SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
PC QUOTE, INC.
----------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
----------------------------------------------------------
(Title of Class and Securities)
693236101
----------------------------------------------------------
(CUSIP Number of Class of Securities)
Howard E. Sullivan, Esq.
411 West Putnam Avenue, Suite 125
Greenwich, Connecticut 06830
(203) 862-7400
----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Randall Doud, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
October 15, 1997
----------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Statement because of
Rule 13d-1(b)(3) or (4), check the following: ( )
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
13D
CUSIP No. 693236101
--------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Imprimis Investors LLC
--------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) ( )
(b) (X)
--------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
--------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
( )
--------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF -0-
SHARES -------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 3,850,000
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------------------------------------------
10. SHARED DISPOSITIVE POWER
3,850,000
--------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,850,000
--------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
--------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.81%
--------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------
13D
CUSIP No. 693236101
--------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Wexford Spectrum Investors LLC
--------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) ( )
(b) (X)
--------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
--------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
( )
--------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF -0-
SHARES -------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 1,650,000
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------------------------------------------
10. SHARED DISPOSITIVE POWER
1,650,000
--------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,650,000
--------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
--------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.78%
--------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------
13D
CUSIP No. 693236101
--------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Wexford Management LLC
--------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) ( )
(b) (X)
--------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
--------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
( )
--------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Connecticut
--------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF -0-
SHARES -------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 5,500,000
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------------------------------------------
10. SHARED DISPOSITIVE POWER
5,500,000
--------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,500,000
--------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
--------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.59%
--------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------
13D
CUSIP No. 693236101
--------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Joseph M. Jacobs
--------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) ( )
(b) (X)
--------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
--------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
( )
--------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
--------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF -0-
SHARES -------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 5,500,000
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------------------------------------------
10. SHARED DISPOSITIVE POWER
5,500,000
--------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,500,000
--------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
--------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.59%
--------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------
13D
CUSIP No. 693236101
--------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Charles E. Davidson
--------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) ( )
(b) (X)
--------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
--------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
( )
--------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
--------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF -0-
SHARES -------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 5,500,000
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------------------------------------------
10. SHARED DISPOSITIVE POWER
5,500,000
--------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,500,000
--------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
--------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.59%
--------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------
Item 1. Security and Issuer.
This statement relates to the shares of common stock, par
value $.001 per share (the "Common Stock"), of PC Quote, Inc., a
Delaware corporation ("PC Quote"). PC Quote has its principal
executive offices at 300 S. Wacker, Chicago, Illinois 60606.
Item 2. Identity and Background.
(a) This statement is being filed by (i) Imprimis
Investors LLC, a limited liability company organized
under the laws of the State of Delaware
("Imprimis"), (ii) Wexford Spectrum Investors LLC, a
limited liability company organized under the laws
of the State of Delaware ("Wexford Spectrum"), (iii)
Wexford Management LLC, a Connecticut limited
liability company ("Wexford Management"), (iv)
Charles E. Davidson and (v) Joseph M. Jacobs (the
individuals and entities referred to above,
collectively, the "Reporting Persons") with respect
to shares of Common Stock beneficially owned by the
Reporting Persons.
(b) The principal business and office address for the
Reporting Persons is c/o Wexford Management LLC, 411
West Putnam Avenue, Greenwich, Connecticut 06830.
(c) Imprimis is a Delaware limited liability company,
the members of which are private investment funds.
The principal business of Imprimis is investments.
Wexford Spectrum is a Delaware limited liability
company, the members of which are private investment
funds. The principal business of Wexford Spectrum
is investments.
Wexford Management is the manager of Imprimis and of
Wexford Spectrum. Wexford Management also serves as
investment manager or sub-advisor to the members of
Imprimis and Wexford Spectrum.
Charles E. Davidson is chairman and a controlling
member of Wexford Management. Mr. Davidson also is
a controlling person or an investor in a number of
private companies, including certain members of
Imprimis and Wexford Spectrum and their controlling
persons.
Joseph M. Jacobs is president, managing member and a
controlling member of Wexford Management. Mr.
Jacobs also is a controlling person or an investor
in a number of private companies, including certain
members of Imprimis and Wexford Spectrum and their
controlling persons.
(d) None of the Reporting Persons has during the last
five years been convicted in a criminal proceeding
(excluding traffic violations or similar
misdemeanors).
(e) None of the Reporting Persons was a party to a civil
proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree
or final order enjoining future violations of, or
prohibiting or mandating activities subject to,
federal of state securities laws or finding any
violation with respect to such laws.
(f) Mr. Davidson and Mr. Jacobs are United States
citizens.
Item 3. Source and Amount of Funds or Other Consideration.
Imprimis and Wexford Spectrum (collectively, "Buyers")
expended $5,000,000 to purchase 5,000,000 shares of Common Stock
and warrants to purchase 500,000 shares of Common Stock at an
exercise price of $2.00 per share, exercisable at any time prior to
October 15, 2002 (the "Warrants"). The funds used in making the
purchases came from the working capital of Buyers.
Item 4. Purpose of Transaction.
The Reporting Persons have acquired the Common Stock and
the Warrants for investment purposes pursuant to a Stock and
Warrant Purchase Agreement, dated October 15, 1997, among PC Quote,
Imprimis and Wexford Spectrum (the "Purchase Agreement"). Pursuant
to the terms of the Purchase Agreement, on October 15, 1997, Buyers
purchased 1,450,000 shares of Common Stock and 500,000 Warrants for
a purchase price of $1,450,000 (the "First Closing"). On October
20, 1997, pursuant to the terms of the Purchase Agreement, Buyers
purchased an additional 550,000 shares of Common Stock for a
purchase price of $550,000 (the "Second Closing"). On October 23,
1997, pursuant to the terms of the Purchase Agreement, Buyers
purchased an additional 3,000,000 shares of Common Stock for a
purchase price of $3,000,000 (the "Third Closing" and, together
with the First Closing and the Second Closing, the "Closings"). As
a condition precedent to the Third Closing, PC Quote, following
approval thereof at a shareholders meeting, sufficiently increased
its capital stock to consummate the transaction. The Purchase
Agreement has been filed as an exhibit to this Schedule 13D and is
hereby incorporated by reference.
Up to 4,ooo,ooo of the shares of Common Stock purchased
by Buyers are subject to repurchase by PC Quote at a purchase price
of $1.00 per share pursuant to the terms of the Purchase Agreement
(the "Repurchase"). Pursuant to the terms of the Purchase
Agreement, PC Quote will use its best efforts to consummate the
Repurchase from the proceeds of a rights offering to be made to
other stockholders of PC Quote to purchase additional shares of
Common Stock at $1.00 per share (the "Rights Offering"). In the
event that the Rights Offering is not completed on or prior to
January 24, 1998, Buyers will be entitled to receive, out of
escrow, warrants to purchase an additional 250,000 shares of Common
Stock with the same terms as the Warrants and, in the event the
Rights Offering is not completed on or prior to February 28, 1998,
Buyers will be entitled to receive, out of escrow, warrants to
purchase an additional 250,000 shares of Common Stock with the same
terms as the Warrants (such waarants, collectively, the "Additional
Warrants"). The Additional Warrants are not included in the
aggregate amount beneficially owned by each Reporting Person in
this Schedule 13D as they are currently being held in escrow and
the Reporting Persons do not have a right to acquire the Additional
Warrants within 60 days from the time of filing this Schedule 13D.
The Reporting Persons do not have any plans or proposals,
other than those described in the preceding two paragraphs, which
relate to or would result in any of the actions or transactions
specified in clauses (a) through (j) of Item 4 of Schedule 13D.
The Reporting Persons reserve the right to acquire or dispose of
Common Stock, the Warrants or any Additional Warrants, or to
formulate other purposes, plans or proposals regarding PC Quote or
the Common Stock, Warrants or any Additional Warrants held by the
Reporting Persons to the extent deemed advisable in light of
general investment policies, market conditions and other factors.
Item 5. Interest in Securities of the Issuer.
The Reporting Persons may be deemed to beneficially own
the respective percentages and numbers of outstanding shares of
Common Stock of PC Quote set forth below (on the basis of
12,914,150 shares of Common Stock of PC Quote issued and
outstanding, of which 500,000 shares are issuable pursuant to the
Warrants).
A. Imprimis
(a) Aggregate number of shares of Common Stock beneficially
owned: 3,850,000 (of which 350,000 are
attributable to the Warrants)
Percentage: 29.81%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 3,850,000
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 3,850,000
(c) Other than the transactions described in Item 4 of this
Schedule 13D, there were no transactions by Imprimis
during the past 60 days.
(d) Not applicable.
(e) Not applicable.
B. Wexford Spectrum
(a) Aggregate number of shares of Common Stock beneficially
owned: 1,650,000 (of which 150,000 are
attributable to the Warrants)
Percentage: 12.74%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 1,650,000
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 1,650,000
(c) Other than the transactions described in Item 4 of this
Schedule 13D, there were no transactions by Wexford
Spectrum during the past 60 days.
(d) Not applicable
(e) Not applicable.
