Document:

<PAGE>

                                                                    Exhibit 10.8

           FIRST AMENDMENT TO DEBTOR-IN-POSSESSION CREDIT AGREEMENT
                                      AND
                     FIRST AMENDMENT TO SECURITY AGREEMENT

                               October 21, 1999

          Reference is made to (i) that certain Debtor-in-Possession Credit
Agreement dated as of September 13, 1999 (as heretofore amended, supplemented or
otherwise modified, the "DIP Credit Agreement"), by and among VENCOR, INC., a
Delaware corporation ("Vencor"), and VENCOR OPERATING, INC., a Delaware
corporation ("Vencor Opco"), each as debtor and debtor-in-possession, and EACH
OF VENCOR'S SUBSIDIARIES LISTED ON THE SIGNATURE PAGES THEREOF, each as debtor
and debtor-in-possession (each such subsidiary, Vencor and Vencor Opco
individually referred to herein as a "Borrower" and, collectively, on a joint
and several basis, as "Borrowers"); THE LENDERS LISTED ON THE SIGNATURE PAGES
THEREOF (each individually referred to herein as a "Lender" and collectively as
"Lenders"); MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as arranger (in such
capacity, "Arranger"), collateral agent and administrative agent for the
Lenders, and as an issuing bank for Letters of Credit thereunder, and (ii) that
certain Security Agreement dated as of September 13, 1999 (as heretofore
amended, supplemented or otherwise modified, the "Security Agreement"), among
the Borrowers, the Subsidiary Guarantor and Morgan Guaranty Trust Company of New
York, as collateral agent (in such capacity, "Collateral Agent"). Capitalized
terms used herein without definition herein shall have the meanings assigned to
such terms in either the DIP Credit Agreement or Security Agreement, as
appropriate.

          Borrowers and Lenders desire to amend the DIP Credit Agreement to: (i)
provide for the ability of the Borrowers to post cash or make deposits with
bonding companies for the issuance of bonds necessitated by either regulatory or
judicial requirements for an aggregate amount of $5,000,000, and (ii) comply
with the terms of Section 5.13 of the DIP Credit Agreement.  Accordingly,
Borrowers and the undersigned Lenders hereby agree that:

          1.   the definition of "Permitted Encumbrances" set forth in Section
1.01 of the DIP Credit Agreement is hereby amended by (i) deleting the "and" at
the end of subparagraph (b) thereof; (ii) deleting the "." immediately after
subparagraph (c) thereof, and substituting therefor "; and"; and (iii) adding a
new subparagraph (d) at the end thereof as follows:

     "    (d)  any other Liens incurred in the ordinary course of business in
     connection with any obligation of any Vencor Company to post cash or make
     deposits with any bonding company for the issuance of bonds necessitated by
     either regulatory or judicial requirements in an aggregate amount of up to
     $5,000,000.";
<PAGE>

          2.   Section 2.05(a)(i) of the DIP Credit Agreement is hereby amended
by adding immediately after the reference to "$15,000,000" and before the semi-
colon, the phrase "(less any amounts posted in cash or deposited with any
bonding company by any Vencor Company as permitted under subparagraph (d) of the
definition of Permitted Encumbrances)"; and

          3.   Section 5.13 of the DIP Credit Agreement is hereby amended by
deleting in its entirety and substituting therefor the following:

          "Section 5.13  Government Settlement.  The Borrowers shall
                         ---------------------
     cause all existing disputes with the United States with respect
     to Medicare and/or under the False Claims Act to be settled in a
     manner satisfactory to Determining Lenders by the close of
     business on Monday, November 29, 1999 or such later date that
     Determining Lenders may otherwise consent to (such date, in any
     event, being the "Default Date"). Notwithstanding anything to the
     contrary herein, failure to cause such disputes to be so settled
     by the Default Date shall be deemed a Material Adverse Effect and
     an immediate Event of Default on such Default Date for all
     purposes hereunder and under the other Financing Documents."

          Borrowers, Subsidiary Guarantor and Lenders further desire to amend
the Security Agreement to reflect the provisions of the Borrowing Order which
require all proceeds of the Collateral to be held in trust by the Borrowers, or
any of their successors or assigns, for the benefit of the Secured Parties.
Accordingly, Borrowers, Subsidiary Guarantor and the undersigned Lenders hereby
agree that Section 12 of the Security Agreement is hereby amended by adding
immediately after subsection (d) thereof a new subsection (e) as follows:

          "(e) Upon the giving of the Enforcement Notice, without
     limiting any of the rights or remedies of the Collateral Agent,
     or any Secured Party, to collect directly from any account debtor
     or obligor, including the U.S. (as defined in the Interim
     Borrowing Order), all proceeds of the Collateral received by any
     Lien Grantor or any successors or assigns, including any trustee
     appointed or elected in any Chapter 11 Case or any superseding
     chapter 7 cases, shall be held in trust for the Collateral Agent
     for the benefit of the Secured Parties."

