<PAGE> 1
SCHEDULE 13D
CUSIP No. 693 236 200 Page 2 of 7 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lee S. Casty
SS ####-##-####
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. Citizen
7 SOLE VOTING POWER
432,743
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 432,743
WITH
10 SHARED DISPOSITIVE POWER
61,292
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
432,743
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.956% based upon 7,265,355 shares outstanding
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 2 of 7
<PAGE> 2
CUSIP No. 693 236 200 13D Page 3 of 7
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ITEM 1. SECURITY AND ISSUER.
Title of Class of Securities: Common Stock, $.001 par value
Name and Address of Issuer: PC Quote, Inc.
300 S. Wacker, Suite 300
Chicago, Illinois 60606
ITEM 2. IDENTITY AND BACKGROUND.
(a) Name of Person Filing: Lee S. Casty
(b) Address: 200 West Adams Street
15th Floor
Chicago, Illinois 60606
(c) Principal Business:
Lee S. Casty ("Lee Casty"), an individual, previously was a
broker-dealer registered under Section 15 of the Act. On April 18, 1990,
Lee Casty filed with the Securities and Exchange Commission Form BDW to
withdraw his registration as a broker-dealer. Accordingly, Lee Casty's
ownership of the Common Stock, which was previously reported on Schedule
13G, was reported by the filing of Schecule 13D on or about April 25,
1990.
Lee Casty is the Sole Shareholder and Sole Director of French American
Securities, Inc. ("FAS") which owns all of the capital of SLS Securities
Limited Partnership ("SLS"), a registered broker dealer located at 30
Montgomery Street, Suite 1460, Jersey City, NJ 07302. Lee Casty is also
the Sole Shareholder and Sole Director of Nash, Weiss & Co., a
broker-dealer, and has an ownership interest in Jack Carl/312 Futures,
Inc., a registered futures commodities merchant. Nash, Weiss & Co. is
located at 30 Montgomery Street, Jersey City, NJ 07302. Jack Carl/312
Futures is located at 200 West Adams Street, Chicago, IL 60606.
(d) Prior Criminal Convictions: None
(e) Prior Civil Proceedings With
Respect to Federal or State
Securities Laws: None
(f) Place of Organization: U. S. Citizen
<PAGE> 3
CUSIP No. 693 236 266 13D Page 4 of 7
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On December 26, 1991, FAS transferred the Common Stock to Lee Casty,
FAS' sole shareholder, as a dividend. A filing was made at that time to report
that Lee Casty being now the sole owner of the Common Stock.
On August 5, 1993, Lee Casty transferred 284,632 shares of the Common
Stock to David Casty in payment of a note.
ITEM 4. PURPOSE OF TRANSACTION.
The subject securities were previously owned and not acquired by Lee
Casty for the purpose of effecting any of the actions listed in the
instructions to Item 4. This Fifth Amendment to Schedule 13D is being filed to
disclose that:
1. Lee Casty transferred 40,000 shares of Common Stock to a third
party and his wife in two transactions: 20,000 shares on July 25, 1994; and
20,000 shares on April 12, 1995;
2. As of November 21, 1995, Lee Casty was granted a written Power of
Attorney to dispose of 214,192 shares of the common stock owned by his father,
David Casty (see Item 6 below). Sales in the total amount of 152,900 shares
were made on behalf of David Casty (see Item 5(c) below), leaving Lee Casty
with the power to dispose of 61,292 shares;
3. On November 30, 1995, Lee Casty sold 25,000 shares of the Common
Stock as of November 28, 1995; and
4. On Novemer 28, 29 and 30, and December 1, 1995, Lee Casty sold
"short against the box" a total of 136,000 shares of the Common Stock (see Item
5(c) below). This 136,000 share amount is included in the amount reported in
Lines 7, 9 and 11 and Item 5 of Schedule 13D.
These actions were not made for the purpose of effecting any of the
actions listed in the instructions to Item 4.
<PAGE> 4
CUSIP No. 693 236 200 13D Page 5 of 7
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
a. Amount beneficially owned: 432,743
Percent of Class: 5.956% based upon 7,265,355
shares outstanding as of
November 10, 1995
b. Number of Shares as to which such person has:
(i) sole power to vote: 432,743
(ii) shared power to vote: -0-
(iii) sole power to dispose: 432,743
(iv) shared power to dispose: 61,292
c. Lee S. Casty
<TABLE>
<CAPTION>
Where &
Date of Amount of Price How
Transaction Securities Involved Per Share Effected
----------- ------------------- --------- --------
<S> <C> <C> <C>
11/28/95 Sold 25,000 sh. 23 1/2-25 7/8 *
11/29/95 Sold SAB** 25,000 sh. 21 *
11/29/95 Sold SAB 41,000 sh. 19 5/8-20 5/8 *
11/29/95 Sold SAB 25,000 sh. 19 7/8-20 3/4 *
11/30/95 Sold SAB 30,000 sh. 20 1/4-21 *
12/01/95 Sold SAB 15,000 sh. 20 1/2 *
</TABLE>
David Casty (Lee Casty has Power of Attorney dated November 21, 1995)
<TABLE>
Where &
Date of Amount of Price How
Transaction Securities Involved Per Share Effected
----------- ------------------- --------- --------
<S> <C> <C> <C>
11/24/95 Sold 7,500 shares 12 1/4-12 3/4 *
11/27/95 Sold 22,500 shares 15 1/4-20 7/8 *
11/28/95 Sold 77,900 shares 23 1/2-26 *
11/29/95 Sold 45,000 shares 20 - 21 3/4 *
</TABLE>
* Transactions effected on American Stock Exchange
through brokers transactions.