C. Wexford Management
(a) Aggregate number of shares of Common Stock beneficially
owned: 5,500,000 (of which 500,000 are
attributable to the Warrants)
Percentage: 42.59%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 5,500,000
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 5,500,000
(c) There were no transactions by Wexford Management during
the past 60 days.
(d) Not applicable
(e) Not applicable.
D. Joseph M. Jacobs
(a) Aggregate number of shares of Common Stock beneficially
owned: 5,500,000 (of which 500,000 are
attributable to the Warrants)
Percentage: 42.59%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 5,500,000
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 5,500,000
(c) There were no transactions by Mr. Jacobs during the past
60 days.
(d) Not applicable
(e) Not applicable.
E. Charles E. Davidson
(a) Aggregate number of shares of Common Stock beneficially
owned: 5,500,000 (of which 500,000 are
attributable to the Warrants)
Percentage: 42.59%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 5,500,000
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 5,500,000
(c) There were no transactions by Mr. Davidson during the
past 60 days.
(d) Not applicable
(e) Not applicable.
Wexford Management may, by reason of its status as
manager of Imprimis and Wexford Spectrum, be deemed to own
beneficially the Common Stock of which Imprimis and Wexford
Spectrum possess beneficial ownership.
Each of Charles E. Davidson and Joseph M. Jacobs may, by
reason of his status as a controlling person of Wexford Management,
be deemed to own beneficially the Common Stock of which Imprimis
and Wexford Spectrum possess beneficial ownership.
Each of Charles E. Davidson, Joseph M. Jacobs and Wexford
Management shares the power to vote and to dispose of the shares of
Common Stock Imprimis and Wexford Spectrum beneficially own.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
See Items 2, 3, 4, and 5 above. The Reporting Persons
have entered into the Purchase Agreement, a copy of which has been
filed as an exhibit to this Schedule 13D and is hereby incorporated
by reference. In addition to the provisions relating to the
Repurchase and the Rights Offering, the Purchase Agreement provides
that PC Quote will use its best efforts to promptly register with
the Securities and Exchange Commission 1,000,000 shares of Common
Stock purchased by Buyers or, in the event the Rights Offering is
not completed, to register all such shares purchased by Buyers.
The Purchase Agreement also provides for certain standard negative
covenants restricting actions that may be taken by PC Quote without
Buyers' consent until the earlier of completion of the Repurchase
in full or February 28, 1998.
Except as described above, there are no contracts,
arrangements, understandings or relationships (legal or otherwise)
among the persons named in Item 2 or between such persons and any
other person with respect to any securities of PC Quote, including
but not limited to, transfer or voting of any such securities,
finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the
giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit I -- Agreement pursuant to Rule 13d-1(f)
filed herewith
Exhibit II -- Stock and Warrant Purchase Agreement
Among PC Quote, Inc., as Seller, and
Imprimis Investors LLC and Wexford
Spectrum Investors LLC, as Buyers,
dated as of October 15, 1997
SIGNATURE
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: October 24, 1997
IMPRIMIS INVESTORS LLC
By: /s/ Arthur H. Amron
-----------------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD SPECTRUM INVESTORS LLC
By: /s/ Arthur H. Amron
-----------------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD MANAGEMENT LLC
By: /s/ Arthur H. Amron
-----------------------------
Name: Arthur H. Amron
Title: Senior Vice President
/s/ Charles E. Davidson
---------------------------------
/s/ Joseph M. Jacobs
---------------------------------
EXHIBIT I: Agreement pursuant to Rule 13d-1(f) filed herewith
Pursuant to Rule 13d-1(f) of Regulation 13D-G of the General
Rules and Regulations of the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, the
undersigned agree that the statement to which this Exhibit is
attached is filed on behalf of each of them in the capacities set
forth below.
IMPRIMIS INVESTORS LLC
By: /s/ Arthur H. Amron
-----------------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD SPECTRUM INVESTORS LLC
By: /s/ Arthur H. Amron
-----------------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD MANAGEMENT LLC
By: /s/ Arthur H. Amron
----------------------------
Name: Arthur H. Amron
Title: Senior Vice President
/s/ Charles E. Davidson
--------------------------------
/s/ Joseph M. Jacobs
--------------------------------
EXHIBIT II
FORM OF STOCK AND WARRANT PURCHASE AGREEMENT AMONG
PC QUOTE, INC., AS SELLER, AND
IMPRIMIS INVESTORS LLC AND
WEXFORD SPECTRUM INVESTORS LLC, AS BUYERS
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC
AND
WEXFORD SPECTRUM INVESTORS LLC
OCTOBER 15, 1997
TABLE OF CONTENTS
1. Definitions
2. Purchase and Sale of Shares and Warrants
3. Representations and Warranties of Buyers
(a) Organization of Buyer
(b) Authorization of Transaction
(c) Noncontravention
(d) Broker's Fees
(e) Investment
(f) Buyers' Qualifications
4. Representations and Warranties of Seller
(a) Authorization of Transaction
(b) Organization, Qualification, and Corporate Power
(c) Capitalization
(d) Noncontravention
(e) Brokers' Fees
(f) Title to Tangible Assets
(g) Financial Statements
(h) Legal Compliance
(i) Tax Matters
(j) Real Property
(k) Intellectual Property
(l) Contracts
(m) Powers of Attorney
(n) Litigation
(o) Employee Benefits
(p) No Undisclosed or Contingent Liabilities
(q) Absence of Certain Changes
(r) Patents, Trade Names, Trademarks, Etc.
(s) Insurance
(t) Products
(u) Environmental Protection
5. Pre-Closing Covenants
(a) General
(b) Notices and Consents
(c) Operation of Business
(d) Full Access
(e) Notice of Developments
(f) Exclusivity
6. Post-Closing Covenants
(a) General
(b) Litigation Support
(c) Rights Offering
(d) Repurchase of Shares from Buyers
(e) Reservation of Shares
(f) Registration Rights
(g) Delivery of Resolutions Adopted
(h) Negative Covenants
7. Additional Conditions Precedent
(a) Conditions to Obligation of Buyers
(b) Conditions to Obligation of Sellers
8. Remedies for Breaches of This Agreement
(a) Survival of Representations and Warranties
(b) Indemnification Provisions for Benefit of Buyers
(c) Indemnification Provisions for Benefit of Seller
(d) Matters Involving Third Parties
(e) Determination of Adverse Consequences
(f) Other Indemnification Provisions
9. Termination
(a) Termination of Agreement
(b) Effect of Termination
10. Miscellaneous
(a) Press Releases and Public Announcements
(b) No Third Party Beneficiaries
(c) Entire Agreement
(d) Succession and Assignment
(e) Counterparts
(f) Headings
(g) Notices
(h) Governing Law
(i) Amendments and Waivers
(j) Severability
(k) Expenses
(l) Construction
(m) Incorporation of Exhibits, Annexes, and Schedules
Exhibit A--Historical Financial Statements
Exhibit B--Form of Common Stock Purchase Warrants
Exhibit C--Form of Opinion of Counsel to Seller
Exhibit D--Form of Buyers' Officer Certificates
Exhibit E--Certificate of Incorporation of Seller
Exhibit F--By-laws of Seller
Exhibit G--Proxy Statement of Seller
Exhibit H--Financial Statements of Seller Schedule 4(c)
Capitalization
Exhibit 4(c)(1) Agreement of Physicians Insurance Company of Ohio
Exhibit 4(c)(2) Agreement of PICO Holdings, Inc.
Schedule 4(d) Noncontravention
Exhibit 4(d)(1) Written Consent of Physicians Insurance Company of
Ohio Exhibit 4(d)(2) Written Consent of PICO Holdings, Inc.
Schedule 4(k) Intellectual Property
Schedule 4(l) Contracts
Schedule 4(m) Powers of Attorney
Schedule 4(n) Litigation
Schedule 4(o) Employee Benefit Plans
Schedule 4(p) Undisclosed or Contingent Liabilities
Schedule 4(q) Absence of Certain Changes
Schedule 4(r) Patents, Trademarks, Trade Names, Etc.
Schedule 4(s) Insurance
Schedule 4(t) Products
Schedule 6(h) Transactions with Affiliates
STOCK AND WARRANT PURCHASE AGREEMENT
Agreement entered into as of October 15, 1997, by and between
Imprimis Investors LLC, a limited liability company organized under the
laws of the State of Delaware, and Wexford Spectrum Investors LLC, a
limited liability company organized under the laws of the State of Delaware
(each, individually, a "Buyer" and, collectively, the "Buyers") and PC
Quote, Inc., a Delaware corporation (the "Seller"). Buyers and Seller are
referred to collectively herein as the "Parties."
This Agreement contemplates a transaction in which Buyers will
purchase from Seller, and Seller will sell to Buyer, up to an aggregate of
five million shares of Seller's common stock, par value $0.001 per share
(the "Common Stock"), and warrants to purchase up to an additional
1,000,000 shares of Seller's Common Stock for an aggregate purchase price
of up to $5 million. Up to four million of such shares of Common Stock
shall be repurchased by Seller from Buyers under certain circumstances set
forth herein at a purchase price of $1.00 per share.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations,
warranties and covenants herein contained, the Parties agree as follows:
1. Definitions.
"Accredited Investor" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"Additional Warrants" shall mean the Common Stock Purchase
Warrants in the aggregate entitling Buyer to purchase up to 500,000 Shares
at an exercise price of $2.00 per Share, exercisable at any time prior to
the fifth anniversary of this Agreement, each substantially in the form
attached hereto as Exhibit B.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues, penalties,
fines, costs, reasonable amounts paid in settlement, liabilities,
obligations, taxes, liens, losses, expenses and fees, including court costs
and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning
of Code ss.1504.