          On and after the First Amendment Effective Date (as defined below),
each reference in the DIP Credit Agreement and the Security Agreement to "this
Agreement", "hereunder", "hereof", "herein" or words of like import referring to
such DIP Credit Agreement or Security Agreement, respectively, and each
reference in the other Financing Documents to the "DIP Credit Agreement" or
"Security Agreement", "thereunder", "thereof" or words of like import referring
to such DIP Credit Agreement or Security Agreement, as the case may be, shall
mean and be a reference to such DIP Credit Agreement or Security Agreement, as
the case may be, as amended by this Amendment (such DIP Credit Agreement and
Security Agreement, as so amended, being the "Amended Agreements").  Except as
specifically amended by this Amendment, the DIP Credit Agreement, Security
Agreement and such other Financing Documents shall remain in full force and
effect and are hereby ratified and confirmed.  The execution, delivery and
performance of this Amendment shall not, except as expressly provided herein,
constitute a waiver of any provision of, or operate as a waiver of any right,
power or

                                       2
<PAGE>

remedy of any Agent or any Lender under the DIP Credit Agreement, Security
Agreement or any of such other Financing Documents.

          In order to induce Lenders to enter into this Amendment, each Borrower
and Subsidiary Guarantor (for purposes of this paragraph only, hereinafter
collectively referred to as the Lien Grantors, as defined in the Security
Agreement), by its execution of a counterpart of this Amendment, represents and
warrants that (a) such Lien Grantor has the corporate power and authority and
all material governmental licenses, authorizations, consents, registrations and
approvals required to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Amended
Agreements, (b) the execution and delivery of this Amendment and the performance
of the Amended Agreements have been duly authorized by all necessary corporate
action on the part of such Lien Grantor, (c) the execution and delivery by such
Lien Grantor of this Amendment and the performance by such Lien Grantor of the
Amended Agreements do not and will not (i) contravene any provision of such Lien
Grantor's charter, articles or certificate of incorporation or by-laws, any
unanimous agreement of all the shareholders of such Lien Grantor or any
applicable United States federal law, or any applicable law of any state, or any
other jurisdiction in which such Lien Grantor's material assets are located,
(ii) constitute, or result in a breach of, or a default under, or be in conflict
with, any material deed, indenture, mortgage, franchise, license, judgment,
agreement or instrument to which such Lien Grantor is a party or by which such
Lien Grantor is bound, (iii) result in any Lien on any of such Lien Grantor's
property or assets, or (iv) require any approval of stockholders or any approval
or consent of any Person under any document referred to in clause (iii) above,
(d) the execution and delivery by such Lien Grantor of this Amendment and the
performance by such Lien Grantor of the relevant Amended Agreements do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority or regulatory body, (e)
this Amendment and the Amended Agreements have been duly executed and delivered
by such Lien Grantor and are the legally valid and binding obligations of such
Lien Grantor, enforceable against such Lien Grantor in accordance with their
respective terms, (f) for purposes of the Borrowing Order (i) this Amendment
constitutes a non-material modification of the DIP Credit Agreement, the
Security Agreement and the Financing Documents, and (ii) notice of this
Amendment has been given to and received by the Committee (as defined in the
Borrowing Order), (g) with respect to the Borrowers, after giving effect to this
Amendment, the representations and warranties contained in Article 4 of the DIP
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date, (h) with respect to the Borrowers and the Subsidiary Guarantor, after
giving effect to this Amendment, the representations and warranties contained in
Section 2 of the Security Agreement are and will be true, correct and complete
in all material respects on and as of the First Amendment Effective Date to the
same extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date, and (i) after giving effect to this Amendment, no event has
occurred and is continuing or will result from the consummation of the
transactions contemplated by this Amendment that would constitute an Event of
Default.

                                       3
<PAGE>

          This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.  This Amendment shall
become effective (the date of such effectiveness being the "First Amendment
Effective Date") with respect to the DIP Credit Agreement and the Security
Agreement upon the execution of a counterpart hereof by the Borrowers, the
Subsidiary Guarantor and Required Lenders and receipt by the Borrowers, the
Subsidiary Guarantor and Agent of written or telephonic notification of such
execution and authorization of delivery thereof; provided that, in addition to
                                                 --------
the foregoing conditions to effectiveness, the amendment to Section 5.13 of the
DIP Credit Agreement set forth in numbered paragraph 3 above shall become
effective upon the execution and delivery of a counterpart hereof by Determining
Lenders.

          THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.

                 [Remainder of page intentionally left blank]

                                       4
<PAGE>

BORROWERS:
                    Advanced Infusion Systems, Inc.
                    American X-Rays, Inc.
                    C.P.C. of Louisiana, Inc.
                    Community Behavioral Health System, Inc.
                    Community Psychiatric Centers of Arkansas, Inc.
                    Community Psychiatric Centers of California
                    Community Psychiatric Centers of Florida, Inc.
                    Community Psychiatric Centers of Idaho, Inc.
                    Community Psychiatric Centers of Indiana, Inc.
                    Community Psychiatric Centers of Kansas, Inc.
                    Community Psychiatric Centers of Mississippi, Inc.
                    Community Psychiatric Centers of Missouri, Inc.
                    Community Psychiatric Centers of North Carolina, Inc.
                    Community Psychiatric Centers of Oklahoma, Inc.
                    Community Psychiatric Centers of Utah, Inc.
                    Community Psychiatric Centers Properties Incorporated
                    Community Psychiatric Centers Properties of Oklahoma, Inc.
                    Community Psychiatric Centers Properties of Texas, Inc.
                    Community Psychiatric Centers Properties of Utah, Inc.
                    Courtland Gardens Health Center, Inc.
                    CPC Investment Corp.
                    CPC Managed Care Health Services, Inc.
                    CPC of Georgia, Inc.
                    CPC Properties of Arkansas, Inc.
                    CPC Properties of Illinois, Inc.
                    CPC Properties of Indiana, Inc.
                    CPC Properties of Kansas, Inc.
                    CPC Properties of Louisiana, Inc.
                    CPC Properties of Mississippi, Inc.
                    CPC Properties of Missouri, Inc.
                    CPC Properties of North Carolina, Inc.
                    First Rehab, Inc.
                    Florida Hospital Properties, Inc.
                    Health Care Holdings, Inc.
                    Health Care Technology, Inc.
                    Helian ASC of Northridge, Inc.
                    Helian Health Group, Inc.
                    Helian Recovery Corporation
                    Homestead Health Center, Inc.
                    Horizon Healthcare Services, Inc.

