<PAGE>
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
_________________________________
[x] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the period ended September 30, 1997
Or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from
-------------to--------------
_______________________________________
Commission file number 0-13093
I.R.S. Employer Identification Number 36-3131704
PC QUOTE, INC.
(a Delaware Corporation)
300 S. WACKER DRIVE, SUITE 300
CHICAGO, ILLINOIS 60606
TELEPHONE (312) 913-2800
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past twelve months, (or for such
shorter period that the Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X No
--- ---
State the number of shares outstanding of each of the issuers classes of common
equity, as of the latest practicable date: 12,384,246 shares of the Company's
common stock ($.001 par value) were outstanding as of November 10, 1997.
Page 1
<PAGE>
PC QUOTE, INC.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Balance Sheets as of September 30, 1997 (unaudited)
and December 31, 1996 3
Statements of Operations for the nine month periods
ended September 30, 1997 and 1996 (unaudited) 4
Statements of Operations for the quarters ended
ended September 30, 1997 and 1996 (unaudited) 5
Statements of Cash Flows for nine month periods
ended September 30, 1997 and 1996 (unaudited) 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of:
Results of Operations and Financial Condition 11
Liquidity and Capital Resources 13
PART II. OTHER INFORMATION
Item 2. Changes in Securities 14
Item 6. Exhibits and Reports on Form 8-K 16
Company's Signature Page 17
Page 2
<PAGE>
PC QUOTE, INC.
BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
ASSETS (UNAUDITED) (AUDITED)
------------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 85,908 $1,321,512
Accounts receivable, net of allowance for doubtful
accounts of $348,384 (1997) and $234,000 1996) 901,526 1,100,253
Income tax refunds receivable 40,000
Prepaid expenses and other current assets 182,045 185,071
------------- ------------
Total current assets 1,169,479 2,646,836
------------- ------------
PROPERTY AND EQUIPMENT
Satellite receiving equipment 889,490 865,454
Computer equipment 6,862,486 6,382,179
Communication equipment 2,671,293 2,656,057
Furniture and fixtures 293,240 293,240
Leasehold improvements 366,326 359,126
------------- ------------
11,082,835 10,556,056
Less accumulated depreciation
and amortization 8,694,155 7,791,849
------------- ------------
2,388,680 2,764,207
------------- ------------
OTHER ASSETS
Software development costs, net of
accumulated amortization of
$4,385,479 (1997) and $3,600,204 (1996) 5,126,629 5,789,845
Deposits and other assets 304,723 353,182
------------- ------------
TOTAL ASSETS $ 8,989,511 $11,554,070
------------- ------------
------------- ------------
SEPTEMBER 30, DECEMBER 31,
1997 1996
LIABILITIES AND STOCKHOLDERS' EQUITY (UNAUDITED) (AUDITED)
------------- ------------
CURRENT LIABILITIES
Note payable, bank, current $ 300,000 $ 300,000
Note payable, credit facility, net of deferred
costs of $536,457 (1997) 1,753,543
Capital lease obligations 142,685
Accounts payable 4,042,462 1,774,390
Unearned revenue 1,021,269 995,600
Accrued expenses 1,432,979 718,640
------------- ------------
Total current liabilities 8,550,253 3,931,315
LONG-TERM LIABILITIES
Note payable to bank, noncurrent 875,000 1,100,000
Convertible Subordinated Debenture Bond Payable
Net of Unamortized Discount of $1,304,379 (1997) 1,195,621 850,000
and $1,650,000 (1996)
Unearned revenue, noncurrent 93,709 134,636
Accrued expense, noncurrent 192,296 206,542
------------- ------------
Total liabilities 10,906,879 6,222,493
------------- ------------
STOCKHOLDERS' EQUITY
Common stock, par value $.001; 10,000,000
shares authorized: 7,384,246 (1997) and 7,355,621
(1996) shares issued and outstanding 7,384 7,356
Paid in capital 12,664,806 12,615,995
Paid in capital-Convertible Subordinated Debenture and
Warrants 2,750,492 1,650,000
Accumulated deficit (17,340,050) (8,941,774)
------------- ------------
Total stockholders' equity (1,917,368) 5,331,577
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,989,511 $11,554,070
------------- ------------
------------- ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 3
<PAGE>
PC QUOTE, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
---------------------------
1997 1996
(UNAUDITED) (UNAUDITED)
---------------------------
<S> <C> <C>
NET REVENUES
Services $12,675,772 $12,883,133
Direct costs of services 11,093,738 7,575,431
----------- -----------
1,582,034 5,307,702
----------- -----------
OPERATING COSTS AND EXPENSES
Amortization of software development 1,250,051 801,000
Research and development 893,846 543,292
Selling and marketing 2,873,830 2,341,820
General and administrative 2,570,682 2,603,026
Restructure expense 1,146,677
----------- -----------
8,735,086 6,289,138
----------- -----------
OPERATING LOSS (7,153,052) (981,436)
OTHER INCOME (EXPENSE)
Interest income 14,721 4,112
Interest expense (1,259,945) (100,796)
----------- -----------
NET LOSS ($8,398,276) ($1,078,120)
----------- -----------
----------- -----------
----------- -----------
NET LOSS PER COMMON SHARE ($1.14) ($0.15)
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4
<PAGE>
PC QUOTE, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR QUARTER ENDED SEPTEMBER 30
------------------------------
1997 1996
(UNAUDITED) (UNAUDITED)
------------------------------
<S> <C> <C>
NET REVENUES
Services $4,449,368 $4,460,823
Direct costs of services 3,767,512 3,075,128
---------- ----------
681,856 1,385,695
---------- ----------
OPERATING COSTS AND EXPENSES
Amortization of software development 418,937 308,000
Research and development 341,137 197,281
Selling and marketing 903,954 882,293
General and administrative 625,529 1,081,249
Restructure expense
---------- ----------
2,289,557 2,468,823
---------- ----------
OPERATING LOSS (1,607,701) (1,083,128)
OTHER INCOME (EXPENSE)
Interest income 1,587 0
Interest expense (705,886) (39,636)
---------- ----------
NET LOSS ($2,312,000) ($1,122,764)
---------- ----------
---------- ----------
---------- ----------
NET LOSS PER COMMON SHARE ($0.31) ($0.15)
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 5
<PAGE>
PC QUOTE, INC
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($8,398,276) ($1,078,120)
----------- -----------
Adjustments to reconcile net income (loss) to cash
provided by (used in) operating activities
Depreciation and amortization of property and equipment 902,306 705,061
Amortization of software development cost 1,250,051 801,000
Amortization of discount on convertible subordinated
debenture bond payable 467,016
Amortization of deferred debt on warrants 442,640
Write-off of capitalized software development costs 571,647
Changes in assets and liabilities:
Accounts receivable, net of allowance 198,727 308,738
Prepaid expenses and other current assets 3,026 188,014
Deposits and other assets 48,459 (26,931)
Accounts payable 2,268,072 8,128
Unearned revenue (15,258) (179,138)
Accrued expenses 700,093 142,976
Income tax refund 40,000
----------- -----------
Total adjustments 6,876,779 1,947,848
----------- -----------
Net cash provided by (used in) operating activities (1,521,497) 869,728
----------- -----------
CASH FLOWS FROM INVESTING ACTIVTIES:
Purchase of property and equipment (526,779) (415,214)
Software development costs capitalized (1,158,482) (2,342,379)
----------- -----------
Net cash used in investing activities (1,685,261) (2,757,593)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 48,839 204,861
Principal payments under capital leases obligations (142,685) (524,273)
Principal payments on note payable to banks (225,000) (225,000)
Net borrowings under line of credit-Bank 1,500,000
Net borrowings under credit facility 2,290,000
----------- -----------
Net cash provided by financing activities 1,971,154 955,588
----------- -----------
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS (1,235,604) (932,277)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 1,321,512 1,043,478
----------- -----------
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $85,908 $111,201
----------- -----------
----------- -----------
- -------------------------------------------------------------------------- -----------
- -------------------------------------------------------------------------- -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest Paid $171,173 $100,796
Income taxes paid None None
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
Issuance of warants $979,097 None
- -------------------------------------------------------------------------- -----------
- -------------------------------------------------------------------------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 6
<PAGE>
PC QUOTE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(1) BASIS OF PRESENTATION
The accompanying interim financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and in conjunction with the rules and regulations of the Securities and Exchange
Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The interim financial statements include all adjustments
that, in the opinion of management, are necessary in order to make the financial
statements not misleading. The amounts indicated as "audited" have been
extracted from the Company's December 31, 1996 annual report. For further
information, refer to the consolidated financial statements and footnotes
included in PC Quote's annual report on Form 10-K for the year ended December
31, 1996. Certain reclassifications have been made to conform to the current
presentation.
Costs associated with the planning and designing phase of software development,
including coding and testing activities necessary to establish technological
feasibility of computer software products to be sold, leased or otherwise
marketed, are charged to research and development costs as incurred. Once
technological feasibility has been determined, costs incurred in the
construction phase of software development, including coding, testing and
product quality assurance, are capitalized.
Amortization is provided over an estimated life of the software products and
commences when the product is available for general release to customers.
Unamortized capitalized costs determined to be in excess of the net realizable
value of the product are expensed at the date of such determination. The
anticipated future gross revenues and remaining economic life of the products
are based on estimates which are subject to change. Accumulated amortization
and related software development costs are removed in the year following full
amortization.
(2) INCOME TAXES
At December 31, 1996, the Company had federal income tax net operating loss
carryforwards of approximately $12,059,000 for federal income tax purposes and
approximately $9,794,000 for alternative minimum tax purposes. The net
operating loss carryforwards will expire in the years 1999 to 2011.
Page 7
<PAGE>
(3) RESTRUCTURE EXPENSE
In June 1997, the Company underwent a significant management reorganization and
restructuring of operations. As a result, the Company wrote off approximately
$572,000 representing the unamortized portion of previously capitalized software
development costs. The write-off relates to development efforts which new
management has decided for economic reasons not to pursue. The management
reorganization resulted in the Company incurring employment termination costs of
$425,000 and $150,000 was paid to terminate a contractual arrangement related to
unprofitable operations.
(4) BORROWINGS FROM SHAREHOLDER
On May 5, 1997, the Company and PICO Holdings, Inc. ("Holdings") entered into a
Loan and Security Agreement (the "Loan Agreement"), under which Holdings agreed
to make a secured loan to the Company in an aggregate principal amount of up to
$1.0 million at a fixed rate equal to 14% per annum. Unless otherwise extended,
the entire principal balance and all accrued interest due under the Loan
Agreement were payable on September 30, 1997. All advances under the Loan
Agreement are secured by a pledge of substantially all of the assets of the
Company. These liens are subject to the prior lien of the Company's primary
lender, Lakeside Bank. Holdings will be paid a "facility fee" of $40,000, plus
interest at a rate equal to 14% per annum, on the maturity date of the loan
contemplated by the Loan Agreement.
Also on May 5, 1997, in consideration of the loan by Holdings to the Company,
the Company issued a Common Stock Purchase Warrant (the "Warrant") to Holdings
entitling Holdings to purchase a minimum of 640,000 shares of the Company's
Common Stock at a price per share equal to the lesser of (a) the mean of the
closing bid price per share for the 20 trading days preceding exercise of the
Warrant or (b) $1.5625 per share (the market value of the Company's Common Stock
on the date the Warrant was issued). The Warrant expires on April 30, 2000.
In August 1997, the Company and Holdings agreed to amend the Loan Agreement and
related documents to increase the amount of the secured loan from Holdings to
the Company from $1.0 million up to $2.0 million. In connection with the
increase of the loan amount pursuant to such amendment, the Company granted
Holdings an additional Common Stock Purchase Warrant for a minimum of 500,000
shares of the Company's Common Stock. The terms of the additional warrant are
substantially the same as those contained in the Warrant, except that the
conversion price is the lesser of (a) $2.00 per share or (b) the mean of the
closing bid price per share for the 20 trading days preceding exercise of the
additional warrant.
Page 8
<PAGE>
On September 22, 1997 the Company and Holdings executed a second amendment to
the Loan Agreement to further increase the amount of the secured loan from
Holdings to the Company from $2.0 million to $2.25 million. The terms of the
Loan Agreement otherwise remained substantially the same, except that the
maturity date was extended to December 31, 1997. In consideration of the
amendment to the Loan Agreement, the Company granted Holdings another Common
Stock Purchase Warrant for up to 129,032 shares of Common Stock. The terms of
such warrant are substantially the same as contained in the Warrant, except that
the conversion price is the lesser of (a) $1.9375 per share or (b) the mean of
the closing bid price per share for the 20 trading days preceding exercise of
this warrant
(5) SUBSEQUENT EVENTS
On October 22, 1997, pursuant to shareholder approval on October 16, 1997, a
Certificate of Amendment to the Company's Certificate of Incorporation that
increased the Company's total authorized Common Stock to fifty million
(50,000,000) shares, eliminated the Preferred Stock, par value $1.312704617 per
share, from the Company's authorized capital, and authorized the Company to
issue up to five million (5,000,000) shares of preferred stock, par value $0.001
per share, was filed with the Secretary of State of the State of Delaware.
In October 1997 Imprimis Investors LLC and Wexford Spectrum Investors LLC
(collectively, the "Wexford Affiliates") expended $5.0 million to purchase five
million shares of Common Stock and warrants to purchase five hundred thousand
shares of Common Stock at an exercise price of $2.00 per share, exercisable at
any time prior to October 15, 2002 (the "Initial Warrants").
The Wexford Affiliates have acquired the Common Stock and the Warrants for
investment purposes pursuant to a certain Stock and Warrant Purchase Agreement
dated October 15, 1997, between PC Quote and the Wexford Affiliates (the
"Purchase Agreement"). Pursuant to the terms of the Purchase Agreement, on
October 15, 1997, the Wexford Affiliates purchased 1,450,000 shares of Common
Stock and the Initial Warrants for a purchase price of $1.45 million. On
October 20, 1997, pursuant to the terms of the Purchase Agreement, the Wexford
Affiliates purchased an additional 550,000 shares of Common Stock for a purchase
price of $0.55 million. On October 23, 1997, pursuant to the terms of the
Purchase Agreement, the Wexford Affiliates purchased an additional 3,000,000
shares of Common Stock for a purchase price of $3.0 million.
Page 9
<PAGE>
Up to four million of the shares of Common Stock purchased by the Wexford
Affiliates 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. In
the event that the rights offering is not completed on or prior to January 24,
1998, the Wexford Affiliates 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 Initial Warrants and, in the event the rights offering is not
completed on or prior to February 28, 1998, the Wexford Affiliates 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 Initial Warrants.
In contemplation of the Purchase Agreement, the Wexford Affiliates have agreed
not to participate in the rights offering. On October 31, 1997 a Form S-2
Registration Statement was filed with the Securities and Exchange Commission for
the rights offering.
Page 10
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
INTRODUCTION
The statements made herein that are not historical facts may contain
forward-looking information that involve substantial risks and uncertainties.
The Company's actual results, performance or achievements could differ
materially from the results, performance or achievements expressed in, or
implied by, these forward-looking statements. Among the factors that could
cause or contribute to such differences include the Company's ability to (i)
obtain adequate financing to fund its current and future business strategies,
(ii) attract and retain key employees, (iii) compete successfully against
competitive products and services, (iv) maintain its relationships with key
suppliers and providers of market data, (v) pay, refinance, or extend the up to
$2.25 million loan from PICO Holdings on or before December 31, 1997, and (vi)
the effect of economic and business conditions, generally.
RESULTS OF OPERATIONS:
FOR THE NINE MONTHS AND QUARTER ENDED SEPTEMBER 30, 1997
Service revenue for the nine months ended September 30,1997 decreased 2% from
the same period of 1996 and was essentially unchanged for the quarter ended
September 30, 1997 when compared to the same period of the prior year. The
decrease is due to the loss of two major customers in the Company's traditional
direct data feed business. The lost revenue, $3.8 million and $400,000 for the
nine months and quarter, respectively, has been substantially offset by
increases in service revenue in the Company's traditional and internet
businesses, as well as revenue from the sale of advertising on the internet.
Direct costs of services increased 46% and 23% for the nine months and quarters
ended September 30, 1997, respectively, over the same periods in 1996. Principal
components of these increases were royalties, leased equipment, communication
costs, and compensation directly attributable to internet operations and sales
of PCW6.0, payments to providers of market data, and maintenance of and
enhancements to the Company's traditional direct data feed systems.
Page 11
<PAGE>
Amortization of software development for the nine months and quarter ended
September 30, 1997 increased 56% and 36%, respectively, from the same periods of
the prior year, reflecting the investment in internet and direct data feed
products and delivery mechanisms.
Similarly, research and development costs increased 65% and 73%, respectively,
for the nine months and quarter ended September 30, 1997 as compared to the same
periods in 1996. The increase was due to additional charges for equipment leased
to upgrade systems' design and testing equipment, in addition to costs of
maintaining and enhancing previously developed products and services.
Selling and marketing costs increased 23% and 2%, respectively, for the nine
months and quarter ended September 30, 1997 over the same periods in 1996. The
increase was mainly due to commissions.
General and administrative expenses decreased 1% and 42% for the nine months and
the quarter ended September 30, 1997, respectively, from the same periods in
1996. The decreases were principally due to reductions in compensation and
related employee costs and a decrease in bad debt expense for the quarter as
compared to the prior year.
In June 1997, the Company underwent a significant management reorganization and
restructuring of operations. As a result, for the nine months ended September
30, 1997 the Company wrote off approximately $572,000 of unamortized software
development costs for previously capitalized software projects that were
discontinued. The management reorganization resulted in the Company incurring
employment related termination costs of $425,000 and $150,000 was paid to
terminate a contractual arrangement related to unprofitable operations.
Interest expense increased 1,150% and 1,681%, respectively, for the nine months
and quarter ended September 30. 1997 over the same periods in 1996. The
increases reflect the recognition of non-cash amortization of $467,016 and
$330,936 for the nine months and quarter, respectively, for the value of the
$2.5 million convertible subordinated debenture's beneficial conversion feature
and amortization of $442,640 and $264,810 for the nine months and quarter,
respectively, for the value of the common stock purchase warrants issued to PICO
Holdings, Inc. in connection with a financing arrangement. Also included is
interest on the bank term loan, the convertible subordinated debenture and
financing arrangement borrowings. See footnote 4 of the Notes to the Financial
Statements for additional information with respect to the financing arrangement.
Page 12
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES:
FOR THE NINE MONTHS AND QUARTER ENDED SEPTEMBER 30, 1997
Net cash declined by 93% for the nine months ended September 30, 1997 as
compared to 89% for the nine months ended September 30, 1996. Expenditures for
new equipment and capitalized software costs were 39% lower than last year. New
direct borrowings of $2,290,000 from the 1997 loan facility with PICO Holdings,
discussed below, were also incurred. Agreements were reached with various
vendors to extend payments under negotiated payment plans.
The Company's $1.0 million line of credit with Lakeside Bank expired in February
1997. The Company is experiencing working capital constraints which has hindered
operations. To lessen such constraints, on May 5, 1997 the Company entered into
a loan and security agreement with its principal shareholder, PICO Holdings
("PICO"), to provide working capital loans of up to $1.0 million. In connection
with the extension by PICO of such $1.0 million facility, the Company and PICO
restructured the terms of its $2.5 million subordinated convertible debenture
("Debenture"). In August 1997, the Company and PICO amended the loan and
security agreement increasing the facility by $1.0 million to $2.0 million. In
September 1997, the Company and PICO further amended the loan and security
agreement increasing the facility by $0.25 million to $2.25 million and
extending the due date for all borrowings on the facility, plus accrued interest
to December 31, 1997. See footnote 4 of the Notes to the Financial Statements
and Part II of this report for additional information regarding the loan
facility.
In October 1997 the Company issued five million (5,000,000) shares of Common
Stock in exchange for five million dollars ($5,000,000), subject to the
Company's right to repurchase four million shares at one dollar ($1) per share
upon completion of a rights offering. See note 5 of the Footnotes to the
Financial Statements and Part II of this report for additional information
regarding the equity capital infusion.
Page 13
<PAGE>
Part II
ITEM 2. CHANGES IN SECURITIES
On September 22, 1997 the Company and PICO Holdings, Inc., ("Holdings")
executed a second amendment to the Loan and Security Agreement dated as of May
5, 1997, as amended on August 8, 1997 (the "Loan Agreement") to further increase
the amount of the secured loan from Holdings to the Company from $2.0 million to
$2.25 million. The terms of the Loan Agreement otherwise remained substantially
the same, except that the maturity date was extended to December 31, 1997. In
consideration of the amendment to the Loan Agreement, the Company granted
Holdings a Common Stock Purchase Warrant entitling Holdings to purchase a
minimum of 129,032 shares of the Company's Common Stock at a price per share
(the "Warrant Price") equal to the lesser of (a) the mean of the closing bid
price per share for the 20 trading days preceding exercise of the Warrant or (b)
$1.9375 per share. The Warrant expires on April 30, 2000. In lieu of exercising
the Warrant for cash, Holdings may elect to receive shares of the Company's
Common Stock equal to the "value" of the Warrant determined in accordance with a
formula specified in the Warrant (the "Conversion Value"). The number of shares
of the Company's Common Stock subject to the Warrant and the Warrant Price will
be adjusted to reflect stock dividends; reclassifications or changes of
outstanding securities of the Company; any consolidation, merger or
reorganization of the Company; stock splits; issuances of rights, options or
warrants to all holders of shares of the Company's Common Stock exercisable at
less than the current market price per share; and other distributions to all
holders of shares of the Company's Common Stock. In the event of any sale,
license or other disposition of all or substantially all of the assets of the
Company or any reorganization, consolidation or merger involving the Company in
which the holders of the Company's securities before the transaction
beneficially own less than 50% of the outstanding voting securities of the
surviving entity (an "Acquisition"), if the successor entity does not assume the
obligations of the Warrant and Holdings has not fully exercised the Warrant, the
unexercised portion of the Warrant will be deemed automatically converted into
shares of the Company's Common Stock at the Conversion Value. Alternatively,
Holdings may elect to cause the Company to purchase the exercised portion of the
Warrant for cash upon the closing of any Acquisition for an amount equal to (a)
the fair market value of any consideration that would have been received had
Holdings exercised the unexercised portion of the Warrant immediately before the
record date for determining stockholders entitled to participate in the proceeds
of the Acquisition, less (b) the aggregate Warrant Price. The Warrant also
provides for certain piggyback registration rights and a one-time demand
registration right.
In October 1997 Imprimis Investors LLC and Wexford Spectrum Investors LLC
(collectively, the "Wexford Affiliates") expended $5.0 million to purchase
five million shares of the Company's Common Stock and warrants to purchase
five hundred thousand shares of the Company's Common Stock at an exercise
price of $2.00 per
Page 14
<PAGE>
share, exercisable at any time prior to October 15, 2002 (the "Initial
Warrants").
The Wexford Affiliates have acquired the Common Stock and the Warrants for
investment purposes pursuant to a certain Stock and Warrant Purchase
Agreement dated October 15, 1997, between PC Quote and the Wexford Affiliates
(the "Purchase Agreement"). Pursuant to the terms of the Purchase Agreement,
on October 15, 1997, the Wexford Affiliates purchased 1,450,000 shares of
Common Stock and the Initial Warrants for a purchase price of $1.45 million.
On October 20, 1997, pursuant to the terms of the Purchase Agreement, the
Wexford Affiliates purchased an additional 550,000 shares of Common Stock for
a purchase price of $0.55 million. On October 23, 1997, pursuant to the
terms of the Purchase Agreement, the Wexford Affiliates purchased an
additional 3,000,000 shares of Common Stock for a purchase price of $3.0
million.
Up to four million of the shares of Common Stock purchased by the Wexford
Affiliates 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 the Rights Offering.
In the event that the Rights Offering is not completed on or prior to
January 24, 1998, the Wexford Affiliates 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 Initial Warrants and, in the event the Rights Offering is
not completed on or prior to February 28, 1998, the Wexford Affiliates 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 Initial Warrants.
In contemplation of the Purchase Agreement, the Wexford Affiliates have
agreed not to participate in the Rights Offering. On October 31, 1997 a Form
S-2 Registration Statement was filed with the Securities and Exchange
Commission for the rights offering.
Page 15
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a. The following Exhibits are filed herein:
Exhibit 4.1
Form of Common Stock Purchase Warrant for 129,032 shares of the
Company's Common Stock issued to PICO Holdings, Inc.
Exhibit 4.2
Form of Common Stock Purchase Warrant for 350,000 shares of the
Company's Common Stock issued to Imprimis Investors LLC
Exhibit 4.3
Form of Common Stock Purchase Warrant for 150,000 shares of the
Company's Common Stock issued to Wexford Spectrum Investors LLC
Exhibit 4.4
Form of Common Stock Purchase Warrant for 101,500 shares of the
Company's Common Stock issued to Imprimis Investors LLC
Exhibit 4.5
Form of Common Stock Purchase Warrant for 43,500 shares of the
Company's Common Stock issued to Wexford Spectrum Investors LLC
.
Exhibit 4.6
Form of Common Stock Purchase Warrant for 38,500 shares of the
Company's Common Stock issued to Imprimis Investors LLC
Exhibit 4.7
Form of Common Stock Purchase Warrant for 16,500 shares of the
Company's Common Stock issued to Wexford Spectrum Investors LLC
Exhibit 4.8
Form of Common Stock Purchase Warrant for 175,000 shares of the
Company's Common Stock issued to Imprimis Investors LLC
Exhibit 4.9
Form of Common Stock Purchase Warrant for 75,000 shares of the
Company's Common Stock issued to Wexford Spectrum Investors LLC
Exhibit 4.10
Form of Common Stock Purchase Warrant for 35,000 shares of the
Company's Common Stock issued to Imprimis Investors LLC
Page 16
<PAGE>
Exhibit 4.11
Form of Common Stock Purchase Warrant for 15,000 shares of the
Company's Common Stock issued to Wexford Spectrum Investors LLC
Exhibit 4.12
Certificate of Amendment dated as of October 22, 1997, to
Company's Certificate of Incorporation.
Exhibit 10.1
Form of Second Joint Amendment to Agreement to Provide
Insurance; Disbursement Request and Authorization; Promissory
Note; and Loan and Security Agreement
Exhibit 10.2
Form of Stock And Warrant Purchase Agreement dated as of
October 15, 1997 between the Company and Imprimis Investors LLC
and Wexford Spectrum Investors LLC
Exhibit 27
Financial Data Schedule
b. The Company's Current Report on Form 8-K was filed on July 16, 1997 and
amended on August 26, 1997.
SIGNATURES
__________
Pursuant to the requirements of the Exchange Act of 1934, the Company caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PC QUOTE, INC.
Date: November 14, 1997 By: /s/ Jim R. Porter
-------------------------
Jim R. Porter
Chief Executive Officer
By: /s/ John E. Juska
-------------------------
John E. Juska
Chief Financial Officer
Page 17
<PAGE>
Common Stock Warrant
Minimum 129,032 Shares
(subject to adjustment)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING
THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after April 30, 2000
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, PICO HOLDINGS, INC., a
California corporation, is entitled to purchase a minimum of one hundred
twenty nine thousand thirty two (129,032) shares of Common Stock ("Warrant
Shares") of PC QUOTE, INC., a Delaware corporation, at a price per share
equal to the mean of the closing bid price per share for the twenty (20)
preceding trading days (or such fewer number of days as such public market
has existed) as reported by Nasdaq or such national securities exchange as
the Common Stock (as defined below) is traded on, but in no event shall the
price be greater than $1.9375 per share ("Warrant Price"), subject to
adjustments and all other terms and conditions set forth in this Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the
context otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(b) "Acquisition" shall mean any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of
the Company's securities before the transaction beneficially own less than
50% of the outstanding voting securities of the surviving entity after the
transaction.
(c) "Commission" shall mean the United States Securities and
Exchange Commission, or any other Federal agency at the time administering
the Act.
(d) "Common Stock" shall mean shares of the Company's presently or
subsequently authorized Common Stock, and any stock into which such Common
Stock may hereafter be exchanged.
<PAGE>
(e) "Company" shall mean PC QUOTE, INC., a Delaware corporation,
and any corporation which shall succeed to or assume the obligations of PC
QUOTE, INC., under this
<PAGE>
Warrant.
(f) "Date of Grant" shall mean September 22, 1997.
(g) "Exercise Date" shall mean the effective date of the delivery
of the Notice of Exercise pursuant to Sections 4 and 11 below.
(h) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(i) "Notes" shall mean (i) the Convertible Subordinated Debenture,
as amended, held by Physicians Insurance of Ohio, and (ii) other indebtedness
of the Company in the aggregate principal amount of up to $2,250,000, owed to
PICO HOLDINGS, INC., which credit shall have been extended concurrently with
the issuance of this Warrant.
(j) "Shares" shall mean shares of the Company's Common Stock, as
described in the Company's Certificate of Incorporation.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is
issued in consideration of the loan by PICO HOLDINGS, INC. to the Company as
described in the Notes issued concurrently with this Warrant by the Company.
3. TERM. The purchase right represented by this Warrant is exercisable
only during the period commencing upon the Date of Grant and ending on April
30, 2000.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and compliance
with all applicable Federal and state securities laws, the purchase right
represented by this Warrant may be exercised, in whole or in part and from
time to time, by the Holder by (i) surrender of this Warrant and delivery of
the Notice of Exercise (the form of which is attached hereto as Exhibit A),
duly executed, at the principal office of the Company and (ii) payment to the
Company of an amount equal to the product of the then applicable Warrant
Price multiplied by the number of Shares then being purchased pursuant to one
of the payment methods permitted under Section 4(b) below.
(b) METHOD OF PAYMENT. Payment shall be made either (1) by check
drawn on a United States bank and for United States funds made payable to the
Company, or (2) by wire transfer of United States funds for the account of
the Company.
(c) NET ISSUE EXERCISE. Notwithstanding any provisions herein to
the contrary, in lieu of exercising this Warrant for cash, the Holder may
elect to receive shares equal to the value (as determined below) of this
Warrant (or the portion thereof being canceled) by surrender of this
2
<PAGE>
Warrant at the principal office of the Company together with a properly
endorsed notice of exercise and notice of such election in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:
Y (A-B)
X = ___________
A
Where X = the number of shares of Common Stock to be issued to the Holder,
Y = the number of shares of Common Stock purchasable under the Warrant
or, if only a portion of the Warrant is being exercised, the
portion of the Warrant being canceled (at the date of such
calculation),
A = the fair market value of one share of the Company's Common Stock
(at the date of such calculation), and
B = the Warrant Price (as adjusted to the date of such calculation).
For purposes of the above calculation, fair market value of one share of
Common Stock shall be determined by the Company's Board of Directors in good
faith; provided, however, that where there exists a public market for the
Company's Common Stock at the time of such exercise, fair market value shall
mean the average over the preceding twenty trading days (or such fewer number
of days as such public market has existed) of the mean of the closing bid and
asked prices on the over-the-counter market as reported by Nasdaq, or if the
Common Stock is then traded on a national securities exchange or the Nasdaq
National Market, the average over the preceding twenty trading days (or such
fewer number of days as the Common Stock has been so traded) of the closing
sale prices on the principal national securities exchange or the National
Market on which it is so traded.
(d) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be delivered to the Holder within ten days of delivery of the
Notice of Exercise and, unless this Warrant has been fully exercised or has
expired, a new warrant representing the portion of the Shares with respect to
which this Warrant shall not then have been exercised shall also be issued to
the Holder within such ten day period.
(e) NO FRACTIONAL SHARES. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the fair market
value per Share as of the date of exercise.
3
<PAGE>
(f) COMPANY'S REPRESENTATIONS.
