February 3, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn: Filing Desk
Re: National Discount Brokers Group, Inc.: Form 8-K
Dear Sir/Madam:
On behalf of our client, National Discount Brokers Group, Inc. (the
"Company"), enclosed for filing is a copy of the Company's Current Report on
Form 8-K, including exhibits thereto.
If you have any questions or comments regarding this filing, please
call me at (973) 596-4637.
Very truly yours,
Frank E. Lawatsch, Jr.
Enclosures
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 29, 1998
NATIONAL DISCOUNT BROKERS GROUP, INC.
(Exact name of Registrant as specified in Charter)
Delaware 1-9480 22-2394480
- ------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
10 Exchange Place Centre, 15th Floor, Jersey City, New Jersey 07302-3913
- -------------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code: (201) 946-2200
--------------
Not Applicable
(Former name and former address, as changed since last report)
<PAGE>
Item 5. Other Events
National Discount Brokers Group, Inc. (the "Company") entered into a
Stock Purchase Agreement with IAT Reinsurance Syndicate Ltd., a Bermuda
corporation, ("IAT") dated as of December 5, 1997, in which IAT agreed to
purchase 1,500,000 common shares of stock of the Company, par value $.01 per
share for $19,312,500. The Company consummated this sale on January 29, 1998.
The Company and IAT also entered into a Registration Rights Agreement dated as
of January 29, 1998 pursuant to which the Company agreed to register for resale
under Section 5 of the Securities Act of 1933, as amended, shares of common
stock of the Company purchased by IAT.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit No. Description
4 Registration Rights Agreement
between the Company and IAT dated
as of January 29, 1998
99(a) Press Release dated January 29, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
National Discount Brokers Group, Inc.
-------------------------------------
Registrant
Dated: February 3, 1998 By: -------------------------------------
Name: Arthur Kontos
Title: President and Chief Executive
Officer
8
EXHIBIT 4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") made January 29, 1998
by and among NATIONAL DISCOUNT BROKERS GROUP, INC., a Delaware corporation (the
"Seller"), and IAT Reinsurance Syndicate Ltd., a Bermuda corporation (the
"Buyer").
Recitals:
A. Pursuant to the terms and conditions of a Stock Purchase Agreement
dated as of December 5, 1997 (the "Stock Purchase Agreement") by and among the
Buyer and the Seller, pursuant to which the Seller is selling and the Buyer is
acquiring 1,500,000 shares of the Common Stock, par value $.01 per share of the
Seller (the "Shares").
B. It is a condition precedent to the obligations of the Buyer under
the Stock Purchase Agreement that the Seller enter into this Agreement
contemporaneously with the closing of the sale and purchase provided for
thereunder.
NOW, THEREFORE, the parties intending to be legally bound, agree as
follows:
1. Definitions. For purposes of this Agreement, the following
definitions shall apply:
(i) "Blue Sky law" shall mean the laws of any state or
territory of the United States regulating the sale of securities within such
state or territory and commonly referred to as "blue sky laws."
(ii) The terms "register," "registered," and "registration"
refer to a registration under Section 5 of the Federal Securities Act of 1933,
as amended (the "Act") effected by preparing and filing a registration statement
or similar document in compliance with the Act, and the declaration or ordering
of effectiveness of such registration statement, document or amendment thereto
by the United States Securities and Exchange Commission ("SEC").
(iii) The term "Registrable Securities" means the Shares sold
to the Buyer under the terms of the Stock Purchase Agreement.
2. Registration Rights. The Seller agrees that the Buyer shall have the
following registration rights with respect to the Shares; provided, however, the
Seller shall have no obligation to provide the registration rights contained in
this Section 2 if a resale by the Buyer of the Shares may be accomplished in
compliance with Rule 144 as promulgated under the Act or any other successor
rule thereto, ("Rule 144").
(a) Requested Registration.
(i) If after one year after the Closing and before
December 31, 2001, the Seller
shall receive from the Buyer a written request that the Seller effect a
registration with respect to all or a part of the Registrable Securities, the
Seller will commence and diligently proceed with the preparation and filing of
one registration statement and the Seller will as soon as practicable, use its
diligent best efforts to effect such registration (including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable Blue Sky law or other state
securities laws and appropriate compliance with applicable regulations issued
under the Act) as may be so requested and as would permit or facilitate the sale
and distribution of such Registrable Securities; provided that the Seller shall
not be obligated to effect, or to take any action to effect, any such
registration pursuant to this Section 2(a) in any particular jurisdiction in
which the Seller would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance, unless the
Seller is already subject to service in such jurisdiction and except as may be
required by the Act or applicable rules or regulations thereunder. Subject to
the foregoing provision, the Seller shall file a registration statement covering
the Registrable Securities so requested to be registered as soon as practicable,
after receipt of the request of the Buyer.
