issuer s rights: (i) to receive all notices, opinions, certificates, copies of documents and correspondence and evidence of certain actions by the Hospital required to be delivered to the Issuer under the Financing Agreement; (ii) to grant approvals and consents and make determinations when required under the Financing Agreement; (iii) to make requests for information and inspections where allowed under the Financing Agreement; (iv) to receive payments due the Issuer under Sections 3.01, 3.03(b) and 8.02 of the Financing Agreement; (v) conferred upon the Issuer in Section of the Financing Agreement, and (vi) to be indemnified pursuant to the Agreement, including, without limitation, rights of the Issuer under Sections 3.01, 6.05, 8.01, and of the Financing Agreement. Underwriter means, with respect to the Bonds, J.P. Morgan Securities LLC, as Senior Manager. C-34

179 Written Request, when used with reference to the Issuer, means a request in writing signed on behalf of the Issuer by the Chairman or the Secretary of the Issuer, or such other officer as may be designated by the Governing Body of the Issuer, and when used with reference to the Hospital or any other Member of the Obligated Group means a request in writing signed by the Obligated Group Representative. Yield means the yield on a particular obligation computed in accordance with Section 148(h) of the Code and, in the case of the Bonds, Treasury Regulations , or, in the case of an investment of proceeds of the Bonds, Treasury Regulations Project means the Project as described in Exhibit A to the Financing Agreement as may be amended from time to time. Defined Terms in Financing Agreement Incorporated by Reference. All terms used in the Trust Agreement in capitalized form and not otherwise defined in the Trust Agreement shall have the meanings ascribed to those terms in the Financing Agreement, and such definitions are incorporated into the Trust Agreement by reference. Revocation of Redemption Notice Notwithstanding any other provision of the Trust Agreement, if, on any day prior to the fifth (5th) Business Day preceding any date fixed for redemption of Bonds, the Hospital notifies the Bond Trustee in writing that the Hospital has elected to revoke its election to redeem such Bonds because it has determined that the source of money for such redemption specified in the notice given by the Hospital is not available or for any other reason, the Bonds shall not be redeemed on such date and any such notice of redemption mailed to the Holders shall be null and void. In such event, within five (5) Business Days after the date on which the Bond Trustee receives notice of such revocation, the Bond Registrar, at the direction of the Bond Trustee, shall cause a notice of such revocation in the name of the Bond Trustee to be mailed to all Holders owning such Bonds. Construction Fund Creation of Construction Fund. A special fund is created under the Trust Agreement with the Bond Trustee and designated Hillsborough County Industrial Development Authority Hospital Revenue Bonds (Tampa General Hospital Project) Construction Fund (the Construction Fund ), to the credit of which such deposits shall be made as are required by the provisions of Section 2.07 of the Trust Agreement. Any moneys received by the Bond Trustee from any other source for the acquisition, construction and installation of the Project shall be deposited to the credit of the Construction Fund and the applicable accounts therein created for such Project. There is created in the Construction Fund a separate account therein to be designated as the Revolving Fund Account for the purposes contemplated under the heading Prerequisites to Payment below. The moneys in the Construction Fund shall be held by the Bond Trustee in trust and, subject to the provisions under the heading Prerequisites to Payment below, shall be used to reimburse the applicable Member of the Obligated Group for, or applied directly to the payment of, the Cost of the Project, or for the purposes elsewhere specified in the Trust Agreement and, pending such application, shall be subject to a lien and charge in favor of the owners of the Bonds issued and outstanding under the Trust Agreement and in favor of the Bond Trustee for the further security of such owners, until paid out or transferred as provided in the Trust Agreement. All income and profits earned from the investment of funds held in the Construction Fund, less the Rebate Amount which shall be deposited into the Rebate Account, shall be retained in the Construction Fund to the extent needed for the purposes thereof and expended as set forth under this heading Construction Fund. Payments from Construction Fund. Payment of the Cost of the Project shall be made from the Construction Fund. All payments from the Construction Fund shall be subject to the provisions and restrictions set forth under this heading Construction Fund. Capitalized interest, if any, deposited in the Construction Fund with respect to a Series of Bonds shall be transferred, to the extent necessary, to the Interest Account to pay interest on such Series of Bonds. Prerequisites to Payment. Payments from the Construction Fund shall be made only in accordance with the provisions of the Financing Agreement, and the Bond Trustee is authorized and directed to apply the moneys in the Construction Fund in accordance therewith but only upon receipt of the statements, orders, certifications and other approvals required by Section 4.03 of the Financing Agreement (related to disbursements from Construction Fund) duly executed by the persons and in the manner provided for therein. Upon receipt of each requisition, the Bond Trustee shall pay the obligations set forth in such requisition or notice out of money in the Construction Fund, and each such obligation shall be paid by wire transfer or check signed by one or more officers or employees of the Bond Trustee designated for such purpose by the Bond Trustee. In making such payments the Bond Trustee conclusively may rely upon such requisitions. In addition to such payments, upon receipt of a requisition signed by the Hospital Representative, the Bond Trustee shall transfer from the Construction Fund to the Revolving Fund Account at one time or from time to time, a sum or sums aggregating not more than One Million Dollars ($1,000,000), exclusive of replenishments to the Revolving Fund Account as contemplated below. The requisition shall be in substantially the form attached to the Financing Agreement as Exhibit B ; provided, however, the Hospital shall not be required to attach an Exhibit A thereto or make any representations as to specific items of Costs then incurred, but rather shall state, prospectively, that it will use such funds only to pay Qualified Project Costs, other than costs of issuance of Bonds, that otherwise would comply with the representations contained in such requisition form. The Hospital may thereafter make withdrawals from the Revolving Fund Account by written notice to the Trustee specifying the amount of the withdrawal, but only to pay such Qualified Project Costs, up to the maximum amount on deposit therein. Such withdrawals shall reduce the amounts available thereunder, but the amounts available thereunder may be replenished (up to a maximum at any time of not to exceed $1,000,000) upon submission to the Bond Trustee of a fully completed requisition in the form of Exhibit B to the Financing Agreement, for such Qualified Project Costs so paid from the Revolving Fund Account, specifying the payee, the amount and the purpose by general classification of each payment from the Revolving Fund Account for which such reimbursement has been made, and otherwise complying with the requisition requirements for such Costs contained in the Trust Agreement and in the Financing Agreement. No item of cost paid from the Revolving Fund Account or used as a basis C-35

180 for the replenishment thereof shall be included in an item of cost in any other requisition delivered under the Trust Agreement. In making such payments and reimbursements the Bond Trustee may rely upon such requisitions as conclusive. Completion of the Project and Disposition of Construction Fund Balance. When the Project shall have been completed, which fact shall be evidenced to the Bond Trustee by an Officer s Certificate of the Hospital delivered to the Bond Trustee pursuant to Section 4.06 of the Financing Agreement (relating to establishment of the completion date of the Project), accompanied by an Opinion of Counsel to the effect that there are no mechanics, workers, repairmen s, architects, engineers, surveyors, carriers, laborers, contractors, or materialmen s liens on any property constituting a part of the Project on file in any public office where the same should be filed in order to be perfected against any part of the Project and that the time within which such liens can be filed has expired, the balance in the Construction Fund shall be applied by the Bond Trustee at the written direction of the Hospital for any purpose permitted by the Act which, in the opinion of nationally recognized bond counsel, shall not adversely affect the excludability from gross income for federal income tax purposes of interest on the Bonds. Revenues and Funds Covenants of the Issuer and the Bond Trustee. (a) The Issuer covenants and agrees that it will not take any action or do anything which is not authorized or permitted by the Trust Agreement, which may result in the termination of the Financing Agreement so long as any Bond is Outstanding; that it will fulfill its obligations and will, to the extent necessary, assist the Bond Trustee in requiring the Hospital to perform punctually the Hospital s duties and obligations under the Financing Agreement; that it will not terminate the Financing Agreement or cause it to be terminated except in strict accordance with the terms thereof and with the concurrence of the Bond Trustee; that it will promptly notify the Bond Trustee of any actual or alleged event of default or breach under the Financing Agreement, whether by the Hospital or the Issuer, of which it receives notice, and will further notify the Bond Trustee at least thirty (30) days before the proposed date of effectiveness thereof of any proposed termination or amendment of the Financing Agreement to which it is a party or is obligated to take affirmative action; that it will not execute or agree to any change, amendment modification of or supplement to the Financing Agreement except by supplemental contract duly executed by the Hospital and the Issuer and upon the further terms and conditions set forth in Article XV of the Trust Agreement; and that it will not agree to any abatement, reduction, abrogation, waiver, diminution or other modification in any manner or to any extent whatsoever of the obligation of the Hospital to pay the Total Required Payments and to meet its other obligations as provided in the Financing Agreement. (b) The Bond Trustee covenants and agrees that, as assignee of the Issuer s rights under the Financing Agreement, it will undertake to enforce to the extent reasonably practicable and necessary for and on behalf of the Holders the obligations of the Hospital to the Issuer and the Bond Trustee under the Financing Agreement. Creation of Funds and Accounts. Special funds are created under the Trust Agreement by the Bond Trustee and designated Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Series 2012A Sinking Fund (the Sinking Fund ) and Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Series 2012A Rebate Fund (the Rebate Fund ). There are created under the Trust Agreement three separate accounts in the Sinking Fund designated Interest Account, Principal Account and Redemption Account, respectively, and subaccounts within each such account shall be established for each Series of Bonds issued under the Trust Agreement. The moneys in each of said Fund and Accounts in the Sinking Fund shall be held by the Bond Trustee in trust and applied as provided in the Trust Agreement with respect to each said Fund and Account and, pending such application, shall be subject to a lien and charge in favor of the owners of the Bonds issued and outstanding under the Trust Agreement and the Bond Trustee until paid out or transferred as provided in the Trust Agreement. Pursuant to the Financing Agreement and the Master Indenture, prior to an Event of Default (as defined in the Master Indenture), the Hospital is required to pay directly to the Bond Trustee for deposit to the credit of the Sinking Fund, all Loan Payments payable by the Hospital in accordance with the Financing Agreement and the Master Indenture. After an Event of Default, all revenues are required to be deposited with the Master Trustee and applied in the order of priority provided therein. Except as otherwise provided in the Trust Agreement, all moneys received by the Bond Trustee under the Trust Agreement, either from the Hospital, the Master Trustee or the Issuer, shall be disposed of in the following order: (a) First to the credit of the Interest Account, until the amounts on deposit therein are equal to the interest due on the Bonds on the next Interest Payment Date. Deposits shall be increased or decreased to the extent required to pay interest coming due, after making allowance for any accrued and capitalized interest and taking into account prior deficiencies. (b) Then to the credit of the Principal Account, until the amounts on deposit therein are equal to principal payments due on the Bonds on the next principal payment in such Bond Year. (c) Then into the Redemption Account, beginning on the Business Day prior to the first Mandatory Amortization Requirements, an amount equal to the amount required to retire the Term Bonds to be called by mandatory redemption or to be paid at maturity on the next ensuing October 1 in accordance with the Mandatory Amortization Requirements therefor. (d) Then on October 1 of each year to the credit of the Rebate Fund the cumulative Rebate Amount from the date of issue of any Series of Bonds or the last date a payment of the Rebate Amount was due to the United States of America under the Code. (e) The Hospital shall pay to the Bond Trustee on the dates required such amounts as may be necessary to pay the fees, charges and expenses of the Bond Trustee as provided in the Trust Agreement and the Master Trustee as provided in the Master Indenture. C-36

181 All amounts received by the Bond Trustee as principal of or interest accruing on Bonds that have been accelerated as provided under the heading Acceleration of Maturities below, will be deposited in the Bond Fund and applied in accordance with the provisions under the heading Pro Rata Application of Funds below. If, after giving effect to the credits specified below, any installment of Loan Payments should be insufficient to enable the Bond Trustee to make the deposits required above, the Bond Trustee shall so notify the Hospital and request that each future installment of the Loan Payments be increased as may be necessary to make up any previous deficiency in any of the required payments and to make up any deficiency or loss in any of the above-mentioned accounts and funds. To the extent that investment earnings are credited to the Interest, Principal or Redemption Accounts in accordance with the provisions under the heading Investment of Monies below or amounts are credited thereto as a result of the application of Bond proceeds or a transfer of investment earnings on any other Fund or Account held by the Bond Trustee, or otherwise, future deposits to such accounts shall be reduced by the amount so credited, and the Loan Payments due from the Hospital following the date upon which such amounts are credited shall be reduced by the amounts so credited. All amounts received by the Bond Trustee as principal of or interest accruing on the Bonds to be redeemed as a result of a prepayment of any Obligation shall be deposited in the Redemption Account and Interest Account, respectively, when received. All amounts received by the Bond Trustee as redemption premiums shall be deposited in the Redemption Account when received. Alternative Method of Satisfying Mandatory Amortization Requirement. The Hospital may satisfy its obligations with respect to the Mandatory Amortization Requirements, on or before the 45th day next preceding each principal payment date on which Term Bonds are to be retired pursuant to the Mandatory Amortization Requirements, by delivering to the Bond Trustee for cancellation, Term Bonds of the Series and maturity required to be redeemed on such principal payment date in any aggregate principal amount desired. Upon such delivery, the Hospital will receive a credit against the amounts required to be deposited into the Redemption Account on account of such Term Bonds in an amount equal to 100% of the principal amount of any such Term Bonds so purchased and cancelled. Money Held in Trust; Unclaimed Funds. All money that the Bond Trustee shall have withdrawn from the Bond Fund or shall have received from any other source and set aside or transferred to the Bond Registrar for the purpose of paying any of the Bonds secured by the Trust Agreement, either at the maturity thereof or by purchase or call for redemption or for the purpose of paying any interest on the Bonds secured by the Trust Agreement, shall be held in trust for the respective Holders. Except as provided in the following paragraph, if any Bond is not presented for payment when the principal thereof becomes due, either at maturity or at the date fixed for redemption thereof, or otherwise, if funds sufficient to pay such Bond shall have been made available to the Bond Trustee and are held in a special account for the benefit of the owner or owners thereof, all liability of the Issuer or the Hospital to the owner thereof for the payment of such Bond shall forthwith cease, terminate and be completely discharged, and thereupon it shall be the duty of the Bond Trustee to hold such funds in such special account, without liability for interest thereon, for the benefit of the owner of such Bond for such period as shall be prescribed by law, who shall thereafter be obligated exclusively to such funds for any claim of whatever nature on his part under the Trust Agreement or on, or with respect to, said Bond. All moneys which the Bond Trustee shall have withdrawn from the Sinking Fund or shall have received from any other source and set aside for the purpose of paying any of the Bonds secured by the Trust Agreement, shall be held in trust for the respective registered owners of such Bonds. Any moneys which shall be so set aside or deposited by the Bond Trustee into such special account and which shall remain unclaimed by the owners of such Bonds for a period of five (5) years after the date on which such Bonds shall have become due and payable (or such shorter or longer period of time as may be specified in Florida Statutes, Section , as amended, as determined by the Hospital) shall upon request in writing be paid to the Hospital or to the extent required by law, to such officer, board or body as may then be entitled by law to receive the same, and thereafter, subject to the defense of any applicable statute of limitations, the owner of such Bonds shall look only to the Hospital or to such officer, board or body, as the case may be, for payment and then only to the extent of the amount so received without any interest thereon, and the Bond Trustee and any such party not receiving such funds shall have no responsibility with respect to such moneys. Depositaries of Moneys, Security for Deposits and Investment of Funds Deposits Constitute Trust Funds. All funds or other property which at any time may be owned or held in the possession of or deposited with the Bond Trustee under the provisions of the Trust Agreement shall be held in trust and applied only in accordance with the provisions of the Trust Agreement, and shall not be subject to lien or attachment by any creditor of the Issuer or the Bond Trustee. All funds or other property which at any time may be owned or held in the possession of or deposited with the Bond Trustee pursuant to the Trust Agreement and the Financing Agreement shall be continuously secured, for the benefit of the Issuer, the Hospital and the owners of the Bonds either (a) by lodging with a bank or trust company approved by the Bond Trustee, as custodian, with collateral security consisting of obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America having a market value (exclusive of accrued interest) not less than the amount of such deposit, or (b) in such other manner as may then be required or permitted by applicable state or federal laws and regulations regarding the security for, or granting a preference in the case of, the deposit of trust funds; but it shall not be necessary for the Bond Trustee to lodge such collateral security with any other bank or trust company, if it lodges such collateral security with its Trust Department as custodian, nor shall it be necessary for the Bond Trustee to give security for any moneys which shall be represented by investments in the obligations referred to under the heading Investment of Monies below, purchased under the provisions of this Article as an investment of such moneys. All moneys deposited with each Depositary shall be credited to the particular Fund or Account to which such moneys belong. C-37