(i) All Shares which may be issued upon the exercise of the
purchase right represented by this Warrant shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any
liens and encumbrances except for restrictions on transfer under applicable
federal and state securities laws. During the period within which the
purchase right represented by this Warrant may be exercised, the Company
shall at all times use its best efforts to have authorized, and reserved for
the purpose of issuance upon exercise of the purchase right represented by
this Warrant, a sufficient number of Shares to provide for the exercise of
the purchase right represented by this Warrant;
(ii) This Warrant has been duly authorized and executed by the
Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;
(iii) The execution and delivery of this Warrant are not,
and the issuance of the Shares upon exercise of this Warrant in accordance
with the terms hereof will not be inconsistent with the Company's Certificate
of Incorporation or Bylaws, do not and will not contravene any law,
governmental rule or regulation, judgment or order applicable to the Company,
and do not and will not conflict with or contravene any provision of, or
constitute a default under, any material indenture, mortgage, contract or
other instrument of which the Company is a party or by which it is bound, or
require the registration or filing with or the taking of any action in
respect of or by, any federal, state or local government authority or agency
(other than such consents, approvals, notices, actions, or filings as have
already been obtained or made, as the case may be).
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number of
securities issuable upon the exercise of this Warrant and the Warrant Price
shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or from
time to time on or after the date hereof the holders of the Common Stock of
the Company (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received or, on or
after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock of the Company by way of dividend then, and in each case,
the Holder of this Warrant shall, upon the exercise hereof, be entitled to
receive, in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration therefor, the
amount of such other or additional stock of the Company which such Holder
would hold on the date of such exercise had it been the holder of record of
such Common Stock on the date hereof and had thereafter, during the period
from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock receivable by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by paragraphs (b) and (c) of this Section 5.
4
<PAGE>
(b) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case of
any reclassification or change of the outstanding securities of the Company
or of any consolidation, merger or reorganization of the Company on or after
the date hereof, then and in each such case the Holder of this Warrant, upon
the exercise hereof at any time after the consummation of such
reclassification, change, consolidation, merger or reorganization, shall be
entitled to receive, in lieu of or in addition to the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities to which such Holder would have
been entitled upon such consummation if such Holder had exercised this
Warrant immediately prior thereto, all subject to further adjustment as
provided in subparagraphs (a) and (c); in each such case, the terms of this
Paragraph 5 shall be applicable to the shares of stock or other securities
property receivable upon the exercise of this Warrant after such consummation.
(c) STOCK SPLITS AND REVERSE STOCK SPLITS. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately
reduced and the number of shares receivable upon exercise of this Warrant
shall thereby be proportionately increased; and, conversely, if at any time
on or after the date hereof the outstanding number of shares of Common Stock
shall be combined into a smaller number of shares, the Warrant Price in
effect immediately prior to such combination shall thereby be proportionately
increased and the number of shares receivable upon exercise of the Warrant
shall be proportionately decreased.
(d) RIGHTS, OPTIONS OR WARRANTS. If the Company issues rights,
options or warrants to all holders of its shares of Common Stock, without any
charge to such holders, entitling them (for a period expiring within 45 days
after the record date mentioned below in this paragraph (d)) to subscribe for
or to purchase shares of Common Stock at a price per share lower than the
then current market price per share of Common Stock at the record date
mentioned below (as defined in paragraph (f) below), the number of Shares
thereafter purchasable upon exercise of each Warrant shall be determined by
multiplying the number of Shares theretofore purchasable upon exercise of
each Warrant by a fraction, of which the numerator shall be the number of
shares of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock offered for subscription or purchase, and
of which the denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares which the aggregate
offering price of the total number of shares of Common Stock so offered would
purchase at the then current market price per share of Common Stock. Such
adjustment shall be made whenever such rights, options or warrants are
issued, and shall become effective retroactively to immediately after the
record date for the determination of stockholders entitled to receive such
rights, options or warrants.
(e) OTHER DISTRIBUTIONS. If the Company distributes to all holders
of its shares of Common Stock shares of stock other than Common Stock or
evidences of its indebtedness or assets (excluding cash dividends payable out
of consolidated earnings or retained earnings and dividends or distributions
referred to in paragraph (a) above) or rights, options or warrants or
convertible or exchangeable securities containing the right to subscribe for
or purchase shares of Common Stock
5
<PAGE>
(excluding those referenced in paragraph (2) above), then in each case the
number of Shares thereafter issuable upon the exercise of each warrant shall
be determined by multiplying the number of Shares theretofore issuable upon
the exercise of each Warrant, by a fraction, of which the numerator shall be
the current market price per share of Common Stock (as defined in paragraph
(f) below) on the record date mentioned below in this paragraph (e), and of
which the denominator shall be the current market price per share of Common
Stock on such record date, less the then fair value (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
conclusive) of the portion of the shares of stock other than the Common Stock
or assets or evidences of indebtedness so distributed or of such subscription
rights, options or warrants, or of such convertible or exchangeable
securities applicable to one share of Common Stock. Such adjustment shall be
made whenever any such distribution is made, and shall become effective on
the date of distribution retroactive to immediately after the record date for
the determination of stockholders entitled to receive such distribution.
(f) CURRENT MARKET PRICE. For the purposes of any computation
under paragraphs (d) and (c) of this Section 5, the current market price per
share of Common Stock at any date shall be the average of the daily closing
prices for fifteen consecutive trading days commencing twenty trading days
before the date of such computation. The closing price for each day shall be
the closing sale price or in case no such reported sale takes place on such
day, the average of the closing bid and asked prices for such day, in either
case on the principal national securities exchange or the Nasdaq National
Market on which the shares are listed or admitted to trading, or if they are
not listed or admitted to trading on any national securities exchange or the
Nasdaq National Market, but are traded in the over-the-counter market, the
average of the representative closing bid and asked quotations for the Common
Stock, on the NASDAQ system or any comparable system, or if the Common Stock
or, in case no sale is publicly reported, the average of the closing bid and
asked prices as furnished by two members of the NASD selected from time to
time by the Company for that purpose.
(g) ADJUSTMENTS TO WARRANT PRICE. Whenever the number of Shares
purchasable upon exercise of each Warrant is adjusted, as herein provided,
the Warrant Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Shares purchasable upon the exercise of each
Warrant immediately prior to such adjustment, and of which the denominator
shall be the number of Shares so purchasable immediately thereafter.
(h) CERTIFICATE AS TO ADJUSTMENTS. Upon each adjustment of
the Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish the Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such
adjustment is based. The Company shall, upon written request, furnish the
Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.
6. ACQUISITIONS
6
<PAGE>
(a) ASSUMPTION OF WARRANT. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this
Warrant shall be exercisable for the same securities, cash, and property as
would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record date
for the Acquisition and subsequent closing.
(b) NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and the
Holder has not otherwise exercised this Warrant in full, then the unexercised
portion of this Warrant shall be deemed to have been automatically converted
pursuant to Section 4(c) and thereafter the Holder shall participate in the
acquisition on the same terms as other holders of the same class of
securities of the Company.
(c) PURCHASE RIGHT. Notwithstanding the foregoing, at the election
of the Holder, the Company shall purchase the unexercised portion of this
Warrant for cash upon the closing of any Acquisition for an amount equal to
(a) the fair market value of any consideration that would have been received
by the Holder in consideration of the Shares had the Holder exercised the
unexercised portion of this Warrant immediately before the record date for
determining the stockholders entitled to participate in the proceeds of the
Acquisition, less (b) the aggregate Warrant Price of the Shares, but in no
event less than zero.
7. NOTICES; INFORMATION; REGISTRATION.
(a) NOTICE OF CERTAIN EVENTS. If the Company proposes at any time
(a) to declare any dividend or distribution upon its Common Stock, whether in
cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any class
or series of its stock any additional shares of stock of any class or series
or other rights; (c) to effect any reclassification or recapitalization of
Common Stock; (d) to merge or consolidate with or into any other corporation,
or sell, lease, license, or convey all or substantially all of its assets, or
to liquidate, dissolve or wind up; or (e) offer holders of registration
rights the opportunity to participate in an underwritten public offering of
the company's securities for cash, then, in connection with each such event,
the Company shall give the Holder (1) at least 20 days prior written notice
of the date on which a record will be taken for such dividend, distribution,
or subscription rights (and specifying the date on which the holders of
Common Stock will be entitled thereto) or in respect of the matters referred
to in (c) and (d) above for determining rights to vote, if any; (2) in the
case of the matters referred to in (c) and (d) above at least 20 days prior
written notice of the date when the same will take place (and specifying the
date on which the holders of Common Stock will be entitled to exchange their
Common Stock for securities or other property deliverable upon the occurrence
of such event); and (3) in the case of the matter referred to in (e) above,
the same notice as is given to the holders of such registration rights.
(b) INFORMATION RIGHTS. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a)
promptly after mailing, copies of all notices or other written communications
to the stockholders of the Company, (b) within ninety days after the end of
each fiscal year of the Company, the annual audited financial statements of
the Company audited by independent public accountants of recognized standing
and (c) within forty-five days
7
<PAGE>
after the end of each of the first three quarters of each fiscal year, the
Company's quarterly, unaudited financial statements.
(c) REGISTRATION UNDER SECURITIES ACT OF 1933. The Company agrees
that the Shares shall be subject to the registration rights set forth on
Exhibit B.
8. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
DISPOSITION OF SHARES.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof, agrees
that this Warrant and the Shares to be issued upon the exercise hereof are
being acquired solely for its own account and not as a nominee for any other
party and not with a view toward the resale or distribution thereof and that
it will not offer, sell or otherwise dispose of this Warrant or any Shares to
be issued upon the exercise hereof except under circumstances which will not
result in a violation of the Act. This Warrant and the Shares to be issued
upon the exercise hereof (unless registered under the Act) shall be imprinted
with a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES,
THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the exercise
hereof shall bear any legends required by the securities laws of any
applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant may
not be transferred or assigned in whole or in part without compliance with
all applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions satisfactory to the Company, if requested by the Company and
the transfer is to a person other than a general partner or affiliate of the
initial Holder). Subject to the provisions of this Warrant with respect to
compliance with the Act, title to this Warrant may be transferred by
endorsement and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery. The Company shall act promptly to
record transfers of this Warrant on its books, but the Company may treat the
registered holder of this Warrant as the absolute owner of this Warrant for
all purposes, notwithstanding any notice to the contrary.
(c) DISPOSITION OF SHARES. With respect to any offer, sale,
transfer or other disposition of any Shares acquired pursuant to the exercise
of this Warrant prior to registration of
8
<PAGE>
such Shares, except for any such offer, sale, transfer or other disposition
of Shares to an affiliate of the initial Holder, the Holder and each
subsequent holder of this Warrant agrees to give written notice to the
Company prior thereto, describing briefly the manner thereof, and if such
transfer is not pursuant to Rule 144, a written opinion of legal counsel for
such holder, if requested by the Company, to the effect that such offer, sale
or other disposition may be effected without registration or qualification of
such Shares. Notwithstanding the foregoing, such Shares may be offered, sold
or otherwise disposed of in accordance with Rule 144, provided that the
Company shall have been furnished with such information as the Company may
reasonably request to provide a reasonable assurance that the provisions of
Rule 144 have been satisfied. Each certificate representing the Shares thus
transferred (except a transfer pursuant to Rule 144) shall bear a restrictive
legend as to the applicable restrictions on transferability in order to
insure compliance with the Act, unless in the aforesaid opinion of legal
counsel for the holder, such legend is not required in order to insure
compliance with the Act.
9. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities
of the Company which may at any time be issuable on the exercise of this
Warrant for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance
of stock, reclassification of stock, consolidation, merger, transfer of
assets or otherwise) or, except as expressly required herein, to receive
notice of meetings, or to receive dividends or subscription rights or
otherwise until this Warrant shall have been exercised and the Shares
issuable upon exercise hereof shall have become deliverable, as provided
herein.
10. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of
an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company at its expense shall execute and deliver, in lieu of
this Warrant, a new warrant of like tenor.
11. EXCHANGE OF WARRANT. Subject to the other provisions of this
Warrant, on surrender of this Warrant for exchange, and subject to the
provisions of this Warrant with respect to compliance with the Act, the
Company at its expense shall issue to or on the order of the Holder a new
warrant or warrants of like tenor, in the name of the Holder or as the Holder
(on payment by the Holder of any applicable transfer taxes) may direct, for
the number of Shares issuable upon exercise thereof.
12. NOTICES. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such Holder from
time to time.
9
<PAGE>
13. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. TITLES AND SUBTITLES; FORMS OF PRONOUNS. The titles of the Sections
and Subsections of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in this Warrant
shall be deemed to include masculine, feminine and neuter forms.
16. ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
Dated: September 22, 1997 PC QUOTE, INC., a Delaware corporation
By:____________________________________
, President
By:____________________________________
, Secretary
10
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
TO: PC QUOTE, INC.
1. The undersigned Holder of the attached Common Stock Purchase Warrant
hereby elects to exercise its purchase right under such Warrant with respect
to ________________ Shares, as defined in the Warrant.
2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed check drawn on a United States bank and for United
States funds made payable to the Company in the amount of
$_____________;
[ ] by wire transfer of United States funds to the account of the
Company in the amount of $___________, which transfer has been
made before or simultaneously with the delivery of this Notice
pursuant to the instructions of the Company; or
[ ] pursuant to the Net Exercise provisions set forth in Section 4(c)
of the Warrant.
3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below:
Name:
_________________________________________________
Address:
______________________________________________
_______________________________________________________
Tax Ident. No.: ______________________________________
HOLDER:
__________________________________
____________________________
By:
_____________________
Date: Title:
<PAGE>
EXHIBIT B
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purpose of the Warrant to which this Statement of
Registration Rights is attached as Exhibit B:
(a) The terms "register," "registered," and "registration" refer to
a registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended
(the "Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means the shares of Common
Stock issued or issuable upon exercise of the Warrant;
(c) The term "Holder" means the original holder of the Warrant and
any transferee of the Warrant; and
(d) The term "Warrant" means the original Warrants issued in
connection with the Company's initial public offering and all Warrants issued
as a result of the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes at any time before April 30, 2000 to register (including for
this purpose a registration effected by the Company for stockholders other
than Holder) any of its stock or other securities under the Act in connection
with the public offering of such securities solely for cash (other than a
registration relating solely to the sale of securities to participants in a
Company stock plan, or a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities), the
Company shall, at such time, promptly give Holder written notice of such
registration. Upon the written request of Holder given within twenty days
after mailing of such notice by the Company, the Company shall, subject to
the provisions of Section 8 hereof and Section 5 of the Warrant, cause to be
registered under the Act all of the Registrable Securities that each such
Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any time before
April 30, 2000, receive from Holders holding 40% or more of the outstanding
Registrable Securities a written request (to be exercised only once) that the
Company effect a registration and any related qualification or compliance
with respect to all or a part of the Registrable Securities (which
registration shall at the election of Holder either be for a registration for
a primary issuance of the Shares upon the exercise of the Warrant or the
resale of the Shares previously issued upon exercise of the Warrant at the
election of Holder) owned by such Holder, the Company will promptly notify
each other Holder (if any) of such request and will:
<PAGE>
(a) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of a Holder's
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder of
registration rights joining in such request as are specified in a written
request given within 20 days after receipt of such written notice from the
Company; PROVIDED, HOWEVER, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
3: (1) if the Company has effected a registration of Registrable Securities
pursuant to this Section 3 within the preceding 12 months; (2) if the Company
shall furnish to Holder a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its
stockholders for such registration to be effected at such time, in which
event the Company shall have the right to defer the filing of the
registration statement for a period of not more than 60 days after receipt of
the request of Holder under this Section 3; PROVIDED, HOWEVER, that the
Company shall not utilize this right more than once in any twelve-month
period; or (3) in any jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process
in effecting such registration, qualification or compliance; and,
(b) subject to the foregoing, file a registration statement
covering the Registrable Securities and other securities so requested to be
registered promptly after receipt of the request or requests of Holder, and
in any event within 30 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the Warrant, in
the event that the Company is to effect the registration of any Registrable
Securities pursuant to Section 2 or 3 hereof, the Company shall promptly:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the
holders of a majority of the securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days, or
such shorter period as is required to dispose of all securities covered by
such registration statement.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the provisions
of the Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as Holder may reasonably request in order
to facilitate the disposition of Registrable Securities owned by Holder.
2
<PAGE>
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue
Sky laws of such jurisdictions as shall be reasonably requested by Holder,
provided that the Company shall not be required in connection therewith or as
a condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions or to agree to any
restrictions as to the conduct of its business in the ordinary course thereof.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Holder shall
also enter into and perform its obligations under such underwriting agreement.
(f) Notify Holder at any time when a prospectus relating to
Registrable Securities of Holder covered by such registration statement is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made.
(g) Furnish, at the request of Holder, on the date that such
Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to the Warrant, if such securities
are being sold through underwriters, or, if such securities are not being
sold through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated such
date, of counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder and (ii) a letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in the Warrant
or this Statement of Registration Rights to the contrary, the Company shall
not be obligated to effect any such registration, qualification or
compliance, pursuant to Section 2 or 3, if application of Rule 144 would
allow Holder requesting a registration under Section 2 or 3 to dispose of the
Registrable Securities for which a registration is demanded within a single
90-day period.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to the Warrant that
the selling Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by Holder, and the intended method of
disposition of such securities as shall be required to effect the
registration of their Registrable Securities.
3
<PAGE>
7. EXPENSES. The Company shall bear and pay all expenses (other than
underwriting discounts and commissions) incurred in connection with any
registration, filing or qualification of Registrable Securities, including
(without limitation) all registration, filing, and qualification fees, legal,
printers and accounting fees relating thereto, and the cost of any reasonable
fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any registrations in
which Registrable Securities have a right to be included pursuant to Section
2 hereof and which involves an underwriting of securities being issued by the
Company, the Company shall not be required, under Section 2 hereof, to
include any of Holder's securities in such underwriting unless Holder accepts
the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it, and then only in such quantity as will not, in
the opinion of the underwriters, jeopardize the success of the offering by
the Company. If the total amount of securities, including Registrable
Securities, requested by stockholders to be included in such offering exceeds
the amount of securities sold other than by the Company that the underwriters
reasonably believe compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters believe
will not jeopardize the success of the offering, the securities so included
to be apportioned pro rata among the selling Holder and other shareholders
holding contractual registration rights according to the total amount of
securities entitled to be included therein owned by each selling stockholder
or in such other proportions as shall mutually be agreed to by Holder and
each other selling stockholder.
9. INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement filed by the Company:
(a) The Company will indemnify and holder harmless Holder, its
officers, directors, and agents, any underwriter (as defined in the Act) for
Holder and each person, if any, who controls Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), against any losses, claims, damages, or liabilities (joint or
several) asserted by a third party to which they may become subject under the
Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of
or are based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, or (iii) any violation or
alleged violation of the Company of the Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Act, the 1934
Act or any state securities law; and the Company will reimburse Holder, any
of its officers or directors, underwriter or controlling person for any legal
or other expenses reasonably incurred by them, as incurred, in connection
with investigating or defending any such loss, claim, damage, liability, or
action; PROVIDED, HOWEVER, that the indemnity agreement contained in this
Section 9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be
4
<PAGE>
unreasonably withheld), nor shall the Company be liable in any such case for
any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and
in conformity with written information furnished expressly for use in
connection with such registration by such Holder, underwriter or controlling
person.
(b) Holder will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company with the meaning of
the Act, any underwriter and any other shareholder selling securities in such
registration statement or any of its directors or officers or any person who
controls such shareholder, against any losses, claims, damages, or
liabilities (joint or several) asserted by a third party to which the Company
or any such director, officer, controlling person, or underwriter or
controlling person, or other such shareholder or director, officer or
controlling person may become subject, under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information furnished
by Holder expressly for use in connection with such registration; and Holder
will reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer, controlling person, underwriter or controlling
person, other shareholder, officer, director, or controlling person, as
incurred, in connection with investigating or defending any such loss, claim,
damage, liability, or action; PROVIDED, HOWEVER, that the obligations of
Holder hereunder shall be limited to an amount equal to the net proceeds
(equal to the offering price less the exercise price, expenses and
underwriting commissions and discounts) to such Holder of Shares sold as
contemplated herein. Notwithstanding the foregoing, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of Holder, which consent shall not be
unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying part under this Section 9,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; PROVIDED, HOWEVER, that an
indemnified party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in
such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 9, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 9.
5
<PAGE>
10. REPORTS UNDER THE 1934 ACT. With a view to making available to
Holder the benefits of Rule 144 promulgated under the Act and any other rule
or regulation of the SEC that may at any time permit Holder to sell
securities of the Company to the public without registration the Company will
endeavor to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable Holder to utilize an
abbreviated registration statement for the sale of its Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company
that it has complied with the reporting requirements of SEC Rule 144, the Act
and the 1934 Act, or that it qualifies as a registrant whose securities may
be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing Holder of any rule or
regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to the Warrant may be assigned by
Holder to a permitted transferee or assignee of the Warrant or of at least
400,000 Shares, provided the Company is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act.
6
<PAGE>
Common Stock Purchase Warrant
350,000 Shares
(subject to adjustment)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING
THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after October 15, 2002
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, IMPRIMIS INVESTORS LLC, a limited
liability company organized under the laws of the State of Delaware
("Imprimis") is entitled to purchase up to Three Hundred Fifty Thousand
(350,000) Shares of Common Stock of PC QUOTE, INC., a Delaware corporation,
at a price of Two Dollars ($2.00) per Share (the "Warrant Price"), subject to
adjustments and all other terms and conditions set forth in this Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the
context otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(b) "Acquisition" shall mean any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of
the Company's securities before the transaction beneficially own less than
50% of the outstanding voting securities of the surviving entity after the
transaction.
(c) "Commission" shall mean the Securities and Exchange Commission,
or any other Federal agency at the time administering the Act.
<PAGE>
(d) "Common Stock" shall mean shares of the Company's presently or
subsequently authorized common stock, par value $0.001, and any stock for
which such common stock may hereafter be exchanged.
(e) "Company" shall mean PC QUOTE, INC., a Delaware corporation,
and any corporation which shall succeed to or assume the obligations of PC
QUOTE, INC., under this Warrant.
(f) "Date of Grant" shall mean October 15, 1997.
(g) "Exercise Date" shall mean the effective date of the delivery
of the Notice of Exercise pursuant to Section 4 below.
(h) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(i) "Shares" shall mean shares of Common Stock.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is
issued in consideration of the purchase price paid by Imprimis to the Company
as set forth in that certain Stock and Warrant Purchase Agreement dated as of
the date hereof and made and entered into by and between the Company and
Imprimis and Wexford Spectrum Investors LLC, a Delaware limited liability
company.
3. TERM. The purchase right represented by this Warrant is exercisable
only during the period commencing upon the Date of Grant and ending on
October 15, 2002.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and compliance
with all applicable Federal and state securities laws, the purchase right
represented by this Warrant may be exercised, in whole or in part and from
time to time, by the Holder by (i) surrender of this Warrant and delivery of
the Notice of Exercise (the form of which is attached hereto as Exhibit A),
duly executed, at the principal office of the Company and (ii) payment to the
Company of an amount equal to the product of the then applicable Warrant
Price multiplied by the number of Shares then being purchased pursuant to one
of the payment methods permitted under Section 4(b) below.
(b) METHOD OF PAYMENT. Payment shall be made either (1) by
cashier's or certified check drawn on a United States bank and for United
States funds made payable to the Company, or (2) by wire transfer of United
States funds for the account of the Company.
(c) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be
2
<PAGE>
delivered to the Holder within five days of delivery of the Notice of
Exercise and, unless this Warrant has been fully exercised or has expired, a
new warrant representing the portion of the Shares with respect to which this
Warrant shall not then have been exercised shall also be issued to the Holder
within such ten day period.
(d) NO FRACTIONAL SHARES. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the fair
market value per Share as of the date of exercise.
(e) COMPANY'S REPRESENTATIONS.
(i) The Company is soliciting proxies in connection with its
Annual Meeting of Stockholders for, among other things, a proposal to amend
its Certificate of Incorporation to increase the number of shares of Common
Stock authorized for issuance. If such proposal is approved by the Company's
stockholders, the Company shall file a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Amendment") in order to increase such number of authorized
shares of Common Stock. From and after the date of filing the Amendment, all
Shares which may be issued upon the exercise of the purchase right
represented by this Warrant shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer under applicable federal and state
securities laws. From and after the date of the Amendment, during the period
within which the purchase right represented by this Warrant may be exercised,
the Company shall at all times use its best efforts to have authorized, and
reserved for the purpose of issuance upon exercise of the purchase right
represented by this Warrant, a sufficient number of Shares to provide for the
exercise of the purchase right represented by this Warrant;
(ii) This Warrant has been duly authorized and executed by the
Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;
(iii) The execution and delivery of this Warrant are not,
and from and after the date of the Amendment, the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company's Certificate of Incorporation or Bylaws, do
not and will not contravene any law, governmental rule or regulation,
judgment or order applicable to the Company, and do not and will not conflict
with or contravene any provision of, or constitute a default under, any
material indenture, mortgage, contract or other instrument of which the
Company is a party or by which it is bound, or require the registration or
filing with or the taking of any action in respect of or by, any federal,
state or local government authority or agency (other than such consents,
approvals, notices, actions, or filings as have already been obtained or
made, as the case may be).
3
<PAGE>
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number of
Shares issuable upon the exercise of this Warrant and the Warrant Price shall
be subject to adjustment from time to time upon the occurrence of certain
events, as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or from
time to time on or after the date hereof the holders of the Common Stock of
the Company (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received or, on or
after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock of the Company by way of dividend then, and in each case,
the Holder of this Warrant shall, upon the exercise hereof, be entitled to
receive, in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration therefor, the
amount of such other or additional stock of the Company which such Holder
would hold on the date of such exercise had it been the holder of record of
such Common Stock on the date hereof and had thereafter, during the period
from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock receivable by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by paragraphs (b) and (c) of this Section 5.
(b) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case of
any reclassification or change of the outstanding securities of the Company
or of any consolidation, merger or reorganization of the Company on or after
the date hereof, then and in each such case the Holder of this Warrant, upon
the exercise hereof at any time after the consummation of such
reclassification, change, consolidation, merger or reorganization, shall be
entitled to receive, in lieu of or in addition to the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities to which such Holder would have
been entitled upon such consummation if such Holder had exercised this
Warrant immediately prior thereto, all subject to further adjustment as
provided in subparagraphs (a) and (c); in each such case, the terms of this
Paragraph 5 shall be applicable to the shares of stock or other securities
property receivable upon the exercise of this Warrant after such consummation.
(c) STOCK SPLITS AND REVERSE STOCK SPLITS. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately
reduced and the number of shares receivable upon exercise of this Warrant
shall thereby be proportionately increased; and, conversely, if at any time
on or after the date hereof the outstanding number of shares of Common Stock
shall be combined into a smaller number of shares, the Warrant Price in
effect immediately prior to such combination shall thereby be proportionately
increased and the number of shares receivable upon exercise of the Warrant
shall be proportionately decreased.
(d) ADJUSTMENTS TO WARRANT PRICE. Whenever the number of Shares
purchasable upon exercise of this Warrant is adjusted, as herein provided,
the Warrant Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior to such
4
<PAGE>
adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment, and of which the denominator shall be the number of Shares
so purchasable immediately thereafter.
(e) CERTIFICATES AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish the Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such
adjustment is based. The Company shall, upon written request, furnish the
Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.
6. ACQUISITIONS.
(a) ASSUMPTION OF WARRANT. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this
Warrant shall be exercisable for the same securities, cash, and property as
would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record date
for the Acquisition and subsequent closing.
(b) NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and the
Holder has not otherwise exercised this Warrant in full, then the unexercised
portion of this Warrant shall be deemed to have been automatically converted
pursuant to Section 4(c) and thereafter the Holder shall participate in the
acquisition on the same terms as other holders of the same class of
securities of the Company.
7. NOTICES; INFORMATION; REGISTRATION.
(a) NOTICE OF CERTAIN EVENTS. If the Company proposes at any time
(a) to effect any reclassification or recapitalization of Common Stock; (b)
to merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (c) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the
company's securities for cash, then, in connection with each such event, the
Company shall give the Holder at least 14 days prior written notice of the
date on which a record will be taken for such action.
(b) INFORMATION RIGHTS. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a)
promptly after mailing, copies of all notices or other written communications
to the stockholders of the Company, (b) within ninety days after the end of
each fiscal year of the Company, the annual audited financial statements of
the Company audited by independent public accountants of recognized standing
and (c) within forty-five days after the end of each of the first three
quarters of each fiscal year, the Company's quarterly, unaudited financial
statements.
5
<PAGE>
(c) REGISTRATION UNDER SECURITIES ACT OF 1933. The Company agrees
that the Shares shall be subject to the registration rights set forth on
Exhibit B.
8. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
DISPOSITION OF SHARES.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof, agrees
that this Warrant and the Shares to be issued upon the exercise hereof are
being acquired solely for its own account and not as a nominee for any other
party and not with a view toward the resale or distribution thereof and that
it will not offer, sell or otherwise dispose of this Warrant or any Shares to
be issued upon the exercise hereof except under circumstances which will not
result in a violation of the Act. This Warrant and the Shares to be issued
upon the exercise hereof (unless registered under the Act) shall be imprinted
with a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the exercise
hereof shall bear any legends required by the securities laws of any
applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant may
not be transferred or assigned in whole or in part without compliance with
all applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions satisfactory to the Company, if requested by the Company and
the transfer is to a person other than a general partner or affiliate of the
initial Holder). Subject to the provisions of this Warrant with respect to
compliance with the Act, title to this Warrant may be transferred by
endorsement and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery. The Company shall act promptly to
record transfers of this Warrant on its books, but the Company may treat the
registered holder of this Warrant as the absolute owner of this Warrant for
all purposes, notwithstanding any notice to the contrary.
6
<PAGE>
(c) DISPOSITION OF SHARES. With respect to any offer, sale,
transfer or other disposition of any Shares acquired pursuant to the exercise
of this Warrant prior to registration of such Shares, except for any such
offer, sale, transfer or other disposition of Shares to an affiliate of the
initial Holder, the Holder and each subsequent holder of this Warrant agrees
to give written notice to the Company prior thereto, describing briefly the
manner thereof, and if such transfer is not pursuant to Rule 144, a written
opinion of legal counsel for such holder, if requested by the Company, to the
effect that such offer, sale or other disposition may be effected without
registration or qualification of such Shares. Notwithstanding the foregoing,
such Shares may be offered, sold or otherwise disposed of in accordance with
Rule 144, provided that the Company shall have been furnished with such
information as the Company may reasonably request to provide a reasonable
assurance that the provisions of Rule 144 have been satisfied. Each
certificate representing the Shares thus transferred (except a transfer
pursuant to Rule 144) shall bear a restrictive legend as to the applicable
restrictions on transferability in order to insure compliance with the Act,
unless in the aforesaid opinion of legal counsel for the holder, such legend
is not required in order to insure compliance with the Act.
9. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities
of the Company which may at any time be issuable on the exercise of this
Warrant for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance
of stock, reclassification of stock, consolidation, merger, transfer of
assets or otherwise) or, except as expressly required herein, to receive
notice of meetings, or to receive dividends or subscription rights or
otherwise until this Warrant shall have been exercised and the Shares
issuable upon exercise hereof shall have become deliverable, as provided
herein.
10. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of
an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company at its expense shall execute and deliver, in lieu of
this Warrant, a new warrant of like tenor.
11. EXCHANGE OF WARRANT. Subject to the other provisions of this
Warrant, on surrender of this Warrant for exchange, and subject to the
provisions of this Warrant with respect to compliance with the Act, the
Company at its expense shall issue to or on the order of the Holder a new
warrant or warrants of like tenor, in the name of the Holder or as the Holder
(on payment by the Holder of any applicable transfer taxes) may direct, for
the number of Shares issuable upon exercise thereof.
12. NOTICES. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or
7
<PAGE>
mailed by first-class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company or the Holder, as the case
may be, in writing by the Company or such Holder from time to time.
13. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. TITLES AND SUBTITLES; FORMS OF PRONOUNS. The titles of the Sections
and Subsections of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in this Warrant
shall be deemed to include masculine, feminine and neuter forms.
16. ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
Dated: October 15, 1997. PC QUOTE, INC., a Delaware corporation
By:
-----------------------------------------
Jim R. Porter, Chief Executive Officer
By:
-----------------------------------------
Darlene E. Czaja, Secretary
8
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
TO: PC QUOTE, INC.
1. The undersigned Holder of the attached Common Stock Purchase
Warrant hereby elects to exercise its purchase right under such Warrant with
respect to ________________ Shares, as defined in the Warrant.
2. The undersigned Holder elects to pay the aggregate Warrant
Price for such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed cashier's or certified check drawn on a
United States bank and for United States funds made
payable to the Company in the amount of $_____________; or
[ ] by wire transfer of United States funds to the account of
the Company in the amount of $___________, which transfer
has been made before or simultaneously with the delivery of
this Notice pursuant to the instructions of the Company.
3. Please issue a stock certificate or certificates representing
the appropriate number of Shares in the name of the undersigned or in such
other names as is specified below:
Name:
-------------------------------------------
Address:
-------------------------------------------
-------------------------------------------
Tax ID No.:
----------------------
HOLDER:
-------------------------------------
By:
-------------------------------
Date: Title:
------------------------------- ----------------------
<PAGE>
EXHIBIT B
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purposes of the Warrant to which this
Statement of Registration Rights is attached as Exhibit B:
(a) The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act of 1933,
as amended (the "Act"), and the declaration or ordering of effectiveness of
such registration statement or document;
(b) The term "Registrable Securities" means the shares of
Common Stock issued or issuable upon exercise of the Warrant;
(c) The term "Holder" means the original holder of the Warrant
and any transferee of the Warrant; and
(d) The term "Warrant" means the original Warrants issued in
connection with the Stock and Warrant Purchase Agreement, dated as of October
15, 1997, between the Company, as Seller, and Imprimis Investors LLC, a
Delaware limited liability company, and Wexford Spectrum Investors LLC, a
Delaware limited liability company, as Buyers, and all Warrants issued as a
result of the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to do so)
the Company proposes at any time before October 15, 2002 to register
(including for this purpose a registration effected by the Company for
stockholders other than Holder) any of its stock or other securities under
the Act in connection with the public offering for its own account of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, or a registration
on any form which does not include substantially the same information as
would be required to be included in a registration statement covering the
sale of the Registrable Securities), the Company shall, at such time,
promptly give Holder written notice of such registration. Upon the written
request of Holder given within twenty days after mailing of such notice by
the Company, the Company shall, subject to the provisions of Section 8 hereof
and Section 5 of the Warrant, cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any time
before October 15, 2002, receive from Holders holding 40% or more of the
outstanding Registrable Securities a written request (to be exercised only
once) that the Company effect a registration
<PAGE>
and any related qualification or compliance with respect to all or a part of
the Registrable Securities (which registration shall at the election of
Holder either be for a registration for a primary issuance of the Shares upon
the exercise of the Warrant or the resale of the Shares previously issued
upon exercise of the Warrant at the election of Holder) owned by such Holder,
the Company will promptly notify each other Holder (if any) of such request
and will:
(a) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of a
Holder's Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other holder of
registration rights joining in such request as are specified in a written
request given within 20 days after receipt of such written notice from the
Company; PROVIDED, HOWEVER, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
3: (1) if the Company has effected a registration of Registrable Securities
pursuant to this Section 3 within the preceding 12 months; (2) if the Company
shall furnish to Holder a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its
stockholders for such registration to be effected at such time, in which
event the Company shall have the right to defer the filing of the
registration statement for a period of not more than 60 days after receipt of
the request of Holder under this Section 3; PROVIDED, HOWEVER, that the
Company shall not utilize this right more than once in any twelve-month
period; or (3) in any jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process
in effecting such registration, qualification or compliance; and,
(b) subject to the foregoing, file a registration statement
covering the Registrable Securities and other securities so requested to be
registered promptly after receipt of the request or requests of Holder, and
in any event within 30 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the
Warrant, in the event that the Company is to effect the registration of any
Registrable Securities pursuant to Section 2 or 3 hereof, the Company shall
promptly:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
holders of a majority of the securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days, or
such shorter period as is required to dispose of all securities covered by
such registration statement.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.
2
<PAGE>
(c) Furnish to Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as Holder may reasonably request in order
to facilitate the disposition of Registrable Securities owned by Holder.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities
or Blue Sky laws of such jurisdictions as shall be reasonably requested by
Holder, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions or
to agree to any restrictions as to the conduct of its business in the
ordinary course thereof.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Holder
shall also enter into and perform its obligations under such underwriting
agreement.
(f) Notify Holder at any time when a prospectus relating to
Registrable Securities of Holder covered by such registration statement is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made.
(g) Furnish, at the request of Holder, on the date that such
Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to the Warrant, if such securities
are being sold through underwriters, or, if such securities are not being
sold through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated such
date, of counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder and (ii) a letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in the
Warrant or this Statement of Registration Rights to the contrary, the Company
shall not be obligated to effect any such registration, qualification or
compliance, pursuant to Section 2 or 3, if application of Rule 144 would
allow Holder requesting a registration under Section 2 or 3 to dispose of the
Registrable Securities for which a registration is demanded within a single
90-day period.
3
<PAGE>
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to the Warrant that
the selling Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by Holder, and the intended method of
disposition of such securities as shall be required to effect the
registration of their Registrable Securities.
7. EXPENSES. The Company shall bear and pay all expenses (other
than underwriting discounts and commissions) incurred in connection with any
registration, filing or qualification of Registrable Securities, including
(without limitation) all registration, filing, and qualification fees, legal,
printers and accounting fees relating thereto, and the cost of any reasonable
fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any
registrations in which Registrable Securities have a right to be included
pursuant to Section 2 hereof and which involves an underwriting of securities
being issued by the Company, the Company shall not be required, under Section
2 hereof, to include any of Holder's securities in such underwriting unless
Holder accepts the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it, and then only in such quantity
as will not, in the opinion of the underwriters, jeopardize the success of
the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the
underwriters believe will not jeopardize the success of the offering, the
securities so included to be apportioned pro rata among the selling Holder
and other shareholders holding contractual registration rights according to
the total amount of securities entitled to be included herein owned by each
selling stockholder or in such other proportions as shall mutually be agreed
to by Holder and each other selling stockholder.
9. INDEMNIFICATION. In the event any Registrable Securities are
included n a registration statement filed by the Company:
(a) The Company will indemnify and holder harmless Holder, its
officers, directors, and agents, any underwriter (as defined in the Act) for
Holder and each person, if any, who controls Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), against any losses, claims, damages, or liabilities (joint or
several) asserted by a third party to which they may become subject under the
Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of
or are based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, or (iii) any violation or
alleged violation of the Company of the Act, the 1934 Act, any state
4
<PAGE>
securities law or any rule or regulation promulgated under the Act, the 1934
Act or any state securities law; and the Company will reimburse Holder, any
of its officers or directors, underwriter or controlling person for any legal
or other expenses reasonably incurred by them, as incurred, in connection
with investigating or defending any such loss, claim, damage, liability, or
action; PROVIDED, HOWEVER, that the indemnity agreement contained in this
Section 9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration
by such Holder, underwriter or controlling person.
(b) Holder will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company with the meaning of
the Act, any underwriter and any other shareholder selling securities in such
registration statement or any of its directors or officers or any person who
controls such shareholder, against any losses, claims, damages, or
liabilities (joint or several) asserted by a third party to which the Company
or any such director, officer, controlling person, or underwriter or
controlling person, or other such shareholder or director, officer or
controlling person may become subject, under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information furnished
by Holder expressly for use in connection with such registration; and Holder
will reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer, controlling person, underwriter or controlling
person, other shareholder, officer, director, or controlling person, as
incurred, in connection with investigating or defending any such loss, claim,
damage, liability, or action; PROVIDED, HOWEVER, that the obligations of
Holder hereunder shall be limited to an amount equal to the net proceeds
(equal to the offering price less the exercise price, expenses and
underwriting commissions and discounts) to such Holder of Shares sold as
contemplated herein. Notwithstanding the foregoing, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of Holder, which consent shall not be
unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying part under this Section 9,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; PROVIDED, HOWEVER, that an
indemnified party shall have the right to retain its
5
<PAGE>
own counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 9.
10. REPORTS UNDER THE 1934 ACT. With a view to making available to
Holder the benefits of Rule 144 promulgated under the Act and any other rule
or regulation of the SEC that may at any time permit Holder to sell
securities of the Company to the public without registration the Company will
endeavor to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable Holder to
utilize an abbreviated registration statement for the sale of its Registrable
Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company
that it has complied with the reporting requirements of SEC Rule 144, the Act
and the 1934 Act, or that it qualifies as a registrant whose securities may
be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing Holder of any rule or
regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to the Warrant may be
assigned by Holder to a permitted transferee or assignee of the Warrant of at
least 150,000 Shares, provided the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act.
6
<PAGE>
Common Stock Purchase Warrant
150,000 Shares
(subject to adjustment)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after October 15, 2002
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, WEXFORD SPECTRUM INVESTORS LLC, a
limited liability company organized under the laws of the State of Delaware
("Wexford Spectrum") is entitled to purchase up to One Hundred Fifty Thousand
(150,000) Shares of Common Stock of PC QUOTE, INC., a Delaware corporation, at a
price of Two Dollars ($2.00) per Share (the "Warrant Price"), subject to
adjustments and all other terms and conditions set forth in this Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the context
otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(b) "Acquisition" shall mean any sale, license, or other disposition
of all or substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
(c) "Commission" shall mean the Securities and Exchange Commission,
or any other Federal agency at the time administering the Act.
<PAGE>
(d) "Common Stock" shall mean shares of the Company's presently or
subsequently authorized common stock, par value $0.001, and any stock for which
such common stock may hereafter be exchanged.
(e) "Company" shall mean PC QUOTE, INC., a Delaware corporation, and
any corporation which shall succeed to or assume the obligations of PC QUOTE,
INC., under this Warrant.
(f) "Date of Grant" shall mean October 15, 1997.
(g) "Exercise Date" shall mean the effective date of the delivery of
the Notice of Exercise pursuant to Section 4 below.
(h) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(i) "Shares" shall mean shares of Common Stock.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is
issued in consideration of the purchase price paid by Wexford Spectrum to the
Company as set forth in that certain Stock and Warrant Purchase Agreement dated
as of the date hereof and made and entered into by and between the Company, as
Seller, and Wexford Spectrum and Imprimis Investors LLC, a Delaware limited
liability company, as Buyers.
3. TERM. The purchase right represented by this Warrant is exercisable
only during the period commencing upon the Date of Grant and ending on
October 15, 2002.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and compliance
with all applicable Federal and state securities laws, the purchase right
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the Holder by (i) surrender of this Warrant and delivery of the
Notice of Exercise (the form of which is attached hereto as Exhibit A), duly
executed, at the principal office of the Company and (ii) payment to the Company
of an amount equal to the product of the then applicable Warrant Price
multiplied by the number of Shares then being purchased pursuant to one of the
payment methods permitted under Section 4(b) below.
(b) METHOD OF PAYMENT. Payment shall be made either (1) by cashier's
or certified check drawn on a United States bank and for United States funds
made payable to the Company, or (2) by wire transfer of United States funds for
the account of the Company.
(c) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be
2
<PAGE>
delivered to the Holder within five days of delivery of the
Notice of Exercise and, unless this Warrant has been fully exercised or has
expired, a new warrant representing the portion of the Shares with respect to
which this Warrant shall not then have been exercised shall also be issued to
the Holder within such ten day period.
(d) NO FRACTIONAL SHARES. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the fair market
value per Share as of the date of exercise.
(e) COMPANY'S REPRESENTATIONS.
(i) The Company is soliciting proxies in connection with its
Annual Meeting of Stockholders for, among other things, a proposal to amend its
Certificate of Incorporation to increase the number of shares of Common Stock
authorized for issuance. If such proposal is approved by the Company's
stockholders, the Company shall file a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Amendment") in order to increase such number of authorized shares
of Common Stock. From and after the date of filing the Amendment, all Shares
which may be issued upon the exercise of the purchase right represented by this
Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and
non-assessable, and free of any liens and encumbrances except for restrictions
on transfer under applicable federal and state securities laws. From and after
the date of the Amendment, during the period within which the purchase right
represented by this Warrant may be exercised, the Company shall at all times use
its best efforts to have authorized, and reserved for the purpose of issuance
upon exercise of the purchase right represented by this Warrant, a sufficient
number of Shares to provide for the exercise of the purchase right represented
by this Warrant;
(ii) This Warrant has been duly authorized and executed by the
Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;
(iii) The execution and delivery of this Warrant are not, and
from and after the date of the Amendment, the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company's Certificate of Incorporation or Bylaws, do not
and will not contravene any law, governmental rule or regulation, judgment or
order applicable to the Company, and do not and will not conflict with or
contravene any provision of, or constitute a default under, any material
indenture, mortgage, contract or other instrument of which the Company is a
party or by which it is bound, or require the registration or filing with or the
taking of any action in respect of or by, any federal, state or local government
authority or agency (other than such consents, approvals, notices, actions, or
filings as have already been obtained or made, as the case may be).
3
<PAGE>
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number of
Shares issuable upon the exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time upon the occurrence of certain events,
as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or from
time to time on or after the date hereof the holders of the Common Stock of the
Company (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or, on or after the record
date fixed for the determination of eligible stockholders, shall have become
entitled to receive, without payment therefor, other or additional stock of the
Company by way of dividend then, and in each case, the Holder of this Warrant
shall, upon the exercise hereof, be entitled to receive, in addition to the
number of shares of Common Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of such other or additional
stock of the Company which such Holder would hold on the date of such exercise
had it been the holder of record of such Common Stock on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock receivable
by it as aforesaid during such period, giving effect to all adjustments called
for during such period by paragraphs (b) and (c) of this Section 5.
(b) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case of
any reclassification or change of the outstanding securities of the Company or
of any consolidation, merger or reorganization of the Company on or after the
date hereof, then and in each such case the Holder of this Warrant, upon the
exercise hereof at any time after the consummation of such reclassification,
change, consolidation, merger or reorganization, shall be entitled to receive,
in lieu of or in addition to the stock or other securities and property
receivable upon the exercise hereof prior to such consummation, the stock or
other securities to which such Holder would have been entitled upon such
consummation if such Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in subparagraphs (a) and
(c); in each such case, the terms of this Paragraph 5 shall be applicable to the
shares of stock or other securities property receivable upon the exercise of
this Warrant after such consummation.
(c) STOCK SPLITS AND REVERSE STOCK SPLITS. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately reduced
and the number of shares receivable upon exercise of this Warrant shall thereby
be proportionately increased; and, conversely, if at any time on or after the
date hereof the outstanding number of shares of Common Stock shall be combined
into a smaller number of shares, the Warrant Price in effect immediately prior
to such combination shall thereby be proportionately increased and the number of
shares receivable upon exercise of the Warrant shall be proportionately
decreased.
(d) ADJUSTMENTS TO WARRANT PRICE. Whenever the number of Shares
purchasable upon exercise of this Warrant is adjusted, as herein provided, the
Warrant Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to such
4
<PAGE>
adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment, and of which the denominator shall be the number of Shares
so purchasable immediately thereafter.
(e) CERTIFICATES AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish the Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such adjustment
is based. The Company shall, upon written request, furnish the Holder a
certificate setting forth the Warrant Price in effect upon the date thereof and
the series of adjustments leading to such Warrant Price.
6. ACQUISITIONS.
(a) ASSUMPTION OF WARRANT. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing.
(b) NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and the Holder
has not otherwise exercised this Warrant in full, then the unexercised portion
of this Warrant shall be deemed to have been automatically converted pursuant to
Section 4(c) and thereafter the Holder shall participate in the acquisition on
the same terms as other holders of the same class of securities of the Company.
7. NOTICES; INFORMATION; REGISTRATION.
(a) NOTICE OF CERTAIN EVENTS. If the Company proposes at any time
(a) to effect any reclassification or recapitalization of Common Stock; (b) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (c) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the company's securities
for cash, then, in connection with each such event, the Company shall give the
Holder at least 14 days prior written notice of the date on which a record will
be taken for such action.
(b) INFORMATION RIGHTS. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a) promptly
after mailing, copies of all notices or other written communications to the
stockholders of the Company, (b) within ninety days after the end of each fiscal
year of the Company, the annual audited financial statements of the Company
audited by independent public accountants of recognized standing and (c) within
forty-five days after the end of each of the first three quarters of each fiscal
year, the Company's quarterly, unaudited financial statements.
5
<PAGE>
(c) REGISTRATION UNDER SECURITIES ACT OF 1933. The Company agrees
that the Shares shall be subject to the registration rights set forth on
Exhibit B.
8. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
DISPOSITION OF SHARES.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof, agrees
that this Warrant and the Shares to be issued upon the exercise hereof are being
acquired solely for its own account and not as a nominee for any other party and
not with a view toward the resale or distribution thereof and that it will not
offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon
the exercise hereof except under circumstances which will not result in a
violation of the Act. This Warrant and the Shares to be issued upon the
exercise hereof (unless registered under the Act) shall be imprinted with a
legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the exercise hereof
shall bear any legends required by the securities laws of any applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant may
not be transferred or assigned in whole or in part without compliance with all
applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions satisfactory to the Company, if requested by the Company and the
transfer is to a person other than a general partner or affiliate of the initial
Holder). Subject to the provisions of this Warrant with respect to compliance
with the Act, title to this Warrant may be transferred by endorsement and
delivery in the same manner as a negotiable instrument transferable by
endorsement and delivery. The Company shall act promptly to record transfers of
this Warrant on its books, but the Company may treat the registered holder of
this Warrant as the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.
6
<PAGE>
(c) DISPOSITION OF SHARES. With respect to any offer, sale, transfer
or other disposition of any Shares acquired pursuant to the exercise of this
Warrant prior to registration of such Shares, except for any such offer, sale,
transfer or other disposition of Shares to an affiliate of the initial Holder,
the Holder and each subsequent holder of this Warrant agrees to give written
notice to the Company prior thereto, describing briefly the manner thereof, and
if such transfer is not pursuant to Rule 144, a written opinion of legal counsel
for such holder, if requested by the Company, to the effect that such offer,
sale or other disposition may be effected without registration or qualification
of such Shares. Notwithstanding the foregoing, such Shares may be offered, sold
or otherwise disposed of in accordance with Rule 144, provided that the Company
shall have been furnished with such information as the Company may reasonably
request to provide a reasonable assurance that the provisions of Rule 144 have
been satisfied. Each certificate representing the Shares thus transferred
(except a transfer pursuant to Rule 144) shall bear a restrictive legend as to
the applicable restrictions on transferability in order to insure compliance
with the Act, unless in the aforesaid opinion of legal counsel for the holder,
such legend is not required in order to insure compliance with the Act.
9. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities of
the Company which may at any time be issuable on the exercise of this Warrant
for any purpose, nor shall anything contained herein be construed to confer upon
the Holder, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger, transfer of assets or
otherwise) or, except as expressly required herein, to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised and the Shares issuable upon exercise hereof
shall have become deliverable, as provided herein.
10. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
11. EXCHANGE OF WARRANT. Subject to the other provisions of this Warrant,
on surrender of this Warrant for exchange, and subject to the provisions of this
Warrant with respect to compliance with the Act, the Company at its expense
shall issue to or on the order of the Holder a new warrant or warrants of like
tenor, in the name of the Holder or as the Holder (on payment by the Holder of
any applicable transfer taxes) may direct, for the number of Shares issuable
upon exercise thereof.
12. NOTICES. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or
7
<PAGE>
mailed by first-class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company or the Holder, as the case
may be, in writing by the Company or such Holder from time to time.
13. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. TITLES AND SUBTITLES; FORMS OF PRONOUNS. The titles of the Sections
and Subsections of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in this Warrant shall
be deemed to include masculine, feminine and neuter forms.
16. ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
Dated: October 15, 1997. PC QUOTE, INC., a Delaware corporation
By: --------------------------------------
Jim R. Porter, Chief Executive Officer
By: --------------------------------------
Darlene E. Czaja, Secretary
8
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
TO: PC QUOTE, INC.
1. The undersigned Holder of the attached Common Stock Purchase Warrant
hereby elects to exercise its purchase right under such Warrant with respect to
________________ Shares, as defined in the Warrant.
2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed cashier's or certified check drawn on a United
States bank and for United States funds made payable to the
Company in the amount of $_____________; or
[ ] by wire transfer of United States funds to the account of the
Company in the amount of $___________, which transfer has been
made before or simultaneously with the delivery of this Notice
pursuant to the instructions of the Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below:
Name:
-----------------------------------
Address:
-----------------------------------
Tax ID No.:
---------------------
HOLDER:
---------------------------------------
By:
--------------------------------
Date: ---------------------
Title:
--------------------------------
<PAGE>
EXHIBIT B
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purposes of the Warrant to which this Statement of
Registration Rights is attached as Exhibit B:
(a) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document;
(b) The term "Registrable Securities" means the shares of Common
Stock issued or issuable upon exercise of the Warrant;
(c) The term "Holder" means the original holder of the Warrant and
any transferee of the Warrant; and
(d) The term "Warrant" means the original Warrants issued in
connection with the Stock and Warrant Purchase Agreement, dated as of
October 15, 1997, between the Company, as Seller, and Wexford Spectrum Investors
LLC, a Delaware limited liability company, and Imprimis Investors LLC, a
Delaware limited liability company, as Buyers, and all Warrants issued as a
result of the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes at any time before October 15, 2002 to register (including
for this purpose a registration effected by the Company for stockholders
other than Holder) any of its stock or other securities under the Act in
connection with the public offering for its own account of such securities
solely for cash (other than a registration relating solely to the sale of
securities to participants in a Company stock plan, or a registration on any
form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities), the Company shall, at such time, promptly give
Holder written notice of such registration. Upon the written request of
Holder given within twenty days after mailing of such notice by the Company,
the Company shall, subject to the provisions of Section 8 hereof and Section
5 of the Warrant, cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any time before
October 15, 2002, receive from Holders holding 40% or more of the outstanding
Registrable Securities a written request (to be exercised only once) that the
Company effect a registration
<PAGE>
and any related qualification or compliance with respect to all or a
part of the Registrable Securities (which registration shall at the election
of Holder either be for a registration for a primary issuance of the Shares
upon the exercise of the Warrant or the resale of the Shares previously
issued upon exercise of the Warrant at the election of Holder) owned by such
Holder, the Company will promptly notify each other Holder (if any) of such
request and will:
(a) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of a Holder's
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder of
registration rights joining in such request as are specified in a written
request given within 20 days after receipt of such written notice from the
Company; PROVIDED, HOWEVER, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
3: (1) if the Company has effected a registration of Registrable Securities
pursuant to this Section 3 within the preceding 12 months; (2) if the Company
shall furnish to Holder a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its
stockholders for such registration to be effected at such time, in which
event the Company shall have the right to defer the filing of the
registration statement for a period of not more than 60 days after receipt of
the request of Holder under this Section 3; PROVIDED, HOWEVER, that the
Company shall not utilize this right more than once in any twelve-month
period; or (3) in any jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process
in effecting such registration, qualification or compliance; and,
(b) subject to the foregoing, file a registration statement covering
the Registrable Securities and other securities so requested to be registered
promptly after receipt of the request or requests of Holder, and in any event
within 30 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the Warrant, in
the event that the Company is to effect the registration of any Registrable
Securities pursuant to Section 2 or 3 hereof, the Company shall promptly:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the holders
of a majority of the securities registered thereunder, keep such registration
statement effective for up to one hundred twenty (120) days, or such shorter
period as is required to dispose of all securities covered by such registration
statement.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
2
<PAGE>
(c) Furnish to Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as Holder may reasonably request in order to
facilitate the disposition of Registrable Securities owned by Holder.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by Holder, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions or to agree to any restrictions as
to the conduct of its business in the ordinary course thereof.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Holder shall also enter
into and perform its obligations under such underwriting agreement.
(f) Notify Holder at any time when a prospectus relating to
Registrable Securities of Holder covered by such registration statement is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made.
(g) Furnish, at the request of Holder, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to the Warrant, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to Holder and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in the Warrant or
this Statement of Registration Rights to the contrary, the Company shall not be
obligated to effect any such registration, qualification or compliance, pursuant
to Section 2 or 3, if application of Rule 144 would allow Holder requesting a
registration under Section 2 or 3 to dispose of the Registrable Securities for
which a registration is demanded within a single 90-day period.
3
<PAGE>
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to the Warrant that the
selling Holder shall furnish to the Company such information regarding itself,
the Registrable Securities held by Holder, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
7. EXPENSES. The Company shall bear and pay all expenses (other than
underwriting discounts and commissions) incurred in connection with any
registration, filing or qualification of Registrable Securities, including
(without limitation) all registration, filing, and qualification fees, legal,
printers and accounting fees relating thereto, and the cost of any reasonable
fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any registrations in
which Registrable Securities have a right to be included pursuant to Section 2
hereof and which involves an underwriting of securities being issued by the
Company, the Company shall not be required, under Section 2 hereof, to include
any of Holder's securities in such underwriting unless Holder accepts the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the opinion of
the underwriters, jeopardize the success of the offering by the Company. If the
total amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters reasonably believe
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters believe will not jeopardize the
success of the offering, the securities so included to be apportioned pro rata
among the selling Holder and other shareholders holding contractual registration
rights according to the total amount of securities entitled to be included
herein owned by each selling stockholder or in such other proportions as shall
mutually be agreed to by Holder and each other selling stockholder.
9. INDEMNIFICATION. In the event any Registrable Securities are included
n a registration statement filed by the Company:
(a) The Company will indemnify and holder harmless Holder, its
officers, directors, and agents, any underwriter (as defined in the Act) for
Holder and each person, if any, who controls Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), against any losses, claims, damages, or liabilities (joint or several)
asserted by a third party to which they may become subject under the Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation of the
Company of the Act, the 1934 Act, any state
4
<PAGE>
securities law or any rule or regulation promulgated under the Act, the 1934
Act or any state securities law; and the Company will reimburse Holder, any
of its officers or directors, underwriter or controlling person for any legal
or other expenses reasonably incurred by them, as incurred, in connection
with investigating or defending any such loss, claim, damage, liability, or
action; PROVIDED, HOWEVER, that the indemnity agreement contained in this
Section 9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration
by such Holder, underwriter or controlling person.
(b) Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Company with the meaning of the Act, any
underwriter and any other shareholder selling securities in such registration
statement or any of its directors or officers or any person who controls such
shareholder, against any losses, claims, damages, or liabilities (joint or
several) asserted by a third party to which the Company or any such director,
officer, controlling person, or underwriter or controlling person, or other such
shareholder or director, officer or controlling person may become subject, under
the Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by Holder expressly for use in connection with
such registration; and Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or controlling person, other shareholder, officer, director,
or controlling person, as incurred, in connection with investigating or
defending any such loss, claim, damage, liability, or action; PROVIDED, HOWEVER,
that the obligations of Holder hereunder shall be limited to an amount equal to
the net proceeds (equal to the offering price less the exercise price, expenses
and underwriting commissions and discounts) to such Holder of Shares sold as
contemplated herein. Notwithstanding the foregoing, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of Holder, which consent shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying part under this Section 9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its
5
<PAGE>
own counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 9.
10. REPORTS UNDER THE 1934 ACT. With a view to making available to Holder
the benefits of Rule 144 promulgated under the Act and any other rule or
regulation of the SEC that may at any time permit Holder to sell securities of
the Company to the public without registration the Company will endeavor to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable Holder to utilize an
abbreviated registration statement for the sale of its Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144, the Act and the
1934 Act, or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested in availing Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration or
pursuant to such form.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to the Warrant may be assigned by
Holder to a permitted transferee or assignee of the Warrant of all 150,000
Shares, provided the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; and provided, further, that such assignment shall be effective
only if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Act.
6
<PAGE>
Common Stock Purchase Warrant
101,500 Shares
(subject to adjustment)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after October 15, 2002
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, IMPRIMIS INVESTORS LLC, a limited
liability company organized under the laws of the State of Delaware ("Wexford
Spectrum") is entitled to purchase up to One Hundred One Thousand Five Hundred
(101,500) Shares of Common Stock of PC QUOTE, INC., a Delaware corporation, at a
price of Two Dollars ($2.00) per Share (the "Warrant Price"), subject to
adjustments and all other terms and conditions set forth in this Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the context
otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(b) "Acquisition" shall mean any sale, license, or other disposition
of all or substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
(c) "Commission" shall mean the Securities and Exchange Commission,
or any other Federal agency at the time administering the Act.
<PAGE>
(d) "Common Stock" shall mean shares of the Company's presently or
subsequently authorized common stock, par value $0.001, and any stock for which
such common stock may hereafter be exchanged.
(e) "Company" shall mean PC QUOTE, INC., a Delaware corporation, and
any corporation which shall succeed to or assume the obligations of PC QUOTE,
INC., under this Warrant.
(f) "Date of Grant" shall mean October 15, 1997.
(g) "Exercise Date" shall mean the effective date of the delivery of
the Notice of Exercise pursuant to Section 4 below.
(h) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(i) "Shares" shall mean shares of Common Stock.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is
issued in consideration of the purchase price paid by Wexford Spectrum to the
Company as set forth in that certain Stock and Warrant Purchase Agreement dated
as of the date hereof and made and entered into by and between the Company, as
Seller, and Wexford Spectrum and Imprimis Investors LLC, a Delaware limited
liability company, as Buyers.
3. TERM. The purchase right represented by this Warrant is exercisable
only during the period commencing upon the Date of Grant and ending on
October 15, 2002.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and compliance
with all applicable Federal and state securities laws, the purchase right
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the Holder by (i) surrender of this Warrant and delivery of the
Notice of Exercise (the form of which is attached hereto as Exhibit A), duly
executed, at the principal office of the Company and (ii) payment to the Company
of an amount equal to the product of the then applicable Warrant Price
multiplied by the number of Shares then being purchased pursuant to one of the
payment methods permitted under Section 4(b) below.
(b) METHOD OF PAYMENT. Payment shall be made either (1) by cashier's
or certified check drawn on a United States bank and for United States funds
made payable to the Company, or (2) by wire transfer of United States funds for
the account of the Company.
(c) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be
2
<PAGE>
delivered to the Holder within five days of delivery of the Notice of
Exercise and, unless this Warrant has been fully exercised or has expired, a
new warrant representing the portion of the Shares with respect to which this
Warrant shall not then have been exercised shall also be issued to the Holder
within such ten day period.
(d) NO FRACTIONAL SHARES. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the fair market
value per Share as of the date of exercise.
(e) COMPANY'S REPRESENTATIONS.
(i) The Company is soliciting proxies in connection with its
Annual Meeting of Stockholders for, among other things, a proposal to amend
its Certificate of Incorporation to increase the number of shares of Common
Stock authorized for issuance. If such proposal is approved by the Company's
stockholders, the Company shall file a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Amendment") in order to increase such number of authorized
shares of Common Stock. From and after the date of filing the Amendment, all
Shares which may be issued upon the exercise of the purchase right
represented by this Warrant shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer under applicable federal and state
securities laws. From and after the date of the Amendment, during the period
within which the purchase right represented by this Warrant may be exercised,
the Company shall at all times use its best efforts to have authorized, and
reserved for the purpose of issuance upon exercise of the purchase right
represented by this Warrant, a sufficient number of Shares to provide for the
exercise of the purchase right represented by this Warrant;
(ii) This Warrant has been duly authorized and executed by
the Company and is a valid and binding obligation of the Company enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;
(iii) The execution and delivery of this Warrant are not, and
from and after the date of the Amendment, the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company's Certificate of Incorporation or Bylaws, do
not and will not contravene any law, governmental rule or regulation,
judgment or order applicable to the Company, and do not and will not conflict
with or contravene any provision of, or constitute a default under, any
material indenture, mortgage, contract or other instrument of which the
Company is a party or by which it is bound, or require the registration or
filing with or the taking of any action in respect of or by, any federal,
state or local government authority or agency (other than such consents,
approvals, notices, actions, or filings as have already been obtained or
made, as the case may be).
