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EXHIBIT 10.28
AMENDMENT NO. 2 AND WAIVER
Dated as of November 30, 2000
To the banks, financial institutions and other institutional lenders
(collectively, the "BANKS") party to the Credit Agreement referred to below,
to Citicorp USA, Inc. as administrative agent for the Banks and as the Swing
Line Bank, and to Bank of America, N.A., as documentation agent
Ladies and Gentlemen:
We refer to the Fourth Amended and Restated Revolving Credit Agreement
dated as of August 25, 2000 (as amended by Amendment No. 1 to the Fourth Amended
and Restated Credit Agreement dated September 29, 2000 the "CREDIT AGREEMENT")
among the undersigned and you. Capitalized terms not otherwise defined in this
Amendment No. 2 and Waiver have the same meanings as specified in the Credit
Agreement.
The Borrower has requested that, on the terms and conditions set forth
herein, the Majority Banks agree to amend the Credit Agreement as provided
herein and to waive defaults as provided herein, and the parties hereto have
agreed to so amend the Credit Agreement and to waive such defaults, effective as
of the effective date of this Amendment No. 2 and Waiver. It is hereby agreed by
you and us as follows:
(a) The Credit Agreement is, effective as of the effective date of this
Amendment No. 2 and Waiver, hereby amended as follows:
(1) The definition of "Corporate Cash Flow Expenditures" is amended in
full to read as follows:
"'Corporate Cash Flow Expenditures' means the sum of (i) Net Income
of the Borrower on an unconsolidated basis (whether positive or negative), less
(ii) Capital Expenditures, plus (iii) depreciation and amortization expense,
plus (iv) income tax expense, plus (v) interest expense, plus (vi) employee
severance expense, plus (vii) professional fee expense of the Agent's advisors,
plus (viii) loan fee expense in connection with the execution of this Agreement,
plus (ix) any monthly decrease in, or minus any monthly increase in, working
capital (excluding the changes in working capital related to items (iv) through
(viii)), provided that the amounts referred to in subclauses (iii) through
(viii) hereof shall be included in the calculation of 'Corporate Cash Flow
Expenditures' only to the extent such amounts are included in determining Net
Income as provided in subclause (i) hereof."
(2) Section 6.02(f) is amended in full to read as follows:
"(f) Advances to NAMM Subsidiaries. Make, or permit any Subsidiary, other than a
NAMM Subsidiary, to make, with respect to any NAMM Subsidiary (A) any loan,
advance, payment or investment of any type or form in an aggregate amount in
excess of $2,000,000 during the period from November 1, 2000 through March 14,
2001, as determined from the Borrower's daily cash management account activity
reports; provided, that (B) for purposes of this covenant, the stated amount of
any Supplemental Letters of Credit issued for the direct or indirect benefit or
any NAMM Subsidiary will be
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deemed an investment in the month such Supplemental Letter of Credit is issued
and (C) any cash paid by a NAMM Subsidiary to the Borrower or any Subsidiary
other than a NAMM Subsidiary may be re-advanced to a NAMM Subsidiary without
being subject to this limitation."
(3) Section 6.02(g) is amended to delete the number "$1,600,000"
therein and replace such number with the number "$0".
(4) Section 6.02(i) is amended in full to read as follows:
"(i) Limitations on Sales of Assets. (A) Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any asset listed on the Anticipated Sales Proceeds
Certificate delivered on or prior to the Closing Date if (i) the Net Cash
Proceeds from the sale, lease, transfer or disposition of such asset is less
than 75% of the Anticipated Sales Proceeds for such assets as set forth on such
Certificate and (ii) such deficiency is greater than $1,000,000 or (B) sell,
lease, transfer or otherwise dispose of, or permit any of its Subsidiaries to
sell, lease, transfer or dispose of, any of the promissory notes listed on Annex
J, any of the assets listed on Annex K or any other assets not otherwise
referred to in this subsection for which the Net Cash Proceeds are greater than
$1,000,000, in each case in this subclause (B) without providing prior notice to
the Lenders and reasonable opportunity for the Lenders to review and discuss
with the Borrower the proposed transaction, provided, that at any time the
Borrower or any of its Subsidiaries shall not sell, transfer or otherwise
dispose of less than all of its interest in any of its Subsidiaries; and
provided, further, that at any time the Borrower or any of its Subsidiaries
shall not sell, transfer or otherwise dispose of assets if in connection with
any such transaction any consideration is received, directly or indirectly, by
any officer or director, or former officer or director of the Borrower or of any
Subsidiary and provided, further, that any notes received as part of the
consideration in a sale or other disposition of assets permitted hereunder shall
be secured by such assets (to the extent such assets do not secure the financing
by the respective purchaser of such assets) and such notes shall be pledged by
the respective owner thereof to the Collateral Agent."
(5) The third parenthetical in Section 6.02(k) is amended in full to
read as follows:
"(other than for scheduled payments of principal and interest due on the date of
payment thereof (after giving effect to all applicable grace periods which
permit the payor to delay payment thereof without penalty), if such payment is
permitted to be made pursuant to the terms of the documents evidencing or
governing the applicable Debt or the Zero Coupon Convertible Subordinated
Notes)".
(6) Section 6.02 is amended to add the following subsection (u) at the
end thereof:
"(u) Advances to Desert Valley Medical Group. Make, or permit any
Subsidiary to make, with respect to Desert Valley Medical Group, any loan,
advance, payment or investment of any type of form in an aggregate amount in
excess of $2,000,000 during the period from November 1, 2000 through March 14,
2001, as determined from the Borrower's daily cash management account activity
reports, provided, that such loan, advance, payment or investment shall not be
subject to the limitations in Section 6.02(j)."