(ii) The registration statement filed pursuant to the
request of the Buyer may,
subject to the provisions of Section 2(a)(iii) below, include securities of the
Seller which are held by other holders or the Seller' securities for its own
account.
(iii) Underwriting. If the Buyer intends to
distribute the Registrable
Securities covered by its request by means of a registered public offering
involving an underwriting, it shall so advise the Seller as a part of its
request made pursuant to Section 2(a). If other holders of the Seller's
securities shall request, pursuant to agreements with the Seller, to include
such securities in any registration pursuant to Section 2(a), the Buyer shall,
on behalf of all such holders, offer to include the securities of such holders
in such underwriting and may condition such offer on their acceptance of the
further applicable provisions of this Section 2(a). The Seller shall (together
with all such holders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for such underwriting
by the Buyer and reasonably acceptable to the Seller. Notwithstanding any other
provision of this Section 2(a), if the representative advises the Buyer in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the shares of the Seller held by such holders shall be excluded
pro rata from such registration to the extent so required by such limitation. If
any such holder who has requested inclusion in such registration as provided
above disapproves of the terms of the underwriting, such person may elect to
withdraw therefrom by written notice to the Seller, the underwriter and the
Seller. The securities so withdrawn shall also be withdrawn from registration.
If the underwriter has not limited the number of securities to be underwritten,
the Seller may include its securities for its own account in such registration
if the underwriter so agrees and if the Registrable Securities will not thereby
be limited.
(b) Seller Registration. (i) If one year after the Closing and
before December 31, 2001, the Seller shall determine to register any of its
common stock either for its own account or the account of a security holder or
holders, other than a registration relating solely to employee benefit plans, or
a registration relating solely to a transaction covered by Rule 145 of the SEC,
or a registration on any registration form which does not permit secondary sales
or does not include substantially the same information as would be required to
be included in a registration statement covering the sale of Registrable
Securities, the Seller will:
(x) promptly give to the Buyer written
notice thereof (which shall include a list of the
jurisdictions in which the Seller intends to attempt
to qualify such securities under the applicable Blue
Sky or other state securities laws); and
(y) include in such registration (and any
related qualification under Blue Sky laws or other
compliance), and in any underwriting involved
therein, all the Registrable Securities specified in
a written request or requests, made by the Buyer
within fifteen (15) days after receipt of the written
notice from the Seller described in clause (x) above,
except as set forth in Section 2(b)(ii) below. Such
written request may specify all or a part of the
Buyer's Registrable Securities.
(ii) Underwriting. If the registration of which
the Seller gives notice is for a
registered public offering involving an underwriting, the Seller shall so advise
the Buyer as a part of the written notice given pursuant to Section 2(b)(i). In
such event the right of the Buyer to registration pursuant to Section 2(b) shall
be conditioned upon the Buyer's participation in such underwriting and the
inclusion of the Buyer's Registrable Securities in the underwriting to the
extent provided herein. All holders proposing to distribute their securities
through such underwriting shall (together with the Seller) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by the Seller. Notwithstanding any other provision of
this Section 2(b), if the underwriter determines that marketing factors require
a limitation on the number of shares to be underwritten, the underwriter may
(subject to the allocation priority set forth below) limit the number of
Registrable Securities to be included in the registration and underwriting. The
Seller shall so advise the Buyer and all holders participating in the
registration described in Section 2(b), and the number of shares of securities
that are entitled to be included in the registration and underwriting shall be
allocated in the following manner: if a limitation on the number of Registrable
Securities is required, the number of shares that may be included in the
registration and underwriting shall be allocated among all holders (including,
without limitation, the Buyer), in proportion, as nearly as practicable, to the
respective amounts of securities which they had requested to be included in such
registration at the time of filing the registration statement. If the Buyer or
any holder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Seller and the underwriter. Any
Registrable Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
(c) Registration Procedures. In the case of each registration
effected by the Seller pursuant to Section 2 of this Agreement, the Seller will
keep the Buyer advised in writing as to the initiation of each registration and
as to the completion thereof. At its expense, the Seller will:
(i) Keep such registration effective for a
period of one hundred twenty (120) days;
(ii) Furnish such number of prospectuses and
other documents incident thereto as the Buyer from
time to time may reasonably request;
(iii) In connection with any underwritten
offering pursuant to a registration statement filed
pursuant to Section 2(a) hereof, the Seller will
enter into any underwriting agreement reasonably
necessary to effect the offer and sale of common
stock, provided such underwriting agreement contains
customary underwriting provisions and provided
further that if the underwriter so requests the
underwriting agreement will contain customary
contribution provisions.