** SAB - "short against the box"
d. None
e. Not applicable
<PAGE> 5
CUSIP No. 693 236 200 13D Page 6 of 7
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
1. Pursuant to a Stock Purchase Agreement dated as of the 3rd
day of January, 1984 by and between STF, Ltd. and P. C. Quote, Inc. (the Issuer
hereunder) FAS (as assignee to the rights to STF, Ltd.) was granted certain
registration rights with respect to the Common Stock.
Pursuant to this Agreement, James M. Casty, the brother of Lee Casty,
FAS's Sole Shareholder, was elected as a Director of the Issuer in April,
1984 and served in such capacity until May, 1995.
The foregoing is a brief and incomplete summary of certain provisions of
such Agreements; reference is made to the complete Forms of Agreements
previously filed in response to Item 7 of this Schedule.
2. Lee Casty has orally agreed to transfer 20,000 shares of
the common stock to James W. Carney.
3. Lee Casty was granted the power to dispose of 214,192
shares of common stock owned by his father, David Casty, pursuant to a written
Power of Attorney dated as of November 21, 1995. 152,900 shares of the Common
Stock have been sold pursuant to this Power of Attorney (see Item 5(c) above).
4. In connection with a Secured Demand Note Collateral
Agreement ("SDN") between Lee Casty and SLS, dated November 29, 1995 and
pursuant to a separate agreement between Lee Casty and SLS dated November 30,
1995, Lee Casty will transfer to SLS 247,743 shares to be pledged by SLS as
collateral to secure the SDN.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
*Exhibit A. Form of Stock Purchase Agreement, dated January 3, 1994.
Exhibit B. Form of Power of Attorney, dated November 21, 1995.
Exhibit C. Form of Secured Demand Note, dated November 29, 1995.
* Previously filed as an exhibit to Schedule 13D dated April 23, 1990
and incorporated herein by reference.
<PAGE> 6
CUSIP No. 693 236 200 13D Page 7 of 7
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 12, 1995
Signature: Lee S. Casty
--------------------------
Lee S. Casty
<PAGE> 7
NASD
SECURED DEMAND NOTE
COLLATERAL AGREEMENT
SL-3
AGREEMENT BETWEEN:
Lender: LEE S. CASTY
-------------------------------------------------------------------------
(Name)
200 West Adams Street, Suite 1500
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(Street Address)
Chicago Illinois 60606
- - -------------------------------------- ----------------- ------------------
(City) (State) (Zip)
AND
Broker-Dealer: SLS SECURITIES LIMITED PARTNERSHIP
-----------------------------------------------------------------
(Name)
30 Montgomery Street, Suite 1460
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(Street Address)
Jersey City New Jersey 07302
- - ----------------------------------------- ----------------- ---------------
(City) (State) (Zip)
NASD ID NO: 013332
--------------------------------------------------------------------
DATE FILED:
--------------------------------------------------------------------
<PAGE> 8
NASD
SECURED DEMAND NOTE
COLLATERAL AGREEMENT
AGREEMENT dated to be effective Nov. 29, 1995 between
---------------
LEE S. CASTY (the "Lender")
- - -----------------------------------------------------------------
and SLS SECURITIES LIMITED PARTNERSHIP (the "Broker-Dealer").
------------------------------------------------------
Subject to the terms and conditions hereinafter set forth, the
Broker-Dealer promises to return to the Lender or assigns, on 12/31/1996 (the
"Scheduled Maturity Date")(the last day of a month at least one year from the
date hereof) at the principal office of the Broker-Dealer the Note and
Collateral as defined herein, and interest payable monthly at the rate of
prime* plus 3% percent per annum from the effective date of this Agreement,
which date shall be the date so agreed upon by the Lender and the Broker-Dealer
unless otherwise determined by the National Association of Securities Dealers,
Inc. ("NASD"). This agreement shall not be considered a satisfactory
subordination agreement pursuant to the provisions of 17 CFR 240.15c3-1d unless
and until the NASD has found the Agreement acceptable and such Agreement has
become effective in the form found acceptable.
The Lender has executed in favor or you SLS SECURITIES LIMITED
PARTNERSHIP (the Broker-Dealer), a Secured Demand Note of even date in the form
of Addendum I hereto. References herein to the "Note" shall be deemed to refer
to such Secured Demand Note and to any Note substituted therefor in accordance
with the terms hereof. The unpaid principal amount of the Note is hereinafter
referred to as the "Indebtedness."
As security for the payment of the principal evidenced by the Note, the
Lender hereby pledges to the Broker-Dealer the securities and cash, if any,
described in Schedule A, attached to the Note, as the same may from time to
time be amended in accordance with the terms hereof (the securities from time
to time listed in said Schedule are herein referred to as the "Securities" and
any securities, cash or other property at anytime pledged hereunder are herein
referred to as the "Collateral" and shall be subject to the risks of the
business.) All Securities shall be fully paid for and in bearer form or
registered in the name of the Broker-Dealer or its nominee or custodian.