"Buyer" and "Buyers" have the meanings set forth in the preface
above.
"Closing Date" shall mean either the First Closing Date, the
Second Closing Date or the Third Closing Date, as the context may require.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of Seller that is not already generally available to
the public.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or
arrangement which is an Employee Pension Benefit Plan, (c) qualified
defined benefit retirement plan or arrangement which is an Employee Pension
Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare
Benefit Plan or material fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
section 3.
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
section .
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Financial Statements" has the meaning set forth in ss.4(g) below.
"First Closing Date" shall mean October 15, 1997.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"Income Tax" means any federal, state, local, or foreign income
tax, including any interest, penalty, or addition thereto, whether disputed
or not.
"Income Tax Return" means any return, declaration, report, claim
for refund, or information return or statement relating to Income Taxes,
including any schedule or attachment thereto.
"Indemnified Party" has the meaning set forth in ss.8 below.
"Indemnifying Party" has the meaning set forth in ss.8 below.
"Initial Warrants" shall mean the Common Stock Purchase Warrants
entitling Buyers to purchase up to 500,000 Shares at an exercise price of
$2.00 per Share, exercisable at any time prior to the fifth anniversary of
this Agreement, substantially in the form attached hereto as Exhibit B.
"Knowledge" means actual knowledge without independent
investigation.
"Multiemployer Plan" has the meaning set forth in ERISA ss.3(37).
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with respect
to quantity and frequency).
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization, a governmental entity (or
any department, agency, or political subdivision thereof) or any entity
similar to any of the foregoing.
"Purchase Price" has the meaning set forth in ss.2 below.
"Reportable Event" has the meaning set forth in ERISA ss.4043.
"Rights Offering" shall have the meaning set forth in ss.6 below.
"Second Closing Date" shall mean October 20, 1997.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for taxes not yet due and
payable or for taxes that the taxpayer is contesting in good faith through
appropriate proceedings, (c) purchase money liens and liens securing rental
payments under capital lease arrangements, and (d) other liens arising in
the Ordinary Course of Business and not incurred in connection with the
borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Shareholders Meeting" shall mean Seller's 1997 Annual Meeting to
be held October 16, 1997 or the date upon which such meeting may be
reconvened due to adjournment or postponement of such meeting.
"Shares" means Seller's shares of Common Stock.
"Third Closing Date" shall mean a date agreed to by the Parties,
but in no event later than seven days after the Shareholders Meeting;
provided the shareholders vote to approve the proposal to increase Seller's
capital stock.
"Third Party Claim" has the meaning set forth in ss.8 below.
"Warrants" shall mean the Initial War rants and the Additional
Warrants.
2. Purchase and Sale of Shares and Warrants. On the Closing Dates,
in the manner set forth in this ss.2, upon the terms set forth in this
Agreement, and in reliance on the representations and warranties contained
herein, Seller will sell, transfer and deliver to Buyers, and Buyers will
purchase from Seller, up to 5,000,000 Shares and the Initial Warrants for
an aggregate purchase price (the "Purchase Price") of up to $5,000,000, in
all cases free and clear of all interests, liens, charges, encumbrances,
equities, claims, assessments and options of whatever nature; except with
respect to the Warrants, for the exercise price of the Warrants as detailed
herein:
(a) On the First Closing Date, as a condition precedent to such
closing,
(i) Seller shall deliver to Buyers the following:
(A) stock certificates representing an aggregate
of 1,450,000 Shares in such names and denominations as
Buyers shall jointly instruct Seller;
(B) the Initial Warrants in such names and
denominations as Buyers shall jointly instruct Seller;
(C) an opinion of Seller's counsel substantially
in the form of Exhibit C hereto; (ii) Seller shall
deliver to an escrow agent to be selected by Seller with
the advice and consent of Buyers (the "Escrow Agent"),
Additional Warrants entitling Buyers (under certain
circumstances) to purchase up to 145,000 Shares on the
same terms as the Initial Warrants; and
(iii) Buyers shall deliver to Seller the following:
(A) officers' certificates substantially in the
form of Exhibit D hereto;
(B) a certified check or wire transfer in the
amount of $1,450,000.
(b) On the Second Closing Date, as a condition precedent
to such closing,
(i) Seller shall deliver to Buyers the following:
(A) stock certificates representing an aggregate
of 550,000 Shares in such names and denominations as
Buyers shall jointly instruct Seller;
(B) an opinion of Seller's counsel substantially
in the form of Exhibit C hereto;
(ii) Seller shall deliver to the Escrow Agent, Additional
Warrants entitling Buyers (under certain circumstances) to purchase
up to 55,000 Shares on the same terms as the Initial Warrants; and
(iii) Buyers shall deliver to Seller the following:
(A) officers' certificates substantially in the
form of Exhibit D hereto;
(B) a certified check or wire transfer in the
amount of $550,000.
(c) On the Third Closing Date, provided that the number of Shares
authorized for issuance by Seller has been sufficiently increased at the
Shareholders Meeting, as a condition precedent to such closing,
(i) Seller shall deliver to Buyers the following:
(A) stock certificates representing 3,000,000
Shares in such names and denominations as Buyers shall
jointly instruct Seller;
(B) an opinion of Seller's counsel substantially
in the form of Exhibit C hereto;
(ii) Seller shall deliver to the Escrow Agent, Additional
Warrants entitling Buyers (under certain circumstances) to purchase
up to 300,000 Shares on the same terms as the Initial Warrants; and
(iii) Buyers shall deliver to Seller the following:
(A) officers' certificates substantially in the
form of Exhibit D hereto;
(B) a certified check or wire transfer in the
amount of $3,000,000.
3. Representations and Warranties of Buyers. Each Buyer represents
and warrants to Seller that the statements contained in this ss.3 are true,
correct and complete as of the date of this Agreement and will be true,
correct and complete as of each Closing Date (as though made on and as of
such Closing Date as if such Closing Date were substituted for the date of
this Agreement throughout this ss.3).
(a) Organization of Buyers. Each Buyer is a limited
liability company duly organized, validly existing, and in good
standing under the laws of the State of Delaware.
(b) Authorization of Transaction. Each Buyer has full
power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes the
valid and legally binding obligation of each Buyer, enforceable in
accordance with its terms. Neither Buyer needs to give any notice
to, make any filing with, or obtain any authorization, consent or
approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
(c) Noncontravention. To the Knowledge of each Buyer,
neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (A)
violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which either
Buyer is subject or any provision of its Certificate of Limited
Liability Company or Limited Liability Company Agreement or (B)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or
other arrangement to which either Buyer is a party or by which it
is bound or to which any of its assets is subject.
(d) Brokers' Fees. Neither Buyer has any liability or
obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this
Agreement for which Seller could become liable or obligated.
(e) Investment. Buyers are acquiring the Shares and the
Warrants for investment purposes and not with a view to or for
sale in connection with any distribution thereof within the
meaning of the Securities Act.
(f) Buyers' Qualifications. Each Buyer (a) has such
knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of its investment in
Seller and (b) has had the opportunity to ask questions of, and
receive answers from, Seller and its management concerning the
terms and conditions of the offering of the Shares and the
Warrants hereunder and to obtain additional information; and (c)
is an Accredited Investor.
4. Representations and Warranties of Seller. Seller represents and
warrants to Buyers that the statements contained in this ss.4 are true,
correct and complete as of the date of this Agreement and will be true,
correct and complete as of each Closing Date (as though made on and as of
such Closing Date as if such Closing Date were substituted for the date of
this Agreement throughout this ss.4).
(a) Authorization of Transaction. Seller has full corporate power
and authority to execute and deliver this Agreement and the other documents
and instruments to be executed and delivered by Seller pursuant to this
Agreement and the transactions contemplated hereby and to perform its
obligations hereunder and thereunder. This Agreement and the other
documents and instruments to be executed and delivered by Seller pursuant
to this Agreement and the transactions contemplated hereby constitute the
valid and legally binding obligations of Seller enforceable in accordance
with their respective terms.
(b) Organization, Qualification, and Corporate Power. Seller is a
corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware. Seller is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where
such qualification is required, except where the lack of such qualification
would not have a material adverse effect on the condition (financial or
otherwise) of Seller. Seller has full corporate power and authority to
carry on the businesses in which it is engaged and to own and use the
properties and assets owned and used by it. Seller has no subsidiaries.
Attached hereto as Exhibit E and Exhibit F, respectively, are true and
correct copies of the Certificate of Incorporation and By-laws of Seller,
each as in effect on each Closing Date. Attached hereto as Exhibit G is
Seller's Proxy Statement, used in connection with its Annual Meeting which
sets forth Seller's proposal to amend its Certificate of Incorporation.