3. Information to be provided by the Buyer. The Buyer will furnish to
the Seller in connection with any registration under this Agreement, in writing,
such information regarding itself, the Registrable Securities and other
securities of the Seller held by it, and the intended method of disposition of
the Registrable Securities as shall be reasonably required to effect the
registration of the Registrable Securities held by the Buyer. Notwithstanding
the provisions of this Agreement, if the Buyer fails to provide such information
to the Seller on a timely basis as is reasonably requested by the Seller, the
Seller may exclude the Buyer's Registrable Securities from such registration
statement and the Buyer may not for twelve (12) months thereafter demand
registration of the Buyer's Registrable Securities.
4. Indemnification.
(a) The Seller will indemnify the Buyer, each of its officers,
directors and partners, and each person controlling the Buyer, with respect to
which registration, qualification or compliance has been effected pursuant to
Section 2 of this Agreement, and each underwriter, if any, and each person who
controls any underwriter, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any 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 any violation by the Seller of the Act
or any rule or regulation thereunder applicable to the Seller and relating to
action or inaction required of the Seller in connection with any such
registration, qualification or compliance, and will reimburse the Buyer, each of
its officers, directors and partners, and each person controlling the Buyer,
each such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action;
provided that the Seller will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information furnished to the
Seller by the Buyer or underwriter and stated to be specifically for use
therein.
(b) The Buyer will, if Registrable Securities held by it are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Seller, each of its directors and
officers and each underwriter, if any, of the Seller's securities covered by
such a registration statement, each person who controls the Seller or such
underwriter within the meaning of the Act and the rules and regulations
thereunder, each other such holder and each of their officers, directors and
partners, and each person controlling such holder, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statement
therein not misleading, and will reimburse the Seller and such holders,
directors, officers, partners, persons, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Seller by the Buyer and
stated to be specifically for use therein; provided, however, that the
obligations of the Buyer thereunder shall be limited to an amount equal to the
proceeds to the Buyer of securities sold as contemplated herein.
(c) Each party entitled to indemnification under this Section
4 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnify may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with defense of such claim and litigation resulting
therefrom.
5. Expenses of Registration.
(a) With respect to the inclusion of Registrable Securities in
a registration statement pursuant to this Agreement, all fees, costs and
expenses of and incidental to such registration, inclusion and public offering
shall be borne by the Seller; provided, however, that any security holders
participating in such registration shall bear their pro-rata share of the
underwriting discounts and commissions, if any, incurred in connection with such
registration
(b) The fees, costs and expenses of registration to be borne
by the Seller as provided in this paragraph 5 shall include, without limitation,
all registration, filing and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Seller, and all legal fees and
disbursements and other expenses of complying with state securities or Blue Sky
laws of any jurisdiction or jurisdictions in which securities to be offered are
to be registered and qualified. The fees and disbursements of counsel and
accountants for the Buyer for personal services rendered incidental to any
registration shall be borne by the Buyer.
6. Standstills. Notwithstanding any other provision of this Agreement,
if requested by the Seller and an underwriter in connection with a public
offering of securities of the Seller which are the same or similar to the
Registrable Securities or convertible into such securities or evidencing a right
to purchase such securities registered on Form S-1, S-2, S-3 or similar form of
the SEC then available to the Seller, a holder of Registrable Securities shall
not sell or otherwise transfer or dispose of any Registrable Securities held by
such holder during the one hundred eighty (180) day period following the
effective date of a registration statement of the Seller filed under the Act;
provided that the foregoing restrictions shall not apply to a registration
statement relating solely to an employee benefit plan or a registration relating
solely to a transaction covered by Rule 145 under the Act or similar form or
forms promulgated in the future and provided further that senior executive
officers of the Buyer are subject to similar restrictions. The Seller may impose
stop-transfer instructions with respect to the Registrable Securities subject to
the foregoing restriction until the end of said one hundred eighty (180) day
period.
