EXHIBIT 99.6
NYSE CSA FORM 1D
SUBORDINATED LOAN AGREEMENT - CASH
THIS AGREEMENT is entered into this 31st day of December 1998, between National
Discount Brokers Group, Inc. (the "Lender") and Equitrade Partners, L.L.C., (the
"Organization").
1. GENERAL - Subject to the terms and conditions hereinafter set forth,
the Organization promises to pay to the Lender or assigns, on January 1, 2000
(the "Scheduled Maturity Date") (the last day of the month at least 1 year and
not more than 10 years from the date thereof) at the principal office of the
Organization, $22,000,000 and interest payable annually at a rate of 6% per
annum from the date hereof. By written notice delivered to the Organization at
its principal office and to the New York Stock Exchange, Inc. (the "Exchange")
no sooner than 6 months from the date hereof, the Lender may accelerate such
payment date to the last business day of a calendar month not less than 6 months
after the receipt of such notice by both the Organization and the Exchange, but
the right of the Lender to receive payment of the principal amount hereof and
interest shall remain subordinate as hereinafter provided.
2. SUSPENDED REPAYMENT
The Organization's obligation to pay the principal amount
hereof on the Scheduled Maturity Date or any accelerated maturity date shall be
suspended and the obligation shall not mature for any period of time during
which after giving effect to such payment (together with (a) the payment of any
other obligation of the Organization payable at or prior to the payment hereof
and (b) the return of any Secured Demand Note and the Collateral therefor held
by the Organization and returnable at or prior to the payment hereof).
(i) in the event that he Organization is not operating
pursuant to the alternative net capital
requirement provided for in paragraph (a)(1)(ii) of
Rule 15c3-1 (the "Rule") under the Securities
Exchange Act of 1934, as amended (the "Act"),
the aggregate indebtedness of the Organization would
exceed 1200 percent of its net capital as those terms
are defined in the Rule or any successor rule as in
effect at the time payment is to be made, or such
other percent as may be made applicable le to the
Organization at the time of such payment by the New
York Stock Exchange, Inc. (the "Exchange") or the
Securities and Exchange Commission (the "SEC"), or
(ii) in the event that the Organization is operating
pursuant to such alternative net capital requirement,
the net capital of the Organization would be less
than 5 percent (or such other percent as may be made
applicable to the Organization at the time of such
payment by the Exchange or the SEC) of aggregate
debit items computed in accordance with Exhibit A to
Rule 15c3-3 under the Act or any successor rule as in
effect at such time, or
(iii) in the event that the Organization is registered as a
futures commission merchant under the Commodity
Exchange Act ( the "CEA"), the net capital of the
Organization (as defined in the CEA or the
regulations thereunder as in effect at the time of
such payment) would be less than 6 percent (or such
other percentum as my be made applicable to the
Organization at the time of such payment by the
commodity Futures Trading Commission ( the "CFTC") of
the funds required to be segregated pursuant to the
CEA and the regulations thereunder, and the foreign
futures or foreign options secured amount less the
market value of commodity options purchased by
customers on or subject to the rules of a contract
market or a foreign board of trade (provided,
however, the deduction for each customer shall be
limited to the amount of customer funds in such
customer's account(s) and foreign futures and
foreign options secured amounts), or the
Organization's net capital would be less than the
minimum capital requirement as defined by the DSRO,
or
(iv) the Organization's net capital, as defined in the
Rule or any successor rule as in effect at the time
of such payment, would be less than 120 percent (or
such other percent as may be made applicable to the
Organization at the time of such payment by the
Exchange or the SEC) of the minimum dollar amount
required by the Rule as in effect at such time (or
such other dollar amount as may be made applicable to
the Organization at the time of such payment by the
Exchange or the SEC), or
(v) in the event that the Organization's registered as a
futures commission merchant under the CEA and if its
net capital, as defined in the CEA or the regulations
thereunder as in effect at the time of such payment,
would be less than 120 percent (or such other percent
as my be made applicable to the Organization at any
time of such payment by the CFTC) of the minimum
dollar amount required by the CEA or the regulations
thereunder as in effect at such time (or such other
dollar amount as may be made applicable to the
Organization at the time of such payment by the
CFTC), or
(vi) in the event that the Organization is subject to the
provisions of Paragraph (a)(6)(v) or (c)(2)(x)(C) of
