April 13, 1998

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: National Discount Brokers Group, Inc.
      Report on Form 10-Q for the Nine Months Ended February 28, 1998

Gentlemen:

Enclosed please find the following material submitted on behalf of National
Discount Brokers Group, Inc. ("Company"):

         One  complete  copy of the  Company's  report on Form 10-Q for the nine
months ended February 28, 1998 including financial statements and exhibits.

Thank you for your attention to this matter.

Very truly yours,

/s/ Denise Isaac
Denise Isaac
Chief Financial Officer and
Principal Accounting Officer







                                                                   CONFORMED

                                 FORM 10-Q
                     SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


             [X]  Quarterly  Report  Pursuant  to  Section 13 or 15(d) of the
                          Securities Exchange Act of 1934

                        For Quarter Ended February 28, 1998
                                     OR
             [ ]  Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

             For the transition period from                    to
                                                --------------    -------------

                        Commission file number       1-9480
          ---------------------------------------------------------------------


                        National Discount Brokers Group, Inc.
         ----------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


                     Delaware                              22-2394480
         ----------------------------------------------------------------------
         (State or other jurisdiction of                  (I.R.S. Employer
          incorporation or organization)                  Identification No.)


             10 Exchange Place Centre, Jersey City, New Jersey     07302
   ----------------------------------------------------------------------------
         (Address of principal executive offices)               (Zip code)


--------------------------------------------------------------------------------
        (Former name, former address and former fiscal year, if changed
                                    since last report)


Indicate by check mark whether the Registrant (1) has filed all reports  require
 to be filed by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934
 during the preceding 12 months (or for such shorter period that the Registrant
  was               required to file such reports),  and (2) has been subject to
                    such filing requirements for the past 90 days.

                                 Yes  X      No
                                    ----        ----


       Indicate the number of shares outstanding of each of the issuer's classes
           of common stock, as of the latest practicable date.

 14,226,260                      shares of  Common  Stock,  par  value  $.01 per
                                 share, were outstanding on March 31, 1998.




                   NATIONAL DISCOUNT BROKERS GROUP, INC.
                               AND SUBSIDIARIES

                                   INDEX


                                                                          PAGE

                                                                        --------

Part I - Financial Information

Item 1. - Financial Statements

  Consolidated Statements of Financial Condition -
         February 28, 1998 (Unaudited) and May 31, 1997                    3

  Consolidated Statements of Income (Unaudited) -
         Three Months and Nine Months Ended February 28, 1998 and 1997   4 - 5

  Consolidated Statements of Cash Flows (Unaudited) -
         Nine Months Ended February 28, 1998 and 1997                    6 - 7

  Notes to Consolidated Financial Statements (Unaudited) -
         February 28, 1998                                               8 - 9


Item 2. - Management's Discussion and Analysis of
               Financial Condition and Results of Operations            10 - 14


Part II - Other Information

Item 2. - Changes in Securities and Use of Proceeds                       14

Item 4. - Submission of Matters to a Vote of Security Holders             14

Item 6. - Exhibits and Reports on Form 8-K                                15

Signatures                                                                16






PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
                     NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>

                                                               February 28,
                                                                   1998              May 31,
              ASSETS                                            (Unaudited)            1997
                                                            ------------------  ------------------

<S>                                                         <C>                 <C>   
Cash                                                        $       1,099,812           3,033,818
Funds segregated for customers                                           -                 29,203
Receivables:
  Brokers and dealers                                              78,773,644          58,047,183
  Other                                                             1,054,714             599,725
Securities owned, at market value                                  60,979,150          45,696,436
Investment securities available for sale, at market value           2,427,600                -
Investment securities not readily marketable, at fair value           834,320             501,320
Investment in partnerships                                             13,484              12,984
Notes receivable                                                    7,523,558             830,589
Furniture, fixtures, equipment, and leasehold improvements - at
  cost, net of accumulated depreciation and amortization of $10,592,405
  at February 28, 1998 and $7,674,370 at May 31, 1997              17,936,759          20,263,511
Computer software - at cost, net of accumulated amortization of
  $1,085,831 at February 28, 1998 and $929,942 at May 31, 1997      2,716,275           1,853,693
Identified intangible assets, net of accumulated amortization of
   $1,121,706 at February 28, 1998 and $535,853 at May 31, 1997     6,142,104           6,727,958
Exchange memberships (market value $11,120,000 at February 28,
  1998 and $7,957,750 at May 31, 1997)                              7,416,496           7,416,496
U.S. Treasury Obligations, held as collateral                       7,578,699           7,815,254
Subordinated notes receivable                                       3,500,000           3,000,000
Deferred tax asset (net of valuation allowance)                     2,088,366           2,220,472
Other assets                                                        1,600,943           2,112,083
                                                            ------------------  ------------------
                                                            $     201,685,924   $     160,160,725
                                                            ==================  ==================
      LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Securities sold, not yet purchased, at market value       $      38,915,943   $      25,129,290
  Accounts payable and accrued expenses, including
    compensation payable to officers and employees of
    $8,231,456 at February 28, 1998 and $11,831,551
    at May 31, 1997                                                23,588,741          31,734,213
  Secured demand notes payable                                      3,500,000           3,000,000
  Income taxes payable                                              2,852,667             302,501
  Minority interest in Equitrade                                    9,967,473           7,720,236
                                                            ------------------  ------------------
          Total liabilities                                        78,824,824          67,886,240
                                                            ------------------  ------------------

Commitments and contingencies (Note 4)

Stockholders' equity (Note 5):
  Preferred stock - $.01 par value;
    authorized 1,000,000 shares; none issued                             -                   -
  Class A common stock - $.01 par value; authorized
    50,000,000 shares at May 31, 1997 and none at
    February 28, 1998; none issued                                       -                   -
  Common stock - $.01 par value; authorized
    50,000,000 shares; issued 14,343,201 shares                       143,432             143,432
  Additional paid-in capital                                       65,050,817          57,189,985
  Unrealized gain on securities available for sale                  2,427,600                -
  Retained earnings                                                56,232,283          47,215,833
                                                            ------------------  ------------------
                                                                  123,854,132         104,549,250
  Less: Treasury stock - at cost, 113,445 shares at
    February 28, 1998 and 1,648,536 shares at May 31, 1997           (993,032)        (12,274,765)
                                                            ------------------  ------------------
          Total stockholders' equity                              122,861,100          92,274,485
                                                            ------------------  ------------------
                                                            $     201,685,924   $     160,160,725
                                                            ==================  ==================
</TABLE>

       The accompanying notes are an integral part of these statements.
                                      (3)

                      NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF INCOME
                                          (Unaudited)
<TABLE>
<CAPTION>

                                                          Three Months Ended February 28,         Nine Months Ended February 28,
                                                      --------------------------------------   -------------------------------------
                                                               1998                1997                 1998       1997
                                                      ------------------  ------------------   ---------------- -----------------