                                      S-1
<PAGE>

                    Interamericana Health Care Group
                    J.B. Thomas Hospital, Inc.
                    Lafayette Health Care Center, Inc.
                    MedEquities, Inc.
                    Medisave of Tennessee, Inc.
                    Medisave Pharmacies, Inc.
                    Old Orchard Hospital, Inc.
                    Palo Alto Surgecenter Corporation
                    Peachtree-Parkwood Hospital, Inc.
                    PersonaCare, Inc.
                    PersonaCare Living Center of Clearwater, Inc.
                    PersonaCare of Bradenton, Inc.
                    PersonaCare of Clearwater, Inc.
                    PersonaCare of Connecticut, Inc.
                    PersonaCare of Georgia, Inc.
                    PersonaCare of Huntsville, Inc.
                    PersonaCare of Little Rock, Inc.
                    PersonaCare of Ohio, Inc.
                    PersonaCare of Owensboro, Inc.
                    PersonaCare of Pennsylvania, Inc.
                    PersonaCare of Pompano East, Inc.
                    PersonaCare of Pompano West, Inc.
                    PersonaCare of Reading, Inc.
                    PersonaCare of San Antonio, Inc.
                    PersonaCare of San Pedro, Inc.
                    PersonaCare of Shreveport, Inc.
                    PersonaCare of St. Petersburg, Inc.
                    PersonaCare of Warner Robbins, Inc.
                    PersonaCare of Wisconsin, Inc.
                    PersonaCare Properties, Inc.
                    ProData Systems, Inc.
                    Recovery Inns of America, Inc.
                    Respiratory Care Services, Inc.
                    Stamford Health Facilities, Inc.
                    THC-Chicago, Inc.
                    THC-Hollywood, Inc.
                    THC-Houston, Inc.
                    THC-Minneapolis, Inc.
                    THC-North Shore, Inc.
                    THC-Orange County, Inc.
                    THC-San Diego, Inc.
                    THC-Seattle, Inc.
                    TheraTx Healthcare Management, Inc.
                    TheraTx Health Services, Inc.
                    TheraTx Management Services, Inc.
                    TheraTx Medical Supplies, Inc.

                                      S-2
<PAGE>

                    TheraTx Rehabilitation Services, Inc.
                    TheraTx Staffing, Inc.
                    Transitional Hospitals Corporation, a Delaware Corporation
                    Transitional Hospitals Corporation, a Nevada Corporation
                    Transitional Hospitals Corporation of Indiana, Inc.
                    Transitional Hospitals Corporation of Louisiana, Inc.
                    Transitional Hospitals Corporation of Michigan, Inc.
                    Transitional Hospitals Corporation of Nevada, Inc.
                    Transitional Hospitals Corporation of New Mexico, Inc.
                    Transitional Hospitals Corporation of Tampa, Inc.
                    Transitional Hospitals Corporation of Texas, Inc.
                    Transitional Hospitals Corporation of Wisconsin, Inc.
                    Tucker Nursing Center, Inc.
                    Tunstall Enterprises, Inc.
                    VC-OIA, Inc.
                    VC-TOHC, Inc.
                    VC-WM, Inc.
                    Vencare, Inc.
                    Vencare Rehab Services, Inc.
                    Vencor Facility Services, Inc.
                    Vencor Holdings, L.L.C.
                    Vencor Home Care Services, Inc.
                    Vencor Hospice, Inc.
                    Vencor Hospitals East, L.L.C.
                    Vencor Hospitals West, L.L.C.
                    Vencor, Inc.
                    Vencor Insurance Holdings, Inc.
                    Vencor Investment Company
                    Vencor Nevada, L.L.C.
                    Vencor Nursing Centers East, L.L.C.
                    Vencor Nursing Centers Central L.L.C.
                    Vencor Nursing Centers North, L.L.C.
                    Vencor Nursing Centers South, L.L.C.
                    Vencor Nursing Centers West, L.L.C.
                    Vencor Operating, Inc.
                    Vencor Pediatric Care, Inc.
                    Vencor Provider Network, Inc.
                    Ventech Systems, Inc.

                                      S-3
<PAGE>

                          by: Vencor Operating, Inc., as agent and attorney-in-
                              fact for each of the foregoing entities

                              By: /s/ Richard A. Schweinhart
                                  ----------------------------------------------
                                  Name: Richard A. Schweinhart
                                  Title: Chief Financial Officer

                         Stamford Health Associates, L.P.