the Rule, the net capital of the Organization would
be less than the amount required to satisfy the 1000
percent test (or such other percentum test as may be
made applicable to the Organization at the time of
such payment by the Exchange or the SEC) stated in
such applicable paragraph,
(the net capital necessary to enable the Organization to avoid such suspension
of its obligation to pay the principal amount hereof being hereinafter referred
to as the "Applicable Minimum Capital") and during any such suspension the
Organization shall, as promptly as consistent with the protection of its
customers, reduce its business to a condition whereby the principal amount
hereof with accrued interest thereon could be paid (together with (a) the
payment of any other obligation of the Organization payable at or prior to the
payment hereof and (b) the return of any Secured Demand Note and the Collateral
therefor held by the Organization and returnable at or prior to the payment
hereof) without the Organization's net capital being below the Applicable
Minimum Capital, at which time the Organization shall repay the principal amount
hereof plus accrued interest thereon on not less than five days' prior written
notice to the Exchange. The aggregate principal amount outstanding pursuant to
this Agreement shall mature on the first day at which under this paragraph the
Organization has an obligation to pay the principal amount hereof. If pursuant
to the terms hereof the Organization's obligation to pay the principal amount
hereof is suspended and does not mature, the Organization agrees (and the Lender
recognizes) that if its obligation to pay the principal amount hereof is ever
suspended for a period of six months or more, it will promptly take whatever
steps are necessary to effect a rapid and orderly complete liquidation of its
business. If payment is made of all or any part of the principal hereof on the
Scheduled Maturity Date or any accelerated maturity date and if immediately
after any such payment the Organization's net capital is less than the
Applicable Minimum Capital, the Lender agrees irrevocably (whether or not such
Lender had any knowledge or notice of such fact at the time of any such payment)
to repay to re Organization, its successors or assigns, the sum so paid, to be
held by the Organization pursuant to the provisions hereof as if such payment
had never been made; provided, however, that any suit for the recovery of any
such payment must be commenced within two years of the date of such payment.
3. SUBORDINATION OF OBLIGATIONS
The Lender irrevocably agrees that the obligations of the
Organization under this Agreement with respect to the payment of principal and
interest are and shall be fully and irrevocably subordinate in right of payment
and subject to the prior payment or provision for payment in full of all claims
of all other present and future creditors of the Organization whose claims are
not similarly subordinated (claims hereunder shall rank part passu with claims
similarly subordinated) and to claims which are now or hereafter expressly
stated in the instruments creating such claims to be senior in right of payment
to the claims of the class of this claim arising out of any matter occurring
prior to the date or which the Organizations obligation to make such payment
matures consistent with the provisions hereof. In the event of the appointment
of a receiver or trustee of the Organization or in the event of its insolvency,
liquidation pursuant to the Securities Investor Protection Act of 1970 ("SIPA")
or otherwise, its bankruptcy, assignment for the benefit of creditors,
reorganization whether or not pursuant to bankruptcy laws, or any other
marshalling of the assets and liabilities of the Organization, the holder hereof
shall not be entitled to participate or share, ratably or otherwise, in the
distribution of the assets or the Organization until all claims are senior
hereto, have been fully satisfied, or adequate provision has been made therefor.
4. PERMISSIVE PREPAYMENT
With the prior written approval of the Exchange, the
Organization may, at its option, make Prepayment of all or any portion of the
principal amount hereof to the Lender prior to the Scheduled Maturity Date at
any time subsequent to one year form the effective date of this agreement. No
Prepayment shall be made, however, if after giving effect thereto (and to all
other payments of principal of outstanding subordination agreements of the
Organization, including the return of any Secured Demand Note and the Collateral
therefor held by the Organization, the maturity or accelerated maturity of which
are scheduled to occur within six months after the date such Prepayment is to
occur pursuant to the provisions of this paragraph, or on or prior to the
Scheduled Maturity Date for payment of the principal amount hereof disregarding
this paragraph, whichever date is earlier) without reference to any projected
profit or loss of the Organization.