Revenues:
  <S>                                                       <C>             <C>                  <C>              <C>             
  Firm securities transactions - net                        $  22,680,785   $      35,930,363    $    72,777,010  $     92,368,915
  Commission income                                             8,065,034           9,271,776         27,358,479        25,024,168
  Floor brokerage income                                        4,047,304           3,946,786         12,456,787        10,320,924
  Equity gain (loss) in partnerships                             -                    (10,844)               500           (26,176)
  Investment securities gains realized                             63,625            -                    63,625          -
  Interest income                                               1,944,346           1,981,003          5,728,192         5,899,232
  Fee income                                                    1,407,725             759,668          3,382,992         1,848,266
  Other revenues                                                   73,809             136,184            202,413           624,490
                                                        ------------------  ------------------   ---------------- -----------------
                                                               38,282,628          52,014,936        121,969,998       136,059,819
                                                         ------------------  ------------------   ---------------- -----------------

Expenses:
  Compensation and benefits                                    14,189,936          15,200,418         40,423,458        43,677,551
  Clearing and related charges                                 10,016,733          15,643,471         38,801,946        43,589,723
  Communications                                                3,045,383           2,898,138          8,299,974         8,650,941
  Litigation settlement                                          -                  9,187,500            -               9,187,500
  Depreciation and amortization                                 2,212,053           1,276,153          5,999,057         3,300,386
  Occupancy costs and equipment rental                            611,387             638,146          1,874,735         2,039,686
  Other expenses                                                3,430,794           4,621,176          9,522,615        10,589,902
  Interest expense                                                211,780             140,274            595,803           273,872
                                                        ------------------  ------------------   ---------------- -----------------
                                                               33,718,066          49,605,276        105,517,588       121,309,561
                                                        ------------------  ------------------   ---------------- -----------------

   Income before minority interest and income taxes             4,564,562           2,409,660         16,452,410        14,750,258

   Income of Equitrade allocated to minority partners          (1,362,300)         (2,113,802)        (4,512,453)       (2,866,762)
                                                        ------------------  ------------------   ---------------- -----------------

   Income from continuing operations before income taxes        3,202,262             295,858         11,939,957        11,883,496
                                                        ------------------  ------------------   ---------------- -----------------

   Income taxes (benefit):
        Federal, currently payable                              1,118,207           3,259,257          3,891,226         6,838,384
        State and local, currently payable                        526,658           1,726,388          1,604,262         3,436,573
                                                            ------------------  ------------------   ---------------- --------------
                  Total current income tax expense              1,644,865           4,985,645          5,495,488        10,274,957
                                                            ------------------  ------------------   ---------------- --------------

        Federal, deferred                                        (161,078)         (3,107,540)           (97,361)       (3,107,540)
        State and local, deferred                                 201,875          (1,339,895)           229,465        (1,339,895)
                                                            ------------------  -----------------  ----------------- ---------------
                  Total deferred income tax expense (benefit)      40,797          (4,447,435)           132,104        (4,447,435)
                                                             ----------------  ------------------   ---------------- ---------------

           Total income taxes from continuing operations        1,685,662             538,210          5,627,592         5,827,522
                                                            ------------------  ------------------   ---------------- --------------

   Net  income (loss) from continuing operations                1,516,600            (242,352)         6,312,365         6,055,974


   Discontinued operations (note 7)
     Gain from sale of discontinued operations (net)            2,704,085            -                 2,704,085          -
                                                           ------------------  ------------------   ---------------- ---------------
   Net income (loss)                                        $   4,220,685   $        (242,352)   $     9,016,450  $      6,055,974
                                                            ==================  ==================   ================ ==============


</TABLE>


                                  (Continued)
                                      (4)


                 NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF INCOME
                                     (Unaudited)
                                     (Continued)
<TABLE>
<CAPTION>




                                                            Three Months Ended February 28,          Nine Months Ended February 28,
                                                          ----------------------------------   -------------------------------------
                                                                   1998                1997                 1998            1997
                                                            ------------------  ------------------   ---------------- --------------

   Net  income per common and common
      equivalent share (a)
     Basic:
        <S>                                                 <C>                  <C>                  <C>              <C>         
        Net  income from continuing operations              $         0.11       $       (0.02)       $       0.48     $       0.47
        Net  income from discontinued operations - gain               0.19                -                   0.20             -
                                                            ==================  ==================   ================ ==============
            Net income (loss)                               $         0.30       $       (0.02)       $       0.68     $       0.47
                                                            ==================  ==================   ================ ==============

Weighted average common shares outstanding                      14,116,572          12,832,835          13,168,693       12,941,668
                                                            ==================  ==================   ================ ==============

     Diluted:
        Net  income from continuing operations              $         0.11       $       (0.02)       $       0.48     $       0.47
        Net  income from discontinued operations - gain               0.19                -                   0.20             -
                                                            ==================  ==================   ================ ==============
            Net income (loss)                               $         0.30       $       (0.02)       $       0.68     $       0.47
                                                            ==================  ==================   ================ ==============

Weighted average common shares outstanding                      14,144,593          12,885,774          13,254,140       12,991,743
                                                            ==================  ==================   ================ ==============




<FN>
(a)  The sum of the  individual  quarters'  earnings  per common  share does not
     equal the total  amount for the nine  months  ended  February  28,  1998 or
     February  28, 1997 due to the effect of  averaging  the number of shares of
     common stock equivalents throughout the year.
</FN>
</TABLE>


































            The accompanying notes are an integral part of these statements.
                                     (5)


                NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       (Unaudited)
<TABLE>
<CAPTION>

                                                                 Nine Months Ended February 28,
                                                            --------------------------------------
                                                                    1998                1997
                                                            ------------------  ------------------
 Cash flows from operating activities:

  <S>                                                       <C>                 <C>              
  Net income from continuing operations                     $       6,312,365   $       6,055,974

 Non-cash items included in net income:
  Equity (income) loss in partnerships                                   (500)             26,176
  Depreciation and amortization                                     5,999,057           3,300,386
  Income of Equitrade allocated to minority partners                4,512,453           2,866,762
  Provision for deferred taxes                                        132,104          (4,447,435)

 (Increase) decrease in operating assets:
  Funds segregated for customers                                       29,203                     -
  Receivables:
    Brokers and dealers                                           (20,726,461)         20,803,603
    Other                                                            (593,904)            (66,918)
  Securities owned, at market value                               (15,282,714)        (14,888,440)
  U.S. Treasury Obligations, held as collateral                       236,555             (88,263)
  Other assets (net of deposits made on furniture, fixtures
     and equipment, and leasehold improvements)                       353,899             337,284

 Increase (decrease) in operating liabilities:
  Securities sold, not yet purchased, at market value              13,786,653            (979,368)
  Accounts payable and accrued expenses                            (9,400,957)          8,529,299
  Income taxes payable                                              1,340,889          (4,241,744)
                                                            ------------------  ------------------
     Net cash (used in) provided by operating activities          (13,301,358)         17,207,316
                                                            ------------------  ------------------

 Cash flows from investing activities:

  Purchase of investment securities not readily marketable           (333,000)           (100,000)
  Distributions from partnerships, net                               -                      5,150
  Loans made                                                          (60,000)           (105,740)
  Principal collected on notes receivable                              69,975             102,340
  Purchases of furniture, fixtures and
    equipment, and leasehold improvements                          (3,533,424)         (9,007,891)
  Deposits made on furniture, fixtures and equipment,
    and leasehold improvements                                        (38,603)         (1,569,347)
  Purchases of computer software                                   (1,572,373)           (326,502)
  Payment for purchase of non-compete agreement                      -                   (188,780)
  Purchase of exchange membership                                    -                 (1,450,000)
  Issuance of subordinated note                                      -                   (500,000)
                                                            ------------------  ------------------
     Net cash used in investing activities                         (5,467,425)        (13,140,770)
                                                            ------------------  ------------------