3
<PAGE>
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number of
Shares issuable upon the exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time upon the occurrence of certain events,
as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or from
time to time on or after the date hereof the holders of the Common Stock of the
Company (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or, on or after the record
date fixed for the determination of eligible stockholders, shall have become
entitled to receive, without payment therefor, other or additional stock of the
Company by way of dividend then, and in each case, the Holder of this Warrant
shall, upon the exercise hereof, be entitled to receive, in addition to the
number of shares of Common Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of such other or additional
stock of the Company which such Holder would hold on the date of such exercise
had it been the holder of record of such Common Stock on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock receivable
by it as aforesaid during such period, giving effect to all adjustments called
for during such period by paragraphs (b) and (c) of this Section 5.
(b) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case of
any reclassification or change of the outstanding securities of the Company or
of any consolidation, merger or reorganization of the Company on or after the
date hereof, then and in each such case the Holder of this Warrant, upon the
exercise hereof at any time after the consummation of such reclassification,
change, consolidation, merger or reorganization, shall be entitled to receive,
in lieu of or in addition to the stock or other securities and property
receivable upon the exercise hereof prior to such consummation, the stock or
other securities to which such Holder would have been entitled upon such
consummation if such Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in subparagraphs (a) and
(c); in each such case, the terms of this Paragraph 5 shall be applicable to the
shares of stock or other securities property receivable upon the exercise of
this Warrant after such consummation.
(c) STOCK SPLITS AND REVERSE STOCK SPLITS. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately reduced
and the number of shares receivable upon exercise of this Warrant shall thereby
be proportionately increased; and, conversely, if at any time on or after the
date hereof the outstanding number of shares of Common Stock shall be combined
into a smaller number of shares, the Warrant Price in effect immediately prior
to such combination shall thereby be proportionately increased and the number of
shares receivable upon exercise of the Warrant shall be proportionately
decreased.
(d) ADJUSTMENTS TO WARRANT PRICE. Whenever the number of Shares
purchasable upon exercise of this Warrant is adjusted, as herein provided, the
Warrant Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to such
4
<PAGE>
adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment, and of which the denominator shall be the number of Shares
so purchasable immediately thereafter.
(e) CERTIFICATES AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish the Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such adjustment
is based. The Company shall, upon written request, furnish the Holder a
certificate setting forth the Warrant Price in effect upon the date thereof and
the series of adjustments leading to such Warrant Price.
6. ACQUISITIONS.
(a) ASSUMPTION OF WARRANT. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing.
(b) NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and the Holder
has not otherwise exercised this Warrant in full, then the unexercised portion
of this Warrant shall be deemed to have been automatically converted pursuant to
Section 4(c) and thereafter the Holder shall participate in the acquisition on
the same terms as other holders of the same class of securities of the Company.
7. NOTICES; INFORMATION; REGISTRATION.
(a) NOTICE OF CERTAIN EVENTS. If the Company proposes at any time
(a) to effect any reclassification or recapitalization of Common Stock; (b) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (c) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the company's securities
for cash, then, in connection with each such event, the Company shall give the
Holder at least 14 days prior written notice of the date on which a record will
be taken for such action.
(b) INFORMATION RIGHTS. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a) promptly
after mailing, copies of all notices or other written communications to the
stockholders of the Company, (b) within ninety days after the end of each fiscal
year of the Company, the annual audited financial statements of the Company
audited by independent public accountants of recognized standing and (c) within
forty-five days after the end of each of the first three quarters of each fiscal
year, the Company's quarterly, unaudited financial statements.
5
<PAGE>
(c) REGISTRATION UNDER SECURITIES ACT OF 1933. The Company agrees
that the Shares shall be subject to the registration rights set forth on
Exhibit B.
8. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
DISPOSITION OF SHARES.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof, agrees
that this Warrant and the Shares to be issued upon the exercise hereof are being
acquired solely for its own account and not as a nominee for any other party and
not with a view toward the resale or distribution thereof and that it will not
offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon
the exercise hereof except under circumstances which will not result in a
violation of the Act. This Warrant and the Shares to be issued upon the
exercise hereof (unless registered under the Act) shall be imprinted with a
legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the exercise hereof
shall bear any legends required by the securities laws of any applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant may
not be transferred or assigned in whole or in part without compliance with all
applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions satisfactory to the Company, if requested by the Company and the
transfer is to a person other than a general partner or affiliate of the initial
Holder). Subject to the provisions of this Warrant with respect to compliance
with the Act, title to this Warrant may be transferred by endorsement and
delivery in the same manner as a negotiable instrument transferable by
endorsement and delivery. The Company shall act promptly to record transfers of
this Warrant on its books, but the Company may treat the registered holder of
this Warrant as the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.
6
<PAGE>
(c) DISPOSITION OF SHARES. With respect to any offer, sale, transfer
or other disposition of any Shares acquired pursuant to the exercise of this
Warrant prior to registration of such Shares, except for any such offer, sale,
transfer or other disposition of Shares to an affiliate of the initial Holder,
the Holder and each subsequent holder of this Warrant agrees to give written
notice to the Company prior thereto, describing briefly the manner thereof, and
if such transfer is not pursuant to Rule 144, a written opinion of legal counsel
for such holder, if requested by the Company, to the effect that such offer,
sale or other disposition may be effected without registration or qualification
of such Shares. Notwithstanding the foregoing, such Shares may be offered, sold
or otherwise disposed of in accordance with Rule 144, provided that the Company
shall have been furnished with such information as the Company may reasonably
request to provide a reasonable assurance that the provisions of Rule 144 have
been satisfied. Each certificate representing the Shares thus transferred
(except a transfer pursuant to Rule 144) shall bear a restrictive legend as to
the applicable restrictions on transferability in order to insure compliance
with the Act, unless in the aforesaid opinion of legal counsel for the holder,
such legend is not required in order to insure compliance with the Act.
9. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities of
the Company which may at any time be issuable on the exercise of this Warrant
for any purpose, nor shall anything contained herein be construed to confer upon
the Holder, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger, transfer of assets or
otherwise) or, except as expressly required herein, to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised and the Shares issuable upon exercise hereof
shall have become deliverable, as provided herein.
10. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
11. EXCHANGE OF WARRANT. Subject to the other provisions of this Warrant,
on surrender of this Warrant for exchange, and subject to the provisions of this
Warrant with respect to compliance with the Act, the Company at its expense
shall issue to or on the order of the Holder a new warrant or warrants of like
tenor, in the name of the Holder or as the Holder (on payment by the Holder of
any applicable transfer taxes) may direct, for the number of Shares issuable
upon exercise thereof.
12. NOTICES. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or
7
<PAGE>
mailed by first-class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company or the Holder, as the case
may be, in writing by the Company or such Holder from time to time.
13. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. TITLES AND SUBTITLES; FORMS OF PRONOUNS. The titles of the Sections
and Subsections of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in this Warrant shall
be deemed to include masculine, feminine and neuter forms.
16. ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
Dated: October 15, 1997. PC QUOTE, INC., a Delaware corporation
By: __________________________________
Jim R. Porter, Chief Executive Officer
By: __________________________________
Darlene E. Czaja, Secretary
8
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
TO: PC QUOTE, INC.
1. The undersigned Holder of the attached Common Stock Purchase Warrant
hereby elects to exercise its purchase right under such Warrant with respect to
________________ Shares, as defined in the Warrant.
2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed cashier's or certified check drawn on a United
States bank and for United States funds made payable to the
Company in the amount of $_____________; or
[ ] by wire transfer of United States funds to the account of the
Company in the amount of $___________, which transfer has been
made before or simultaneously with the delivery of this Notice
pursuant to the instructions of the Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below:
Name: _____________________________________________________
Address: _____________________________________________________
_____________________________________________________
Tax ID No.: ____________________
HOLDER:
______________________________________
By:______________________________
Date: __________________________ Title: ____________________
<PAGE>
EXHIBIT B
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purposes of the Warrant to which this Statement of
Registration Rights is attached as Exhibit B:
(a) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document;
(b) The term "Registrable Securities" means the shares of Common
Stock issued or issuable upon exercise of the Warrant;
(c) The term "Holder" means the original holder of the Warrant and
any transferee of the Warrant; and
(d) The term "Warrant" means the original Warrants issued in
connection with the Stock and Warrant Purchase Agreement, dated as of
October 15, 1997, between the Company, as Seller, and Wexford Spectrum Investors
LLC, a Delaware limited liability company, and Imprimis Investors LLC, a
Delaware limited liability company, as Buyers, and all Warrants issued as a
result of the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes at any time before October 15, 2002 to register (including for
this purpose a registration effected by the Company for stockholders other than
Holder) any of its stock or other securities under the Act in connection with
the public offering for its own account of such securities solely for cash
(other than a registration relating solely to the sale of securities to
participants in a Company stock plan, or a registration on any form which does
not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give Holder written
notice of such registration. Upon the written request of Holder given within
twenty days after mailing of such notice by the Company, the Company shall,
subject to the provisions of Section 8 hereof and Section 5 of the Warrant,
cause to be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any time before
October 15, 2002, receive from Holders holding 40% or more of the outstanding
Registrable Securities a written request (to be exercised only once) that the
Company effect a registration and any related qualification or compliance with
respect to all or a part of the Registrable Securities (which registration shall
at the election of Holder either be for a registration for a primary issuance of
the Shares upon the exercise of the Warrant or the resale of the Shares
previously issued upon exercise of the Warrant at the election of Holder) owned
by such Holder, the Company will promptly notify each other Holder (if any) of
such request and will:
<PAGE>
(a) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of a Holder's
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder of registration
rights joining in such request as are specified in a written request given
within 20 days after receipt of such written notice from the Company; PROVIDED,
HOWEVER, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 3: (1) if
the Company has effected a registration of Registrable Securities pursuant to
this Section 3 within the preceding 12 months; (2) if the Company shall furnish
to Holder a certificate signed by the President of the Company stating that in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the registration statement for a period of not more than 60
days after receipt of the request of Holder under this Section 3; PROVIDED,
HOWEVER, that the Company shall not utilize this right more than once in any
twelve-month period; or (3) in any jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance; and,
(b) subject to the foregoing, file a registration statement covering
the Registrable Securities and other securities so requested to be registered
promptly after receipt of the request or requests of Holder, and in any event
within 30 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the Warrant, in
the event that the Company is to effect the registration of any Registrable
Securities pursuant to Section 2 or 3 hereof, the Company shall promptly:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the holders
of a majority of the securities registered thereunder, keep such registration
statement effective for up to one hundred twenty (120) days, or such shorter
period as is required to dispose of all securities covered by such registration
statement.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as Holder may reasonably request in order to
facilitate the disposition of Registrable Securities owned by Holder.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by Holder, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions or to agree to any restrictions as
to the conduct of its business in the ordinary course thereof.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Holder shall also enter
into and perform its obligations under such underwriting agreement.
2
<PAGE>
(f) Notify Holder at any time when a prospectus relating to
Registrable Securities of Holder covered by such registration statement is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made.
(g) Furnish, at the request of Holder, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to the Warrant, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to Holder and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in the Warrant or
this Statement of Registration Rights to the contrary, the Company shall not be
obligated to effect any such registration, qualification or compliance, pursuant
to Section 2 or 3, if application of Rule 144 would allow Holder requesting a
registration under Section 2 or 3 to dispose of the Registrable Securities for
which a registration is demanded within a single 90-day period.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to the Warrant that the
selling Holder shall furnish to the Company such information regarding itself,
the Registrable Securities held by Holder, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
7. EXPENSES. The Company shall bear and pay all expenses (other than
underwriting discounts and commissions) incurred in connection with any
registration, filing or qualification of Registrable Securities, including
(without limitation) all registration, filing, and qualification fees, legal,
printers and accounting fees relating thereto, and the cost of any reasonable
fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any registrations in
which Registrable Securities have a right to be included pursuant to Section 2
hereof and which involves an underwriting of securities being issued by the
Company, the Company shall not be required, under Section 2 hereof, to include
any of Holder's securities in such underwriting unless Holder accepts the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the opinion of
the underwriters, jeopardize the success of the offering by the Company. If the
total amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters reasonably believe
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters believe will not jeopardize the
success of the offering, the securities so included to be apportioned pro rata
among the selling Holder and other shareholders holding contractual registration
rights according to the total amount of securities entitled to be included
herein owned by each selling stockholder or in such other proportions as shall
mutually be agreed to by Holder and each other selling stockholder.
3
<PAGE>
9. INDEMNIFICATION. In the event any Registrable Securities are included
n a registration statement filed by the Company:
(a) The Company will indemnify and holder harmless Holder, its
officers, directors, and agents, any underwriter (as defined in the Act) for
Holder and each person, if any, who controls Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), against any losses, claims, damages, or liabilities (joint or several)
asserted by a third party to which they may become subject under the Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation of the
Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will reimburse Holder, any of its officers or directors,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability, or action; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 9(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, underwriter or controlling person.
(b) Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Company with the meaning of the Act, any
underwriter and any other shareholder selling securities in such registration
statement or any of its directors or officers or any person who controls such
shareholder, against any losses, claims, damages, or liabilities (joint or
several) asserted by a third party to which the Company or any such director,
officer, controlling person, or underwriter or controlling person, or other such
shareholder or director, officer or controlling person may become subject, under
the Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by Holder expressly for use in connection with
such registration; and Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or controlling person, other shareholder, officer, director,
or controlling person, as incurred, in connection with investigating or
defending any such loss, claim, damage, liability, or action; PROVIDED, HOWEVER,
that the obligations of Holder hereunder shall be limited to an amount equal to
the net proceeds (equal to the offering price less the exercise price, expenses
and underwriting commissions and discounts) to such Holder of Shares sold as
contemplated herein. Notwithstanding the foregoing, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of Holder, which consent shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying part under this Section 9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
4
<PAGE>
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 9, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 9.
10. REPORTS UNDER THE 1934 ACT. With a view to making available to Holder
the benefits of Rule 144 promulgated under the Act and any other rule or
regulation of the SEC that may at any time permit Holder to sell securities of
the Company to the public without registration the Company will endeavor to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable Holder to utilize an
abbreviated registration statement for the sale of its Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144, the Act and the
1934 Act, or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested in availing Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration or
pursuant to such form.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to the Warrant may be assigned by
Holder to a permitted transferee or assignee of the Warrant of all 150,000
Shares, provided the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; and provided, further, that such assignment shall be effective
only if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Act.
5
<PAGE>
Common Stock Purchase Warrant
43,500 Shares
(subject to adjustment)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after October 15, 2002
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, WEXFORD SPECTRUM INVESTORS LLC, a
limited liability company organized under the laws of the State of Delaware
("Wexford Spectrum") is entitled to purchase up to Forty-three Thousand Five
Hundred (43,500) Shares of Common Stock of PC QUOTE, INC., a Delaware
corporation, at a price of Two Dollars ($2.00) per Share (the "Warrant Price"),
subject to adjustments and all other terms and conditions set forth in this
Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the context
otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(b) "Acquisition" shall mean any sale, license, or other disposition
of all or substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
(c) "Commission" shall mean the Securities and Exchange Commission,
or any other Federal agency at the time administering the Act.
<PAGE>
(d) "Common Stock" shall mean shares of the Company's presently or
subsequently authorized common stock, par value $0.001, and any stock for which
such common stock may hereafter be exchanged.
(e) "Company" shall mean PC QUOTE, INC., a Delaware corporation, and
any corporation which shall succeed to or assume the obligations of PC QUOTE,
INC., under this Warrant.
(f) "Date of Grant" shall mean October 15, 1997.
(g) "Exercise Date" shall mean the effective date of the delivery of
the Notice of Exercise pursuant to Section 4 below.
(h) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(i) "Shares" shall mean shares of Common Stock.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is
issued in consideration of the purchase price paid by Wexford Spectrum to the
Company as set forth in that certain Stock and Warrant Purchase Agreement dated
as of the date hereof and made and entered into by and between the Company, as
Seller, and Wexford Spectrum and Imprimis Investors LLC, a Delaware limited
liability company, as Buyers.
3. TERM. The purchase right represented by this Warrant is exercisable
only during the period commencing upon the Date of Grant and ending on
October 15, 2002.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and compliance
with all applicable Federal and state securities laws, the purchase right
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the Holder by (i) surrender of this Warrant and delivery of the
Notice of Exercise (the form of which is attached hereto as Exhibit A), duly
executed, at the principal office of the Company and (ii) payment to the Company
of an amount equal to the product of the then applicable Warrant Price
multiplied by the number of Shares then being purchased pursuant to one of the
payment methods permitted under Section 4(b) below.
(b) METHOD OF PAYMENT. Payment shall be made either (1) by cashier's
or certified check drawn on a United States bank and for United States funds
made payable to the Company, or (2) by wire transfer of United States funds for
the account of the Company.
(c) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be
2
<PAGE>
delivered to the Holder within five days of delivery of the Notice of
Exercise and, unless this Warrant has been fully exercised or has expired, a
new warrant representing the portion of the Shares with respect to which this
Warrant shall not then have been exercised shall also be issued to the Holder
within such ten day period.
(d) NO FRACTIONAL SHARES. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the fair market
value per Share as of the date of exercise.
(e) COMPANY'S REPRESENTATIONS.
(i) The Company is soliciting proxies in connection with its
Annual Meeting of Stockholders for, among other things, a proposal to amend its
Certificate of Incorporation to increase the number of shares of Common Stock
authorized for issuance. If such proposal is approved by the Company's
stockholders, the Company shall file a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Amendment") in order to increase such number of authorized shares
of Common Stock. From and after the date of filing the Amendment, all Shares
which may be issued upon the exercise of the purchase right represented by this
Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and
non-assessable, and free of any liens and encumbrances except for restrictions
on transfer under applicable federal and state securities laws. From and after
the date of the Amendment, during the period within which the purchase right
represented by this Warrant may be exercised, the Company shall at all times use
its best efforts to have authorized, and reserved for the purpose of issuance
upon exercise of the purchase right represented by this Warrant, a sufficient
number of Shares to provide for the exercise of the purchase right represented
by this Warrant;
(ii) This Warrant has been duly authorized and executed by the
Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;
(iii) The execution and delivery of this Warrant are not, and
from and after the date of the Amendment, the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company's Certificate of Incorporation or Bylaws, do not
and will not contravene any law, governmental rule or regulation, judgment or
order applicable to the Company, and do not and will not conflict with or
contravene any provision of, or constitute a default under, any material
indenture, mortgage, contract or other instrument of which the Company is a
party or by which it is bound, or require the registration or filing with or the
taking of any action in respect of or by, any federal, state or local government
authority or agency (other than such consents, approvals, notices, actions, or
filings as have already been obtained or made, as the case may be).
3
<PAGE>
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number of
Shares issuable upon the exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time upon the occurrence of certain events,
as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or from
time to time on or after the date hereof the holders of the Common Stock of the
Company (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or, on or after the record
date fixed for the determination of eligible stockholders, shall have become
entitled to receive, without payment therefor, other or additional stock of the
Company by way of dividend then, and in each case, the Holder of this Warrant
shall, upon the exercise hereof, be entitled to receive, in addition to the
number of shares of Common Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of such other or additional
stock of the Company which such Holder would hold on the date of such exercise
had it been the holder of record of such Common Stock on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock receivable
by it as aforesaid during such period, giving effect to all adjustments called
for during such period by paragraphs (b) and (c) of this Section 5.
(b) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case of
any reclassification or change of the outstanding securities of the Company or
of any consolidation, merger or reorganization of the Company on or after the
date hereof, then and in each such case the Holder of this Warrant, upon the
exercise hereof at any time after the consummation of such reclassification,
change, consolidation, merger or reorganization, shall be entitled to receive,
in lieu of or in addition to the stock or other securities and property
receivable upon the exercise hereof prior to such consummation, the stock or
other securities to which such Holder would have been entitled upon such
consummation if such Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in subparagraphs (a) and
(c); in each such case, the terms of this Paragraph 5 shall be applicable to the
shares of stock or other securities property receivable upon the exercise of
this Warrant after such consummation.
(c) STOCK SPLITS AND REVERSE STOCK SPLITS. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately reduced
and the number of shares receivable upon exercise of this Warrant shall thereby
be proportionately increased; and, conversely, if at any time on or after the
date hereof the outstanding number of shares of Common Stock shall be combined
into a smaller number of shares, the Warrant Price in effect immediately prior
to such combination shall thereby be proportionately increased and the number of
shares receivable upon exercise of the Warrant shall be proportionately
decreased.
(d) ADJUSTMENTS TO WARRANT PRICE. Whenever the number of Shares
purchasable upon exercise of this Warrant is adjusted, as herein provided, the
Warrant Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to such
4
<PAGE>
adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment, and of which the denominator shall be the number of Shares
so purchasable immediately thereafter.
(e) CERTIFICATES AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish the Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such adjustment
is based. The Company shall, upon written request, furnish the Holder a
certificate setting forth the Warrant Price in effect upon the date thereof and
the series of adjustments leading to such Warrant Price.
6. ACQUISITIONS.
(a) ASSUMPTION OF WARRANT. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing.
(b) NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and the Holder
has not otherwise exercised this Warrant in full, then the unexercised portion
of this Warrant shall be deemed to have been automatically converted pursuant to
Section 4(c) and thereafter the Holder shall participate in the acquisition on
the same terms as other holders of the same class of securities of the Company.
7. NOTICES; INFORMATION; REGISTRATION.
(a) NOTICE OF CERTAIN EVENTS. If the Company proposes at any time
(a) to effect any reclassification or recapitalization of Common Stock; (b) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (c) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the company's securities
for cash, then, in connection with each such event, the Company shall give the
Holder at least 14 days prior written notice of the date on which a record will
be taken for such action.
(b) INFORMATION RIGHTS. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a) promptly
after mailing, copies of all notices or other written communications to the
stockholders of the Company, (b) within ninety days after the end of each fiscal
year of the Company, the annual audited financial statements of the Company
audited by independent public accountants of recognized standing and (c) within
forty-five days after the end of each of the first three quarters of each fiscal
year, the Company's quarterly, unaudited financial statements.
5
<PAGE>
(c) REGISTRATION UNDER SECURITIES ACT OF 1933. The Company agrees
that the Shares shall be subject to the registration rights set forth on
Exhibit B.
8. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
DISPOSITION OF SHARES.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof, agrees
that this Warrant and the Shares to be issued upon the exercise hereof are being
acquired solely for its own account and not as a nominee for any other party and
not with a view toward the resale or distribution thereof and that it will not
offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon
the exercise hereof except under circumstances which will not result in a
violation of the Act. This Warrant and the Shares to be issued upon the
exercise hereof (unless registered under the Act) shall be imprinted with a
legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the exercise hereof
shall bear any legends required by the securities laws of any applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant may
not be transferred or assigned in whole or in part without compliance with all
applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions satisfactory to the Company, if requested by the Company and the
transfer is to a person other than a general partner or affiliate of the initial
Holder). Subject to the provisions of this Warrant with respect to compliance
with the Act, title to this Warrant may be transferred by endorsement and
delivery in the same manner as a negotiable instrument transferable by
endorsement and delivery. The Company shall act promptly to record transfers of
this Warrant on its books, but the Company may treat the registered holder of
this Warrant as the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.
6
<PAGE>
(c) DISPOSITION OF SHARES. With respect to any offer, sale, transfer
or other disposition of any Shares acquired pursuant to the exercise of this
Warrant prior to registration of such Shares, except for any such offer, sale,
transfer or other disposition of Shares to an affiliate of the initial Holder,
the Holder and each subsequent holder of this Warrant agrees to give written
notice to the Company prior thereto, describing briefly the manner thereof, and
if such transfer is not pursuant to Rule 144, a written opinion of legal counsel
for such holder, if requested by the Company, to the effect that such offer,
sale or other disposition may be effected without registration or qualification
of such Shares. Notwithstanding the foregoing, such Shares may be offered, sold
or otherwise disposed of in accordance with Rule 144, provided that the Company
shall have been furnished with such information as the Company may reasonably
request to provide a reasonable assurance that the provisions of Rule 144 have
been satisfied. Each certificate representing the Shares thus transferred
(except a transfer pursuant to Rule 144) shall bear a restrictive legend as to
the applicable restrictions on transferability in order to insure compliance
with the Act, unless in the aforesaid opinion of legal counsel for the holder,
such legend is not required in order to insure compliance with the Act.
9. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities of
the Company which may at any time be issuable on the exercise of this Warrant
for any purpose, nor shall anything contained herein be construed to confer upon
the Holder, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger, transfer of assets or
otherwise) or, except as expressly required herein, to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised and the Shares issuable upon exercise hereof
shall have become deliverable, as provided herein.
10. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
11. EXCHANGE OF WARRANT. Subject to the other provisions of this Warrant,
on surrender of this Warrant for exchange, and subject to the provisions of this
Warrant with respect to compliance with the Act, the Company at its expense
shall issue to or on the order of the Holder a new warrant or warrants of like
tenor, in the name of the Holder or as the Holder (on payment by the Holder of
any applicable transfer taxes) may direct, for the number of Shares issuable
upon exercise thereof.
12. NOTICES. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or
7
<PAGE>
mailed by first-class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company or the Holder, as the case
may be, in writing by the Company or such Holder from time to time.
13. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. TITLES AND SUBTITLES; FORMS OF PRONOUNS. The titles of the Sections
and Subsections of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in this Warrant shall
be deemed to include masculine, feminine and neuter forms.
16. ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
Dated: October 15, 1997. PC QUOTE, INC., a Delaware corporation
By:______________________________________
Jim R. Porter, Chief Executive Officer
By:_____________________________________
Darlene E. Czaja, Secretary
8
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
TO: PC QUOTE, INC.
1. The undersigned Holder of the attached Common Stock Purchase Warrant
hereby elects to exercise its purchase right under such Warrant with respect to
________________ Shares, as defined in the Warrant.
2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed cashier's or certified check drawn on a United
States bank and for United States funds made payable to the Company in
the amount of $_____________; or
[ ] by wire transfer of United States funds to the account of the
Company in the amount of $___________, which transfer has been made
before or simultaneously with the delivery of this Notice pursuant to
the instructions of the Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below:
Name: ___________________________________________
Address:___________________________________________
___________________________________________
Tax ID No.: _________________________
HOLDER:
______________________________________
By:_______________________________
Date:__________________________ Title:____________________
<PAGE>
EXHIBIT B
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purposes of the Warrant to which this Statement of
Registration Rights is attached as Exhibit B:
(a) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document;
(b) The term "Registrable Securities" means the shares of Common
Stock issued or issuable upon exercise of the Warrant;
(c) The term "Holder" means the original holder of the Warrant and
any transferee of the Warrant; and
(d) The term "Warrant" means the original Warrants issued in
connection with the Stock and Warrant Purchase Agreement, dated as of
October 15, 1997, between the Company, as Seller, and Wexford Spectrum Investors
LLC, a Delaware limited liability company, and Imprimis Investors LLC, a
Delaware limited liability company, as Buyers, and all Warrants issued as a
result of the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes at any time before October 15, 2002 to register (including for
this purpose a registration effected by the Company for stockholders other than
Holder) any of its stock or other securities under the Act in connection with
the public offering for its own account of such securities solely for cash
(other than a registration relating solely to the sale of securities to
participants in a Company stock plan, or a registration on any form which does
not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give Holder written
notice of such registration. Upon the written request of Holder given within
twenty days after mailing of such notice by the Company, the Company shall,
subject to the provisions of Section 8 hereof and Section 5 of the Warrant,
cause to be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any time before
October 15, 2002, receive from Holders holding 40% or more of the outstanding
Registrable Securities a written request (to be exercised only once) that the
Company effect a registration and any related qualification or compliance with
respect to all or a part of the Registrable Securities (which registration shall
at the election of Holder either be for a registration for a primary issuance of
the Shares upon the exercise of the Warrant or the resale of the Shares
previously issued upon exercise of the Warrant at the election of Holder) owned
by such Holder, the Company will promptly notify each other Holder (if any) of
such request and will:
<PAGE>
(a) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of a Holder's
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder of registration
rights joining in such request as are specified in a written request given
within 20 days after receipt of such written notice from the Company; PROVIDED,
HOWEVER, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 3: (1) if
the Company has effected a registration of Registrable Securities pursuant to
this Section 3 within the preceding 12 months; (2) if the Company shall furnish
to Holder a certificate signed by the President of the Company stating that in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the registration statement for a period of not more than 60
days after receipt of the request of Holder under this Section 3; PROVIDED,
HOWEVER, that the Company shall not utilize this right more than once in any
twelve-month period; or (3) in any jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance; and,
(b) subject to the foregoing, file a registration statement covering
the Registrable Securities and other securities so requested to be registered
promptly after receipt of the request or requests of Holder, and in any event
within 30 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the Warrant, in
the event that the Company is to effect the registration of any Registrable
Securities pursuant to Section 2 or 3 hereof, the Company shall promptly:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the holders
of a majority of the securities registered thereunder, keep such registration
statement effective for up to one hundred twenty (120) days, or such shorter
period as is required to dispose of all securities covered by such registration
statement.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as Holder may reasonably request in order to
facilitate the disposition of Registrable Securities owned by Holder.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by Holder, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions or to agree to any restrictions as
to the conduct of its business in the ordinary course thereof.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Holder shall also enter
into and perform its obligations under such underwriting agreement.
2
<PAGE>
(f) Notify Holder at any time when a prospectus relating to
Registrable Securities of Holder covered by such registration statement is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made.
(g) Furnish, at the request of Holder, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to the Warrant, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to Holder and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in the Warrant or
this Statement of Registration Rights to the contrary, the Company shall not be
obligated to effect any such registration, qualification or compliance, pursuant
to Section 2 or 3, if application of Rule 144 would allow Holder requesting a
registration under Section 2 or 3 to dispose of the Registrable Securities for
which a registration is demanded within a single 90-day period.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to the Warrant that the
selling Holder shall furnish to the Company such information regarding itself,
the Registrable Securities held by Holder, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
7. EXPENSES. The Company shall bear and pay all expenses (other than
underwriting discounts and commissions) incurred in connection with any
registration, filing or qualification of Registrable Securities, including
(without limitation) all registration, filing, and qualification fees, legal,
printers and accounting fees relating thereto, and the cost of any reasonable
fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any registrations in
which Registrable Securities have a right to be included pursuant to Section 2
hereof and which involves an underwriting of securities being issued by the
Company, the Company shall not be required, under Section 2 hereof, to include
any of Holder's securities in such underwriting unless Holder accepts the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the opinion of
the underwriters, jeopardize the success of the offering by the Company. If the
total amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters reasonably believe
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters believe will not jeopardize the
success of the offering, the securities so included to be apportioned pro rata
among the selling Holder and other shareholders holding contractual registration
rights according to the total amount of securities entitled to be included
herein owned by each selling stockholder or in such other proportions as shall
mutually be agreed to by Holder and each other selling stockholder.
3
<PAGE>
9. INDEMNIFICATION. In the event any Registrable Securities are included
n a registration statement filed by the Company:
(a) The Company will indemnify and holder harmless Holder, its
officers, directors, and agents, any underwriter (as defined in the Act) for
Holder and each person, if any, who controls Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), against any losses, claims, damages, or liabilities (joint or several)
asserted by a third party to which they may become subject under the Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation of the
Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will reimburse Holder, any of its officers or directors,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability, or action; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 9(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, underwriter or controlling person.
