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EXHIBIT 10.18
FIRST AMENDMENT
to
RESTRUCTURING AGREEMENT,
Dated as of March 29, 2000
among
STOCKPOINT, INC., formerly known as
NEURAL APPLICATIONS CORPORATION,
as the Borrower,
and
THE NORTHERN TRUST COMPANY,
and
IOWA STATE BANK & TRUST
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EXHIBIT 10.18
FIRST AMENDMENT
to
RESTRUCTURING AGREEMENT
Dated as of March 29, 2000
THIS FIRST AMENDMENT TO RESTRUCTURING AGREEMENT, dated as of March 29,
2000 (this "Agreement"), is entered into by and among STOCKPOINT, INC., formerly
known as NEURAL APPLICATIONS CORPORATION, a corporation organized under the laws
of the State of Delaware (the "Borrower"), THE NORTHERN TRUST COMPANY, an
Illinois banking corporation ("Northern"), as lead bank (the "Lead Bank") and as
a lender to the Borrower, and IOWA STATE BANK & TRUST, as Northern's participant
(together with Northern, the "Lenders").
R E C I T A L S :
A. Northern extended a line of credit (the "November 28, 1997 Line of
Credit") to the Borrower in the maximum principal amount of THREE MILLION
DOLLARS ($3,000,000), the Borrower's obligations relating to which being
evidenced by a promissory note dated as of November 28, 1997 (the "November 28,
1997 Note"), of the Borrower in favor of Northern.
B. ISB has purchased a $1,000,000.00 participating interest in the
November 28, 1997 Line of Credit.
C. Northern issued letters of credit (collectively, the "Letters of
Credit") in the maximum aggregate amount of $6,313,000 for the account of the
Borrower to support the repayment of certain debentures issued by the Borrower
(the "Debentures"), the Borrower's reimbursement obligations relating to which
being set forth in accompanying reimbursement agreements (collectively the "L/C
Reimbursement Agreements").
D. Iowa State Bank & Trust ("ISB"), an Iowa banking corporation, has
purchased a $2,000,000.00 participating interest in Northern's obligations
relating to the Letters of Credit.
E. Northern extended another line of credit (the "September 14, 1998
Line of Credit") to the Borrower in the maximum principal amount of TWO MILLION
DOLLARS ($2,000,000), the Borrower's obligations relating to which being
evidenced by a promissory note, dated as of September 14, 1998 (the "September
14, 1998 Note"), of the Borrower in favor of Northern.
F. The Borrower's obligations under and in relation to the November 28,
1997 Line of Credit, the Letters of Credit, and the September 14, 1998 Line of
Credit were guaranteed by Xxxxxx X. Xxxxx and the sole original collateral for
these obligations was to be shares of UAL Corporation stock to be pledged by Xx.
Xxxxx to secure his obligations under such guarantees.
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Consistent with the foregoing, Xx. Xxxxx ultimately delivered certificates to
Northern purporting to represent shares of UAL Corporation stock (the
"Purported UAL Stock Certificates").
G. Based on information obtained on December 1, 1998, the Lenders
believed and continue to believe that the Purported UAL Stock Certificates are
counterfeit. The Borrower states that its senior management (other than Xx.
Xxxxx) first learned that the certificates were alleged to be counterfeit on
December 3, 1998. Xx. Xxxxx has since become subject to an involuntary
bankruptcy petition. These constitute events of default under each promissory
note and the L/C Reimbursement Agreements, resulting, inter alia, in the
termination of the lines of credit.
H. The Borrower, Northern, ISB, and the Lead Bank entered into
restructuring discussions regarding the existing events of default, particularly
in light of the Borrower's stated intent to provide for the payment in full of
all obligations owing to the Lenders through the consummation of a strategic
transaction such as an initial public offering of its common stock, and the
parties amended the November 28, 1997 Note, the September 14, 1998 Note, and the
L/C Reimbursement Agreements to definitively reflect the terms of such a
restructuring pursuant to the terms and conditions set forth in that certain
Restructuring Agreement (the "Restructuring Agreement"), dated as of December 3,
1999, among the Borrower and the Lenders, it being understood that the Lead Bank
and the Lenders would not have entered into such a restructuring in the absence
of the Borrower's intent (and its commitment to use its best efforts) to
consummate such a strategic transaction on or before June 30, 2001 and that,
consequently, the Lead Bank and the Lenders materially relied thereupon in
entering into the Restructuring Agreement.