182 Investment of Moneys. Moneys held for the credit of the Funds and Accounts created by the Trust Agreement (except for moneys held in a special account, for the payment of Bonds for which payment is due) shall be invested and reinvested at the Written Request of the Hospital Representative. Such investments or reinvestments shall mature not later than the respective dates, as estimated by the Hospital, that the moneys held for the credit of said Funds or Accounts will be needed for the purposes of such Funds or Accounts. The Written Request of the Hospital Representative shall specify the issuer or obligor, the type, principal amount, the interest rate and the maturity of each such requested investment of moneys. Obligations so purchased as an investment of moneys in any such Fund or Account shall be deemed at all times to be a part of such Fund or Account, and shall at all times, for the purposes of the Trust Agreement, be valued on each principal payment date at the market value thereof on the date of valuation. The Bond Trustee, at the written direction of the Hospital Representative or when required to pay debt service on the Bonds, shall sell at the best price obtainable any obligations so purchased whenever it shall be necessary or desirable to do so in order to provide moneys to meet any payment or transfer from such Funds or Accounts. The Bond Trustee shall not be liable or responsible for any loss resulting from any such investments or reinvestments made at the request of the Hospital Representative or made to meet payment or transfer obligations from Funds or Accounts. The Bond Trustee may conclusively rely upon the Hospital Representative s written instructions as to both the suitability and legality of all investments directed hereunder. Ratings of investments shall be determined at the time of purchase of such investments and without regard to ratings subcategories. The Bond Trustee shall have no responsibility to monitor the ratings of investments after the initial purchase of such investments. The Bond Trustee may make any and all such investments through its own investment department or that of its affiliates or subsidiaries, and may charge its ordinary and customary fees for such trades. In the absence of written investment instructions from a Hospital Representative, the Bond Trustee shall not be responsible or liable for keeping the moneys held by it hereunder fully invested. All income and profits derived from the investment of moneys in the Construction Fund shall be retained in such Fund and used for the purposes specified for such Fund. All income and profits derived from the investment of moneys in all other Funds and Accounts created by the Trust Agreement shall be retained in such Funds and Accounts to the extent necessary to make the amount then on deposit therein equal to the maximum amount required to be on deposit in such Funds and Accounts. Any balance remaining in or accruing to any such other Fund or Account shall be deposited upon receipt first into the Sinking Fund for use as provided in the Trust Agreement for said Fund and shall then be transferred to the Hospital to be used for any lawful purpose. Valuation. For the purpose of determining the amount on deposit in any Fund or Account Qualified Investments in which money in such Fund or Account is invested shall be valued at the lesser of (i) the cost of such Qualified Investments, and (ii) the market value of such obligations, exclusive of accrued interest, if any. For the purpose of determining the amount on deposit in any Fund or Account, Qualified Investments in which money in such Fund or Account is invested shall be valued as follows: (a) The value of the securities shall be computed on the basis of the closing bid price quoted by Interactive Data Systems, Inc.; or (b) the valuation of the securities shall be performed by a nationally recognized and accepted pricing service whose valuation method consists of the composite average of various bid price quotes on the valuation date; or (c) the valuation of the collateral shall be based on the lower of two dealer bids on the valuation date. The dealers or their parent holding companies must be rated at least investment grade by Fitch or Moody s. In addition, the dealers must be market makers in the securities being valued; (d) provided, however, that the valuation of certificates of deposit and bankers acceptances shall be the face amount thereof, plus accrued interest; and as to any investment not specified above, the value therefor shall be established by prior agreement between the Hospital and the Bond Trustee. The Bond Trustee shall value the Qualified Investments in the Funds and Accounts established under the Trust Agreement on the last day of each Fiscal Year. In addition, the Qualified Investments shall be valued by the Bond Trustee at any time requested by the Hospital on reasonable notice to the Bond Trustee (which period of notice may be waived or reduced by the Bond Trustee); provided, however, that the Bond Trustee shall not be required to value the Qualified Investments more than once in any calendar month. Covenant as to Arbitrage. The Issuer, to the extent within its control, and the Bond Trustee agree that money on deposit in any Fund or Account maintained in connection with the Series 2012A Bonds, whether or not such money was derived from the proceeds of the sale of the Series 2012A Bonds or from any other sources, will not be used in a manner that would cause the Series 2012A Bonds to be arbitrage bonds within the meaning of Section 148 of the Code and applicable regulations promulgated from time to time thereunder; provided, however, that the Issuer and the Bond Trustee shall have no obligation to pay any amounts necessary to comply with this covenant other than from money received from the Hospital. The Bond Trustee shall be deemed to have complied with the foregoing covenant and shall have no liability to the extent it follows the directions of the Hospital. In the event the Issuer is of the opinion that it is necessary to restrict or limit the yield on the investment of money held by the Bond Trustee pursuant to the Trust Agreement, or to use such money in a certain manner, in order to avoid the Series 2012A Bonds being considered arbitrage bonds within the meaning of Section 148 of the Code and the regulations thereunder as such may be applicable to the Series 2012A Bonds at such time, the Issuer may issue to the Bond Trustee a written certificate to such effect and appropriate instructions, in which event the Bond Trustee shall take such action as is necessary to restrict or limit the yield on such investment or to use such money in accordance with such certificate and instructions. Tax Exemption Covenant. The Issuer, to the extent within its control, covenants that it will not take any action which will, or fail to take any action which failure will, cause interest payable on the Series 2012A Bonds to become includable in the gross income of the Holders thereof for federal income tax purposes pursuant to the provisions of the Code and regulations promulgated thereunder from time to time; provided, however, that the C-38

183 Issuer shall have no obligation to pay any amounts necessary to comply with this covenant other than from money received by the Issuer from the Hospital for such purpose. Particular Covenants Covenant of Issuer as to Performance of Obligations. (a) The Issuer covenants that it will promptly pay, solely from the Total Required Payments and any other income and other moneys to the extent provided in the Trust Agreement, which are pledged by the Trust Agreement to the payment thereof in the manner and to the extent specified in the Trust Agreement, the principal of and the interest on all Bonds issued under the provisions of the Trust Agreement at the places, on the dates and in the manner provided in the Trust Agreement and in said Bonds, and any premium required for the retirement of said Bonds by purchase or redemption, according to the true intent and meaning thereof. (b) The Bonds and the obligations evidenced thereby shall not be deemed to constitute a general obligation or a debt, liability or obligation of the Issuer, Hillsborough County, the State of Florida, or any political subdivision thereof, or a pledge of the faith and credit of the Issuer, Hillsborough County, the State of Florida or any political subdivision thereof. The Issuer shall not be obligated to pay the Bonds, any interest thereon or any other obligations of the Issuer under the Trust Agreement except from the revenues and proceeds pledged therefor and from the collateral pledged as security therefor, and neither the faith and credit nor the taxing power of Hillsborough County, the State of Florida or any political subdivision thereof is pledged to pay the principal of or the interest on the Bonds or any other obligations of the Issuer under the Trust Agreement. Neither Hillsborough County, nor the State of Florida, nor any political subdivision thereof shall be directly, indirectly or contingently obligated to levy or to pledge any form of taxation whatever for the payment of the Issuer s obligations under the Trust Agreement or make any appropriation for their payment. The Issuer has no taxing powers. List of Bondholders. At reasonable times and under reasonable regulations established by the Bond Registrar, the Obligated Group and the registered owners (or designated representatives thereof) or fifteen percent (15%) or more of the Obligations may request and obtain from the Bond Registrar a list of the names and addresses of the registered holder of the Bonds as they appear on the registered books maintained by the Bond Registrar. Covenants against Liens. The Issuer covenants that it will not create or suffer to be created any Lien upon its interest in the Financing Agreement or any income or revenues it derives therefrom (other than such as may be imposed by execution of the Financing Agreement or any supplement thereto or any amendment thereof) or upon any other moneys pledged under the Trust Agreement, except the Lien of the Trust Agreement and the Bonds secured by the Trust Agreement. Events of Default; Remedies Events of Default. Each of the following events is declared an Event of Default, that is to say if: (a) payment of the principal or premium on any Bond or the making of any deposits into the Principal Account or the Redemption Account in the Sinking Fund, of or for any of the Bonds shall not be made when the same shall become due and payable, either at maturity (whether by acceleration or otherwise) or on required payment dates by proceedings for redemption or otherwise; or (b) payment of any installment of interest or the making of any deposit into the Interest Account shall not be made when the same shall become due and payable; or (c) the Issuer shall for any reason be rendered incapable of fulfilling its obligations under the Trust Agreement to the extent that the payment of, or security for, the Bonds would be materially adversely affected, and such conditions shall continue unremedied for a period of thirty (30) days after the Issuer becomes aware of such conditions; provided, however, that if said failure be such that it cannot be corrected within thirty (30) days after the receipt of such notice but is reasonably subject to cure within a reasonable time, it shall not constitute an Event of Default if corrective action is instituted within such 30-day period and diligently pursued until the Event of Default is corrected; or (d) an order or decree shall be entered, with the consent or acquiescence of the Issuer, appointing a receiver or receivers of the Issuer and of the Total Required Payments or any other income to be derived from the Financing Agreement to the Hospital, or the filing of a petition by the Issuer for relief under federal bankruptcy laws or any other applicable law or statute of the United States of America or the State which shall not be vacated or discharged or stayed on appeal within ninety (90) days after the entry thereof; or (e) any proceedings shall be instituted, with the consent or acquiescence of the Issuer, for the purpose of effecting a composition between the Issuer and its creditors or for the purpose of adjusting the claims of such creditors, pursuant to any federal or state statutes enacted as of the date of the Trust Agreement or thereafter, if the claims of such creditors are under any circumstances payable from the Total Required Payments or any other income to be derived by the Issuer pursuant to the Financing Agreement; or (f) the Master Trustee shall have declared the aggregate principal amount of the Obligations and all interest due thereon immediately due and payable in accordance with Section 5.02 of the Master Indenture (relating to rights of the Master Trustee); or (g) an Event of Default under the Financing Agreement shall have occurred; or (h) the Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in the Trust Agreement on the part of the Issuer to be performed the nonperformance of which would have a material adverse effect on the payment of the Bonds, and such default shall continue for thirty (30) days after written notice specifying such default and C-39

184 requiring the same to be remedied shall have been given to the Issuer and the Hospital (and, if different, to the Obligated Group Representative) by the Bond Trustee, which may give such notice in its discretion and shall give such notice at the written request of the registered owners of not less than twenty-five percent (25%) of the Bond Obligation then outstanding; provided, however, that if said failure be such that it cannot be corrected within thirty (30) days after the receipt of such notice but is reasonably subject to cure within a reasonable time, it shall not constitute an Event of Default if corrective action is instituted within such 30-day period and diligently pursued until the Event of Default is corrected. Acceleration of Maturities. Upon the happening and continuance of any Event of Default specified above, then and in every such case the Bond Trustee may, and upon the written request of the owners of not less than twenty-five percent (25%) of the Bond Obligation then outstanding shall, by a notice in writing to the Issuer and the Hospital (and, if different, to the Obligated Group Representative), declare the principal of all of the Bonds then outstanding (if not then due and payable) to be due and payable immediately, and upon such declaration the same shall become and be immediately due and payable; provided, however, that if at any time after the principal of the Bonds shall have been so declared to be due and payable, and before the entry of final judgment or decree in any suit, action or proceeding instituted on account of such default, or before the completion of the enforcement of any other remedy under the Trust Agreement, moneys shall have accumulated in the appropriate Funds and Accounts created under the Trust Agreement sufficient to pay the principal of all matured Bonds and all arrears of interest, if any, on all Bonds then outstanding (except the principal of any Bonds not then due and payable by their terms and the interest accrued on such Bonds since the last interest payment date), and the charges, compensation, expenses, disbursements, advances and liabilities of the Bond Trustee and all other amounts then payable by the Issuer under the Trust Agreement shall have been paid or a sum sufficient to pay the same shall have been deposited with the Bond Trustee, and every other default known to the Bond Trustee in the observance or performance of any covenant, condition, agreement or provision contained in the Bonds or in the Trust Agreement (other than a default in the payment of the principal of such Bonds then due and payable only because of declaration under this Section) shall have been remedied to the satisfaction of the Bond Trustee, then and in every such case the Bond Trustee may, and upon the written request of the owners of not less than fifty-one percent (51%) of the Bond Obligation not then due and payable by the terms of the Bonds and then outstanding shall, by written notice to the Issuer and the Hospital (and, if different, to the Obligated Group Representative), rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent default or impair any right consequent thereon provided that: (a) money shall have accumulated in the Interest Account, the Principal Account and the Redemption Account sufficient to pay the principal of all matured Bonds and all arrears of interest, if any, upon Bonds then Outstanding (except the principal of any Bonds not then due except by virtue of such declaration and the interest accrued on such Bonds since the last Interest Payment Date but not otherwise due and payable); (b) all amounts then payable by the Issuer under the Trust Agreement shall have been paid or a sum sufficient to pay the same shall have been deposited by the Issuer with the Bond Trustee, and (c) every other default in the observance or performance of any covenant, condition, agreement or provision contained in the Bonds or in the Trust Agreement (other than a default in the payment of the principal of such Bonds then due only because of a declaration under this Section) shall have been remedied and, in the case of an Event of Default under subsection (f) under the heading Events of Default; Remedies above, any acceleration of Obligation No. 3 shall have been rescinded in accordance with the Master Indenture. Enforcement of Remedies. Upon the happening and continuance of any Event of Default, then and in every such case the Bond Trustee may proceed and upon the written request of the owners of not less than twenty-five percent (25%) of the Bond Obligation then outstanding under the Trust Agreement shall proceed, subject to the provisions under the heading Acceleration of Maturities above or Bond Trustee Entitled to Indemnity below, to protect and enforce its rights and the rights of the Bondholders under the laws of the State of Florida, including the Act, and under the Trust Agreement, the Financing Agreement or the Master Indenture by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board, body or officer having jurisdiction, either for the specific performance of any covenant or agreement contained in the Trust Agreement or in aid of execution of any power in the Trust Agreement granted or for the enforcement of any proper legal or equitable remedy, as the Bond Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights. In the enforcement of any remedy against the Issuer under the Trust Agreement the Bond Trustee shall be entitled to institute such action against the Issuer necessary to compel performance of any agreement of the Issuer under the Trust Agreement and otherwise, with respect to any action against the Issuer, to recover solely from moneys in the Funds and Accounts established by the Trust Agreement, but in no other manner shall the Issuer be deemed liable for any other damages of whatsoever kind or nature. When the Bond Trustee incurs costs or expenses (including legal fees, costs and expenses) or renders services after the occurrence of an Event of Default, such costs and expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law. Pro Rata Application of Funds. Anything in the Trust Agreement to the contrary notwithstanding, if at any time the moneys in the Sinking Fund shall not be sufficient to pay the principal of or the interest on the Bonds as the same become due and payable (either by their terms or under Acceleration of Maturities above), such money, together with any money then available or thereafter becoming available for such purposes, or to redeem particular Bonds theretofore called for redemption, whether through the exercise of the remedies provided for under this heading Events of Default; Remedies or otherwise, subject to the expenditure of moneys to make any payments required to permit the Issuer to comply with any requirement or covenant in the Trust Agreement to cause interest on the Bonds not to become includable in the gross income of the Holders thereof for federal income tax purposes, shall be applied, after the payment of any compensation, expenses (including reasonable attorneys fees, costs and expenses), disbursements and advances then owing to the Bond Trustee, as follows: first: if the principal of the Bonds shall not have become due and payable, to the payment of all installments of interest then due, in the order of the maturity of the installments of such interest; C-40

