JUDICATE INC, DEF 14A, 1996-03-07

JUDICATE INC
DEF 14A, 1996-03-07
LEGAL SERVICES

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<PAGE>
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant /x/

Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

JUDICATE, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

/x/ Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: $125

(2) Form, Schedule or Registration Statement No.: 14A

(3) Filing Party: Judicate, Inc.

(4) Date Filed: February 23, 1996

<PAGE>
JUDICATE, INC.
THE BELLEVUE
200 SOUTH BROAD STREET
PHILADELPHIA, PA 19102

Dear Stockholder:

You are cordially invited to attend a Special Meeting of Stockholders of
Judicate, Inc., which will be held on Thursday, March 21, 1996 at 10:00 a.m., at
the City Midday Club, 140 Broadway, 50th Floor, New York, New York.

The Company has called this Special Meeting for the purposes set forth in
the attached Notice of Meeting. The Company felt that it was in the best
interests of the Company not to defer these items until the 1996 Annual Meeting,
particularly the proposal to change the Company's name to reflect the change in
the focus of the Company's business. It was also thought that the Special
Meeting would provide the Company's stockholders with the opportunity to meet
the new members of the Company's Board of Directors and management.

The 1996 Annual Meeting of Stockholders is intended to be held by June of
this year. The proxy statement for that meeting will be accompanied or preceded
by a report containing audited financial statements and other information
relating to the Company. At that meeting, you will be given the opportunity to
elect directors to hold office until the 1997 Annual Meeting of Stockholders.

This booklet includes the notice of the meeting and the proxy statement
which contains information about the functions of your Board of Directors and
its committees and personal information about each of the nominees for the
Board. It also includes four (4) proposals of the Board of Directors, with the
Board's position on each.

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING REGARDLESS
OF THE SIZE OF YOUR HOLDINGS. I URGE YOU TO COMPLETE, SIGN, DATE, AND RETURN
YOUR PROXY CARD PROMPTLY.

If you plan to attend the meeting and are a stockholder of record, please
mark your proxy card in the space provided for that purpose. An admission ticket
is included with the proxy card for each stockholder of record. However, if your
shares are not registered in your own name, please advise the stockholder of
record (your bank, broker, etc.) that you wish to attend. That firm must provide
you with evidence of your ownership which will enable you to gain admittance to
the meeting.

Sincerely yours,

Dominic A. Polimeni
Chairman, President and
Chief Executive Officer of the Company

March 6, 1996

YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN
YOUR PROXY CARD IN THE ENCLOSED ENVELOPE

<PAGE>
NOTICE OF
SPECIAL MEETING
OF
STOCKHOLDERS

A Special Meeting of Stockholders of Judicate, Inc. (the 'Company') will be
held at the City Midday Club, 140 Broadway, 50th Floor, New York, New York on
Thursday, March 21, 1996, beginning at 10:00 a.m., New York time, for the
following purposes:

1. TO ELECT DIRECTORS.

2. TO CONSIDER AND ACT UPON:

-- a proposal to amend the Certificate of Incorporation of the
Company to change the Company's name, which is RECOMMENDED by
the Board of Directors;

-- a proposal to amend the Certificate of Incorporation of the
Company to increase the authorized common stock of the Company,
which is RECOMMENDED by the Board of Directors;

-- a proposal to amend the Certificate of Incorporation of the
Company to increase the authorized preferred stock of the
Company, which is RECOMMENDED by the Board of Directors; and

-- a proposal to approve the 1994 Director Non-Qualified Stock
Option Plan, which is RECOMMENDED by the Board of Directors.

3. TO TRANSACT ANY OTHER BUSINESS WHICH PROPERLY MAY BE BROUGHT BEFORE
THE MEETING.

Stockholders of record at the close of business on February 21, 1996 will
be entitled to vote at the meeting.

By Order of the Board of Directors,

Milton M. Adler
Secretary

JUDICATE, INC.
The Bellevue
200 South Broad Street
Philadelphia, PA 19102
March 6, 1996

<PAGE>
GENERAL INFORMATION

This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Judicate, Inc., a Delaware corporation (the
'Company'), for use at a Special Meeting of Stockholders of the Company (the
'Meeting') which will be held at 10:00 a.m. on Thursday, March 21, 1996 at the
City Midday Club, 140 Broadway, 50th Floor, New York, New York, and at any and
all adjournments of the Meeting for the purposes set forth in the accompanying
Notice of Meeting of Stockholders. This Proxy Statement and the enclosed proxy
card will be mailed to stockholders on or about March 7, 1996. The Company's
principal executive offices are located at The Bellevue, 200 South Broad Street,
Philadelphia, PA 19102.

The accompanying proxy card is designed to permit each stockholder of
record at the close of business on February 21, 1996 to vote in the election of
directors and on the proposals described in this Proxy Statement. The proxy card
provides space for a stockholder to withhold voting for any or all nominees for
the Board of Directors or to abstain from voting for any proposal if the
stockholder chooses to do so. Shares represented by properly executed proxy
cards received by the Company at or prior to the Meeting will be voted at the
Meeting according to the instructions indicated thereon or otherwise as provided
therein. The election of directors requires the affirmative vote of a plurality
of the votes cast. The amendments to the Company's Certificate of Incorporation
require the affirmative vote of a majority of the outstanding stock entitled to
vote. Approval of the stock option plan requires the affirmative vote of a
majority of the votes cast at the Meeting. For purposes of determining the
number of votes cast with respect to any voting matter, only those cast 'FOR' or
'AGAINST' are included. Abstentions and broker non-votes are counted only for
purposes of determining whether a quorum is present at the Meeting.

Unless instructions to the contrary are indicated, the persons named on the
proxy card will be deemed to have intended to vote the shares so represented
'FOR' changing the corporate name, 'FOR' the increase in the shares of
authorized common stock, 'FOR' the increase in the shares of authorized
preferred stock and 'FOR' approval of the 1994 Director Non-Qualified Stock
Option Plan. As to any other business which may properly come before the
Meeting, the persons named on the proxy card will vote according to their best
judgment.

A proxy may be revoked at any time before it is voted at the Meeting by
filing with the Secretary of the Company an instrument revoking it, by a duly
executed proxy bearing a later date, or by voting by ballot at the Meeting.

This proxy is solicited by the Board of Directors of the Company. The cost
of preparing, assembling and mailing this notice of meeting, proxy statement,
and proxy will be borne by the Company. In addition to solicitation of the
proxies by use of the mails, some of the officers, directors and regular
employees of the Company, without extra remuneration, may solicit proxies
personally or by telephone, telegraph, or cable. The Company may also request
brokerage houses, nominees, custodians and fiduciaries to forward soliciting
material to the beneficial owners of stock held of record. The Company will
reimburse such persons for their reasonable expenses in forwarding soliciting
material.

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<PAGE>
VOTING SECURITIES AND SECURITIES OWNERSHIP

VOTING SECURITIES

The Board of Directors has fixed the close of business on February 21, 1996
as the record date (the 'Record Date') for the determination of stockholders
entitled to notice of, and to vote at, the Meeting and any adjournments thereof.
Only stockholders on the Record Date will be able to vote at the Meeting, and
each holder of record will be entitled to one vote for each share held, with no
shares having cumulative voting rights. The list of stockholders entitled to
vote at the Meeting will be available for the examination of any stockholder at
the offices of Gould & Wilkie, One Chase Manhattan Plaza, 58th Floor, New York,
New York, for ten days prior to the date of the Meeting.