I. The parties desire to amend the provisions of the Restructuring
Agreement for the limited purpose of (i) increasing the maximum amount of the
Bridge Financing (as such term is defined in the Restructuring Agreement) by
$500,000 and (ii) permitting the Borrower to incur up to $1,000,000 in unsecured
indebtedness for borrowed money from Xxxx Xxxxxxxxx, one of its present equity
holders, or from one of his affiliates.
Therefore, the parties hereto agree, subject to the satisfaction of the
conditions precedent set forth in Section 3, to amend the Restructuring
Agreements as follows:
SECTION 1 AMENDMENTS TO RESTRUCTURING AGREEMENT
SECTION 1.1 Bridge Financing Increase. Section 6.1 of the Restructuring
Agreement is hereby amended to delete the amount "$2.5 million" in the third
line thereof and substitute "$3.0 million" therefor.
SECTION 1.2 Indebtedness for Borrowed Money. Section 10.5(a) of the
Restructuring Agreement is hereby amended to delete the present text in its
entirety and substitute the following therefor:
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(a) Indebtedness. Not incur, permit to remain outstanding,
assume or in any way become committed for indebtedness in respect of
borrowed money, except (i) indebtedness existing on December 3, 1999
shown on the financial statements furnished to the Lenders before the
Restructuring Agreement was originally signed, including any extensions
or renewals thereof so long as the principal amount of such
indebtedness is not increased by such extension or renewal; (ii) the
Bridge Financing; (iii) after March 29, 2000, up to ONE MILLION DOLLARS
($1,000,000) in an unsecured line of credit (the "New Unsecured Line of
Credit") to be extended by Xxxx Xxxxxxxxx, one of the Borrower's equity
holders, or one of his affiliates, which, in addition to being
unsecured, (A) shall not bear interest at a rate greater than (i) the
Prime Rate and (ii) LIBOR plus 1.75%, (B) shall permit the lender
thereunder to receive "interest only" payments until maturity, (C)
shall have a stated maturity of June 30, 2001, and (D) may be
accelerated only upon the occurrence of either a payment default that
remains uncured or unwaived for three (3) business days or the
consummation of a Strategic Transaction; and (iv) indebtedness incurred
after the date hereof in the nature of Capitalized Lease Liabilities
and/or purchase money debt, provided that the aggregate amount thereof
outstanding at any one time does not exceed (a) $750,000 in calendar
1999, (b) $1,500,000 in calendar 2000, and (c) $1,500,000 through June
30, 2001 (assuming a total year limitation of $2,500,000) for the
Borrower and all Subsidiaries and otherwise does not have a Material
Adverse Effect on the Borrower and its business operations at any time.
SECTION 1.3 Unsecured Line of Credit. Prior to incurring any
indebtedness under the New Unsecured Line of Credit, Borrower shall submit
executed copies of the agreement and documents relating thereto to the Lead Bank
and shall receive the Lead Bank's approval as to the form thereof, which
approval shall not be unreasonably withheld if such agreements and documents
comply with the provisions set forth in Section 1.2 of this Agreement.
SECTION 2 REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuer and the Lead Bank to enter into this
Agreement, the Borrower represents and warrants unto the Lead Bank, and each
Lender that:
SECTION 2.1 Organization. The Borrower is a corporation existing and in
good standing under the laws of the state indicated in the heading; any
Subsidiary is a corporation or partnership duly existing and in good standing
under the laws of the state of its formation as indicated on Schedule 2.5; the
Borrower and any Subsidiary are duly qualified, in good standing and authorized
to do business in each other jurisdiction where, because of the nature of their
activities or properties, such qualification is required and where the failure
to be so qualified may have a Material Adverse Effect; and the Borrower and any
Subsidiary have the power and authority to own their properties and to carry on
their businesses as now being conducted.