185 second: if the principal of less than all of the Bonds shall have become due and payable, first to the payment of all installments of accrued interest in the order of the maturity of the installments thereof, and next to the payment of interest at the respective rates specified in such Bonds on overdue principal, and next to the payment of the principal of Bonds then due in order of their due dates; third: if the principal of all Bonds shall have become due and payable by declaration, redemption or otherwise, first to the payment of all interest due on the Bonds and unpaid, and next to the payment of interest at the respective rates specified in the Bonds on overdue principal, and next to the payment of the principal of the Bonds in order of their due date; fourth: if the principal of all Bonds shall have been declared due and payable and if such declaration shall thereafter have been rescinded and annulled as provided under the heading Acceleration of Maturities above, then, subject to the provisions of paragraph third of this Section in the event that the principal of all Bonds shall later become due and payable or be declared due and payable, the money then remaining in and thereafter accruing to the Interest Account, Principal Account, and the Redemption Account shall be applied in accordance with the provisions of paragraph first or second of this Section, whichever is then applicable; provided, however, that all payments to be made to the Holders pursuant to this Section shall be made ratably to the persons entitled thereto, without discrimination or preference, and provided further, however, that if there are insufficient funds to make any payment of interest or principal then due, the amount to be paid in respect of principal or interest, as the case may be, on each Bond shall be determined by multiplying the aggregate amount of the funds available for such payment by a fraction, the numerator of which shall be the amount then due as principal or interest, as the case may be, on each Bond and the denominator of which shall be the aggregate amount due in respect of all interest or all principal, as the case may be, on all Bonds. Whenever money is to be applied by the Bond Trustee pursuant to the provisions of this Section, the Bond Trustee shall incur no liability whatsoever to the Issuer, any Holder, or any other person for any delay in applying any such money so long as the Bond Trustee acts with reasonable diligence, having due regard for the circumstances, and ultimately applies the same in accordance with such provisions of the Trust Agreement as may be applicable at the time of application by the Bond Trustee. Whenever the Bond Trustee shall apply such money, it shall fix the date upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Bond Trustee shall give such notice as it may deem appropriate of the fixing of any date, and shall not be required to make payment to the Holder of any Bonds until such Bonds shall be surrendered to the Bond Trustee for appropriate endorsement, or for cancellation if fully paid. Directions to Bond Trustee as to Remedial Proceedings. Anything in the Trust Agreement to the contrary notwithstanding, the holders of a majority of the Bonds then outstanding under the Trust Agreement shall have the right, subject to the provisions under the heading Bond Trustee Entitled to Indemnity below, by an instrument or concurrent instruments in writing executed and delivered to the Bond Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Bond Trustee under the Trust Agreement other than acceleration as provided under the heading Acceleration of Maturities above; provided, however, that such direction shall not be otherwise than in accordance with law or the provisions of the Trust Agreement, and that the Bond Trustee shall have the right to decline to follow any such direction which in the opinion of the Bond Trustee would be unjustly prejudicial to Bondholders not parties to such direction, and provided, further, that the Bond Trustee shall have the right to decline to follow any such direction if the Bond Trustee in good faith shall determine that the proceeding so directed would involve it in personal liability, and provided, further, that nothing in this Section shall impair the right of the Bond Trustee, in its discretion, to take any other action under the Trust Agreement which it may deem proper and which is not inconsistent with such direction by the Holders. With respect to actions which may be taken by Holders of less than a majority in aggregate principal amount of Bonds pursuant to any provision of the Trust Agreement, if the Bond Trustee receives conflicting directions, then the directions of Holders of the greater percentage of aggregate principal amount of Bonds shall control, subject to the exceptions described in the immediately preceding paragraph. Restrictions on Actions by Individual Bondholders. No Bondholder shall have any right to institute any suit, action or proceeding in equity or at law for the execution of any trust under the Trust Agreement or for any other remedy under the Trust Agreement unless such Bondholder previously shall have given to the Bond Trustee written notice of the event of default on account of which such suit, action or proceeding is to be taken, and unless the holders of not less than twenty-five percent (25%) of the Bonds then outstanding shall have made written request of the Bond Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Bond Trustee a reasonable opportunity either to proceed to exercise the powers above granted or to institute such action, suit or proceeding in its or their name, and unless, also, there shall have been offered to the Bond Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, including the reasonable fees, costs and expenses of its attorneys (including fees, costs and expenses on appeal and in insolvency proceedings), and the Bond Trustee shall have refused or neglected to comply with such request within a reasonable time; and such notification, request and offer of indemnity are declared in every such case, at the option of the Bond Trustee, to be conditions precedent to the execution of the powers and trusts of the Trust Agreement or for any other remedy under the Trust Agreement. It is understood and intended that no one or more owners of the Bonds secured by the Trust Agreement shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of the Trust Agreement, or to enforce any right under the Trust Agreement, except in the manner provided in the Trust Agreement, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner provided in the Trust Agreement and for the benefit of all owners of the outstanding Bonds, and that any individual rights of action or any other right given to one or more of such owners by law are obligated by the Trust Agreement to the rights and remedies provided in the Trust Agreement. Nothing contained in the Trust Agreement, however, shall affect or impair the right of any Bondholder, individually, to enforce the payment of the principal of and interest on his Bond at and after the maturity thereof, at the time, place, from the source and in the manner provided in the Trust Agreement. C-41

186 Concerning the Bond Trustee and Bond Registrar Notwithstanding anything provided under this heading below to the contrary, if a Credit Facility is then in effect, no resignation or removal of the Bond Trustee shall be effective until a successor Bond Trustee has been appointed and the Credit Facility has been transferred to such successor Bond Trustee. Acceptance of Trusts; Performance of Duties. The Bond Trustee accepts and agrees to execute the trusts imposed upon it by the Trust Agreement, but only upon the terms and conditions set forth under this heading Concerning the Bond Trustee and Bond Registrar and subject to the provisions of the Trust Agreement, to all of which the parties to the Trust Agreement and the respective Bondholders agree. The Bond Trustee, prior to the occurrence of an event of default and after the curing of all events of default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in the Trust Agreement, and no implied covenants or obligations should be read into the Trust Agreement against the Bond Trustee. If any event of default under the Trust Agreement shall have occurred and be continuing, the Bond Trustee shall exercise such of the rights and powers vested in it by the Trust Agreement and shall use the same degree of care as a prudent person would exercise or use in the circumstances in the conduct of such prudent person's own affairs. All funds created by the Trust Agreement shall be held by the Bond Trustee (except as otherwise provided in the Trust Agreement) and administered as trust funds. Where the Trust Agreement requires the Issuer or the Hospital or the Obligated Group to obtain the acceptance, consent or approval of the Bond Trustee, such acceptance, consent or approval shall not be unreasonably withheld. Bond Trustee Entitled to Indemnity. The Bond Trustee shall be under no obligation to institute any suit, or to take any remedial proceeding under the Trust Agreement or under the Financing Agreement, or to enter any appearance or in any way defend in any suit in which it may be made defendant, or to take any steps in the execution of the trust created by the Trust Agreement or in the enforcement of any rights and powers under the Trust Agreement or under the Financing Agreement, until it shall be indemnified to its satisfaction against any and all costs and expenses, outlays and counsel fees, costs and expenses and other reasonable disbursements, and against all liability. Nothing contained in the foregoing sentence shall be construed as imposing on the Issuer any obligation to reimburse the Bond Trustee for costs and expenses, outlays and counsel fees and other disbursements arising out of or related to any acts of negligence or willful misconduct of the Bond Trustee. Limitation on Obligations and Responsibilities. The Bond Trustee shall be under no obligation to effect or maintain insurance or to renew any policies of insurance or to inquire as to the sufficiency of any policies of insurance carried by the Issuer or the Obligated Group, or to report, or make or file claim or proof of loss for, any loss or damage insured against or which may occur. The Bond Trustee shall have no responsibility in respect of the validity or sufficiency of the Trust Agreement, or the validity or sufficiency of the security provided under the Trust Agreement, or except as to the authentication of the Trust Agreement by the Bond Trustee, in respect of the validity of the Bonds or the due execution or issuance thereof. The permissive right of the Bond Trustee to do things enumerated in this Indenture shall not be construed as a duty and the Bond Trustee shall not be answerable for other than its negligence or willful default. The Bond Trustee shall have no responsibility with respect to any information, statement or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds and shall have no responsibility for compliance with any state or federal securities laws in connection with the Bonds. None of the provisions of this Indenture shall require the Bond Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties under the Trust Agreement, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it. The Bond Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; hurricanes or other storms; wars; terrorism; similar military disturbances; sabotage; epidemic; pandemic; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications services; accidents; labor disputes; acts of civil or military authority or governmental action; it being understood that the Bond Trustee shall use commercially reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as reasonably practicable under the circumstances. Limitation on Liability. The Bond Trustee shall not be liable or responsible because of the failure of the Issuer or the Obligated Group or any of its employees or agents to make any collections or deposits or to perform any act required of them or because of the loss of any moneys arising through the insolvency or the act or default or omission of any other Depositary other than itself in which such moneys shall have been deposited under the provisions of the Trust Agreement. The Bond Trustee shall not be responsible for the application of any of the proceeds of the Bonds or any other moneys deposited with it and paid out, withdrawn or transferred in accordance with the provisions of the Trust Agreement. The immunities and exemptions from liability of the Bond Trustee under the Trust Agreement shall extend to its directors, officers, employees and agents. The Bond Trustee may perform the duties required of it under the Trust Agreement by or through officers, agents, employees or attorneys. None of the provisions of the Trust Agreement shall be construed to relieve the Bond Trustee from liability for its own negligent action, negligent failure to act, or willful misconduct, except that (a) the Bond Trustee shall not be liable for any error of judgment made in good faith by any one of its officers, agents or employees, unless it shall be established that the Bond Trustee was negligent in ascertaining the pertinent facts; (b) the Bond Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the owners of not less than a majority of the Bond Obligation relating to the time, method and place of conducting any proceeding for any remedy available to the Bond Trustee or exercising any trust or power conferred upon the Bond Trustee under the provisions of the Trust Agreement; and (c) the Bond Trustee may consult with its counsel and shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any counsel, accountants or skilled persons of generally accepted competence selected by it with reasonable care. C-42

187 Compensation of Bond Trustee. Subject to the provisions of any contract between the Issuer and the Bond Trustee relating to the compensation of the Bond Trustee, the Issuer shall cause the Hospital to pay the Bond Trustee fees and charges in accordance with Sections 3.03(b) (relating to the loan repayments), 8.01 (relating to indemnification of the Issuer) and 8.02 (relating to payment of costs upon a default) of the Financing Agreement. [The Bond Trustee shall in no event have a lien upon and security interest in any moneys or other assets which shall secure the payment of the Bonds.] Annual Statement. It shall be the duty of the Bond Trustee each Bond Year to file with the Issuer and the Hospital a statement setting forth with respect to the preceding Bond Year: (a) the amount withdrawn or transferred by it and the amount deposited with it on account of each Fund and Account held by it under the provisions of the Trust Agreement; (b) (c) the amount on deposit with it at the end of such Bond Year to the credit of such Fund and Account; a brief description of all obligations held by it as an investment of moneys in each such Fund and Account; (d) the amount applied to the purchase or redemption of Bonds under the provisions of Section 7.04 of the Trust Agreement (relating to application of monies in the Redemption Account) and a description of the Bonds or portions of Bonds so purchased or redeemed; and (e) any other information which the Issuer or the Obligated Group Representative may reasonably request in writing. All records and files pertaining to the Operating Assets in the custody of the Bond Trustee shall be open at all reasonable times during the normal business hours of the Bond Trustee to the inspection of the Issuer, each Member of the Obligated Group, the Bondholders, and their agents and representatives. C-43

188 Reliance on Certificates. In case at any time it shall be necessary or desirable for the Bond Trustee to make an investigation respecting any fact preparatory to taking or not taking any action or doing or not doing anything as such Bond Trustee, and in any case in which the Trust Agreement permits the taking of any action, the Bond Trustee may conclusively rely upon any certificate required or permitted to be filed with it under the provisions of the Trust Agreement, and any such certificate shall be evidence of such fact to protect the Bond Trustee in any action that it may or may not take or in respect of anything it may or may not do, in good faith, by reason of the supposed existence of such fact. Except as otherwise provided in the Trust Agreement, any request, notice or other instrument from the Issuer to the Bond Trustee shall be deemed to have been signed by the proper party or parties if signed by the Chairman of the Issuer, or if signed by the Obligated Group Representative with respect to the Obligated Group or the Hospital Representative with respect to the Hospital, and the Bond Trustee may accept a certificate signed by such parties as to any action taken by the Issuer, the Hospital, or the Obligated Group, as the case may be. Notice of Defaults. Except in the case of a default in the payment of principal of (or premium, if any) or interest on the Bonds, the Bond Trustee shall not be obligated to take notice or be deemed to have notice of any event of default under the Trust Agreement except as to the funds held by it or other defaults actually known to a Responsible Officer unless specifically notified in writing of such event of default by any Bondholder, the Issuer, any Member of the Obligated Group or the Underwriter. Within thirty (30) days after the occurrence of any Event of Default under the Trust Agreement, the Bond Trustee shall transmit by mail to the registered owners of the Bonds and to the Underwriters notice of such Event of Default actually known to the Bond Trustee; provided, however, that except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Bonds, the Bond Trustee shall not be required to deliver such notice if and so long as the Bond Trustee in good faith determines that the withholding of such notice will not be detrimental to the interests of the Bondholders. Bond Trustee as Bondholder. The bank or trust company acting as Bond Trustee pursuant to the Trust Agreement, and its directors, officers, employees or agents, may in good faith buy, sell, own, hold and deal in any of the Bonds issued under and secured by the Trust Agreement and may join in any action that any Bondholder may be entitled to take with like effect as if such bank or trust company were not the Bond Trustee pursuant to the Trust Agreement and each Bondholder, by the purchase of any of the Bonds, shall be deemed to have expressly assented to the provisions of the Trust Agreement. Reliance on Certain Documents. The Bond Trustee may conclusively rely upon, shall be fully protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of the Trust Agreement, upon any resolution, order, notice, request, consent, waiver, certificate, statement, affidavit, requisition, bond or other paper or document that it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper board or person, or to have been prepared and furnished pursuant to any of the provisions of the Trust Agreement, or upon the written opinion of any attorney, engineer, consultant or accountant believed by the Bond Trustee to be qualified in relation to the subject matter, and the Bond Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matter referred to therein, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Bond Trustee shall not be bound to recognize any person as an owner of any Bond or to take any action at his request unless proof of ownership of such Bond satisfactory to the Bond Trustee has been exhibited to or deposited with the Bond Trustee. Resignation. The Bond Trustee or the Bond Registrar may resign and thereby become discharged from the trusts and duties created by the Trust Agreement, by giving sixty (60) days prior written notice to the Issuer and the Hospital, and in the case of the Bond Trustee only, by giving written notice to the Bondholders in the manner provided in the Trust Agreement, not less than thirty (30) days before such resignation is to take effect, but such resignation shall take effect immediately upon the appointment of a new Bond Trustee or Bond Registrar under the Trust Agreement, if such Bond Trustee or Bond Registrar shall be appointed before the time limited by such notice and shall then accept the trusts and duties set forth in the Trust Agreement. Removal of Bond Trustee. The Bond Trustee may be removed at any time: (a) by an instrument or concurrent instruments in writing, executed by the owner or owners of not less than a majority of the Bonds then outstanding and secured by the Trust Agreement and filed with the Issuer and the Hospital; or (b) so long as no Event of Default shall have occurred and be continuing, by an instrument in writing executed by the Hospital Representative, and notice given in the manner provided in the Trust Agreement not less than sixty (60) days before such removal is to take effect as stated in said instrument or instruments; provided, however, that in the case of clause (a) above, if there shall be filed with the Issuer and the Hospital, prior to the date on which such removal is so stated to take effect an instrument or concurrent instruments in writing, executed by the owner or owners of a greater amount of the Bonds secured by the Trust Agreement and then outstanding than the amount of such Bonds held by the owner or owners signing such removal instrument or instruments, objecting to the removal of the Bond Trustee, then such removal instrument or instruments shall be ineffective and the Bond Trustee shall not be removed. A photographic copy of any instrument filed with the Issuer and the Hospital under the provisions of this paragraph shall be delivered by the Issuer to the Bond Trustee and shall be certified to be a true and correct copy of the original. The Bond Trustee may also be removed at any time for any breach of trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provisions of the Trust Agreement with respect to the duties and obligations of the Bond Trustee, or for failing to remain qualified as provided under the succeeding heading by any court of competent jurisdiction upon the application of the Hospital, the Issuer or the owner or owners of not less than twenty-five percent (25%) of the Bonds then outstanding under the Trust Agreement. Appointment and Qualification of Successor Bond Trustee. If at any time after the execution of the Trust Agreement the Bond Trustee shall resign, be removed, be dissolved or otherwise become incapable of acting, or the bank or trust company acting as Bond Trustee shall be taken over by any governmental official, agency, department or board, the position of Bond Trustee shall thereupon become vacant. If at any time moneys on deposit with the Bond Trustee shall not be secured as required under the heading Deposits Constitute Trust Funds above and the Bond Trustee shall have been given thirty (30) days advance written notice thereof without having cured the same, a vacancy in the position of Bond Trustee may be declared by a resolution duly passed by the Issuer. If the position of Bond Trustee shall become vacant for any of the foregoing reasons or for any other C-44