7. Rights of Transferees. In the event that all or any part of the
Registrable Securities held by the Buyer shall at any time be transferred by the
Buyer, in a transfer permissible under applicable securities laws, other than
pursuant to an effective registration statement, the registration rights
hereunder shall extend to the transferee of such securities, provided that such
transferee enters into an agreement with the Seller containing terms and
conditions substantially the same as this Agreement.
8. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval or other
communication shall or may be given to or served upon any party by any other, or
whenever any party desires to give or serve upon another party communication
with respect to this Agreement, each such notice, demand, request, consent,
approval, or other communication shall be in writing and either shall be
delivered in person with receipt acknowledged or registered or certified mail,
return receipt requested, postage prepaid, addressed as follows or by facsimile
to the facsimile number noted below so long as electronic confirmation is
received by the sender of the facsimile that the recipient's facsimile machine
has received the transmission:
(i) If to the Seller:
National Discount Brokers Group, Inc.
10 Exchange Place Centre, 15th Floor
Jersey City, New Jersey 07302-3913
Attention: General Counsel
(ii) If to Buyer:
IAT Reinsurance Syndicate Ltd.
41 Cedar Avenue
Cedar House
Hamilton HM 12, Bermuda
If to Buyer at PO Box:
IAT Reinsurance Syndicate Ltd.
PO Box 1179
Hamilton HMEX, Bermuda
with a copy to:
Peter R. Kellogg
120 Broadway
New York, New York 10271
or at such other address or facsimile number as may be substituted by notice
given as herein provided. The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such notice. Every notice,
demand, request, consent, approval, declaration or other communication hereunder
shall be deemed to have been duly given or served on the date on which
personally delivered, with receipt acknowledged, or three (3) days after the
same shall have been deposited in the United States mail for overnight delivery
or delivered to a courier service for overnight delivery. Failure or delay in
delivering copies of any notice, demand, request, consent, approval, declaration
or other communication to the persons designated above to receive copies shall
in no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
9. Miscellaneous.
(a) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.
(b) None of the terms or provisions of this Agreement may be
waived, altered, modified or amended except in writing duly signed for and on
behalf of the parties hereto.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
(d) This Agreement shall be governed and construed in
accordance with the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the day and year first above written.
NATIONAL DISCOUNT BROKERS GROUP, INC.
By:-----------------------------------
Name: Arthur Kontos
Title:President and Chief Executive Officer
IAT REINSURANCE SYNDICATE LTD.
By:-----------------------------------
Name: Peter R. Kellogg
Title: President
EXHIBIT 99(a)
FROM: National Discount Brokers Group, Inc.
Jersey City, NJ 07302
The MWW Group
Public Relations - Tel. (201) 507-9500
Contact: Alissa Blate ([email protected])
Rich Tauberman ([email protected])
- ----------------------------------------------------------------
FOR IMMEDIATE RELEASE
NATIONAL DISCOUNT BROKERS GROUP COMPLETES
$19.3 MILLION SALE OF TREASURY STOCK
JERSEY CITY, New Jersey -- January 29, 1998 -- National
Discount Brokers Group, Inc. (NYSE: NDB) today announced that it has completed a
previously announced private placement of 1.5 million shares of NDB common
stock, to Bermuda-based IAT Reinsurance Syndicate Ltd., an entity controlled by
investor Peter Kellogg.
The deal boosts Mr. Kellogg's holdings from approximately 8% to 17.8%.
The $19.3 million proceeds from the transaction will be used for
general corporate purposes and marketing activities to support the expansion of
National Discount Brokers/ndb.com, the company's Internet trading and financial
services subsidiary.
Headquartered in Jersey City, New Jersey, National Discount Brokers
Group, Inc. is the parent company of three financial services entities: National
Discount Brokers/ndb.com, Sherwood Securities and MXNet. National Discount
Brokers Group also owns the majority interest in a limited partnership,
Equitrade Partners, a specialist on the New York Stock Exchange. Combined, the
four entities generate more than six million transactions annually. The company
has offices in New York, Los Angeles, Chicago, Denver, Minneapolis and Boston.