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SECTION 2.2 Authorization; No Conflict. The execution and delivery of
this Agreement is within the Borrower's corporate powers, has been authorized by
all necessary corporate action, have received all necessary governmental
approval (if any shall be required) and do not and will not contravene or
conflict with any provision of law applicable to the Borrower or of the charter
or by-laws of the Borrower or any Subsidiary or of any agreement binding upon
the Borrower or any Subsidiary.
SECTION 2.3 Taxes. Except in the case of state and local tax returns
for the fiscal years ended December 31, 1998 and December 31, 1999,
respectively, the Borrower and any Subsidiary have filed or caused to be filed
all federal, state and local tax returns which, to the knowledge of the Borrower
or any Subsidiary, are required to be filed, and have paid or have caused to be
paid all taxes as shown on such returns or on any assessment received by them,
to the extent that such taxes have become due (except for current taxes not
delinquent and taxes being contested in good faith and by appropriate
proceedings for which adequate reserves have been provided on the books of the
Borrower or the appropriate Subsidiary, and as to which no foreclosure,
distraint, sale or similar proceedings have been commenced). Specifically, the
Borrower is current in the filing of all of its federal income tax returns,
including for the calendar year ending December 31, 1998 and December 31, 1999,
respectively. The Borrower and any Subsidiary have set up reserves which are
adequate for the payment of additional taxes for years which have not been
audited by the respective tax authorities.
SECTION 2.4 Litigation and Contingent Liabilities. No litigation
(including derivative actions), arbitration proceedings or governmental
proceedings are pending or threatened against the Borrower which would (singly
or in the aggregate), if adversely determined, have a Material Adverse Effect.
SECTION 2.5 Subsidiaries. Attached hereto as Schedule 2.5 is a correct
and complete list of all Subsidiaries and Affiliates of the Borrower.
SECTION 2.6 ERISA/Health. The Borrower does not maintain a Plan, but
only administers a 401(k) plan for its employees. The Borrower maintains a
self-funded health insurance plan, which represents a scheduled contingent
liability of no more than $100,000. Each of the foregoing complies in all
material respects with all applicable requirements of law and regulations.
SECTION 2.7 Strategic Transaction Acknowledgment. The Borrower
continues to understand and acknowledge that the Lead Bank and the Lenders would
not have entered into the restructuring set forth in the Restructuring Agreement
(as amended hereby) in the absence of the Borrower's stated intent to use its
best efforts to consummate a Strategic Transaction on or before June 30, 2001
and that, consequently, the Lead Bank and the Lenders materially relied
thereupon in entering into the original Restructuring Agreement and continue to
materially rely thereupon in entering into this Agreement; provided, however,
that the failure to actually consummate a Strategic Transaction on or before
such date shall not constitute an Event of Default.
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SECTION 2.8 No Defaults. As of the date hereof, (a) no Event of Default
or Unmatured Event of Default has occurred and is continuing and (b) the
Borrower is in compliance with the financial restrictions set forth in Sections
10.5 and 10.11 of the Restructuring Agreement (as amended by this Agreement).
SECTION 3 CONDITIONS TO EFFECTIVENESS OF AGREEMENT
This Agreement and the amendment of the Restructuring Agreement
provided for herein shall become effective as of the date hereof upon
satisfaction of the following conditions precedent:
SECTION 3.1 Letters of Credit. There shall have been no demand for
payment made under any of the Letters of Credit.
SECTION 3.2 Agreement. Each party hereto shall have received a
counterpart of this Agreement which has been executed by all of the parties
hereto.
SECTION 3.3 Documentation. The Lead Bank shall have received all of the
following, each duly executed and dated the closing date hereof or such earlier
date as is provided for herein or in an Exhibit hereto or is satisfactory to the
Lead Bank, in form and substance satisfactory to the Lead Bank and its counsel,
at the expense of the Borrower, and in such number of signed counterparts as the
Lead Bank may request:
(a) Borrower Resolution. A copy of a resolution of the Board
of Directors of the Borrower authorizing or ratifying the execution,
delivery and performance, respectively, of this Agreement, to be
executed by the Borrower and certified by the Secretary of the
Borrower.
