<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
PC Quote, Inc.
--------------
(Name of Issuer)
Common Stock, $.001 par value per share
---------------------------------------
(Title of Class of Securities)
693236200
------------
(CUSIP Number)
James F. Mosier, Corporate Secretary and General Counsel
PICO Holdings, Inc.
875 Prospect Street
Suite 301
La Jolla, CA 92037
(619) 456-6022
--------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 22, 1997; December 30, 1997; February 5, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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AMENDMENT NO. 3
to
SCHEDULE 13D
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
PICO Holdings, Inc.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
(a) X
-------
(b)
-------
3. SEC USE ONLY:
4. SOURCE OF FUNDS (SEE INSTRUCTIONS):
Not applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e):
------
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
California
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7. SOLE VOTING POWER: 1,269,032 shares
8. SHARED VOTING POWER: 3,691,400 shares
9. SOLE DISPOSITIVE POWER: 1,269,032 shares
10. SHARED DISPOSITIVE POWER: 3,691,400 shares
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
4,960,432 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS):
------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
32.4%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
HC
2
<PAGE> 3
AMENDMENT NO. 3
to
SCHEDULE 13D
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
Physicians Insurance Company of Ohio
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
(a) X
-------
(b)
-------
3. SEC USE ONLY:
4. SOURCE OF FUNDS (SEE INSTRUCTIONS):
Not applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e):
-------
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Ohio
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7. SOLE VOTING POWER: None
8. SHARED VOTING POWER: 3,691,400 shares
9. SOLE DISPOSITIVE POWER: None
10. SHARED DISPOSITIVE POWER: 3,691,400 shares
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
3,691,400 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS):
-----
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
26.3%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
IC
3
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AMENDMENT NO. 3 to
SCHEDULE 13D
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
American Physicians Life Insurance Company
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
(a) X
-------
(b)
-------
3. SEC USE ONLY:
4. SOURCE OF FUNDS (SEE INSTRUCTIONS):
Not applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e): -------
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Ohio
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7. SOLE VOTING POWER: None
8. SHARED VOTING POWER: 41,400 shares
9. SOLE DISPOSITIVE POWER: None
10. SHARED DISPOSITIVE POWER: 41,400 shares
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
41,400 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS):
-----
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
0.3%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
IC
4
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AMENDMENT NO. 3
to
SCHEDULE 13D
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
Physicians Investment Company
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
(a) X
-------
(b)
-------
3. SEC USE ONLY:
4. SOURCE OF FUNDS (SEE INSTRUCTIONS):
Not applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e):
-------
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Ohio
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7. SOLE VOTING POWER: None
8. SHARED VOTING POWER: 41,400 shares
9. SOLE DISPOSITIVE POWER: None
10. SHARED DISPOSITIVE POWER: 41,400 shares
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
41,400 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS):
-----
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
0.3%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
HC
5
<PAGE> 6
Item 1. Security and Issuer.
This Amendment No. 3 to Schedule 13D ("Amendment No. 3") relates to the
shares of Common Stock, $.001 par value (the "PC Quote Shares"), of PC Quote,
Inc. ("PC Quote"). The address of the principal executive offices of PC Quote is
300 South Wacker Drive, Chicago, Illinois 60606.
Item 2. Identity and Background
The persons filing this Amendment No. 3 are PICO Holdings, Inc.
("Holdings"), Physicians Insurance Company of Ohio ("Physicians"), American
Physicians Life Insurance Company ("APL") and Physicians Investment Company
("PIC").
None of the information reported in Item 2 of Amendment No. 1 to the
Reporting Persons' Schedule 13D which was filed with the Securities and Exchange
Commission (the "SEC") on June 11, 1997 ("Amendment No. 1") has changed except
that Loman H. Hartley no longer serves as Vice President, Controller and
Treasurer of APL. Richard H. Sharpe, who serves as President, Chief Executive
Officer and a director of APL, also assumed the position of Treasurer upon Mr.
Hartley's resignation on October 2, 1997.
Item 3. Source and Amount of Funds or Other Consideration.
As described in Amendment No. 1, on May 5, 1997, Holdings and PC Quote
entered into a Loan and Security Agreement (the "Loan Agreement"), under which
Holdings agreed to make a secured loan to PC Quote in an aggregate principal
amount of up to $1,000,000 at a fixed rate equal to 14% per annum. The entire
principal balance and all accrued interest due under the Loan Agreement were to
be paid on September 30, 1997. All advances under the Loan Agreement were to be
secured by a pledge of substantially all of the assets of PC Quote. These liens
were subject to the prior lien of PC Quote's primary lender, Lakeside Bank.
Holdings was to 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.