(c) Capitalization. The entire authorized capital stock of Seller
consists of 10,000,000 Shares, of which 7,414,150 Shares are issued and
outstanding and 644,000 Shares are held in treasury; and 976,428 Shares of
Preferred Stock, $1.312704617 par value, none of which are outstanding. All
of the issued and outstanding Shares have been duly authorized, are validly
issued, fully paid, and nonassessable. Except as set forth in Schedule 4(c)
hereto, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require Seller to issue, sell, or
otherwise cause to become outstanding any of its capital stock. All such
options, warrants (including the Warrants), purchase rights, subscription
rights, conversion rights, exchange rights or other contracts or
commitments and the Shares issuable upon exercise thereof have been duly
authorized, and when issued in accordance with their terms will be validly
issued, fully paid and non-assessable. There are no preemptive or first
refusal or similar rights binding on Seller to subscribe for or purchase
from Seller any Shares pursuant to any provisions of law, the Certificate
of Incorporation or By-laws of Seller or by agreement or otherwise. There
are no outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Shares.
(d) Noncontravention. Except as set forth in Schedule 4(d) hereto,
to the Knowledge of Seller, neither the execution and delivery of this
Agreement, nor consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Seller is subject or any
provision of the Certificate of Incorporation or By-laws of Seller or (ii)
conflict with, result in breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which Seller
is a party or by which Seller is bound or to which Seller or its assets is
subject (or result in the imposition of any Security Interest upon any of
its assets), except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to give
notice, or Security Interest would not have a material adverse effect on
the condition (financial or otherwise) of Seller or on the ability of the
Parties to consummate the transactions contemplated by this Agreement.
Except as set forth in Schedule 4(d) hereto, Seller does not need to give
any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement,
except where the failure to give notice, to file, or to obtain any
authorization, consent, or approval would not have a material adverse
effect on the condition (financial or otherwise) of Seller or on the
ability of the Parties to consummate the transactions contemplated by this
Agreement.
(e) Brokers' Fees. Seller does not have any liability or
obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement.
(f) Title to Tangible Assets. Seller has good title to, or a valid
leasehold interest in, the tangible assets it uses regularly in the conduct
of its businesses.
(g) Financial Statements. Attached hereto as Exhibit E are copies
of Seller's annual report on Form 10-K for the year ended December 31, 1996
and its Quarterly Report on Form 10-Q for each of the quarters ended March
31, 1997 and June 30, 1997. Included in such reports are the following
financial statements (collectively the "Financial Statements"): (i) audited
consolidated balance sheets for the years ending December 31, 1996 and 1995
and statements of income, changes in stockholders' equity, and cash flow as
of and for the years ended December 31, 1996, 1995 and 1994 for the
Company; and (ii) unaudited balance sheets and statements of income,
changes in stockholders' equity, and cash flow as of and for the quarters
ended March 31, 1997 and June 30, 1997 (the "Quarterly Financial
Statements"). The Financial Statements (including the notes thereto) have
been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby and present fairly the financial
condition of Seller as of such dates and the results of operations of
Seller for such periods; provided, however, that the Quarterly Financial
Statements are subject to normal year-end adjustments and lack footnotes
and other presentation items.
(h) Legal Compliance. Seller has complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local,
and foreign governments (and all agencies thereof), except where the
failure to comply would not have a material adverse effect upon the
condition (financial or otherwise) of Seller.
(i) Tax Matters.
(i) Seller has filed all Income Tax Returns that it was
required to file, and has paid all Income Taxes shown thereon as
owing, except where the failure to file Income Tax Returns or to pay
Income Taxes would not have a material adverse effect on the
condition (financial or otherwise) of Seller.
(ii) Seller has not waived any statute of limitations in
respect of Income Taxes or agreed to any extension of time with
respect to an Income Tax assessment or deficiency.
(iii) Seller is not a party to any Income Tax
allocation or sharing agreement.
(j) Real Property
Seller does not own any real property.
(k) Intellectual Property. Schedule 4(k) herein identifies each
application for registration which Seller has made with respect to any of
its intellectual property, and identifies each license, agreement, or other
permission which Seller has granted to any third party with respect to any
of its intellectual property.
(l) Contracts. Schedule 4(l) herein lists all written contracts
and other written agreements to which Seller is a party the performance of
which will involve consideration in excess of $100,000 per year. Seller has
made available to Buyer a correct and complete copy of each contract or
other agreement listed in Schedule 4(l) hereto.
(m) Powers of Attorney. Except as set forth in Schedule 4(m),
there are no outstanding powers of attorney executed on behalf of Seller.
(n) Litigation. Schedule 4(n) hereto sets forth each instance in
which Seller (i) is subject to any outstanding injunction, judgment, order,
decree, ruling, or charge or (ii) is a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction, except where the injunction, judgment, order, decree,
ruling, action, suit, proceeding, hearing, or investigation would not have
a material adverse effect on the condition (financial or otherwise),
assets, liabilities, earnings or business of Seller. Except as set forth in
Schedule 4(n) hereto, Seller does not know nor have any reason to know of
any basis for any such claim, action, suit, proceeding or investigation and
no such claim, action, suit, proceeding or investigation has been pending
during the two-year period preceding the date hereof.
(o) Employee Benefits.
(i) Schedule 4(o) hereto lists each Employee Benefit Plan
that is sponsored, maintained or contributed to or required to be
contributed to by the Seller or by any trade or business, whether or
not incorporated (an "ERISA Affiliate"), that together with the
Seller would be deemed a "single employer" within the meaning of
Section 4001(b) of ERISA.
(A) Each such Employee Benefit Plan (and each
related trust, insurance contract, or fund) complies in
form and in operation in all respects with the applicable
requirements of ERISA and the Code, except where the
failure to comply would not have a material adverse
effect on the condition (financial or otherwise) of
Seller.
(B) All contributions (including all employer
contributions and employee salary reduction
contributions) which are due have been paid to each such
Employee Benefit Plan which is an Employee Pension
Benefit Plan.
(C) Each such Employee Benefit Plan which is an
Employee Pension Benefit Plan has received a
determination letter from the Internal Revenue Service to
the effect that it meets the requirements of Code
ss.401(a).
(D) Seller has made available to Buyer correct
and complete copies of the plan documents and summary
plan descriptions, the most recent determination letter
received from the Internal Revenue Service, the most
recent Form 5500 Annual Report, and all related trust
agreements, insurance contracts, and other funding
agreements which implement each such Employee Benefit
Plan.
(E) No such Employee Benefit Plan which is an
Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been completely or partially
terminated or been the subject of a Reportable Event as
to which notices would be required to be filed with the
PBGC. No proceeding by the PBGC to terminate any such
Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted.
(F) No action, suit, proceeding, hearing, or
investigation with respect to the administration or the
investment of the assets of any such Employee Benefit
Plan (other than routine claims for benefits) is pending,
except where the action, suit, proceeding, hearing, or
investigation would not have a material adverse effect on
the condition (financial or otherwise) of Seller.
(G) Neither Seller nor any ERISA Affiliate has
incurred any liability to the PBGC (other than PBGC
premium payments) or otherwise under Title IV of ERISA
(including any withdrawal liability) with respect to any
such Employee Benefit Plan which is an Employee Pension
Benefit Plan.
(H) The aggregate withdrawal liability of Seller
and any and all ERISA Affiliates, computed as if a
complete withdrawal by Seller and such ERISA Affiliates
had occurred under each Multiemployer Plan on the date
hereof, would not exceed $10,000.
(p) No Undisclosed or Contingent Liabilities. Except as set forth
in Schedule 4(p) hereto, Seller has no material liabilities or obligations
of any nature (absolute, accrued, contingent or otherwise) which are not
fully reflected or reserved against in Seller's Financial Statements,
except for commercial liabilities and obligations incurred in the ordinary
course of business and consistent with past practice since the date
thereof, no one of which is in excess of, $50,000 (counting obligations and
liabilities arising from one transaction or a series of related
transactions over any three month period, and all periodic installments or
payments under any lease or other agreement providing for periodic or
installment payments, as a single obligation or liability) and Seller has
no Knowledge of any basis for the transaction against it of any liability
or obligation of any nature whatsoever not fully reflected or reserved
against in the Financial Statements or set forth in Schedule 4(p) hereto.