</TABLE>




                                    (Continued)
                                        (6)


                NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       (Unaudited)
                                       (Continued)
<TABLE>
<CAPTION>

                                                                 Nine Months Ended February 28,
                                                            --------------------------------------
                                                                      1998                1997
                                                            ------------------  ------------------
 Cash flows from financing activities:
  <S>                                                       <C>                 <C>              
  Sale of treasury stock                                           19,267,500            -
  Purchase of treasury stock                                          (49,760)         (2,239,421)
  Capital contributions by minority interest                          275,087             135,659
  Capital withdrawals by minority interest                         (2,540,303)         (1,536,000)
                                                            ------------------  ------------------
     Net cash provided by (used in) financing activities           16,952,524          (3,639,762)
                                                            ------------------  ------------------

 Net (decrease) increase in cash                                   (1,816,259)            426,784

 Cash acquired due to consolidation of Anvil                         -                     22,740
 Cash surrendered on sale of MXNet                                   (117,747)           -

 Cash at beginning of period                                        3,033,818             470,313
                                                            ------------------  ------------------
 
 Cash at end of period                                      $       1,099,812   $         919,837
                                                            ==================  ==================


Supplemental disclosure of non-cash investing and financing activities:

  During  September  1997,  the  Company  sold the  remaining  net assets of its
  subsidiary,  Anvil  Institutional  Services,  Inc., and received a note in the
  amount of $102,945 which is due in December 1998.

  During  October  1997 and December  1997,  certain  executives  of the Company
  exercised an aggregate of 294,758  options for the purchase of 294,758  shares
  of the Company's  common stock with exercise  prices  ranging from $7.9375 per
  share  to  $10.125  per  share.  In  order  to  pay  for  the  exercise  price
  ($2,701,705)  and to  reimburse  the Company  for the  personal  income  taxes
  ($441,389) on the gain related to the transaction,  the executives remitted to
  the Company  255,450 shares of the Company's  common stock with a market value
  of $3,143,094.

  During October 1997, Equitrade entered into a $500,000 subordination agreement
  with an  unrelated  party.  The note has a  stated  interest  rate of 4% and a
  maturity date of October 1, 1998.

  On December 8, 1997,  the Company  received net cash  proceeds of  $19,267,500
  from the sale of  1,500,000  shares  of its  common  stock to IAT  Reinsurance
  Syndicate Ltd.

  During  February  1998,  the  Company  sold the  remaining  net  assets of its
  subsidiary,  MXNet,  Inc., and received a promissory  note for $6,600,000 with
  interest accrued at 6% from the date of sale, due and payable in full in April
  1998.  In  addition,  Sherwood  Securities  sold its American  Stock  Exchange
  specialist  business,  in February 1998,  for $325,000 which was  subsequently
  received  in March  1998.  Sherwood  Securities  also  received  $275,000  for
  consulting services provided to the buyer in connection with the sale.

  During February 1998, certain available-for-sale securities appreciated due to
  the entity's  succesful  initial  public  offering.  As such,  the Company has
  relected these securities at fair market value on the consolidated  statements
  of financial  condition.  The unrealized  gain of $2,427,600  associated  with
  marking  these  securities  to fair market  value is  reflected  as a separate
  component of stockholders' equity on the consolidated  statements of financial
  condition.


</TABLE>





          The accompanying notes are an integral part of these statements.
                                       (7)














               NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      (Unaudited)

                                  February 28, 1998

Note 1 - Business and organization

    National  Discount Brokers Group, Inc.  ("NDBG"),  and its subsidiaries (the
"Company")  are primarily  engaged in the  securities  business and in providing
related financial services. NDBG has a principal registered broker-dealer wholly
owned subsidiary,  Sherwood Securities Corp. ("Sherwood  Securities").  National
Discount Brokers ("NDB"),  another  registered  broker-dealer,  is a division of
NDBG's wholly owned  subsidiary,  Triak  Services Corp. On January 24, 1997, the
Company  acquired,  from its joint venture  partner,  the remaining 51% of Anvil
Institutional  Services  Company  (the "Anvil  Joint  Venture")  that it did not
previously  own.  The  Company,  therefore,  became  the  100%  owner  of  Anvil
Institutional Services Inc. ("Anvil"),  a broker-dealer  previously owned by the
Anvil Joint Venture.

     On  September  5,  1997,  the  Company  sold all of the  stock of Anvil for
$217,000,  which  approximated  book value.  In  connection  with the sale,  the
Company's  $250,000  subordinated  loan agreement  with Anvil was cancelled.  As
such, the Company liquidated the $300,000 face value of U.S. Treasury securities
that had been  pledged  as  collateral  for the  agreement  and such  funds were
transferred back to the Company.

     In  addition,  NDBG  has a 60%  special  limited  partnership  interest  in
Equitrade Partners ("Equitrade"), which is a specialist for securities listed on
The New York Stock Exchange  ("NYSE").  The Company  acquired a further  limited
partnership  interest in Equitrade on May 2, 1997 upon the acquisition of all of
the stock of SHD  Corporation  (formerly  Dresdner-NY  Incorporated),  which was
engaged in the specialist business of the NYSE. The assets, including four seats
on the NYSE,  except cash, and liabilities of SHD Corporation  ("SHD") were then
contributed by SHD to Equitrade in exchange for a limited partner interest.  Two
employees  of SHD  retained  a portion  of the  specialist  book of SHD and also
became  limited  partners  of  Equitrade.  SHD is  entitled  to 38.4% of the net
profits and losses from the activities of this specialist book.

     On  February  13,  1998,  MXNet,  Inc.  ("MXNet"),   another  wholly  owned
subsidiary  of NDBG was sold.  In  addition,  on  February  27,  1998,  Sherwood
Securities sold its American Stock Exchange ("AMEX")  specialist  business.  See
"Note 7 - Discontinued Operations".

Note 2 - Basis of presentation

     The accompanying unaudited consolidated financial statements do not include
all of the  information  and notes  required by  generally  accepted  accounting
principles for complete  consolidated  financial  statements.  In the opinion of
management,  all  adjustments  considered  necessary for a fair  presentation of
consolidated  financial  condition  and  results of  operations  for the periods
presented  have been  included.  All  adjustments  are of a normal and recurring
nature. It is suggested that these consolidated  financial statements be read in
conjunction  with the  consolidated  financial  statements and the related notes
included in the Company's  1997 Annual  Report on Form 10-K.  Certain prior year
amounts  have been  reclassified  to conform to the three and nine months  ended
February 28, 1998 presentations.

Note 3 - Net income per common share

     Net income per common share is computed  using the weighted  average number
of shares of common stock and common stock equivalents outstanding. Common stock
equivalents  include stock  issuable  under stock  options.  The treasury  stock
method of accounting was used in computing the common stock  equivalents for the
computation of earnings per common share.