The Lender irrevocably agrees that the obligations of the Broker-Dealer
under this Agreement with respect to the payment of principal and interest
shall be and are subordinate in right of payment and subject to the prior
payment or provision for payment in full of all claims of all other present and
future creditors of the Broker-Dealer arising out of any matter occurring prior
to the date on which the related Payment Obligation (as defined herein) matures
consistent with the provisions of 17 CFR 240.15c3-1 and 240.15c3-1d, except for
claims which are the subject of subordination agreements which rank on the same
priority as or are junior to the claim of the Lender under such subordination
agreements.
* AS PUBLISHED BY HARRIS TRUST AND SAVINGS BANK OF CHICAGO, ILLINOIS AS ITS
PRIME RATE OF INTEREST FROM TIME TO TIME.
1
<PAGE> 9
I. OWNERSHIP AND PROPERTY RIGHTS WITH RESPECT TO COLLATERAL
(a) Subject only to the prior rights of the Broker-Dealer pledgee
hereunder and under the Note, until liquidated in accordance with Paragraph III
hereof, the Lender shall have and retain full legal and beneficial ownership
of the Collateral and shall have the benefit of any increases and bear the risk
of any decreases in the value of such Collateral. Prior to such liquidation,
the Lender shall have the sole right to vote or have the sole right to any
income there from or distribution thereon by payment of interest or dividend or
otherwise, subject however, to the right of the Broker-Dealer to receive and
hold as pledgee all dividends payable in securities and all partial and
complete liquidating dividends; and shall pay all taxes, assessments or other
charges upon or with respect to such securities or the income therefrom or
distributions thereon or the gain or loss of value thereof.
(b) The Lender, subject to the prior rights of the Broker-Dealer as
pledgee, shall have the right to direct the sale of any Securities included in
the Collateral, to direct the purchase of securities with any cash included
therein, to withdraw excess collateral or to substitute cash or other securities
as Collateral, provided that the net proceeds of any such sale and the cash so
substituted and the securities so purchased or substituted are held by the
Broker-Dealer, as pledgee, and are included within the Collateral to secure
payment of the Secured Demand Note, and provided further that no such
transaction shall be permitted if, after giving effect thereto, the sum of the
amount of any cash, plus the Collateral Value (as defined herein) of the
Securities, then pledged as Collateral to secure the Secured Demand Note would
be less than the unpaid amount of the Secured Demand Note.
II. CERTAIN RIGHTS OF THE BROKER-DEALER
The Broker-Dealer, as holder of the Note and pledgee of the Collateral,
shall have the right to:
(a) Pledge, repledge, hypothecate and re-hypothecate any or all of the
Securities pledged as Collateral to secure the Secured Demand Note, without
notice, separately or in common with other securities or property for the
purpose of securing any indebtedness of the Broker-Dealer.
(b) Lend to itself or others any or all of the Securities and cash
pledged as Collateral to secure this Secured Demand Note;
(c) Deposit any cash from time to time pledged as Collateral in an
account or accounts in its own name in any bank or trust company, and to hold
the Securities in bearer form, in its own name, or in the name of its nominee
or custodian; and,
(d) Liquidate all or any part of the Securities then pledged as
collateral and to apply the net proceeds of such liquidation, together with any
cash then included in the Collateral, in payment in whole or in part of the
Payment Obligation, if the Note is not paid upon presentment and demand as
provided for therein.
2
<PAGE> 10
III. INSUFFICIENT COLLATERAL VALUE
If any cash plus Collateral Value of any Securities pledged as
Collateral to secure this Note is at any time less than the Indebtedness,
the Broker-Dealer shall give immediate written notice to the Lender and the
NASD, in which event the Lender may as it option:
(a)(i) Prior to 12 o'clock noon on the business day following the
transmittal of such notice pledge additional Collateral to bring the Collateral
Value up to an amount not less than the unpaid principal of the Note; and,
(ii) Unless such additional Collateral is so pledged prior to 12
o'clock noon of the business day following the transmittal of such notice, the
Broker-Dealer shall forthwith sell all or any part of the Collateral for the
account of the Lender and apply so much of the proceeds thereof any cash then
included in the Collateral as may be necessary to reduce or eliminate the
unpaid principal, provided that the unpaid principal need not be reduced below
the sum of any remaining cash plus the Collateral Value of the remaining
Securities. The Broker-Dealer shall not purchase for its own account any
Securities subject to such a sale.