(q) Absence of Certain Changes. With respect to the business of
Seller, except as and to the extent set forth in Schedule 4(q) hereto,
since July 31, 1997, Seller has not:
(i) suffered any material adverse change in its condition
(financial or otherwise), assets, liabilities (absolute, accrued,
contingent or otherwise), business, prospects or operations, or
experienced any labor difficulty, or suffered any casualty loss
(whether or not insured);
(ii) incurred any obligations or liabilities of any
nature (whether absolute, accrued, contingent or otherwise and
whether due or to become due) other than obligations and
liabilities incurred in the ordinary course of business and
consistent with past practice no one of which is in excess of
$50,000 (counting obligations and liabilities arising from one
transaction or a series of related transactions over any three
month period, and all periodic installments or payments under any
lease or other agreement providing for periodic installments or
payments, as a single obligation or liability) or experienced any
change in any assumptions underlying or methods of calculating any
bad debt, contingency or other reserves;
(iii) paid, discharged or satisfied any claim, lien,
encumbrance or liability (whether absolute, accrued, contingent or
otherwise and whether due or to become due), other than claims,
liens, encumbrances or liabilities (i) which are reflected or
reserved against in the Financial Statements, and which were paid,
discharged or satisfied since the date of the most recent
Financial Statements in the ordinary course of business and
consistent with past practice, or (ii) which were incurred and
paid, discharged or satisfied since the date of the most recent
Financial Statements in the ordinary course of business and
consistent with past practice;
(iv) permitted or allowed any of the properties or
assets, real, principal or mixed, tangible or intangible, of or
used by Seller, to be mortgaged, pledged or subjected to any lien
or encumbrance;
(v) written down or written up the value of any
inventory, or written off as uncollectible any notes or accounts
receivable or any portion thereof, except for write-downs,
write-ups and write-offs in the ordinary course of business
consistent with past practice;
(vi) cancelled any other debts or claims, or waived any
rights of substantial value, or sold, transferred or otherwise
disposed of any of the properties or assets, real, personal or
mixed, tangible or intangible, except in the ordinary course of
business and consistent with past practice;
(vii) disposed of or permitted to lapse any patent,
trademark, assumed name, service mark, trade name or copyright
application or license or under which Seller has any right or
license, or disposed of or disclosed to any person any trade
secret, formula, process or know-how of Seller or under which
Seller has any right or license;
(viii) granted any general uniform increase in the
compensation of employees (including, without limitation, any
increase or change pursuant to any bonus, pension, profit-sharing,
retirement or other plan or commitment), or any increase in any
such compensation payable or to become payable to any officer or
employee thereof; and no such increase (whether general or
otherwise) is required;
(ix) made any single capital expenditure or commitment in
excess of $50,000 for additions to property, plant or equipment,
or made aggregate capital expenditures or commitments in excess of
$250,000 for additions to property, plant or equipment;
(x) made any change in any method of accounting or
accounting practice or policy; made any loan or advance (other
than advances to employees in the ordinary course of business or
travel and expenses disbursement in accordance with the past
practice, but not in excess of $3,000 at any one time outstanding)
to any person who is an officer, director or employee of Seller;
(xi) declared or paid any dividend or purchased any of
its outstanding shares of capital stock;
(xii) agreed, whether in writing or otherwise, to take
any of the actions set forth in this Section 4(q);
(r) Patents, Trade Names, Trademarks, Etc. With respect to
Seller's business, Schedule 4(r) hereto sets forth an accurate and complete
description of all patents, trademarks, trade names, assumed names,
copyrights, technology, know-how, formulae and processes, and all
applications therefor, presently owned or held by Seller, under which
Seller owns or holds any license or other interest. The name "PC Quote,
Inc." and such other names and marks as are designated in Schedule 4(r)
hereto and the use thereof by Seller, do not, to the Seller's Knowledge,
infringe on any patents, trademarks or copyrights or any other rights of
any person. Seller does not know nor have any reason to believe that there
are any claims of third parties to the use of any such names or any similar
names, and there is no basis for any such claim or claims. Except as set
forth in Schedule 4(r) hereto, Seller has the sole and exclusive right to
use the patents, trademarks, trade names, copyrights, technology, know-how,
formulae and processes referred to in such Schedule 4(r), and the
consummation of the transactions contemplated hereby will not alter or
impair any such rights. No services provided or products manufactured or
sold by Seller, nor any patents, formulae, processes, know-how, trade
secrets, trademarks, trade names, assumed names, copyrights or designations
used in its business, infringe on any patents, trademarks or copyrights, or
any other rights of any person or corporate entity, and no claims have been
made against Seller in such connection except as disclosed on Schedule 4(n)
hereto.
(s) Insurance. Schedule 4(s) hereto sets forth a complete and
accurate list and description, including but not limited to annual premiums
thereon and the deductibles thereunder, of all policies of fire,
comprehensive general liability including product liability and worker's
compensation insurance presently in effect with respect to Seller, two
copies of which have heretofore been delivered to Buyer. All such policies
are valid, outstanding and enforceable policies and provide insurance
coverage for the properties, assets and operations of Seller of the kinds,
in the amounts and against the risks customarily maintained by
organizations similarly situated. Seller has not been refused any insurance
with respect to any aspect of its operations, nor has its coverage been
limited by any insurance carrier to which it has applied for insurance or
with which it has carried insurance during the last three years.
(t) Products.
1. Except as set forth in Schedule 4(t) hereto, there
exists no set of facts (i) which could furnish a basis for the recall,
withdrawal, suspension or cancellation of any product registration, product
license, manufacturing license, wholesale dealers license, export license
or other governmental license, approval or consent of any governmental or
regulatory agency with respect to any product developed, manufactured,
distributed or sold by Seller (a "Product"), (ii) which could furnish a
basis for the recall, withdrawal or suspension by order of any state,
federal or foreign court of law of any Product, or (iii) which could have a
material adverse effect on the continued operation of any facility of
Seller or which could otherwise cause Seller to recall, withdraw or suspend
any such Product from the market or to change the marketing clarification
of any such Product.
2. Each product manufactured by Seller has in all
material respects been manufactured in accordance with the specifications
under which such Product normally is and has been manufactured and the
provisions of all applicable laws or regulations including, without
limitation, any applicable governmental regulatory authorities.
(u) Environmental Protection.
In connection with its business operations, Seller has
obtained all permits, licenses and other authorizations which are required
under federal, state and local laws relating to pollution or protection of
the environment, including laws relating to emissions, discharges, releases
or threatened releases of pollutants, contaminants, or hazardous or toxic
materials or wastes into ambient air, surface water, ground water, or land,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants or hazardous or toxic materials or wastes; to the best of its
knowledge after due investigation, Seller is in compliance in all material
respects with all terms and conditions of the required permits, licenses
and authorizations, and is also in compliance in all material respects with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in those laws
or contained in any regulation, code, plan, order, decree, judgment, notice
or demand latter issued, entered, promulgated or approved thereunder.
Seller is not aware of, and has not received notice of, past, present or
future events, conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with or prevent continued compliance,
or which may give rise to any common law or legal liability, or otherwise
form the basis of any claim, action, suit, proceeding, hearing or
investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling, or
the omission, discharge, release or threatened release into the
environment, of any pollutant, contaminant, or hazardous or toxic material
or waste.
5. Pre-closing Covenants. The Parties agree as follows with
respect to the period between the execution of this Agreement and (i) each
Closing Date or (ii) termination of this Agreement.
(a) General. Each of the Parties will use his or its reasonable
best efforts to take any action and to do all things reasonably necessary
in order to consummate and make effective the transactions contemplated by
this Agreement (including satisfaction, but not waiver, of the conditions
precedent to closing set forth in ss.2 and ss.7 hereof).
(b) Notices and Consents. Seller will give any notices to third
parties, and will use its reasonable best efforts to obtain any third party
consents, that Buyers reasonably may request in connection with the matters
referred to in ss.4(d) above.
(c) Operation of Business. Except for transactions contemplated
hereby, Seller will not engage in, take any action, or enter into any
transaction outside the Ordinary Course of Business.
(d) Full Access. Seller will permit representatives of Buyers to
have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of Seller, to all premises,
properties, personnel, books, records (including tax records), contracts,
and documents of or pertaining to Seller. Buyers will treat and hold as
such any Confidential Information received from Seller in the course of the
reviews contemplated by this ss.5(d), will not use any of the Confidential
Information except in connection with this Agreement, and, if this
Agreement is terminated for any reason whatsoever, will return to Seller
all tangible embodiments (and all copies) of the Confidential Information
which are in its possession.
(e) Notice of Developments. Seller shall notify Buyers of any
development causing a breach of any of the representations and warranties
in ss. 4 above. Unless Buyers have the right to terminate this Agreement
pursuant to ss. 9(a)(ii) below by reason of the development and exercise
that right within the period referred to in ss. 9(a)(ii) below, the written
notice pursuant to this ss.5(e)(i) will be deemed to have amended the
relevant Schedule, if any, to have qualified the representations and
warranties contained in ss. 4 above, and to have cured any
misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the development.
(f) Exclusivity. Until twenty-eight days from the date hereof,
Seller shall not solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of all or
substantially all of the capital stock or assets of Seller (including any
acquisition structured as a merger, consolidation, or share exchange);
provided, however, that Seller and its directors and officers will remain
free to participate in any discussions or negotiations regarding, furnish
any information with respect to, assist or participate in, or facilitate in
any other manner any effort or attempt by any Person to do or seek any of
the foregoing to the extent their fiduciary duties may require and shall
keep Buyers informed thereof.
6. Post-Closing Covenants. The Parties agree as follows with
respect to the period following the
Closing.
(a) General. In case at any time after any Closing Date any
further action is necessary to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution
and delivery of such further instruments and documents) as any other Party
reasonably may request, all at the sole cost and expense of the requesting
party (unless the requesting Party is entitled to indemnification therefor
under ss.8 below).