189 reason, the Hospital shall recommend, and the Issuer shall appoint, a Bond Trustee to fill such vacancy; provided, however, that the resignation or removal of the Bond Trustee shall not affect the rights of the Bond Trustee under the above headings Bond Trustee Entitled to Indemnity and Compensation and Indemnification of Bond Trustee. If no appointment of a successor Bond Trustee shall be made pursuant to the foregoing provisions of this Section within sixty (60) days of notice of such resignation or removal, the owner of any Bond outstanding under the Trust Agreement or any retiring Bond Trustee may apply to any court of competent jurisdiction to appoint a successor Bond Trustee. Such court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Bond Trustee. Any successor Bond Trustee appointed pursuant to this Section shall have the qualifications provided under the succeeding heading. Qualifications of Bond Trustee. Any Bond Trustee appointed and serving under the Trust Agreement shall be a bank or trust company duly and legally authorized and empowered to exercise the corporate trust powers provided in the Trust Agreement, and subject to examination by federal or state authority, of good standing and having a combined capital and surplus aggregating not less than fifty million dollars ($50,000,000). If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority referred to above, then for the purposes of this Section the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of conditions so published. If at any time the Bond Trustee shall cease to be eligible in accordance with the provisions of this Section, the Bond Trustee shall resign immediately in the manner and with the effect specified under the above heading Resignation. Execution of Instruments by Bondholders and Proof of Ownership of Bonds Execution of Instruments by Bondholders; Proof of Ownership of Bonds. Any request, direction, consent or other instrument in writing required or permitted by the Trust Agreement to be signed or executed by Bondholders may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Bondholders in person or by agent appointed by an instrument in writing. Proof of the execution of any such instrument and of the ownership of Bonds shall be sufficient for any purpose of the Trust Agreement, and shall be conclusive in favor of the Bond Trustee with regard to any action taken by it under such instrument, if the fact and date of the execution by any person of any such instrument may be proved by the verification of any officer in any jurisdiction who, by the laws thereof, has power to take affidavits within such jurisdiction, to the effect that such instrument was subscribed and sworn to before him, or by an affidavit of a witness to such execution. The ownership of Bonds shall be proved by the registration books kept by the Bond Registrar under the provisions of the Trust Agreement. None of the provisions contained in this Section, however, shall be construed as limiting the Bond Trustee to such proof, it being intended that the Bond Trustee may accept any other evidence of the matters stated in the Trust Agreement which to it may seem sufficient. Any request or consent of the owner of any Bond shall bind every future owner of the same Bond in respect of anything done by the Bond Trustee in pursuance of such request or consent. Notwithstanding any of the foregoing provisions of this Section, the Bond Trustee shall not be required to recognize any person as a Holder or to take any action at his request unless such Bonds shall be deposited with it. Preservation of Information; Communications to Holders. (a) The Bond Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders received by the Bond Trustee from the Bond Registrar. (b) If three or more Holders (referred to as applicants ) apply in writing to the Bond Trustee and furnish reasonable proof that each such applicant has owned a Bond for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders with respect to their rights under the Trust Agreement or under the Bonds and is accompanied by a copy of the form of communication which such applicants propose to transmit, then the Bond Trustee shall, within five Business Days after the receipt of such application, at its election, either (1) afford such applicants access to the information preserved at the time by the Bond Trustee in accordance with subsection (a) above; or (2) inform such applicants as to the approximate number of Holders whose names and addresses appear in the information preserved at the time by the Bond Trustee in accordance with subsection (a) above, and as to the approximate cost of mailing to such Holders the form of communication, if any, specified in such application. If the Bond Trustee shall elect not to afford such applicants access to such information, the Bond Trustee shall, upon the written request of such applicants, mail to each Holder whose name and address appears in the information preserved at the time by the Bond Trustee in accordance with subsection (a) above a copy of the form of communication which is specified in such request, with reasonable promptness after a tender to the Bond Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing. C-45

190 (c) Every Holder, by receiving and holding one or more Bonds, agrees with the Issuer and the Bond Trustee that neither the Issuer nor the Bond Trustee shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with subsection (b) above, regardless of the source from which such information was derived, and that the Bond Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under such subsection. Holders of Bonds Deemed Holders of Obligations. In the event that any request, direction or consent is required or permitted by the Master Indenture of the registered owners of Obligations issued thereunder, including Obligation No. 3, the Holders of Bonds then Outstanding shall be deemed to be registered owners of the Obligations which correspond to such Bonds for the purpose of any such request, direction or consent in the proportion that the aggregate principal amount of Bonds then Outstanding held by each such Holder of Bonds bears to the aggregate principal amount of all Bonds then Outstanding. The provisions under this heading Execution of Instruments by Bondholders and Proof of Ownership of Bonds and of Article VIII of the Master Indenture (relating to matters concerning the Holders) shall govern the execution of any such request, direction, consent or other instrument in writing required or permitted to be signed by Holders and registered owners of Obligations. Notwithstanding anything in the Trust Agreement to the contrary, in the event that a credit facility is in full force and effect as to any Series of Bonds, the credit facility provider is not insolvent and no default under the credit facility exists on the part of the credit facility provider, then the said credit facility provider, in place of the owners of the applicable Series of Bonds, shall have the power and authority to give any written consents and exercise any and all other rights which the owners of the said Series of Bonds would otherwise have the power and authority to make, give or exercise, including, but not limited to, the exercise of remedies on Default and giving of written consents to Supplemental Trust Agreements when required; and such consents shall be deemed to also constitute the consent of the owners of all said Series of Bonds which are secured by such credit facility. Supplemental Trust Agreements Supplemental Trust Agreements Without Bondholder Consent. (a) The Issuer and the Bond Trustee may, from time to time and at any time without the consent of the Bondholders, enter into such supplemental trust agreements as shall not be inconsistent with the terms and provisions of the Trust Agreement (which supplemental trust agreements shall thereafter form a part of the Trust Agreement): (1) To cure any ambiguity, inconsistency or formal defect or omission in the Trust Agreement or in any supplemental trust agreement, or (2) To grant to or confer upon the Bond Trustee for the benefit of the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders or the Bond Trustee, or (3) To modify, amend or supplement the Trust Agreement or any trust agreement supplemental thereto in such manner as to permit its qualification under the Trust Indenture Act of 1939 or any similar federal statute in effect after the date of the Trust Agreement or to permit the qualification of the Bonds for sale under the securities laws of any of the states of the United States of America, and, if they so determine, to add to the Trust Agreement or any trust agreement supplemental thereto such other terms, conditions and provisions as may be permitted by said Trust Indenture Act of 1939 or similar federal statute, or (4) To provide for the designation of a co-bond Trustee who shall have the same qualifications as provided for a successor Bond Trustee under the heading Appointment and Qualification of Successor Bond Trustee above, or (5) To provide for the issuance of coupon Bonds or certificated or uncertificated registered public obligations, or (6) To provide for changes suggested by a Rating Agency as necessary to maintain a rating or secure a higher rating on the Bonds, or (7) To make any other change or modification of the terms of the Trust Agreement that is not materially prejudicial to the rights or interests of the holders of the Bonds under the Trust Agreement. (b) Not less than thirty (30) days prior to the execution of any supplemental trust agreement or any consent for any of the purposes of this Section, the Bond Trustee shall, at the expense of the Hospital, cause a notice of the proposed execution of such supplemental trust agreement or consent to be mailed, postage prepaid, to all Holders. Such notice shall briefly set forth the nature of the proposed supplemental trust agreement and shall state that copies thereof are on file at the designated corporate trust office of the Bond Trustee for inspection by all Holders. A failure on the part of the Bond Trustee to mail the notice required by this Section shall not affect the validity of such supplemental trust agreement or consent. Modification of Trust Agreement With Consent of Bondholders. Anything contained in the Trust Agreement to the contrary notwithstanding, subject to the terms and provisions contained in this Section and not otherwise, the owner or owners of not less than a majority of the Bond Obligation then outstanding shall have the right, from time to time, to consent to and approve such supplemental trust agreements as shall be deemed necessary or desirable by the Issuer for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in the Trust Agreement or in any supplemental trust agreement; provided, however, that nothing contained in the Trust Agreement shall permit, or be construed as permitting (a) an extension of the maturity of principal of or the interest on any Bond issued under the Trust Agreement, or (b) a reduction in the principal amount of any Bond or the rate of interest thereon, or (c) the creation of a lien upon or pledge of any moneys pledged under the Trust Agreement ranking prior to the lien or pledge created by the Trust Agreement for the Bonds, or (d) a preference or priority of any Bond or Bonds over any other Bond or Bonds, except as otherwise expressly provided in the Trust Agreement, or (e) a reduction in the amount of the C-46

191 Bond Obligation required for consent to such supplemental trust agreement, in each case without the consent of the Holders of all Bonds then Outstanding. Nothing contained in the Trust Agreement, however, shall be construed as making necessary the approval by Bondholders of the execution of any supplemental trust agreement as authorized under the preceding heading. If at any time the Issuer shall request the Bond Trustee to consent to and approve any supplemental trust agreement for any of the purposes of this Section, the Bond Trustee shall cause notice of the proposed adoption of such supplemental trust agreement to be mailed, postage prepaid, to all owners of Bonds then outstanding at their addresses as they appear on the registration books; provided, however, that the failure to give such notice by mailing, or any defect therein, shall not affect the validity of any proceedings pursuant to the Trust Agreement. Such notice shall briefly set forth the nature of the proposed supplemental trust agreement, such notice to the underwriter shall be accompanied by a copy thereof, and such notice to any other Bondholder shall state that a copy thereof is on file at the office of the Bond Trustee for inspection by all Bondholders. Whenever, at any time within three (3) years after the date such notice shall have been given, the Issuer shall deliver to the Bond Trustee an instrument or instruments purporting to be executed by the holders or owners of not less than a majority of the Bond Obligation then outstanding, which instrument or instruments shall refer to the proposed supplemental trust agreement described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form which accompanied such notice to the underwriter, or otherwise referred to in such notice as on file with the Bond Trustee, thereupon but not otherwise, the Bond Trustee may consent to and approve such supplemental trust agreement in substantially such form, without liability or responsibility to any Bondholder, whether or not such Bondholder shall have consented thereto. The foregoing notice requirements, and time limitations with respect thereto, shall not be applicable to consents of bondholders contained or adequately summarized in the supplemental trust agreement or a Series of Bonds issued thereunder. If the holders or owners of not less than a majority of the Bond Obligation outstanding at the time of the adoption of such supplemental trust agreement shall have consented to and approved the execution thereof as provided in the Trust Agreement, no Bondholder shall have any right to object to the adoption of such supplemental trust agreement or to object to any of the terms and provisions contained therein or in the operation thereof, or in any manner to question the propriety of the adoption or approval thereof, or to enjoin or restrain the Bond Trustee or the Issuer from executing the same or from taking any action pursuant to the provisions thereof. Upon the adoption and approval of any supplemental trust agreement pursuant to the provisions of this Section, the Trust Agreement shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under the Trust Agreement of the Issuer and the Bond Trustee and the holders and owners of all Bonds then outstanding, shall thereafter be determined, exercised and enforced under the Trust Agreement, subject in all respects to such modifications and amendments. Discretion of Bond Trustee in Approving Supplemental Trust Agreements. The Bond Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Bond Counsel as conclusive evidence that any such proposed supplemental trust agreement does or does not comply with the provisions of the Trust Agreement, and that it is or is not proper for the Bond Trustee, under the provisions under this heading Supplemental Trust Agreements, to approve such supplemental trust agreement. Subject to the foregoing, the Bond Trustee shall approve such supplemental trust agreements provided that its rights and protections are not diminished and duties and obligations thereunder are no greater than its duties and obligations which already exist under the Trust Agreement, unless it shall agree to any additional duties in its consent. Defeasance Release of Trust Agreement. (a) If, at any time after the date of issuance of the Bonds: (1) the Bonds secured by the Trust Agreement, or any maturity of Bonds or any Bonds within a maturity of Bonds shall have become due and payable in accordance with their terms or otherwise as provided in the Trust Agreement, or such Bonds shall have been duly called for redemption, or the Issuer gives the Bond Trustee irrevocable written instructions directing the payment of the principal and interest on such Bonds at maturity or at any earlier redemption date scheduled by the Issuer, or any combination thereof, (2) the whole amount of the principal of, the interest on and redemption premium, if any, so due and payable upon all of such Bonds or maturity thereof then outstanding, at maturity or upon redemption, shall be paid, or sufficient moneys shall be held by the Bond Trustee or a Bond Registrar under the Trust Agreement (whether or not in any accounts created by the Trust Agreement) which, when invested in Escrow Obligations maturing not later than the maturity or redemption dates of such Bonds will, at the maturity thereof or the date upon which such Bonds are to be called for redemption prior to maturity, be sufficient to pay all principal of, interest on and redemption premium, if any, with respect to said Bonds to their respective maturity and redemption dates as the case may be, (3) provisions shall also be made for paying all other sums payable under the Trust Agreement by the Hospital, and (4) the Bond Trustee shall have been furnished with an Opinion of Counsel to the effect that all conditions precedent to the release of the Trust Agreement have been satisfied, then and in that case the pledge of and lien on the Issuer s interests under the Financing Agreement, and all other pledges and liens created by or pursuant to the Trust Agreement, with respect to such Bonds shall thereupon cease, determine and become void, and if such conditions have been satisfied with respect to all Bonds issued and Outstanding under the Trust Agreement, the Bond Trustee in such case, on demand of the Issuer or the Hospital, shall execute such documents to evidence such release as may be reasonably required by the Issuer or the Hospital, and shall, as provided in the Trust Agreement, turn over to the Hospital any surplus in any account in the Sinking Fund and all balances remaining in any other funds or C-47

192 accounts created by the Trust Agreement other than moneys held for redemption or payment of Bonds and to pay all other sums payable by the Hospital; otherwise the Trust Agreement shall be, continue and remain in full force and effect. (b) The deposit required by subsection (a) above, may be made with respect to any particular maturity of Bonds (or portion thereof), in which case such Bonds shall no longer be deemed to be Outstanding under the terms of the Trust Agreement, and the holders of such defeased Bonds shall be secured only by such trust funds and not by any other part of the Trust Estate, and the Trust Agreement and the Financing Agreement shall remain in full force and effect to protect the interests of the holders of Bonds remaining Outstanding thereafter. (c) In the absence of a request by the Hospital, authorized by appropriate resolution as aforesaid, the payment of all Bonds Outstanding shall not render the Trust Agreement inoperative. (d) The obligations of the Hospital to the Issuer, the Bond Trustee, and the Registrar and Paying Agent and the obligation to remit the Rebate Amount to the United States, shall survive the satisfaction and discharge of the Trust Agreement. Supplemental Contracts Supplemental Contracts without Bondholders Consent. The Bond Trustee, as assignee of the Issuer may, from time to time and at any time, consent to such contracts supplemental to or amendatory of the Financing Agreement as shall not be inconsistent with the terms and provisions thereof and shall not be detrimental to the interest of the Bondholders (which supplemental contracts shall thereafter form a part thereof) including, without limitation, amendments; (a) to cure any ambiguity or formal defect or omission in the Financing Agreement or in any supplemental contracts, or (b) to amend the Financing Agreement for the purposes of issuing completion indebtedness or to accommodate mergers and acquisitions all to the extent permitted under the terms of the Master Indenture, or (c) to grant to or confer upon the Bond Trustee for the benefit of the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders or the Bond Trustee, or (d) to assure compliance with Section 145 of the Code relating to qualified 501(c)(3) obligations, Section 148(f) of the Code relating to rebate requirements or otherwise as may be necessary to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes. Amendment of Contract with Consent of Bondholders. Except for supplemental contracts permitted without the Bondholder s consent or amendments to the Financing Agreement as therein provided for, the Bond Trustee shall not consent to any supplemental contract or amendment to the Financing Agreement unless notice of the proposed execution of such supplemental contract or amendment shall have been given and the owners or holders of not less than a majority of the Bond Obligation then Outstanding shall have consented to and approved the execution thereof all as provided for under the heading Modification of Trust Agreement with Consent of Bondholders above in the case of the supplemental trust agreements. The Bond Trustee shall be entitled to conclusively rely on an Opinion of Bond Counsel in the same manner as provided for under the heading Discretion of Bond Trustee in Approving Supplemental Trust Agreements above in the case of supplemental trust agreements with respect to any supplement or amendment as provided in this Section. The foregoing notice requirements shall not be applicable to any consents contained or referred to in a Series of Bonds issued under the Trust Agreement. Miscellaneous Provisions No Third-Party Beneficiaries; Limitations on Liability. Except as otherwise expressly provided in the Trust Agreement, nothing in the Trust Agreement expressed or implied is intended or shall be construed to confer upon any person, firm or corporation other than the parties to the Trust Agreement and the owners and holders of the Bonds issued under and secured by the Trust Agreement, any right, remedy or claim, legal or equitable, under or by reason of the Trust Agreement, the Trust Agreement and all its provisions being intended to be and being for the sole and exclusive benefit of the parties to the Trust Agreement and the owners and holders from time to time of the Bonds issued under the Trust Agreement. Notwithstanding anything in the Trust Agreement to the contrary, the Hospital shall not be liable for any losses or claims resulting from the negligent act of, or negligent failure to take action by, any third party. Action by Issuer. Notwithstanding anything to the contrary contained in any of the Bonds, the Trust Agreement, or in any other instrument or document executed by or on behalf of the Issuer in connection with the issuance of the Bonds, (i) the Issuer shall have no obligation to take action under the Trust Agreement, the Financing Agreement, the Bonds or such other instruments or documents, unless the Issuer is reasonably requested in writing by an appropriate person to take such action and is provided with indemnity and assurances satisfactory to it of payment of or reimbursement for any expenses (including attorney s fees) in such action; (ii) neither the Issuer nor any member of the Issuer or any officer, employee or agent of the Issuer shall be personally liable to the Hospital, the Bond Trustee or any other person for any action taken by the Issuer or by its officers, agents or employees or for any failure to take action under the Trust Agreement, the Financing Agreement, the Bonds or such other instruments or documents, except that the Issuer agrees to take, or to refrain from taking, any action if so required by an injunction or if required to comply with any final judgment for specific performance; and (iii) any judgment rendered against the Issuer for breach of its obligations under the Trust Agreement, the Financing Agreement, the Bonds or such other instruments or documents, shall be payable solely from the revenues derived from the payments to C-48