As of the Record Date, there were 15,382,705 shares of the Company's common
stock, par value $.0001 per share, (the 'Common Stock') issued and outstanding,
all of which are entitled to one (1) vote per share at the Meeting. Holders of
the Common Stock are entitled to vote on all matters.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND PRINCIPAL STOCKHOLDERS

The following table sets forth certain information, as of February 28,
1996, known to the Company regarding beneficial ownership of the Company's
Common Stock by (i) any holder of more than five percent of the outstanding
shares; (ii) the Company's directors; (iii) the executive officers of the
Company; and (iv) all directors and executive officers of the Company as a
group:

<TABLE>
<CAPTION>
POSITION WITH NUMBER PERCENTAGES
NAME & ADDRESS THE COMPANY OF SHARES OF SHARES
- ------------------------------ ------------------------------ --------- -----------
<S> <C> <C> <C>
Dominic A. Polimeni(1)........ Chairman, President and Chief
Executive Officer 2,602,721(2) 16.9%

Milton M. Adler(1)............ Director, Secretary, Treasurer
and Controller 6,666(3) *

Robert V. Gubitosi(1)......... Director -- (4) --

Mitchell Hymowitz(1).......... Director 45,000(5) *

William J. McSherry, Jr.(1)... Director 35,000(6) *

Joan R. Gubitosi
c/o Gulfstream Financial
Group, Inc.
6400 Congress Avenue
Suite 200
Boca Raton, FL 33487........ 2,602,721(2) 16.9%

Phillip D. Schwiebert
1180 Murphy Avenue
San Jose, CA................ 1,361,360(7) 8.8%
</TABLE>

2
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH NUMBER PERCENTAGES
NAME & ADDRESS THE COMPANY OF SHARES OF SHARES
- ------------------------------ ------------------------------ --------- -----------
<S> <C> <C> <C>
The Miami Project to
Cure Paralysis
The University of Miami
School of Medicine
1600 N.W. Tenth Avenue
Miami, FL 33136............. 1,000,000 6.5%

All officers and directors as
a group (5 persons)......... 2,689,387 17.5%
</TABLE>
- ------------------
* Less than 1%.

(1) c/o Judicate, Inc., The Bellevue, 200 South Broad Street, Suite 800,
Philadelphia, PA 19102.

(2) These shares are owned by Gulfstream Financial Group, Inc. ('Gulfstream').
Joan R. Gubitosi and Dominic Polimeni are executive officers and the
stockholders of Gulfstream and share voting and investment power with
respect to shares owned by Gulfstream. Pursuant to a Management Advisory and
Consulting Agreement, dated as of November 29, 1994, between the Company and
Gulfstream, Gulfstream may be entitled to be awarded as incentive
compensation warrants to purchase up to 10.0% of the Company's Common Stock
outstanding at March 31, 1995 (for purposes of such calculation, the common
stock outstanding at March 31, 1995 assumes the conversion of all
outstanding warrants, options and preferred stock), at a price of $.10 per
share, upon the attainment of certain earnings targets. See also 'Related
Party Transactions.'

(3) Consists of Options to purchase 6,666 shares of Common Stock at $12.75 per
share granted pursuant to the 1992 Stock Option Plan.

(4) Mr. Gubitosi's wife, Joan R. Gubitosi, has shared beneficial ownership of
2,602,721 shares of Common Stock (see Footnote 2). Mr. Gubitosi disclaims
beneficial ownership of such shares.

(5) Consists of Options to purchase 15,000 shares of Common Stock at $1.125 per
share, Options to purchase 15,000 shares of Common Stock at $2.406 per share
and Options to purchase 15,000 shares of Common Stock at $1.906 per share
granted, subject to stockholder approval, pursuant to the 1994 Director Non-
Qualified Stock Option Plan.

(6) Includes Options to purchase 15,000 shares of Common Stock at $1.906 per
share granted, subject to stockholder approval, pursuant to the 1994
Director Non-Qualified Option Plan.

(7) Pursuant to an Employment Agreement, dated as of November 29, 1994, between
Quest and Phillip Schwiebert, Mr. Schwiebert may be entitled to be awarded
as incentive compensation warrants to purchase up to 5.0% of the Company's
Common Stock outstanding at March 31, 1995 (for purposes of such
calculation, the common stock outstanding at March 31, 1995 assumes the
conversion of all outstanding warrants, options and preferred stock), at a
price of $.10 per share, upon the attainment of certain earnings targets.

3
<PAGE>
As of the close of business on March 31, 1995, the Company acquired from
Gulfstream Financial Group, Inc. ('Gulfstream'), a Florida corporation owned by
Dominic A. Polimeni and Joan R. Gubitosi, all of the outstanding capital stock
of Quest Electronic Hardware, Inc. ('Quest'). Quest, in turn, simultaneously
acquired the fasteners distribution business of Arrow Electronics, Inc. These
events resulted in changes in ownership of the capital stock of the Company
which may have affected the control of the Company. These changes included the
following:

(a) Gulfstream became the direct beneficial owner of 22.1% of the
shares of common stock, par value $.0001 per share ('Common Stock'), of the
Company outstanding at March 31, 1995;

(b) Gulfstream, in consideration of its services to the Company under
a Management Advisory and Consulting Agreement, dated as of November 29,
1994, may be entitled to be awarded as incentive compensation, subject to
certain conditions and restrictions, warrants to purchase up to 10.0% of
the Company's Common Stock outstanding at March 31, 1995 (for purposes of
such calculation, the Common Stock outstanding at March 31, 1995 assumes
the conversion of all outstanding warrants, options and preferred stock),
at a price of $.10 per share, upon the attainment of certain earnings
targets;

(c) Dominic A. Polimeni ('Polimeni'), a Director, Executive Officer
and principal stockholder of Gulfstream, and the Chairman, Chief Executive
Officer and Chief Financial Officer of Quest, which became a subsidiary of
the Company, was named President and Chief Operating Officer of the Company
(Mr. Polimeni was subsequently named Chairman, President and Chief
Executive Officer of the Company); and

(d) Phillip D. Schwiebert ('Schwiebert'), the President and Chief
Operating Officer of Quest, became the beneficial owner of 11.6% of the
shares of Common Stock of the Company outstanding at March 31, 1995, and,
pursuant to an Employment Agreement, dated as of November 29, 1994, by and
between Quest and Schwiebert, may be entitled to be awarded as incentive
compensation, subject to certain conditions and restrictions, warrants to
purchase up to 5.0% of the Company's Common Stock outstanding at March 31,
1995 (for purposes of such calculation, the Common Stock outstanding at
March 31, 1995 assumes the conversion of all outstanding warrants, options
and preferred stock), at a price of $.10 per share, upon the attainment of
certain earnings targets.

Subsequent to the foregoing events, certain principal stockholders of the
Company (Jordan R. Belfort, Richard Bronson, Elliot Loewenstern and Daniel
Porush) who, in the aggregate, beneficially owned approximately 45% of the
Company's outstanding stock disposed of the bulk of these shares. In addition,
the Board of Directors of the Company has undergone a substantial restructuring
by reason of the resignation of four (4) former directors and the election of
Messrs. Adler, Gubitosi and McSherry to the Board.

ELECTION OF DIRECTORS

At the Meeting, the stockholders of record will elect five (5) directors to
hold office until the 1996 annual meeting of stockholders which is intended to
be held later this year or until their respective successors have been duly
elected and qualified. Unless contrary instructions are given, the shares
represented by a properly executed proxy will be voted 'FOR' the election of the
following nominees: Milton M. Adler, Robert V. Gubitosi, Mitchell Hymowitz,
William J. McSherry, Jr. and Dominic A. Polimeni. All of the nominees presently
comprise the entire Board of Directors of the Company. If at any time during the
Meeting any of the nominees become

<PAGE>
unavailable to serve as director, the persons named in the enclosed proxy will
vote the shares represented by the proxy for the election of such person as the
Board of Directors may recommend.

Set forth below is certain information concerning the nominees for election
as directors:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------- --- ---------------------------------
<S> <C> <C>
Milton M. Adler.................. 68 Secretary, Treasurer and Director
Robert V. Gubitosi............... 48 Director
Mitchell Hymowitz................ 34 Director(1)
William J. McSherry, Jr.......... 48 Director(1)
Dominic A. Polimeni.............. 49 Chairman, President and Chief
Executive Officer
</TABLE>
- ------------------
(1) Members of the Committee for the Administration of the 1992 Amended and
Restated Management Incentive Option Plan.

MILTON M. ADLER has been a Director of the Company since February 1996,
Controller of the Company since January 1992 and has been Treasurer of the
Company since February 1992 and Secretary since October 1993. Prior thereto, Mr.
Adler was employed by Travelco, a travel consulting firm, for more than 18 years
in various capacities, the most recent of which was Vice President of
Administration. Mr. Adler is a Certified Public Accountant.