(b)(i)(OPTIONAL) With the prior written consent of the NASD and the
Broker-Dealer, reduce the unpaid principal amount of the Note by not more than
15 percent of its original principal amount, provided that the Broker-Dealer
clearly establishes that its aggregate indebtedness would not, after giving
effect to such reduction, exceed 1000 percent of its net capital as those terms
are defined in 17 CFR 240.15c3-1, or if the Broke-Dealer is operating pursuant
to paragraph (a)(1)(ii) of 17 CFR 240.15c3-1 its net capital would be less than
5 percent of aggregate debit items computed in accordance with 17 CFR
240.15c3-3a, or if registered as a futures commission merchant, 7 percent of
the funds required to be segregated pursuant to the Commodity Exchange Act, and
the regulations thereunder, (less the market value of commodity options
purchased by option customers on or subject to the rules of a contract market,
provided, however, the deduction for each option customer shall be limited to
the amount of customer funds in such option customers account,) if greater, and
in the event of such reduction the right of the Lender to withdraw Collateral
as provided in paragraph 1(b) shall be suspended. The NASD shall not consent to
a reduction of the principal amount of this Note if, after giving effect to
such reduction, net capital would be less than 120 percent of the minimum
dollar amount required by 17 CFR 240.15c3-1 including paragraph (a)(1)(ii), if
applicable, or such greater dollar amount as may be made applicable to the
Broker-Dealer by the NASD, or a governmental agency or self-regulatory body
having appropriate authority.
IV. PAYMENT BY LENDER
Upon payment by the Lender, as distinguished from a reduction by the
Lender which is provided in paragraph III(b)(i), or reduction by the
Broker-Dealer as provided for in paragraph V, of all or any part of the unpaid
principal amount of this Note, the Broker-Dealer shall issue to the Lender a
subordinated loan agreement, preferred or common stock of the Broker-Dealer, or
if a partnership, shall credit a capital account of the Lender in the amount of
such payment, or in any combination of the foregoing, as specified below:
V. PERMISSIVE PREPAYMENTS (OPTIONAL)
At the option of the Broker-Dealer, but not at the option of the
Lender, payment of all or
3
<PAGE> 11
any part of the "Payment Obligation" amount hereof prior to the
Scheduled Maturity Date may be made by the Broker-Dealer only upon receipt of
the prior written approval of the NASD, but in no event may any prepayment be
made before the expiration of one year from the date this Agreement became
effective. No prepayment shall be made if after giving effect thereof (and to
all payments of Payment Obligations under any other subordination agreements
then outstanding, the maturity or accelerated maturity of which are scheduled
to fall due either within six months after the date such prepayment is to occur
or on or prior to the date on which the Payment Obligation hereof is scheduled
to mature, whichever date is earlier), without reference to any projected
profit or loss of the Broker-Dealer, either aggregate indebtedness of the
Broker-Dealer would exceed 1000 percent of its net capital or such lesser
percent as may be made applicable to the Broker-Dealer from time to time by the
NASD, or a governmental agency or self-regulatory body having appropriate
authority, or if the Broker-Dealer is operating pursuant to paragraph
(a)(1)(ii) of 17 CFR 240.15c3-1, its net capital would be less than 5 percent
of aggregate debit items computed in accordance with 17 CFR 240.15c3-3a, or if
registered as a futures commission merchant, 7 percent of the funds required to
be segregated pursuant to the Commodity Exchange Act and the regulations
thereunder, (less the market value of commodity options purchased by option
customers on or subject to the rules of a contract market, provided, however,
the deduction for each option customer shall be limited to the amount of
customer funds in such option customers account,) if greater, or its net
capital would be less than 120 percent of the minimum dollar amount required by
17 CFR 240.15c3-1 including paragraph (a)(1)(ii), if applicable, or such
greater dollar amount as may be made applicable to the Broker-Dealer by the
NASD, or a governmental agency or self-regulatory body having appropriate
authority.
VI. SUSPENDED REPAYMENTS
(a) The Payment Obligation of the Broker-Dealer shall be suspended and
shall not mature if, after giving effect to such payment (together with the
payment of any Payment Obligation of the Broker-Dealer under any other
subordination agreement scheduled to mature on or before such Payment
Obligation) the aggregate indebtedness of the Broker-Dealer would exceed 1200
percent of its net capital or such lesser percent as may be made applicable to
the Broker-Dealer from time to time by the NASD, or a governmental agency or
self-regulatory body having appropriate authority, or if the Broker-Dealer is
operating pursuant to paragraph (a)(1)(ii) of 17 CFR 240.15c3-1, its net
capital would be less than 5 percent of aggregate debit items computed in
accordance with 17 CFR 240.15c3-3a, or if registered as a futures commission
merchant, 6 percent of the funds required to be segregated pursuant to the
Commodity Exchange Act and the regulations thereunder, (less the market value
of commodity options purchased by option customers on or subject to the rules
of a contract market, provided, however, the deduction for each option customer
shall be limited to the amount of customer funds in such option customer's
account,) if greater, or its net capital would be less than 120 percent of the
minimum dollar amount required by 17 CFR 240.15c3-1 including paragraph
(a)(1)(ii), if applicable, or such greater dollar amount as may be made
applicable to the Broker-Dealer by the NASD, or a governmental agency or
self-regulatory body having appropriate authority.
(b)(OPTIONAL) The Broker-Dealer agrees that if its obligation to pay the
principal amount hereof is suspended for a period of six months, the
Broker-Dealer will thereupon commence a rapid and orderly complete liquidation
of its business. The date on which the liquidation commences shall be the
maturity date for each subordination agreement of the Broker-Dealer then
outstanding.