193 be made by the Hospital under the Financing Agreement, and no personal liability or charge payable directly or indirectly from the general funds of the Issuer shall arise therefrom. In acting under the Trust Agreement, the Financing Agreement, the Bonds or such other instruments or documents, or in refraining from taking such action, the Issuer may conclusively rely on the advice of its counsel. Controlling Law; Members of the Issuer Not Liable. All covenants, stipulations, obligations and agreements of the Issuer contained in the Trust Agreement shall be deemed to be covenants, stipulations, obligations and agreements of the Issuer to the full extent provided by the Constitution and laws of the State of Florida without regard to conflict of law principles. No covenant, stipulation, obligation or agreement contained in the Trust Agreement shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, agent or employee of the Issuer in his individual capacity, and neither the members of the Issuer nor any official executing the Bonds shall be liable personally on the Bonds or the Trust Agreement or shall be subject to any personal liability or accountability by reason of the issuance or the execution by the Issuer or such members thereof. Payments Due on Saturdays, Sundays and Holidays. In any case where the date of maturity of principal of or interest on the Bonds or the date fixed for redemption of any Bonds shall be, in the city of payment, a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized by law to close, then payment of principal or interest need not be made on such date in such city but may be made on the next succeeding business day not a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized by law to close, with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue on such payment in the interim. C-49

194 Definitions Summary of the Financing Agreement Unless otherwise required by the context, all terms used in the Financing Agreement have the same meanings as set fort in the Trust Agreement or the Master Indenture, or as set forth below: Eminent Domain means the eminent domain or condemnation power by which all or any part of the Operating Assets may be taken for public use or any agreement that is reached in lieu of proceedings to exercise such power. Financial Statements means the financial statements of the Obligated Group. Hospital Tax Compliance Certificate means the Tax Compliance Certificate as signed by the Hospital concurrently with the issuance of the Bonds (or any other Series of Bonds issued under the Trust Agreement). Lease means the Lease Agreement dated as of June 20, 1997 between the Hospital and the Hillsborough County Hospital Authority. Loan means the loan of the proceeds of the Bonds made by the Issuer to the Hospital pursuant to the Financing Agreement. Loan Repayments means those payments designated by and set forth in the Financing Agreement. Mortgage means the Leasehold Mortgage and Security Agreement from the Hospital to the Master Trustee, as modified and supplemented from time to time in accordance with its terms and the terms of the Master Indenture. Official Statement means the Official Statement relating to the Bonds. Project means the 2012 Project, and, as to the extent the context requires, the facilities financed or refinanced with proceeds of the Refunded Bonds. Project. Project Documents means, collectively, any contracts, documents and agreements, and surety bonds and instruments pertaining to the Qualified Project Costs means Costs of the Project which constitute costs for property which is to be owned by the Hospital and will not be used in an unrelated trade or business (as such term is used in Section 513(a) of the Code) of the Hospital (or any other organization described in Section 501(c)(3) of the Code) or in the trade or business of a person who is neither a governmental unit nor an organization described in Section 501(c)(3) of the Code; provided, however, that Issuance Costs are not Qualified Project Costs and that letter of credit fees, municipal bond insurance premiums or other guaranty fees and any capitalized interest on the Bonds shall be allocated between Qualified Project Costs to be paid or reimbursed from proceeds of the Bonds and costs other than Qualified Project Costs to be paid or reimbursed from the proceeds of the Bonds. Rebate Amount means the excess of the future value, as of a computation date, of all receipts on nonpurpose investments (as defined in Treasury Regulations (b)) over the future value, as of that date, of all payments on nonpurpose investments, all as provided by regulations under the Code implementing Section 148 thereof. Rebate Payments refers to the obligation of the Hospital to make payment of the Rebate Amount pursuant to Section 5.14 of the Financing Agreement (relating to tax covenants). Refunded Bonds means a portion of the Hillsborough County Industrial Development Authority Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Series 2003A and Hospital Revenue Bonds (Tampa General Hospital Project), Series 2003B, the proceeds of which were used to finance or refinance certain of the Operating Assets, as further identified in the Trust Agreement. Required Payments means the payments so designated by and set forth under the heading Required Payments of the Financing Agreement below. Total Required Payments means the sum of Loan Repayments, Required Payments, Rebate Payments and other amounts due under the Financing Agreement. Yield means the yield on a particular obligation computed in accordance with Section 148(h) of the Code and, in the case of the Bonds, Treasury Regulations , or, in the case of an investment of proceeds of the Bonds, Treasury Regulations Project means the project described in Exhibit A to the Financing Agreement, including any modifications thereof, substitutions thereof or additions thereto and excluding deletions therefrom, as may be approved and made by the Hospital from time to time in accordance with the provisions hereof. The Loan Total Required Payments. The Hospital shall make Total Required Payments under the Financing Agreement when due. C-50

195 The obligation of the Hospital to make the Total Required Payments and to satisfy any other financial liabilities incurred under the Financing Agreement shall be a direct, general and unconditional obligation of the Hospital. The Hospital shall make Loan Repayments, and Required Payments that are required for the repayment of the Bonds, directly to the Bond Trustee for deposit in the Sinking Fund and the various accounts therein. Required Payments under the Financing Agreement, other than those referred to in the preceding sentence, shall be made by the Hospital directly to the persons, firms, governmental agencies and other entities entitled to such payments. The Hospital shall make the Required Payments that are required under Section 148 of the Code to the Bond Trustee for deposit in the Rebate Fund. Neither the Issuer nor the Bond Trustee is required to give the Hospital notice of any date upon which any of the Total Required Payments is due. Nothing under this heading Total Required Payments shall require the Hospital to pay the costs and expenses set forth in paragraph (a) under the heading Required Payments Under the Financing Agreement below, so long as the validity or the reasonableness thereof shall be contested in good faith and the Hospital shall have delivered to the Bond Trustee an Opinion of Counsel, the content of which is acceptable to the Bond Trustee, to the effect that such contest does not jeopardize the interests of the Issuer, the Bond Trustee or the Holders; otherwise the Hospital shall pay such costs and expenses to the end that, in the Opinion Of Counsel, the interests of the Issuer, the Bond Trustee or the Holders are not jeopardized. If the content of the Opinion of Counsel mentioned in the preceding sentence is not acceptable to the Bond Trustee, the Bond Trustee shall so notify the Issuer and the Hospital within five (5) days of its receipt thereof, after which a subsequent Opinion of Counsel may be furnished. If the content of such subsequent Opinion of Counsel is not acceptable to the Bond Trustee, the Hospital shall pay such costs and expenses in paragraph (a) under the heading Required Payments Under the Financing Agreement below. If, after giving effect to the credits specified in Section 7.02 of the Trust Agreement (relating to creation of funds and accounts), any installment of Total Required Payments should be insufficient to enable the Bond Trustee to make the deposits specified in said Section, the Hospital shall increase each future installment of the Total Required Payments as may be necessary to make up any previous deficiency. All of the Total Required Payments shall be made in any coin or currency of the United States of America that is legal tender for the payment of public and private debts at the time each of the Total Required Payments is made. Loan Repayments. The Hospital shall repay the Loan in installments, or as otherwise provided in the Financing Agreement. Each installment shall be deemed to be a Loan Repayment and shall be paid at the times and in the amounts set forth below, subject to the credits provided for under the Financing Agreement and in the Trust Agreement. Loan Repayments shall be sufficient in the aggregate to repay the Loan, together with interest thereon and to pay in full, when due (whether by maturity, redemption, acceleration or otherwise), all Bonds, together with the total interest and redemption premium, if any, thereon, and payments made by the Hospital with respect to the Bonds shall be credited against the corresponding payments due under Obligation No. 3. Required Payments Under the Financing Agreement. (a) The Hospital shall pay, when due and payable, as Required Payments under the Financing Agreement, certain costs and expenses, exclusive of costs and expenses payable from the proceeds of the Bonds, as follows (and the following shall constitute Required Payments for purposes of the Financing Agreement): (1) the fees and other costs payable to the Bond Trustee, the Master Trustee and the Bond Registrar; (2) all costs incurred in connection with the purchase or redemption of Bonds to the extent money is not otherwise available therefor; (3) the fees and other costs and expenses incurred for services of such attorneys, management consultants, insurance advisers and accountants as are employed to make examinations, provide services, render opinions or prepare reports required under the Financing Agreement, the Master Indenture or the Trust Agreement; (4) all costs incurred by the Issuer, the Bond Trustee or the Bond Registrar in connection with the discontinuation of or withdrawal from any book-entry system for the Bonds or any transfer from one book-entry system to another, including, without limitation, the printing and issuance of additional or substitute Bonds in connection with such withdrawal, discontinuance or transfer; and (5) Issuance Costs incurred in connection with the issuance of the Bonds to the extent such Issuance Costs are not paid from the proceeds of the Bonds; provided, however, in no event shall the amount of Issuance Costs paid from proceeds of the Bonds exceed two percent (2%) of the principal amount of the Bonds minus any original issue discount. The Required Payments under the Financing Agreement, if any, as set forth under paragraph (a) above shall be equal to the sum of the amounts specified in clauses (1) to (5), inclusive. (b) The Hospital shall also pay to the Bond Trustee for deposit to the credit of the Rebate Fund, as Required Payments under the Financing Agreement, at the times and in the amounts required under Section 148 of the Code, any Rebate Amount, after taking into account amounts deposited in the Rebate Fund under the Trust Agreement which may be available for such purpose, all as more fully set forth in Section 5.14 of the Financing Agreement (relating to federal tax covenants). The obligation of the Hospital to make such payments shall survive the termination of the Financing Agreement. C-51

196 Obligations Unconditional. Until such time as the principal of and interest on the Bonds and the other payments required under the Financing Agreement shall have been fully paid or provision for the payment thereof shall have been made in accordance with the Trust Agreement, the Hospital (i) will not suspend or discontinue any Loan Repayment, (ii) will perform and observe in all respects all of its other agreements contained in the Financing Agreement, and (iii) will not terminate the Financing Agreement or the Lease prior to the payment in full of all amounts due under the Financing Agreement for any cause whatsoever. The Hospital waives, to the extent permitted by applicable law, any and all rights which it may now have or which may at any time hereafter be conferred upon it, by substitute or otherwise, to terminate, cancel, quit or surrender any of its obligations under the Financing Agreement and agrees that if, for any reason whatsoever, the Financing Agreement, the Bonds or the Trust Agreement shall become void or unenforceable in whole or in part or shall be terminated in whole or in part by operation of law or otherwise, the Hospital will nonetheless promptly pay to the Bond Trustee amounts equal to all such amounts which shall become due and payable in respect of the Financing Agreement, to the same extent as if the Financing Agreement, the Bonds or the Trust Agreement had not been terminated, or had not become void or unenforceable, in whole or in part. No Set-Off. The obligation of the Hospital to make the Loan Repayments and all other Required Payments under the Financing Agreement and Obligation No. 3 and to perform and observe the other agreements contained in the Financing Agreement shall be absolute and unconditional. The Hospital will pay without abatement, diminution or deduction (whether for taxes or otherwise) all such amounts regardless of any cause or circumstance whatsoever, including, without limitation, any defense, set-off, recoupment or counterclaim that the Hospital may have or assert against the Issuer, the Bond Trustee or any other person. Acquisition and Construction of the Project Revision of Project Documents. The Hospital may revise the description of the 2012 Project from time to time but cannot make any revision that would cause any representation of the Hospital set forth in the Hospital Tax Compliance Certificate, to be untrue unless, prior to the making of such revision, the Hospital shall deliver to the Bond Trustee an Opinion of Bond Counsel to the effect that such revision will not affect the exclusion of interest on the Bonds from the gross income of the holders thereof for purposes of federal income taxation. Special Covenants Compliance with Covenants, Conditions and Agreements. The Hospital covenants that so long as the Bonds are Outstanding it shall comply with, and with respect to the other Members of the Obligated Group, the Hospital covenants to cause each Member of the Obligated Group to comply with, each and every covenant, condition and agreement in the Master Indenture and in the Financing Agreement. Each such covenant, condition and agreement in the Master Indenture is incorporated into the Financing Agreement by reference and made a part of the Financing Agreement with the same effect intended as though the text of each such covenant, condition and agreement were set forth in the Financing Agreement as express covenants, conditions and agreements of the Hospital. Merger, Sale and Transfer Permitted. So long as any Bonds are Outstanding, the Hospital agrees that it will not consolidate with or merge into another corporation that is not a Member of the Obligated Group, or permit one or more other corporations that are not Members of the Obligated Group to consolidate with or to merge into it, or sell or otherwise transfer to another entity that is not a Member of the Obligated Group all or substantially all of its assets as an entirety and thereafter dissolve, except as permitted in the Master Indenture. Events of Default and Remedies Events of Default Defined. The term Event of Default shall mean any one or more of the following events: (a) The Hospital shall fail to pay, or cause to be paid, in full any payment required under the Financing Agreement or under Obligation No. 3 when due, whether at maturity, redemption, acceleration or otherwise pursuant to the terms of the Financing Agreement or thereof; or (b) The Hospital shall fail duly to perform, observe or comply with any covenant, condition or agreement on its part under the Financing Agreement (other than a failure by the Hospital to make any payment as described above), including any covenant, condition or agreement in the Master Indenture applicable to the Hospital and incorporated by reference in the Financing Agreement, and such failure continues for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Hospital by the Bond Trustee, or to the Hospital and the Bond Trustee by the Holders of at least twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding; provided, however, that if such performance, observation or compliance requires work to be done, action to be taken, or conditions to be remedied, which by their nature cannot reasonably be done, taken or remedied, as the case may be, within such thirty-day period, no Event of Default shall be deemed to have occurred or to exist if, and so long as, the Hospital shall commence such performance, observation or compliance within such period and shall diligently and continuously prosecute the same to completion; or (c) The Master Trustee shall have declared the aggregate principal amount of Obligation No. 3 and all interest due thereon immediately due and payable; or C-52

