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Exhibit 10(xx)
AMENDMENT NUMBER 3 TO THE SECOND AMENDED
AND RESTATED CREDIT AGREEMENT
Amendment Number 3 dated as of September 30, 1996 among COVENTRY
CORPORATION (the "Borrower"), the BANKS listed on the signature pages hereof
(the "Banks") and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the
"Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Banks and the Agent entered into a
Second Amended and Restated Credit Agreement dated as of November 20, 1992, and
amended by Amendment Number 1, dated as of June 30, 1995, and Amendment Number
2, dated as of March 14, 1996 (as so amended, the "Credit Agreement"); and
WHEREAS, the parties hereto desire to amend the Credit Agreement
as set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Credit Agreement
shall have the meaning assigned to such term in the Credit Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other similar
reference and each reference to "this Agreement" and each other similar
reference contained in the Agreement shall from and after the date hereof refer
to the Credit Agreement as amended hereby.
SECTION 2. Amendment of Section 1.01 of the Credit Agreement. (a)
Section 1.01 of the Credit Agreement is amended by adding, in appropriate
alphabetical order, the following new definitions:
"Champion Dental Sale" means the sale of Champion Dental Services
Inc., a Subsidiary of GHP.
"Purchase Adjustment" means a downward adjustment in the purchase
price of an Acquisition made during fiscal year 1996 pursuant to the
indemnification or
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other provisions of the purchase agreement for, or any other transaction
pursuant to which a member of the Coventry Group receives a payment in cash
in respect of, such an Acquisition from or for the account of the party
from which such Acquisition was made.
(b) The following definitions in Section 1.01 of the Credit
Agreement are amended in full to read as follows:
"Commitment Reduction Date" means February 18, 1997 and each
three-month anniversary of such date to and including August 18, 1999 or,
if any such date is not a Euro-Dollar Business Day, the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which such Commitment Reduction Date shall be
the next preceding Euro-Dollar Business Day.
"Reduction Percentage" means, for purposes of determining the
amount of any mandatory reduction of the Commitments pursuant to Section
2.07(c), (i) in the case of any such reduction in respect of an Asset Sale
(other than the Champion Dental Sale or a Purchase Adjustment) or the
issuance of any Subject Debt, 100% and (ii) in the case of any such
reduction in respect of the issuance of Equity Securities or in respect of
a Purchase Adjustment, 50%.
"Reduction Transaction" means (i) any Asset Sale consummated after
the Effective Date, (ii) the incurrence after the Effective Date of any
Subject Debt by the Borrower, (iii) the issuance after the Effective Date
of any Equity Securities by the Borrower or any of its Subsidiaries (other
than (A) Equity Securities which constitute Debt of the Borrower or any of
its Subsidiaries, (B) Equity Securities issued to the Borrower or any of
its Subsidiaries, (C) Equity Securities issued pursuant to employee stock
option plans, employee stock ownership plans or other employee benefit
arrangements in the ordinary course of business and (D) Equity Securities
issued upon exercise of common stock warrants outstanding on the Effective
Date) or (iv) any Purchase Adjustment; provided that the Champion Dental
Sale shall not be a Reduction Transaction. The description of any
transaction as falling within the above definition does not affect any
limitation on such transaction imposed by Article V of this Agreement.
SECTION 3. Amendment of Section 2.05(b) of the Credit Agreement.
Section 2.05(b) of the Credit Agreement
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is amended by deleting the definition of "Euro-Dollar Margin" and inserting, in
lieu thereof, the following:
"Euro-Dollar Margin" means (x) on and after September 30, 1996 to
and including the Reset Date, 2.00% and (y) after the Reset Date, 1.50%.
"Reset Date" means the first date, if any, subsequent to September
30, 1996 on which the Borrower delivers a certificate pursuant to Section
5.01(c) setting forth a ratio of Adjusted Cash Flow to Fixed Charges for
the fiscal quarter ended at the date of the accompanying financial
statements of 2.00 to 1.00 or greater.
SECTION 4. Amendment of Section 2.08 of the Credit Agreement. (a)
Section 2.08(b) of the Credit Agreement is amended in full to read as follows:
(b) The aggregate Commitments shall be reduced (and the Commitment
of each Bank shall be correspondingly reduced on a pro rata basis) on each
Commitment Reduction Date by the amount set forth below for such Commitment
Reduction Date:
Commitment Reduction Date Amount
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February 18, 1997 $ 2,000,000
May 18, 1997 $ 3,000,000
August 18, 1997 $12,000,000
November 18, 1997 $10,000,000
February 18, 1998 $10,500,000
May 18, 1998 $10,500,000
August 18, 1998 $10,500,000
November 18, 1998 $10,500,000
February 18, 1999 $10,500,000
May 18, 1999 $10,500,000
August 18, 1999 $10,000,000
Each reduction of the Commitments pursuant to Section 2.07 or subsection
(c) below shall be applied to ratably reduce the required reductions of
Commitments under this subsection for each subsequent Commitment Reduction
Date.