VII. LENDER'S RIGHT TO ACCELERATE THE MATURITY OF THE PAYMENT OBLIGATION
4
<PAGE> 12
By written notice to the Broker-Dealer at its principal office and to the
NASD, no sooner than six months after the effective date of this Agreement,
the Lender may accelerate such Payment Obligation, together with accrued
interest or compensation, to a date not earlier than six months after the
giving of such notice. However, the right of the Lender to receive payment,
together with accrued interest or compensation, shall remain subordinate as
required by the provisions of 17 CFR 240.15c3-1 and 240.15c3-1d.
VIII. ACCELERATED MATURITY OF THE SUBORDINATION AGREEMENT UPON THE OCCURRENCE
OF AN EVENT OF ACCELERATION (OPTIONAL)
By prior written notice delivered to the Broker-Dealer at its principal
office and to the NASD upon the occurrence of any Event of Acceleration (as
defined herein), given no sooner than six months from the effective date of
this Agreement, the Lender may accelerate such Payment Obligation to the last
business day of a calendar month not less than six months after the receipt of
such notice by both the Broker-Dealer and the NASD. If, upon such accelerated
maturity, the Payment Obligation of the Broker-Dealer is suspended pursuant to
paragraph VI of this Agreement, and liquidation of the Broker-Dealer has not
commenced on or prior to such accelerated maturity date, such Agreement shall
mature on the day immediately following such accelerated maturity date and, in
any event, the Payment Obligations of the Broker-Dealer with respect to all
other subordination agreements then outstanding, shall also mature at the same
time. Events of Acceleration, which may be included shall be limited to:
(a) Failure to pay interest or any installment of principal on this
Agreement as scheduled;
(b) Failure to pay when due other money obligations of a specified
material amount;
(c) Discovery that any material, specified representation or warranty of
the Broker-Dealer, which is included in this Agreement and on which this
Agreement was based or continued, was inaccurate in a material respect at the
time made; or,
(d) The following specified and clearly measurable event(s) which the
Lender and Broker-Dealer agree (i) is a significant indication that the
financial position of the Broker-Dealer has changed materially and adversely
from agreed upon specified norms; or (ii) could materially and adversely affect
the ability of the Broker-Dealer to conduct its business as conducted on the
effective date of the subordination agreement; or (iii) is a significant change
in the senior management or in the general business conducted by the
Broker-Dealer from the date this Agreement became effective; or (iv) constitute
continued failure to perform agreed-upon covenants included in this Agreement
relating to the maintenance and reporting by the Broker-Dealer or its financial
position or relating to the conduct of its business.
The Events of Acceleration as discussed in paragraphs (a) through (d) with
repect to this agreement are enumerated below:
None
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
5
<PAGE> 13
IX. ACCELERATED MATURITY OF THE SUBORDINATION AGREEMENT UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT (OPTIONAL)
(a) If the liquidation of the business of the Broker-Dealer has not
already commenced, the Payment Obligation shall mature, together with accrued
interest or compensation, upon the occurrence of an Event of Default, as
hereinafter defined.
(b) Further, if liquidation of the business of the Broker-Dealer has
not already commenced, the rapid and orderly liquidation of the business of the
Broker-Dealer shall then commence upon the happening of an Event of Default,
and the date of said Event of Default shall be the date on which the Payment
Obligations of the Broker-Dealer with respect to all other subordination
agreements then outstanding shall mature.
Events of Default which may be included shall be limited to:
(i) The filing of an application by the Securities Investor Protection
Corporation for a decree adjudicating that customers of the Broker-Dealer are
in need of protection under the Securities Investor Protection Act of 1970 and
the failure of the Broker-Dealer to obtain the dismissal of such application
within 30 days;
(ii) The aggregate indebtedness of the Broker-Dealer exceeding 1500
percent of its net capital or, in the case of a Broker-Dealer which has elected
to operate under paragraph (a)(1)(ii) of 17 CFR 240.15c3-1, its net capital
computed in accordance therewith is less than 2 percent of its aggregate debit
items computed in accordance with 17 CFR 240.15c3-3a, or if registered as a
futures commission merchant, 4 percent of the funds required to be segregated
pursuant to the Commodity Exchange Act and the regulations thereunder, if
greater, throughout a period of 15 consecutive business days, commencing on the
day the Broker-Dealer first determines and notifies the Lender and the NASD, or
the NASD or the Commission first determines and notifies the Broker-Dealer of
such fact;
(iii) Revocation by the Commission of the registration of the
Broker-Dealer;
(iv) Suspension by the NASD (without reinstatement within 10 days) or
revocation of the Broker-Dealer's status as a member thereof; and,
(v) Receivership, insolvency, liquidation pursuant to the Securities
Investor Protection Act of 1970 or otherwise, bankruptcy, assignment for the
benefit of creditors, reorganization whether or not pursuant to bankruptcy
laws, or any other marshaling of the assets and liabilities of the
Broker-Dealer.
X. NOTICE OF MATURITY OR ACCELERATED MATURITY
The Broker-Dealer shall immediately notify the NASD if, after giving
effect to all payments of Payment Obligations under subordination agreements
then outstanding which are then due or mature within six months without
reference to any projected profit or loss of the Broker-Dealer.