                         by: Stamford Health Facilities, Inc., Its General
                               Partner

                               By: /s/ Richard A. Schweinhart
                                   ---------------------------------------------
                               Name: Richard A. Schweinhart
                               Title: Chief Financial Officer

                         Vencor Home Care and Hospice Indiana Partnership

                         by: Vencor Home Care Services, Inc., Its General
                               Partner

                               By: /s/ Richard A. Schweinhart
                                   ---------------------------------------------
                               Name: Richard A. Schweinhart
                               Title: Chief Financial Officer

                         by: Vencor Hospice, Inc., Its General Partner

                               By: /s/ Richard A. Schweinhart
                                   ---------------------------------------------
                               Name: Richard A. Schweinhart
                               Title: Chief Financial Officer

                                      S-4
<PAGE>

                         Vencor Hospitals Limited Partnership

                         by: Vencor Operating, Inc., Its General Partner

                               By: /s/ Richard A. Schweinhart
                                   ---------------------------------------------
                               Name: Richard A. Schweinhart
                               Title: Chief Financial Officer

                         by: Vencor Nursing Centers Limited Partnership,
                               Its General Partner

                             by: Vencor Operating, Inc., Its General
                                 Partner

                               By: /s/ Richard A. Schweinhart
                                   ---------------------------------------------
                               Name: Richard A. Schweinhart
                               Title: Chief Financial Officer

                                      S-5
<PAGE>

                         Vencor Nursing Centers Central Limited Partnership

                         by: Vencor Operating, Inc., Its General Partner

                               By: /s/ Richard A. Schweinhart
                                   ---------------------------------------------
                               Name: Richard A. Schweinhart
                               Title: Chief Financial Officer

                         by: Vencor Nursing Centers Limited Partnership, Its
                              General Partner

                         by: Vencor Operating, Inc., Its General Partner

                               By: /s/ Richard A. Schweinhart
                                   ---------------------------------------------
                               Name: Richard A. Schweinhart
                               Title: Chief Financial Officer

                                      S-6
<PAGE>

                         Vencor Nursing Centers Limited Partnership

                         by: Vencor Operating, Inc., Its General Partner

                               By: /s/ Richard A. Schweinhart
                                   ---------------------------------------------
                               Name: Richard A. Schweinhart
                               Title: Chief Financial Officer

                         by: Vencor Hospitals Limited Partnership,
                         Its General Partner

                             by: Vencor Operating, Inc., Its General Partner

                                By: /s/ Richard A. Schweinhart
                                    --------------------------------------------
                                Name: Richard A. Schweinhart
                                Title: Chief Financial Officer

                                      S-7
<PAGE>

SUBSIDIARY GUARANTOR:

                              CARIBBEAN BEHAVIORAL HEALTH SYSTEMS, INC.

                              By: /s/ Richard A. Schweinhart
                                  ----------------------------------------------
                              Name: Richard A. Schweinhart
                              Title: Chief Financial Officer

                                      S-8
<PAGE>

AGENTS AND LENDERS:

                         MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Arranger,
                         Collateral Agent and Administrative Agent and as a
                         Lender

                         By: /s/ Houston A. Stebbins
                             -----------------------
                                 Name: Houston A. Stebbins
                                 Title: Vice President

                                      S-9
<PAGE>

                         ABLECO FINANCE LLC, as a Lender

                         By: /s/ Kevin Genda
                             ---------------------------------------------------
                             Name: Kevin Genda
                             Title: Chief Credit Officer

                                     S-10
<PAGE>

                         APPALOOSA INVESTMENT LIMITED PARTNERSHIP I, as a Lender

                         By: /s/ Ronald M. Goldstein
                             ---------------------------------------------------
                             Name: Ronald M. Goldstein
                             Title: Chief Financial Officer

                                     S-11
<PAGE>

                         BANKERS TRUST COMPANY, as a Lender

                         By: /s/ Kevin Driscoll
                             ---------------------------------------------------
                             Name: Kevin Driscoll
                             Title: Director

                                     S-12
<PAGE>

                         CHASE SECURITIES INC, AS AGENT FOR THE CHASE MANHATTAN
                         BANK, as a Lender

                         By: /s/ Howard J. Golden
                             ---------------------------------------------------
                             Name: Howard J. Golden
                             Title: Authorized Signatory

                                     S-13
<PAGE>

                         GOLDMAN SACHS CREDIT PARTNERS L.P., as a Lender

                         By: /s/ Mark Denatale
                             ---------------------------------------------------
                             Name: Mark Denatale
                             Title:

                                     S-14
<PAGE>

                         PARIBAS, as a Lender

                         By: /s/ Albert A. Young, Jr.
                             ---------------------------------------------------
                             Name: Albert A. Young, Jr.
                             Title: Director

                         By: /s/ Amy Kirschner
                             ---------------------------------------------------
                             Name: Amy Kirschner
                             Title: Vice President

                                     S-15
<PAGE>

                         VAN KAMPEN PRIME RATE INCOME TRUST, as a Lender

                         By: VAN KAMPEN INVESTMENT ADVISORY CORP.