(b) Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Company with the meaning of the Act, any
underwriter and any other shareholder selling securities in such registration
statement or any of its directors or officers or any person who controls such
shareholder, against any losses, claims, damages, or liabilities (joint or
several) asserted by a third party to which the Company or any such director,
officer, controlling person, or underwriter or controlling person, or other such
shareholder or director, officer or controlling person may become subject, under
the Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by Holder expressly for use in connection with
such registration; and Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or controlling person, other shareholder, officer, director,
or controlling person, as incurred, in connection with investigating or
defending any such loss, claim, damage, liability, or action; PROVIDED, HOWEVER,
that the obligations of Holder hereunder shall be limited to an amount equal to
the net proceeds (equal to the offering price less the exercise price, expenses
and underwriting commissions and discounts) to such Holder of Shares sold as
contemplated herein. Notwithstanding the foregoing, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of Holder, which consent shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying part under this Section 9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
4
<PAGE>
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 9, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 9.
10. REPORTS UNDER THE 1934 ACT. With a view to making available to Holder
the benefits of Rule 144 promulgated under the Act and any other rule or
regulation of the SEC that may at any time permit Holder to sell securities of
the Company to the public without registration the Company will endeavor to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable Holder to utilize an
abbreviated registration statement for the sale of its Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144, the Act and the
1934 Act, or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested in availing Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration or
pursuant to such form.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to the Warrant may be assigned by
Holder to a permitted transferee or assignee of the Warrant of all 150,000
Shares, provided the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; and provided, further, that such assignment shall be effective
only if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Act.
5
<PAGE>
Common Stock Purchase Warrant
38,500 Shares
(subject to adjustment)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING
THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after October 15, 2002
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, IMPRIMIS INVESTORS LLC, a limited
liability company organized under the laws of the State of Delaware ("Wexford
Spectrum") is entitled to purchase up to Thirty-eight Thousand Five Hundred
(38,500) Shares of Common Stock of PC QUOTE, INC., a Delaware corporation, at
a price of Two Dollars ($2.00) per Share (the "Warrant Price"), subject to
adjustments and all other terms and conditions set forth in this Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the context
otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
(b) "Acquisition" shall mean any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of
the Company's securities before the transaction beneficially own less than
50% of the outstanding voting securities of the surviving entity after the
transaction.
(c) "Commission" shall mean the Securities and Exchange
Commission, or any other Federal agency at the time administering the Act.
<PAGE>
(d) "Common Stock" shall mean shares of the Company's presently
or subsequently authorized common stock, par value $0.001, and any stock for
which such common stock may hereafter be exchanged.
(e) "Company" shall mean PC QUOTE, INC., a Delaware corporation,
and any corporation which shall succeed to or assume the obligations of PC
QUOTE, INC., under this Warrant.
(f) "Date of Grant" shall mean October 15, 1997.
(g) "Exercise Date" shall mean the effective date of the delivery
of the Notice of Exercise pursuant to Section 4 below.
(h) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(i) "Shares" shall mean shares of Common Stock.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is
issued in consideration of the purchase price paid by Wexford Spectrum to the
Company as set forth in that certain Stock and Warrant Purchase Agreement
dated as of the date hereof and made and entered into by and between the
Company, as Seller, and Wexford Spectrum and Imprimis Investors LLC, a
Delaware limited liability company, as Buyers.
3. TERM. The purchase right represented by this Warrant is exercisable
only during the period commencing upon the Date of Grant and ending on
October 15, 2002.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and
compliance with all applicable Federal and state securities laws, the
purchase right represented by this Warrant may be exercised, in whole or in
part and from time to time, by the Holder by (i) surrender of this Warrant
and delivery of the Notice of Exercise (the form of which is attached hereto
as Exhibit A), duly executed, at the principal office of the Company and (ii)
payment to the Company of an amount equal to the product of the then
applicable Warrant Price multiplied by the number of Shares then being
purchased pursuant to one of the payment methods permitted under Section 4(b)
below.
(b) METHOD OF PAYMENT. Payment shall be made either (1) by
cashier's or certified check drawn on a United States bank and for United
States funds made payable to the Company, or (2) by wire transfer of United
States funds for the account of the Company.
(c) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be
2
<PAGE>
delivered to the Holder within five days of delivery of the Notice of
Exercise and, unless this Warrant has been fully exercised or has expired, a
new warrant representing the portion of the Shares with respect to which this
Warrant shall not then have been exercised shall also be issued to the Holder
within such ten day period.
(d) NO FRACTIONAL SHARES. No fractional shares shall be issued
in connection with any exercise hereunder, but in lieu of such fractional
shares the Company shall make a cash payment therefor upon the basis of the
fair market value per Share as of the date of exercise.
(e) COMPANY'S REPRESENTATIONS.
(i) The Company is soliciting proxies in connection with its
Annual Meeting of Stockholders for, among other things, a proposal to amend
its Certificate of Incorporation to increase the number of shares of Common
Stock authorized for issuance. If such proposal is approved by the Company's
stockholders, the Company shall file a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Amendment") in order to increase such number of authorized
shares of Common Stock. From and after the date of filing the Amendment, all
Shares which may be issued upon the exercise of the purchase right
represented by this Warrant shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer under applicable federal and state
securities laws. From and after the date of the Amendment, during the period
within which the purchase right represented by this Warrant may be exercised,
the Company shall at all times use its best efforts to have authorized, and
reserved for the purpose of issuance upon exercise of the purchase right
represented by this Warrant, a sufficient number of Shares to provide for the
exercise of the purchase right represented by this Warrant;
(ii) This Warrant has been duly authorized and executed by
the Company and is a valid and binding obligation of the Company enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;
(iii) The execution and delivery of this Warrant are not,
and from and after the date of the Amendment, the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company's Certificate of Incorporation or Bylaws, do
not and will not contravene any law, governmental rule or regulation,
judgment or order applicable to the Company, and do not and will not conflict
with or contravene any provision of, or constitute a default under, any
material indenture, mortgage, contract or other instrument of which the
Company is a party or by which it is bound, or require the registration or
filing with or the taking of any action in respect of or by, any federal,
state or local government authority or agency (other than such consents,
approvals, notices, actions, or filings as have already been obtained or
made, as the case may be).
3
<PAGE>
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number of
Shares issuable upon the exercise of this Warrant and the Warrant Price shall
be subject to adjustment from time to time upon the occurrence of certain
events, as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or
from time to time on or after the date hereof the holders of the Common Stock
of the Company (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received or, on or
after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock of the Company by way of dividend then, and in each case,
the Holder of this Warrant shall, upon the exercise hereof, be entitled to
receive, in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration therefor, the
amount of such other or additional stock of the Company which such Holder
would hold on the date of such exercise had it been the holder of record of
such Common Stock on the date hereof and had thereafter, during the period
from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock receivable by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by paragraphs (b) and (c) of this Section 5.
(b) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case
of any reclassification or change of the outstanding securities of the
Company or of any consolidation, merger or reorganization of the Company on
or after the date hereof, then and in each such case the Holder of this
Warrant, upon the exercise hereof at any time after the consummation of such
reclassification, change, consolidation, merger or reorganization, shall be
entitled to receive, in lieu of or in addition to the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities to which such Holder would have
been entitled upon such consummation if such Holder had exercised this
Warrant immediately prior thereto, all subject to further adjustment as
provided in subparagraphs (a) and (c); in each such case, the terms of this
Paragraph 5 shall be applicable to the shares of stock or other securities
property receivable upon the exercise of this Warrant after such consummation.
(c) STOCK SPLITS AND REVERSE STOCK SPLITS. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately
reduced and the number of shares receivable upon exercise of this Warrant
shall thereby be proportionately increased; and, conversely, if at any time
on or after the date hereof the outstanding number of shares of Common Stock
shall be combined into a smaller number of shares, the Warrant Price in
effect immediately prior to such combination shall thereby be proportionately
increased and the number of shares receivable upon exercise of the Warrant
shall be proportionately decreased.
(d) ADJUSTMENTS TO WARRANT PRICE. Whenever the number of Shares
purchasable upon exercise of this Warrant is adjusted, as herein provided,
the Warrant Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior to such
4
<PAGE>
adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment, and of which the denominator shall be the number of Shares
so purchasable immediately thereafter.
(e) CERTIFICATES AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish the Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such
adjustment is based. The Company shall, upon written request, furnish the
Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.
6. ACQUISITIONS.
(a) ASSUMPTION OF WARRANT. If upon the closing of any
Acquisition the successor entity assumes the obligations of this Warrant,
then this Warrant shall be exercisable for the same securities, cash, and
property as would be payable for the Shares issuable upon exercise of the
unexercised portion of this Warrant as if such Shares were outstanding on the
record date for the Acquisition and subsequent closing.
(b) NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and the
Holder has not otherwise exercised this Warrant in full, then the unexercised
portion of this Warrant shall be deemed to have been automatically converted
pursuant to Section 4(c) and thereafter the Holder shall participate in the
acquisition on the same terms as other holders of the same class of
securities of the Company.
7. NOTICES; INFORMATION; REGISTRATION.
(a) NOTICE OF CERTAIN EVENTS. If the Company proposes at any
time (a) to effect any reclassification or recapitalization of Common Stock;
(b) to merge or consolidate with or into any other corporation, or sell,
lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (c) offer holders of registration rights
the opportunity to participate in an underwritten public offering of the
company's securities for cash, then, in connection with each such event, the
Company shall give the Holder at least 14 days prior written notice of the
date on which a record will be taken for such action.
(b) INFORMATION RIGHTS. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a)
promptly after mailing, copies of all notices or other written communications
to the stockholders of the Company, (b) within ninety days after the end of
each fiscal year of the Company, the annual audited financial statements of
the Company audited by independent public accountants of recognized standing
and (c) within forty-five days after the end of each of the first three
quarters of each fiscal year, the Company's quarterly, unaudited financial
statements.
5
<PAGE>
(c) REGISTRATION UNDER SECURITIES ACT OF 1933. The Company
agrees that the Shares shall be subject to the registration rights set forth
on Exhibit B.
8. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
DISPOSITION OF SHARES.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof,
agrees that this Warrant and the Shares to be issued upon the exercise hereof
are being acquired solely for its own account and not as a nominee for any
other party and not with a view toward the resale or distribution thereof and
that it will not offer, sell or otherwise dispose of this Warrant or any
Shares to be issued upon the exercise hereof except under circumstances which
will not result in a violation of the Act. This Warrant and the Shares to be
issued upon the exercise hereof (unless registered under the Act) shall be
imprinted with a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING
SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144
UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO
THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the exercise hereof
shall bear any legends required by the securities laws of any applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant may
not be transferred or assigned in whole or in part without compliance with all
applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions satisfactory to the Company, if requested by the Company and the
transfer is to a person other than a general partner or affiliate of the initial
Holder). Subject to the provisions of this Warrant with respect to compliance
with the Act, title to this Warrant may be transferred by endorsement and
delivery in the same manner as a negotiable instrument transferable by
endorsement and delivery. The Company shall act promptly to record transfers of
this Warrant on its books, but the Company may treat the registered holder of
this Warrant as the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.
6
<PAGE>
(c) DISPOSITION OF SHARES. With respect to any offer, sale, transfer
or other disposition of any Shares acquired pursuant to the exercise of this
Warrant prior to registration of such Shares, except for any such offer, sale,
transfer or other disposition of Shares to an affiliate of the initial Holder,
the Holder and each subsequent holder of this Warrant agrees to give written
notice to the Company prior thereto, describing briefly the manner thereof, and
if such transfer is not pursuant to Rule 144, a written opinion of legal counsel
for such holder, if requested by the Company, to the effect that such offer,
sale or other disposition may be effected without registration or qualification
of such Shares. Notwithstanding the foregoing, such Shares may be offered, sold
or otherwise disposed of in accordance with Rule 144, provided that the Company
shall have been furnished with such information as the Company may reasonably
request to provide a reasonable assurance that the provisions of Rule 144 have
been satisfied. Each certificate representing the Shares thus transferred
(except a transfer pursuant to Rule 144) shall bear a restrictive legend as to
the applicable restrictions on transferability in order to insure compliance
with the Act, unless in the aforesaid opinion of legal counsel for the holder,
such legend is not required in order to insure compliance with the Act.
9. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities of
the Company which may at any time be issuable on the exercise of this Warrant
for any purpose, nor shall anything contained herein be construed to confer upon
the Holder, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger, transfer of assets or
otherwise) or, except as expressly required herein, to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised and the Shares issuable upon exercise hereof
shall have become deliverable, as provided herein.
10. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
11. EXCHANGE OF WARRANT. Subject to the other provisions of this Warrant,
on surrender of this Warrant for exchange, and subject to the provisions of this
Warrant with respect to compliance with the Act, the Company at its expense
shall issue to or on the order of the Holder a new warrant or warrants of like
tenor, in the name of the Holder or as the Holder (on payment by the Holder of
any applicable transfer taxes) may direct, for the number of Shares issuable
upon exercise thereof.
12. NOTICES. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or
7
<PAGE>
mailed by first-class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company or the Holder, as the case
may be, in writing by the Company or such Holder from time to time.
13. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. TITLES AND SUBTITLES; FORMS OF PRONOUNS. The titles of the Sections
and Subsections of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in this Warrant shall
be deemed to include masculine, feminine and neuter forms.
16. ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
Dated: October 20, 1997. PC QUOTE, INC., a Delaware corporation
By:_____________________________________
John E. Juska, Chief Financial Officer
8
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
TO: PC QUOTE, INC.
1. The undersigned Holder of the attached Common Stock Purchase Warrant
hereby elects to exercise its purchase right under such Warrant with respect to
________________ Shares, as defined in the Warrant.
2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed cashier's or certified check drawn on a United
States bank and for United States funds made payable to the Company
in the amount of $_____________; or
[ ] by wire transfer of United States funds to the account of the
Company in the amount of $___________, which transfer has been made
before or simultaneously with the delivery of this Notice pursuant
to the instructions of the Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below:
Name: ______________________________
Address: ______________________________
______________________________
Tax ID No.: __________________
HOLDER:
______________________________________
By: ______________________________
Date: _________________________ Title: ____________________
<PAGE>
EXHIBIT B
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purposes of the Warrant to which this Statement of
Registration Rights is attached as Exhibit B:
(a) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document;
(b) The term "Registrable Securities" means the shares of Common
Stock issued or issuable upon exercise of the Warrant;
(c) The term "Holder" means the original holder of the Warrant and
any transferee of the Warrant; and
(d) The term "Warrant" means the original Warrants issued in
connection with the Stock and Warrant Purchase Agreement, dated as of
October 15, 1997, between the Company, as Seller, and Wexford Spectrum Investors
LLC, a Delaware limited liability company, and Imprimis Investors LLC, a
Delaware limited liability company, as Buyers, and all Warrants issued as a
result of the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes at any time before October 15, 2002 to register (including for
this purpose a registration effected by the Company for stockholders other than
Holder) any of its stock or other securities under the Act in connection with
the public offering for its own account of such securities solely for cash
(other than a registration relating solely to the sale of securities to
participants in a Company stock plan, or a registration on any form which does
not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give Holder written
notice of such registration. Upon the written request of Holder given within
twenty days after mailing of such notice by the Company, the Company shall,
subject to the provisions of Section 8 hereof and Section 5 of the Warrant,
cause to be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any time before
October 15, 2002, receive from Holders holding 40% or more of the outstanding
Registrable Securities a written request (to be exercised only once) that the
Company effect a registration and any related qualification or compliance with
respect to all or a part of the Registrable Securities (which registration shall
at the election of Holder either be for a registration for a primary issuance of
the Shares upon the exercise of the Warrant or the resale of the Shares
previously issued upon exercise of the Warrant at the election of Holder) owned
by such Holder, the Company will promptly notify each other Holder (if any) of
such request and will:
<PAGE>
(a) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of a Holder's
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder of registration
rights joining in such request as are specified in a written request given
within 20 days after receipt of such written notice from the Company; PROVIDED,
HOWEVER, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 3: (1) if
the Company has effected a registration of Registrable Securities pursuant to
this Section 3 within the preceding 12 months; (2) if the Company shall furnish
to Holder a certificate signed by the President of the Company stating that in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the registration statement for a period of not more than 60
days after receipt of the request of Holder under this Section 3; PROVIDED,
HOWEVER, that the Company shall not utilize this right more than once in any
twelve-month period; or (3) in any jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance; and,
(b) subject to the foregoing, file a registration statement covering
the Registrable Securities and other securities so requested to be registered
promptly after receipt of the request or requests of Holder, and in any event
within 30 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the Warrant, in
the event that the Company is to effect the registration of any Registrable
Securities pursuant to Section 2 or 3 hereof, the Company shall promptly:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the holders
of a majority of the securities registered thereunder, keep such registration
statement effective for up to one hundred twenty (120) days, or such shorter
period as is required to dispose of all securities covered by such registration
statement.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as Holder may reasonably request in order to
facilitate the disposition of Registrable Securities owned by Holder.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by Holder, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions or to agree to any restrictions as
to the conduct of its business in the ordinary course thereof.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Holder shall also enter
into and perform its obligations under such underwriting agreement.
2
<PAGE>
(f) Notify Holder at any time when a prospectus relating to
Registrable Securities of Holder covered by such registration statement is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made.
(g) Furnish, at the request of Holder, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to the Warrant, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to Holder and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in the Warrant or
this Statement of Registration Rights to the contrary, the Company shall not be
obligated to effect any such registration, qualification or compliance, pursuant
to Section 2 or 3, if application of Rule 144 would allow Holder requesting a
registration under Section 2 or 3 to dispose of the Registrable Securities for
which a registration is demanded within a single 90-day period.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to the Warrant that the
selling Holder shall furnish to the Company such information regarding itself,
the Registrable Securities held by Holder, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
7. EXPENSES. The Company shall bear and pay all expenses (other than
underwriting discounts and commissions) incurred in connection with any
registration, filing or qualification of Registrable Securities, including
(without limitation) all registration, filing, and qualification fees, legal,
printers and accounting fees relating thereto, and the cost of any reasonable
fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any registrations in
which Registrable Securities have a right to be included pursuant to Section 2
hereof and which involves an underwriting of securities being issued by the
Company, the Company shall not be required, under Section 2 hereof, to include
any of Holder's securities in such underwriting unless Holder accepts the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the opinion of
the underwriters, jeopardize the success of the offering by the Company. If the
total amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters reasonably believe
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters believe will not jeopardize the
success of the offering, the securities so included to be apportioned pro rata
among the selling Holder and other shareholders holding contractual registration
rights according to the total amount of securities entitled to be included
herein owned by each selling stockholder or in such other proportions as shall
mutually be agreed to by Holder and each other selling stockholder.
3
<PAGE>
9. INDEMNIFICATION. In the event any Registrable Securities are included
n a registration statement filed by the Company:
(a) The Company will indemnify and holder harmless Holder, its
officers, directors, and agents, any underwriter (as defined in the Act) for
Holder and each person, if any, who controls Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), against any losses, claims, damages, or liabilities (joint or several)
asserted by a third party to which they may become subject under the Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation of the
Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will reimburse Holder, any of its officers or directors,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability, or action; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 9(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, underwriter or controlling person.
(b) Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Company with the meaning of the Act, any
underwriter and any other shareholder selling securities in such registration
statement or any of its directors or officers or any person who controls such
shareholder, against any losses, claims, damages, or liabilities (joint or
several) asserted by a third party to which the Company or any such director,
officer, controlling person, or underwriter or controlling person, or other such
shareholder or director, officer or controlling person may become subject, under
the Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by Holder expressly for use in connection with
such registration; and Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or controlling person, other shareholder, officer, director,
or controlling person, as incurred, in connection with investigating or
defending any such loss, claim, damage, liability, or action; PROVIDED, HOWEVER,
that the obligations of Holder hereunder shall be limited to an amount equal to
the net proceeds (equal to the offering price less the exercise price, expenses
and underwriting commissions and discounts) to such Holder of Shares sold as
contemplated herein. Notwithstanding the foregoing, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of Holder, which consent shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying part under this Section 9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
4
<PAGE>
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 9, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 9.
10. REPORTS UNDER THE 1934 ACT. With a view to making available to Holder
the benefits of Rule 144 promulgated under the Act and any other rule or
regulation of the SEC that may at any time permit Holder to sell securities of
the Company to the public without registration the Company will endeavor to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable Holder to utilize an
abbreviated registration statement for the sale of its Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144, the Act and the
1934 Act, or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested in availing Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration or
pursuant to such form.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to the Warrant may be assigned by
Holder to a permitted transferee or assignee of the Warrant of all 150,000
Shares, provided the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; and provided, further, that such assignment shall be effective
only if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Act.
5
<PAGE>
Common Stock Purchase Warrant
16,500 Shares
(subject to adjustment)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after October 15, 2002
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, WEXFORD SPECTRUM INVESTORS LLC, a
limited liability company organized under the laws of the State of Delaware
("Wexford Spectrum") is entitled to purchase up to Sixteen Thousand Five Hundred
(16,500) Shares of Common Stock of PC QUOTE, INC., a Delaware corporation, at a
price of Two Dollars ($2.00) per Share (the "Warrant Price"), subject to
adjustments and all other terms and conditions set forth in this Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the context
otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(b) "Acquisition" shall mean any sale, license, or other disposition
of all or substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
(c) "Commission" shall mean the Securities and Exchange Commission,
or any other Federal agency at the time administering the Act.
<PAGE>
(d) "Common Stock" shall mean shares of the Company's presently or
subsequently authorized common stock, par value $0.001, and any stock for which
such common stock may hereafter be exchanged.
(e) "Company" shall mean PC QUOTE, INC., a Delaware corporation, and
any corporation which shall succeed to or assume the obligations of PC QUOTE,
INC., under this Warrant.
(f) "Date of Grant" shall mean October 15, 1997.
(g) "Exercise Date" shall mean the effective date of the delivery of
the Notice of Exercise pursuant to Section 4 below.
(h) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(i) "Shares" shall mean shares of Common Stock.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is
issued in consideration of the purchase price paid by Wexford Spectrum to the
Company as set forth in that certain Stock and Warrant Purchase Agreement dated
as of the date hereof and made and entered into by and between the Company, as
Seller, and Wexford Spectrum and Imprimis Investors LLC, a Delaware limited
liability company, as Buyers.
3. TERM. The purchase right represented by this Warrant is exercisable
only during the period commencing upon the Date of Grant and ending on
October 15, 2002.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and compliance
with all applicable Federal and state securities laws, the purchase right
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the Holder by (i) surrender of this Warrant and delivery of the
Notice of Exercise (the form of which is attached hereto as Exhibit A), duly
executed, at the principal office of the Company and (ii) payment to the Company
of an amount equal to the product of the then applicable Warrant Price
multiplied by the number of Shares then being purchased pursuant to one of the
payment methods permitted under Section 4(b) below.
(b) METHOD OF PAYMENT. Payment shall be made either (1) by cashier's
or certified check drawn on a United States bank and for United States funds
made payable to the Company, or (2) by wire transfer of United States funds for
the account of the Company.
(c) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be
2
<PAGE>
delivered to the Holder within five days of delivery of the Notice of Exercise
and, unless this Warrant has been fully exercised or has expired, a new warrant
representing the portion of the Shares with respect to which this Warrant shall
not then have been exercised shall also be issued to the Holder within such ten
day period.
(d) NO FRACTIONAL SHARES. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the fair market
value per Share as of the date of exercise.
(e) COMPANY'S REPRESENTATIONS.
(i) The Company is soliciting proxies in connection with
its Annual Meeting of Stockholders for, among other things, a proposal to amend
its Certificate of Incorporation to increase the number of shares of Common
Stock authorized for issuance. If such proposal is approved by the Company's
stockholders, the Company shall file a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Amendment") in order to increase such number of authorized shares
of Common Stock. From and after the date of filing the Amendment, all Shares
which may be issued upon the exercise of the purchase right represented by this
Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and
non-assessable, and free of any liens and encumbrances except for restrictions
on transfer under applicable federal and state securities laws. From and after
the date of the Amendment, during the period within which the purchase right
represented by this Warrant may be exercised, the Company shall at all times use
its best efforts to have authorized, and reserved for the purpose of issuance
upon exercise of the purchase right represented by this Warrant, a sufficient
number of Shares to provide for the exercise of the purchase right represented
by this Warrant;
(ii) This Warrant has been duly authorized and executed by
the Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;
(iii) The execution and delivery of this Warrant are not, and
from and after the date of the Amendment, the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company's Certificate of Incorporation or Bylaws, do not
and will not contravene any law, governmental rule or regulation, judgment or
order applicable to the Company, and do not and will not conflict with or
contravene any provision of, or constitute a default under, any material
indenture, mortgage, contract or other instrument of which the Company is a
party or by which it is bound, or require the registration or filing with or the
taking of any action in respect of or by, any federal, state or local government
authority or agency (other than such consents, approvals, notices, actions, or
filings as have already been obtained or made, as the case may be).
3
<PAGE>
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number of
Shares issuable upon the exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time upon the occurrence of certain events,
as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or from
time to time on or after the date hereof the holders of the Common Stock of the
Company (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or, on or after the record
date fixed for the determination of eligible stockholders, shall have become
entitled to receive, without payment therefor, other or additional stock of the
Company by way of dividend then, and in each case, the Holder of this Warrant
shall, upon the exercise hereof, be entitled to receive, in addition to the
number of shares of Common Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of such other or additional
stock of the Company which such Holder would hold on the date of such exercise
had it been the holder of record of such Common Stock on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock receivable
by it as aforesaid during such period, giving effect to all adjustments called
for during such period by paragraphs (b) and (c) of this Section 5.
(b) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case of
any reclassification or change of the outstanding securities of the Company or
of any consolidation, merger or reorganization of the Company on or after the
date hereof, then and in each such case the Holder of this Warrant, upon the
exercise hereof at any time after the consummation of such reclassification,
change, consolidation, merger or reorganization, shall be entitled to receive,
in lieu of or in addition to the stock or other securities and property
receivable upon the exercise hereof prior to such consummation, the stock or
other securities to which such Holder would have been entitled upon such
consummation if such Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in subparagraphs (a) and
(c); in each such case, the terms of this Paragraph 5 shall be applicable to the
shares of stock or other securities property receivable upon the exercise of
this Warrant after such consummation.
(c) STOCK SPLITS AND REVERSE STOCK SPLITS. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately reduced
and the number of shares receivable upon exercise of this Warrant shall thereby
be proportionately increased; and, conversely, if at any time on or after the
date hereof the outstanding number of shares of Common Stock shall be combined
into a smaller number of shares, the Warrant Price in effect immediately prior
to such combination shall thereby be proportionately increased and the number of
shares receivable upon exercise of the Warrant shall be proportionately
decreased.
(d) ADJUSTMENTS TO WARRANT PRICE. Whenever the number of Shares
purchasable upon exercise of this Warrant is adjusted, as herein provided, the
Warrant Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to such
4
<PAGE>
adjustment by a fraction, of which the numerator shall be the number of Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Shares so
purchasable immediately thereafter.
(e) CERTIFICATES AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish the Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such adjustment
is based. The Company shall, upon written request, furnish the Holder a
certificate setting forth the Warrant Price in effect upon the date thereof and
the series of adjustments leading to such Warrant Price.
6. ACQUISITIONS.
(a) ASSUMPTION OF WARRANT. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing.
(b) NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and the Holder
has not otherwise exercised this Warrant in full, then the unexercised portion
of this Warrant shall be deemed to have been automatically converted pursuant to
Section 4(c) and thereafter the Holder shall participate in the acquisition on
the same terms as other holders of the same class of securities of the Company.
7. NOTICES; INFORMATION; REGISTRATION.
(a) NOTICE OF CERTAIN EVENTS. If the Company proposes at any time
(a) to effect any reclassification or recapitalization of Common Stock; (b) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (c) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the company's securities
for cash, then, in connection with each such event, the Company shall give the
Holder at least 14 days prior written notice of the date on which a record will
be taken for such action.
(b) INFORMATION RIGHTS. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a) promptly
after mailing, copies of all notices or other written communications to the
stockholders of the Company, (b) within ninety days after the end of each fiscal
year of the Company, the annual audited financial statements of the Company
audited by independent public accountants of recognized standing and (c) within
forty-five days after the end of each of the first three quarters of each fiscal
year, the Company's quarterly, unaudited financial statements.
5
<PAGE>
(c) REGISTRATION UNDER SECURITIES ACT OF 1933. The Company agrees
that the Shares shall be subject to the registration rights set forth on
Exhibit B.
8. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
DISPOSITION OF SHARES.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof, agrees
that this Warrant and the Shares to be issued upon the exercise hereof are being
acquired solely for its own account and not as a nominee for any other party and
not with a view toward the resale or distribution thereof and that it will not
offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon
the exercise hereof except under circumstances which will not result in a
violation of the Act. This Warrant and the Shares to be issued upon the
exercise hereof (unless registered under the Act) shall be imprinted with a
legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION
OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO
THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION
IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the exercise hereof
shall bear any legends required by the securities laws of any applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant may
not be transferred or assigned in whole or in part without compliance with all
applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions satisfactory to the Company, if requested by the Company and the
transfer is to a person other than a general partner or affiliate of the initial
Holder). Subject to the provisions of this Warrant with respect to compliance
with the Act, title to this Warrant may be transferred by endorsement and
delivery in the same manner as a negotiable instrument transferable by
endorsement and delivery. The Company shall act promptly to record transfers of
this Warrant on its books, but the Company may treat the registered holder of
this Warrant as the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.
6
<PAGE>
(c) DISPOSITION OF SHARES. With respect to any offer, sale, transfer
or other disposition of any Shares acquired pursuant to the exercise of this
Warrant prior to registration of such Shares, except for any such offer, sale,
transfer or other disposition of Shares to an affiliate of the initial Holder,
the Holder and each subsequent holder of this Warrant agrees to give written
notice to the Company prior thereto, describing briefly the manner thereof, and
if such transfer is not pursuant to Rule 144, a written opinion of legal counsel
for such holder, if requested by the Company, to the effect that such offer,
sale or other disposition may be effected without registration or qualification
of such Shares. Notwithstanding the foregoing, such Shares may be offered, sold
or otherwise disposed of in accordance with Rule 144, provided that the Company
shall have been furnished with such information as the Company may reasonably
request to provide a reasonable assurance that the provisions of Rule 144 have
been satisfied. Each certificate representing the Shares thus transferred
(except a transfer pursuant to Rule 144) shall bear a restrictive legend as to
the applicable restrictions on transferability in order to insure compliance
with the Act, unless in the aforesaid opinion of legal counsel for the holder,
such legend is not required in order to insure compliance with the Act.
9. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities of
the Company which may at any time be issuable on the exercise of this Warrant
for any purpose, nor shall anything contained herein be construed to confer upon
the Holder, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger, transfer of assets or
otherwise) or, except as expressly required herein, to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised and the Shares issuable upon exercise hereof
shall have become deliverable, as provided herein.
10. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
11. EXCHANGE OF WARRANT. Subject to the other provisions of this Warrant,
on surrender of this Warrant for exchange, and subject to the provisions of this
Warrant with respect to compliance with the Act, the Company at its expense
shall issue to or on the order of the Holder a new warrant or warrants of like
tenor, in the name of the Holder or as the Holder (on payment by the Holder of
any applicable transfer taxes) may direct, for the number of Shares issuable
upon exercise thereof.
12. NOTICES. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or
7
<PAGE>
mailed by first-class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company or the Holder, as the case may
be, in writing by the Company or such Holder from time to time.
13. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. TITLES AND SUBTITLES; FORMS OF PRONOUNS. The titles of the Sections
and Subsections of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in this Warrant shall
be deemed to include masculine, feminine and neuter forms.
16. ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
Dated: October 20, 1997. PC QUOTE, INC., a Delaware corporation
By:
-----------------------------------------
John E. Juska, Chief Financial Officer
8
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
TO: PC QUOTE, INC.