(b) Borrower Articles of Incorporation and By-laws. A
certificate of the Secretary of the Borrower to the effect that true
and correct copies of the articles of incorporation and the by-laws of
the Borrower then in effect are attached as exhibits to such
certificate or that its articles of incorporation and its by-laws are
unchanged from the certified copies thereof that were provided by the
Borrower at the time of the original execution and delivery of the
Restructuring Agreement.
(c) Borrower Certificate of Incumbency. A certificate of the
Secretary of the Borrower certifying the names of the officer or
officers of the Borrower authorized to sign this Agreement, to be
executed by the Borrower, together with a sample of the true signature
of each such officer (the Lead Bank and each Lender may conclusively
rely on such certificate until formally advised by a like certificate
of any changes therein).
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(d) Opinion of Counsel to the Borrower. An opinion or opinions
of counsel to the Borrower to such effect as the Lead Bank may
reasonably require.
(e) Miscellaneous. Such other documents and certificates as
the Lead Bank may reasonably request.
SECTION 3.4 Bridge Financing. The Lead Bank shall have received copies
of the executed agreements and other documents relating to the increase in the
maximum amount of the Bridge Financing contemplated hereby.
SECTION 3.5 Payment of Accrued Interest and Letter of Credit Fees. The
Lead Bank, on behalf of the Lenders, shall have received current payment in full
of all accrued and unpaid interest on the Notes and unpaid Letter of Credit
Fees.
SECTION 3.6 Xxxxxx X. Xxxxx. The Lenders shall have entered into an
amendment to the Xxxxxx Xxxxx/Lender Agreement substantially in the form of
Exhibit A hereto (the "Xxxxxx Xxxxx/Lender Agreement"), which agreement will not
be subject to bankruptcy court approval, whether to be obtained before or after
closing.
SECTION 4 DEFINITIONS
SECTION 4.1 Definitions. Unless otherwise set forth herein, the
definitions are set forth in Schedule I of the Restructuring Agreement.
SECTION 5 MISCELLANEOUS
SECTION 5.1 Effectiveness and Successors. This Agreement shall, upon
execution and delivery by the Borrower, the Lenders and the Lead Bank in
Chicago, Illinois, become effective and shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Lead Bank and their respective
successors and assigns, except that the Borrower may not transfer or assign any
of its rights or interest hereunder without the prior written consent of the
Lenders.
SECTION 5.2 Captions. Captions in this Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof. References herein to Sections or provisions without reference to the
document in which they are contained are references to this Agreement.
SECTION 5.3 Singular and Plural. Unless the context requires otherwise,
wherever used herein the singular shall include the plural and vice versa, and
the use of one gender shall also denote the other where appropriate.
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SECTION 5.4 Counterparts. This Agreement may be executed by the parties
on any number of separate counterparts, and by each party on separate
counterparts; each counterpart shall be deemed an original instrument; and all
of the counterparts taken together shall be deemed to constitute one and the
same instrument.
SECTION 5.5 Payment of Costs and Expenses. Other than with respect to
the professional fees and expenses of the Lead Bank and the Lenders relating to
the period prior to the execution and delivery of the original Restructuring
Agreement (which are addressed in Section 7.1 of the Restructuring Agreement),
the Borrower's obligations under the Notes and/or the L/C Reimbursement
Agreements to reimburse the Lead Bank and the Lenders for their respective
expenses remain unchanged. The aggregate limit set forth in Section 7.1 of the
Restructuring Agreement in no manner applies or otherwise limits the rights of
the Lead Bank and each Lender to be reimbursed for such fees and expenses
(including, without limitation, those relating to the preparation, execution,
and delivery of this Agreement and the other matters relating thereto), which,
for expenses incurred from December 3, 1999 to such date, shall be due and
payable on the earlier to occur of the date of the consummation of a Strategic
Transaction (or other acceleration of the Obligations pursuant to any of the
other provisions hereof) and June 30, 2001 and which, for expenses incurred
after such date, shall be due and payable on demand.