                             By: /s/ Douglas J. Smith
                                 -----------------------------------------------
                             Name: Douglas J. Smith
                             Title: Vice President

                                     S-16
<PAGE>

                         FRANKLIN MUTUAL ADVISERS LLC, as a Lender

                              By: ______________________________________________
                                  Name:
                                  Title:

                                     S-17
<PAGE>

                         FRANKLIN FLOATING RATE TRUST, as a Lender

                              By: ______________________________________________
                                  Name:
                                  Title:

                                     S-18<PAGE>

                                                                    Exhibit 10.9

           SECOND AMENDMENT TO DEBTOR-IN-POSSESSION CREDIT AGREEMENT

                               November 19, 1999

          Reference is made to that certain Debtor-In-Possession Credit
Agreement dated as of September 13, 1999 (as heretofore amended, supplemented or
otherwise modified, the "DIP Credit Agreement"), by and among Vencor, Inc., a
Delaware corporation ("Vencor"), and Vencor Operating, Inc., a Delaware
corporation ("Vencor Opco"), each as debtor and debtor-in-possession, and each
of Vencor's subsidiaries listed on the signature pages thereof, each as debtor
and debtor-in-possession (each such subsidiary, Vencor and Vencor Opco
individually referred to herein as a "Borrower" and, collectively, on a joint
and several basis, as the "Borrowers"); the Lenders listed on the signature
pages thereof; and Morgan Guaranty Trust Company of New York, as arranger,
collateral agent and administrative agent (in such capacity, "Administrative
Agent") for the Lenders, and as an issuing bank for Letters of Credit
thereunder. Capitalized terms used herein without definition herein shall have
the meanings assigned to such terms in the DIP Credit Agreement.

          The Borrowers and the undersigned Lenders hereby agree to amend the
DIP Credit Agreement as follows:

          1.  Section 1.01 of the DIP Credit Agreement is hereby amended by
inserting therein the following definitions in alphabetical order:

          "Dixfield Note" means a promissory note issued by the
     purchaser of the Dixfield Property in the principal amount of
     $197,500, which promissory note shall bear interest at the rate
     of 9.0% per annum, shall mature and be due and payable in full
     not later than one year from the date of issuance thereof and
     shall be in the form delivered to the Administrative Agent in
     connection with the execution of the Second Amendment, with no
     modifications thereto which are deemed material by the
     Administrative Agent other than those approved by Required
     Lenders.

          "Dixfield Property" means the land and related improvements
     owned by Vencor Nursing Centers East, LLC at 100 Weld Street,
     Dixfield, Maine.

          "Government Settlement Term Sheet" means the term sheet
     contained in Schedule 14.
                  -----------

          "Second Amendment" means that certain Second Amendment to
     Debtor-In-Possession Credit Agreement dated as of November 19,
     1999, by and among the Borrowers, the Collateral Agent, the
     Administrative Agent and the Lenders party thereto.
<PAGE>

          2.  Section 1.01 of the DIP Credit Agreement is hereby further amended
by adding at the end of the definition of "Net Cash Proceeds" contained therein
the following sentence:

     "Anything contained herein to the contrary notwithstanding, (i)
     the Borrowers shall be deemed to receive Net Cash Proceeds from
     the sale of the Dixfield Property in the principal amount of the
     Dixfield Note at the time of such sale (and the amount of such
     Net Cash Proceeds shall be applied as Net Cash Proceeds from an
     Asset Sale of a Property Held For Sale in accordance with Section
     2.08(a)), and (ii) no payments on the Dixfeld Note thereafter
     received by any of the Borrowers shall be deemed Net Cash
     Proceeds hereunder."

          3.  Section 5.10 of the DIP Credit Agreement is hereby amended by
deleting the reference contained therein to "three months" and substituting
therefor "four months".

          4.  Section 5.13 of the DIP Credit Agreement is hereby amended by
deleting it in its entirety therefrom.

          5.  Section 7.03(b) of the DIP Credit Agreement is hereby amended by
adding at the end thereof the following sentence:

     "Anything contained herein to the contrary notwithstanding, the
     Borrowers may receive a portion of the consideration for the sale
     of the Dixfield Property in the form of the Dixfield Note,
     provided that (i) the Dixfield Note shall be pledged pursuant to
     --------
     the Collateral Documents promptly after the issuance thereof, and
     delivered to the Collateral Agent with appropriate instruments of
     transfer relating thereto, and (ii) the obligations of the issuer
     of the Dixfield Note shall be secured by a mortgage on such
     issuer's interest in the Dixfield Property in favor of Vencor
     Nursing Centers East, LLC."

          6.   Section 8.01 of the DIP Credit Agreement is hereby amended by
adding "or" at the end of subdivision (p) thereof and adding immediately after
subdivision (p) a new subdivision (q) as follows:

     "(q) the disputes with the United States with respect to Medicare
     and/or under the False Claims Act shall be settled on terms less
     favorable (in any respect deemed material by Determining Lenders)
     with respect to the interests of the Borrowers or the Lenders
     than the terms set forth in the Government Settlement Term Sheet;
     or the United States shall assert against any of the Borrowers or
     any Subsidiary Guarantor any claim deemed material by Determining
     Lenders other than those claims which are described in paragraphs
     2.a and 2.b of the Government Settlement Term Sheet;"

          7.   The DIP Credit Agreement is hereby amended by adding a new
Schedule 14 thereto in the form of Annex A attached hereto.
-----------

          The amendment to Section 5.13 of the DIP Credit Agreement contained in
numbered paragraph 4 above shall not be deemed or construed in any respect as a
determination

                                  2
<PAGE>

by the Lenders or Determining Lenders that the terms set forth in the Government
Settlement Term Sheet represent a settlement of the claims of the United States
against the Borrowers and Subsidiary Guarantor which is or would be satisfactory
in form or substance to the Lenders or Determining Lenders.

