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                                                                    EXHIBIT 10.3


                           AMENDMENT NO. 3 AND CONSENT

                                                   Dated as of September 1, 1999

To the banks, financial institutions and
  other institutional lenders (collectively,
  the "BANKS") party to the Credit Agreement
  referred to below, to Citibank, N.A., as
  administrative agent (the "AGENT") for the
  Banks, to SunTrust Bank, Nashville, N.A., as
  the swing line bank, and to NationsBank,
  N.A., as documentation agent

Ladies and Gentlemen:

                  We refer to the Second Amended and Restated Revolving Credit
Agreement dated as of April 2, 1998, as amended by Amendment No.1 and Consent
thereto dated as of September 22, 1998 and Amendment No. 2 and Consent thereto
dated as of March 10, 1999 (such Credit Agreement, as so amended, the "CREDIT
AGREEMENT") among the undersigned and you. Capitalized terms not otherwise
defined in this Amendment No. 3 and Consent have the same meanings as specified
in the Credit Agreement.

                  It is hereby agreed by you and us as follows:

                  The Credit Agreement is, effective as of the effective date of
this Amendment No. 3 and Consent, hereby amended as follows:

                  (a) Section 1.01 is amended by adding thereto in the correct
         alphabetical order the following definitions:

                      "`Securities Repurchase Amount' means, at any time,
                  $35,000,000 plus, after the issuance of any Series B Zero
                  Coupon Convertible Subordinated Notes, 50% of the gross
                  proceeds received by the Borrower from the issuance of such
                  Series B Zero Coupon Convertible Subordinated Notes.

                      "`Series A Zero Coupon Convertible Subordinated Notes'
                  means the Series A Zero Coupon Convertible Subordinated Notes
                  issued by the Borrower for aggregate gross proceeds received
                  by the Borrower of not less than $100,000,000 and having the
                  terms and conditions set forth on Exhibit H hereto, which
                  shall include terms stating that such Series A Zero Coupon
                  Convertible Subordinated Notes shall have no requirement for
                  cash payments at any time that any Notes remain unpaid or any
                  Letter of Credit is outstanding or any Bank shall have a
                  Commitment under the Credit Agreement."




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                      "`Series B Zero Coupon Convertible Subordinated Notes'
                  means the Series B Zero Coupon Convertible Subordinated Notes
                  issued by the Borrower for aggregate gross proceeds received
                  by the Borrower not in excess of $100,000,000 and having the
                  terms and conditions set forth on Exhibit H hereto, which
                  shall include terms stating that such Series B Zero Coupon
                  Convertible Subordinated Notes shall have no requirement for
                  cash payments at any time that any Notes remain unpaid or any
                  Letter of Credit is outstanding or any Bank shall have a
                  Commitment under the Credit Agreement."

                      "`Zero Coupon Convertible Subordinated Notes' means,
                  collectively, the Series A Zero Coupon Convertible
                  Subordinated Notes and the Series B Zero Coupon Convertible
                  Subordinated Notes."

                  (b) The definition of "Debt" in Section 1.01 is amended by
         adding at the end thereof a new sentence to read as follows:

                      "The obligations of the Borrower and its subsidiaries
                      under the Zero Coupon Convertible Subordinated Notes shall
                      be deemed not to be Debt."

                  (c) The definition of "EBITDA" in Section 1.01 is amended by
         adding at the end thereof (a) new clause (xiv) to read as follows:

                  "plus (xiv) to the extent deducted in the calculation of Net
                  Income for such period, the aggregate amount of any reduction
                  in Net Income attributable to the charge-off of any intangible
                  assets in existence at or prior to June 30, 1999 made in
                  accordance with generally accepted accounting principles."

                  (d) The definition of "Applicable Eurodollar Rate Margin" in
         Section 1.01 is amended by deleting such in its entirety and
         substituting therefor the following:

                  "`Applicable Eurodollar Rate Margin' means, for the initial
                  Effective Period (as defined below), the percentage set forth
                  in the chart below based on the Consolidated Debt/EBITDA Ratio
                  of the Borrower and its Subsidiaries for the period ended June
                  30, 1999 (calculated taking into account the Debt repaid or
                  otherwise satisfied in full with the proceeds of the Zero
                  Coupon Convertible Subordinated Notes) and thereafter, for
                  each subsequent Effective Period, 1.3500% per annum; provided,
                  however, that if the Borrower, for a subsequent Effective
                  Period shall have satisfied the Consolidated Debt/EBITDA Ratio
                  test indicated in the table below, the Applicable Eurodollar
                  Rate Margin for the Effective Period as to which such test is
                  satisfied shall be the percentage rate per annum set forth
                  opposite the appropriate test for the Commitment in the table
                  below.