Note 4 - Commitments and contingencies

     Certain significant legal proceedings and matters were previously disclosed
in Item 3, Legal Proceedings,  of the Company's 1997 Annual Report on Form 10-K,
and the disclosures regarding such matters are incorporated herein by reference.
NDBG's  subsidiaries,  and in some cases NDBG,  have been named as defendants in
lawsuits  that allege  violations  of Federal and state  securities  and related
laws. Sherwood Securities has received additional subpoenas in


                                     (8)

connection with the SEC's ongoing  investigation In the Matter of Certain Market
Making  Activities  on NASDAQ,  HO-2974.  Sherwood  Securities  is continuing to
cooperate with the SEC's investigation.  Although there can be no assurance that
such lawsuits and investigations  involving the Company are not likely to have a
material,  adverse  effect on the  results of  operations  of the Company in any
future  period,  depending  in part on the  results  for such  period,  based on
information  currently  available,  management of the Company  believes that any
such  lawsuits  and  investigations  are not likely to have a  material  adverse
effect on the  consolidated  financial  condition  and results of  operations or
liquidity of the Company in future periods.

Note 5 - Net capital requirements

     As registered  broker-dealers,  Sherwood Securities,  NDB and Equitrade are
subject to the  Securities  Exchange Act of 1934 Uniform Net Capital Rule 15c3-1
(the "Rule").  As of February 28, 1998, the net capital of Sherwood  Securities,
NDB  and  Equitrade   exceeded  their  required  net  capital  by   $26,713,000,
$3,897,000,  and  $28,732,000,  respectively.  On July 10,  1997,  SHD filed its
notice of withdrawal from registration as a broker-dealer with the SEC. As such,
SHD is no longer required to compute net capital.

     The Rule also  provides  that equity  capital may not be  withdrawn or cash
dividends be paid if the resulting net capital of a broker-dealer  would be less
than the amount required under the Rule. Accordingly,  at February 28, 1998, the
payment of  dividends  and  advances  to NDBG by  Sherwood  Securities,  NDB and
Equitrade is limited to $26,513,000, $3,826,000, and $28,682,000,  respectively,
under  the most  restrictive  of these  requirements.  The SEC  may,  by  order,
restrict the  withdrawal of equity  capital on a net basis if the SEC determines
that such  withdrawal  would be  detrimental  to the financial  integrity of the
broker-dealer or the financial community.

Note 6 - New Accounting Pronouncement

              In February 1997, the Financial  Accounting Standards Board issued
Statement  of  Financial  Accounting  Standards  No. 128,  "Earnings  per Share"
("Statement  128"),  for periods ending after  December 15, 1997.  Statement 128
replaces  the current  standard  used to calculate  primary  earnings per share,
Accounting  Principles Board Opinion No. 15 ("APB 15"). Statement 128 requires a
calculation of basic earnings per share, as well as a dual presentation of basic
and diluted  earnings per share on the face of the  statement  of income.  Basic
earnings per share differs from primary  earnings per share under APB 15 in that
dilution for common stock equivalents is excluded.

Note 7 - Discontinued Operations

      On  February  13,  1998,  NDBG  sold  100%  of  the  common  stock  of its
subsidiary,  MXNet, to IPC Information Systems,  Inc. NDBG received a promissory
note of $6,600,000  with interest  accrued at 6% from the date of sale,  due and
payable in full in April 1998.  In  addition,  during  February  1998,  Sherwood
Securities  disposed of its AMEX  specialist  business for  $325,000,  which was
subsequently  received in March 1998. Sherwood Securities also received $275,000
from the buyer for consulting services rendered in connection with the sale. The
aggregate net gain on the aforementioned sales was $2,704,000, net of $2,353,000
of applicable income taxes and other expenses directly related to the sales.



















                                   (9)
Item - 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS

Results of Operations

     The  results  of  operations  of  National  Discount  Brokers  Group,  Inc.
("NDBG"),  and its subsidiaries  (the "Company"),  for the three and nine months
ended February 28, 1998 reflect primarily the activities of Sherwood  Securities
Corp. ("Sherwood Securities"),  National Discount Brokers ("NDB"), a division of
the Company's subsidiary,  Triak Services Corp. ("Triak") and Equitrade Partners
("Equitrade").  Sherwood  Securities  is  primarily  engaged  in the  securities
business  as a  wholesale  market  maker in NASDAQ  National  Market  System and
Small-Cap  securities.  NDB is a deep discount  brokerage firm  specializing  in
trade  execution  for  individual   investors  and  Equitrade  is  a  registered
specialist in equity securities on The New York Stock Exchange ("NYSE").

     On February 13, 1998,  MXNet, Inc.  ("MXNet"),  another wholly owned 
subsidiary of NDBG was sold. (See "Note 7 - Discontinued Operations".)

     The Company's  consolidated  net income for the three months ended February
28, 1998 was $4,221,000  compared to net loss of $(242,000) for the three months
ended  February 28, 1997.  The  Company's  consolidated  net income for the nine
months ended  February 28, 1998 was  $9,016,000  compared to $6,056,000  for the
nine months ended February 28, 1997.

     The Company's  third quarter and  nine-month  results for fiscal years 1998
and fiscal 1997 include benefits or charges from  non-recurring  events.  In the
quarter ended February 28, 1998, the Company benefited from gains on the sale of
its information technology  subsidiary,  MXNet, and the AMEX specialist business
of Sherwood Securities. Absent the gains recognized from these dispositions, net
of increased  bonus accruals and tax expenses,  net income for the third quarter
and nine months ended February 28, 1998 would have been $1,517,000, or $0.11 per
share, and $6,312,000,  or $0.48 per share,  respectively.  In the quarter ended
February  28,  1997,  the  Company  incurred  a  one-time  litigation  charge of
approximately  $9,187,500.  Absent the charge and associated  professional fees,
net of reduced bonus accruals and tax expenses, net income for the third quarter
and nine months ended February 28, 1997 would have been $4,342,000, or $0.34 per
share, and $10,640,000, or $0.82 per share, respectively.

     Total revenue for the Company  decreased by approximately  $13,732,000,  or
26%, for the three months ended February 28, 1998, and $14,090,000,  or 10%, for
the nine months  ended  February 28, 1998 as compared  with the previous  year's
respective  periods.  The reasons for the  variances  in revenues  are set forth
below.

    Revenue from firm securities  transactions  decreased $ 13,250,000,  or 37%,
and $19,592,000, or 21%, for the three and nine month periods ended February 28,
1998,  respectively,  as compared with the previous year,  even though  Sherwood
Securities'  overall ticket volume increased  approximately  16% and 29% for the
same periods as trading profits per ticket continued to decline. Several factors
contributed to this decrease.  Regulatory  changes enacted by the Securities and
Exchange Commission ("SEC") and the National  Association of Securities Dealers,
such as limit order  protection,  have  resulted in an increase in the number of
transactions  executed on an "even" basis.  Tightened  spreads between "bid" and
"ask" prices,  the new limit order display  rules,  increased  volatility in the
marketplace and increased Small Order Execution  Systems ("SOES")  activity have
also been factors in the decrease in trading  profits per ticket.  These changes
are having an adverse impact on Sherwood Securities' trading profits. A decrease
in  Equitrade's  revenues  from  securities  transactions  for the quarter ended
February  28,  1998 versus the  comparable  period last year also had an adverse
effect on overall revenue from securities  transactions for the current quarter.
However,  for the nine months ended  February 28, 1998,  an increase in revenues
from  securities  transactions  at Equitrade,  partially  offset the decrease in
trading profits at Sherwood Securities.