ROBERT V. GUBITOSI has been a Director of the Company since February 1996
and Director of Operations of Quest Electronic Hardware, Inc., a subsidiary of
the Company, since March 1995. Mr. Gubitosi has been a Managing Director of
Gulfstream Financial Group, Inc., a privately held financial consulting and
investment banking firm since August 1990. Prior to that he held the position of
General Partner and Chief Financial Officer of the Securities Groups, a New York
investment banking firm and primary dealer of U.S. government securities, with
responsibility for the investment banking activities of the firm. In addition,
he has held managerial positions at Goldman Sachs & Company and Oppenheimer &
Company, and specialized in brokerage accounting and auditing at Haskins & Sells
and Touche Ross & Co. He holds a bachelor of business administration degree from
Hofstra University. Mr. Gubitosi is the brother-in-law of Mr. Polimeni.

MITCHELL HYMOWITZ has been a Director of the Company since December 1993.
Mr. Hymowitz has also been Principal/Chief Financial Officer of H&W Hardware
Co., Inc. and Vice President of Two Twenty First Avenue Realty Corp. since
September 1990. Prior to that he was Senior Accountant with Paritz and Company,
P.A., in New Jersey. Mr. Hymowitz earned a Bachelor of Science in Business
Administration with a degree in Accounting from State University of New York at
Buffalo in 1984.

WILLIAM J. MCSHERRY, JR. has been a Director of the Company since February
1996. Mr. McSherry has been a partner of Battle Fowler LLP, a law firm with
offices in New York City and Los Angeles, since July 1991. Prior to July 1991,
Mr. McSherry was a partner in the law firm of Bryan Cave. Mr. McSherry is also
the President and a director of Playtex Marketing Corporation, a privately-owned
corporation, and serves as a trustee and as Deputy Mayor of the Village of
Larchmont, State of New York.

DOMINIC A. POLIMENI has been President, Chief Operating Officer and a
Director of the Company since March 1995, and Chairman and Chief Executive
Officer since February 1996. He has also been Chairman, Chief Executive Officer
and Chief Financial Officer of Quest Electronic Hardware, Inc. since October
1994. Mr. Polimeni has been Managing Director of Gulfstream Financial Group,
Inc., a privately held financial

5
<PAGE>
consulting and investment banking firm since August 1990. Prior to that he held
the position of Chief Financial Officer of Arrow Electronics, Inc. ('Arrow') for
four (4) years. He also held several other positions, including general
management positions, with Arrow over an eight-year period. Prior to that he
practiced as a Certified Public Accountant for more than 12 years and was a
Partner in the New York office of Arthur Young & Company. He has also held the
position of Chief Operating Officer of Fugazy Express, Inc., a New York based
transportation company in its start-up phase. He holds a bachelor of business
administration degree from Hofstra University. Mr. Polimeni is the
brother-in-law of Mr. Gubitosi.

THE BOARD OF DIRECTORS AND ITS COMMITTEES

The Board of Directors held two meetings during the fiscal year ended
December 31, 1995. All directors participated in both such meetings of the Board
of Directors except for Marc Powell, a former director who did not attend one of
the meetings. The Board of Directors acted by unanimous written consent four (4)
times during such fiscal year.

The Company does not have standing audit, nominating or compensation
committees. The Company has one Board of Directors' committee: the Committee for
the Administration of the 1992 Amended and Restated Management Incentive Option
Plan. The Committee did not take action during the fiscal year ended December
31, 1995.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the compensation of the named executives for
the periods indicated. No executive officer had total annual salary and bonus
equal to or greater than $100,000.

<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------------- ----------------------------- -----------------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
RESTRICTED SECURITIES
NAME AND OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS ($) OPTIONS/SARS(#) PAYOUTS COMPENSATION
- -------------------------- ---- ------- ----- ------------ ---------- --------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dominic A. Polimeni....... 1995 $75,000 -- -- -- -- -- --
Chairman, President and 1994 -- -- -- -- -- -- --
Chief Executive Officer 1993 -- -- -- -- -- -- --
Stephen J. Drescher....... 1995 $52,000 -- -- -- 0 -- --
Former Chairman and 1994 $52,000 -- -- -- 250,000(1) -- --
Chief Executive Officer 1993 $19,000 -- -- -- 0 -- --
</TABLE>
- ------------------
(1) Options to acquire 250,000 shares at $0.625 per share were granted to Mr.
Drescher in 1994 pursuant to the 1992 Amended and Restated Management
Incentive Option Plan.

6
<PAGE>
EMPLOYMENT AGREEMENT

Dominic A. Polimeni, Chairman, Chief Executive Officer and President of the
Company, is party to an employment agreement with Quest Electronic Hardware,
Inc., a subsidiary of the Company. This agreement expires on March 31, 2000 and
provides for a base salary of $100,000 per annum. See also 'Related Party
Transactions' with respect to a Management Advisory and Consulting Agreement
between the Company and Gulfstream, a company owned by Mr. Polimeni and Joan R.
Gubitosi.

OPTION/SAR GRANTS

There were no grants during 1995 of stock options or stock appreciation
rights to any person named in the Summary Compensation Table. For information
relating to warrants granted to Gulfstream, a company owned by Dominic A.
Polimeni and Joan R. Gubitosi, see 'Voting Securities and Securities Ownership.'

OPTION/SAR EXERCISES

Set forth below is information concerning exercises of options during 1995
and the fiscal year-end value of unexercised options for the persons named in
the Summary Compensation Table:

<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/ OPTIONS/SARS AT
SHARES ACQUIRED VALUE SARS AT FY-END (#) FY-END ($)
NAME ON EXERCISE (#) REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---------------------------- --------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Dominic A. Polimeni
Chairman, President and
Chief Executive Officer... 0 0 0 0
Stephen J. Drescher
Former Chairman, Chief
Executive Officer......... 250,000 $656,250(1) 0 0
</TABLE>
- ------------------
(1) Based on the difference between the exercise price of $0.625 per share and
the average of the high and low bid prices for the Common Stock on April 28,
1995, the date of exercise.

COMPENSATION OF DIRECTORS

Other than the 1994 Director Non-Qualified Stock Option Plan described
below, the Company does not have a standard policy regarding compensation of
members of the Board of Directors. Other than as reported below, the members of
the Board of Directors did not receive compensation for their services as such
during the year ended December 31, 1995.

1994 DIRECTOR NON-QUALIFIED STOCK OPTION PLAN

In January 1994, the Board of Directors (the 'Board') adopted, subject to
stockholder approval, the above captioned plan and in February 1996 amended the
plan so as to change the annual date of the grant to the first Wednesday of
February. The plan, as amended, is hereinafter referred to as the '1994 Plan.'
Pursuant to the

7
<PAGE>
terms of the 1994 Plan, options for an aggregate of 300,000 shares of the
Company's Common Stock may be granted.

All non-employee directors shall receive an option to purchase 15,000
shares of the Common Stock of the Company on the first Wednesday of February in
each calendar year at an exercise price equal to the fair market value per share
of the Common Stock on that date. Such options shall be exercisable immediately
for a period of 10 years from date of grant unless terminated earlier pursuant
to the terms of the plan. Subject to shareholder approval, 135,000 options have
been granted to date at exercise prices of $1.125 per share, $2.406 per share,
and $1.906 per share.

1992 STOCK OPTION PLAN

In June 1992, the Board approved the adoption of the '1992 Plan' which was
approved by the shareholders of the Company on January 8, 1993. Under the 1992
Plan, both incentive stock options ('ISOs') and non-qualified stock options
('Non-Qualified Options') may be granted (together, the 'Options'). Each Option
is to be specifically designated at the time of its grant as an ISO (within the
meaning of Section 422 of the Internal Revenue Code of 1986) (the 'Code'), or a
Non-Qualified Option. All non-management employees are eligible to receive ISOs
under the 1992 Plan. All non-management employees and non-employee consultants
and Company Judges are eligible to receive Non-Qualified Options under the 1992
Plan.

The aggregate maximum number of options issuable under the 1992 Plan to
purchase shares of the Company's Common Stock is 1,900,000 options.