As described in Amendment No. 2 to the Reporting Persons' Schedule 13D,
which was filed with the SEC on September 17, 1997 ("Amendment No. 2"),
effective August 8, 1997, Holdings and PC Quote entered into a Joint Amendment
to Agreement to Provide Insurance; Disbursement Request and Authorization;
Promissory Note; and Loan and Security Agreement (the "Joint Amendment")
pursuant to which the amount which Holdings agreed to lend to PC Quote was
increased from $1,000,000 to $2,000,000. Holdings made a secured loan to PC
Quote on August 8, 1997 in the amount of the additional $1,000,000 (the "August
8, 1997 Loan"). No "facility fee" was payable by PC Quote to Holdings in
connection with the August 8, 1997 Loan. The remaining terms and provisions of
the Loan Agreement remained in full force and effect.
Effective September 22, 1997, Holdings and PC Quote entered into a
Second Joint Amendment to Agreement to Provide Insurance; Disbursement Request
and Authorization; Promissory Note; and Loan and Security Agreement (the "Second
Joint Amendment") pursuant to which the amount which Holdings agreed to lend to
PC Quote was increased from $2,000,000 to $2,250,000. Holdings made a secured
loan to PC Quote on September 22, 1997 in the amount of the additional $250,000
(the "September 22, 1997 Loan"). No "facility fee" was payable by PC Quote to
Holdings in connection with the September 22, 1997 Loan. In addition, the
maturity date of the loans contemplated by the Loan Agreement, as amended by the
Joint Amendment and the Second Joint Amendment, was extended from September 30,
1997 to December 31, 1997. Other than the
6
<PAGE> 7
provisions discussed in this paragraph, the terms and provisions of the Loan
Agreement, as previously amended, remained in full force and effect.
On September 22, 1997, in connection with the September 22, 1997 Loan
by Holdings to PC Quote, PC Quote issued a Common Stock Purchase Warrant (the
"Third Warrant") to Holdings entitling Holdings to purchase a minimum of 129,032
PC Quote Shares, at a price per share (the "Third Warrant Price") equal to the
lesser of (a) the mean of the closing bid price per share for the 20 preceding
trading days (as reported by NASDAQ or such national securities exchange as the
PC Quote Shares are traded on) and (b) $1.9375 per share. The Third Warrant
expires on April 30, 2000. In lieu of exercising the Third Warrant for cash,
Holdings may elect to receive PC Quote Shares equal to the "value" of the Third
Warrant determined in accordance with a formula specified in the Third Warrant
(the "Conversion Value"). The number of PC Quote Shares subject to the Third
Warrant and the Third Warrant Price will be adjusted to reflect stock dividends;
reclassifications or changes of outstanding securities of PC Quote; any
consolidation, merger or reorganization of PC Quote; stock splits; issuances of
rights, options or warrants to all holders of PC Quote Shares exercisable at
less than the current market price per share; and other distributions to all
holders of PC Quote Shares. In the event of any sale, license or other
disposition of all or substantially all of the assets of PC Quote or any
reorganization, consolidation or merger involving PC Quote in which the holders
of PC Quote 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 Third Warrant and
Holdings has not fully exercised the Third Warrant, the unexercised portion of
the Third Warrant will be deemed automatically converted into PC Quote Shares at
the Conversion Value. Alternatively, Holdings may elect to cause PC Quote to
purchase the unexercised portion of the Third 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 Third Warrant immediately before the record date for
determining stockholders entitled to participate in the proceeds of the
Acquisition, less (b) the aggregate Third Warrant Price. The Third Warrant also
provides for certain piggyback registration rights and a one-time demand
registration right.
Effective December 30, 1997, Holdings and PC Quote entered into a Third
Joint Amendment to Agreement to Provide Insurance; Disbursement Request and
Authorization; Promissory Note; and Loan and Security Agreement (the "Third
Joint Amendment") pursuant to which the maturity date of the loans contemplated
by the Loan Agreement, as previously amended, was extended from December 31,
1997 to January 31, 1998. All other terms and provisions of the Loan Agreement,
as previously amended, remained in full force and effect.
Effective February 5, 1998, Holdings and PC Quote entered into a Fourth
Joint Amendment to Agreement to Provide Insurance; Disbursement Request and
Authorization; Promissory Note; and Loan and Security Agreement (the "Fourth
Joint Amendment") pursuant to which the maturity date of the loans contemplated
by the Loan Agreement, as previously amended, was extended from January 31, 1998
to February 28, 1998. All other terms and provisions of the Loan Agreement, as
previously amended, remained in full force and effect.
Item 4. Purpose of Transaction.
As described more fully in Item 3 of this Amendment No. 3 above, in
connection with the Second Joint Amendment, on September 22, 1997, the Third
Warrant was issued to Holdings.
7
<PAGE> 8
Item 5. Interest in Securities of the Issuer.