     The Company's  commission  income decreased by $1,207,000,  or 13%, for the
three months ended  February 28, 1998 and increased  $2,334,000,  or 9%, for the
nine months ended February 28, 1998,  when compared with the comparable  periods
in the prior year. These results occurred even though NDB's average daily ticket
count rose from approximately 5,400 to 5,660 tickets per day, an increase of 5%,
for the three months ended February 28, 1998 and from 4,800 to 6,000 tickets per
day, an  increase  of 25%,  for the nine  months  ended  February  28, 1998 when
compared  with  the  previous  year's  comparable  periods.   The  variances  in
commission  income do not  correspond  directly to the increases in NDB's ticket
count as the mix of NDB's  trades has  trended  more toward  electronic  trading
(i.e.-IVR  telephone and Internet  trading),  on which the commission charged is
lower than for trades executed by a live sales representative.


                                   (10)
     Floor brokerage  income  increased by  approximately  $101,000,  or 3%, and
$2,136,000,  or 21%, respectively,  for the three and nine months ended February
28, 1998,  when compared to the prior year.  The increases were the result of an
increase in the volume of Equitrade's transactions due in part to an increase in
the number of stocks in which  Equitrade  serves as a  specialist.  The increase
from 100 stocks at February  28, 1997 to 156 stocks at February 28, 1998 was due
principally  to the  acquisition  by NDBG, on May 2, 1997,  of SHD  Corporation,
which added 54 stocks to Equitrade's specialist list.

     On January 24, 1997,  NDBG acquired,  from its joint venture  partner,  the
remaining  51%  of  Anvil  Institutional  Services  Company  (the  "Anvil  Joint
Venture") that it did not previously own. NDBG, therefore, became the 100% owner
of Anvil Institutional Services Inc. ("Anvil"), a broker-dealer previously owned
by the Anvil Joint Venture.  On September 5, 1997, NDBG sold all of the stock of
Anvil for $217,000,  which approximated book value. In connection with the sale,
NDBG's $250,000  subordinated loan agreement with Anvil was cancelled.  As such,
NDBG  liquidated the $300,000 face value of U.S.  Treasury  securities  that had
been pledged as collateral  for the  agreement  and such funds were  transferred
back to NDBG.

     For the three and nine  months  ended  February  28,  1997,  the  principal
portion of equity loss in partnerships was an equity loss from the Company's 49%
limited  partnership  interest it held in the Anvil Joint Venture.  For the nine
months ended February 28, 1998,  Anvil's results were consolidated with those of
the Company until Anvil was sold on September 5, 1997.

   Realized  investment  securities  gains for the three and nine  months  ended
February 28, 1998 resulted  entirely from sales during December 1997 and January
1998 of an aggregate of 50,00 shares of common stock of Eurotech Ltd. There were
no realized investment securities gains or losses during the three or nine month
periods ended February 28, 1997.

     Interest income decreased by approximately $37,000, or 2%, and $171,000, or
3%, for the three and nine months  ended  February 28,  1998,  respectively,  as
compared  to  the  previous  year.  The  decreases  are  primarily  due  to  the
availability of lesser average  amounts of cash for  investment.  Since February
28,  1997,  the  Company  has  used   approximately   $21,322,000   for  capital
expenditures,  including  $4,800,000 for four NYSE seats. A significant  rise in
NDB's customer debit and credit balances held with the Company's clearing broker
led to an increase in interest earned from that source and substantially  offset
the decline in interest income as described above.

     Fee income increased by $648,000,  or 85%, and $1,535,000,  or 83%, for the
three and nine months ended February 28, 1998, respectively,  as compared to the
prior year. The increases are due to several factors. First, NDB received higher
12b-1 fees from mutual  funds as NDB's  customers'  balances in those funds have
increased  since  the  prior  year,  as well  as the  negotiated  rates  used to
calculate the fees rebated thereon. Second, MXNet began to service its customers
during the current year,  leading to their earning revenue for  subscription and
other related fees. Finally, in connection with Sherwood Securities' sale of its
AMEX specialist  business,  Sherwood  Securities  performed  certain  consulting
services during the transition  period for the purchaser.  A fee of $275,000 was
received for these services.

     Total  expenses  for the three months  ended  February  28, 1998  decreased
approximately  $15,887,000,  or 32%, from  $49,605,000 in 1997 to $33,718,000 in
1998.  Total  expenses  for the nine months ended  February  28, 1998  decreased
approximately $15,792,000,  or 13%, from $121,310,000 in 1997 to $105,518,000 in
1998. The reasons for the net decreases in expenses are set forth below.

     Compensation and benefits decreased $1,010,000,  or 7%, and $3,254,000,  or
7%, for the three and nine month periods ended February 28, 1998,  respectively,
compared  with  the  prior  year.  The  decreases  are due  primarily  to  lower
commissions  paid to Sherwood  Securities'  traders  because of the  decrease in
trading  profits  for that  subsidiary.  Partially  offsetting  the  decrease in
commissions  were  increases  in  staff  and  officer  salaries,  as  well as in
hospitalization and other insurance benefits.

     Clearing and related charges decreased by approximately $5,627,000, or 36%,
and $4,788,000,  or 11%, for the three and nine month periods ended February 28,
1998,  respectively,  as  compared  to the prior  year.  The  decreases  are due
principally to lower  correspondent fees being paid by Sherwood Securities based
on the overall size and type of the order flow received.  Also  contributing  to
the decrease are lower clearance charges for Sherwood Securities,  which despite
increased  ticket counts,  decreased due to newly negotiated rates with both its
former and its new clearing brokers.

     Communications expense, which includes market data services, increased by
approximately $147,000, or 5%, and

                                   (11)
decreased by approximately  $351,000, or 4%, for the three and nine months ended
February 28, 1998, respectively,  as compared to the previous year. The decrease
for the  nine-month  period is  mainly  due to the  upgrade  of the  mainly  due
Powerbrokersm IVR System and development of an in-house quote server at NDB. The
increase in the third  quarter is to billings on certain  market data  services,
which were being used in addition to the  regularly  used  services  while being
considered  for a  possible  change by  Sherwood  Securities,  which  caused the
expense to rise.

     Litigation  settlement,  for the three and nine months  ended  February 28,
1997,   represents  a  charge  in  connection   with  the  case  In  Re:  NASDAQ
Market-Makers  Antitrust  Litigation,  94 Civ.  3996(RWS)  as  discussed  in the
Company's  1997 Annual  Report on Form 10-K. No such charge has been incurred in
the current year.

     Depreciation and amortization increased by approximately $936,000, or 73 %,
and  $2,699,000,  or 82%, for the three and nine months ended February 28, 1998,
respectively,  as compared to the prior year.  These increases can be attributed
to depreciation and amortization incurred on fixed asset, leasehold improvement,
computer  software and  intangible  asset  additions by the Company  aggregating
approximately  $12,930,000  during the period from March 1997  through  February
1998 primarily in conjunction with the upgrade of NDB's  infrastructure  and the
purchase of a NYSE specialist unit.