1992 AMENDED AND RESTATED MANAGEMENT INCENTIVE OPTION PLAN

In December 1991, the Board approved the Company's 1992 Management
Incentive Option Plan (the 'Incentive Plan'). In September and October 1992,
effective as of the date of the original plan, the Board approved certain
amendments to the original plan which were ratified by the stockholders of the
Company on January 8, 1993. Pursuant to the terms of the Incentive Plan,
non-qualified options to purchase up to 533,333 shares of the Company's Common
Stock may be granted to officers, directors, key employees and consultants of
the Company.

RELATED PARTY TRANSACTIONS

As of the close of business on March 31, 1995, the Company acquired from
Gulfstream, a Florida corporation owned by Dominic A. Polimeni and Joan R.
Gubitosi, all of the outstanding capital stock of Quest Electronic Hardware,
Inc. This transaction is described under 'Voting Securities and Securities
Ownership.' Pursuant to the Management Advisory and Consulting Agreement therein
described, the Company has also agreed to compensate Gulfstream for advisory and
consulting services at the rate of $150,000 per year. This agreement expires on
March 31, 2000 and can be terminated by either party on 90 days notice.

In April 1995, the Company loaned Stephen J. Drescher, then Chairman and
Chief Executive Officer of the Company, $156,250 in connection with the exercise
by Mr. Drescher of options to purchase Common Stock of the Company. The
obligation to repay this loan was satisfied by Gulfstream and Phillip D.
Schwiebert by the contribution of shares of Common Stock to the Company in
connection with Mr. Drescher's resignation in January 1996 as an officer and
director of the Company.

8
<PAGE>
In April 1995, the Company loaned Paul L. Burton, then Executive Vice
President and a Director of the Company, $125,000 in connection with the
exercise by Mr. Burton of options to purchase Common Stock of the Company. The
obligation to repay this loan and to repay $69,228 of expenses paid by the
Company on Mr. Burton's behalf was satisfied by Gulfstream and Mr. Schwiebert by
the contribution of shares of Common Stock to the Company in connection with Mr.
Burton's resignation in January 1996 as an officer and director of the Company.

CERTAIN OTHER TRANSACTIONS

In November 1994, the Company sold to J2 Holdings, Inc., a private company
owned by Jordan R. Belfort, 1,202,905 units for $0.35 per unit. Each unit
consisted of one common share and one warrant to purchase a share of common
stock for $0.35 per share. These warrants were exercised in December 1995.

Biltmore Securities, Inc. ('Biltmore') acted as the Placement Agent for the
Company for the November 1994 Private Placement consisting of the sale of
2,000,000 shares of the Company's Common Stock. As compensation, Biltmore
received 200,000 shares of the Company's Common Stock and Warrants to purchase
200,000 shares of Common Stock of the Company at $.35 per share. These Warrants
were exercised in December 1995.

Biltmore received 250,000 shares of Common Stock of the Company as
compensation under a Consulting Agreement dated January 26, 1994, and 250,000
options to purchase Common Stock of the Company at an exercise price of $.625,
which later through anti-dilution provisions resulted in 626,956 options to
purchase Common Stock of the Company at $.249 per share. These options were
exercised in December 1995. Biltmore received 61,824 shares of Common Stock of
the Company as compensation for acting as placement agent for the Exchange Offer
and Series II Warrants in July 1994.

On March 31, 1995 Biltmore, in consideration of its serving as Placement
Agent, was granted 116,000 options to purchase a like number of shares of the
Common Stock of the Company at $3.50 per share. Such options expire March 31,
2000. The Company also agreed to pay to Biltmore a cash payment of $217,500
which represents a 10% placement agent fee and a 2.5% non-accountable expense
allowance based on total proceeds of $1,740,000.

COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership of equity
securities of the Company with the Securities and Exchange Commission and the
National Association of Securities Dealers. Officers, directors and
greater-than-ten-percent shareholders are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms that they file.

Based solely on a review of the copies of Forms 3, 4 and 5 and amendments
thereto furnished to the Company, or written representations from certain
reporting persons that such persons have filed on a timely basis all reports
required by Section 16(a), and without researching or making any inquiry
regarding delinquent Section 16(a) filings, the Company believes that, during
the fiscal year ended December 31, 1995, a Form 5 was filed on a non-timely
basis by Daniel Porush and Forms 4 were filed on a non-timely basis with respect
to two transactions by Paul L. Burton and with respect to six transactions by
Stephen J. Drescher. Messrs. Burton and Drescher were officers and directors of
the Company during 1995.

9
<PAGE>
BOARD OF DIRECTORS PROPOSALS

PROPOSAL NO. 1:

APPROVAL OF AN AMENDMENT TO ARTICLE FIRST OF THE
COMPANY'S CERTIFICATE OF INCORPORATION TO CHANGE THE COMPANY'S
NAME TO QUESTRON TECHNOLOGY, INC.

Stockholders are being asked to approve an amendment to the Company's
Certificate of Incorporation for the purpose of changing the name of the Company
to 'QUESTRON TECHNOLOGY, INC.' This amendment has been approved by the Board of
Directors, subject to the approval of the Company's stockholders. The
affirmative vote of a majority of the shares present in person or represented by
proxy and entitled to vote at the meeting.

The Board of Directors is of the opinion that changing the name of the
Company is in the best interests of the corporation in order to reflect that the
Company is now engaged in the business of supplying low technology products to
high technology industries in addition to the alternate dispute resolution
business historically conducted by the Company.

The text of the proposed amendment is set forth in Exhibit A attached
hereto.

The amendment to the Certificate of Incorporation requires the affirmative
vote of a majority of the outstanding stock entitled to vote.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE 'FOR' THE
FOREGOING AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO CHANGE THE
COMPANY'S NAME TO 'QUESTRON TECHNOLOGY, INC.'

PROPOSAL NO. 2:

APPROVAL OF AN AMENDMENT TO ARTICLE FOURTH OF THE COMPANY'S
CERTIFICATE OF INCORPORATION
PROVIDING FOR AN INCREASE IN AUTHORIZED COMMON STOCK

Article FOURTH of the Company's Certificate of Incorporation currently
authorizes the Company to issue 20,000,000 shares of Common Stock and 1,000,000
shares of Preferred Stock. At the Record Date, 15,382,705 shares of Common Stock
were issued and outstanding. The proposed amendment would increase the
authorized Common Stock to 50,000,000 shares. See also Proposal No. 3 for a
proposed increase in authorized Preferred Stock. The Board of Directors has
determined that such increase is advisable in order to provide the Company with
additional flexibility should it choose at a later date to engage in financings
or acquisitions.

Although management is not currently aware of any effort by any person to
gain control of the Company, in the event of such an effort, the authorized but
unissued shares of Common Stock or Preferred Stock could be used to make a
change in control of the Company more difficult. Under certain circumstances
such shares could be used to create voting impediments to deter persons seeking
to effect a takeover or otherwise gain control of the Company. Such shares could
be sold in public or private transactions to purchasers who might side with the
Board of Directors in opposing a takeover bid which the Board of Directors
determines not to be in the best interests of the Company and its stockholders.
The amendment might have the effect of discouraging an attempt by another
person, through the acquisition of a substantial number of shares of the
Company's Common Stock, to acquire control of the Company with a view to
imposing a merger, sale of all or any part of the Company's assets or a similar
transaction, since the issuance of new shares could be used to dilute the stock
ownership of such person or entity.

10
<PAGE>
In addition, shares of the Company may be authorized for issuance by the
Board of Directors as consideration in whole or in part for future acquisitions
which may be made by the Company. The Company's stockholders may not have the
opportunity to review the financial statements of any of the companies which may
be acquired or have the opportunity to vote on any proposed acquisitions. Any
such issuance of additional shares may cause current stockholders of the Company
to suffer significant dilution which may adversely affect the market for the
Company's securities.

The text of the proposed amendment is set forth in Exhibit A attached
hereto.

The amendment to the Certificate of Incorporation requires the affirmative
vote of a majority of the outstanding stock entitled to vote.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE 'FOR' THE
FOREGOING AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE
THE AUTHORIZED COMMON STOCK.