1. The undersigned Holder of the attached Common Stock Purchase Warrant
hereby elects to exercise its purchase right under such Warrant with respect to
________________ Shares, as defined in the Warrant.
2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed cashier's or certified check drawn on a United
States bank and for United States funds made payable to the
Company in the amount of $_____________; or
[ ] by wire transfer of United States funds to the account of the
Company in the amount of $___________, which transfer has been
made before or simultaneously with the delivery of this Notice
pursuant to the instructions of the Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below:
Name:
--------------------------------
Address:
--------------------------------
--------------------------------
Tax ID No.:
-------------------
HOLDER:
----------------------------------------
By:
--------------------------------
Date: Title:
-------------------- ------------------------
<PAGE>
EXHIBIT B
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purposes of the Warrant to which this Statement of
Registration Rights is attached as Exhibit B:
(a) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document;
(b) The term "Registrable Securities" means the shares of Common
Stock issued or issuable upon exercise of the Warrant;
(c) The term "Holder" means the original holder of the Warrant and
any transferee of the Warrant; and
(d) The term "Warrant" means the original Warrants issued in
connection with the Stock and Warrant Purchase Agreement, dated as of
October 15, 1997, between the Company, as Seller, and Wexford Spectrum Investors
LLC, a Delaware limited liability company, and Imprimis Investors LLC, a
Delaware limited liability company, as Buyers, and all Warrants issued as a
result of the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes at any time before October 15, 2002 to register (including for
this purpose a registration effected by the Company for stockholders other than
Holder) any of its stock or other securities under the Act in connection with
the public offering for its own account of such securities solely for cash
(other than a registration relating solely to the sale of securities to
participants in a Company stock plan, or a registration on any form which does
not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give Holder written
notice of such registration. Upon the written request of Holder given within
twenty days after mailing of such notice by the Company, the Company shall,
subject to the provisions of Section 8 hereof and Section 5 of the Warrant,
cause to be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any time before
October 15, 2002, receive from Holders holding 40% or more of the outstanding
Registrable Securities a written request (to be exercised only once) that the
Company effect a registration and any related qualification or compliance with
respect to all or a part of the Registrable Securities (which registration shall
at the election of Holder either be for a registration for a primary issuance of
the Shares upon the exercise of the Warrant or the resale of the Shares
previously issued upon exercise of the Warrant at the election of Holder) owned
by such Holder, the Company will promptly notify each other Holder (if any) of
such request and will:
<PAGE>
(a) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of a Holder's
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder of registration
rights joining in such request as are specified in a written request given
within 20 days after receipt of such written notice from the Company; PROVIDED,
HOWEVER, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 3: (1) if
the Company has effected a registration of Registrable Securities pursuant to
this Section 3 within the preceding 12 months; (2) if the Company shall furnish
to Holder a certificate signed by the President of the Company stating that in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the registration statement for a period of not more than 60
days after receipt of the request of Holder under this Section 3; PROVIDED,
HOWEVER, that the Company shall not utilize this right more than once in any
twelve-month period; or (3) in any jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance; and,
(b) subject to the foregoing, file a registration statement covering
the Registrable Securities and other securities so requested to be registered
promptly after receipt of the request or requests of Holder, and in any event
within 30 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the Warrant, in
the event that the Company is to effect the registration of any Registrable
Securities pursuant to Section 2 or 3 hereof, the Company shall promptly:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the holders
of a majority of the securities registered thereunder, keep such registration
statement effective for up to one hundred twenty (120) days, or such shorter
period as is required to dispose of all securities covered by such registration
statement.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as Holder may reasonably request in order to
facilitate the disposition of Registrable Securities owned by Holder.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by Holder, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions or to agree to any restrictions as
to the conduct of its business in the ordinary course thereof.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Holder shall also enter
into and perform its obligations under such underwriting agreement.
2
<PAGE>
(f) Notify Holder at any time when a prospectus relating to
Registrable Securities of Holder covered by such registration statement is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made.
(g) Furnish, at the request of Holder, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to the Warrant, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to Holder and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in the Warrant or
this Statement of Registration Rights to the contrary, the Company shall not be
obligated to effect any such registration, qualification or compliance, pursuant
to Section 2 or 3, if application of Rule 144 would allow Holder requesting a
registration under Section 2 or 3 to dispose of the Registrable Securities for
which a registration is demanded within a single 90-day period.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to the Warrant that the
selling Holder shall furnish to the Company such information regarding itself,
the Registrable Securities held by Holder, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
7. EXPENSES. The Company shall bear and pay all expenses (other than
underwriting discounts and commissions) incurred in connection with any
registration, filing or qualification of Registrable Securities, including
(without limitation) all registration, filing, and qualification fees, legal,
printers and accounting fees relating thereto, and the cost of any reasonable
fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any registrations in
which Registrable Securities have a right to be included pursuant to Section 2
hereof and which involves an underwriting of securities being issued by the
Company, the Company shall not be required, under Section 2 hereof, to include
any of Holder's securities in such underwriting unless Holder accepts the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the opinion of
the underwriters, jeopardize the success of the offering by the Company. If the
total amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters reasonably believe
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters believe will not jeopardize the
success of the offering, the securities so included to be apportioned pro rata
among the selling Holder and other shareholders holding contractual registration
rights according to the total amount of securities entitled to be included
herein owned by each selling stockholder or in such other proportions as shall
mutually be agreed to by Holder and each other selling stockholder.
3
<PAGE>
9. INDEMNIFICATION. In the event any Registrable Securities are included
n a registration statement filed by the Company:
(a) The Company will indemnify and holder harmless Holder, its
officers, directors, and agents, any underwriter (as defined in the Act) for
Holder and each person, if any, who controls Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), against any losses, claims, damages, or liabilities (joint or several)
asserted by a third party to which they may become subject under the Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation of the
Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will reimburse Holder, any of its officers or directors,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability, or action; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 9(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, underwriter or controlling person.
(b) Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Company with the meaning of the Act, any
underwriter and any other shareholder selling securities in such registration
statement or any of its directors or officers or any person who controls such
shareholder, against any losses, claims, damages, or liabilities (joint or
several) asserted by a third party to which the Company or any such director,
officer, controlling person, or underwriter or controlling person, or other such
shareholder or director, officer or controlling person may become subject, under
the Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by Holder expressly for use in connection with
such registration; and Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or controlling person, other shareholder, officer, director,
or controlling person, as incurred, in connection with investigating or
defending any such loss, claim, damage, liability, or action; PROVIDED, HOWEVER,
that the obligations of Holder hereunder shall be limited to an amount equal to
the net proceeds (equal to the offering price less the exercise price, expenses
and underwriting commissions and discounts) to such Holder of Shares sold as
contemplated herein. Notwithstanding the foregoing, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of Holder, which consent shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying part under this Section 9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
4
<PAGE>
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 9, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 9.
10. REPORTS UNDER THE 1934 ACT. With a view to making available to Holder
the benefits of Rule 144 promulgated under the Act and any other rule or
regulation of the SEC that may at any time permit Holder to sell securities of
the Company to the public without registration the Company will endeavor to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable Holder to utilize an
abbreviated registration statement for the sale of its Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144, the Act and the
1934 Act, or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested in availing Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration or
pursuant to such form.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to the Warrant may be assigned by
Holder to a permitted transferee or assignee of the Warrant of all 150,000
Shares, provided the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; and provided, further, that such assignment shall be effective
only if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Act.
5
<PAGE>
Common Stock Purchase Warrant
175,000 Shares
(subject to adjustment)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING
THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after October 15, 2002
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, IMPRIMIS INVESTORS LLC, a limited
liability company organized under the laws of the State of Delaware ("Wexford
Spectrum") is entitled to purchase up to One Hundred Seventy-five Thousand
(175,000) Shares of Common Stock of PC QUOTE, INC., a Delaware corporation, at a
price of Two Dollars ($2.00) per Share (the "Warrant Price"), subject to
adjustments and all other terms and conditions set forth in this Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the context
otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
(b) "Acquisition" shall mean any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of
the Company's securities before the transaction beneficially own less than
50% of the outstanding voting securities of the surviving entity after the
transaction.
(c) "Commission" shall mean the Securities and Exchange
Commission, or any other Federal agency at the time administering the Act.
<PAGE>
(d) "Common Stock" shall mean shares of the Company's presently
or subsequently authorized common stock, par value $0.001, and any stock for
which such common stock may hereafter be exchanged.
(e) "Company" shall mean PC QUOTE, INC., a Delaware corporation,
and any corporation which shall succeed to or assume the obligations of PC
QUOTE, INC., under this Warrant.
(f) "Date of Grant" shall mean October 15, 1997.
(g) "Exercise Date" shall mean the effective date of the delivery
of the Notice of Exercise pursuant to Section 4 below.
(h) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(i) "Shares" shall mean shares of Common Stock.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is
issued in consideration of the purchase price paid by Wexford Spectrum to the
Company as set forth in that certain Stock and Warrant Purchase Agreement
dated as of the date hereof and made and entered into by and between the
Company, as Seller, and Wexford Spectrum and Imprimis Investors LLC, a
Delaware limited liability company, as Buyers.
3. TERM. The purchase right represented by this Warrant is
exercisable only during the period commencing upon the Date of Grant and
ending on October 15, 2002.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and
compliance with all applicable Federal and state securities laws, the
purchase right represented by this Warrant may be exercised, in whole or in
part and from time to time, by the Holder by (i) surrender of this Warrant
and delivery of the Notice of Exercise (the form of which is attached hereto
as Exhibit A), duly executed, at the principal office of the Company and (ii)
payment to the Company of an amount equal to the product of the then
applicable Warrant Price multiplied by the number of Shares then being
purchased pursuant to one of the payment methods permitted under Section 4(b)
below.
(b) METHOD OF PAYMENT. Payment shall be made either (1)
by cashier's or certified check drawn on a United States bank and for United
States funds made payable to the Company, or (2) by wire transfer of United
States funds for the account of the Company.
(c) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be
2
<PAGE>
delivered to the Holder within five days of delivery of the Notice of
Exercise and, unless this Warrant has been fully exercised or has expired, a
new warrant representing the portion of the Shares with respect to which this
Warrant shall not then have been exercised shall also be issued to the Holder
within such ten day period.
(d) NO FRACTIONAL SHARES. No fractional shares shall be
issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Company shall make a cash payment therefor upon the
basis of the fair market value per Share as of the date of exercise.
(e) COMPANY'S REPRESENTATIONS.
(i) The Company is soliciting proxies in connection with its
Annual Meeting of Stockholders for, among other things, a proposal to amend
its Certificate of Incorporation to increase the number of shares of Common
Stock authorized for issuance. If such proposal is approved by the Company's
stockholders, the Company shall file a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Amendment") in order to increase such number of authorized
shares of Common Stock. From and after the date of filing the Amendment, all
Shares which may be issued upon the exercise of the purchase right
represented by this Warrant shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer under applicable federal and state
securities laws. From and after the date of the Amendment, during the period
within which the purchase right represented by this Warrant may be exercised,
the Company shall at all times use its best efforts to have authorized, and
reserved for the purpose of issuance upon exercise of the purchase right
represented by this Warrant, a sufficient number of Shares to provide for the
exercise of the purchase right represented by this Warrant;
(ii) This Warrant has been duly authorized and executed by the
Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;
(iii) The execution and delivery of this Warrant are not, and
from and after the date of the Amendment, the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company's Certificate of Incorporation or Bylaws, do
not and will not contravene any law, governmental rule or regulation,
judgment or order applicable to the Company, and do not and will not conflict
with or contravene any provision of, or constitute a default under, any
material indenture, mortgage, contract or other instrument of which the
Company is a party or by which it is bound, or require the registration or
filing with or the taking of any action in respect of or by, any federal,
state or local government authority or agency (other than such consents,
approvals, notices, actions, or filings as have already been obtained or
made, as the case may be).
3
<PAGE>
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The
number of Shares issuable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or
from time to time on or after the date hereof the holders of the Common Stock
of the Company (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received or, on or
after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock of the Company by way of dividend then, and in each case,
the Holder of this Warrant shall, upon the exercise hereof, be entitled to
receive, in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration therefor, the
amount of such other or additional stock of the Company which such Holder
would hold on the date of such exercise had it been the holder of record of
such Common Stock on the date hereof and had thereafter, during the period
from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock receivable by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by paragraphs (b) and (c) of this Section 5.
(b) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case
of any reclassification or change of the outstanding securities of the
Company or of any consolidation, merger or reorganization of the Company on
or after the date hereof, then and in each such case the Holder of this
Warrant, upon the exercise hereof at any time after the consummation of such
reclassification, change, consolidation, merger or reorganization, shall be
entitled to receive, in lieu of or in addition to the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities to which such Holder would have
been entitled upon such consummation if such Holder had exercised this
Warrant immediately prior thereto, all subject to further adjustment as
provided in subparagraphs (a) and (c); in each such case, the terms of this
Paragraph 5 shall be applicable to the shares of stock or other securities
property receivable upon the exercise of this Warrant after such consummation.
(c) STOCK SPLITS AND REVERSE STOCK SPLITS. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately
reduced and the number of shares receivable upon exercise of this Warrant
shall thereby be proportionately increased; and, conversely, if at any time
on or after the date hereof the outstanding number of shares of Common Stock
shall be combined into a smaller number of shares, the Warrant Price in
effect immediately prior to such combination shall thereby be proportionately
increased and the number of shares receivable upon exercise of the Warrant
shall be proportionately decreased.
(d) ADJUSTMENTS TO WARRANT PRICE. Whenever the number of Shares
purchasable upon exercise of this Warrant is adjusted, as herein provided,
the Warrant Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior to such
4
<PAGE>
adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment, and of which the denominator shall be the number of Shares
so purchasable immediately thereafter.
(e) CERTIFICATES AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish the Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such
adjustment is based. The Company shall, upon written request, furnish the
Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.
6. ACQUISITIONS.
(a) ASSUMPTION OF WARRANT. If upon the closing of any
Acquisition the successor entity assumes the obligations of this Warrant,
then this Warrant shall be exercisable for the same securities, cash, and
property as would be payable for the Shares issuable upon exercise of the
unexercised portion of this Warrant as if such Shares were outstanding on the
record date for the Acquisition and subsequent closing.
(b) NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and the
Holder has not otherwise exercised this Warrant in full, then the unexercised
portion of this Warrant shall be deemed to have been automatically converted
pursuant to Section 4(c) and thereafter the Holder shall participate in the
acquisition on the same terms as other holders of the same class of
securities of the Company.
7. NOTICES; INFORMATION; REGISTRATION.
(a) NOTICE OF CERTAIN EVENTS. If the Company proposes at any
time (a) to effect any reclassification or recapitalization of Common Stock;
(b) to merge or consolidate with or into any other corporation, or sell,
lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (c) offer holders of registration rights
the opportunity to participate in an underwritten public offering of the
company's securities for cash, then, in connection with each such event, the
Company shall give the Holder at least 14 days prior written notice of the
date on which a record will be taken for such action.
(b) INFORMATION RIGHTS. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a)
promptly after mailing, copies of all notices or other written communications
to the stockholders of the Company, (b) within ninety days after the end of
each fiscal year of the Company, the annual audited financial statements of
the Company audited by independent public accountants of recognized standing
and (c) within forty-five days after the end of each of the first three
quarters of each fiscal year, the Company's quarterly, unaudited financial
statements.
5
<PAGE>
(c) REGISTRATION UNDER SECURITIES ACT OF 1933. The Company
agrees that the Shares shall be subject to the registration rights set forth
on Exhibit B.
8. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
DISPOSITION OF SHARES.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof,
agrees that this Warrant and the Shares to be issued upon the exercise hereof
are being acquired solely for its own account and not as a nominee for any
other party and not with a view toward the resale or distribution thereof and
that it will not offer, sell or otherwise dispose of this Warrant or any
Shares to be issued upon the exercise hereof except under circumstances which
will not result in a violation of the Act. This Warrant and the Shares to be
issued upon the exercise hereof (unless registered under the Act) shall be
imprinted with a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING
SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144
UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO
THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the exercise
hereof shall bear any legends required by the securities laws of any
applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant
may not be transferred or assigned in whole or in part without compliance
with all applicable federal and state securities laws by the transferor and
the transferee (including the delivery of investment representation letters
and legal opinions satisfactory to the Company, if requested by the Company
and the transfer is to a person other than a general partner or affiliate of
the initial Holder). Subject to the provisions of this Warrant with respect
to compliance with the Act, title to this Warrant may be transferred by
endorsement and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery. The Company shall act promptly to
record transfers of this Warrant on its books, but the Company may treat the
registered holder of this Warrant as the absolute owner of this Warrant for
all purposes, notwithstanding any notice to the contrary.
6
<PAGE>
(c) DISPOSITION OF SHARES. With respect to any offer, sale,
transfer or other disposition of any Shares acquired pursuant to the exercise
of this Warrant prior to registration of such Shares, except for any such
offer, sale, transfer or other disposition of Shares to an affiliate of the
initial Holder, the Holder and each subsequent holder of this Warrant agrees
to give written notice to the Company prior thereto, describing briefly the
manner thereof, and if such transfer is not pursuant to Rule 144, a written
opinion of legal counsel for such holder, if requested by the Company, to the
effect that such offer, sale or other disposition may be effected without
registration or qualification of such Shares. Notwithstanding the foregoing,
such Shares may be offered, sold or otherwise disposed of in accordance with
Rule 144, provided that the Company shall have been furnished with such
information as the Company may reasonably request to provide a reasonable
assurance that the provisions of Rule 144 have been satisfied. Each
certificate representing the Shares thus transferred (except a transfer
pursuant to Rule 144) shall bear a restrictive legend as to the applicable
restrictions on transferability in order to insure compliance with the Act,
unless in the aforesaid opinion of legal counsel for the holder, such legend
is not required in order to insure compliance with the Act.
9. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities
of the Company which may at any time be issuable on the exercise of this
Warrant for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance
of stock, reclassification of stock, consolidation, merger, transfer of
assets or otherwise) or, except as expressly required herein, to receive
notice of meetings, or to receive dividends or subscription rights or
otherwise until this Warrant shall have been exercised and the Shares
issuable upon exercise hereof shall have become deliverable, as provided
herein.
10. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of
an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company at its expense shall execute and deliver, in lieu of
this Warrant, a new warrant of like tenor.
11. EXCHANGE OF WARRANT. Subject to the other provisions of this
Warrant, on surrender of this Warrant for exchange, and subject to the
provisions of this Warrant with respect to compliance with the Act, the
Company at its expense shall issue to or on the order of the Holder a new
warrant or warrants of like tenor, in the name of the Holder or as the Holder
(on payment by the Holder of any applicable transfer taxes) may direct, for
the number of Shares issuable upon exercise thereof.
12. NOTICES. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or
7
<PAGE>
mailed by first-class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company or the Holder, as the case
may be, in writing by the Company or such Holder from time to time.
13. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. TITLES AND SUBTITLES; FORMS OF PRONOUNS. The titles of the Sections
and Subsections of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in this Warrant
shall be deemed to include masculine, feminine and neuter forms.
16. ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
Dated: October 23, 1997. PC QUOTE, INC., a Delaware corporation
By:
-------------------------------
Jim R. Porter, Chief Executive
Officer
By:
-------------------------------
Darlene E. Czaja, Secretary
8
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
TO: PC QUOTE, INC.
1. The undersigned Holder of the attached Common Stock Purchase Warrant
hereby elects to exercise its purchase right under such Warrant with respect
to ________________ Shares, as defined in the Warrant.
2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed cashier's or certified check drawn on
a United States bank and for United States funds made payable to
the Company in the amount of $_____________; or
[ ] by wire transfer of United States funds to the
account of the Company in the amount of $___________, which
transfer has been made before or simultaneously with the
delivery of this Notice pursuant to the instructions of the
Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below:
Name:
------------------------------------------
Address:
------------------------------------------
Tax ID No.:
-------------------------
HOLDER:
--------------------------------
By:
-----------------------------
Date: Title:
------------------------------- ------------------
<PAGE>
EXHIBIT B
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purposes of the Warrant to which this Statement of
Registration Rights is attached as Exhibit B:
(a) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement
or similar document in compliance with the Securities Act of 1933, as amended
(the "Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means the shares of Common
Stock issued or issuable upon exercise of the Warrant;
(c) The term "Holder" means the original holder of the Warrant
and any transferee of the Warrant; and
(d) The term "Warrant" means the original Warrants issued in
connection with the Stock and Warrant Purchase Agreement, dated as of October
15, 1997, between the Company, as Seller, and Wexford Spectrum Investors LLC,
a Delaware limited liability company, and Imprimis Investors LLC, a Delaware
limited liability company, as Buyers, and all Warrants issued as a result of
the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes at any time before October 15, 2002 to register (including
for this purpose a registration effected by the Company for stockholders
other than Holder) any of its stock or other securities under the Act in
connection with the public offering for its own account of such securities
solely for cash (other than a registration relating solely to the sale of
securities to participants in a Company stock plan, or a registration on any
form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities), the Company shall, at such time, promptly give
Holder written notice of such registration. Upon the written request of
Holder given within twenty days after mailing of such notice by the Company,
the Company shall, subject to the provisions of Section 8 hereof and Section
5 of the Warrant, cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any time before
October 15, 2002, receive from Holders holding 40% or more of the outstanding
Registrable Securities a written request (to be exercised only once) that the
Company effect a registration and any related qualification or compliance
with respect to all or a part of the Registrable Securities (which
registration shall at the election of Holder either be for a registration for
a primary issuance of the Shares upon the exercise of the Warrant or the
resale of the Shares previously issued upon exercise of the Warrant at the
election of Holder) owned by such Holder, the Company will promptly notify
each other Holder (if any) of such request and will:
<PAGE>
(a) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of a Holder's
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder of
registration rights joining in such request as are specified in a written
request given within 20 days after receipt of such written notice from the
Company; PROVIDED, HOWEVER, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
3: (1) if the Company has effected a registration of Registrable Securities
pursuant to this Section 3 within the preceding 12 months; (2) if the Company
shall furnish to Holder a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its
stockholders for such registration to be effected at such time, in which
event the Company shall have the right to defer the filing of the
registration statement for a period of not more than 60 days after receipt of
the request of Holder under this Section 3; PROVIDED, HOWEVER, that the
Company shall not utilize this right more than once in any twelve-month
period; or (3) in any jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process
in effecting such registration, qualification or compliance; and,
(b) subject to the foregoing, file a registration statement
covering the Registrable Securities and other securities so requested to be
registered promptly after receipt of the request or requests of Holder, and
in any event within 30 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the Warrant, in
the event that the Company is to effect the registration of any Registrable
Securities pursuant to Section 2 or 3 hereof, the Company shall promptly:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the
holders of a majority of the securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days, or
such shorter period as is required to dispose of all securities covered by
such registration statement.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the provisions
of the Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as Holder may reasonably request in order
to facilitate the disposition of Registrable Securities owned by Holder.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue
Sky laws of such jurisdictions as shall be reasonably requested by Holder,
provided that the Company shall not be required in connection therewith or as
a condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions or to agree to any
restrictions as to the conduct of its business in the ordinary course thereof.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Holder shall
also enter into and perform its obligations under such underwriting agreement.
2
<PAGE>
(f) Notify Holder at any time when a prospectus relating to
Registrable Securities of Holder covered by such registration statement is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made.
(g) Furnish, at the request of Holder, on the date that such
Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to the Warrant, if such securities
are being sold through underwriters, or, if such securities are not being
sold through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated such
date, of counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder and (ii) a letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in the Warrant or
this Statement of Registration Rights to the contrary, the Company shall not
be obligated to effect any such registration, qualification or compliance,
pursuant to Section 2 or 3, if application of Rule 144 would allow Holder
requesting a registration under Section 2 or 3 to dispose of the Registrable
Securities for which a registration is demanded within a single 90-day period.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to the Warrant that
the selling Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by Holder, and the intended method of
disposition of such securities as shall be required to effect the
registration of their Registrable Securities.
7. EXPENSES. The Company shall bear and pay all expenses (other than
underwriting discounts and commissions) incurred in connection with any
registration, filing or qualification of Registrable Securities, including
(without limitation) all registration, filing, and qualification fees, legal,
printers and accounting fees relating thereto, and the cost of any reasonable
fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any registrations in
which Registrable Securities have a right to be included pursuant to Section
2 hereof and which involves an underwriting of securities being issued by the
Company, the Company shall not be required, under Section 2 hereof, to
include any of Holder's securities in such underwriting unless Holder accepts
the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it, and then only in such quantity as will not, in
the opinion of the underwriters, jeopardize the success of the offering by
the Company. If the total amount of securities, including Registrable
Securities, requested by stockholders to be included in such offering exceeds
the amount of securities sold other than by the Company that the underwriters
reasonably believe compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters believe
will not jeopardize the success of the offering, the securities so included
to be apportioned pro rata among the selling Holder and other shareholders
holding contractual registration rights according to the total amount of
securities entitled to be included herein owned by each selling stockholder
or in such other proportions as shall mutually be agreed to by Holder and
each other selling stockholder.
3
<PAGE>
9. INDEMNIFICATION. In the event any Registrable Securities are
included n a registration statement filed by the Company:
(a) The Company will indemnify and holder harmless Holder, its
officers, directors, and agents, any underwriter (as defined in the Act) for
Holder and each person, if any, who controls Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), against any losses, claims, damages, or liabilities (joint or
several) asserted by a third party to which they may become subject under the
Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of
or are based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, or (iii) any violation or
alleged violation of the Company of the Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Act, the 1934
Act or any state securities law; and the Company will reimburse Holder, any
of its officers or directors, underwriter or controlling person for any legal
or other expenses reasonably incurred by them, as incurred, in connection
with investigating or defending any such loss, claim, damage, liability, or
action; PROVIDED, HOWEVER, that the indemnity agreement contained in this
Section 9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration
by such Holder, underwriter or controlling person.
(b) Holder will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company with the meaning of
the Act, any underwriter and any other shareholder selling securities in such
registration statement or any of its directors or officers or any person who
controls such shareholder, against any losses, claims, damages, or
liabilities (joint or several) asserted by a third party to which the Company
or any such director, officer, controlling person, or underwriter or
controlling person, or other such shareholder or director, officer or
controlling person may become subject, under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information furnished
by Holder expressly for use in connection with such registration; and Holder
will reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer, controlling person, underwriter or controlling
person, other shareholder, officer, director, or controlling person, as
incurred, in connection with investigating or defending any such loss, claim,
damage, liability, or action; PROVIDED, HOWEVER, that the obligations of
Holder hereunder shall be limited to an amount equal to the net proceeds
(equal to the offering price less the exercise price, expenses and
underwriting commissions and discounts) to such Holder of Shares sold as
contemplated herein. Notwithstanding the foregoing, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of Holder, which consent shall not be
unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying part under this Section 9,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party
4
<PAGE>
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party
shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 9, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 9.
10. REPORTS UNDER THE 1934 ACT. With a view to making available to
Holder the benefits of Rule 144 promulgated under the Act and any other rule
or regulation of the SEC that may at any time permit Holder to sell
securities of the Company to the public without registration the Company will
endeavor to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable Holder to utilize
an abbreviated registration statement for the sale of its Registrable
Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company
that it has complied with the reporting requirements of SEC Rule 144, the Act
and the 1934 Act, or that it qualifies as a registrant whose securities may
be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing Holder of any rule or
regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to the Warrant may be assigned by
Holder to a permitted transferee or assignee of the Warrant of all 150,000
Shares, provided the Company is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act.
5
<PAGE>
Common Stock Purchase Warrant
75,000 Shares
(subject to adjustment)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING
THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after October 15, 2002
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, WEXFORD SPECTRUM INVESTORS LLC, a
limited liability company organized under the laws of the State of Delaware
("Wexford Spectrum") is entitled to purchase up to Seventy-five Thousand
(75,000) Shares of Common Stock of PC QUOTE, INC., a Delaware corporation, at
a price of Two Dollars ($2.00) per Share (the "Warrant Price"), subject to
adjustments and all other terms and conditions set forth in this Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the
context otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
(b) "Acquisition" shall mean any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of
the Company's securities before the transaction beneficially own less than
50% of the outstanding voting securities of the surviving entity after the
transaction.
(c) "Commission" shall mean the Securities and Exchange
Commission, or any other Federal agency at the time administering the Act.
<PAGE>
(d) "Common Stock" shall mean shares of the Company's presently or
subsequently authorized common stock, par value $0.001, and any stock for
which such common stock may hereafter be exchanged.
(e) "Company" shall mean PC QUOTE, INC., a Delaware corporation,
and any corporation which shall succeed to or assume the obligations of PC
QUOTE, INC., under this Warrant.
(f) "Date of Grant" shall mean October 15, 1997.
(g) "Exercise Date" shall mean the effective date of the delivery
of the Notice of Exercise pursuant to Section 4 below.
(h) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(i) "Shares" shall mean shares of Common Stock.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is
issued in consideration of the purchase price paid by Wexford Spectrum to the
Company as set forth in that certain Stock and Warrant Purchase Agreement
dated as of the date hereof and made and entered into by and between the
Company, as Seller, and Wexford Spectrum and Imprimis Investors LLC, a
Delaware limited liability company, as Buyers.
3. TERM. The purchase right represented by this Warrant is
exercisable only during the period commencing upon the Date of Grant and
ending on October 15, 2002.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and
compliance with all applicable Federal and state securities laws, the
purchase right represented by this Warrant may be exercised, in whole or in
part and from time to time, by the Holder by (i) surrender of this Warrant
and delivery of the Notice of Exercise (the form of which is attached hereto
as Exhibit A), duly executed, at the principal office of the Company and (ii)
payment to the Company of an amount equal to the product of the then
applicable Warrant Price multiplied by the number of Shares then being
purchased pursuant to one of the payment methods permitted under Section 4(b)
below.
(b) METHOD OF PAYMENT. Payment shall be made either (1) by
cashier's or certified check drawn on a United States bank and for United
States funds made payable to the Company, or (2) by wire transfer of United
States funds for the account of the Company.
(c) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be
2
<PAGE>
delivered to the Holder within five days of delivery of the Notice of
Exercise and, unless this Warrant has been fully exercised or has expired, a
new warrant representing the portion of the Shares with respect to which this
Warrant shall not then have been exercised shall also be issued to the Holder
within such ten day period.
(d) NO FRACTIONAL SHARES. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the fair
market value per Share as of the date of exercise.
(e) COMPANY'S REPRESENTATIONS.
(i) The Company is soliciting proxies in connection with its
Annual Meeting of Stockholders for, among other things, a proposal to amend
its Certificate of Incorporation to increase the number of shares of Common
Stock authorized for issuance. If such proposal is approved by the Company's
stockholders, the Company shall file a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Amendment") in order to increase such number of authorized
shares of Common Stock. From and after the date of filing the Amendment, all
Shares which may be issued upon the exercise of the purchase right
represented by this Warrant shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer under applicable federal and state
securities laws. From and after the date of the Amendment, during the period
within which the purchase right represented by this Warrant may be exercised,
the Company shall at all times use its best efforts to have authorized, and
reserved for the purpose of issuance upon exercise of the purchase right
represented by this Warrant, a sufficient number of Shares to provide for the
exercise of the purchase right represented by this Warrant;
(ii) This Warrant has been duly authorized and executed by the
Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;
(iii) The execution and delivery of this Warrant are not,
and from and after the date of the Amendment, the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company's Certificate of Incorporation or Bylaws, do
not and will not contravene any law, governmental rule or regulation,
judgment or order applicable to the Company, and do not and will not conflict
with or contravene any provision of, or constitute a default under, any
material indenture, mortgage, contract or other instrument of which the
Company is a party or by which it is bound, or require the registration or
filing with or the taking of any action in respect of or by, any federal,
state or local government authority or agency (other than such consents,
approvals, notices, actions, or filings as have already been obtained or
made, as the case may be).
3
<PAGE>
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number of
Shares issuable upon the exercise of this Warrant and the Warrant Price shall
be subject to adjustment from time to time upon the occurrence of certain
events, as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or
from time to time on or after the date hereof the holders of the Common Stock
of the Company (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received or, on or
after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock of the Company by way of dividend then, and in each case,
the Holder of this Warrant shall, upon the exercise hereof, be entitled to
receive, in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration therefor, the
amount of such other or additional stock of the Company which such Holder
would hold on the date of such exercise had it been the holder of record of
such Common Stock on the date hereof and had thereafter, during the period
from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock receivable by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by paragraphs (b) and (c) of this Section 5.