          The undersigned Lenders hereby also approve, pursuant to Section
7.03(b)(i) of the DIP Credit Agreement, the Asset Sale or Asset Sales of any
equipment and related items used in connection with the Borrowers' in-patient
and out-patient respiratory care services provided at third-party acute care
hospitals; provided, that (i) the consideration received from such Asset Sale or
           --------
Asset Sales shall be in an amount at least equal to the fair market value of the
property sold, which shall not exceed $255,000, (ii) such property shall be sold
solely for cash consideration, and (iii) the Borrowers shall comply with all
applicable provisions of the DIP Credit Agreement with respect to such Asset
Sale or Asset Sales.

          On and after the Second Amendment Effective Date (as defined below),
each reference in the DIP Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the DIP Credit
Agreement, and each reference in the other Financing Documents to the "DIP
Credit Agreement", "thereunder", "thereof" or words of like import referring to
the DIP Credit Agreement, shall mean and be a reference to the DIP Credit
Agreement as amended by this Second Amendment to Debtor-In-Possession Credit
Agreement (this "Amendment"; the DIP Credit Agreement, as so amended, being the
"Amended Agreement").  Except as specifically amended by this Amendment, the DIP
Credit Agreement and such other Financing Documents shall remain in full force
and effect and are hereby ratified and confirmed.  The execution, delivery and
performance of this Amendment shall not, except as expressly provided herein,
constitute a waiver of any provision of, or operate as a waiver of any right,
power or remedy of any Agent or any Lender under, the DIP Credit Agreement or
any of such other Financing Documents, and nothing in this Amendment shall be
deemed to constitute approval by any Lender of any Asset Sale not expressly
approved herein.

          In order to induce Lenders to enter into this Amendment, each
Borrower, by its execution of a counterpart of this Amendment, represents and
warrants that (a) such Borrower has the corporate or other power and authority
and all material Governmental Approvals required to enter into this Amendment
and to carry out the transactions contemplated by, and perform its obligations
under, the Amended Agreement, (b) the execution and delivery of this Amendment
and the performance of the Amended Agreement have been duly authorized by all
necessary corporate or other action on the part of such Borrower, (c) the
execution and delivery by such Borrower of this Amendment and the performance by
such Borrower of the Amended Agreement do not and will not contravene, or
constitute a default under, any Applicable Laws (including an applicable order
of the Court) or any provision of its Organizational Documents, or of any
agreement or other instrument binding upon it or result in or require the
imposition of any Liens (other than the Liens created by the Collateral
Documents) on any of its assets, (d) the execution and delivery by such Borrower
of this Amendment and the performance by such Borrower of the Amended Agreement
do not and will not require any action by or in respect of, or filing with, any
governmental body, agency or official (except for the Court and such as shall
have been made at or before the time required and shall be in full force and
effect on and after the date when made), (e) this Amendment and the Amended
Agreement have been duly executed and delivered by such Borrower and constitute
the valid and binding obligations of such

                                       3
<PAGE>

Borrower, enforceable in accordance with their respective terms, except as may
be limited by general principles of equity, (f) for purposes of the Borrowing
Order (i) this Amendment constitutes a non-material modification of the DIP
Credit Agreement and the Financing Documents, and (ii) notice of this Amendment
has been given to and received by counsel to the Committee (as defined in the
Borrowing Order), (g) after giving effect to this Amendment, the representations
and warranties contained in Article 4 of the DIP Credit Agreement are and will
be true, correct and complete in all material respects on and as of the Second
Amendment Effective Date to the same extent as though made on and as of that
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date, and (h) after giving
effect to this Amendment, no event has occurred and is continuing or will result
from the consummation of the transactions contemplated by this Amendment that
would constitute a Default or an Event of Default.

          This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.  This Amendment shall
become effective (the date of such effectiveness being the "Second Amendment
Effective Date") upon satisfaction of the following conditions:  (i) the
Borrowers and Required Lenders shall have executed counterparts of this
Amendment, and the Borrowers and the Administrative Agent shall have received
written or telephonic notification of such execution and authorization of
delivery thereof; and (ii) the Administrative Agent shall have received from the
Borrowers an amendment fee in the aggregate amount of $200,000 for ratable
distribution on the Second Amendment Effective Date to each Lender that has
executed and delivered this Amendment on or prior to November 29, 1999 according
to the ratio of (x) the Commitment of such executing Lender to (y) the aggregate
Commitments of all such executing Lenders. Anything contained herein to the
contrary notwithstanding, the amendments to Section 5.13 and Section 8.01 of the
DIP Credit Agreement set forth in numbered paragraphs 4 and 6 above shall become
effective only upon satisfaction of the conditions set forth in the immediately
preceding sentence and the execution and delivery of a counterpart hereof by the
Borrowers and Determining Lenders

          THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.