(b) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection
with (i) any transaction contemplated under this Agreement or (ii) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or
prior to any Closing Date involving Seller, each of the other Parties shall
cooperate with him or it and his or its counsel in the defense or contest,
make available their personnel, and provide such testimony and access to
their books and records as shall be necessary in connection with the
defense or contest, all at the sole cost and expense of Seller (unless the
contesting or defending Party is entitled to indemnification therefor under
ss.8 below).
(c) Rights Offering. Seller shall use its best efforts to prepare,
file with the Securities and Exchange Commission and have declared
effective a Registration Statement covering an offering of rights to its
existing stockholders (other than Buyers) to subscribe for the purchase of
one additional Share for each Share of Seller owned by such stockholders as
of the record date. In the event the Rights Offering is not completed on or
before January 24, 1998, Buyers shall receive from the Escrow Agent
Additional Warrants to purchase up to an aggregate of 250,000 shares. In
the event the Rights Offering is not completed on or before February 28,
1998, Buyers shall have the right, in their discretion, (i) to extend the
time for completion of the Rights Offering, or (ii) to (A) terminate
Seller's obligation to complete the Rights Offering and (B) terminate
Seller's right to repurchase from Buyers four million of the Shares
purchased by Buyers hereunder and (C) receive from the Escrow Agent
Additional Warrants to purchase up to an aggregate of 250,000 Shares.
(d) Repurchase of Shares from Buyers. Seller covenants and agrees
that the proceeds from the sale of the first 4 million Shares sold by
Seller pursuant to the Rights Offering will be used to repurchase 4 million
Shares from Buyers at a price to Seller of $1.00 per Share.
(e) Reservation of Shares. Seller will reserve a sufficient number
of Shares for issuance upon the exercise of the Warrants and the other
options, etc. set forth in Schedule 4(b) hereto.
(f) Registration Rights. As soon as practicable after the First
Closing Date, Seller shall use its best efforts to register with the
Securities and Exchange Commission one million of the Shares purchased by
Buyers hereunder on a Registration Statement on Form S-3 (if appropriate)
and, in the event the Rights Offering is not completed, to amend such
Registration Statement to include the remaining Shares purchased by Buyers
hereunder. Buyers agree to cooperate fully in such registration effort.
(g) Delivery of Resolutions Adopted. Seller shall deliver to
Buyers copies of any and all resolutions adopted by the shareholders of
Seller at the Shareholders Meeting.
(h) Negative Covenants. Seller covenants and agrees that, until
the earlier of (i) such time as Seller completes the Rights Offering and
repurchases from Buyers four million Shares as contemplated by ss.6(d)
hereof or (ii) February 28, 1998, Seller will not do any of the following
without the prior written consent of Buyers, which shall not be
unreasonably withheld:
(i) Dispositions. Convey, sell, lease, transfer or
otherwise dispose of (each of the foregoing, a "Transfer"), all or
any part of its business or property, other than: (i) Transfers of
non-exclusive licenses and similar arrangements for the use of
Seller's services; or (ii) Transfers of worn-out or obsolete
equipment. >
(ii) Mergers or Acquisitions. Merge or consolidate with
or into any other business organization, or acquire all or
substantially all of the capital stock or property of another
Person.
(iii) Distributions. Pay any dividends or make any other
distribution or payment on account of or in redemption, retirement
or purchase of any capital stock except with respect to any
obligations in existence as of the date hereof and set forth on
Schedule 6(h) hereto.
(iv) Transactions with Affiliates. Directly or indirectly
enter into or permit to exist any material transaction with any
Affiliate of Seller except for transactions set forth in Schedule
6(h) hereto involving agreements that are in place at the date
hereof or that are in the ordinary course of Seller's business,
upon fair and reasonable terms that are no less favorable to
Seller than would be obtained in an arm's length transaction with
a nonaffiliated Person.
7. Additional Conditions Precedent.
(a) Conditions to Obligation of Buyers. The obligation of Buyers
to consummate the transactions contemplated by this Agreement is subject to
satisfaction of the following conditions:
(i) Buyers shall have completed a reasonable due
diligence investigation satisfactory to Buyers on or before the
First Closing Date;
(ii) the representations and warranties of Seller set
forth in ss.4 above shall be true and correct in all material
respects at and as of each Closing Date;
(iii) Seller shall have performed and complied with all
of its covenants hereunder in all material respects through each
Closing Date ;
(iv) there shall not be any injunction, judgment, order,
or decree enjoining the transactions contemplated by this
Agreement;
(v) all actions to be taken by Seller in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required
to effect the transactions contemplated hereby will be
satisfactory in form and substance to Buyers.
Buyers may waive any condition specified in this ss.7(a) upon execution of a
writing so stating at or prior to each Closing Date.
(b) Conditions to Obligation of Seller. The obligation of Seller
to consummate the transactions contemplated by this Agreement is subject to
satisfaction of the following conditions:
(i) the representations and warranties of Buyers set
forth in ss.3 above shall be true and correct in all material
respects at and as of each Closing Date;
(ii) Buyers shall have performed and complied with all of
its covenants hereunder in all material respects through each
Closing Date;
(iii) there shall not be any injunction, judgment, order,
decree, ruling, or charge in effect preventing consummation of any
of the transactions contemplated by this Agreement;
(iv) all actions to be taken by Buyers in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to Seller.
Seller may waive any condition specified in this ss.7(b) if it executes a
writing so stating at or prior to each Closing Date.
8. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties. All of the
representations and warranties of Seller contained in ss.4 above shall
survive this Agreement and continue in full force and effect for a period
of one year thereafter.
(b) Indemnification Provisions for Benefit of Buyers. In
the event Seller breaches any of its representations, warranties,
or covenants contained herein, it shall so notify Buyers and
provided that Buyer makes a written claim for indemnification
against Seller pursuant to ss.10 below within such survival
period, then Seller agrees to indemnify Buyers from and against
the entirety of any Adverse Consequences Buyers shall suffer
through and after the date of the claim for indemnification caused
by the breach.
(c) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party
Claim") which may give rise to a claim for indemnification against
any other Party (the "Indemnifying Party") under this ss. 8, then the
Indemnified Party shall promptly (and in any event within [five
business days] after receiving notice of the Third Party Claim)
notify each Indemnifying Party thereof in writing.
(ii) Any Indemnifying Party will have the right to assume
and thereafter conduct the defense of the Third Party Claim with
counsel of his or its choice reasonably satisfactory to the
Indemnified Party; provided, however, that the Indemnifying Party
will not consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the prior
written consent of the Indemnified Party (not to be withheld
unreasonably) unless the judgment or proposed settlement involves
only the payment of money damages and does not impose an injunction
or other equitable relief upon the Indemnified Party.
(iii) Unless and until an Indemnifying Party assumes the
defense of the Third Party Claim as provided in ss.8(c)(ii) above,
however, the Indemnified Party may defend against the Third Party
Claim in any manner he or it reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent to the
entry of any judgment or enter into any settlement with respect to
the Third Party Claim without the prior written consent of each of
the Indemnifying Parties, not to be unreasonably withheld.
(d) Determination of Adverse Consequences. The Parties shall make
appropriate adjustments for tax benefits and insurance coverage in
determining Adverse Consequences for purposes of this ss.8. All
indemnification payments under this ss.8 shall be deemed adjustments to the
Purchase Price.
(e) Other Indemnification Provisions. The indemnification
provisions in this ss.8 are in addition to, and not in derogation of, any
statutory, equitable, or common law remedy any Party may have for breach of
representation, warranty, or covenant.
9. Termination.
(a) Termination of Agreement. The Parties may terminate this
Agreement as provided below
(i) Buyers and Seller may terminate this Agreement by
mutual written consent at any time prior to the First Closing
Date;
(ii) Buyers may terminate this Agreement by giving
written notice to Seller at any time prior to the First Closing
Date in the event (A) Seller has given Buyers any notice pursuant
to ss.5(e) above and (B) the development that is the subject of
the notice has had, or reasonably believes will have, a material
adverse effect upon the condition (financial or otherwise) of
Seller;
(iii) Buyers may terminate this Agreement by giving
written notice to Seller at any time prior to the First Closing
Date (A) in the event Seller has breached any material
representation, warranty, or covenant contained in this Agreement
in any material respect, Buyers have notified Seller of the
breach, and the breach has continued without cure for a period of
10 days after the notice of breach or (B) if the First Closing
shall not have occurred on or before October 16, 1997, by reason
of the failure of any condition precedent under ss.2 or ss.7
hereof (unless the failure results primarily from any breach by
Buyers of any material representation, warranty, or covenant
contained in this Agreement); and
(iv) Seller may terminate this Agreement by giving
written notice to Buyers at any time prior to the First Closing
Date (A) in the event either Buyer has breached any material
representation, warranty, or covenant contained in this Agreement
in any material respect, Seller has notified each Buyer of the
breach, and the breach has continued without cure for a period of
10 days after the notice of breach or (B) if the first Closing
shall not have occurred on or before October 15, 1997, by reason
of the failure of any condition precedent under ss.2 or ss.7
hereof (unless the failure results primarily from Seller breaching
any material representation, warranty, or covenant contained in
this Agreement).
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to ss.9(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other
Party (except for any liability of any Party then in breach); provided,
however, that the confidentiality provisions contained in ss.5(d) above
shall survive termination.