PROPOSAL NO. 3:

APPROVAL OF AN AMENDMENT TO ARTICLE FOURTH OF THE COMPANY'S
CERTIFICATE OF INCORPORATION
PROVIDING FOR AN INCREASE IN AUTHORIZED PREFERRED STOCK

Article FOURTH of the Company's Certificate of Incorporation currently
authorizes the Company to issue 20,000,000 shares of Common Stock and 1,000,000
shares of Preferred Stock. 900,000 shares of Preferred Stock were previously
issued under terms which provided that such shares could not be reissued at a
later date. Of these 900,000 shares, 25,000 remain outstanding today. By reason
of the foregoing, the Company has authority to issue only 100,000 shares of
Preferred Stock. The proposed amendment would increase the authorized Preferred
Stock to 10,000,000 shares.

Please refer to Proposal No. 2 for a discussion of the reasons why the
Board of Directors has determined that an increase in the authorized Preferred
Stock is advisable.

The voting, dividend and other rights of any shares of Preferred Stock will
be determined by the Board of Directors at the time of issuance.

The text of the proposed amendment is set forth in Exhibit A attached
hereto.

The amendment to the Certificate of Incorporation requires the affirmative
vote of a majority of the outstanding stock entitled to vote.

The Board of Directors recommends that stockholders vote 'FOR' the
foregoing amendment to the Company's Certificate of Incorporation to increase
the authorized Preferred Stock.

PROPOSAL NO. 4:

APPROVAL OF THE COMPANY'S 1994 DIRECTOR NON-QUALIFIED
STOCK OPTION PLAN

Stockholders are being asked to approve the 1994 Director Non-Qualified
Stock Option Plan, as amended (the '1994 Plan'). The purpose of the 1994 Plan is
to induce directors of the Company or any of its subsidiaries who are not also
officers or employees of the Company or any of its subsidiaries ('Non-Employee
Directors'), who are in a position to contribute materially to the Company's
prosperity to remain with the Company, to offer said persons incentives and
rewards in recognition of their contributions to the Company's progress, and to
encourage said persons to continue to promote the best interests of the Company.
The 1994 Plan provides for

11
<PAGE>
options that do not qualify as incentive options under Section 422 of the
Internal Revenue Code of 1986, as amended, to be issued to such persons.

Approval of the 1994 Plan requires the affirmative vote of a majority of
the shares present in person or represented by proxy and entitled to vote at the
meeting.

The following summary of the 1994 Plan is not intended to be complete and
is qualified in its entirety by reference to the 1994 Plan which is attached
hereto as Exhibit B.

1. Number of Shares. The aggregate maximum number of shares of the
Company's Common Stock as to which options may be granted under the Plan will be
300,000 shares. Options to purchase 135,000 shares of the Company's Common Stock
have already been granted as of the record date. The shares may be made
available from either authorized but unissued shares, treasury shares or both.
The maximum number of shares may, in the discretion of the Board of Directors or
of the Committee (defined below), be adjusted to reflect any future changes in
the Company's capitalization, for example, in the event of stock dividends,
stock splits and other similar events. No shares shall be delivered pursuant to
the 1994 Plan unless and until the Company has sufficient authorized capital to
deliver such shares. The Company receives no consideration in connection with
the grant of an option.

2. Administration. The 1994 Plan will be administered by the Committee for
the Administration of the 1994 Director Non-Qualified Stock Option Plan (the
'Committee'), or in the absence of such a committee, by the Board of Directors.

3. Eligibility. Eligible participants under the 1994 Plan are all
directors of the Company or any of its subsidiaries who are not also officers or
employees of the Company or any of its subsidiaries.

4. Term. The 1994 Plan became effective on January 26, 1994, subject to
stockholder approval. No options may be granted under the 1994 Plan after
January 26, 2004. In the event that the 1994 Plan is not approved by the
stockholders, the 1994 Plan and all options granted under the 1994 Plan shall
terminate.

5. Term of Options. All options granted under the 1994 Plan terminate on
the earliest of (a) the expiration of the term specified in the option, which
shall not exceed ten (10) years; the expiration of three (3) months from the
date a director's service on the Company's Board of Directors terminates for any
reason other than death, disability or cause; (c) the expiration of one or three
years from the date the director's service terminates by reason of death or
disability, respectively; (d) the date a director's service terminates for cause
(as defined in Section 6.1 of the 1994 Plan); or (e) the date set by the
Committee to be an accelerated expiration date in the event of a dissolution or
liquidation of the Company or upon the occurrence of certain other corporate
transactions.

6. Option Price. The purchase price of shares of the Company's Common
Stock issuable upon exercise of options granted pursuant to the 1994 Plan shall
be the fair market value (as defined in Section 5.1(b) of the 1994 Plan) per
share of such Common Stock on the date of the granting of such options.

7. Option Grant. Subject to the terms of the 1994 Plan, the number of
options to be granted annually to each eligible director is 15,000. Such grants
are to be made to each director in office on the first Wednesday in February of
each year.

8. Payment. The purchase price of shares of the Company's Common Stock
issuable upon the exercise of options granted under the 1994 Plan shall be in
United States dollars, payable in cash or by certified bank check.

9. Option Document. All options granted under the 1994 Plan are required
to be evidenced by written documents containing provisions consistent with the
1994 Plan and such other provisions as the Committee

12
<PAGE>
deems appropriate. Options granted under the 1994 Plan are not transferable
other than by will, or by the laws of descent and distribution.

10. Amendment. The Board of Directors may terminate the 1994 Plan or amend
the 1994 Plan from time to time in such manner as it may deem advisable and in
the best interests of the Company, without action on the part of the
stockholders of the Company; provided, however, that no such termination or
amendment shall, without the consent of the individual to whom any option shall
theretofore have been granted, affect or impair the rights of such individual
under such option, and provided further, that, unless the holders of a majority
of all classes of the Company's outstanding voting stock entitled to vote
thereon shall have first approved thereof, no amendment of the 1994 Plan shall
be made if the amendment would (a) materially increase the benefits accruing to
participants under the 1994 Plan; (b) materially increase the number of
securities which may be issued under the 1994 Plan; or (c) materially modify the
requirements as to the eligibility for participation in the 1994 Plan. The 1994
Plan was amended in February 1996 to change the date of the annual grant to the
first Wednesday in February.

Set forth below is information relating to benefits to be allocated under
the 1994 Plan during 1996 to directors who are not officers or employees of the
Company. None of the persons named in the Summary Compensation Table are
eligible to participate in the 1994 Plan. The closing price of the Common Stock
was $1 57/64 on March 5, 1996 as reported by the Nasdaq SmallCap Market.

<TABLE>
<CAPTION>
1994 PLAN
--------------------------
NUMBER
NAME AND OF
POSITION DOLLAR VALUE($) UNITS
- ---------------------------- --------------- ------
<S> <C> <C>
Non-Executive Director Group
(2 persons)............... (a) 30,000(b)
</TABLE>
- ------------------
(a) Options under the 1994 Plan are granted with an exercise price equal to the
fair market value of the Common Stock as of the date of grant. The
respective dollar value of each stock option to be granted under the 1994
Plan, which depends upon the fair market value of the Common Stock at the
time of the exercise of such stock option, is not determinable at this time.

(b) These options were granted, subject to stockholder approval, on February 7,
1996 with an exercise price of $1.906 per share and an expiration date of
February 7, 2006.

Summary of Certain Federal Income Tax Consequences. This summary of
certain federal tax consequences is provided as general information, but does
not purport to be a complete and detailed description of all possible tax
consequences. It describes the federal tax consequences in effect as of the date
set forth in the notice.

Certain Federal Income Tax Consequences. When an optionee exercises an
option other than an incentive stock option (a 'non-qualified option'), the
difference between the option price and any higher fair market value of the
Common Stock, generally on the date of exercise, will be ordinary income to the
optionee (subject to withholding) and will be generally allowed as a deduction
at that time for federal income tax purposes to the Company.

Any gain or loss realized by an optionee on disposition of the Common Stock
acquired upon exercise of a non-qualified option will generally be capital gain
or loss to such optionee, long-term or short-term depending on the holding
period, and will not result in any additional federal income tax consequences to
the Company. The optionee's basis in the Common Stock for determining gain or
loss on the disposition will be the fair market value of such Common Stock
determined generally at the time of exercise.