(i) in the event that the Organization is not operating
pursuant to the alternative net capital requirement
provided for in paragraph (a)(1)(ii) of the Rule, the
aggregate indebtedness of the Organization would
exceed 1000 percent of its net capital as those terms
are defined in the rule or any successor rule as in
effect at the time such Prepayment is to be made (or
such other percent as may be made applicable at such
time to the Organization by the Exchange or the SEC),
or
(ii) in the event that the Organization is operating
pursuant to such alternative net capital requirement,
the net capital of the Organization would be less
than 5 percent (or such other percent as may be made
applicable to the Organization at the time of such
Prepayment by the Exchange or the SEC) of aggregate
debit items computed in accordance with Exhibit A to
Rule 15c3-3 under the Act or any successor rule as in
effect at such time, or
(iii) in the event that the Organization is registered as a
futures commission merchant under the CEA, the net
capital of the Organization (as defined in the CEA or
the regulations thereunder as in effect at the time
of such Prepayment) would be less than 7 percent (or
such other percent as may be made applicable to
the Organization at the time of such Prepayment by
the CFTC) of the funds required to be segregated
pursuant to the CEA and the regulations
thereunder, and the foreign futures or foreign
options secured amount less the market value of
commodity options purchased by customers of the
Organization on or subject to the rules of a contract
market or a foreign board of trade (provided,
however, the deduction for each customer shall be
limited to the amount of customer funds in such
customer's account(s) and foreign futures and foreign
options secured amounts) or the Organization's net
capital would be less than the minimum capital
requirement as defined by the DSRO, or
(iv) The Organization's net capital as defined in the Rule
or any successor rule as in effect at the time of
such Prepayment, would be less than 120 percent (or
such other percent as may be made applicable to the
Organization at the time of such Prepayment by the
Exchange or the SEC) of the minimum dollar amount
required by the Rule as in effect at such time (or
such other dollar amount as may be made applicable to
the Organization at the time of such Prepayment by
the Exchange or the SEC), or
(v) In the event that the Organization is registered as a
futures commission merchant under the CEA, its net
capital, as defined in the CEA or the regulations
thereunder as in effect at the time of such
Prepayment would be less than 120 percent (or such
other percent as may be made applicable to the
Organization at the time of such Prepayment by the
CFTC) of the minimum dollar amount required by the
CEA or the regulations thereunder as in effect at
such time or such other dollar amount as may be made
applicable to the Organization at the time of such
Prepayment by the CFTC, or
(vi) In the event that the Organization is subject to the
provisions of paragraph (a)(6)(v) or (c)(2)(x)(c) of
the Rule, the net capital of the Organization would
be less than the amount required to satisfy the 1000
percent test (or such other percent test as may be
made applicable to the Organization at the time of
such Prepayment by the Exchange or the SEC) stated in
such applicable paragraph, or
If Prepayment is made of all or any part of the principal hereof prior to the
Scheduled Maturity Date and if the Organization's net capital is less than the
amount required to permit such Prepayment pursuant to the foregoing provisions
of this Paragraph, the Lender agrees revocable (whether or not such Lender had
an knowledge or notice of such fact at the time of such Prepayment) to repay the
organization, its successors or assigns, the sum so paid to be held by the
Organization pursuant to the provisions hereof as if such Prepayment had never
been made; provided, however, that any suit for the recovery of any such
Prepayment must be commenced within two years of the date of such Prepayment.
5. ACCELERATION IN EVENT OF INSOLVENCY
The Organization's obligation to pay the unpaid principal
amount hereof shall forthwith mature, together with interest accrued thereon, in
the event of any receivership, insolvency, liquidation pursuant to SIPA or
otherwise, bankruptcy, assignment of the benefit of creditors, reorganization
whether or not pursuant to bankruptcy laws, or any other marshalling of the
assets and liabilities of the organization; but payment of the same shall remain
subordinate as herinabove set forth.
6. EFFECT OF DEFAULT
Default in any payment hereunder, including the payment of
interest, shall not accelerate the maturity hereof except as herein specifically
provided, and the obligation to make payment shall remain subordinated as herein
above set forth.