(A)(B) Beneficial Ownership of PC Quote Shares:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PC QUOTE SHARES WHICH
MAY BE ACQUIRED UPON
CONVERSION OF DEBENTURE TOTAL PC QUOTE PERCENT OF
PC QUOTE SHARES AND/OR UPON EXERCISE OF SHARES OUTSTANDING PC QUOTE
PERSON CURRENTLY HELD WARRANTS BENEFICIALLY OWNED SHARES (1)
------ -------------- ----------------------- ------------------- --------------------
<S> <C> <C> <C> <C>
Holdings 2,091,400 (2)(3)(4) 2,869,032 (5)(6) 4,960,432 32.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Physicians 2,091,400 (2)(3)(4) 1,600,000 (5) 3,691,400 26.3%
- ------------------------------------------------------------------------------------------------------------------------------------
APL 41,400 (3) 0 41,400 0.3%
- ------------------------------------------------------------------------------------------------------------------------------------
PIC 41,400 (3) 0 41,400 0.3%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) The percent of the outstanding PC Quote Shares is based upon the
number of PC Quote Shares outstanding as of December 31, 1997
(12,436,800) and the number of PC Quote Shares that the person may
acquire upon conversion of an outstanding debenture and/or upon
exercise of outstanding warrants.
(2) Includes 2,050,000 PC Quote Shares beneficially owned directly by
Physicians which is a direct subsidiary of Holdings. As a result of
Holdings' status as parent of Physicians, Physicians and Holdings may
be deemed to share voting and investment power with respect to these
PC Quote Shares.
(3) Includes 41,400 PC Quote Shares beneficially owned directly by APL,
which is a direct subsidiary of PIC and an indirect subsidiary of
Physicians and of Holdings. As a result of these relationships, APL,
PIC, Physicians and Holdings may be deemed to share voting and
investment power with respect to these PC Quote Shares.
(4) Does not include PC Quote Shares which may be acquired by Physicians
as a result of a Rights offering as described in Item 4 of Amendment
No. 1.
(5) Includes 1,600,000 PC Quote Shares which may be acquired upon
conversion of an outstanding debenture beneficially owned directly by
Physicians. As a result of Holdings' status as parent of Physicians,
Holdings and Physicians may be deemed to share voting and investment
power with respect to these PC Quote Shares.
(6) Includes 1,269,032 PC Quote Shares which may be acquired upon exercise
of outstanding warrants beneficially owned directly by Holdings.
(C) See Items 3 and 4 of this Amendment No. 3 above.
(D) See Items 5(A) and 5(B) of this Amendment No. 3 above.
(E) Not applicable.
8
<PAGE> 9
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
See Items 3 and 4 of this Amendment No. 3 above.
Item 7. Material to be Filed as Exhibits:
Exhibit A - Joint Filing Agreement, dated December 3, 1996, among PICO
Holdings, Inc., Physicians Insurance Company of Ohio,
American Physicians Life Insurance Company and Physicians
Investment Company [Incorporated herein by reference to
Exhibit A to the Reporting Persons' Schedule 13D filed with
the SEC on December 16, 1996.]
Exhibit B - Second Joint Amendment to Agreement to Provide Insurance;
Disbursement Request and Authorization; Promissory Note;
and Loan and Security Agreement, dated September 22, 1997,
between PICO Holdings, Inc. and PC Quote, Inc.
Exhibit C - Common Stock Purchase Warrant issued on September 22, 1997
by PC Quote, Inc. to PICO Holdings, Inc.
Exhibit D - Third Joint Amendment to Agreement to Provide Insurance;
Disbursement Request and Authorization; Promissory Note;
and Loan and Security Agreement, dated December 30, 1997,
between PICO Holdings, Inc. and PC Quote, Inc.
Exhibit E - Fourth Joint Amendment to Agreement to Provide Insurance;
Disbursement Request and Authorization; Promissory Note;
and Loan and Security Agreement, dated February 5, 1998,
between PICO Holdings, Inc. and PC Quote, Inc.
9
<PAGE> 10
Signature.
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: February 25, 1998 PICO HOLDINGS, INC.
By: /s/ James F. Mosier
-----------------------------
James F. Mosier,
General Counsel and Secretary
PHYSICIANS INSURANCE COMPANY OF OHIO
By: /s/ James F. Mosier
-----------------------------
James F. Mosier,
General Counsel and Secretary
AMERICAN PHYSICIANS LIFE INSURANCE
COMPANY
By: /s/ James F. Mosier
-----------------------------
James F. Mosier,
General Counsel and Secretary
PHYSICIANS INVESTMENT COMPANY
By: /s/ James F. Mosier
-----------------------------
James F. Mosier, Secretary
10
<PAGE> 11
Exhibit B
Second Joint Amendment to Agreement to Provide Insurance;
Disbursement Request and Authorization; Promissory Note; and
Loan and Security Agreement, dated as of September 22, 1997,
between PICO Holdings, Inc. and PC Quote, Inc.