(b) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case of
any reclassification or change of the outstanding securities of the Company
or of any consolidation, merger or reorganization of the Company on or after
the date hereof, then and in each such case the Holder of this Warrant, upon
the exercise hereof at any time after the consummation of such
reclassification, change, consolidation, merger or reorganization, shall be
entitled to receive, in lieu of or in addition to the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities to which such Holder would have
been entitled upon such consummation if such Holder had exercised this
Warrant immediately prior thereto, all subject to further adjustment as
provided in subparagraphs (a) and (c); in each such case, the terms of this
Paragraph 5 shall be applicable to the shares of stock or other securities
property receivable upon the exercise of this Warrant after such consummation.
(c) STOCK SPLITS AND REVERSE STOCK SPLITS. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately
reduced and the number of shares receivable upon exercise of this Warrant
shall thereby be proportionately increased; and, conversely, if at any time
on or after the date hereof the outstanding number of shares of Common Stock
shall be combined into a smaller number of shares, the Warrant Price in
effect immediately prior to such combination shall thereby be proportionately
increased and the number of shares receivable upon exercise of the Warrant
shall be proportionately decreased.
(d) ADJUSTMENTS TO WARRANT PRICE. Whenever the number of Shares
purchasable upon exercise of this Warrant is adjusted, as herein provided,
the Warrant Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior to such
4
<PAGE>
adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment, and of which the denominator shall be the number of Shares
so purchasable immediately thereafter.
(e) CERTIFICATES AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish the Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such
adjustment is based. The Company shall, upon written request, furnish the
Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.
6. ACQUISITIONS.
(a) ASSUMPTION OF WARRANT. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this
Warrant shall be exercisable for the same securities, cash, and property as
would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record date
for the Acquisition and subsequent closing.
(b) NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and the
Holder has not otherwise exercised this Warrant in full, then the unexercised
portion of this Warrant shall be deemed to have been automatically converted
pursuant to Section 4(c) and thereafter the Holder shall participate in the
acquisition on the same terms as other holders of the same class of
securities of the Company.
7. NOTICES; INFORMATION; REGISTRATION.
(a) NOTICE OF CERTAIN EVENTS. If the Company proposes at any time
(a) to effect any reclassification or recapitalization of Common Stock; (b)
to merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (c) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the
company's securities for cash, then, in connection with each such event, the
Company shall give the Holder at least 14 days prior written notice of the
date on which a record will be taken for such action.
(b) INFORMATION RIGHTS. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a)
promptly after mailing, copies of all notices or other written communications
to the stockholders of the Company, (b) within ninety days after the end of
each fiscal year of the Company, the annual audited financial statements of
the Company audited by independent public accountants of recognized standing
and (c) within forty-five days after the end of each of the first three
quarters of each fiscal year, the Company's quarterly, unaudited financial
statements.
5
<PAGE>
(c) REGISTRATION UNDER SECURITIES ACT OF 1933. The Company agrees
that the Shares shall be subject to the registration rights set forth on
Exhibit B.
8. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
DISPOSITION OF SHARES.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof, agrees
that this Warrant and the Shares to be issued upon the exercise hereof are
being acquired solely for its own account and not as a nominee for any other
party and not with a view toward the resale or distribution thereof and that
it will not offer, sell or otherwise dispose of this Warrant or any Shares to
be issued upon the exercise hereof except under circumstances which will not
result in a violation of the Act. This Warrant and the Shares to be issued
upon the exercise hereof (unless registered under the Act) shall be imprinted
with a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE
SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT,
OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE
COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the exercise
hereof shall bear any legends required by the securities laws of any
applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant
may not be transferred or assigned in whole or in part without compliance
with all applicable federal and state securities laws by the transferor and
the transferee (including the delivery of investment representation letters
and legal opinions satisfactory to the Company, if requested by the Company
and the transfer is to a person other than a general partner or affiliate of
the initial Holder). Subject to the provisions of this Warrant with respect
to compliance with the Act, title to this Warrant may be transferred by
endorsement and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery. The Company shall act promptly to
record transfers of this Warrant on its books, but the Company may treat the
registered holder of this Warrant as the absolute owner of this Warrant for
all purposes, notwithstanding any notice to the contrary.
6
<PAGE>
(c) DISPOSITION OF SHARES. With respect to any offer, sale,
transfer or other disposition of any Shares acquired pursuant to the exercise
of this Warrant prior to registration of such Shares, except for any such
offer, sale, transfer or other disposition of Shares to an affiliate of the
initial Holder, the Holder and each subsequent holder of this Warrant agrees
to give written notice to the Company prior thereto, describing briefly the
manner thereof, and if such transfer is not pursuant to Rule 144, a written
opinion of legal counsel for such holder, if requested by the Company, to the
effect that such offer, sale or other disposition may be effected without
registration or qualification of such Shares. Notwithstanding the foregoing,
such Shares may be offered, sold or otherwise disposed of in accordance with
Rule 144, provided that the Company shall have been furnished with such
information as the Company may reasonably request to provide a reasonable
assurance that the provisions of Rule 144 have been satisfied. Each
certificate representing the Shares thus transferred (except a transfer
pursuant to Rule 144) shall bear a restrictive legend as to the applicable
restrictions on transferability in order to insure compliance with the Act,
unless in the aforesaid opinion of legal counsel for the holder, such legend
is not required in order to insure compliance with the Act.
9. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities
of the Company which may at any time be issuable on the exercise of this
Warrant for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance
of stock, reclassification of stock, consolidation, merger, transfer of
assets or otherwise) or, except as expressly required herein, to receive
notice of meetings, or to receive dividends or subscription rights or
otherwise until this Warrant shall have been exercised and the Shares
issuable upon exercise hereof shall have become deliverable, as provided
herein.
10. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of
an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company at its expense shall execute and deliver, in lieu of
this Warrant, a new warrant of like tenor.
11. EXCHANGE OF WARRANT. Subject to the other provisions of this
Warrant, on surrender of this Warrant for exchange, and subject to the
provisions of this Warrant with respect to compliance with the Act, the
Company at its expense shall issue to or on the order of the Holder a new
warrant or warrants of like tenor, in the name of the Holder or as the Holder
(on payment by the Holder of any applicable transfer taxes) may direct, for
the number of Shares issuable upon exercise thereof.
12. NOTICES. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or
7
<PAGE>
mailed by first-class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company or the Holder, as the case
may be, in writing by the Company or such Holder from time to time.
13. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. TITLES AND SUBTITLES; FORMS OF PRONOUNS. The titles of the
Sections and Subsections of this Warrant are for convenience only and are not
to be considered in construing this Warrant. All pronouns used in this
Warrant shall be deemed to include masculine, feminine and neuter forms.
16. ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
Dated: October 23, 1997. PC QUOTE, INC., a Delaware corporation
By:______________________________________
Jim R. Porter, Chief Executive Officer
By:______________________________________
Darlene E. Czaja, Secretary
8
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
TO: PC QUOTE, INC.
1. The undersigned Holder of the attached Common Stock Purchase Warrant
hereby elects to exercise its purchase right under such Warrant with respect
to ________________ Shares, as defined in the Warrant.
2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed cashier's or certified check drawn on a United
States bank and for United States funds made payable to the
Company in the amount of $_____________; or
[ ] by wire transfer of United States funds to the account of the
Company in the amount of $___________, which transfer has been
made before or simultaneously with the delivery of this Notice
pursuant to the instructions of the Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below:
Name: ___________________________________
Address: ___________________________________
___________________________________
Tax ID No.: ______________________
HOLDER:
___________________________________
By:___________________________
Date:_________________________________ Title: _________________
<PAGE>
EXHIBIT B
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purposes of the Warrant to which this Statement of
Registration Rights is attached as Exhibit B:
(a) The terms "register," "registered," and "registration" refer to
a registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended
(the "Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means the shares of Common
Stock issued or issuable upon exercise of the Warrant;
(c) The term "Holder" means the original holder of the Warrant and
any transferee of the Warrant; and
(d) The term "Warrant" means the original Warrants issued in
connection with the Stock and Warrant Purchase Agreement, dated as of October
15, 1997, between the Company, as Seller, and Wexford Spectrum Investors LLC,
a Delaware limited liability company, and Imprimis Investors LLC, a Delaware
limited liability company, as Buyers, and all Warrants issued as a result of
the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes at any time before October 15, 2002 to register (including
for this purpose a registration effected by the Company for stockholders
other than Holder) any of its stock or other securities under the Act in
connection with the public offering for its own account of such securities
solely for cash (other than a registration relating solely to the sale of
securities to participants in a Company stock plan, or a registration on any
form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities), the Company shall, at such time, promptly give
Holder written notice of such registration. Upon the written request of
Holder given within twenty days after mailing of such notice by the Company,
the Company shall, subject to the provisions of Section 8 hereof and Section
5 of the Warrant, cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any time before
October 15, 2002, receive from Holders holding 40% or more of the outstanding
Registrable Securities a written request (to be exercised only once) that the
Company effect a registration and any related qualification or compliance
with respect to all or a part of the Registrable Securities (which
registration shall at the election of Holder either be for a registration for
a primary issuance of the Shares upon the exercise of the Warrant or the
resale of the Shares previously issued upon exercise of the Warrant at the
election of Holder) owned by such Holder, the Company will promptly notify
each other Holder (if any) of such request and will:
<PAGE>
(a) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of a Holder's
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder of
registration rights joining in such request as are specified in a written
request given within 20 days after receipt of such written notice from the
Company; PROVIDED, HOWEVER, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
3: (1) if the Company has effected a registration of Registrable Securities
pursuant to this Section 3 within the preceding 12 months; (2) if the Company
shall furnish to Holder a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its
stockholders for such registration to be effected at such time, in which
event the Company shall have the right to defer the filing of the
registration statement for a period of not more than 60 days after receipt of
the request of Holder under this Section 3; PROVIDED, HOWEVER, that the
Company shall not utilize this right more than once in any twelve-month
period; or (3) in any jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process
in effecting such registration, qualification or compliance; and,
(b) subject to the foregoing, file a registration statement
covering the Registrable Securities and other securities so requested to be
registered promptly after receipt of the request or requests of Holder, and
in any event within 30 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the Warrant, in
the event that the Company is to effect the registration of any Registrable
Securities pursuant to Section 2 or 3 hereof, the Company shall promptly:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the
holders of a majority of the securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days, or
such shorter period as is required to dispose of all securities covered by
such registration statement.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the provisions
of the Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as Holder may reasonably request in order
to facilitate the disposition of Registrable Securities owned by Holder.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue
Sky laws of such jurisdictions as shall be reasonably requested by Holder,
provided that the Company shall not be required in connection therewith or as
a condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions or to agree to any
restrictions as to the conduct of its business in the ordinary course thereof.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Holder shall
also enter into and perform its obligations under such underwriting agreement.
2
<PAGE>
(f) Notify Holder at any time when a prospectus relating to
Registrable Securities of Holder covered by such registration statement is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made.
(g) Furnish, at the request of Holder, on the date that such
Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to the Warrant, if such securities
are being sold through underwriters, or, if such securities are not being
sold through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated such
date, of counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder and (ii) a letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in the Warrant
or this Statement of Registration Rights to the contrary, the Company shall
not be obligated to effect any such registration, qualification or
compliance, pursuant to Section 2 or 3, if application of Rule 144 would
allow Holder requesting a registration under Section 2 or 3 to dispose of the
Registrable Securities for which a registration is demanded within a single
90-day period.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to the Warrant that
the selling Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by Holder, and the intended method of
disposition of such securities as shall be required to effect the
registration of their Registrable Securities.
7. EXPENSES. The Company shall bear and pay all expenses (other than
underwriting discounts and commissions) incurred in connection with any
registration, filing or qualification of Registrable Securities, including
(without limitation) all registration, filing, and qualification fees, legal,
printers and accounting fees relating thereto, and the cost of any reasonable
fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any registrations in
which Registrable Securities have a right to be included pursuant to Section
2 hereof and which involves an underwriting of securities being issued by the
Company, the Company shall not be required, under Section 2 hereof, to
include any of Holder's securities in such underwriting unless Holder accepts
the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it, and then only in such quantity as will not, in
the opinion of the underwriters, jeopardize the success of the offering by
the Company. If the total amount of securities, including Registrable
Securities, requested by stockholders to be included in such offering exceeds
the amount of securities sold other than by the Company that the underwriters
reasonably believe compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters believe
will not jeopardize the success of the offering, the securities so included
to be apportioned pro rata among the selling Holder and other shareholders
holding contractual registration rights according to the total amount of
securities entitled to be included herein owned by each selling stockholder
or in such other proportions as shall mutually be agreed to by Holder and
each other selling stockholder.
3
<PAGE>
9. INDEMNIFICATION. In the event any Registrable Securities are
included n a registration statement filed by the Company:
(a) The Company will indemnify and holder harmless Holder, its
officers, directors, and agents, any underwriter (as defined in the Act) for
Holder and each person, if any, who controls Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), against any losses, claims, damages, or liabilities (joint or
several) asserted by a third party to which they may become subject under the
Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of
or are based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, or (iii) any violation or
alleged violation of the Company of the Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Act, the 1934
Act or any state securities law; and the Company will reimburse Holder, any
of its officers or directors, underwriter or controlling person for any legal
or other expenses reasonably incurred by them, as incurred, in connection
with investigating or defending any such loss, claim, damage, liability, or
action; PROVIDED, HOWEVER, that the indemnity agreement contained in this
Section 9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration
by such Holder, underwriter or controlling person.
(b) Holder will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company with the meaning of
the Act, any underwriter and any other shareholder selling securities in such
registration statement or any of its directors or officers or any person who
controls such shareholder, against any losses, claims, damages, or
liabilities (joint or several) asserted by a third party to which the Company
or any such director, officer, controlling person, or underwriter or
controlling person, or other such shareholder or director, officer or
controlling person may become subject, under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information furnished
by Holder expressly for use in connection with such registration; and Holder
will reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer, controlling person, underwriter or controlling
person, other shareholder, officer, director, or controlling person, as
incurred, in connection with investigating or defending any such loss, claim,
damage, liability, or action; PROVIDED, HOWEVER, that the obligations of
Holder hereunder shall be limited to an amount equal to the net proceeds
(equal to the offering price less the exercise price, expenses and
underwriting commissions and discounts) to such Holder of Shares sold as
contemplated herein. Notwithstanding the foregoing, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of Holder, which consent shall not be
unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying part under this Section 9,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party
4
<PAGE>
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party
shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 9, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 9.
10. REPORTS UNDER THE 1934 ACT. With a view to making available to
Holder the benefits of Rule 144 promulgated under the Act and any other rule
or regulation of the SEC that may at any time permit Holder to sell
securities of the Company to the public without registration the Company will
endeavor to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable Holder to utilize an
abbreviated registration statement for the sale of its Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company
that it has complied with the reporting requirements of SEC Rule 144, the Act
and the 1934 Act, or that it qualifies as a registrant whose securities may
be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing Holder of any rule or
regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to the Warrant may be assigned by
Holder to a permitted transferee or assignee of the Warrant of all 150,000
Shares, provided the Company is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act.
5
<PAGE>
Common Stock Purchase Warrant
35,000 Shares
(subject to adjustment)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after October 15, 2002
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, IMPRIMIS INVESTORS LLC, a limited
liability company organized under the laws of the State of Delaware ("Wexford
Spectrum") is entitled to purchase up to Thirty-five Thousand (35,000) Shares of
Common Stock of PC QUOTE, INC., a Delaware corporation, at a price of Two
Dollars ($2.00) per Share (the "Warrant Price"), subject to adjustments and all
other terms and conditions set forth in this Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the context
otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(b) "Acquisition" shall mean any sale, license, or other disposition
of all or substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
(c) "Commission" shall mean the Securities and Exchange Commission,
or any other Federal agency at the time administering the Act.
<PAGE>
(d) "Common Stock" shall mean shares of the Company's presently or
subsequently authorized common stock, par value $0.001, and any stock for which
such common stock may hereafter be exchanged.
(e) "Company" shall mean PC QUOTE, INC., a Delaware corporation, and
any corporation which shall succeed to or assume the obligations of PC QUOTE,
INC., under this Warrant.
(f) "Date of Grant" shall mean October 15, 1997.
(g) "Exercise Date" shall mean the effective date of the delivery of
the Notice of Exercise pursuant to Section 4 below.
(h) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(i) "Shares" shall mean shares of Common Stock.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is
issued in consideration of the purchase price paid by Wexford Spectrum to the
Company as set forth in that certain Stock and Warrant Purchase Agreement dated
as of the date hereof and made and entered into by and between the Company, as
Seller, and Wexford Spectrum and Imprimis Investors LLC, a Delaware limited
liability company, as Buyers.
3. TERM. The purchase right represented by this Warrant is exercisable
only during the period commencing upon the Date of Grant and ending on
October 15, 2002.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and compliance
with all applicable Federal and state securities laws, the purchase right
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the Holder by (i) surrender of this Warrant and delivery of the
Notice of Exercise (the form of which is attached hereto as Exhibit A), duly
executed, at the principal office of the Company and (ii) payment to the Company
of an amount equal to the product of the then applicable Warrant Price
multiplied by the number of Shares then being purchased pursuant to one of the
payment methods permitted under Section 4(b) below.
(b) METHOD OF PAYMENT. Payment shall be made either (1) by cashier's
or certified check drawn on a United States bank and for United States funds
made payable to the Company, or (2) by wire transfer of United States funds for
the account of the Company.
(c) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be
2
<PAGE>
delivered to the Holder within five days of delivery of the Notice of Exercise
and, unless this Warrant has been fully exercised or has expired, a new warrant
representing the portion of the Shares with respect to which this Warrant shall
not then have been exercised shall also be issued to the Holder within such ten
day period.
(d) NO FRACTIONAL SHARES. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the fair market
value per Share as of the date of exercise.
(e) COMPANY'S REPRESENTATIONS.
(i) The Company is soliciting proxies in connection with its
Annual Meeting of Stockholders for, among other things, a proposal to amend its
Certificate of Incorporation to increase the number of shares of Common Stock
authorized for issuance. If such proposal is approved by the Company's
stockholders, the Company shall file a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Amendment") in order to increase such number of authorized shares
of Common Stock. From and after the date of filing the Amendment, all Shares
which may be issued upon the exercise of the purchase right represented by this
Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and
non-assessable, and free of any liens and encumbrances except for restrictions
on transfer under applicable federal and state securities laws. From and after
the date of the Amendment, during the period within which the purchase right
represented by this Warrant may be exercised, the Company shall at all times use
its best efforts to have authorized, and reserved for the purpose of issuance
upon exercise of the purchase right represented by this Warrant, a sufficient
number of Shares to provide for the exercise of the purchase right represented
by this Warrant;
(ii) This Warrant has been duly authorized and executed by the
Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;
(iii) The execution and delivery of this Warrant are not, and
from and after the date of the Amendment, the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company's Certificate of Incorporation or Bylaws, do not
and will not contravene any law, governmental rule or regulation, judgment or
order applicable to the Company, and do not and will not conflict with or
contravene any provision of, or constitute a default under, any material
indenture, mortgage, contract or other instrument of which the Company is a
party or by which it is bound, or require the registration or filing with or the
taking of any action in respect of or by, any federal, state or local government
authority or agency (other than such consents, approvals, notices, actions, or
filings as have already been obtained or made, as the case may be).
3
<PAGE>
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number of
Shares issuable upon the exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time upon the occurrence of certain events,
as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or from
time to time on or after the date hereof the holders of the Common Stock of the
Company (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or, on or after the record
date fixed for the determination of eligible stockholders, shall have become
entitled to receive, without payment therefor, other or additional stock of the
Company by way of dividend then, and in each case, the Holder of this Warrant
shall, upon the exercise hereof, be entitled to receive, in addition to the
number of shares of Common Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of such other or additional
stock of the Company which such Holder would hold on the date of such exercise
had it been the holder of record of such Common Stock on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock receivable
by it as aforesaid during such period, giving effect to all adjustments called
for during such period by paragraphs (b) and (c) of this Section 5.
(b) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case of
any reclassification or change of the outstanding securities of the Company or
of any consolidation, merger or reorganization of the Company on or after the
date hereof, then and in each such case the Holder of this Warrant, upon the
exercise hereof at any time after the consummation of such reclassification,
change, consolidation, merger or reorganization, shall be entitled to receive,
in lieu of or in addition to the stock or other securities and property
receivable upon the exercise hereof prior to such consummation, the stock or
other securities to which such Holder would have been entitled upon such
consummation if such Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in subparagraphs (a) and
(c); in each such case, the terms of this Paragraph 5 shall be applicable to the
shares of stock or other securities property receivable upon the exercise of
this Warrant after such consummation.
(c) STOCK SPLITS AND REVERSE STOCK SPLITS. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately reduced
and the number of shares receivable upon exercise of this Warrant shall thereby
be proportionately increased; and, conversely, if at any time on or after the
date hereof the outstanding number of shares of Common Stock shall be combined
into a smaller number of shares, the Warrant Price in effect immediately prior
to such combination shall thereby be proportionately increased and the number of
shares receivable upon exercise of the Warrant shall be proportionately
decreased.
(d) ADJUSTMENTS TO WARRANT PRICE. Whenever the number of Shares
purchasable upon exercise of this Warrant is adjusted, as herein provided, the
Warrant Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to such
4
<PAGE>
adjustment by a fraction, of which the numerator shall be the number of Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Shares so
purchasable immediately thereafter.
(e) CERTIFICATES AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish the Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such adjustment
is based. The Company shall, upon written request, furnish the Holder a
certificate setting forth the Warrant Price in effect upon the date thereof and
the series of adjustments leading to such Warrant Price.
6. ACQUISITIONS.
(a) ASSUMPTION OF WARRANT. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing.
(b) NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and the Holder
has not otherwise exercised this Warrant in full, then the unexercised portion
of this Warrant shall be deemed to have been automatically converted pursuant to
Section 4(c) and thereafter the Holder shall participate in the acquisition on
the same terms as other holders of the same class of securities of the Company.
7. NOTICES; INFORMATION; REGISTRATION.
(a) NOTICE OF CERTAIN EVENTS. If the Company proposes at any time
(a) to effect any reclassification or recapitalization of Common Stock; (b) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (c) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the company's securities
for cash, then, in connection with each such event, the Company shall give the
Holder at least 14 days prior written notice of the date on which a record will
be taken for such action.
(b) INFORMATION RIGHTS. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a) promptly
after mailing, copies of all notices or other written communications to the
stockholders of the Company, (b) within ninety days after the end of each fiscal
year of the Company, the annual audited financial statements of the Company
audited by independent public accountants of recognized standing and (c) within
forty-five days after the end of each of the first three quarters of each fiscal
year, the Company's quarterly, unaudited financial statements.
5
<PAGE>
(c) REGISTRATION UNDER SECURITIES ACT OF 1933. The Company agrees
that the Shares shall be subject to the registration rights set forth on
Exhibit B.
8. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
DISPOSITION OF SHARES.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof, agrees
that this Warrant and the Shares to be issued upon the exercise hereof are being
acquired solely for its own account and not as a nominee for any other party and
not with a view toward the resale or distribution thereof and that it will not
offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon
the exercise hereof except under circumstances which will not result in a
violation of the Act. This Warrant and the Shares to be issued upon the
exercise hereof (unless registered under the Act) shall be imprinted with a
legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the exercise hereof
shall bear any legends required by the securities laws of any applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant may
not be transferred or assigned in whole or in part without compliance with all
applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions satisfactory to the Company, if requested by the Company and the
transfer is to a person other than a general partner or affiliate of the initial
Holder). Subject to the provisions of this Warrant with respect to compliance
with the Act, title to this Warrant may be transferred by endorsement and
delivery in the same manner as a negotiable instrument transferable by
endorsement and delivery. The Company shall act promptly to record transfers of
this Warrant on its books, but the Company may treat the registered holder of
this Warrant as the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.
6
<PAGE>
(c) DISPOSITION OF SHARES. With respect to any offer, sale, transfer
or other disposition of any Shares acquired pursuant to the exercise of this
Warrant prior to registration of such Shares, except for any such offer, sale,
transfer or other disposition of Shares to an affiliate of the initial Holder,
the Holder and each subsequent holder of this Warrant agrees to give written
notice to the Company prior thereto, describing briefly the manner thereof, and
if such transfer is not pursuant to Rule 144, a written opinion of legal counsel
for such holder, if requested by the Company, to the effect that such offer,
sale or other disposition may be effected without registration or qualification
of such Shares. Notwithstanding the foregoing, such Shares may be offered, sold
or otherwise disposed of in accordance with Rule 144, provided that the Company
shall have been furnished with such information as the Company may reasonably
request to provide a reasonable assurance that the provisions of Rule 144 have
been satisfied. Each certificate representing the Shares thus transferred
(except a transfer pursuant to Rule 144) shall bear a restrictive legend as to
the applicable restrictions on transferability in order to insure compliance
with the Act, unless in the aforesaid opinion of legal counsel for the holder,
such legend is not required in order to insure compliance with the Act.
9. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities of
the Company which may at any time be issuable on the exercise of this Warrant
for any purpose, nor shall anything contained herein be construed to confer upon
the Holder, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger, transfer of assets or
otherwise) or, except as expressly required herein, to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised and the Shares issuable upon exercise hereof
shall have become deliverable, as provided herein.
10. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
11. EXCHANGE OF WARRANT. Subject to the other provisions of this Warrant,
on surrender of this Warrant for exchange, and subject to the provisions of this
Warrant with respect to compliance with the Act, the Company at its expense
shall issue to or on the order of the Holder a new warrant or warrants of like
tenor, in the name of the Holder or as the Holder (on payment by the Holder of
any applicable transfer taxes) may direct, for the number of Shares issuable
upon exercise thereof.
12. NOTICES. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or
7
<PAGE>
mailed by first-class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company or the Holder, as the case may
be, in writing by the Company or such Holder from time to time.
13. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. TITLES AND SUBTITLES; FORMS OF PRONOUNS. The titles of the Sections
and Subsections of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in this Warrant shall
be deemed to include masculine, feminine and neuter forms.
16. ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
Dated: October 23, 1997. PC QUOTE, INC., a Delaware corporation
By:
---------------------------------
Jim R. Porter, Chief Executive
Officer
By:
---------------------------------
Darlene E. Czaja, Secretary
8
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
TO: PC QUOTE, INC.
1. The undersigned Holder of the attached Common Stock Purchase Warrant
hereby elects to exercise its purchase right under such Warrant with respect to
________________ Shares, as defined in the Warrant.
2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed cashier's or certified check drawn on a
United States bank and for United States funds made payable
to the Company in the amount of $_____________; or
[ ] by wire transfer of United States funds to the account of
the Company in the amount of $___________, which transfer
has been made before or simultaneously with the delivery of
this Notice pursuant to the instructions of the Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below:
Name: _________________________________
Address: _________________________________
_________________________________
Tax ID No.: __________________
HOLDER:
______________________________________________
By: ____________________________________
Date:______________________ Title: _________________________
<PAGE>
EXHIBIT B
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purposes of the Warrant to which this
Statement of Registration Rights is attached as Exhibit B:
(a) The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities
Act of 1933, as amended (the "Act"), and the declaration or ordering of
effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means the shares
of Common Stock issued or issuable upon exercise of the Warrant;
(c) The term "Holder" means the original holder of the
Warrant and any transferee of the Warrant; and
(d) The term "Warrant" means the original Warrants
issued in connection with the Stock and Warrant Purchase Agreement, dated as
of October 15, 1997, between the Company, as Seller, and Wexford Spectrum
Investors LLC, a Delaware limited liability company, and Imprimis Investors
LLC, a Delaware limited liability company, as Buyers, and all Warrants issued
as a result of the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to
do so) the Company proposes at any time before October 15, 2002 to register
(including for this purpose a registration effected by the Company for
stockholders other than Holder) any of its stock or other securities under
the Act in connection with the public offering for its own account of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, or a registration
on any form which does not include substantially the same information as
would be required to be included in a registration statement covering the
sale of the Registrable Securities), the Company shall, at such time,
promptly give Holder written notice of such registration. Upon the written
request of Holder given within twenty days after mailing of such notice by
the Company, the Company shall, subject to the provisions of Section 8 hereof
and Section 5 of the Warrant, cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any
time before October 15, 2002, receive from Holders holding 40% or more of the
outstanding Registrable Securities a written request (to be exercised only
once) that the Company effect a registration and any related qualification or
compliance with respect to all or a part of the Registrable Securities (which
registration shall at the election of Holder either be for a registration for
a primary issuance of the Shares upon the exercise of the Warrant or the
resale of the Shares previously issued upon exercise of the Warrant at the
election of Holder) owned by such Holder, the Company will promptly notify
each other Holder (if any) of such request and will:
<PAGE>
(a) as soon as practicable, effect such registration and
all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of a
Holder's Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other holder of
registration rights joining in such request as are specified in a written
request given within 20 days after receipt of such written notice from the
Company; PROVIDED, HOWEVER, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
3: (1) if the Company has effected a registration of Registrable Securities
pursuant to this Section 3 within the preceding 12 months; (2) if the Company
shall furnish to Holder a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its
stockholders for such registration to be effected at such time, in which
event the Company shall have the right to defer the filing of the
registration statement for a period of not more than 60 days after receipt of
the request of Holder under this Section 3; PROVIDED, HOWEVER, that the
Company shall not utilize this right more than once in any twelve-month
period; or (3) in any jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process
in effecting such registration, qualification or compliance; and,
(b) subject to the foregoing, file a registration
statement covering the Registrable Securities and other securities so
requested to be registered promptly after receipt of the request or requests
of Holder, and in any event within 30 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the
Warrant, in the event that the Company is to effect the registration of any
Registrable Securities pursuant to Section 2 or 3 hereof, the Company shall
promptly:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best
efforts to cause such registration statement to become effective, and, upon
the request of the holders of a majority of the securities registered
thereunder, keep such registration statement effective for up to one hundred
twenty (120) days, or such shorter period as is required to dispose of all
securities covered by such registration statement.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to Holder such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as Holder may reasonably
request in order to facilitate the disposition of Registrable Securities
owned by Holder.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities
or Blue Sky laws of such jurisdictions as shall be reasonably requested by
Holder, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions or
to agree to any restrictions as to the conduct of its business in the
ordinary course thereof.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of such offering.
Holder shall also enter into and perform its obligations under such
underwriting agreement.
2
<PAGE>
(f) Notify Holder at any time when a prospectus relating
to Registrable Securities of Holder covered by such registration statement is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made.
(g) Furnish, at the request of Holder, on the date that
such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to the Warrant, if such securities
are being sold through underwriters, or, if such securities are not being
sold through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated such
date, of counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder and (ii) a letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in
the Warrant or this Statement of Registration Rights to the contrary, the
Company shall not be obligated to effect any such registration, qualification
or compliance, pursuant to Section 2 or 3, if application of Rule 144 would
allow Holder requesting a registration under Section 2 or 3 to dispose of the
Registrable Securities for which a registration is demanded within a single
90-day period.
6. FURNISH INFORMATION. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to the Warrant
that the selling Holder shall furnish to the Company such information
regarding itself, the Registrable Securities held by Holder, and the intended
method of disposition of such securities as shall be required to effect the
registration of their Registrable Securities.
7. EXPENSES. The Company shall bear and pay all expenses
(other than underwriting discounts and commissions) incurred in connection
with any registration, filing or qualification of Registrable Securities,
including (without limitation) all registration, filing, and qualification
fees, legal, printers and accounting fees relating thereto, and the cost of
any reasonable fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any
registrations in which Registrable Securities have a right to be included
pursuant to Section 2 hereof and which involves an underwriting of securities
being issued by the Company, the Company shall not be required, under Section
2 hereof, to include any of Holder's securities in such underwriting unless
Holder accepts the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it, and then only in such quantity
as will not, in the opinion of the underwriters, jeopardize the success of
the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the
underwriters believe will not jeopardize the success of the offering, the
securities so included to be apportioned pro rata among the selling Holder
and other shareholders holding contractual registration rights according to
the total amount of securities entitled to be included herein owned by each
selling stockholder or in such other proportions as shall mutually be agreed
to by Holder and each other selling stockholder.