13
<PAGE>
The foregoing discussion summarizes the federal income tax consequences of
the 1994 Plan based on current provisions of the Code, which are subject to
change. This summary does not cover any foreign, state or local tax consequences
of participation in such plan.

The approval of the 1994 Plan requires the affirmative vote of a majority
of the votes cast at the Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE 'FOR' THE
FOREGOING PROPOSAL TO APPROVE THE 1994 PLAN.

PROPOSALS FOR STOCKHOLDER APPROVAL

The 1996 Annual Meeting of Stockholders is expected to be held prior to
June 30, 1996, although an exact date has not yet been set. Proposals of
stockholders intended to be presented at the 1996 Annual Meeting of Stockholders
of the Company which are received in writing by the Chief Executive Officer of
the Company at its offices by April 1, 1996 will be considered for inclusion in
the Company's proxy statement relating to the 1996 Annual Meeting.

ADDITIONAL INFORMATION

The Company has retained Mortenson and Associates, P.C. as the Company's
independent public accountants for the fiscal year ended December 31, 1995. One
or more representatives of such firm are expected to be present at the Meeting.
Such representative(s) will have the opportunity to make a statement if they
desire to do so and are expected to be available to respond to appropriate
questions.

The Board of Directors does not know of any matter to be proposed for
action at the Meeting other than those described in this proxy statement. If
other matters properly come before the Meeting, the persons named in the
accompanying proxy will act in accordance with their best judgment.

By Order of the Board of Directors

WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE FILL IN, SIGN,
AND DATE THE PROXY SUBMITTED HEREWITH AND RETURN IT IN THE ENCLOSED STAMPED
ENVELOPE. THE GIVING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE SUCH
PROXY IN PERSON SHOULD YOU LATER DECIDE TO ATTEND THE SPECIAL MEETING. THE
ENCLOSED PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS.

<PAGE>
EXHIBIT A

PROPOSED AMENDMENTS
TO
CERTIFICATE OF INCORPORATION

PROPOSAL NO. 1

The Certificate of Incorporation is proposed to be amended by deleting Article
FIRST thereof in its entirety and substituting the following in lieu thereof:

'FIRST: The name of the corporation is:

QUESTRON TECHNOLOGY, INC.'

PROPOSAL NOS. 2 AND 3

The Certificate of Incorporation is proposed to be further amended by deleting
Article FOURTH thereof in its entirety and substituting the following in lieu
thereof*:

'FOURTH: The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is sixty million
(60,000,000) shares, of which fifty million (50,000,000) shares shall be
Common Stock, par value $.0001 per share and ten million (10,000,000)
shares shall be preferred stock, par value $.01 per share ('Preferred
Stock'). The Preferred Stock may be issued with full, multiple or
fractional voting rights and with such designations, preferences,
qualifications, privileges, limitations, options, conversion rights and
other special, relative rights that shall be fixed from time to time by
resolution of the Board of Directors.'

- ------------------
* If either Proposal No. 2 or Proposal No. 3 is not approved, the proposed
amendment to the Certificate of Incorporation shall be modified so as to
delete the reference to the increased authorized common or preferred stock, as
the case may be.

A-1

<PAGE>
EXHIBIT B

AS AMENDED AND RESTATED ON FEBRUARY 7, 1996

JUDICATE, INC.
1994 DIRECTOR NON-QUALIFIED STOCK OPTION PLAN

ARTICLE I
ESTABLISHMENT AND PURPOSE

SECTION 1.1 Effective as of January 26, 1994, the Board of Directors (the
'Board') of Judicate, Inc. (the 'Company'), a Delaware corporation, adopted,
subject to shareholder approval, a stock option plan to be named the 1994
Director Non-Qualified Stock Option Plan (the 'Plan'). The Plan was amended by
the Board effective February 7, 1996.

SECTION 1.2 The purpose of the Plan is to induce directors of the Company
or any of its subsidiaries who are not also officers or employees of the Company
or any of its subsidiaries ('Non-Employee Directors'), who are in a position to
contribute materially to the Company's prosperity to remain with the Company, to
offer said persons incentives and rewards in recognition of their contributions
to the Company's progress, and to encourage said persons to continue to promote
the best interests of the Company. The Plan provides for options which do not
qualify as incentive options under Section 422 of the Internal Revenue Code of
1986, as amended (the 'Code') to be issued to such persons.

SECTION 1.3 All options specifically designated as being granted pursuant
to this Plan and granted to Non-Employee Directors on or after the date that
this Plan has been approved or adopted by the Company's Board shall be governed
by the terms and conditions of this Plan.

ARTICLE II
ADMINISTRATION

SECTION 2.1 The Plan shall be administered by the Board or by a committee
(the 'Committee') of not less than two members of the Board who are
'disinterested persons' within the meaning of such term under Rule 16b-3 under
the Securities Exchange Act of 1934, as such rule may be amended from time to
time. If the Plan is administered by the Committee, except as permitted in
Section 2.4 hereof, no member of the Committee shall be eligible for selection
as a person to whom stock may be allocated or stock options or stock
appreciation rights may be granted pursuant to any other plan of the Company or
any of its affiliates entitling the participants therein to acquire stock, stock
appreciation rights, or stock options of the Company or any of its affiliates.
Furthermore, no member of the Board shall be eligible to be appointed to the
Committee unless such member was not eligible to receive options under any prior
Company stock option plan at any time within one year prior to the date of his
proposed appointment to the Committee. In the event the Plan is administered by
the Committee, the Committee may select one of its members as its Chairman, and
shall hold its meetings at such times and places as it may determine. A majority
of the Committee shall constitute a quorum, and the acts of a majority of the
members present at any meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee, shall be deemed the acts of the

Committee. Notwithstanding any other provision

B-1
<PAGE>
hereof, all action taken pursuant to this Plan must be in accordance with the
provisions Rule 16b-3, as amended from time to time, under the Securities
Exchange Act of 1934.

SECTION 2.2 The Company shall grant options under the Plan only in
accordance with the formula set forth in Section 2.4 hereof. The Board or the
Committee may from time to time adopt (and thereafter amend or rescind) such
rules and regulations for carrying out the Plan and take such action in the
administration of the Plan, not inconsistent with the provisions hereof, as it
shall deem proper. The interpretation and construction of any provisions of the
Plan by the Board or the Committee (unless otherwise determined by the Board)
shall be final, conclusive and binding upon all persons.

SECTION 2.3 No member of the Board or the Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any
option granted under it. A member of the Board or the Committee shall be
indemnified by the Company, pursuant to the Company's By-Laws, for any expenses,
judgments or other costs incurred as a result of a lawsuit filed against him
claiming any rights or remedies due to his participation in the administration
of the Plan.

SECTION 2.4 Non-Employee Directors shall participate in the Plan to the
extent that they shall be granted options on a non-discretionary basis in
accordance with the following formula. On the first Wednesday in February of
each calendar year, each member of the Company's Board of Directors then in such
office shall receive an option to purchase 15,000 shares of the Company's Common
Stock at an exercise price equal to the fair market value per share of such
Common Stock on that date. Each such option shall be exercisable immediately and
for ten years from the date of grant unless sooner terminated under the terms of
this Plan. Each such option shall be subject to the restrictions upon transfer,
limitations on exercise, and restrictions upon transfer of the Common Stock to
be issued upon exercise of the option, as are set forth elsewhere herein or as
are imposed by applicable law, including without limitation applicable federal
and state securities laws. This Section 2.4 shall not be amended more than one
(1) time in any consecutive six (6) month period, other than to comport with
changes in the Code, the Employee Retirement Income Security Act, or the
regulations thereunder.

ARTICLE III
TOTAL NUMBER OF SHARES TO BE OPTIONED

SECTION 3.1 Options for an aggregate of 300,000 shares of common stock
($.0001 par value) of the Company (subject to adjustment as provided in Article
VIII hereof) may be granted under the Plan. The shares sold under the Plan may
be either issued shares reacquired by the Company at any time or authorized but
unissued shares, as the Board from time to time may determine.

SECTION 3.2 In the event that any outstanding options under the Plan for
any reason expire or are terminated without having been exercised in full, the
unpurchased shares subject to such option may again be available for transfer
under the Plan.