                  [Remainder of page intentionally left blank]

                                       4
<PAGE>

BORROWERS:
               Advanced Infusion Systems, Inc.
               American X-Rays, Inc.
               C.P.C. of Louisiana, Inc.
               Community Behavioral Health System, Inc.
               Community Psychiatric Centers of Arkansas, Inc.
               Community Psychiatric Centers of California
               Community Psychiatric Centers of Florida, Inc.
               Community Psychiatric Centers of Idaho, Inc.
               Community Psychiatric Centers of Indiana, Inc.
               Community Psychiatric Centers of Kansas, Inc.
               Community Psychiatric Centers of Mississippi, Inc.
               Community Psychiatric Centers of Missouri, Inc.
               Community Psychiatric Centers of North Carolina, Inc.
               Community Psychiatric Centers of Oklahoma, Inc.
               Community Psychiatric Centers of Utah, Inc.
               Community Psychiatric Centers Properties Incorporated
               Community Psychiatric Centers Properties of Oklahoma, Inc.
               Community Psychiatric Centers Properties of Texas, Inc.
               Community Psychiatric Centers Properties of Utah, Inc.
               Courtland Gardens Health Center, Inc.
               CPC Investment Corp.
               CPC Managed Care Health Services, Inc.
               CPC of Georgia, Inc.
               CPC Properties of Arkansas, Inc.
               CPC Properties of Illinois, Inc.
               CPC Properties of Indiana, Inc.
               CPC Properties of Kansas, Inc.
               CPC Properties of Louisiana, Inc.
               CPC Properties of Mississippi, Inc.
               CPC Properties of Missouri, Inc.
               CPC Properties of North Carolina, Inc.
               First Rehab, Inc.
               Florida Hospital Properties, Inc.
               Health Care Holdings, Inc.
               Health Care Technology, Inc.
               Helian ASC of Northridge, Inc.
               Helian Health Group, Inc.
               Helian Recovery Corporation
               Homestead Health Center, Inc.
               Horizon Healthcare Services, Inc.
               Interamericana Health Care Group

                                      S-1
<PAGE>

               J.B. Thomas Hospital, Inc.
               Lafayette Health Care Center, Inc.
               MedEquities, Inc.
               Medisave of Tennessee, Inc.
               Medisave Pharmacies, Inc.
               Old Orchard Hospital, Inc.
               Palo Alto Surgecenter Corporation
               Peachtree-Parkwood Hospital, Inc.
               PersonaCare, Inc.
               PersonaCare Living Center of Clearwater, Inc.
               PersonaCare of Bradenton, Inc.
               PersonaCare of Clearwater, Inc.
               PersonaCare of Connecticut, Inc.
               PersonaCare of Georgia, Inc.
               PersonaCare of Huntsville, Inc.
               PersonaCare of Little Rock, Inc.
               PersonaCare of Ohio, Inc.
               PersonaCare of Owensboro, Inc.
               PersonaCare of Pennsylvania, Inc.
               PersonaCare of Pompano East, Inc.
               PersonaCare of Pompano West, Inc.
               PersonaCare of Reading, Inc.
               PersonaCare of San Antonio, Inc.
               PersonaCare of San Pedro, Inc.
               PersonaCare of Shreveport, Inc.
               PersonaCare of St. Petersburg, Inc.
               PersonaCare of Warner Robbins, Inc.
               PersonaCare of Wisconsin, Inc.
               PersonaCare Properties, Inc.
               ProData Systems, Inc.
               Recovery Inns of America, Inc.
               Respiratory Care Services, Inc.
               Stamford Health Facilities, Inc.
               THC-Chicago, Inc.
               THC-Hollywood, Inc.
               THC-Houston, Inc.
               THC-Minneapolis, Inc.
               THC-North Shore, Inc.
               THC-Orange County, Inc.
               THC-San Diego, Inc.
               THC-Seattle, Inc.
               TheraTx Healthcare Management, Inc.
               TheraTx Health Services, Inc.
               TheraTx Management Services, Inc.
               TheraTx Medical Supplies, Inc.
               TheraTx Rehabilitation Services, Inc.
               TheraTx Staffing, Inc.

                                      S-2
<PAGE>

               Transitional Hospitals Corporation, a Delaware Corporation
               Transitional Hospitals Corporation, a Nevada Corporation
               Transitional Hospitals Corporation of Indiana, Inc.
               Transitional Hospitals Corporation of Louisiana, Inc.
               Transitional Hospitals Corporation of Michigan, Inc.
               Transitional Hospitals Corporation of Nevada, Inc.
               Transitional Hospitals Corporation of New Mexico, Inc.
               Transitional Hospitals Corporation of Tampa, Inc.
               Transitional Hospitals Corporation of Texas, Inc.
               Transitional Hospitals Corporation of Wisconsin, Inc.
               Tucker Nursing Center, Inc.
               Tunstall Enterprises, Inc.
               VC-OIA, Inc.
               VC-TOHC, Inc.
               VC-WM, Inc.
               Vencare, Inc.
               Vencare Rehab Services, Inc.
               Vencor Facility Services, Inc.
               Vencor Holdings, L.L.C.
               Vencor Home Care Services, Inc.
               Vencor Hospice, Inc.
               Vencor Hospitals East, L.L.C.
               Vencor Hospitals West, L.L.C.
               Vencor, Inc.
               Vencor Insurance Holdings, Inc.
               Vencor Investment Company
               Vencor Nevada, L.L.C.
               Vencor Nursing Centers East, L.L.C.
               Vencor Nursing Centers Central L.L.C.
               Vencor Nursing Centers North, L.L.C.
               Vencor Nursing Centers South, L.L.C.
               Vencor Nursing Centers West, L.L.C.
               Vencor Operating, Inc.
               Vencor Pediatric Care, Inc.
               Vencor Provider Network, Inc.
               Ventech Systems, Inc.