197 (d) The occurrence of an Event of Default under the Master Indenture. Remedies on Default. Whenever any Event of Default shall have happened and be continuing, the Issuer may take the following remedial steps: (a) In the case of an Event of Default described in paragraph (a) under the heading Events of Default Defined above, the Issuer may take whatever action at law or in equity is necessary or desirable to collect the payments then due; (b) In the case of an Event of Default described in paragraph (b) under the heading Events of Default Defined above, the Issuer may take whatever action at law or in equity may be necessary or desirable to enforce the performance, observance or compliance by the Hospital with any covenant, condition or agreement by the Hospital under the Financing Agreement or under the Master Indenture; and (c) In the case of an Event of Default described in paragraphs (c) or (d) under the heading Events of Default Defined above, the Issuer (or the Bond Trustee as its assignee) shall take such action, or cease such action, as the Master Trustee shall direct, but only to the extent such directions are consistent with the provisions of the Master Indenture. Notwithstanding any other provision of the Financing Agreement or any right, power or remedy existing at law or in equity or by statute, the Issuer shall not under any circumstances declare the entire unpaid aggregate amount of the Loan to be immediately due and payable except in accordance with the directions of the Master Trustee in the event that the Master Trustee shall have declared the aggregate principal amount of Obligation No. 3 and all respective interest due thereon immediately due and payable. Prepayments Optional Prepayment. The Hospital shall have, the option to prepay, together with accrued interest to the date of redemption or maturity date of the Bonds, all or any portion of the unpaid aggregate amount of the Loan in accordance with the terms and provisions of the Trust Agreement. Said prepayment shall be made by the Hospital requesting that the Obligated Group Representative cause the Issuer to take the actions required (i) for payment of the Bonds, whether by redemption or purchase prior to maturity or by payment at maturity, or (ii) to effect the purchase, redemption or payment at maturity of less than all of the Outstanding principal amount of the Bonds according to their terms. Extraordinary Prepayment. (a) The Hospital shall have the option to prepay all or a portion of the unpaid aggregate amount of the Loan, together with accrued interest to the date of redemption of the Bonds, from amounts received by the Hospital as insurance proceeds with respect to any casualty loss or failure of title or as condemnation awards, upon the occurrence of the following event: Damage or destruction of all or any part (if damage or destruction of such part causes the Operating Assets to be impracticable to operate, as evidenced by an Officer s Certificate filed with the Issuer and the Bond Trustee) of the Operating Assets by fire or casualty, or loss of title to or use of substantially all of the Operating Assets as a result of the failure of title or as a result of Eminent Domain proceedings or proceedings in lieu thereof. (b) Subject to the provisions of Section 3.04 of the Master Indenture (relating to insurance and condemnation proceeds), this Section Extraordinary Prepayment shall not be construed to prohibit the Hospital from applying insurance proceeds with respect to any casualty loss or condemnation awards or payments in lieu thereof to the optional prepayment of the Loan in accordance with the provisions under the heading Optional Prepayment above. Notice and Right of Revocation. (a) To make a prepayment pursuant to the provisions under the headings Optional Prepayment or Extraordinary Prepayment above, the Hospital shall give written notice to the Issuer and the Bond Trustee which shall specify therein (i) the date of the intended prepayment of the Loan, which shall not be less than thirty (30) nor more than sixty (60) days from the date the notice is mailed (or such lesser period as is agreed to by the Bond Trustee as providing sufficient time to effect a redemption of Bonds), (ii) the aggregate principal amount of the Bonds to be purchased, redeemed or paid at maturity and the date or dates on which the purchase, redemption or payment is to occur, (iii) the source of the money that will be used by the Hospital to make such prepayment of the Loan, and (iv) subject to the requirements of Section 4.05 of the Trust Agreement (relating to the method of selecting bonds in case of partial redemption), the maturities of the Bonds to be called. (b) The Hospital shall have the right to revoke any notice of prepayment given pursuant to this Section Notice and Right of Revocation if, on or prior to the fifth (5th) Business Day preceding any date fixed for redemption of Bonds, the Hospital notifies the Bond Trustee in writing that the Hospital has elected to revoke its election to redeem such Bonds because it has determined that the source of money for such redemption specified in the notice given by the Hospital pursuant to paragraph (a) above will not be available. C-53

198 Miscellaneous Members, Officers and Employees of the Issuer and the Hospital Not Liable. Neither the members, officers or employees of the Issuer nor the members of the board of the Issuer nor the officers or employees of Bond Trustee nor the members of the board, officers or employees of the Hospital shall be personally liable for any costs, losses, damages or liabilities caused or subsequently incurred by the Hospital or any officer, trustee or agent thereof in connection with or as a result of the Financing Agreement. Amendment of Financing Agreement. The Financing Agreement may, without the consent of or notice to any of the Holders, be amended from time to time, to: (a) cure any ambiguity or formal defect or omission in the Financing Agreement or in any supplement thereto; (b) correct or supplement any provisions in the Financing Agreement which may be inconsistent with any other provisions in the Financing Agreement or make any other provisions with respect to matters which do not materially or adversely affect the interest of the Holders; (c) grant to or confer upon the Bond Trustee for the benefit of the Holders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Holders or the Bond Trustee; (d) add conditions, limitations and restrictions on the Hospital to be observed thereafter, or (e) make any other modifications or amendments that are not materially adverse to the rights and interests of the Issuer, and the Bond Trustee as its assignee. Other than amendments referred to in the preceding paragraph of this Section and subject to the terms and provisions and limitations contained in Section of the Trust Agreement (relating to supplemental contracts without bondholders consent), and not otherwise, the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, shall have the right, from time to time, anything contained in the Financing Agreement to the contrary notwithstanding, to consent to and approve the execution by the Hospital and the Issuer of such supplements and amendments to the Financing Agreement as shall be deemed necessary and desirable for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in the Financing Agreement; provided, however, nothing in this Section Amendment of Financing Agreement shall permit or be construed as permitting a supplement or amendment which would: (a) Extend the stated maturity of or time for paying interest on Obligation No. 3 or reduce the principal amount of or the redemption premium or rate of interest payable on Obligation No. 3 without the consent of the Holders of all Bonds then Outstanding; or (b) Reduce the aggregate principal amount of Bonds then outstanding the consent of the Holders of which is required to authorize such supplement or amendment without the consent of the Holders of all Bonds then Outstanding. Limitation on the Issuer s Liability. All obligations of the Issuer under the Financing Agreement shall be payable solely from the Total Required Payments and other revenues derived and to be derived from the Hospital. Neither the members, officers nor employees of the Issuer shall be personally liable for the payment of any sum or for the performance of any obligation under the Financing Agreement. C-54

199 Summary of the Leasehold Mortgage Mortgaged Property The Leasehold Mortgaged Property under the Leasehold Mortgage consists of the following: (a) (b) (c) (d) The Mortgagor s leasehold interest in the real estate described in Exhibit A attached to the Leasehold Mortgage ( Leased Real Property ) created by that certain Lease Agreement, dated as of June 20, 1997, from the Lessor to the Mortgagor, a memorandum of which is recorded in Official Records Book 8735, Page 0484 et. seq., of the Public Records of Hillsborough County, Florida (as amended, the Lease ), together with all other real properties as of the date of Leasehold Mortgage or thereafter made subject to the lien of the Leasehold Mortgage by supplemental mortgage or otherwise (the Project Site ); All buildings, structures, additions, improvements, facilities, and fixtures, and other articles of tangible personal property of every kind and nature that constitutes a structure, addition, improvement, facility or fixture as of the date of Leasehold Mortgage or thereafter located in, upon or under or based at the Project Site and all substitutions and replacements therefor (the Project Facilities ); All rentals, revenue, payments, repayments, income, charges and moneys derived by the Mortgagor from the lease, sale or other disposition or use of the Project Site or Project Facilities and the Proceeds (as defined in the Commercial Code) from any insurance or condemnation award pertaining thereto; and All easements, rights of way or use, licenses, privileges, franchises, servitudes, tenements, hereditaments and all appurtenances as of the date of Leasehold Mortgage or thereafter belonging to or anywise appertaining to the Project Site or the Project Facilities including, without limitation, all right, title and interest in any street, vacated, open or proposed. BUT SPECIFICALLY EXCLUDING THEREFROM, any Pledged Assets (as defined in the Master Indenture), a security interest in which Pledged Assets has been separately given to secure all Obligations issued under the Master Indenture from time to time, and any personal property that does not constitute a structure, addition, improvement, facility or fixture on or at the Project Site. Definitions Definitions. As used in the Leasehold Mortgage: Commercial Code means the Uniform Commercial Code as enacted in the State, as from time to time duly amended or supplemented. Engineer means an individual or firm acceptable to the Mortgagee and qualified to practice the profession of engineering or architecture under the laws of the State and who is not an officer, employee or owner of an interest in the Mortgagor. Event of Default means any of the events described as an Event of Default under such heading below. Financing Payments means all amounts required to be paid by the Mortgagor pursuant to the Obligations and the Bonds. Force Majeure means any of the causes, circumstances or events described as constituting Force Majeure as described under the heading Events of Default below. Independent Counsel means an attorney or firm of attorneys acceptable to the Mortgagor and duly admitted to practice law before the highest court of the State and who is not an officer, employee or owner of an interest in the Mortgagor. Insurance Requirements means those insurance requirements described under the heading Compliance with Legal, Insurance and Lease Requirements below. Interest Rate for Advances means the annual rate which is that annual interest rate announced by the Trustee in its lending capacity as a bank as its Prime Rate or its Base Rate, not to exceed the maximum rate permitted by applicable law. Lease means the Lease Agreement by and between the Lessor, as lessor, and the Mortgagor, as lessee, dated as of June 20, 1997, as amended or supplemented from time to time. Leasehold Mortgage means the Leasehold Mortgage and Security Agreement, as amended or supplemented from time to time, from Florida Health Sciences Center, Inc. to the Bank of New York Trust Company of Florida, N.A. as Master Trustee, dated May 1, Lessor means Hillsborough County Hospital Authority, a public body corporate and special district of the State of Florida. Legal Requirements means those legal requirements described under the heading Compliance with Legal, Insurance and Lease Requirements below. C-55

200 Loan means the loan by the Issuer to the Mortgagor of the proceeds received from the sale of the Bonds. Net Proceeds, when used with respect to any insurance proceeds or condemnation award, means the gross proceeds thereof less the payment of all expenses, including attorneys fees and costs incurred in connection with the collection of such gross proceeds. Permitted Encumbrances means the exceptions, restrictions, easements and encumbrances set forth in Exhibit B to the Leasehold Mortgage and those matters defined as Permitted Liens in the Master Indenture. Property means, collectively, the Project Site and the Project Facilities. Required Property Insurance Coverage means insurance (that may include one or more self-insurance programs considered to be adequate) covering the Project Facilities (i) against loss or damage by fire, lightning, vandalism and malicious mischief and all other perils covered by standard extended coverage or all risks policies in the State such amounts and with such deductibles and co-insurance provisions as, in the judgment of its Governing Body are adequate to protect it and its Property and operations against such casualties, contingencies and risks and in amounts not less than is customary in the case of corporations engaged in the same or similar and similarly situated 4. Required Public Liability Insurance Coverage means comprehensive general accident and public liability insurance in connection with the Project Site or the Project Facilities and other property and operations of the Mortgagor with a deductible not to exceed $3,000,000 per occurrence up to $11,000,000 per year with every dollar in excess thereof being insured dollar for dollar. Advances State means the State of Florida. Security for Loan Advances/Future Advance. It is agreed that the Leasehold Mortgage shall also secure future or additional advances in the form of one or more additional Obligations issued under the Master Indenture or advances made by the Mortgagee under the heading Rights to Perform Covenants below, provided that all those advances are to be made within twenty (20) years from the date of the Leasehold Mortgage, or within such lesser period of time as may be provided by law as a prerequisite for the sufficiency of actual notice or record notice of the optional future or additional advances as against the rights of creditors or subsequent purchaser for valuable consideration. The maximum amount of indebtedness, exclusive of interest thereon, and advances made for the payment of taxes, assessments, insurance premiums and costs incurred for the protection of the Leasehold Mortgaged Property, which may be outstanding at any time, shall not exceed $420,000, Taxes, Mechanics Liens and Insurance Payment of Taxes and Other Governmental Charges. The Mortgagor shall pay, promptly when due and before penalty or interest accrue thereon, all taxes, assessments, whether general or special, and other governmental charges of any kind whatsoever, foreseen or unforeseen, ordinary or extraordinary, that as of the date of the Leasehold Mortgage or may at any time thereafter be assessed or levied against or with respect to the Leasehold Mortgaged Property or any part thereof (including, without limitation, any taxes levied upon or with respect to the revenue, income or profits of the Mortgagor from the Leasehold Mortgaged Property) which, if not paid, may become or be made a lien on the Leasehold Mortgaged Property, or any part thereof, or a charge on such revenue, income or profits. Notwithstanding the preceding paragraph, the Mortgagor may, at its expense and with notice to the Mortgagee, by appropriate proceedings diligently prosecuted, contest in good faith the validity or amount of any such taxes, assessments or other charges and during the period of contest, need not pay the items so contested. However, if at any time the Mortgagee shall deliver to the Mortgagor an opinion of Independent Counsel to the effect that by nonpayment of any such items, the lien or security interest created by the Leasehold Mortgage as to any part of the Leasehold Mortgaged Property will be materially affected or the Leasehold Mortgaged Property or any part thereof will be subject to imminent loss or forfeiture, the Mortgagor shall promptly pay such taxes, assessments or charges. During the period when the taxes, assessments or other charges so contested remain unpaid, the Mortgagor shall set aside on its books adequate reserves with respect thereto. Mechanics and Other Liens. The Mortgagor shall not permit any mechanics or other liens to be filed or to exist against the Leasehold Mortgaged Property by reason of work, labor, services or materials supplied or claimed to have been supplied to, for or in connection with the Leasehold Mortgaged Property or to the Mortgagor or anyone holding the Leasehold Mortgaged Property or any part thereof through or under the Mortgagor. If any such lien shall at any time be filed, the Mortgagor shall, within sixty (60) days after notice of the filing thereof but subject to the right to contest as set forth in the Leasehold Mortgage, cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. Notwithstanding the foregoing, the Mortgagor shall have the right, at its own expense and with written notice to the Mortgagee, by appropriate proceedings duly instituted and diligently prosecuted, to contest in good faith the validity or the amount of any such lien. However, if the Mortgagee shall deliver to the Mortgagor an opinion of Independent Counsel to the effect that by nonpayment of any such items, the lien or security interests created by the Leasehold Mortgage will be materially affected or the Leasehold Mortgaged Property or any part thereof will be subject to imminent loss or forfeiture, the Mortgagor shall promptly cause such lien to be discharged of record. Insurance. The Mortgagor shall keep the Project Facilities continuously insured with Required Property Insurance Coverage. In the event the Mortgagor utilizes self-insurance to meet the insurance requirements contained herein, the Mortgagor shall be required to (i) retain biennially an 4 Reflects amended insurance requirements. C-56