(b) The following sentence is added to Section
2.08(d) as the second sentence thereof:
In addition, (i) on the date of any reduction of the Commitments pursuant
to subsection (c) of this Section 2.08 on account of a Purchase Adjustment,
the Borrower
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shall repay an aggregate principal amount of the Loans equal to the excess
of the Net Cash Proceeds of such Purchase Adjustment over the amount of any
repayment required in connection therewith pursuant to the preceding
sentence and (ii) on the date the Commitments would have been so reduced on
account of the Champion Dental Sale but for the proviso to the definition
of Reduction Transaction (or as soon thereafter as the regulatory approval
described below shall be obtained), the Borrower shall repay an aggregate
principal amount of the Loans equal to the Net Cash Proceeds of the
Champion Dental Sale, if and to the extent that any necessary approval of
the Missouri Department of Insurance for the remission of such Net Cash
Proceeds to the Borrower shall have been obtained (the Borrower hereby
agreeing to use its best efforts to obtain any such necessary approval).
SECTION 5. Amendment of Section 4.04(d) of the Credit Agreement.
Section 4.04(d) of the Credit Agreement is amended in full to read as follows:
(d) Except as disclosed in writing to the Banks prior to September
30, 1996, since March 31, 1994 there has been no material adverse change in
the business, financial position, results of operation or prospects of the
Coventry Group, considered as a whole.
SECTION 6. Amendment of Section 5.17 of the Credit Agreement.
Section 5.17 of the Credit Agreement is amended in full to read as follows:
The ratio of Adjusted Cash Flow to Fixed Charges will not, for any
period of four consecutive fiscal quarters ended on or after June 30, 1996
(or, in the case of any fiscal quarter ended prior to June 30, 1997, for
such fiscal quarter), be less than the ratio set forth below opposite such
period in which such four-quarter period (or such quarter) ends:
Period Ratio
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On June 30, 1996 Waived
On September 30, 1996 0.80 to 1.00
From and including
December 31, 1996
to and including
March 31, 1997 1.35 to 1.00
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On June 30, 1997 1.50 to 1.00
On September 30, 1997 1.75 to 1.00
On December 31, 1997 2.00 to 1.00
On or after March 31, 1998 2.50 to 1.00
SECTION 7. Application of Reduction of Commitments. The parties
hereby agree that (i) the notice of reduction of the Commitments contemplated by
clause (iv) of Section 11 shall be effective immediately upon receipt by the
Agent, the requirement of three Domestic Business Days' prior notice being
hereby waived solely on this occasion, and (ii) notwithstanding the second
sentence of Section 2.08(b), the amount of such reduction shall be applied to
scheduled reductions of the Commitments so as to result in the revised reduction
schedule contemplated by Section 4(b) of this Amendment.
SECTION 8. Waiver for Champion Dental Sale. The Banks hereby
waive any noncompliance with Section 5.04(d) or 5.12 of the Credit
Agreement arising solely by reason of the Champion Dental Sale. Upon
consummation of the Champion Dental Sale, the second sentence of Section
5.04(d) of the agreement shall be deleted.
SECTION 9. Effect of Amendment. Except as expressly set forth
herein, this Amendment shall not constitute an amendment of the surviving terms
and conditions of the Credit Agreement and all such terms and conditions shall
remain in full force and effect and are hereby ratified and confirmed in all
respects.
SECTION 10. Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 11. Counterparts; Effectiveness. This Amendment may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Amendment shall become effective as of the date hereof upon (i)
receipt by the Agent of duly executed counterparts hereof signed by the Borrower
and the Required Banks (or, in the case of any party as to which an executed
counterpart shall not have been received, the Agent shall have received
telegraphic, telex or other written confirmation from such party of execution of
a counterpart hereof by such party), (ii) receipt by the Agent, for the
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account of each Bank, of a fee in an amount equal to 0.25% of such Bank's
Commitment as in effect upon the effectiveness hereof, (iii) receipt by the
Agent of payment of all accrued expenses payable by the Borrower pursuant to
Section 9.03 of the Credit Agreement, and (iv) receipt by the Agent of notice
from the Borrower of reduction of the Commitments pursuant to Section 2.07 of
the Agreement to the aggregate amount of $100,000,000; provided that Section 6
shall be effective as of June 30, 1996.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first above written.
COVENTRY CORPORATION
By/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President, Finance
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By/s/ Penelope ▇.▇. ▇▇▇
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Title: Vice President
NATIONSBANK OF TENNESSEE, N.A.
By/s/ Walker Choppin
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Title: Senior Vice President
SUNTRUST BANK, NASHVILLE, N.A.
(FORMERLY THIRD NATIONAL
BANK IN NASHVILLE)
By/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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FLEET NATIONAL BANK
By/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Senior Vice President
CITICORP USA, INC.
By/s/ ▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President
MELLON BANK, N.A.
By/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
FIRST AMERICAN NATIONAL BANK
By/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Vice President
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