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<TABLE>
<CAPTION>
                                                                  Applicable Eurodollar
                         "Consolidated                               Rate Margin for
                       Debt/EBITDA Ratio                                 Advances
                       -----------------                                 --------
<S>                                                               <C>
                  Greater than 3.50 to 1.00                               1.3500%

                  Less than or equal to 3.50 to 1.00 but greater
                  than 3.00 to 1.00                                       1.1750%

                  Less than or equal to 3.00 to 1.00 but greater
                  than 2.50 to 1.00                                       1.0000%

                  Less than or equal to 2.50 to 1.00 but greater
                  than 2.00 to 1.00                                       0.8000%

                  Less than or equal to 2.00 to 1.00                      0.7000%"
</TABLE>


                  The Applicable Eurodollar Rate Margin shall be determined by
                  the Agent each quarter on the basis of quarterly certified
                  Consolidated financial statements and a schedule evidencing
                  financial covenant compliance delivered to the Banks pursuant
                  to Section 6.04(b). The "Effective Period" with respect to the
                  Applicable Eurodollar Rate Margin shall be the period
                  commencing on the date of effectiveness of Amendment No. 3 and
                  Consent to this Agreement and ending on the fifth Business Day
                  after the Quarterly Delivery for such quarter (commencing with
                  the fiscal quarter ended September 30, 1999) and each period
                  thereafter commencing the fifth Business Day after the
                  Quarterly Delivery for the then most recent fiscal quarter and
                  ending on the fifth Business Day of the Quarterly Delivery for
                  the then immediately following fiscal quarter. Notwithstanding
                  the foregoing, the Applicable Eurodollar Rate Margin shall be
                  deemed to be 1.3500% per annum in respect of Advances made on
                  any day as of which the deliveries required to calculate the
                  Applicable Eurodollar Rate Margin shall not have been made."

                  (e) The definition of "Applicable Letter of Credit Fee Rate"
         in Section 1.01 is amended by deleting such in its entirety and
         substituting therefor the following:

                  "`Applicable Letter of Credit Fee Rate' means, for the initial
                  Effective Period (as defined below), the percentage set forth
                  in the chart below based on the Consolidated Debt/EBITDA Ratio
                  of the Borrower and its Subsidiaries for the period ended June
                  30, 1999 (calculated taking into account the Debt repaid or
                  otherwise satisfied in full with the proceeds of the Zero
                  Coupon Convertible Subordinated Notes) and thereafter, for
                  each subsequent Effective Period, 1.2250% per annum; provided,
                  however, that if the Borrower, for a subsequent Effective
                  Period shall have satisfied the Consolidated Debt/EBITDA Ratio
                  test indicated in the table below, the Applicable Letter of
                  Credit Fee Rate for the Effective Period as to which such test
                  is satisfied shall be the percentage rate per annum set forth
                  opposite the appropriate test for the Commitment in the table
                  below.




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<TABLE>
<CAPTION>
                                                                       Applicable
                                "Consolidated                       Letter of Credit
                              Debt/EBITDA Ratio                          Fee Rate
                              -----------------                          --------

<S>                                                                 <C>
                  Greater than 3.50 to 1.00                               1.2250%

                  Less than or equal to 3.50 to 1.00 but greater          1.0500%
                  than 3.00 to 1.00

                  Less than or equal to 3.00 to 1.00 but greater          0.8750%
                  than 2.50 to 1.00

                  Less than or equal to 2.50 to 1.00 but greater          0.6750%
                  than 2.00 to 1.00

                  Less than or equal to 2.00 to 1.00                      0.5750%"
</TABLE>

                  The Applicable Letter of Credit Fee Rate shall be determined
                  by the Agent each quarter on the basis of quarterly certified
                  Consolidated financial statements and a schedule evidencing
                  financial covenant compliance delivered to the Banks pursuant
                  to Section 6.04(b). The "Effective Period" with respect to the
                  Applicable Letter of Credit Fee Rate shall be the period
                  commencing on the date of effectiveness of Amendment No. 3 and
                  Consent to this Agreement and ending on the fifth Business Day
                  after the Quarterly Delivery for such quarter (commencing with
                  the fiscal quarter ended September 30, 1999) and each period
                  thereafter commencing the fifth Business Day after the
                  Quarterly Delivery for the then most recent fiscal quarter and
                  ending on the fifth Business Day of the Quarterly Delivery for
                  the then immediately following fiscal quarter. Notwithstanding
                  the foregoing, the Applicable Letter of Credit Fee Rate shall
                  be deemed to be 1.2250% per annum in respect of Advances made
                  on any day as of which the deliveries required to calculate
                  the Applicable Eurodollar Rate Margin shall not have been
                  made.