<PAGE> 12
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." 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:
<PAGE> 13
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.
IN WITNESS WHEREOF, the parties have executed this Joint Amendment as
of the date first written above.
PC QUOTE, INC.
By: /s/ Jim R. Porter
-----------------------------
Its: CEO
PICO HOLDINGS, INC.
By: /s/ James F. Mosier
-----------------------------
Its: General Counsel and Secretary
<PAGE> 14
Exhibit C
Common Stock Purchase Warrant issued on September 22, 1997 by PC
Quote, Inc. to PICO Holdings, Inc.
<PAGE> 15
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 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.
(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 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.
<PAGE> 16
(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 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).
<PAGE> 17
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.
(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
<PAGE> 18
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) 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
<PAGE> 19
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 (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
<PAGE> 20
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.
(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
<PAGE> 21
forty-five days 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 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
<PAGE> 22
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.
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.
<PAGE> 23
Dated: September 22, 1997. PC QUOTE, INC., a Delaware corporation
By: /s/ Jim R. Porter
---------------------------------
, President
By: /s/ Darlene E. Czaja
---------------------------------
, Secretary
<PAGE> 24
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> 25
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:
(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
<PAGE> 26
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.
(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
<PAGE> 27
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 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 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:
<PAGE> 28
(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
<PAGE> 29
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.
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.
<PAGE> 30
Exhibit D
Third Joint Amendment to Agreement to Provide Insurance;
Disbursement Request and Authorization; Promissory Note; and
Loan and Security Agreement, dated December 30, 1997, between
PICO Holdings, Inc. and PC Quote, Inc.
<PAGE> 31
THIRD JOINT AMENDMENT TO
AGREEMENT TO PROVIDE INSURANCE;
DISBURSEMENT REQUEST AND AUTHORIZATION;
PROMISSORY NOTE; AND
LOAN AND SECURITY AGREEMENT
This Third Joint Amendment to Agreement to Provide Insurance;
Disbursement Request and Authorization; Promissory Note; and Loan and Security
Agreement is entered into this 30th day of December, 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 that certain Agreement to
Provide Insurance; Disbursement Request and Authorization; Promissory Note; and
Loan and Security Agreement, as amended August 8, 1997 and September 22, 1997
(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. Promissory Note, Dated May 5, 1997, Amended August 8, 1997 and
September 22, 1997.
The Amended Promissory Note is hereby again amended as follows:
A. In the second paragraph, on the third line delete
"December 31, 1997" and insert "January 31, 1998."
II. Except as expressly provided herein, all of the terms and provisions of
the Definitive Agreements shall remain in full force and effect.
III. This Third 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.
IN WITNESS WHEREOF, the parties have executed this Third Joint
Amendment as of the date first written above.
PC QUOTE, INC.
By: /s/ Jim R. Porter
---------------------------------
Its: Chairman and CEO
PICO HOLDINGS, INC.
By: /s/ James F. Mosier
---------------------------------
Its: Secretary and General Counsel
<PAGE> 32
Exhibit E
Fourth Joint Amendment to Agreement to Provide Insurance;
Disbursement Request and Authorization; Promissory Note; and
Loan and Security Agreement, dated February 5, 1998, between
PICO Holdings, Inc. and PC Quote, Inc.
<PAGE> 33
FOURTH JOINT AMENDMENT TO
AGREEMENT TO PROVIDE INSURANCE;
DISBURSEMENT REQUEST AND AUTHORIZATION;
PROMISSORY NOTE; AND
LOAN AND SECURITY AGREEMENT
This Fourth Joint Amendment to Agreement to Provide Insurance;
Disbursement Request and Authorization; Promissory Note; and Loan and Security
Agreement is entered into this 5th day of February, 1998, 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 that certain Agreement to
Provide Insurance; Disbursement Request and Authorization; Promissory Note; and
Loan and Security Agreement, as amended August 8, 1997, September 22, 1997 and
December 30, 1997 (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. Promissory Note Dated May 5, 1997, Amended August 8, 1997,
September 22, 1997 and December 30, 1997.
The Amended Promissory Note is hereby again amended as follows:
A. In the second paragraph, on the third line delete "January 31,
1998" and insert "February 28, 1998."
II. Except as expressly provided herein, all of the terms and provisions of
the Definitive Agreements shall remain in full force and effect.
III. This Fourth Joint Amendment may be executed in multiple counterparts,
each of which shall be deemed an original and all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Fourth Joint
Amendment as of the date first written above.
PC QUOTE, INC.
By: /s/ Jim R. Porter
---------------------------------
Its: Chairman and CEO
PICO HOLDINGS, INC.
By: /s/ James F. Mosier
---------------------------------
Its: General Counsel and Secretary