7. NOTICE OF MATURITY OR ACELERATED MATURITY
The organization shall immediately notify the Examining
Authority for such broker or dealer, if, after giving effect to all Payments of
Payment Obligations (as that term is defined in (a)(2)(iv) of Appendix D of the
Rule) under subordination agreements then outstanding that are then due or
mature within the following six months without reference to any projected profit
or loss of the broker or dealer either the aggregate indebtedness of the broker
or dealer would exceed 1200 percent of its net capital or its net capital xxxx
be less than 120 percent of the minimum dollar amount required by the Rule, or,
in the case of a broker or dealer operating pursuant to paragraph (a)(1)(ii) of
the Rule, its net capital would be less than 5 percent of aggregate debit items
computed in accordance with Exhibit A to Rule 15c3-3 under the Act or any
successor rule as in effect at such time, or, if registered as a futures
commission merchant, 6 percent of the funds required to be segregated pursuant
to the Commodity Exchange Act and the regulations thereunder (less the market
value of commodity options purchased by option customers on or subject to the
rules of a contract market, each such deduction not to exceed the amount of
funds in the option customer's account), if greater, or less than 120 percent of
the minimum dollar amount required by paragraphs (a)(1)(ii) of the rule.
8. NON-LIABILITY OF EXCHANGE
The Lender irrevocably agrees that the loan evidenced hereby
is not being made in reliance upon the standing of the Organization as a member
organization of the Exchange or upon the Exchange's surveillance of the
Organization's financial position or its compliance with the Constitution, Rules
and practices of the Exchange. The Lender has made such investigation of the
Organization and its partners, officer, directors and stockholder, as the Lender
deems necessary and appropriate under the circumstance. The Lender is not
relying upon the Exchange to provide any information concerning or relating to
the Organization and agrees that the Exchange has no responsibility to disclose
to the Lender any information concerning or relating to the Organization which
it may now, or at any future time, have. The lender agrees that neither the
Exchange, its Special Trust Fund, or any director, officer, trustee nor employee
of the Exchange or said Trust Fund shall be liable to the Lender with respect to
this agreement or the repayment of the loan evidenced hereby or of any interest
thereon.
9. STATUS OF PROCEEDS
The proceeds hereof shall be dealt with in all respects as
capital of the Organization, shall be subject to the risks of its business, and
may be deposited in an account or accounts in the Organization's name in any
bank or trust company.
10. FUTURES COMMISSION MERCHANTS
If the Organization is a futures commission merchant, as that
term is defined in the CEA, the Organization agrees, consistent with the
requirements of Section 1.17(h) of the regulations of the CFTC (17 CFR 1.17(h)),
that:
(a) whenever prior written notice by the Organization to
the Exchange is required pursuant to the provision of
this agreement, the same prior written notice shall
be given by the Organization to (i) the CFTC at its
principal office in Washington, DC, Attention Chief
Accountant of Division of Trading and Markets, and/or
(ii) the commodity exchange of which the Organization
is a member and which is then designated by the CFTC
as the Organization's designated self-regulatory
organization (the "DSRO"), and
(b) whenever prior written consent, permission or
approval of the Exchange is required pursuant to the
provisions of this agreement, the Organization shall
also obtain the prior written consent, permission or
approval of the CFTC and/or of the DSRO, and
(c) whenever the Organization receives written notice of
acceleration of maturity pursuant to the provisions
of this agreement, the Organization shall promptly
give written notice thereof to the CFTC at the
address stated and/or o the DSRO.
11. DEFINITION OF ORGANIZATION
The term "Organization" as used in this agreement shall
include the Organization, its heirs, executors, administrators, successors and
assigns.
12. EFFECT OF EXCHANGE MEMBERSHIP TERMINATION
Upon termination of the Organization as a member organization
of the Exchange, the references herein to the Exchange shall be deemed to refer
to the Examining Authority. The term "Examining Authority" shall refer to the
regulatory body having responsibility for inspecting or examining the
Organization for compliance with financial responsibility requirements under
Section 9(c) of SIPA and Section 17(d) of the Act.
13. UPON WHOM BINDING
The provision of this agreement shall be binding upon the
Lender, his or its heirs, executors, administrators, successors and assigns and
upon the Organization.