SECTION 5.6 Confidentiality. The Lenders shall hold all non-public
information (which has been identified as such by the Borrower) obtained
pursuant to the requirements of this Agreement in accordance with their
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure to any of their examiners, insurers, Affiliates, outside auditors,
counsel and other professional advisors in connection with this Agreement or as
reasonably required by any bona fide transferee, participant or assignee or as
required or requested by any governmental agency or representative thereof or
pursuant to legal process.
SECTION 5.7 Construction. This Agreement, the Restructuring Agreement
(including as amended by this Agreement), the Notes (as amended by the
Restructuring Agreement), the Loan Documents and any other document or
instrument executed in connection herewith shall be governed by, and construed
and interpreted in accordance with, the internal laws of the State of Illinois,
and shall be deemed to have been executed in the State of Illinois.
SECTION 5.8 Reaffirmation of the Provisions of the Loan Documents. This
Agreement amends the Restructuring Agreement only to the extent expressly set
forth herein. Consistent with the foregoing, none of the other provisions of the
Restructuring Agreement shall be amended, and the parties reaffirm the
Restructuring Agreement, as amended by the provisions of this Agreement, in all
respects. Except as amended by the Restructuring Agreement (including as amended
by the provisions of this Agreement), the provisions of the Notes and the L/C
Reimbursement Agreements remain unchanged, and the Borrower hereby reaffirms its
obligations thereunder. Consistent with the foregoing, any conflict between the
provisions of the Notes and/or the L/C Reimbursement Agreements prior to
December 3, 1999, on the one hand, and the provisions of the Restructuring
Agreement (including as amended by the provisions of
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this Agreement), on the other hand, shall be governed by the provisions
of the Restructuring Agreement (including as amended by the provisions of this
Agreement).
SECTION 5.9 Relationship between this Agreement and Participation
Agreement. Iowa State Bank's execution and delivery of this Agreement shall be
deemed to satisfy any consent requirement under any of the existing
participation agreements (the "Participation Agreements") between Iowa State
Bank and Northern. Except as provided in the preceding sentence, the provisions
of the Participation Agreement shall remain unchanged and any conflict between
the provisions of the Participation Agreement and the Restructuring Agreement
(including as amended by the provisions of this Agreement) shall be governed by
the provisions of the Participation Agreement.
SECTION 5.10 Submission to Jurisdiction; Venue; Waiver of Right to Jury
Trial. THE BORROWER IRREVOCABLY AGREES THAT ALL SUITS, ACTIONS OR OTHER
PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO
THIS AGREEMENT, THE RESTRUCTURING AGREEMENT (INCLUDING AS AMENDED BY THE
PROVISIONS OF THIS AGREEMENT), THE NOTES, THE LOAN DOCUMENTS OR ANY OTHER
DOCUMENT EXECUTED IN CONNECTION HEREWITH, SHALL BE SUBJECT TO LITIGATION IN
COURTS HAVING SITUS WITHIN CHICAGO, ILLINOIS. THE BORROWER HEREBY CONSENTS AND
SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN
SAID CITY AND STATE. THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL
BY JURY, TO TRANSFER OR CHANGE THE VENUE OF ANY SUIT, ACTION OR OTHER PROCEEDING
BROUGHT AGAINST ANY PARTY IN ACCORDANCE WITH THIS SECTION, OR TO CLAIM THAT ANY
SUCH PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
STOCKPOINT, INC., formerly known as
NEURAL APPLICATIONS CORPORATION
By: /s/ W.E. Xxxxx
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Its: President
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Address: 0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: 319/626-5001
THE NORTHERN TRUST COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
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Its: Vice President
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Address: 00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Vice President
Credit Policy Division
Facsimile: 312/630-6105
Telephone: 312/000-0000
IOWA STATE BANK & TRUST
By: /s/ Xxxx X. Xxxxx
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Its: Senior Vice President
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Address: X.X. Xxx 0000
Xxxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxx
Facsimile: 319/356-5844
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