     Occupancy and  equipment  rental  expenses  decreased  $27,000,  or 4%, and
$165,000,  or 8%, for the three and nine month periods ended  February 28, 1998,
as compared to the prior year. The declines are due to a decrease for NDB which,
last year, incurred rent concurrently, through November 1997, on two main office
locations as it awaited the move of its new  headquarters to 7 Hanover Square in
New York City.  In addition,  the closing of NDB's branch  offices as of October
31, 1997 has led to a reduction in rent expense.

     Other  expenses  decreased  by  approximately   $1,190,000,   or  26%,  and
$1,067,000,  or 10%,  for the three and nine months  ended  February  28,  1998,
respectively,  as compared to the prior year.  The  decreases  are mainly due to
lower legal and other  professional  fees paid in the  current  year than in the
prior year.  Partially  offsetting  this decrease is an increase in expenses for
service   contracts,   which  is  a  result  of  the  recent  upgrade  of  NDB's
technological  infrastructure.  Also,  there  was an  increase  in NDB  customer
accomodations related to trade executions, and in public relations expenses.

     Interest expense increased by approximately  $72,000, or 51%, and $322,000,
or 118%, for the three and nine months ended February 28, 1998, respectively, as
compared to the previous  year.  During the three and nine months ended February
28, 1998,  Sherwood Securities incurred interest charges on the remaining unpaid
balance of approximately $4,600,000,  due in April 1998, owed in connection with
its  settlement  agreement,  as  amended,  in the case  entitled  In Re:  NASDAQ
Market-Makers  Antitrust Litigation.  In addition, the Company incurred interest
expense on short-term borrowings made in connection with its trading activities.

     Income of Equitrade  allocated to minority partners represents the share of
Equitrade's  net income  allocated to the partners of Equitrade,  other than the
Company and its subsidiary, SHD, during the three and nine months ended February
28, 1998 and 1997, respectively.

     The Company's  effective tax rate decreased from approximately 182% and 49%
for the three and nine months ended February 28, 1997 to  approximately  53% and
47% for the three and nine months ended  February 28,  1998,  respectively.  The
unusually  high tax rate for the three months ended  February 28, 1997 arose due
to the  low  taxable  income  basis  which  was  the  result  of the  litigation
settlement   charge  taken  that  quarter.   When  coupled  with  permanent  tax
differences (such as meals and entertainment expenses,  which are only partially
tax deductible while fully deductible for book purposes), the effective tax rate
for the quarter ended February 28, 1997 appears unusually high.

     For the three and nine months ended February 28, 1998, deferred tax expense
of approximately $41,000 and $132,000,  included in income tax expense,  relates
to the future taxability of certain temporary book to tax basis differences.  In
conjunction  with the deferred tax asset the Company has recorded,  no valuation
allowance  has  been  established  because  in  management's  judgment,  it  was
concluded that it was more likely than not that the benefit would be realized.


Liquidity

     The Company's  tangible assets are highly liquid with  approximately 70% of
these  tangible  assets  consisting of cash or assets readily  convertible  into
cash.  The  Company's  operations  have  generally  been  financed by internally
generated

                                     (12)

funds.  In  addition,  at  February  28,  1998,  margin  account  borrowings  of
approximately  $118,000,000  were  available  to the Company  from its  clearing
brokers.

     The  Company's  broker-dealer  entities,   Sherwood  Securities,   NDB  and
Equitrade,  are subject to the SEC's minimum net capital  requirement,  which is
designed  to  measure  the  general   financial   soundness   and  liquidity  of
broker-dealers.  On July 10,  1997,  SHD filed its  notice  of  withdrawal  from
registration as a broker-dealer with the SEC. As such, SHD is no longer required
to compute net capital.  As of February 28, 1998, Sherwood  Securities,  NDB and
Equitrade   had   approximately   $26,713,000,   $3,897,000   and   $28,732,000,
respectively,  in excess of the required  minimum net  capital.  The net capital
rule imposes  financial  restrictions  upon  Sherwood  Securities',  NDB's,  and
Equitrade's  businesses  which are more severe than those  imposed on most other
businesses.

     From time to time,  the Company has borrowed  funds in connection  with its
trading  activities.  The Company currently has no committed lines of credit and
such  borrowings  were done on an "as needed"  basis.  On December 5, 1997,  the
Company entered into an agreement with IAT Reinsurance Syndicate Ltd. ("IAT"), a
Bermuda  corporation,  for the sale of 1,500,000  shares of the Company's common
stock at $12.875 per share. IAT, an entity controlled by investor Peter Kellogg,
received shares from the Company's treasury stock. The transaction increased Mr.
Kellogg's  beneficial ownership of the Company's common stock from approximately
8% to 17.8%.  The proceeds from the  transaction of  approximately  $19,300,000,
which were  received  by the  Company on  December  8, 1997,  are being used for
general corporate purposes and marketing  activities to support the expansion of
NDB.

     Cash  flows from  operations  will vary on a daily  basis as the  Company's
portfolio of marketable  securities  changes.  The Company's  ability to convert
marketable  securities  owned into cash is determined by the depth of the market
and the size of the Company's  security positions in relation to the market as a
whole.  The  portfolio  mix also  affects the  regulatory  capital  requirements
imposed on Sherwood  Securities,  NDB and Equitrade,  which directly affects the
amount of funds available for operating, investing and financing activities.

     Cash flows from the Company's investment activities are directly related to
market conditions.

     During the three and nine  months  ended  February  28,  1998,  the Company
repurchased 4,217 additional shares in connection with its December 1992 plan to
buy back up to 1,500,000  shares of the Company's common stock from time to time
in the open market or through privately negotiated transactions.  As of February
28, 1998,  1,355,699  shares had been reacquired  under this plan. The source of
funds for these purchases was internally generated.


Effects of Inflation

     The Company's assets are not  significantly  affected by inflation  because
they are primarily  monetary in nature.  Management  believes  that  replacement
costs of furniture,  equipment and leasehold  improvements  will not  materially
affect  operations.  However,  the  rate  of  inflation  affects  the  Company's
principal expenses such as employee compensation, rent and communication,  which
may not be readily recoverable from increased revenues.

     Because  of market  forces and  competitive  conditions  in the  securities
industry,  a  broker-dealer  may be unable to restructure  its profit margins in
order to recover increased costs related to inflation. Consequently, the Company
must rely on  increased  volume  for this  purpose.  However,  the  Company  has
significant  cash  balances on deposit with its  principal  clearing  brokers on
which  interest is paid.  In the event there are higher  interest  rates,  which
normally  result from inflation,  such additional  interest would offset some of
the costs related to inflation.


New Accounting Pronouncement

     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards No. 128,  "Earnings  per Share"  ("Statement
128"),  for periods ending after  December 15, 1997.  Statement 128 replaces the
current  standard  used to  calculate  primary  earnings  per share,  Accounting
Principles Board Opinion No. 15 ("APB 15"). Statement 128 requires a calculation
of basic earnings per share, as well as a dual presentation of basic and diluted
earnings per share on the face of the  statement of income.  Basic  earnings per
share differs from diluted  earnings per share under APB 15 in that dilution for
common stock equivalents is excluded.