201 Actuarial Consultant to examine and report on the adequacy of the funding of such self-insurance; and (ii) comply with the recommendations of such Actuarial Consultant with respect to the funding of such self-insurance 5. The Mortgagor shall keep and maintain Required Public Liability Insurance Coverage with reference to the Project Site and the Project Facilities, and with reference to activities conducted thereby or thereon provided that the Required Public Liability Insurance Coverage shall be increased to such larger amounts as the Mortgagee may determine to be appropriate in light of inflationary increases, the operations conducted by the Mortgagor and the insurance coverage carried by other entities conducting similar operations. All insurance shall be obtained and maintained either by means of policies with generally recognized, responsible insurance companies or in conjunction with other companies through an insurance trust or other arrangements satisfactory to the Mortgagee, and all such companies shall be qualified to do business in the State. The insurance to be provided may be by blanket policies. The Mortgagee and the Issuer shall each be named as an additional insured on each policy of insurance to the extent of its interest in the Leasehold Mortgaged Property. Each policy of insurance shall be written so as not to be subject to cancellation or substantial modification upon less than fifteen days advance written notice to the Mortgagee and the Issuer. The Mortgagor shall deposit with the Mortgagee and the Issuer certificates or other evidence satisfactory to the Mortgagee and the Issuer that (i) the insurance required by the Leasehold Mortgage has been obtained and is in full force and effect and (ii) all premiums thereon have been paid in full. Prior to the expiration of any such insurance, the Mortgagor shall furnish the Mortgagee and the Issuer with evidence satisfactory to the Mortgagee and the Issuer that such insurance has been renewed or replaced and that all premiums thereon have been paid in full and all insurance policies required by the Leasehold Mortgage are in full force and effect. The Mortgagor shall file with the Mortgagee and the Issuer a copy of any claim it may make under the Required Property Insurance Coverage which claim is in excess of $100,000. All policies providing the Required Property Insurance Coverage shall contain standard mortgagee clauses requiring all proceeds resulting from any claim for loss or damage in excess of $50,000 to be paid to the Mortgagee, and any Net Proceeds of insurance providing such coverage shall be paid and applied as provided under the heading Use of Insurance Proceeds below. All proceeds of business interruption insurance, up to the amounts required to be carried under the Leasehold Mortgage, shall be paid to the Mortgagee for application to Financing Payments. Any proceeds of policies providing Required Public Liability Insurance Coverage shall be applied toward the extinguishment or satisfaction of the liability with respect to which such insurance proceeds have been paid. Workers Compensation Coverage. The Mortgagor shall maintain or cause to be maintained in connection with the Leasehold Mortgaged Property any workers compensation coverage required by the applicable laws of the State upon a written request of the Mortgagee or the Issuer and shall not more frequently than annually deposit with the Mortgagee and the Issuer evidence of such coverage. Maintenance and Use of Leasehold Mortgage Property Compliance with Legal, Insurance and Lease Requirements. The Mortgagor, at its expense, shall promptly comply with all Legal Requirements and Insurance Requirements (both as defined below), and shall procure, maintain and comply with all permits, licenses and other authorizations required for any use being made of the Leasehold Mortgaged Property or any part thereof then being made or anticipated to be made, and for the acquisition and proper construction, installation, operation and maintenance of the Leasehold Mortgaged Property or any part thereof, and will comply with any instruments of record at the time in force burdening the Leasehold Mortgaged Property or any part thereof. As used in this Section, Legal Requirements means all laws, statutes, codes, acts, ordinances, resolutions, orders, judgments, decrees, injunctions, rules, regulations, permits, licenses, authorizations, directions and requirements of all governmental or quasi-governmental entities, departments, commissions, boards, courts, authorities, agencies, officials and officers, foreseen or unforeseen, ordinary or extraordinary, which as of the date of the Leasehold Mortgage or at any time thereafter may be applicable to the Leasehold Mortgaged Property or any part thereof, or to any use, anticipated use or condition of the Leasehold Mortgaged Property or any part thereof. Insurance Requirements means all provisions of any insurance policy covering or applicable to the Leasehold Mortgaged Property or any part thereof, all requirements of the issuer of any such policy, and all orders, rules, regulations and other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) applicable to or affecting the Leasehold Mortgaged Property or any part thereof. The Mortgagor may, at its expense and after prior notice to the Mortgagee, by any appropriate proceedings diligently prosecuted, contest in good faith any Legal Requirement and postpone compliance therewith pending the resolution or settlement of such contest provided that such postponement does not, in the opinion of Independent Counsel, materially affect the lien or security interests created by the Leasehold Mortgage as to any part of the Leasehold Mortgaged Property or subject the Leasehold Mortgaged Property, or any part thereof, to imminent loss or forfeiture. Subject to the provisions of the Lease, Mortgagor covenants and agrees to duly and punctually pay when due all rents and other payments under the Lease, to at all times perform all covenants and agreements, terms and conditions imposed on or assumed by Mortgagor as Lessee under the Lease, to cause the Lease to be renewed and to remain in effect so long as any portion of any indebtedness secured by the Leasehold Mortgage shall be unpaid, to do all things necessary to keep unimpaired Mortgagor s right in and to the estate created by the Lease, to refrain from doing anything which would impair Mortgagor s right in and to the estate of the Lease or which would be grounds for declaring a forfeiture of the Lease, and to prevent any default thereunder or forfeiture or impairment thereof. Mortgagor will not, except with the prior written consent of Mortgagee: (a) Cancel, terminate or surrender the Lease or consent to or accept any cancellation or termination thereof or permit any condition or event to exist which would terminate or cancel the same or permit such termination or cancellation; or (b) Take any action in connection with the Lease, including, without limitation, an amendment of the Lease, which would have the effect of impairing the value of Mortgagor s interest thereunder or of the Mortgaged Property or of impairing the interest of Mortgagee therein. 5 See Footnote 4, above. C-57

202 Maintenance and Use of Leasehold Mortgaged Property. The Mortgagor, at its expense, will keep or cause to be kept the Leasehold Mortgaged Property in good order and condition (ordinary wear and tear excepted) and will make all necessary or appropriate repairs, replacements and renewals thereof, interior, exterior, structural and nonstructural, ordinary and extraordinary, foreseen and unforeseen, subject to the provisions of the Lease. The Mortgagor will not do, or permit to be done, any act or thing which would materially impair the value or usefulness of the Leasehold Mortgaged Property or any part thereof, will not commit or permit any material waste of the Leasehold Mortgaged Property or any part thereof, and will not knowingly permit any unlawful occupation, business or trade to be conducted on the Leasehold Mortgaged Property or any part thereof. The Mortgagor shall also, at its expense, promptly comply in all material respects with all rights of way or use, privileges, franchises, servitudes, licenses, easements, tenements, hereditaments and appurtenances forming a part of the Leasehold Mortgaged Property and all instruments creating or evidencing the same, in each case, to the extent compliance therewith is required of the Mortgagor under the terms thereof. Additions, Modifications and Improvements. The Mortgagor may, in its discretion and at its expense, make from time to time any additions, modifications or improvements to the Leasehold Mortgaged Property which it may deem desirable for its business purposes provided that no such additions, modifications or improvements shall adversely affect the structural integrity or strength of any improvements constituting a part of the Leasehold Mortgaged Property or materially interfere with the use and operation thereof. All additions, modifications and improvements so made by the Mortgagor shall become part of the Leasehold Mortgaged Property, except as may be provided in the Leasehold Mortgage. Substitutions and Removals. If the Mortgagor, in its reasonable discretion, determines that any item of personal property constituting a part of the Leasehold Mortgaged Property shall have become inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary or should be replaced, the Mortgagor may remove such items; provided that such removal (taking into account any substitutions) shall not impair the operating unity of the Leasehold Mortgaged Property and provided that the Mortgagor shall: (a) substitute and install as part of the Leasehold Mortgaged Property, property of equal or greater utility and value (but not necessarily fulfilling the same function in the operation of the Leasehold Mortgaged Property) as the removed property, which such substituted property shall be free from all liens and encumbrances (other than encumbrances permitted by Section 2.4 of the Leasehold Mortgage or Exhibit B of the Leasehold Mortgage) and shall become part of the Leasehold Mortgaged Property; or (b) in the case of removal of property without substitution, promptly pay to the Bond Trustee for application as provided in Section 3.03 of the Financing Agreement (relating to loan repayments) (to be credited against amounts due or coming due under the Obligations) or to any other person having an interest superior to the Master Trustee under the Leasehold Mortgage, an amount equal to (i) if the removed property is sold or scrapped, the proceeds of such sale or the scrap value thereof, (ii) if the removed property is used as a trade-in for property not to be installed as part of the Leasehold Mortgaged Property, the trade-in credit received by the Mortgagor, or (iii) in the case of the retention of such removed property by the Mortgagor for other purposes, the fair market value of such property, as determined by an Engineer. If, prior to any such removal, the Mortgagor shall have acquired and installed personal property with its own funds which have become a part of the Leasehold Mortgaged Property, the Mortgagor may credit the amount so spent against the requirement that it either substitute other property or make payment under this Section on account of such removal, provided that such previously acquired and installed property meets the requirements for substituted property under subsection (a) above. The Mortgagor shall promptly report to the Mortgagee each such removal, substitution, sale or other disposition and shall pay to the Mortgagee such amounts as are required by the provisions of subsection (b) above promptly after the sale, trade-in or other disposition requiring such payment; provided, however, that no such reporting or payment need be made until the amount to be paid to the Mortgagee on account of all such sales, trade-ins or other dispositions not previously paid aggregates at least $100,000. At the request of the Mortgagee, the Mortgagor shall deliver to the Mortgagee such instruments, including financing statements and amendments thereto, that are necessary or advisable to perfect the Mortgagee s lien upon and security interest in any personal property installed in substitution for any property removed pursuant to this Section. The Mortgagee may require the Mortgagor to provide, at the expense of the Mortgagor, an opinion of Independent Counsel as to the perfection of the Mortgagee s lien and security interest. Upon the request of the Mortgagor, the Mortgagee shall execute and deliver to the Mortgagor appropriate instruments releasing any property removed pursuant to this Section from the liens and security interests under the Leasehold Mortgage. Damage, Destruction and Condemnation Damage to or Destruction of Project Facilities. In case of any damage to or destruction of the Project Facilities or any part thereof, the Mortgagor will promptly give or cause to be given written notice thereof to the Mortgagee and the Issuer generally describing the nature and extent of such damage or destruction. Mortgagor shall, whether or not the Net Proceeds of insurance, if any, received on account of such damage or destruction shall be sufficient for such purpose, promptly commence and complete, or cause to be commenced and completed, the repair or restoration of the Project Facilities as nearly as practicable to the value, condition and character thereof existing immediately prior to such damage or destruction, with such changes or alterations, however, as the Mortgagor may deem necessary for proper operation of the Leasehold Mortgaged Property. Use of Insurance Proceeds. In connection with the repair or restoration of the Project Facilities pursuant to the immediately preceding Section Damage to or Destruction of Project Facilities Net Proceeds of Required Property Insurance Coverage (other than business interruption insurance) shall be applied as provided in Master Indenture. Eminent Domain. If title to or the temporary use of the Leasehold Mortgaged Property, or any part thereof, shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority, the Mortgagor will promptly give written notice thereof to the Mortgagee and the Issuer describing the nature and extent of such taking. Any Net Proceeds received from any award made in such eminent domain proceedings shall be applied as provided in Section 14 of the Supplemental Indenture. C-58

203 Remedies Right to Perform Covenants. If the Mortgagor shall fail to make any payment or perform any act required to be made or performed under the Leasehold Mortgage (including, without limitation, the payments described in under the heading Taxes, Mechanics Liens and Insurance above) or under the Trust Agreement or the Obligation, the Mortgagee, without demand upon the Mortgagor and without waiving or releasing any obligation or default, may (but shall be under no obligation to) upon ten (10) days written notice to the Mortgagor and the Lessor (except under emergency conditions), make such payment or perform such act for the account and at the expense of the Mortgagor and may enter upon the Leasehold Mortgaged Property or any part thereof for such purpose and take all such action thereon as, in its opinion, may be necessary or appropriate therefor. All payments so made by the Mortgagee and all costs, fees and expenses (including, without limitation, reasonable attorneys fees and expenses) incurred in connection therewith or in connection with the performance by the Mortgagee of any such act, together with interest thereon at the Interest Rate for Advances from the date of payment or incurrence, shall, together with such interest, be additional indebtedness secured by the Leasehold Mortgage, to the extent permitted by law, shall be paid by the Mortgagor to the Mortgagee on demand. In any action brought to collect such indebtedness, or to foreclose the Leasehold Mortgage, the Mortgagee shall be entitled to the recovery of such expenses in such action except as limited by law or judicial order or decision entered in such proceedings. Events of Default. Any one or more of the following events shall be an Event of Default under the Leasehold Mortgage: (a) Failure by the Mortgagor to pay in full when due or before the expiration of any applicable grace period any installment of principal, interest or premium under the Obligation. (b) An Event of Default as defined in the Master Indenture. (c) Failure by the Mortgagor to pay to the Mortgagee (within ten (10) days of receipt of notice from the Mortgagee of the sum owing) any amounts due under the heading Right to Perform Covenants above. (d) Failure by the Mortgagor to observe or perform any other term, covenant or agreement on the Mortgagor s part to be observed or performed under the Leasehold Mortgage, and continuation of that failure for thirty (30) days after written notice thereof shall have been given to the Mortgagor and the Lessor by the Mortgagee, or for such longer period as the Mortgagee may agree to in writing; provided that if the failure is other than the payment of money and is of such nature that it cannot be corrected within the applicable period, that failure shall not constitute an Event of Default so long as the Mortgagor institutes curative action within the applicable period and diligently pursues that action to completion. (e) The Mortgagor shall: (i) admit in writing its inability to pay its debts generally as they become due; (ii) have an order for relief entered in any case commenced by or against it under the federal bankruptcy laws, as of the date of the Leasehold Mortgage or thereafter in effect; (iii) commence a proceeding under any other federal or state bankruptcy, insolvency, reorganization or similar law, or have such a proceeding commenced against it and either have an order of insolvency or reorganization entered against it or have the proceeding remain undismissed and unstayed for 90 days; (iv) make an assignment for the benefit of creditors; or (v) have a receiver or trustee appointed for it or for the whole or any substantial part of its property. (f) Mortgagor s default under the Lease, which remains uncured after all applicable cure periods set forth in the Lease. Notwithstanding the foregoing, if, by reason of Force Majeure, the Mortgagor is unable to perform or observe any agreement, term or condition of the Leasehold Mortgage which would give rise to an Event of Default only under subsection (d) or (f) above, the Mortgagor shall not be deemed in default during the continuance of such inability. However, the Mortgagor shall promptly give notice to the Mortgagee and the Issuer of the existence of an event of Force Majeure and shall use its best efforts to remove the effects thereof; provided that the settlement of strikes or other industrial disturbances shall be entirely within its discretion. The term Force Majeure shall mean, without limitation, the following: (i) acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States of America or of the State or any of their departments, agencies, political subdivisions or officials, or any civil or military authority; insurrections; civil disturbances; riots; epidemics; landslides; lightning; earthquakes; fires; hurricanes; tornados; storms; droughts; floods; arrests; restraint of government and people; explosions; breakage, malfunction or accident to facilities, machinery, transmission pipes or canals; partial or entire failure of utilities; shortages of labor, materials, supplies or transportation; or (ii) any cause, circumstance or event not reasonably within the control of the Mortgagor. The declaration of an Event of Default under subsection (e) above, and the exercise of remedies upon any such declaration, shall be subject to any applicable limitations of federal bankruptcy law affecting or precluding such declaration or exercise during the pendency of or immediately following any bankruptcy, liquidation or reorganization proceedings. Remedies. If an Event of Default shall have occurred and be continuing after all cure periods, the Mortgagee, at any time, at its election, may exercise any or all or any combination of the remedies conferred upon or reserved to it under the Leasehold Mortgage, the Master Indenture, the Obligation or any instrument collateral thereto, or as of the date of the Leasehold Mortgage or thereafter existing at law, in equity or by statute. Without limitation, the Mortgagee may (a) declare the entire unpaid principal balance of the indebtedness secured by the Leasehold Mortgage immediately due and payable without notice of demand, the same being expressly waived by the Mortgagor; (b) proceed at law or in equity to collect all indebtedness secured by the Leasehold Mortgage, whether at maturity or by acceleration; (c) foreclose the lien of the Leasehold Mortgage as against all or any part of the Leasehold Mortgaged Property; and (d) exercise any rights, powers and remedies it may have as a secured party under C-59

204 the Commercial Code, or other similar laws in effect including, without limitation, the option of proceeding as to both personal property and fixtures in accordance with the Mortgagee s rights with respect to real property. Any moneys received by the Mortgagee pursuant to the exercise of remedies provided in the Leasehold Mortgage or by law shall be applied as provided in Section 4.04 of the Master Indenture (relating to application of monies after a default). Miscellaneous Additional Security. Without notice to or consent of the Mortgagor and without impairment of the lien and rights created by the Leasehold Mortgage, the Mortgagee may accept from the Mortgagor or from any other person or persons, additional security for the indebtedness secured by the Leasehold Mortgage. Neither the giving of the Leasehold Mortgage nor the acceptance of any such additional security shall prevent the Mortgagee from resorting, first, to such additional security, or first, to the security created by the Leasehold Mortgage, in either case without affecting the lien of the Leasehold Mortgage and the rights conferred under the Leasehold Mortgage. Release of Leasehold Mortgaged Property and Easements. At the request of the Mortgagor, the Mortgagee may, at any time and from time to time, without the consent of the Issuer or Holders of the Bonds, consent to, join in or permit a release of any part of the Leasehold Mortgaged Property or the granting of any easements, licenses, party wall rights and rights of lateral support with respect to the Project Site or the Project Facilities; provided, that the Mortgagee shall have determined that any of the foregoing is not prejudicial to the Holders of the Bonds and does not impair the value of the Leasehold Mortgaged Property as security under the Leasehold Mortgage. None of the foregoing shall impair in any manner the validity, or except as specifically provided therein the priority, of the Leasehold Mortgage. Any moneys received by the Mortgagee pursuant to this Section shall be applied as provided in Section 4.06 of the Trust Agreement (relating to purchase in lieu of redemption). Release and Discharge. If all of the Financing Payments under the Master Indenture shall have been paid and all other sums payable under the Leasehold Mortgage, the Obligation and the Trust Agreement by the Mortgagor shall have been paid and the Mortgagor shall have complied with all the terms, conditions and requirements of the Leasehold Mortgage, of the Trust Agreement and of the Obligation, then the Leasehold Mortgage shall be null and void and of no further force and effect. Upon the written request and at the expense of the Mortgagor, the Mortgagee will promptly execute and deliver such proper instruments of release and discharge as may reasonably be requested to evidence such defeasance, release and discharge. C-60