               By: Vencor Operating, Inc., as agent and attorney-in-
                      fact for each of the foregoing entities

                      By: /s/ Richard A. Schweinhart
                          --------------------------
                      Name: Richard A. Schweinhart
                      Title: Chief Financial Officer

                                      S-3
<PAGE>

               Stamford Health Associates, L.P.

               By: Stamford Health Facilities, Inc., Its General
                    Partner

                    By: /s/ Richard A. Schweinhart
                        --------------------------
                    Name: Richard A. Schweinhart
                    Title: Chief Financial Officer

               Vencor Home Care and Hospice Indiana Partnership

               By: Vencor Home Care Services, Inc., Its General
                    Partner

                    By: /s/ Richard A. Schweinhart
                        --------------------------
                    Name: Richard A. Schweinhart
                    Title: Chief Financial Officer

               By: Vencor Hospice, Inc., Its General Partner

                     By: /s/ Richard A. Schweinhart
                         --------------------------
                     Name: Richard A. Schweinhart
                     Title: Chief Financial Officer

               Vencor Hospitals Limited Partnership

               By: Vencor Operating, Inc., Its General Partner

                     By: /s/ Richard A. Schweinhart
                         --------------------------
                     Name: Richard A. Schweinhart
                     Title: Chief Financial Officer

               By: Vencor Nursing Centers Limited Partnership,
                    Its General Partner

                   By: Vencor Operating, Inc., Its General
                       Partner

                    By: /s/ Richard A. Schweinhart
                        --------------------------
                    Name: Richard A. Schweinhart
                    Title: Chief Financial Officer

                                      S-4
<PAGE>

               Vencor Nursing Centers Central Limited
                Partnership

               By: Vencor Operating, Inc., Its General Partner

                    By: /s/ Richard A. Schweinhart
                        --------------------------
                    Name: Richard A. Schweinhart
                    Title: Chief Financial Officer

               By: Vencor Nursing Centers Limited Partnership,
                    Its General Partner

                   By: Vencor Operating, Inc., Its General
                       Partner

                    By:/s/ Richard A. Schweinhart
                       --------------------------
                    Name: Richard A. Schweinhart
                    Title: Chief Financial Officer

               Vencor Nursing Centers Limited Partnership

               By: Vencor Operating, Inc., Its General Partner

                   By: /s/ Richard A. Schweinhart
                       --------------------------
                   Name: Richard A. Schweinhart
                   Title: Chief Financial Officer

               By: Vencor Hospitals Limited Partnership, Its
                    General Partner

                   By: Vencor Operating, Inc., Its General
                       Partner

                    By: /s/ Richard A. Schweinhart
                        --------------------------
                    Name: Richard A. Schweinhart
                    Title: Chief Financial Officer

                                      S-5
<PAGE>

AGENTS AND LENDERS:

                         MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Arranger,
                         Collateral Agent and Administrative Agent and as a
                         Lender

                         By: /s/ Houston A. Stebbins
                            ------------------------
                              Name: Houston A. Stebbins
                              Title: Vice President

                                      S-6
<PAGE>

                        ABLECO FINANCE LLC, as a Lender

                        By:_____________________________________
                           Name:
                           Title:

                                      S-7
<PAGE>

                         APPALOOSA INVESTMENT LIMITED
                         PARTNERSHIP I, as a Lender

                         By:  /s/ Ronald Goldstein
                              --------------------
                              Name: Ronald Goldstein
                              Title: Chief Financial Officer

                                      S-8
<PAGE>

                      BANKERS TRUST COMPANY, as a Lender

                      By:_____________________________________
                         Name:
                         Title:

                                      S-9
<PAGE>

                    CHASE SECURITIES INC, AS AGENT FOR THE
                    CHASE MANHATTAN BANK, as a Lender

                    By: /s/ Howard J. Golden
                        --------------------
                        Name: Howard J. Golden
                        Title: Authorized Signatory

                                     S-10
<PAGE>

                   GOLDMAN SACHS CREDIT PARTNERS L.P., as a
                   Lender

                   By: /s/ Mark Denatale
                       -----------------
                       Name: Mark Denatale
                       Title: Authorized Signatory

                                     S-11
<PAGE>

                             PARIBAS, as a Lender

                             By: /s/ Albert A. Young, Jr.
                                 ------------------------
                                 Name: Albert A. Young, Jr.
                                 Title: Director

                             By: /s/ Edward V. Canale
                                 --------------------
                                 Name: Edward V. Canale
                                 Title: Managing Director

                                     S-12
<PAGE>

                   VAN KAMPEN PRIME RATE INCOME TRUST, as a
                   Lender

                   By:  VAN KAMPEN INVESTMENT ADVISORY CORP.

                        By: /s/ Douglas J. Smith
                            --------------------
                            Name: Douglas J. Smith
                            Title: Vice President

                                     S-13
<PAGE>

                   FRANKLIN MUTUAL ADVISERS LLC, as a Lender

                   By: /s/ Jeffrey A. Altman
                       ---------------------
                       Name: Jeffrey A. Altman
                       Title: Senior Vice President

                                     S-14
<PAGE>

                   FRANKLIN FLOATING RATE TRUST, as a Lender

                   By: /s/ Chauncey Lufkin
                       -------------------
                       Name: Chauncey Lufkin
                       Title: Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}]]