                                        (13)
Year 2000 Compliance

     The  Company is  preparing  for the issues  associated  with the year 2000,
including  possible  changes in the  programming of internal and vendor computer
systems.  The "year 2000"  problem is pervasive  and complex as virtually  every
computer  operation  will be affected to some degree by the  rollover of the two
digit  year value to 00. The issue is whether  computer  systems  will  properly
recognize date sensitive information when the year changes to 2000. Systems that
do not properly  recognize such  information  could  generate  erroneous data or
cause a system to fail.

     The Company is utilizing  both  internal and external  sources to identify,
correct or reprogram,  and to test the systems for year 2000  compliance.  While
management anticipates that internal reprogramming efforts will be substantially
complete by December 31, 1998, there can be no assurance that all  reprogramming
efforts  will  be  completed  on a  timely  basis.  The  Company  plans  to mail
notification  letters to our existing vendors apprising them of our requirements
for year 2000 compliance.  Thereafter, the Company plans to assess the year 2000
compliance  expense and its related potential effect on the Company's  earnings,
if any.

Forward Looking Statement

     Statements regarding the Company's expectations as to its future operations
and financial  condition and certain  other  information  contained in this Form
10-Q or in documents incorporated herein by reference constitute forward looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995.  Although  the  Company  believes  that  its  expectations  are  based  on
reasonable  assumptions  within the bounds of its  knowledge of its business and
operation,  there  can be no  assurance  that  actual  results  will not  differ
materially  from its  expectations.  Factors which could cause actual results to
differ from expectations  include a general downturn in the economy,  changes in
the level of activity of securities  markets in which the Company  participates,
changes  in  government  policy or  regulation  and  unforeseen  costs and other
effects  related to legal  proceedings or  investigations  of  governmental  and
self-regulatory organizations.



PART II - OTHER INFORMATION

Item 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

     On January 29, 1998, NDBG sold 1,500,000  shares of its common stock to IAT
Reinsurance  Syndicate  Ltd.,  a  corporation  formed  under  the  laws  of  the
Commonwealth  of  Bermuda  ("IAT"),  for  a  price  of  $12.875  per  share,  or
$19,312,500. IAT is controlled by investor Peter R. Kellogg. The proceeds of the
sale were delivered to NDBG on December 8, 1997. The  transaction  increased Mr.
Kellogg's  beneficial ownership of the Company's common stock from approximately
8% to 17.8% as of the date of purchase.  The common stock sold to IAT was exempt
from  registration  under the  Securities  Act of 1933,  as amended by virtue of
Section 4(2) and Regulation D thereunder.



Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          (a) The Company held a Special Meeting of its Stockholders on December
12, 1997.

          (b)  (i) The  shareholders  ratified  an  amendment  to The  Company's
Restated  Certificate  of  Incorporation  to change the Company's  name from The
Sherwood Group,  Inc. to National Discount Brokers Group, Inc. The following was
the shareholder vote on this matter:
<TABLE>
<CAPTION>

                              <S>                                        <C>       
                              For:                                       11,212,871
                              Against:                                       15,040
                              Withheld:                                       4,425
                              Broker Non-Vote:                                    0


</TABLE>



                                                       (14)

Item 6 - EXHIBITS AND REPORTS ON FORM 8-K

        (a)  Exhibits:

                  Exhibit 10 - Stock Purchase Agreement dated as of February 13,
                               1998 between MXNet,  Inc., the Company  and  IPC
                               Information Systems, Inc.

                  Exhibit 11 - Computation of Net Income Per Common Share

                  Exhibit 27 - Financial Data Schedule

        (b) Reports on Form 8-K:

               The  Company  filed two  reports on Form 8-K  during the  quarter
      ended  February  28,  1998,  dated  December 5, 1997 and January 29, 1998,
      respectively. Both reports were in respect to the sale of 1,500,000 shares
      of the Company's common stock.











































                                      (15)

                                   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 thereunto duly authorized.



                                           National Discount Brokers Group, Inc.
                                           -------------------------------------

      Date: April 10, 1998                 By: Dennis Marino
      --------------------                 -------------------------------------
                                           Dennis Marino
                                           Executive Vice President
                                           and Chief Administrative Officer
                                     


      Date: April 10, 1998                 By: Denise Isaac
      --------------------                 -------------------------------------
                                           Denise Isaac
                                           Chief Financial Officer and
                                           Principal Accounting Officer










                                       17                                  

                                                                    EXHIBIT 10









                          STOCK PURCHASE AGREEMENT

                                   AMONG

                                MXNET, INC.,

                   NATIONAL DISCOUNT BROKERS GROUP, INC.

                                    AND

          IPC INFORMATION SYSTEMS, INC., a Delaware corporation



                      Dated as of February 13, 1998



<PAGE>


                         STOCK PURCHASE AGREEMENT

         AGREEMENT  dated as of February  13, 1998 by and among  MXNET,  Inc., a
Delaware  corporation (the "Company"),  National Discount Brokers Group, Inc., a
Delaware corporation ("Seller") and IPC, Inc., a Delaware corporation ("Buyer").

                                                    WITNESSETH:

         WHEREAS,  Buyer  desires to acquire from Seller all of the  outstanding
shares of capital stock of the Company (the "Shares"); and

         WHEREAS, Seller desires to sell to Buyer all of the Shares;

         NOW, THEREFORE, the parties hereto agree as follows:

                                                     ARTICLE I

                                                    DEFINITIONS

         1.01.  Definitions.  The following terms, as used herein, have the
following meanings:

                  "Affiliate"  means,  with  respect to any  Person,  any Person
directly or indirectly controlling,  controlled by, or under common control with
such Person.

                  "Balance Sheet" means the balance sheet of the Company as of
December 31, 1997 referred to in
                  
Section 3.07.

                  "Balance Sheet Date" means December 31, 1997.

                  "Buyer" means IPC, Inc., a Delaware corporation.

                  "Closing Date" means the date of this Agreement.

                  "Company" means MXNet, Inc., a Delaware corporation.

                  "Executive   Employment   Agreements"   means  the   Executive
Employment  Agreements  to be entered  into between the Company and each of Paul
Pluschkell,  Steve Schiff,  Dan Diversey and Eric  Goebelbecker  at the Closing,
substantially in the form set forth on Exhibit A.

                  "Intellectual Property Right" means any trademark, trade name,
trade dress, service mark, service name, logo, and corporate name,  registration
therefor  application  for  registration  therefor;  invention,  patent,  patent
application,     patent    disclosure    and    any    related     continuation,
continuation-in-part,   divisional,  reissue,  re-examination,  utility,  model,
certificate of invention and design patent, patent application, registration and
application for  registration;  mask work and  registration  and application for
registration thereof;  computer software, data and documentation;  trade secret,
know-how,   and  confidential  business   information,   whether  patentable  or
nonpatentable  and whether or not reduced to practice,  know-how,  manufacturing
and product  processes and  techniques,  research and  development  information,
copyrightable  works,  financial,  marketing and business data, pricing and cost
information,  business and marketing  plans and customer and supplier  lists and
information;  copyright,  copyright  registration,   application  for  copyright
registration;  or-any other similar type of  proprietary  intellectual  property
right,  (including without limitation  associated  goodwill and remedies against
infringements  thereof and rights of protection of an interest therein under the
laws of all  jurisdictions)  in each  case  which is owned  or  licensed  by the
Company.