205 APPENDIX D Form of Bond Counsel Opinion

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207 APPENDIX D PROPOSED FORM OF BOND COUNSEL OPINION To: Hillsborough County Industrial Development Authority Tampa, Florida We have served as bond counsel to our client Florida Health Sciences Center, Inc. (the Hospital ) and not as counsel to any other person in connection with the issuance by the Hillsborough County Industrial Development Authority (the Authority ) of its $166,490,000 Hillsborough County Industrial Development Authority Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Series 2012A (the Bonds ), dated the date of this letter. The Bonds are issued pursuant to Parts II and III of Chapter 159, Florida Statutes, a Trust Agreement, dated as of January 1, 2013 (the Trust Agreement ), between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the Bond Trustee ), and resolutions of the Authority, adopted on October 30, 2012 and November 29, 2012 (collectively, the Resolution ). Capitalized terms not otherwise defined in this letter are used as defined in the Trust Agreement. In our capacity as bond counsel, we have examined the transcript of proceedings relating to the issuance of the Bonds, a copy of the signed and authenticated Bond of the first maturity, the Trust Agreement, the Financing Agreement dated as of January 1, 2013 (the Financing Agreement ) between the Authority and Florida Health Sciences Center, Inc. (the Hospital ), and such other documents, matters and law as we deem necessary to render the opinions set forth in this letter. Based on that examination and subject to the limitations stated below, we are of the opinion that under existing law: 1. The Bonds, the Trust Agreement and the Financing Agreement are valid and binding obligations of the Authority, enforceable in accordance with their respective terms. 2. The Bonds constitute limited obligations of the Authority, and the principal of and interest and any premium on (collectively, debt service ) the Bonds are payable solely from the revenues and other moneys pledged and assigned by the Authority under the Trust Agreement. Those revenues and other money include the payments required to be made by the Hospital under the Financing Agreement. The payment of debt service on the Bonds is not secured by an obligation or pledge of any money raised by taxation, and the Bonds do not represent or constitute a general obligation or a pledge of the faith and credit of the Authority, the State of Florida or any of its political subdivisions. 3. Interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the Code ), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, portions of the interest on the Bonds earned by certain corporations may be subject to a corporate alternative D-1

208 minimum tax. The Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except for estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. We express no opinion as to any other tax consequences regarding the Bonds. The opinions stated above are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. In rendering all such opinions, we assume, without independent verification, and rely upon (i) the accuracy of the factual matters represented, warranted or certified in the proceedings and documents we have examined, (ii) the due and legal authorization, execution and delivery of those documents by, and the valid, binding and enforceable nature of those documents upon, any parties other than the Authority and (iii) the correctness of the legal conclusions contained in the certificate of Carlton Fields, P.A., General Counsel to the Hospital, delivered in connection with this matter. In rendering those opinions with respect to the treatment of the interest on the Bonds under the federal tax laws, we further assume and rely upon compliance with the covenants in the proceedings and documents we have examined, including those of the Authority and the Hospital. Failure to comply with certain of those covenants subsequent to issuance of the Bonds may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to their date of issuance. In addition, in rendering those opinions with respect to the treatment of the interest on the Bonds under the federal tax laws, we also further assume the correctness of, and rely on the certification of, Carlton Fields, P.A., General Counsel to the Hospital, regarding the current qualification of the Hospital as an organization described in Section 501(c)(3) of the Code and the use of the facilities financed with the Bonds in activities that are not considered unrelated trade or business activities of the Hospital, as defined in Section 513(a) of the Code, which opinion is subject to a number of qualifications and limitations. We have not given any opinion or assurance concerning Section 513(a) of the Code or the effect of any future activities of the Authority or the Hospital. Failure of the Hospital to maintain its qualification as an organization described in Section 501(c)(3) of the Code, or to use the facilities financed by the Bonds in a manner that is substantially related to the Hospital s charitable purpose under Section 513(a) of the Code, may cause interest on the Bonds to be included in gross income retroactively to their date of the issuance. The rights of the owners of the Bonds and the enforceability of the Bonds, the Trust Agreement and the Financing Agreement are subject to bankruptcy, insolvency, arrangement, fraudulent conveyance or transfer, reorganization, moratorium and other laws relating to or affecting creditors rights, to the application of equitable principles, to the exercise of judicial discretion, and to limitations on legal remedies against public entities. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the Bonds, the Trust Agreement or the Financing Agreement. D-2

209 The opinions rendered in this letter are stated only as of this date, and no other opinion shall be implied or inferred as a result of anything contained in or omitted from this letter. Our engagement as bond counsel with respect to the Bonds has concluded on this date. Respectfully submitted, D-3

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211 APPENDIX E Form of Continuing Disclosure Agreement

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213 FORM OF CONTINUING DISCLOSURE AGREEMENT APPENDIX E THIS CONTINUING DISCLOSURE AGREEMENT (the "Disclosure Agreement") is executed and delivered by Florida Health Sciences Center, Inc. (d/b/a Tampa General Hospital) (the "Hospital"), and The Bank of New York Mellon Trust Company, N.A. in its capacity as dissemination agent hereunder. The $166,490,000 Hillsborough County Industrial Development Authority (Florida) Hospital Revenue Refunding Bonds (Tampa General Hospital Project), Series 2012A (the "Bonds") are being issued pursuant to a Trust Agreement dated as of January 1, 2013, between the Hillsborough County Industrial Development Authority and The Bank of New York Mellon Trust Company, N.A. in its capacity as trustee (in such capacity, the "Bond Trustee"), as amended and supplemented (the "Trust Agreement"). The parties hereto covenant and agree as follows: SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered for the benefit of the Bondholders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with the Rule. SECTION 2. Definitions. Unless otherwise required by the context, all capitalized terms used herein shall have the meanings assigned to such terms in the Trust Agreement, or as set forth below: "Annual Report" means any Annual Report provided by the Hospital pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Beneficial Owner" means any person which has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). "Disclosure Representative" means the Chief Financial Officer of the Hospital or her or his designee, or such other officer or employee as the Hospital shall designate in writing to the Dissemination Agent from time to time. "EMMA" shall mean the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System. "Dissemination Agent" means The Bank of New York Mellon Trust Company, N.A., acting in its capacity as dissemination agent hereunder, or any successor dissemination agent designated in writing by the Hospital and which has assumed the responsibilities of the Dissemination Agent hereunder. "Listed Events" means any of the events listed in Section 5(a) of this Disclosure Agreement. "Official Statement" means the Official Statement relating to the Bonds, dated January 24, E-1

214 "Participating Underwriter" means any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. SECTION 3. Provision of Annual Reports. (a) The Hospital shall, or shall cause the Dissemination Agent to, not later than 120 days after the end of the Hospital's fiscal year (the "Filing Date"), commencing with the report for the Fiscal Year, provide to EMMA an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the Hospital may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Hospital's fiscal year changes, it shall give notice of such changes in the same manner as for a Listed Event under Section 5 below. (b) Not later than fifteen (15) business days prior to the Filing Date, the Hospital shall provide eight (8) copies (or such other reasonable number of copies as the Dissemination Agent shall specify) of the Annual Report to the Dissemination Agent and one copy to the Bond Trustee (if the Bond Trustee is not the Dissemination Agent). If the Dissemination Agent has not received the Annual Report for a fiscal year by its close of business on the fifteenth business day preceding the Filing Date for that fiscal year, then the Dissemination Agent shall provide a notice to the Hospital, not later than the Dissemination Agent's close of business on the next business day, substantially in the form of Exhibit A, by facsimile transmission (or other means similarly prompt) and by certified or registered mail, postage prepaid, return receipt requested. If the Dissemination Agent has not received the Annual Report by its close of business on the Filing Date, the Dissemination Agent shall provide a notice to the Hospital, not later than the Dissemination Agent's close of business on the next business day, substantially in the form of Exhibit B, by facsimile transmission (or other means similarly prompt). (c) If, in any instance, the Annual Report was not timely filed by the Filing Date or the Hospital fails to provide the Dissemination Agent with written evidence of filing the Annual Report with EMMA, by 3:00 p.m., Eastern time, on the second business day following the Filing Date, the Dissemination Agent shall send or cause to be sent promptly, but in any event not later than its close of business on the second business day following the Filing Date, a notice substantially in the form of Exhibit C, modified to reflect the pertinent facts, to EMMA, (with a duplicate copy of such notice to the Hospital) by facsimile transmission (or other means similarly prompt). The Dissemination Agent shall be entitled to rely conclusively upon any written evidence provided by the Hospital regarding the provision of the Annual Report to EMMA pursuant to this Section 3. (d) The Dissemination Agent shall file a report with the Hospital and (if the Dissemination Agent is not the Bond Trustee) the Bond Trustee certifying that the Annual E-2

215 Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided to EMMA. SECTION 4. Content of Annual Reports. The Hospital's Annual Report shall contain or include by reference the following: (a) The audited financial statements of the Hospital for the prior fiscal year, prepared in accordance with generally accepted accounting principles as promulgated by the Financial Accounting Standards Board ("FASB"). If the Hospital's audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a) above, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) The following described information: (i) An update of the "Summary of Historical Utilization" section of Appendix A of the Official Statement; (ii) An update of the "Historical Financial Performance" section of Appendix A of the Official Statement; and (iii) An update of the "Sources of Revenue" section of Appendix A of the Official Statement. SECTION 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5 below, the Hospital shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: (i) (ii) (iii) difficulties; (iv) difficulties; (v) perform; principal and interest payment delinquencies; non-payment related defaults, if material; unscheduled draws on the debt service reserves reflecting financial unscheduled draws on credit enhancements reflecting financial substitution of credit or liquidity providers, or their failure to (vi) adverse tax opinions, IRS notices or events affecting the tax status of the security; (vii) modifications to rights of securities holders, if material; E-3

216 (viii) bond calls, if material; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the securities, if material; (xi) (xii) rating changes; tender offers; (xiii) bankruptcy, insolvency, receivership or similar event of the obligated person; (xiv) material; and merger, consolidation, or acquisition of the obligated person, if (xv) appointment of a successor or additional trustee, or the change of name of a trustee, if material. (b) If the Dissemination Agent has been instructed by the Hospital to report the occurrence of a Listed Event, the Dissemination Agent shall file the notice provided to the Dissemination Agent by the Hospital of such occurrence with EMMA, and, if the Dissemination Agent is not the Bond Trustee, the Bond Trustee. (c) In addition to the reporting obligations set forth in this Section 5 and in Section 3 above, not later than 60 days after the end of each fiscal quarter, or 90 days after the end of each fourth fiscal quarter, commencing with the fiscal quarter ending March 31, 2013, the Hospital shall provide the following information for the quarterly period ending on the last day of the immediately preceding calendar quarter to EMMA and to any Holders of at least $1,000,000 aggregate principal amount of Outstanding Bonds who have requested it in writing, unaudited financial statements of the Hospital. Also, by the Filing Date, the Hospital shall provide to any Holders of at least $1,000,000 aggregate principal amount of Outstanding Bonds who have requested it in writing audited financial statements of the Hospital for the prior fiscal year accompanied by an opinion of independent certified public accountants. SECTION 6. Termination of Reporting Obligation. The Hospital's obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Hospital shall give notice of such termination in the same manner as for a Listed Event under Section 5. SECTION 7. Dissemination Agent. The Hospital may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Hospital pursuant to this Disclosure Agreement. E-4

217 If at any time there is not any other designated Dissemination Agent, the Hospital shall be the Dissemination Agent. SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the parties may amend this Disclosure Agreement (and the Trustee shall agree to any amendment so requested by the Hospital), and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Trust Agreement for amendments to the Trust Agreement with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Hospital shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Hospital. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(f), and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Hospital from disseminating any other information, using the means of Dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Hospital chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Hospital shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the Hospital to comply with any provision of this Disclosure Agreement, the Bond Trustee may (and, at the request of any E-5

218 Participating Underwriter or the Holders of at least 25% aggregate principal amount of Outstanding Bonds, shall), or any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Hospital to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Trust Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the Hospital to comply with this Disclosure Agreement shall be an action to compel performance. SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. With respect to the subject matter contained herein, the Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Hospital agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's gross negligence or willful misconduct. The obligations of the Hospital under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. SECTION 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Agreement may be given as follows: To the Hospital: Bond Trustee & Dissemination Agent: Florida Health Sciences Center, Inc. 2 Columbia Drive Tampa, Florida Attention: President and Chief Executive Officer The Bank of New York Mellon Trust Company, N.A Centurion Parkway Jacksonville, Florida Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent. SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Hospital, the Bond Trustee (including, specifically, the Bond Trustee's right to enforce Section 10 hereof), the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. SECTION 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. E-6

219 Dated: February 28, 2013 FLORIDA HEALTH SCIENCES CENTER, INC. By: Ronald A. Hytoff President and Chief Executive Officer THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Dissemination Agent By: Authorized Officer E-7

220 EXHIBIT A Hillsborough County Industrial Development Authority (Florida) Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Series 2012A NOTICE OF FAILURE TO FILE ANNUAL REPORT TO: Florida Health Sciences Center, Inc. 2 Columbia Drive Tampa, Florida Attn: President and Chief Executive Officer [or current notice address] The undersigned, as the Dissemination Agent with respect to the captioned bonds (the "Bonds"), and serving in that capacity under the Continuing Disclosure Agreement dated as of February 28, 2013 (the "Agreement"), between the undersigned and Florida Health Sciences Center, Inc. (the "Hospital") hereby notifies you (with each capitalized term used but not defined herein having the meaning assigned to it in the Agreement), that you, as the Hospital, as of the date of this notice, have not provided or caused to be provided to the undersigned the Annual Report that is required under the Agreement to be so provided not later than, 20. The Annual Report is required under the Agreement to be provided either to the undersigned (to be distributed by the undersigned as Dissemination Agent) or both to the undersigned and to EMMA (as defined in the Agreement) not later than that date. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Dissemination Agent Dated By: Title: E-8

221 EXHIBIT B Hillsborough County Industrial Development Authority (Florida) Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Series 2012A SECOND NOTICE OF FAILURE TO FILE ANNUAL INFORMATION TO: Florida Health Sciences Center, Inc. 2 Columbia Drive Tampa, Florida Attn: President and Chief Executive Officer [or current notice address] The undersigned, as the Dissemination Agent with respect to the captioned bonds (the "Bonds"), and serving in that capacity under the Continuing Disclosure Agreement dated as of February 28, 2013 (the "Agreement"), between the undersigned and Florida Health Sciences Center, Inc. (the "Hospital"), hereby notifies you (with each capitalized term used but not defined herein having the meaning assigned to it in the Agreement), that you, as the Hospital, as of the date of this notice, have not provided to the undersigned the Annual Report that was required under the Agreement to be so provided not later than. Please provide the required Annual Report to the undersigned, together with written evidence as to whether that information has been provided to EMMA and, if so, when it was provided. If, in any instance, the Annual Report was not timely provided to EMMA in accordance with Section 3 of the Agreement, you may submit a written statement regarding the Hospital's failure to comply that would be provided to EMMA or to the Municipal Securities Rulemaking Board, with the notice that the undersigned must give of that failure to comply under subsection 3(c) of the Agreement. Any such written evidence or statement must be received by the undersigned not later than 3:00 p.m., Eastern time, on. If the undersigned has not received written evidence by that time that a timely filing was made, a notice will be filed promptly thereafter with EMMA, substantially in the form attached as Exhibit C to the Agreement. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Dissemination Agent Dated By: Title: E-9

222 EXHIBIT C Hillsborough County Industrial Development Authority (Florida) Hospital Revenue Refunding Bonds (Tampa General Hospital Project) Series 2012A ISSUED: February 28, 2013 NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT NOTICE IS HEREBY GIVEN that Florida Health Sciences Center, Inc. (the "Hospital") has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Agreement dated February 28, 2013 between the Hospital and the Dissemination Agent. The Hospital anticipates that the Annual Report will be filed by. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Dissemination Agent Dated By: Title: cc: Hospital E-10

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224 HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (FLORIDA) HOSPITAL REVENUE REFUNDING BONDS (TAMPA GENERAL HOSPITAL PROJECT), SERIES 2012A