6
<PAGE> 14
either the aggregate indebtedness of the Broker-Dealer would exceed 1200
percent of its net capital, or in the case of a Broker-Dealer operating
pursuant to paragraph (a)(1)(ii) of 17 CFR 240.15c3-1, its net capital would be
less than 5 percent of aggregate debit items computed in accordance with 17 CFR
240.15c3-3a, or if registered as a futures commission merchant, 6 percent of
the funds required to be segregated pursuant to the Commodity Exchange Act and
the regulations thereunder, (less the market value of commodity options
purchased by option customers on or subject to the rules of a contract market,
provided, however, the deduction for each option customer shall be limited to
the amount of customer funds in such option customer's account,) if greater,
and in either case, if its net capital would be less than 120 percent of the
minimum dollar amount required by 17 CFR 240.15c3-1 including paragraph
(a)(1)(ii), if applicable, or such greater dollar amount as may be made
applicable to the Broker-Dealer by the NASD, or a governmental agency or
self-regulatory body having appropriate authority.
XI. WARRANTIES OF THE LENDER
The Lender hereby warrants that he has duly executed the Note; that he
has duly delivered the Note to the Broker-Dealer and, upon such delivery, the
Broker-Dealer acquired good title thereto; that the Note is his valid and
binding obligation enforceable by the Broker-Dealer in accordance with its
terms; that he has duly and validly pledged with the Broker-Dealer the
Securities described in Schedule A attached to the Note; and that the
Broker-Dealer as pledgee of the Securities has the rights with respect thereto
which are conferred upon it by this Agreement. Each such representation and
warranty shall survive the execution and delivery of the Note and the pledge of
the Securities.
The Lender represents that the Securities may be publicly offered and
sold without registration under the Securities Act of 1933 as amended and that
the sale and transfer of the Securities is not restricted by that Act nor is it
restricted by any other law, agreement or in any other manner.
XII. BROKER-DEALERS CARRYING THE ACCOUNTS OF SPECIALISTS AND MARKET MAKERS IN
LISTED OPTIONS
A Broker-Dealer who guarantees, endorses, carries or clears specialist
or market-maker transactions in options listed on a national securities
exchange or facility of a national securities association shall not permit a
reduction, prepayment, or repayment of the unpaid principal amount if the
effect would cause the equity required in such specialist or market-maker
accounts to exceed 1000 percent of the Broker-Dealer's net capital or such
percent as may be made applicable to the Broker-Dealer from time to time by the
NASD or a governmental agency or self-regulatory body having appropriate
authority.
XIII. BROKER-DEALERS REGISTERED WITH CFTC
If the Broker-Dealer is a futures commission merchant or introductory
broker as that term is defined in the Commodity Exchange Act, the Organization
agrees, consistent with the requirements of Section 1.17(h) of the regulations
of the CFTC (17 CFR 1.17(h)), that:
(a) Whenever prior written notice by the Broker-Dealer to the NASD is
required pursuant to the provisions of this Agreement, the same prior written
notice shall be given by the Broker-Dealer to (i) the CFTC at its principal
office in Washington, D.C., attention Chief Accountant of Division of
7
<PAGE> 15
Trading and Markets, and/or (ii) the commodity exchange of which the
Organization is a member and which is then designated by the CFTC as the
Organization's designated self-regulatory organization (the "DRSO");
(b) Whenever prior written consent, permission or approval of the NASD is
required pursuant to the provisions of this Agreement, the Broker-Dealer shall
also obtain the prior written consent, permission or approval of the CFTC
(and/or the DSRO); and,
(c) Whenever the Broker-Dealer receives written notice of accleration of
maturity pursuant to the provisions of this Agreement, the Broker-Dealer shall
promptly give written notice thereof to the CFTC at the address above stated
and/or to the DSRO.
XV. GENERAL
Neither the Lender, his heirs, executors, administrators, or assigns
shall be personally liable on such Note, and in the event of default, the
Broker-Dealer shall look for payment of such Note solely to the Collateral
pledged herein.
This Agreement shall not be subject to cancellation by either the
Lender or the Broker-Dealer, and no payment shall be made nor the Agreement
terminated, rescinded or modified by mutual consent or otherwise if the effect
thereof would be inconsistent with the requirements of 17 CFR 240.15c3-1 and
240.15c3-1d.
This Agreement may not be transferred, sold, assigned, pledged, or
otherwise encumbered or otherwise disposed of, and no lien, charge or other
encumbrance may be created or permitted to be created thereof without the prior
written consent of NASD.
In the event of the appointment of a receiver or trustee of the
Broker-Dealer or in the event of its insolvency, liquidation pursuant to the
Securities Investor Protection Act of 1970 or otherwise, bankruptcy, assignment
for the benefit of creditors, reorganization whether or not pursuant to
bankruptcy laws, or any other marshaling of the assets and liabilities of the
Broker-Dealer, the Payment Obligation of the Broker-Dealer shall mature, and
the holder hereof shall not be entitled to participate or share, ratably or
otherwise, in the distribution of the assets of the Broker-Dealer until all
claims of all other present and future creditors of the Broker-Dealer, whose
claims are senior hereto, have been fully satisfied.