                  (f) The definition of "Applicable Utilization Fee Rate" in
         Section 1.01 is deleted in its entirety.

                  (g) The definition of "Total Liabilities" in Section 1.01 is
         amended by adding at the end thereof a new sentence to read as follows:

                      "The obligations of the Borrower and its subsidiaries
                      under the Zero Coupon Convertible Subordinated Notes
                      shall be deemed not to be Total Liabilities."

                  (h) Section 3.01 is amended by deleting the figure
         "$50,000,000" in the fifth line thereof and substituting therefor the
         figure "$75,000,000".

                  (i) Section 6.02(e)(i)(C) is amended by deleting clauses (1),
         (2) and (3) therein and replacing such clauses with the phrase "the
         Securities Repurchase Amount".

                  (j) Section 6.02(f)(iv) is amended by adding immediately after
         the phrase "aggregate amount" therein the parenthetical "(together with
         the aggregate amount of capital investments made pursuant to clause
         (v)).


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                  (k) Section 6.02(f)(viii) is amended by deleting clauses (1),
         (2) and (3) therein and replacing such clauses with the phrase "the
         Securities Repurchase Amount".

                  (l) Section 6.02(f) is amended by adding at the end thereof a
         new clause (x) to read as follows:

                      "(x) the Borrower and its Subsidiaries may make
                      investments consisting of notes receivables financing sale
                      or other disposition of assets permitted hereunder in an
                      aggregate amount not to exceed $45,000,000."

                  (m) Section 6.02(f)(v) is amended by deleting the figure
         "$15,000,000" therein and replacing such figure with the phrase
         (together with the aggregate amount of capital investments made
         pursuant to clause (iv)) $50,000,000.

                  (n) Section 6.2(j) is amended by adding immediately after each
         reference therein (prior to the proviso contained therein) to "Debt"
         the phrase "or the Zero Coupon Convertible Subordinated Notes".

                  (o) Section 6.02(j)(vii) is amended by deleting clauses (1),
         (2) and (3) therein and replacing such clauses with the phrase "the
         Securities Repurchase Amount".

                  (p) Section 6.03(a) is amended by deleting such in its
         entirety and substituting therefor the following:

                      "(a) Consolidated Net Worth. Permit at any date of
                  determination the Consolidated Net Worth of the Borrower and
                  its Subsidiaries to be less than $683,000,000, plus (i)(A) 80%
                  of the net proceeds received from the issuance, sale or
                  disposition of the Borrower's Securities (common, preferred or
                  special), securities converted into or exchanged for
                  Securities, and any rights, options, warrants and similar
                  instruments from December 31, 1997 to such date of
                  determination minus (B)(x) the aggregate amount not in excess
                  of $6,500,000 paid to acquire shares of Common Stock of the
                  Borrower and (y) after the issuance of the Series B Zero
                  Coupon Convertible Subordinated Notes, the aggregate amount
                  not in excess of $78,500,000 paid to acquire shares of Common
                  Stock of the Borrower plus (ii) 50% of positive Consolidated
                  Net Income (if any) earned from December 31, 1997 through such
                  date of determination (without regard for net losses)."

                  (q) Section 6.03(c) is amended by deleting clause (y) therein
         and replacing such clause with the following clauses:

                      "(y) for each such period ending thereafter but prior to
                      March 31, 2000, 3.75 to 1.00 and (z) for each period
                      thereafter, 3.50 to 1.00.

                  (r) Section 7.01(j) is amended by deleting the figure "5%"
         therein and replacing such figure with the figure "10%".

                  (s) Section 7.01(o) is amended in full to read "[Intentionally
         Omitted]."




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                  (t) The Credit Agreement is hereby amended by adding thereto
         Exhibit H to read as set forth in Schedule I hereto.