SECTION 3.3 No options shall be granted pursuant to this Plan to any
optionee after the tenth anniversary of the earlier of the date that this Plan
is adopted by the Board or the date that this Plan is approved by the
shareholders.

B-2
<PAGE>
ARTICLE IV
ELIGIBILITY

SECTION 4.1 Options will be issued to Non-Employee Directors only. Persons
granted options pursuant to this Plan are referred to herein as 'optionees.' No
option will be granted which has terms or conditions inconsistent with this
Plan.

SECTION 4.2 No options may be granted under any Company stock option plan
to any member of the Committee other than those options issued pursuant to the
non-discretionary formula set forth in Section 2.4, or a similar formula plan
complying with Rule 16b-3(c)(2) under the Securities Exchange Act of 1934, as
amended. If this Plan is administered by the Board rather than the Committee, no
options under any Company stock option plan (other than those options issued
pursuant to the non-discretionary formula set forth in Section 2.4, or a similar
formula plan complying with Rule 16b-3(c)(2) under the Securities Exchange Act
of 1934, as amended) may be granted to any director unless a majority of the
Board and a majority of the Board members voting on the grant of such options
are not eligible to receive options under any Company stock option plan (other
than pursuant to the non-discretionary formula in Section 2.4 or a similar
formula plan complying with Rule 16b-3(c)(2) under the Securities Exchange Act
of 1934, as amended) as of the date of the Board action, and have not been so
eligible to receive options thereunder (other than pursuant to the
non-discretionary formula in Section 2.4 or a similar formula plan complying
with Rule 16b-3(c)(2) under the Securities Exchange Act of 1934, as amended) at
any time within one year prior to the date of such action, for selection as a
person to whom stock may be allocated or stock options or stock appreciation
rights may be granted pursuant to any other plan of the Company or any of its
affiliates entitling the participants therein to acquire stock, stock
appreciation rights, or stock options of the Company or any of its affiliates.

ARTICLE V
TERMS AND CONDITIONS OF OPTIONS

SECTION 5.1 Each option granted under the Plan shall be evidenced by a
Stock Option Certificate and Agreement in a form not inconsistent with the Plan,
provided that the following terms and conditions shall apply:

(a) The price at which each share of common stock covered by an option
may be purchased shall be set forth in the Stock Option Certificate and
Agreement and shall be determined in accordance with the formula set forth
in Section 2.4.

(b) For purposes of Section 2.4, the 'fair market value' shall be
determined in accordance with the following: (i) if the common stock is not
listed and traded upon a recognized securities exchange and there is no
report of stock prices with respect to the common stock published by a
recognized stock quotation service, on the basis of the recent purchases
and sales of the common stock in arms-length transactions; or (ii) if the
common stock is not then listed and traded upon a recognized securities
exchange or quoted on the NASDAQ National Market System, and there are
reports of stock prices by a recognized quotation service, upon the basis
of the mean between the bid and asked quotations for such stock on the date
of grant as reported by a recognized stock quotation service, or, if there
are no bid or asked quotations on that day, then upon the basis of the mean
between the bid and asked quotations for such stock on the date nearest
preceding that day; or (iii) if the common stock shall then be listed and
traded upon a recognized securities exchange or quoted on the NASDAQ
National Market System, upon the basis of the mean between the highest and
lowest selling prices at which shares of the common stock were traded on
such recognized securities exchange on that date or, if the common stock
was not traded on such date, upon the basis of the

B-3
<PAGE>
mean of such prices on the date nearest preceding that date. The Board or
the Committee shall also consider such other factors relating to the fair
market value of the common stock as it shall deem appropriate.

(c) An optionee may, pursuant to the formula in Section 2.4, be
granted more than one option during the duration of this Plan.

(d) Any option and any right related thereto shall not be transferable
by the optionee other than by will, or by the laws of descent and
distribution. An option may be exercised during the optionee's lifetime
only by the optionee.

(e) No shares shall be delivered pursuant to the exercise of any
option granted pursuant to the Plan unless and until the Company has
sufficient authorized capital to issue such shares.

ARTICLE VI
SERVICE OF OPTIONEE

SECTION 6.1 The option rights of an optionee under any then outstanding
option shall terminate immediately if the optionee is removed from the Board of
Directors for any one of the following reasons: (i) disloyalty, gross
negligence, dishonesty or breach of fiduciary duty to the Company; or (ii) the
commission of an act of embezzlement, fraud or deliberate disregard of the rules
or policies of the Company which results in loss, damage or injury to the
Company, whether directly or indirectly; or (iii) the unauthorized disclosure of
any trade secret or confidential information of the Company; or (iv) the
commission of an act which constitutes unfair competition with the Company or
which induces any customer of the Company to break a contract with the Company;
or (v) the conduct of any activity on behalf of any organization or entity which
is a competitor of the Company (unless such conduct is approved by a majority of
the disinterested members of the Board of Directors).

SECTION 6.2 If the optionee voluntarily resigns or ceases to be a member
of the Board of Directors for any reason other than for death or for disability,
as defined in Section 22(e)(3) of the Code, the option rights of such optionee
under any then outstanding option shall be exercisable by such optionee at any
time prior to the expiration of the option or within three months after the date
of such termination, whichever period of time is shorter.

SECTION 6.3 In the case of an optionee who becomes disabled, as defined by
Section 22(e)(3) of the Code, the option rights of such optionee under any then
outstanding option shall be exercisable by such optionee at any time prior to
the expiration of the option or within one year after the date of termination of
service due to disability, whichever period of time is shorter, but only to the
extent of the accrued right to exercise the option at the date of such
termination.

SECTION 6.4 In the event of the death of an optionee, the option rights of
such optionee under any then outstanding option shall be exercisable by the
person or persons to whom these rights pass by will, or by the laws of descent
and distribution, at any time prior to the expiration of the option or within
three years after the date of death, whichever period of time is shorter, but
only to the extent of the accrued right to exercise the option at the date of
death. If a person or estate acquires the right to exercise a option by bequest
or inheritance, the Board or Committee may require reasonable evidence as to the
ownership of such option, and may require such consents and releases of taxing
authorities as the Board or Committee may deem advisable.

B-4
<PAGE>
SECTION 6.5 Nothing contained in the Plan, or in any option granted
pursuant to the Plan, shall confer upon any optionee any right with respect to
continuance of service by the Company nor interfere in any way with the right of
the Company to terminate the optionee's service.

ARTICLE VII
PURCHASE OF SHARES

SECTION 7.1 An option shall be exercised by tender to the Company of the
full purchase price of the shares with respect to which the option is exercised
and written notice of the exercise. The right to purchase shares shall be
cumulative so that, once the right to purchase any shares has accrued, such
shares or any part thereof may be purchased at any time thereafter until the
expiration or termination of the option. A partial exercise of an option shall
not affect the right of the optionee to exercise the option from time to time,
in accordance with the Plan, as to the remaining number of shares subject to the
option. The purchase price of the shares shall be in United States dollars,
payable in cash or by certified bank check.

SECTION 7.2 Except as provided in Article VI, an option may not be
exercised unless the holder thereof is a director of the Company at the time of
exercise.

SECTION 7.3 No optionee, or optionee's executor, administrator, legatee,
or distributee shall be deemed to be a holder of any shares subject to an option
for any purpose whatsoever unless and until a stock certificate or certificates
for such are issued to such person(s) under the terms of the Plan. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as
provided in Article VIII hereof.

SECTION 7.4 If (i) the listing, registration or qualification of the
options issued hereunder, or of any securities that may be purchased upon
exercise of such options (the 'Subject Securities') upon any securities exchange
or quotation system, or under federal or state law is necessary as a condition
of or in connection with the issuance or exercise of the options; or (ii) the
consent or approval of any governmental regulatory body is necessary as a
condition of or in connection with the issuance or exercise of the options, the
Company shall not be obligated to deliver the certificates representing the
Subject Securities or to accept or to recognize an option exercise unless and
until such listing, registration, qualification, consent or approval shall have
been effected or obtained. The Company will take reasonable action to so list,
register, or qualify the options and the Subject Securities, or effect or obtain
such consent or approval, so as to allow for their issuance.