10. Miscellaneous.
(a) Press Releases and Public Announcements. No Party shall issue
any press release or make any public announcement relating to the subject
matter of this Agreement prior to the First Closing Date, without the prior
written approval of Buyers and Seller; provided, however, that any Party
may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use its
reasonable best efforts to advise the other Parties prior to making the
disclosure).
(b) No Third Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they have related in any
way to the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either
this Agreement or any of his or its rights, interests, or obligations
hereunder without the prior written approval of the other.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and
then two business days after) it is sent by registered or certified mail,
return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below:
If to Seller:
P.C. Quote Inc.
300 South Wacker, Suite 300
Chicago, Illinois 60606
Attn: Jim Porter
If to Buyers:
Imprimis Investors LLC
c/o Wexford Management LLC
411 West Putnam Avenue
Greenwich, Connecticut 06830
Attn: Frank Plimpton
and to:
Wexford Spectrum Investors LLC
c/o Wexford Management LLC
411 West Putnam Avenue
Greenwich, Connecticut 06830
Attn: Frank Plimpton
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other Parties notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware
without giving effect to any choice or conflict of law provision or rule
(whether of the State of or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Delaware.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
the Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision
in any other situation or in any other jurisdiction.
(k) Expenses. Each Party bears its own costs and expenses
(including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby; provided, however, that
Seller will reimburse Buyers a maximum of $25,000 for such expenses.
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or burden
of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. The word "including" shall mean including
without limitation.
(m) Incorporation of Exhibits, Annexes, and Schedules. The
Exhibits, Annexes, and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
(n) The Closings. The closings of the transactions contemplated by
this Agreement shall take place at the offices of Wildman, Harrold, Allen &
Dixon in Chicago, Illinois, commencing at 9:00 a.m. local time on each
Closing Date or on such other time(s) and date(s) mutually agreed by the
Parties.
* * * * *
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.
IMPRIMIS INVESTORS LLC
By: WEXFORD MANAGEMENT LLC, a
Delaware limited liability company,
its manager
By:_________________________________
Name: Frank S. Plimpton
Title: Vice President
WEXFORD SPECTRUM INVESTORS LLC
By: WEXFORD MANAGEMENT LLC,
a Delaware limited liability company,
its manager
By:_________________________________
Name: Frank S. Plimpton
Title: Vice President
PC QUOTE, INC.
By:_________________________________
Name: Jim R. Porter
Title: Chief Executive Officer
Certain Exhibits to the Stock and Warrant Purchase Agreement Among
PC Quote, Inc. and Imprimis Investors LLC and Wexford Spectrum Investors
LLC, dated as of October 15, 1997
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(c)
CAPITALIZATION
The following is the capitalization of PC Quote, Inc. as of October 15,
1997:
Authorized Shares - 10,000,000
Issued and Outstanding - 7,414,149.55
Options Outstanding - 521,503
Options Exercisable - 274,498
The following warrants were issued and outstanding:
Common Stock Purchase Warrant issued May 4, 1997 expiring April
30, 2000 to purchase 640,000 shares at a price per share equal
to the lesser of (a) the mean of the closing bid price per share
for the twenty (20) preceding trading days, or (b) $1.5625 per
share.
Common Stock Purchase Warrant issued August 8, 1997 expiring
April 30, 2000 to purchase 500,000 shares at a price per share
equal to the lesser of (a) the mean of the closing bid price per
share for the twenty (20) preceding trading days, or (b) $2.00
per share.
Common Stock Purchase Warrant issued September 22, 1997 expiring
April 30, 2000 to purchase 129,032 shares at a price per share
equal to the lesser of (a) the mean of the closing bid price per
share for the twenty (20) preceding trading days, or (b) $1.9375
per share.
The Seller has issued and outstanding a Convertible Subordinated
Debenture in the amount of $2,500,000 due and payable on April 30, 1999
convertible at the sole option of the holder into fully paid and
non-assessable shares of Common Stock at the conversion price of the
lesser of (a) the mean of the closing bid price per share for the twenty
(20) preceding trading days, or (b) $1.5625 per share.
Both PHYSCIANS INSURANCE COMPANY OF OHIO (Subordinated Debt holder) and
PICO HOLDINGS, INC. (Common Stock Warrants holder) have agreed in writing
(Exhibit 4(b)(1) and Exhibit 4(b)2) not to convert or exercise until such
time as Seller attains shareholder approval increasing the number of
authorized shares of the Seller.
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
EXHIBIT 4(c)(1)
AGREEMENT OF PHYSICIANS INSURANCE COMPANY OF OHIO
(Attached)
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
EXHIBIT 4(c)(2)
AGREEMENT OF PICO HOLDINGS, INC.
(Attached)
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(d)
NONCONTRAVENTION
Pursuant to Section 6.2 of the Convertible Subordinated
Debenture Agreement dated November 14, 1996 as amended on May 5, 1997 by
and between PC QUOTE, INC. and PHYSICIANS INSURANCE COMPANY OF OHIO
("Physicians") and Section 7.2 of the Loan and Security Agreement dated
May 5, 1997 as amended on August 8, 1997 and September 22, 1997 by and
between PC QUOTE, INC. and PICO HOLDINGS, INC. ("PICO"), Seller may not
suffer a material change in ownership. Both Physicians and PICO have
consented in writing (Exhibit 4(d)(1) and Exhibit 4(d)(2)) to the Stock
Purchase Agreement.
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
EXHIBIT 4(d)(1)
WRITTEN CONSENT OF PHYSICIANS INSURANCE COMPANY OF OHIO
(Attached)
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
EXHIBIT 4(d)(2)
WRITTEN CONSENT OF PICO HOLDINGS, INC.
(Attached)
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(k)
INTELLECTUAL PROPERTY
Subscribers to Seller's products and services have a
non-exclusive license to use Seller's proprietary software, so long as
they execute and adhere to Seller's license agreement.
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(l)
CONTRACTS
EXCHANGE AGREEMENTS
Vendor agreement with the Option Price Reporting Authority - Payments
based upon usage. Estimated annual payments $50,000.
Vendor agreement with the New York Stock Exchange, Inc. - Payments based
upon usage. Estimated annual payments $100,000.
Vendor agreements with the National Association of Securities Dealers,
Inc. - Payments based upon usage. Estimated annual payments $700,000.
Vendor agreement with the American Stock Exchange - Payments based upon
usage. Estimated annual payments $75,000.
Vendor agreement with the Chicago Board of Trade - Payments based upon
usage. Estimated annual payments $250,000
Vendor agreement with the Chicago Board of Options Exchange - Payments
based upon usage. Estimated annual payments $10,000
Vendor agreement with the Chicago Mercantile Exchange - Payments based
upon usage. Estimated annual payments $250,000
Vendor agreements with the Commodities Exchange Center - Payments based
upon usage. Estimated annual payments $275,000
Vendor agreement with the London Stock Exchange - Estimated annual
payments $50,000.
Vendor agreement with New York Mercantile Exchange - Payments based upon
usage. Estimated annual payments $75,000
SOFTWARE AND ROYALTY AGREEMENTS
Townsend Analytics, Inc. Royalty agreement for PCQ 6.0 software. Monthly
royalties averaging $200,000 per month.
AT Financial, Inc. Royalty agreement for PCQ 5.0 software. Monthly
royalties averaging $20,000 per month.
Townsend Analytics, Inc. Royalty agreement for Real Trade software.
Monthly royalties averaging $50,000 per month.
Backweb Technologies. Software licensing agreement - 1 year. Purchase
cost $144,000, remaining amount due $122,000.
Market Arts Software. Software agreement - DISPUTED. Approximate asserted
claim of Market Arts Software $52,000.
Standard & Poor Corporation. Information provider. Monthly payments and
royalties averaging $12,000.
COMTEX. Information provider (news wire). Monthly net payments averaging
$10,000.
News Alert, Inc. Co-branded web site. Monthly net payments (costs and
revenue sharing) averaging $15,000.
COMMUNICATIONS SERVICES (SATELLITES, CIRCUITS, OTHER) AGREEMENTS
Circuits
- --------
AT&T - Data and voice communications - approximate minimum monthly
charges $30,000 through April 2001. Additionally, PC Quote has a
payment plan with AT&T for past due charges of approximately $315,000,
payable for 7 additional months at approximately $45,000 per month.
Cable& Wireless - Data and voice communications - month to month
obligation - approximate monthly charges $30,000.
American Teletronics, Inc. - Data communications - month to month
obligation - approximate monthly charges $10,000.
MFS Telecom, Inc. - Data communications - month to month obligation -
approximate monthly charges $10,000.
Ameritech - Voice communications - voice communications - approximate
minimum monthly charges $17,000 through April 1999.
ATCI - Data communications - Monthly charges of $4,800 through February
1998.
MCI Capital, Inc. - Circuit and equipment for NASDAQ services. Monthly
charges of approximately $10,000 through October 1998.
Satellite
- ---------
SpaceCom Systems, Inc.
Guatamela service - $2,800 per month through February 1999
North America service - $56,000 per month through January 2006
Hawaii/Alaska service - $7,500 per month through November 1998
European service - Terminated as of June 30, 1997 - Termination
payment Of $150,000 payable under a promissory note due in
three installments beginning December 31, 1997.