                  Notwithstanding the provisions of Section 7.01(j), the
Majority Banks hereby consent to the termination of the Service Agreements
listed on Schedule II hereto.

                  This Amendment No. 3 and Consent 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 September 1, 1999, counterparts of
this Amendment No. 3 and Consent executed by the undersigned, the Issuing Bank
and the Majority Banks or, as to any of the Banks, advice satisfactory to the
Agent that such Bank has executed this Amendment No. 3 and Consent (all such
Banks that shall have so executed this Amendment No. 3 and Consent being the
"APPROVING BANKS"), (ii) the Agent shall have received no later than the date of
the issuance of the Series A Zero Coupon Convertible Subordinated Notes, for the
ratable account of each Approving Bank, a consent fee of of one percent of each
such Approving Bank's Commitment (which fee the Agent will distribute to such
Approving Banks no later than the first Business Day after the date this
Amendment No. 3 and Consent becomes effective), (iii) the consent attached
hereto executed by each Guarantor and (iv) the Borrower shall have, prior to
December 1, 1999, (A) issued the Series A Zero Coupon Convertible Subordinated
Notes for net cash proceeds of not less than $92,000,000 and (B) applied at
least $92,000,000 of such net cash proceeds to prepay Advances under the Credit
Agreement. This Amendment No. 3 and Consent is subject to the provisions of
Section 9.01 of the Credit Agreement.

                  On and after the effectiveness of this Amendment No. 3 and
Consent, 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. 3 and Consent.

                  The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Amendment No. 3 and Consent, 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. 3 and Consent 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 Mario
Murillo at Citibank, N.A. (Telecopier No. (212) 793-5963) and returning at least
three counterparts of this Amendment No. 3 and Consent to Philip Strauss at
Shearman & Sterling, 555 California Street, San Francisco, CA 94104 (Telecopier
No. (415) 616-1199).

                  This Amendment No. 3 and Consent 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. 3 and Consent by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment No. 3 and Consent.



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                  This Amendment No. 3 and Consent shall be governed by, and
construed in accordance with, the laws of the State of New York.


                                         Very truly yours,



                                         PHYCOR, INC.



                                         By  /s/ John K. Crawford
                                             -----------------------------------
                                             Title: Executive Vice President and
                                                    Chief Financial Officer







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<PAGE>   8


Agreed as of the date first above written:


CITIBANK, N.A.,
         as Agent, as an Issuing Bank and as Bank



By /s/ James J. McCarthy
   -------------------------------------
   Title: Vice President










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BANK OF AMERICA, N.A.
         as Documentation Agent



By /s/ Ashley Crabtree
   -------------------------------------
   Title: Managing Director






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AMSOUTH BANK



By /s/ Cathy M. Wind
   -------------------------------------
   Title: Vice President






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BANK OF AMERICA, N.A.



By /s/ Ashley Crabtree
   -------------------------------------
   Title: Managing Director






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BANKERS TRUST COMPANY



By /s/ David J. Bell
   -------------------------------------
   Title: Principal






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THE BANK OF NOVA SCOTIA



By  /s/ W. J. Brown
   -------------------------------------
    Title: Vice President






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CREDIT LYONNAIS NEW YORK BRANCH



By /s/ Henry J. Reukauf
   -------------------------------------
   Title: Vice President






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FIRST AMERICAN NATIONAL BANK



By /s/ Allison H. Jones
   -------------------------------------
   Title: Senior Vice President







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THE FIRST NATIONAL BANK OF CHICAGO



By /s/ Erik C. Back
   -------------------------------------
   Title: Assistant Vice President





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FIRST UNION NATIONAL BANK



By /s/ Carolyn Hannon
   -------------------------------------
   Title: Director






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FLEET NATIONAL BANK



By /s/ Lori H. Jou
   -------------------------------------
   Title: Assistant Vice President






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MELLON BANK, N.A.



By /s/ Marsha Wicker
   -------------------------------------
   Title: Vice President






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COOPERATIEVE CENTRALE RAIFFEISEN
BOERENLEENBANK B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH



By /s/ Terrell Boyle
   -------------------------------------
   Title: Vice President



By /s/ Ian Reece
   -------------------------------------
   Title: Senior Credit Officer





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SUNTRUST, NASHVILLE, N.A.
         as Swing Line Bank



By /s/ Mark D. Mattson
   -------------------------------------
   Title: Vice President






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