SECTION 7.5 An optionee may be required to represent to the Company as a
condition of his exercise of options issued under this Plan: (i) that the
Subject Securities acquired upon option exercise are being acquired by him for
investment and not with a view to distribution or resale, unless counsel for the
Company is then of the view that such a representation is not necessary and is
not required under the Securities Act of 1933, as amended, or any other
applicable statute, law, regulation or rule; and (ii) that the optionee shall
make no exercise or disposition of an option or of the Subject Securities in
contravention of the Securities Exchange Act of 1934, as amended. Optionees may
also be required to provide (as a condition precedent to exercise of an option)
such documentation as may be reasonably requested by the Company to assure
compliance with applicable law and the terms and conditions of the Plan and the
subject option.

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<PAGE>
ARTICLE VIII
CHANGE IN NUMBER OF OUTSTANDING SHARES OF STOCK,
ADJUSTMENTS, REORGANIZATIONS, ETC.

SECTION 8.1 In the event that the outstanding shares of common stock of
the Company are hereafter increased or decreased or changed into or exchanged
for a different number of shares or kind of shares or other securities of the
Company or of another corporation by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split, combination of
shares, or a dividend payable in capital stock, appropriate adjustment will be
made in the number and kind of shares for the purchase of which options may be
granted under the Plan, including the maximum number that may be granted to any
one person. In addition, appropriate adjustments in the number and kind of
shares as to which outstanding options, or portions thereof then unexercised,
shall be exercisable, to the end that the optionee's proportionate interest
shall be maintained as before the occurrence to the unexercised portion of the
option and with a corresponding adjustment in the option price per share.

SECTION 8.2 The grant of an option pursuant to the Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.

SECTION 8.3 Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company as a result of which the
outstanding securities of the class then subject to options hereunder are
changed into or exchanged for cash or property or securities not of the
Company's issue, or upon a sale of substantially all the property of the Company
to an association, person, party, corporation, partnership, or control group as
that term is construed for purposes of the Securities Exchange Act of 1934, as
amended, the Plan shall terminate, and all options theretofore granted hereunder
shall terminate, unless provision be made in writing in connection with such
transaction for the continuance of the Plan and/or for the assumption of options
theretofore granted, or the substitution for such options of options covering
the stock of a successor employer corporation, or a parent or a subsidiary
thereof, with appropriate adjustments as to the number and kind of shares and
prices, in which event the Plan and options theretofore granted shall continue
in the manner and under the terms so provided. If the Plan and unexercised
options shall terminate pursuant to the foregoing sentence, all persons owning
any unexercised portions of options then outstanding shall have the right, at
such time prior to the consummation of the transaction causing such termination
as the Company shall designate, to exercise the unexercised portions of their
options, including the portions thereof which would, but for this Section 8.3,
not yet be exercisable.

ARTICLE IX
DURATION, AMENDMENT AND TERMINATION

SECTION 9.1 The Board may at any time terminate the Plan or make such
amendments thereto as it shall deem advisable and in the best interests of the
Company, without action on the part of the stockholders of the Company;
provided, however, that no such termination or amendment shall, without the
consent of the individual to whom any option shall theretofore have been
granted, affect or impair the rights of such individual under such option, and
provided further, that, unless the holders of a majority of all classes of the
Company's outstanding voting stock entitled to vote thereon shall have first
approved thereof, no amendment of this Plan shall be made if the amendment would
(a) materially increase the benefits accruing to participants under the Plan;
(b) materially

B-6
<PAGE>
increase the number of securities which may be issued under the Plan; or (c)
materially modify the requirements as to eligibility for participation in the
Plan.

ARTICLE X
RESTRICTIONS

SECTION 10.1 Any shares issued pursuant to the Plan shall be subject to
such restrictions on transfer and limitations as shall, in the opinion of the
Board or the Committee, be necessary or advisable to assure compliance with the
laws, rules and regulations of the United States government or any state or
jurisdiction thereof. By accepting an award pursuant to the Plan each optionee
shall thereby agree to any such restrictions.

SECTION 10.2 Any certificate issued to evidence shares issued pursuant to
an option shall bear such legends and statements as the Board or counsel to the
Company shall deem advisable to assure compliance with the laws, rules and
regulations of the United States government or any state or jurisdiction
thereof. No shares will be delivered under the Plan until the Company has
obtained such consents or approvals from such regulatory bodies of the United
States government or any state or jurisdiction thereof as the Board or counsel
to the Company deems necessary or advisable.

ARTICLE XI
APPLICATION OF FUNDS

SECTION 11.1 The proceeds received by the Company from the sale of stock
pursuant to the Plan are to be added to the general funds of the Company and
used for its corporate purposes as determined by the Board.

ARTICLE XII
EFFECTIVENESS OF PLAN

SECTION 12.1 This Plan shall become effective upon adoption by the Board,
and options may be issued hereunder from and after that date subject to the
provisions of Section 3.3. The effectiveness of this Plan and of the grant of
all options hereunder is in all respects subject to the approval of the
Company's stockholders. This Plan must be approved by the Company's stockholders
in accordance with the applicable provisions (relating to the issuance of stock
or options) of the Company's governing documents and state law or, if no such
approval is prescribed therein, by the affirmative vote of the holders of a
majority of the votes cast at a duly held stockholders meeting at which a quorum
representing a majority of all the Company's outstanding voting stock is present
and voting (in person or by proxy).

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<PAGE>
JUDICATE, INC.

Proxy for Special Meeting of Stockholders

The undersigned hereby appoints Milton M. Adler, Robert V. Gubitosi and
Dominic A. Polimeni as Proxies, each with the full power of substitution, and
hereby authorizes each of them, to represent and vote, as designated on the
reverse hereof, all shares of Common Stock of Judicate, Inc. (the "Company")
held of record by the undersigned on February 21, 1996, at the Special Meeting
of Stockholders to be held on March 21, 1996, or any adjournment thereof, upon
all such matters as may properly come before the Meeting.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS. THIS PROXY WILL BE VOTED AS DIRECTED. IN THE
ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED "FOR" ITEM
1, "FOR" ITEM 2, "FOR" ITEM 3, "FOR" ITEM 4 AND "FOR"
ITEM 5.

STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN
THIS PROXY PROMPTLY IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES.

(The Proxy continues and must be signed on the reverse side.)

<PAGE>
/X/ Please mark your
votes as in this
example.

WITHHOLD AUTHORITY
to vote for all
FOR nominees listed below

/ / / /

Nominees:

1. ELECTION OF Milton M. Adler
DIRECTORS Robert V. Gubitosi
Mitchell Hymowitz
FOR all nominees listed William J. McSherry, Jr.
(except as marked to the contrary below) Dominic A. Polimeni

- ---------------------------

2. Proposal No. 1: Approval of an amendment to Article FIRST of the
Company's Certificate of Incorporation to change the Company's name to
Questron Technology, Inc. (The Board of Directors recommends a vote "FOR"
approval.)

FOR AGAINST ABSTAIN
/ / / / / /

3. Proposal No. 2: Approval of an amendment to Article FOURTH of the
Company's Certificate of Incorporation providing for an increase in authorized
common stock. (The Board of Directors recommends a vote "FOR" approval.)

FOR AGAINST ABSTAIN
/ / / / / /

4. Proposal No. 3: Approval of an amendment to Article FOURTH of the Company's
Certificate of Incorporation providing for an increase in authorized preferred
stock. (The Board of Directors recommends a vote "FOR" approval.)

FOR AGAINST ABSTAIN
/ / / / / /

5. Proposal No. 4: Approval of the Company's 1994 Director Non-Qualified
Stock Option Plan. (The Board of Directors recommends a vote "FOR"
approval.)

FOR AGAINST ABSTAIN
/ / / / / /

6. In their discretion upon such other business as may properly come before the
Special Meeting or any postponement or adjournment thereof.

If you plan to attend / /
the Annual Meeting,
place an X in this box.

SIGNATURE: ____________________________ DATE: _______________

NOTE: Please sign exactly as name or
names appear on stock certificate
as indicated hereon. Joint owners
should each sign. When signing as
attorney, executor, administrator
or guardian, please give full
title as such.