14. ARBITRATION
Any controversy arising out of or relating to this agreement
shall be submitted to and settled by arbitration pursuant to the Constitution
and Rules of the Exchange. The Organization and Lender shall be conclusively
bound by such arbitration.
15. EFFECTIVE DATE
This agreement shall be effective from the date on which it is
approved by the Exchange and shall not be modified or amended without the prior
written approval of the Exchange.
16. ENTIRE AGREEMENT
This instrument embodies the entire agreement between the
Organization and the Lender and no other evidence of such agreement has been or
will be executed without the prior written consent of the Exchange.
17. GOVERNING LAW
This agreement shall be deemed to have been made under, and
shall be governed by, the laws of the State of New York in all respects.
18. CANCELLATION
This agreement shall not be subject to cancellation by either
party, unless the New York Stock Exchange agrees in writing to such cancellation
30 days in advance.
19. NO RIGHT OF SET-OFF
The Lender agrees that it is not taking and will not take or
assert as security for the payment of the loan any security interest in or lien
upon, whether created by contract, statute or otherwise, any property of the
Organization or any property in which the Organization may have an interest,
which is or at any time may be in the possession or subject to the control of
the lender. The Lender hereby waives, and further agrees that it will not seek
to obtain payment of the note in whole or in any part by exercising any right of
set-off it may assert or possess whether created by contract, statute or
otherwise. Any agreement between the organization and the Lender (whether in the
nature of a general loan and collateral agreement, a security or pledge
agreement or otherwise) shall be deemed amended hereby to the extent necessary
so as not to be inconsistent with the provision of this paragraph.
20. * Check this box if you wish to incorporate the
following optional provision:
The Scheduled Maturity Date hereof in each year, without
further action by either the lender or organization shall be extended an
additional year, unless on or before the day seven months preceding the
Scheduled Maturity Date then in effect, the lender shall notify the Organization
in writing, with a written copy to the New York Stock Exchange, Inc., that such
Scheduled Maturity Date shall not be extended.
IN WITNESS HEREOF the parties hereto have set their hands and seals this 31st
day of December, 1998.
By:/s/ Xxxxxxx X. XxXxxxxx By:/s/ Xxxxx X. Xxxxxx
Name: Xxxxxxx X. XxXxxxxx Name: Xxxxx X. Xxxxxx
Title : Equitrade Partners, L.L.C. Title: National Discount Brokers
(Organization) Group, Inc. (Lender)
EXHIBIT 99.8
May __, 1999
BT Alex. Xxxxx Incorporated
as Representatives of the Several Underwriters
c/o BT Alex. Xxxxx Incorporated
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: National Discount Brokers Group, Inc. Follow-on Public Offering
I am an executive officer, director and/or shareholder of National
Discount Brokers Group, Inc., a Delaware corporation ("NDBG"), Sherwood
Securities Corp. or Triak Services Corp. (collectively, the "Company"). I hereby
agree and represent to you that, without the prior written approval of BT Alex.
Xxxxx Incorporated, I will not directly or indirectly make or cause any
offering, sale, short sale, hypothecation, pledge or other disposition of any
shares of common stock of NDBG (the "Common Stock") or any securities
convertible into or exercisable or exchangeable for shares of Common Stock or
derivative of Common Stock that I own either of record or beneficially on the
date hereof, and of which I have the power to control the disposition, other
than (i) gifts of shares of the Common Stock if the donee agrees in writing to
be bound by the terms of this letter; (ii) transfer(s) to NDBG for the purpose
of either exercising options to acquire the Common Stock or paying taxes related
to such exercise; or (iii) transfer(s) of shares of Common Stock or options to
acquire Common Stock granted by NDBG to a spouse, a child of mine or a trust for
the benefit of my children so long as the recipient or a guardian or parent in
the care of a minor child agrees to be bound by the terms of this letter with
respect to such transferred shares or options from this date to a date 180 days
after the effective date of the Registration Statement, Form S-3 (File No.
333-__________) filed by NDBG with the United States Securities and Exchange
Commission under the Securities Act of 1933, as amended. I recognize that you
and NDBG are relying on my representations and agreement contained in this
letter in entering into underwriting arrangements with respect to the offering
contemplated by such Registration Statement, as amended.
Very truly yours,
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(print name)