8
<PAGE> 16
The Lender irrevocably agrees that the loan evidenced hereby is not
being made in reliance upon the standing of the Broker-Dealer as a member
organization of the NASD or upon the NASD surveillance of the Broker-Dealer's
financial position or its compliance with the By-Laws, rules, and practices of
the NASD. The Lender has made such investigation of the Broker-Dealer and its
partners, officers, directors, and stockholders as the Lender deems necessary
and appropriate under the circumstances. The Lender is not relying upon the
NASD to provide any information concerning or relating to the Broker-Dealer and
agrees that the NASD has no responsibility to disclose to the Lender any
information concerning or relating to the Broker-Dealer which it may now, or at
any future time, have.
The term "Broker-Dealer", as used in this Agreement, shall include the
broker-dealer, its heirs, executors, administrators, successors and assigns.
The term "Payment Obligation" shall mean the return of the Secured Demand
Note contributed to the Broker-Dealer or the reduction of the unpaid principal
amount thereof, and the return of cash or securities pledged as Collateral to
secure this Secured Demand Note.
The term "Collateral Value" of any securities pledged to secure this
Secured Demand Note shall mean the market value of such Securities after giving
effect to the haircut deductions specified in subparagraph (c)(2)(vi) of 17
CFR 240.15c3-1, except for paragraph (c)(2)(vi)(J). In lieu of the reduction
under (c)(2)(vi)(J), the Broker-Dealer shall reduce the market value of the
securities pledged by 30%.
The provisions of this Agreement shall be binding upon the Broker-Dealer
and the Lender, and their respective heirs, executors, administrators,
successors and assigns.
Any controversy arising out of or relating to this Agreement may be
submitted to and settled by arbitration pursuant to the By-Laws and rules of
the NASD. The Broker-Dealer and the Lender shall be conclusively bound by such
arbitration.
This instrument embodies the entire agreement between the Broker-Dealer
and the Lender and no other evidence of such agreement has been or will be
executed without prior written consent of the NASD.
This Agreement shall be deemed to have been made under, and shall be
governed by, the laws of the State of Illinois in all respects.
IN WITNESS WHEREOF the parties have set their hands and seal this 29th day
November 1995.
SLS SECURITIES LIMITED PARTNERSHIP (Name of
-----------------------------------------
Broker-Dealer)
By Richard D. Peterson L.S
------------------------------------------
(Authorized Person) Richard D. Peterson
<PAGE> 17
Lee S. Casty L.S.
-----------------------------
(Lender) Lee S. Casty
FOR NASD USE ONLY
ACCEPTED BY:__________________________
(Name)
__________________________
(Title)
EFFECTIVE DATE:_______________________
LOAN NUMBER:__________________________
10
<PAGE> 18
C O P Y
ADDENDUM I
SECURED DEMAND NOTE
November 29 1995
FOR VALUE RECEIVED, I promise to pay to SLS SECURITIES LIMITED
PARTNERSHIP (the Broker-Dealer) at its principal office at 30 Montgomery
Street, Jersey City, New Jersey (where presentment and demand for payment shall
be made), without interest, the sum of One Million Dollars ($1,000,000.00), on
demand.
This Note is secured at its date by the pledge of the securities and
cash, if any, described in Schedule A attached hereto. I agree that whenever
the value of the securities and cash securing this Note, as determined in
accordance with the capital requirements of 17 CFR 240.15c3-1 or the rules and
regulations of the National Association of Securities Dealers, Inc. ("NASD") or
those of a governmental agency or self-regulatory body having appropriate
authority which are applicable to the Broker-Dealer at the time of such
valuation, is less than the unpaid balance of this Note, the Broker-Dealer
shall exercise the rights set forth in paragraph III(a)(ii) of the Secured
Demand Note Collateral Agreement (The Agreement) of even date between me and
the Broker-Dealer without first making a demand hereof.
The Broker-Dealer, by acceptance hereof, agrees, for itself, its
representatives, successors and assigns (1) that neither I, my heirs,
executors, administrators or assigns shall be personally liable on this Note,
it being intended that my obligation to pay the principal amount of this Note
is included for the sole purpose of establishing the existence of the
indebtedness represented hereby and (2) that in the event of default, the
Broker-Dealer and any such successor or assign shall look for payment solely to
the Collateral, as defined herein, then pledged to secure this Note, and will
not make claim or institute any action or proceedings against me, my heirs,
executors, administrators or assigns for the payment of this Note (or for any
deficiency remaining after application of the Collateral pledged to secure this
Note, or otherwise); provided, however, that nothing herein contained shall be
construed to release or impair the indebtedness evidenced by this Note, or of
the lien upon the Collateral pledged to secure it, or preclude the application
of said pledged Collateral to the payment hereof in accordance with the
provisions of the Agreement.
The Borker-Dealer agrees that upon payment by me of all or any portion
of this Note, as distinguished from a reduction by me as provided in paragraph
III b(i) of the Agreement or reduction by the Broker-Dealer as provided for in
paragraph of the Agreement, the Broker-Dealer shall issue to me a subordinated
loan agreement in the amount of such payment, as provided pursuant to paragraph
IV of the Agreement.
