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EXHIBIT 1.4
AMENDMENT NUMBER 3 TO SECURITIES PURCHASE AGREEMENT
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AMENDMENT NUMBER 3 TO
SECURITIES PURCHASE AGREEMENT
This AMENDMENT NUMBER 3 TO SECURITIES PURCHASE AGREEMENT (this "Amendment")
is entered into on this 18th day of September 1996 but is effective for all
purposes as of January 8, 1996, by and among MEDIRISK, INC., a Florida
corporation (the "Company"), and HEALTHPLAN SERVICES CORPORATION, a Delaware
corporation ("Purchaser").
BACKGROUND
WHEREAS, Purchaser and the Company are parties to a Securities Purchase
Agreement, dated January 8, 1996, as amended as of May 31, 1996 and August 22,
1996 (as so amended, the "Agreement"), pursuant to which Purchaser purchased
280,623 shares of Series B Convertible Preferred Stock of the Company and agreed
to purchase up to $10,000,000.00 in original principal amount of Senior
Subordinated Notes (as defined in the Agreement); and
WHEREAS, upon delivery and review of the Company's audited financial
statements for the year ended December 31, 1995, the parties have determined
that they established certain of the financial covenants set forth in the
Agreement based upon their review of the Company's unaudited financial
statements as of September 30, 1995 and upon certain assumptions concerning the
Company's business and financial transactions for 1996 and the accounting
treatment therefor; and
WHEREAS, the parties desire to acknowledge that the assumptions underlying
such anticipated financial transactions, and the parties' assumptions concerning
the accounting therefor, were changed by way of mutual consent and that such
changes necessitate an amendment of certain of the financial covenants set forth
in the Agreement, with such amendment being effective as of the parties' entry
into the Agreement, and the parties desire to acknowledge and agree that no
default has existed or now exists based upon such covenants;
NOW, THEREFORE, Purchaser and the Company hereby agree as follows:
1. Amendment of Agreement. Section 5.10 of the Agreement is hereby amended
by deleting such Section in its entirety and inserting in lieu thereof the
following:
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5.10 Financial Covenants.
5.10.1 Consolidated EBITDA. Permit the Consolidated EBITDA
determined at the end of each Fiscal Year to be less than the amount
specified below:
Fiscal Year Ending Amount
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December 31, 1996 $ 192,000
December 31, 1997 $ 3,900,000
December 31, 1998 $ 5,900,000
December 31, 1999 $ 8,800,000
December 31, 2000 and thereafter $13,000,000
5.10.2 Minimum Consolidated Net Worth. Permit Consolidated Net
Worth determined at the end of each Fiscal Year specified below to be
less than the amount specified below:
Fiscal Year Ending Amount
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December 31, 1995 ($11,586,000)
December 31, 1996 ($9,637,000)
December 31, 1997 ($5,000,000)
December 31, 1998 $ 8,000,000
December 31, 1999 $ 12,000,000
December 31, 2000 and thereafter $ 16,000,000
5.10.3 Consolidated Debt to Consolidated EBITDA. Permit the ratio
of Consolidated Debt to Consolidated EBITDA determined at the end of each
Fiscal Year to exceed the ratio specified below:
Fiscal Year Ending Amount
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December 31, 1996 47.0:1.0
December 31, 1997 3.0:1.0
December 31, 1998 2.0:1.0
December 31, 1999 1.0:1.0
December 31, 2000 and thereafter 1.0:1.0
(C) Fixed Charge Coverage. Permit the Fixed Charge Coverage Ratio
determined at the end of each Fiscal Year to be less than the ratio
specified below:
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Fiscal Year Ending Amount
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December 31, 1996 n/a
December 31, 1997 4.0:1.0
December 31, 1998 and thereafter 6.0:1.0
2. Amendment of Appendix A. Appendix A is hereby amended by deleting
therefrom the definition of "Consolidated EBITDA" and inserting in lieu thereof
the following:
"Consolidated EBITDA" means, for any period, Consolidated Net Income
for the Company for such period as determined in accordance with GAAP,
plus all amounts deducted therefrom for such period, if any, in respect of
(i) Consolidated Interest Charges, (ii) Consolidated Depreciation, (iii)
Consolidated Taxes, (iv) Consolidated Amortization, and (v) consolidated
in progress research and development charges or similar non-cash charges
or expenses incurred by the Company in connection with acquisitions, or
similar transactions, occurring during or prior to such period.
3. Effect of Amendment. This Amendment shall be effective as of the date
of the Agreement as if the modifications and amendments made herein were
included in the Agreement ab initio, and the covenants originally contained in
Section 5.10 shall be deemed for all purposes never to have been in force or
effect. The parties acknowledge that the provisions of Section 5.10 were agreed
to based upon mutually anticipated financial transactions and certain financial
assumptions, and that the revised covenants set forth in this Amendment
accurately reflect the parties' original intent upon entering into the
Agreement. The parties further acknowledge and agree that no default has
existed or now exists as a result of any failure to comply with such covenants.
4. Miscellaneous. Except as specifically modified and amended by this
Amendment, the Agreement shall remain in full force and effect, and the terms
of the Agreement are hereby ratified and confirmed in all respects as so
amended. Capitalized terms used and not defined in this Amendment but defined
in the Agreement shall have the respective meanings set forth in the Agreement.
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IN WITNESS WHEREOF, each party hereto has executed or caused this
Amendment to be executed on its behalf, all on the day and year first above
written.
MEDIRISK, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
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Title: Vice President
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HEALTHPLAN SERVICES CORPORATION
By: /s/ Xxxxx X. Xxxxxx, III
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Title: Executive Vice President
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