3
<PAGE>
9. INDEMNIFICATION. In the event any Registrable Securities
are included n a registration statement filed by the Company:
(a) The Company will indemnify and holder harmless
Holder, its officers, directors, and agents, any underwriter (as defined in
the Act) for Holder and each person, if any, who controls Holder or
underwriter within the meaning of the Act or the Securities Exchange Act of
1934, as amended (the "1934 Act"), against any losses, claims, damages, or
liabilities (joint or several) asserted by a third party to which they may
become subject under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii)
the omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation of the Company of the
Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities law; and the
Company will reimburse Holder, any of its officers or directors, underwriter
or controlling person for any legal or other expenses reasonably incurred by
them, as incurred, in connection with investigating or defending any such
loss, claim, damage, liability, or action; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 9(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if
such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability, or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by such Holder, underwriter or
controlling person.
(b) Holder will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company with the meaning of
the Act, any underwriter and any other shareholder selling securities in such
registration statement or any of its directors or officers or any person who
controls such shareholder, against any losses, claims, damages, or
liabilities (joint or several) asserted by a third party to which the Company
or any such director, officer, controlling person, or underwriter or
controlling person, or other such shareholder or director, officer or
controlling person may become subject, under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information furnished
by Holder expressly for use in connection with such registration; and Holder
will reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer, controlling person, underwriter or controlling
person, other shareholder, officer, director, or controlling person, as
incurred, in connection with investigating or defending any such loss, claim,
damage, liability, or action; PROVIDED, HOWEVER, that the obligations of
Holder hereunder shall be limited to an amount equal to the net proceeds
(equal to the offering price less the exercise price, expenses and
underwriting commissions and discounts) to such Holder of Shares sold as
contemplated herein. Notwithstanding the foregoing, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of Holder, which consent shall not be
unreasonably withheld.
(c) Promptly after receipt by an indemnified party under
this Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying part under this Section 9,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party
4
<PAGE>
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 9, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 9.
10. REPORTS UNDER THE 1934 ACT. With a view to making
available to Holder the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit Holder to
sell securities of the Company to the public without registration the Company
will endeavor to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable Holder to
utilize an abbreviated registration statement for the sale of its Registrable
Securities;
(c) file with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144,
the Act and the 1934 Act, or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested in availing
Holder of any rule or regulation of the SEC which permits the selling of any
such securities without registration or pursuant to such form.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register Registrable Securities pursuant to the Warrant may be
assigned by Holder to a permitted transferee or assignee of the Warrant of
all 150,000 Shares, provided the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act.
5
<PAGE>
Common Stock Purchase Warrant
15,000 Shares
(subject to adjustment)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING
THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after October 15, 2002
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, WEXFORD SPECTRUM INVESTORS LLC, a
limited liability company organized under the laws of the State of Delaware
("Wexford Spectrum") is entitled to purchase up to Fifteen Thousand (15,000)
Shares of Common Stock of PC QUOTE, INC., a Delaware corporation, at a price of
Two Dollars ($2.00) per Share (the "Warrant Price"), subject to adjustments and
all other terms and conditions set forth in this Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the context
otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(b) "Acquisition" shall mean any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of
the Company's securities before the transaction beneficially own less than
50% of the outstanding voting securities of the surviving entity after the
transaction.
(c) "Commission" shall mean the Securities and Exchange Commission,
or any other Federal agency at the time administering the Act.
<PAGE>
(d) "Common Stock" shall mean shares of the Company's presently or
subsequently authorized common stock, par value $0.001, and any stock for
which such common stock may hereafter be exchanged.
(e) "Company" shall mean PC QUOTE, INC., a Delaware corporation,
and any corporation which shall succeed to or assume the obligations of PC
QUOTE, INC., under this Warrant.
(f) "Date of Grant" shall mean October 15, 1997.
(g) "Exercise Date" shall mean the effective date of the delivery
of the Notice of Exercise pursuant to Section 4 below.
(h) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(i) "Shares" shall mean shares of Common Stock.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is
issued in consideration of the purchase price paid by Wexford Spectrum to the
Company as set forth in that certain Stock and Warrant Purchase Agreement
dated as of the date hereof and made and entered into by and between the
Company, as Seller, and Wexford Spectrum and Imprimis Investors LLC, a
Delaware limited liability company, as Buyers.
3. TERM. The purchase right represented by this Warrant is exercisable
only during the period commencing upon the Date of Grant and ending on
October 15, 2002.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and compliance
with all applicable Federal and state securities laws, the purchase right
represented by this Warrant may be exercised, in whole or in part and from
time to time, by the Holder by (i) surrender of this Warrant and delivery of
the Notice of Exercise (the form of which is attached hereto as Exhibit A),
duly executed, at the principal office of the Company and (ii) payment to the
Company of an amount equal to the product of the then applicable Warrant
Price multiplied by the number of Shares then being purchased pursuant to one
of the payment methods permitted under Section 4(b) below.
(b) METHOD OF PAYMENT. Payment shall be made either (1) by
cashier's or certified check drawn on a United States bank and for United
States funds made payable to the Company, or (2) by wire transfer of United
States funds for the account of the Company.
(c) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be
2
<PAGE>
delivered to the Holder within five days of delivery of the Notice of Exercise
and, unless this Warrant has been fully exercised or has expired, a new warrant
representing the portion of the Shares with respect to which this Warrant shall
not then have been exercised shall also be issued to the Holder within such ten
day period.
(d) NO FRACTIONAL SHARES. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the fair
market value per Share as of the date of exercise.
(e) COMPANY'S REPRESENTATIONS.
(i) The Company is soliciting proxies in connection with
its Annual Meeting of Stockholders for, among other things, a proposal to
amend its Certificate of Incorporation to increase the number of shares of
Common Stock authorized for issuance. If such proposal is approved by the
Company's stockholders, the Company shall file a Certificate of Amendment to
its Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Amendment") in order to increase such number of authorized
shares of Common Stock. From and after the date of filing the Amendment, all
Shares which may be issued upon the exercise of the purchase right
represented by this Warrant shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer under applicable federal and state
securities laws. From and after the date of the Amendment, during the period
within which the purchase right represented by this Warrant may be exercised,
the Company shall at all times use its best efforts to have authorized, and
reserved for the purpose of issuance upon exercise of the purchase right
represented by this Warrant, a sufficient number of Shares to provide for the
exercise of the purchase right represented by this Warrant;
(ii) This Warrant has been duly authorized and executed by
the Company and is a valid and binding obligation of the Company enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;
(iii) The execution and delivery of this Warrant are not,
and from and after the date of the Amendment, the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company's Certificate of Incorporation or Bylaws, do
not and will not contravene any law, governmental rule or regulation,
judgment or order applicable to the Company, and do not and will not conflict
with or contravene any provision of, or constitute a default under, any
material indenture, mortgage, contract or other instrument of which the
Company is a party or by which it is bound, or require the registration or
filing with or the taking of any action in respect of or by, any federal,
state or local government authority or agency (other than such consents,
approvals, notices, actions, or filings as have already been obtained or
made, as the case may be).
3
<PAGE>
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number of
Shares issuable upon the exercise of this Warrant and the Warrant Price shall
be subject to adjustment from time to time upon the occurrence of certain
events, as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or from
time to time on or after the date hereof the holders of the Common Stock of
the Company (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received or, on or
after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock of the Company by way of dividend then, and in each case,
the Holder of this Warrant shall, upon the exercise hereof, be entitled to
receive, in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration therefor, the
amount of such other or additional stock of the Company which such Holder
would hold on the date of such exercise had it been the holder of record of
such Common Stock on the date hereof and had thereafter, during the period
from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock receivable by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by paragraphs (b) and (c) of this Section 5.
(b) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case of
any reclassification or change of the outstanding securities of the Company
or of any consolidation, merger or reorganization of the Company on or after
the date hereof, then and in each such case the Holder of this Warrant, upon
the exercise hereof at any time after the consummation of such
reclassification, change, consolidation, merger or reorganization, shall be
entitled to receive, in lieu of or in addition to the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities to which such Holder would have
been entitled upon such consummation if such Holder had exercised this
Warrant immediately prior thereto, all subject to further adjustment as
provided in subparagraphs (a) and (c); in each such case, the terms of this
Paragraph 5 shall be applicable to the shares of stock or other securities
property receivable upon the exercise of this Warrant after such consummation.
(c) STOCK SPLITS AND REVERSE STOCK SPLITS. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately
reduced and the number of shares receivable upon exercise of this Warrant
shall thereby be proportionately increased; and, conversely, if at any time
on or after the date hereof the outstanding number of shares of Common Stock
shall be combined into a smaller number of shares, the Warrant Price in
effect immediately prior to such combination shall thereby be proportionately
increased and the number of shares receivable upon exercise of the Warrant
shall be proportionately decreased.
(d) ADJUSTMENTS TO WARRANT PRICE. Whenever the number of Shares
purchasable upon exercise of this Warrant is adjusted, as herein provided,
the Warrant Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior to such
4
<PAGE>
adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment, and of which the denominator shall be the number of Shares
so purchasable immediately thereafter.
(e) CERTIFICATES AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish the Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such
adjustment is based. The Company shall, upon written request, furnish the
Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.
6. ACQUISITIONS.
(a) ASSUMPTION OF WARRANT. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this
Warrant shall be exercisable for the same securities, cash, and property as
would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record date
for the Acquisition and subsequent closing.
(b) NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and the
Holder has not otherwise exercised this Warrant in full, then the unexercised
portion of this Warrant shall be deemed to have been automatically converted
pursuant to Section 4(c) and thereafter the Holder shall participate in the
acquisition on the same terms as other holders of the same class of
securities of the Company.
7. NOTICES; INFORMATION; REGISTRATION.
(a) NOTICE OF CERTAIN EVENTS. If the Company proposes at any time
(a) to effect any reclassification or recapitalization of Common Stock; (b)
to merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (c) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the
company's securities for cash, then, in connection with each such event, the
Company shall give the Holder at least 14 days prior written notice of the
date on which a record will be taken for such action.
(b) INFORMATION RIGHTS. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a)
promptly after mailing, copies of all notices or other written communications
to the stockholders of the Company, (b) within ninety days after the end of
each fiscal year of the Company, the annual audited financial statements of
the Company audited by independent public accountants of recognized standing
and (c) within forty-five days after the end of each of the first three
quarters of each fiscal year, the Company's quarterly, unaudited financial
statements.
5
<PAGE>
(c) REGISTRATION UNDER SECURITIES ACT OF 1933. The Company agrees
that the Shares shall be subject to the registration rights set forth on
Exhibit B.
8. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
DISPOSITION OF SHARES.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof, agrees
that this Warrant and the Shares to be issued upon the exercise hereof are
being acquired solely for its own account and not as a nominee for any other
party and not with a view toward the resale or distribution thereof and that
it will not offer, sell or otherwise dispose of this Warrant or any Shares to
be issued upon the exercise hereof except under circumstances which will not
result in a violation of the Act. This Warrant and the Shares to be issued
upon the exercise hereof (unless registered under the Act) shall be imprinted
with a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the exercise
hereof shall bear any legends required by the securities laws of any
applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant may
not be transferred or assigned in whole or in part without compliance with
all applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions satisfactory to the Company, if requested by the Company and
the transfer is to a person other than a general partner or affiliate of the
initial Holder). Subject to the provisions of this Warrant with respect to
compliance with the Act, title to this Warrant may be transferred by
endorsement and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery. The Company shall act promptly to
record transfers of this Warrant on its books, but the Company may treat the
registered holder of this Warrant as the absolute owner of this Warrant for
all purposes, notwithstanding any notice to the contrary.
6
<PAGE>
(c) DISPOSITION OF SHARES. With respect to any offer, sale,
transfer or other disposition of any Shares acquired pursuant to the exercise
of this Warrant prior to registration of such Shares, except for any such
offer, sale, transfer or other disposition of Shares to an affiliate of the
initial Holder, the Holder and each subsequent holder of this Warrant agrees
to give written notice to the Company prior thereto, describing briefly the
manner thereof, and if such transfer is not pursuant to Rule 144, a written
opinion of legal counsel for such holder, if requested by the Company, to the
effect that such offer, sale or other disposition may be effected without
registration or qualification of such Shares. Notwithstanding the foregoing,
such Shares may be offered, sold or otherwise disposed of in accordance with
Rule 144, provided that the Company shall have been furnished with such
information as the Company may reasonably request to provide a reasonable
assurance that the provisions of Rule 144 have been satisfied. Each
certificate representing the Shares thus transferred (except a transfer
pursuant to Rule 144) shall bear a restrictive legend as to the applicable
restrictions on transferability in order to insure compliance with the Act,
unless in the aforesaid opinion of legal counsel for the holder, such legend
is not required in order to insure compliance with the Act.
9. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities
of the Company which may at any time be issuable on the exercise of this
Warrant for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance
of stock, reclassification of stock, consolidation, merger, transfer of
assets or otherwise) or, except as expressly required herein, to receive
notice of meetings, or to receive dividends or subscription rights or
otherwise until this Warrant shall have been exercised and the Shares
issuable upon exercise hereof shall have become deliverable, as provided
herein.
10. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of
an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company at its expense shall execute and deliver, in lieu of
this Warrant, a new warrant of like tenor.
11. EXCHANGE OF WARRANT. Subject to the other provisions of this
Warrant, on surrender of this Warrant for exchange, and subject to the
provisions of this Warrant with respect to compliance with the Act, the
Company at its expense shall issue to or on the order of the Holder a new
warrant or warrants of like tenor, in the name of the Holder or as the Holder
(on payment by the Holder of any applicable transfer taxes) may direct, for
the number of Shares issuable upon exercise thereof.
12. NOTICES. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or
7
<PAGE>
mailed by first-class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company or the Holder, as the case
may be, in writing by the Company or such Holder from time to time.
13. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. TITLES AND SUBTITLES; FORMS OF PRONOUNS. The titles of the Sections
and Subsections of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in this Warrant
shall be deemed to include masculine, feminine and neuter forms.
16. ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
Dated: October 23, 1997. PC QUOTE, INC., a Delaware corporation
By:
-------------------------------
Jim R. Porter, Chief Executive Officer
By:
-------------------------------
Darlene E. Czaja, Secretary
8
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
TO: PC QUOTE, INC.
1. The undersigned Holder of the attached Common Stock Purchase Warrant
hereby elects to exercise its purchase right under such Warrant with respect to
________________ Shares, as defined in the Warrant.
2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed cashier's or certified check drawn on a United
States bank and for United States funds made payable to the
Company in the amount of $_____________; or
[ ] by wire transfer of United States funds to the account of the
Company in the amount of $___________, which transfer has been
made before or simultaneously with the delivery of this Notice
pursuant to the instructions of the Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below:
Name:
----------------------------------
Address:
----------------------------------
----------------------------------
Tax ID No.:
-------------------------
HOLDER:
----------------------------------
By:
--------------------------
Date: Title:
---------------------- ------------------
<PAGE>
EXHIBIT B
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purposes of the Warrant to which this
Statement of Registration Rights is attached as Exhibit B:
(a) The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act of 1933,
as amended (the "Act"), and the declaration or ordering of effectiveness of
such registration statement or document;
(b) The term "Registrable Securities" means the shares of
Common Stock issued or issuable upon exercise of the Warrant;
(c) The term "Holder" means the original holder of the Warrant
and any transferee of the Warrant; and
(d) The term "Warrant" means the original Warrants issued in
connection with the Stock and Warrant Purchase Agreement, dated as of October
15, 1997, between the Company, as Seller, and Wexford Spectrum Investors LLC,
a Delaware limited liability company, and Imprimis Investors LLC, a Delaware
limited liability company, as Buyers, and all Warrants issued as a result of
the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to do so)
the Company proposes at any time before October 15, 2002 to register
(including for this purpose a registration effected by the Company for
stockholders other than Holder) any of its stock or other securities under
the Act in connection with the public offering for its own account of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, or a registration
on any form which does not include substantially the same information as
would be required to be included in a registration statement covering the
sale of the Registrable Securities), the Company shall, at such time,
promptly give Holder written notice of such registration. Upon the written
request of Holder given within twenty days after mailing of such notice by
the Company, the Company shall, subject to the provisions of Section 8 hereof
and Section 5 of the Warrant, cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any time
before October 15, 2002, receive from Holders holding 40% or more of the
outstanding Registrable Securities a written request (to be exercised only
once) that the Company effect a registration and any related qualification or
compliance with respect to all or a part of the Registrable Securities (which
registration shall at the election of Holder either be for a registration for
a primary issuance of the Shares upon the exercise of the Warrant or the
resale of the Shares previously issued upon exercise of the Warrant at the
election of Holder) owned by such Holder, the Company will promptly notify
each other Holder (if any) of such request and will:
<PAGE>
(a) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of a
Holder's Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other holder of
registration rights joining in such request as are specified in a written
request given within 20 days after receipt of such written notice from the
Company; PROVIDED, HOWEVER, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
3: (1) if the Company has effected a registration of Registrable Securities
pursuant to this Section 3 within the preceding 12 months; (2) if the Company
shall furnish to Holder a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its
stockholders for such registration to be effected at such time, in which
event the Company shall have the right to defer the filing of the
registration statement for a period of not more than 60 days after receipt of
the request of Holder under this Section 3; PROVIDED, HOWEVER, that the
Company shall not utilize this right more than once in any twelve-month
period; or (3) in any jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process
in effecting such registration, qualification or compliance; and,
(b) subject to the foregoing, file a registration statement
covering the Registrable Securities and other securities so requested to be
registered promptly after receipt of the request or requests of Holder, and
in any event within 30 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the
Warrant, in the event that the Company is to effect the registration of any
Registrable Securities pursuant to Section 2 or 3 hereof, the Company shall
promptly:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
holders of a majority of the securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days, or
such shorter period as is required to dispose of all securities covered by
such registration statement.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as Holder may reasonably request in order
to facilitate the disposition of Registrable Securities owned by Holder.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities
or Blue Sky laws of such jurisdictions as shall be reasonably requested by
Holder, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions or
to agree to any restrictions as to the conduct of its business in the
ordinary course thereof.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Holder
shall also enter into and perform its obligations under such underwriting
agreement.
2
<PAGE>
(f) Notify Holder at any time when a prospectus relating to
Registrable Securities of Holder covered by such registration statement is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made.
(g) Furnish, at the request of Holder, on the date that such
Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to the Warrant, if such securities
are being sold through underwriters, or, if such securities are not being
sold through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated such
date, of counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder and (ii) a letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in the
Warrant or this Statement of Registration Rights to the contrary, the Company
shall not be obligated to effect any such registration, qualification or
compliance, pursuant to Section 2 or 3, if application of Rule 144 would
allow Holder requesting a registration under Section 2 or 3 to dispose of the
Registrable Securities for which a registration is demanded within a single
90-day period.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to the Warrant that
the selling Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by Holder, and the intended method of
disposition of such securities as shall be required to effect the
registration of their Registrable Securities.
7. EXPENSES. The Company shall bear and pay all expenses (other
than underwriting discounts and commissions) incurred in connection with any
registration, filing or qualification of Registrable Securities, including
(without limitation) all registration, filing, and qualification fees, legal,
printers and accounting fees relating thereto, and the cost of any reasonable
fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any
registrations in which Registrable Securities have a right to be included
pursuant to Section 2 hereof and which involves an underwriting of securities
being issued by the Company, the Company shall not be required, under Section
2 hereof, to include any of Holder's securities in such underwriting unless
Holder accepts the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it, and then only in such quantity
as will not, in the opinion of the underwriters, jeopardize the success of
the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the
underwriters believe will not jeopardize the success of the offering, the
securities so included to be apportioned pro rata among the selling Holder
and other shareholders holding contractual registration rights according to
the total amount of securities entitled to be included herein owned by each
selling stockholder or in such other proportions as shall mutually be agreed
to by Holder and each other selling stockholder.
3
<PAGE>
9. INDEMNIFICATION. In the event any Registrable Securities are
included n a registration statement filed by the Company:
(a) The Company will indemnify and holder harmless Holder, its
officers, directors, and agents, any underwriter (as defined in the Act) for
Holder and each person, if any, who controls Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), against any losses, claims, damages, or liabilities (joint or
several) asserted by a third party to which they may become subject under the
Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of
or are based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, or (iii) any violation or
alleged violation of the Company of the Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Act, the 1934
Act or any state securities law; and the Company will reimburse Holder, any
of its officers or directors, underwriter or controlling person for any legal
or other expenses reasonably incurred by them, as incurred, in connection
with investigating or defending any such loss, claim, damage, liability, or
action; PROVIDED, HOWEVER, that the indemnity agreement contained in this
Section 9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration
by such Holder, underwriter or controlling person.
(b) Holder will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company with the meaning of
the Act, any underwriter and any other shareholder selling securities in such
registration statement or any of its directors or officers or any person who
controls such shareholder, against any losses, claims, damages, or
liabilities (joint or several) asserted by a third party to which the Company
or any such director, officer, controlling person, or underwriter or
controlling person, or other such shareholder or director, officer or
controlling person may become subject, under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information furnished
by Holder expressly for use in connection with such registration; and Holder
will reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer, controlling person, underwriter or controlling
person, other shareholder, officer, director, or controlling person, as
incurred, in connection with investigating or defending any such loss, claim,
damage, liability, or action; PROVIDED, HOWEVER, that the obligations of
Holder hereunder shall be limited to an amount equal to the net proceeds
(equal to the offering price less the exercise price, expenses and
underwriting commissions and discounts) to such Holder of Shares sold as
contemplated herein. Notwithstanding the foregoing, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of Holder, which consent shall not be
unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying part under this Section 9,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party
4
<PAGE>
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party
shall have the right to retain its own counsel, with the fees and expenses to
be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 9, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 9.
10. REPORTS UNDER THE 1934 ACT. With a view to making available to
Holder the benefits of Rule 144 promulgated under the Act and any other rule
or regulation of the SEC that may at any time permit Holder to sell
securities of the Company to the public without registration the Company will
endeavor to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable Holder to
utilize an abbreviated registration statement for the sale of its Registrable
Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company
that it has complied with the reporting requirements of SEC Rule 144, the Act
and the 1934 Act, or that it qualifies as a registrant whose securities may
be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing Holder of any rule or
regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to the Warrant may be
assigned by Holder to a permitted transferee or assignee of the Warrant of
all 150,000 Shares, provided the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act.
5
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PC QUOTE, INC.
-----------
PC QUOTE, INC., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY THAT:
FIRST: The Board of Directors of the Corporation approved and adopted the
following resolution for amending its Certificate of Incorporation, declaring
it advisable and recommended that the amendment be submitted to the
stockholders for their consideration:
RESOLVED, that Article Fourth of the Company's Certificate of
Incorporation be amended in its entirety, to read as follows:
"FOURTH:
A.AUTHORIZED SHARES. The total number of shares of all
classes of stock which the Corporation shall have authority
to issue is Fifty-five Million (55,000,000), consisting of
Fifty Million (50,000,000) shares of Common Stock, $0.001
par value per share (the "Common Stock"), and Five Million
(5,000,000) shares of Preferred Stock, $0.001 par value per
share (the "Preferred Stock").
B.PREFERRED STOCK. The Board of Directors is authorized,
subject to any limitations prescribed by law, to provide
for the issuance of shares of Preferred Stock in series,
and by filing a certificate pursuant to the applicable law
of the State of Delaware (such certificate being
hereinafter referred to as a "Preferred Stock
Designation"), to establish from time to time the number of
shares to be included in each such series, and to fix the
designations, powers, preferences and rights of the shares
of each such series and any qualifications, limitations or
restrictions thereof. The
<PAGE>
number of authorized shares of Preferred Stock may be increased
or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority
of the Common Stock, without a vote of the holders of the Preferred
Stock, or of any series thereof, unless a vote of any such
holders is required pursuant to the terms of any Preferred
Stock Designation.
C.COMMON STOCK. Except as otherwise provided by the General
Corporation Law of the State of Delaware, by this
Certificate of Incorporation or any amendments hereto or by
a Preferred Stock Designation, all of the voting power of
the Corporation shall be vested in the holders of Common
Stock, and each holder of Common Stock shall have one (1)
vote for each share of Common Stock held by such holder on
all matters voted upon by the stockholders."
SECOND: The amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware at the
1997 Annual Meeting of Stockholders held on October 16, 1997.
IN WITNESS WHEREOF, PC QUOTE, INC. has caused this Certificate to be
executed by its Chief Executive Officer this 21st day of October, 1997.
PC QUOTE, INC.
By:
------------------------------------
Jim R. Porter
Chief Executive Officer
<PAGE>
SECOND JOINT AMENDMENT TO
AGREEMENT TO PROVIDE INSURANCE;
DISBURSEMENT REQUEST AND AUTHORIZATION;
PROMISSORY NOTE; AND
LOAN AND SECURITY AGREEMENT
This Second Joint Amendment to Agreement to Provide Insurance;
Disbursement Request and Authorization; Promissory Note; and Loan and
Security Agreement is entered into this 22nd day of September, 1997, by and
between PC Quote, Inc., a Delaware corporation ("PC Quote") and PICO
Holdings, Inc., a California corporation ("PICO").
WHEREAS, PC Quote and PICO are parties to those certain Agreement to
Provide Insurance; Disbursement Request and Authorization; Promissory Note;
and Loan and Security Agreement all entered into in connection with that
certain Promissory Note dated May 5, 1997 in the amount of $1,000,000 payable
to PICO, and Joint Amendment to Agreement to Provide Insurance; Disbursement
Request and Authorization; Promissory Note; and Loan and Security Agreement
executed on August 8, 1997 in connection with an increase in the amount of
the Promissory Note to $2,000,000 (collectively, the "Definitive Agreements").
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, PC Quote and PICO hereby agree to amend the
Definitive Agreements as follows:
I. AGREEMENT TO PROVIDE INSURANCE, DATED MAY 5, 1997, AMENDED AUGUST 8, 1997.
The Amended Agreement to Provide Insurance, dated August 8, 1997, is
hereby again amended to change the sentence immediately before the signature
blocks from: "Grantor acknowledges that this Agreement applies to the loan
made to Grantor by Lender on August 8, 1997." to: "Grantor acknowledges that
this Agreement applies to the loans made to Grantor by Lender on August 8,
1997 and September 22, 1997."
II. DISBURSEMENT REQUEST AND AUTHORIZATION, DATED MAY 5, 1997, AMENDED
AUGUST 8, 1997.
The section entitled "Loan Type" of the Disbursement Request and
Authorization, dated August 8, 1997 is amended to delete "$2,000,000" and
insert "$2,250,000."
<PAGE>
III. PROMISSORY NOTE, DATED MAY 5, 1997, AMENDED AUGUST 8, 1997.
The Amended Promissory Note dated August 8, 1997 is hereby again amended
as follows:
A. Delete all references to "Two Million Dollars" or "$2,000,000" and
insert "Two Million Two Hundred and Fifty Thousand Dollars" or
"$2,250,000," respectively.
B. In the second paragraph, on the third line delete "September 30,
1997" and insert "December 31, 1997.
IV. LOAN AND SECURITY AGREEMENT, DATED MAY 5, 1997, AMENDED AUGUST 8, 1997.
The Amended Loan and Security Agreement dated August 8, 1997 is hereby
again amended as follows:
A. On page 1, in the third line of "RECITALS" delete "$2,000,000" and
insert "$2,250,000."
B. On page 2, in the first paragraph delete "$2,000,000" and insert
"$2,250,000."
C. On page 7, amend the sentence at the end of Section 2.5 to read as
follows: "There shall be no Facility Fee owed by Borrower to Lender
in connection with Lender's $1,000,000 loan to Borrower on August 8,
1997 or the Lender's $250,000 loan to Borrower on September 22, 1997.
V. Except as expressly provided herein, all of the terms and provisions of
the Definitive Agreements shall remain in full force and effect.
VI. This Second Joint Amendment may be executed in a multiple counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Second Joint
Amendment as of the date first written above.
PC QUOTE, INC.
By:
---------------------------------
Its:
---------------------------------
PICO HOLDINGS, INC.
By:
---------------------------------
Its:
---------------------------------
-3-
<PAGE>
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
i
<PAGE>
(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
ii
<PAGE>
(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
iii
<PAGE>
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
Section 1504.
"BUYER" and "Buyers" have the meanings set forth in the preface above.
<PAGE>
"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
3.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 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 Section 8 below.
"INDEMNIFYING PARTY" has the meaning set forth in Section 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.
2
<PAGE>
"MULTIEMPLOYER PLAN" has the meaning set forth in ERISA Section 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 Section 2 below.
"REPORTABLE EVENT" has the meaning set forth in ERISA Section 4043.
"RIGHTS OFFERING" shall have the meaning set forth in Section 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.
3
<PAGE>
"THIRD PARTY CLAIM" has the meaning set forth in Section 8 below.
"WARRANTS" shall mean the Initial Warrants and the Additional Warrants.
2. PURCHASE AND SALE OF SHARES AND WARRANTS. On the Closing Dates, in
the manner set forth in this Section 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;
4
<PAGE>
(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 Section 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 Section 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.
5
<PAGE>
(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 Section 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 Section 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
6
<PAGE>
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
7
<PAGE>
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.
8
<PAGE>
(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
9
<PAGE>
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
Section 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
10
<PAGE>
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;
11
<PAGE>
(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
12
<PAGE>
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
13
<PAGE>
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 Section 2 and Section 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
Section 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 Section 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 OFDEVELOPMENTS. Seller shall notify Buyers of any
development causing a breach of any of the representations and warranties in
Section 4 above. Unless Buyers have the right to terminate this Agreement
pursuant to Section 9(a)(ii) below by reason of the development and exercise
that right within the period referred to in Section 9(a)(ii) below, the
written notice pursuant to this Section 5(e)(i) will be deemed to have
amended the relevant Schedule, if any, to have
14
<PAGE>
qualified the representations and warranties contained in Section 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 Section 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 Section 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
15
<PAGE>
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 Section 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
16
<PAGE>
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 Section
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 Section 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 Section
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;
17
<PAGE>
(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 Section 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 Section 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 Section 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 Section 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 Section 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
18
<PAGE>
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 Section 8. All indemnification
payments under this Section 8 shall be deemed adjustments to the Purchase Price.
(e) OTHER INDEMNIFICATION PROVISIONS. The indemnification provisions in
this Section 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 Section 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 Section 2 or Section 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 Section 2 or Section 7 hereof
(unless the failure results primarily from Seller breaching any material
representation, warranty, or covenant contained in this Agreement).
19
<PAGE>
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement pursuant
to Section 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 Section 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:
20
<PAGE>
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.
21
<PAGE>
(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.
* * * * *
22
<PAGE>
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
23
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 85,908
<SECURITIES> 0
<RECEIVABLES> 901,526
<ALLOWANCES> 348,384
<INVENTORY> 0
<CURRENT-ASSETS> 1,169,479
<PP&E> 11,082,835
<DEPRECIATION> 8,694,155
<TOTAL-ASSETS> 8,989,511
<CURRENT-LIABILITIES> 8,550,253
<BONDS> 0
0
0
<COMMON> 7,384
<OTHER-SE> (1,924,752)
<TOTAL-LIABILITY-AND-EQUITY> 8,989,511
<SALES> 12,675,772
<TOTAL-REVENUES> 12,675,772
<CGS> 11,093,738
<TOTAL-COSTS> 11,093,738
<OTHER-EXPENSES> 8,735,086
<LOSS-PROVISION> 624,042
<INTEREST-EXPENSE> 1,259,945
<INCOME-PRETAX> (8,398,276)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,398,276)
<EPS-PRIMARY> (1.14)
<EPS-DILUTED> (1.14)
</TABLE>