The Broker-Dealer further agrees that it will make a demand for payment
hereof only after it determines in good faith that it is in or approaching
financial difficulty, provided, however, that no failure to make such a
determination in good faith shall affect the effectiveness of a demand, or give
rise to any claim which is superior to my claim under the Agreement for the
withdrawal return or deduction of the Note.
11
<PAGE> 19
The term "in or approaching financial difficulty" shall mean for the
purposes hereof any of the specified and clearly measurable events enumerated
below:
NONE
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This Note and the securities and cash from time to time pledged to secure
it are subject in all respects to the provisions of the Agreement, a copy of
which may be examined at the principal office of the Broker-Dealer.
The term "Collateral" shall mean, as defined in subparagraph (b)(6) of
Appendix D of SEC Rule 15c3-1, "only cash and securities which are fully paid
for and which may be publicly offered or sold without registration under the
Securities Act of 1933, and the offer, sale and transfer of which are otherwise
restricted."
Lee S. Casty L.S.
--------------------------------------
Lender Lee S. Casty
SLS SECURITIES LIMITED PARTNERSHIP Broker-Dealer
--------------------------------------
By Richard D. Peterson L.S.
-----------------------------------
Authorized Person Richard D. Peterson
12
<PAGE> 20
SCHEDULE A
SCHEDULE OF COLLATERAL FOR SECURED DEMAND NOTE
SLS SECURITIES LIMITED PARTNERSHIP
----------------------------------------
(Broker-Dealer)
Cash Pledged: $ NONE
----------------------------
Securities Pledged:
Stock:
Number of Shares Description
247,743 P.C. Quote, Inc. Common Stock
Bonds: NONE
Pricipal Amount Description
"Only cash and securities which are fully paid for and which may be
publicly offered or sold without registration under the Securities Act of 1933,
and the offer, sale and transfer of which are not otherwise restricted, may be
pledged as collateral to secure a Secured Demand Note.
13
<PAGE> 21
SUBORDINATED LOAN AGREEMENT
LENDER'S ATTESTATION
It is recommended that you discuss the merits of this investment with an
attorney, accountant or some other person who has knowledge and experience in
financial and business matters prior to executing this Agreement.
1. I have received and reviewed a reprint of Appendix D of 17 CFR
240.15c3-1, and am familiar with its provisions.
2. I am aware that the funds or securities subject to Agreement are
not covered by the Securities Investor Protection Act of 1970.
3. I understand that I will be furnished financial statements
pursuant to SEC Rule 17a-5(c).
4. On the date this Agreement was entered into, the broker-dealer
carried funds or securities for my account.
(State Yes or No) Yes.
5. Lender's business relationship to the broker-dealer is:
100% owner, General Partner and Limited Partner
6. If not a partner or stockholder actively engaged in the
business of the broker-dealer, acknowledge receipt of the
following:
a. Certified audit and accountant's certificate dated 8/11/95.
b. Disclosure of financial and/or operational problems since
the last certified audit which required reporting pursuant
to SEC Rule 17a-11. (if no such reporting was required,
state "none")
NONE
----------------------------------------------------------
------------------------------------------
c. Balance sheet and statement of ownership equity dated
10/31/95
d. Most recent computation of net capital and aggregate
indebtedness or aggregate debit items dated reflecting a net
capital of $4,039,000 and a ratio of -0-
e. Debt/equity ratio as of 10/31 of .37
f. Other disclosures:_______________________________________
Lee S. Casty L.S.
Dated:_________________ -----------------------------------
(Lender) Lee S. Casty
14
<PAGE> 22
GENERAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, which are intended to constitute a GENERAL
POWER OF ATTORNEY, pursuant to Article 5, Title 15 of the New York General
Obligations Law:
WHEREAS, this document shall confirm the Power of Attorney, as described
herein, granted by David Casty to Lee S. Casty on November 21, 1995.
I, David Casty, 850 Boylston Street, Suite 428, Chestnut Hill,
Massachusetts, 02167, as principal, do hereby appoint Lee S. Casty, 200 West
Adams, Suite 1500, Chicago, Illinois, 60606, as my attorney-in-fact, to act for
me in my name, place and stead in any way which I myself could do, if I were
personally present, with respect to 214,192 shares of the Common Stock of PC
Quote, Inc., to the extent that I am permitted by law to act through an agent.
My attorney-in-fact shall have full and unqualified authority to delegate
any or all of the foregoing powers to any person or persons whom my
attorney-in-fact shall select.
This Power of Attorney shall not be affected by subsequent disability or
incompetence of the principal.
To induce any third party to act hereunder, I hereby agree that any third
party receiving a duly executed copy or facsimile of this instrument may act
hereunder, and that revocation or termination hereof shall be ineffective as to
such third party unless and until actual notice or knowledge of such revocation
shall have been received by such third party, and I for myself and for my
heirs, executors, legal representatives and assigns, hereby agree to indemnify
and hold harmless any such third party from
<PAGE> 23
and against any and all claims that may arise against such third party by
reason of such third party having relied on the provisions of this instrument.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed my seal
as of the ____ day of December, 1995.
/s/ David Casty
------------------------
DAVID CASTY
SWORN TO and SUBSCRIBED
before me this _____ day of
_______________, 1995.
- - --------------------------------
Notary Public