Additionally, past due charges to SpaceCom are being paid per a
payment plan at approximately $33,000 per month over 7 months.
California Microwave (GTE SpaceNet Satellite Services Corporation) -
Service agreement terminated as of July 31, 1997. Remaining payments
due to vendor of approximately $275,000 are being paid over 7 months
at approximately $40,000 per month.
Sonet Rings
- -----------
Teleport Communications Group - three groups of sonet rings located in
New York City, Chicago, IL and Houston, TX. Monthly charges of
approximately $55,000. Some charges variable.
Ameritech Enhanced Business Services - one sonet ring located in Chicago,
IL. Not currently used by PC Quote. Approximate monthly payment of
$13,000 for 60 months.
Space and Service Contracts
- ---------------------------
Securities Industry Automation Corporation. New York City location for
sonet rings. Space and service contract through January 2000.
Approximate monthly charges $8,000.
Genuity. Chicago, IL location for internet servers and equipment. Space
and service contract for 12 months. Approximate monthly charges
$7,500.
EQUIPMENT AND REAL ESTATE LEASES WITH ANNUAL PAYMENTS > $100,000
EQUIPMENT
Annual Expiration
Lessor Payments Date
- ------ -------- ----------
Ameritech Credit Corp. $49,276 Jan-00
Leasing Services 13,048 Jan-00
2550 W. Golf Road 79,196 Jan-00
Rolling Meadows, Illinois 60008 35,976 Dec-99
Attn: Jamie Duffy
Beverly Bank Matteson 60,420 Mar-99
4350 W. Lincoln Highway 107,393 Mar-99
Matteson, Illinois 60443-2400 54,215 Mar-99
Attn: Robert Pettay
The CIT Group 130,102 Apr-99
900 Ashwood Parkway, Suite 600
Atlanta, Georgia 30338
Attn: Catherine Bersch
Foxdale Bank 182,544 Jun-99
40 S. McClean Blvd. 9,593 Oct-98
South Elgin, Illinois 60443-2400 23,340 Oct-98
Attn: Phil Short 81,996 Sep-98
Harris Bank St. Charles 55,097 Feb-99
1 East Main St. 56,177 Aug-98
St. Charles, Illinois 60174
Imperial Business Credit, Inc. 125,734 Apr-00
1515 Arapahoe Street, Suite 520
Denver, Colorado 80202
Ron Wagner, Sr. VP--Marketing
M&I 77,616 Oct-99
250 E. Wisconsin Ave. 114,336 Apr-99
Milwaukee, Wisconsin 53202 49,932 Jan-99
Attn: Richard McKowen, VP 36,060 Jul-98
63,592 May-98
14,364 May-98
10,686 Mar-98
16,632 Dec-98
Marquette National Bank 115,970 Jun-99
8020 S. Harlem Avenue 50,506 Dec-98
Bridgeview, Illinois 60455 53,051 Nov-98
Attn: Gretchen Hoffman
New England 119,248 May-99
P.O. Box 755
Avon, Connecticut 06001
Park National Bank & Trust 112,929 May-99
2958 N. Milwaukee Ave. 77,290 May-99
Chicago, Illinois 60618 25,366 Apr-99
Attn: Rose Bryja 33,708 Oct-98
28,140 Oct-98
22,696 Sep-98
47,196 Sep-98
14,256 Mar-98
Pullman Bank 125,782 May-99
P.O. Box 94850 83,990 Mar-99
Chicago, Illinois 60690-4850 56,537 Nov-98
87,659 Oct-98
REAL ESTATE
50 Broadway Associates, L.P. 102,300 Jul-02
c/o CBC Properties, Inc.
1500 Broadway, Suite 502
New York, New York 10036
Markborough 300 WJ L.P. 240,000 Jun-04
300 S. Wacker Drive Approximate
Chicago, Illinois 60606
EMPLOYMENT OR SEVERANCE AGREEMENTS
Louis Morgan, Chairman of the Board. Employment contract to December 2,
1997. Contract value approximately $58,000 to end of term.
Henry Clyde III, Vice President, Internet. Employment contract to June
15, 1998. Annual salary $160,000, plus benefits, bonus and options.
Includes a 7 month severance provision.
Michael J. Kreutzjans, Senior Vice President, Development & Design.
Employment contract to June 15, 1998. Annual salary $180,000, plus
benefits, bonus and options. Includes a 7 month severance provision.
Daniel Schwartz, Vice President Operations. Employment contract to June
15, 1998. Annual salary $110,000, plus benefits, bonus and options.
Includes a 7 month severance provision.
Howard Meltzer, former president and COO. Severance contract to March
1998 (salary) and December 1998 (health insurance). Contract value of
approximately $113,000 to end of term.
Michael Press, former chief financial officer. Severance contract to
March 1998 (salary) and July 1998 (health insurance). Contract value
of approximately $75,000 to end of term.
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(m)
POWERS OF ATTORNEY
Seller has granted power of attorney to KPMG Peat Marwick LLC to
represent it before the Illinois Department of Revenue with respect to
certain sales and use tax audits.
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(n)
LITIGATION
Seller has the following pending legal matters:
Case: Richard Chappetto V. P.C. Quote, Inc., Cook County, Illinois
Circuit Court, Case No. 96 L 015250. This litigation is described in the
Seller's Report 10-Q.
Case: Cynthia Ratliff v. P.C. Quote, Inc., The City of Chicago Commission
on Human Relations Administrative Complaint No. 97-E-233. On September
22, 1997, Ms. Ratliff, a current clerical employee of the Seller, filed
an Administrative Complaint with the City of Chicago claiming that she
has been subjected to discrimination due to race and seeks unspecified
relief.
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(o)
EMPLOYEE BENEFIT PLANS
Seller maintains a 401(k) retirement savings plan named PC
Quote, Inc. 401(k) Plan and a flexible benefits plan (including group
health and life insurance) named PC Quote Flexible Benefits Plan for
eligible employees.
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(p)
UNDISCLOSED OR CONTINGENT LIABILITIES
An equipment lessor of the Seller has asserted a default under
its leases due to the location of the equipment at the Seller's customer
sites. Lessor is demanding accelerated payment for the equipment in the
amount of approximately $51,000.
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(q)
ABSENCE OF CERTAIN CHANGES
The following are capital expenditures greater than $50,000
since July 31, 1997. Where financed by leases, the lessor was granted
liens on the subject equipment.
As of October 13, 1997
Valcom Professional Computer Center, Inc.
- -----------------------------------------
Various computer equipment for internet server site
Aggregate approximate purchases - $86,000
Valcom Professional Computer Center, Inc.
Financed through Americorp Financial, Inc.
- ------------------------------------------
Various computer equipment for internet service backup
Aggregate purchase price approximately $100,000
Financed at $3,300 per month for 36 months
Valcom Professional Computer Center, Inc.
Financed through First Commercial Capital.
- ------------------------------------------
Various computer equipment for internet service backup
Aggregate purchase price approximately $50,000
Financed at $1,700 per month for 36 months
MCI Capital, Inc.
- -----------------
Capital equipment required for NASDAQ communication lines
Financed through MCI Capital under 12 month service contract (listed
above as item 7. under Circuits)
Total capital cost of contract approximately $70,000. The contract is
secured by 12 month irrevocable letter of credit for $70,000 issued by
Lakeside Bank. (The letter of credit is collateralized by a cash
deposit at Lakeside Bank of $70,000).
In addition, the Seller granted Lakeside Bank of Chicago a security
interest in a $50,000 deposit at Lakeside Bank, which secures a
irrevocable letter of credit for $100,000 issued to the landlord of
the Seller's corporate office. The letter of credit expires on or
about June 30, 1998.
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(r)
PATENTS, TRADEMARKS, TRADE NAMES, ETC.
PC QUOTE
PC QUOTE 6.0 FOR WINDOWS
MARKETSMART
PCQUOTE QUOTE SERVICES
QUOTESOCKETS
HYPERFEED
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(s)
INSURANCE
See attached insurance summary.
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 4(t)
PRODUCTS
Not applicable.
STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
PC QUOTE, INC.
AND
IMPRIMIS INVESTORS LLC AND WEXFORD SPECTRUM INVESTORS LLC
SCHEDULES
OCTOBER 15, 1997
SCHEDULE 6 (h)
TRANSACTIONS WITH AFFILIATES
In addition to the capital transactions previously set forth in
SCHEDULE 4(b) and Employment or Severance Agreements set forth in
SCHEDULE 4(l), the Seller has outstanding a Loan and Security Agreement
dated May 5, 1997 as amended on August 8, 1997 and September 22, 1997 by
and between Seller and PICO Holdings, Inc. The principal amount of the
loan is $2,250,000 and is due and payable, plus accrued interest at 14%
per annum to and through December 31, 1997, on December 31, 1997.
Interest on the Convertible Debenture set forth in SCHEDULE 4(b)
accrues at the rate of one percent (1%) over the prime rate as announced
from time to time by The Wall Street Journal, and is payable
semi-annually, beginning January 1, 1998, in cash or, at the option of
the holder, in shares of Common Stock of the Seller at their fair market
value at the time of such payment.