(7) Section 6.03 to the Credit Agreement is amended in its entirety to
read as follows:
"SECTION 6.03. Financial Covenants. So long as any Note shall remain
unpaid, any Letter of Credit shall remain outstanding, any amount shall remain
due hereunder, or any Banks shall have any Commitment hereunder, the Borrower
will, unless the Majority Banks otherwise consent in
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writing, not make Capital Expenditures, including Capital Leases but exclusive
of the acquisition of the Additional Parcels, in an aggregate amount in excess
of $1,200,000 during the term of this Agreement."
(8) Section 6.04 is amended by deleting the word "and" at the end of
subsection (s) thereof, deleting the period at the end of subsection (t) thereof
and replacing it with the word "; and" and by adding the following subsection
(u) at the end thereof:
"(u) as soon as available and in any event within 5 Business Days after the end
of each calendar month, the Borrower's cash management reports for the Desert
Valley Medical Group and for NAMM Subsidiaries, certified by the Borrower's
chief financial officer, together with a schedule, in form satisfactory to the
Agent, of the computations used by the Borrower in determining compliance with
the covenants in Section 6.02(f) and 6.02(u) and a certificate from the
Borrower's chief financial officer stating that no Event of Default has occurred
and is continuing."
(9) Section 7.01 is amended by (i) adding the word "or" at the end of
subsection (n) thereof, (ii) deleting the word "or" from the end of subsection
(o) thereof and (iii) deleting subsection (p) thereof in its entirety.
(10) Annex E to the Credit Agreement is hereby replaced with Exhibit A
hereto.
(11) Annex G to the Credit Agreement is hereby replaced with Exhibit B
hereto.
(12) Annex J is added to the Credit Agreement in the form of Exhibit C
hereto.
(13) Annex K is added to the Credit Agreement in the form of Exhibit D
hereto.
(b) The Required Lenders hereby permanently waive, effective as of the
effective date of this Amendment No. 2 and Waiver, any Event of Default arising
under Section 7.01(e) as a result of the Kentucky state receivership proceeding
instituted on November 8, 2000 against Advantage Care, Inc. and any Event of
Default under 7.01(p) as a result of the Net Cash Flow Expenditures/Receipts in
respect of Clinic Subsidiaries in September 2000 being less than $0."
This Amendment No. 2 and Waiver shall become effective as of the date
first above written when, and only when, (i) the Agent shall have received by
5:00 pm (New York City time) on November 30, 2000, counterparts of this
Amendment No. 2 and Waiver executed by the undersigned and the Majority Banks
or, as to any of the Banks, advice satisfactory to the Agent that such Bank has
executed this Amendment No. 2 and Waiver, (ii) the consent attached hereto
executed by each Guarantor and (iii) the Borrower shall have paid by such date
all amounts due and payable under Section 9.04 of the Credit Agreement. This
Amendment No. 2 and Waiver is subject to the provisions of Section 9.01 of the
Credit Agreement.
On and after the effectiveness of this Amendment No. 2 and Waiver, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to the Credit Agreement, and each reference in
the Notes and each of the other Loan Documents to "the Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement, as amended by
this Amendment No. 2 and Waiver.
The Credit Agreement and each of the other Loan Documents, as
specifically amended by this Amendment No. 2 and Waiver, are and shall continue
to be in full force and effect and are hereby in all respects ratified and
confirmed. The execution, delivery and effectiveness of this Amendment No. 2
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and Waiver shall not, except as expressly provided herein, operate as a waiver
of any right, power or remedy of any Bank or the Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
If you agree to the terms and provisions hereof, please evidence such
agreement by executing and telecopying one signature page to Xxxxx XxXxxxxxx at
Citibank, N.A. (Telecopier No. (000) 000-0000) and returning at least three
counterparts of this Amendment No. 2 and Waiver to Xxxxxxxx Xxxxxxx at Shearman
& Sterling, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000 (Telecopier No. (415)
616-1199).
This Amendment No. 2 and Waiver may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Amendment No. 2 and Waiver by telecopier
shall be effective as delivery of a manually executed counterpart of this
Amendment No. 2 and Waiver. This Amendment No. 2 and Waiver shall be governed
by, and construed in accordance with, the laws of the State of New York.
Very truly yours,
PHYCOR, INC.
By /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
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Agreed as of the date first above written:
CITIBANK, N.A.,
as Issuing Bank
By: /s/ Xxxxx XxXxxxxxx
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Title: Vice President
CITICORP USA, INC.
as Agent, as Swing Line Bank and as Bank
By: /s/ Xxxxx XxXxxxxxx
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Title: Attorney-In-Fact
AMSOUTH BANK, successor in interest by merger to,
FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxxxx X. Xxxx
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Title: Senior Vice President
BANK OF AMERICA, N.A.
By: /s/
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Title: Managing Director
BANKERS TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxxxx
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Title: Vice President
By: /s/ Xxxx Xxxxx
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Title: Managing Director
THE BANK OF NOVA SCOTIA, Atlanta Agency
By:
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Title:
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/
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Title: Vice President
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BANK ONE, NA (f/k/a THE FIRST NATIONAL BANK OF CHICAGO)
By: /s/
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Title: First Vice President
FIRST UNION NATIONAL BANK
By:
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Title:
FLEET NATIONAL BANK
By: /s/
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Title: Senior Vice President
MELLON BANK, N.A.
By: /s/ Xxxxxxx XxXxxxxx
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Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN
BOERENLEENBANK B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By:
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Title:
By:
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Title:
THE SUMITOMO BANK, LIMITED
By: /s/
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Title: Senior Vice President
SUNTRUST BANK
By:
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Title:
TORONTO DOMINION (TEXAS), INC.
By:
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Title:
WACHOVIA BANK
By:
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Title:
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