                  "Lien" means,  with respect to any asset, any mortgage,  lien,
pledge,  charge,  security  interest,  restriction or encumbrance of any kind in
respect of such asset.

                  "Material  Adverse Change" means a material  adverse change in
the  business,  assets or financial  condition or results of  operations  of the
Company.

                  "Material  Adverse Effect" means a material  adverse effect on
the business, assets, condition (financial or otherwise),  results of operations
or prospects of the Company.

                  "Person"  means  an  individual,   corporation,   partnership,
association  trust or other entity or  organization,  including a government  or
political subdivision or an agency or instrumentality thereof.

                  "Seller" means National Discount Brokers Group, Inc., a 
Delaware corporation.

                  "Shares" means all outstanding capital stock or other equity
interests of the Company.

                              ARTICLE II

                          PURCHASE AND SALE

         2.01.  Purchase and Sale.  Upon the terms and subject to the conditions
of this  Agreement,  Seller shall sell to Buyer,  and Buyer shall  purchase from
Seller, at the Closing,  all of the Shares.  The aggregate purchase price, to be
paid by delivery of a promissory  note, the form of which is attached  hereto as
Annex 1 (the "Promissory Note"), shall be $6,660,000 (the "Purchase Price"). The
Purchase Price shall be paid as provided in Section 2.02.

         2.02.  Closing.  The closing (the "Closing") of the purchase and sale 
of the Shares hereunder shall take place at the offices of Gibbons, Del Deo,
Dolan, Griffinger & Vecchione, One Riverfront Plaza, Newark, New Jersey 07102.
At the Closing,

                  (a)      Buyer shall deliver to Seller the Promissory Note.

                  (b) Seller shall deliver to Buyer  certificates for the Shares
duly  endorsed  and  signature  guaranteed,  accompanied  by stock  powers  duly
endorsed and signature  guaranteed in blank,  with any required  transfer stamps
affixed thereto.


         2.03.  Transfer Taxes. Buyer shall pay any and all sales,  documentary,
use, filing, transfer and other taxes payable as a result of the transfer of the
Shares to Buyer by Seller (including any such state taxes that may be imposed on
the Company by reason of a deemed transfer of assets).

         2.04. Books and Records.  On the Closing Date,  Seller shall deliver to
Buyer,  or its  representatives,  all  minutes  books,  stock  record  books and
corporate seals of the Company, and the original copies of all books of account,
leases, other agreements, securities, customer lists, files and other documents,
instruments  and papers of any kind or nature  belonging  to or  relating to the
Company or its business.

         2.05. Resignations.  The Company will deliver to Buyer the resignations
of all officers  and  directors  of the Company  from their  positions  with the
Company at or prior to the Closing  Date,  except those  persons who have signed
Executive Employment Agreements, unless otherwise specified by Buyer.

         2.06. Balance Sheet Adjustment.  At the Closing Date, the balance sheet
of the  Company  shall be  adjusted  to remove all  receivables  from Seller and
affiliates  to the Company and all  payables  to Seller and  affiliates.  At the
Closing  Date,  the balance  sheet of the  Company  shall be adjusted to reflect
working capital of $1.00 (i. e.accounts receivable, cash and certain agreed upon
deposits and prepaid expenses less accounts payable).

                              ARTICLE III

                     REPRESENTATIONS AND WARRANTIES OF

                         THE COMPANY AND SELLER

         The  Company and Seller  hereby  jointly and  severally  represent  and
warrant to Buyer as of the date hereof and as of the Closing Date that:

         3.01.  Corporate Existence and Power. The Company is a corporation duly
incorporated,  validly  existing  and in good  standing  under  the  laws of its
jurisdiction of incorporation, and has all corporate powers and all governmental
licenses,  authorizations,  consents  and  approvals  required  to  carry on its
business as now  conducted.  The Company is duly  qualified  to do business as a
foreign  corporation and is in good standing in each  jurisdiction in the United
States where the  character of the property  owned or leased by it or the nature
of  its  activities  make  such  qualification   necessary,   except  for  those
jurisdictions where failure to be so qualified would not, individually or in the
aggregate,  have a Material Adverse Effect. The Company has heretofore delivered
to Buyer true and complete copies of the certificate of incorporation and bylaws
of the Company as currently in effect.

         3.02. Corporate Authorization.  The execution, delivery and performance
by the Company and Seller of this Agreement and the  consummation by the Company
and Seller of the transactions  contemplated hereby are within the Company's and
Seller's  corporate  powers  and have  been  duly  authorized  by all  necessary
corporate  action  on the  part  of  the  Company  and  Seller.  This  Agreement
constitutes a valid and binding agreement of the Company and Seller.

         3.03.  Governmental Authorization;  Consents.

                  (a) The  execution  and delivery of this  Agreement by Seller,
and the  performance by the Company and Seller of their  obligations  under this
Agreement,  require  no  action  by  or in  respect  of,  or  filing  with,  any
governmental body, agency, official or authority or any other Person.

                  (b)  Except  as  set  forth  on  Schedule  3.03,  no  consent,
approval,  waiver or other action by any Person under any  contract,  agreement,
indenture,  lease,  instrument or other document to which the Company is a party
or by which it is bound is required or necessary  for the execution and delivery
of this Agreement by Seller,  the performance by the Company and Seller of their
obligations  under  this  Agreement  or the  consummation  of  the  transactions
contemplated hereby.

         3.04.  Non-Contravention.  The execution and delivery of this Agreement
by the Company and Seller,  the  performance  by the Company and Seller of their
obligations  under  this  Agreement  and the  consummation  of the  transactions
contemplated  hereby do not and will not (i)  contravene  or  conflict  with the
corporate charter or bylaws of the Company,  (ii) contravene or conflict with or
constitute  a  violation  of any  provision  of any law,  regulation,  judgment,
injunction,  order or decree binding upon or applicable to the Company; or (iii)
except as set forth on Schedule 3.04, constitute a default under or give rise to
any  right  of  termination,  cancellation  or  acceleration  of  any  right  or
obligation  of the  Company or to a loss of any  benefit to which the Company is
entitled  under any  provision of any  agreement,  contract or other  instrument
binding upon the Company or any permit held by the Company.

         3.05.  Capitalization.  The  authorized  capital  stock of the  Company
consists of 3,000 shares of common stock, $.01 par value. As of the date hereof,
there were  outstanding 100 shares of common stock.  All  outstanding  shares of
capital stock of the Company have been duly  authorized  and validly  issued and
are fully  paid and are  owned by  Seller.  Except as set forth in this  Section
3.05, there are no outstanding (i) shares of capital stock,  other securities or
phantom or other equity interests of the Company, (ii) securities of the Company
convertible into or exchangeable for shares of capital stock or other securities
of the Company or (iii)  options or other rights to acquire from the Company any
capital  stock,  other  securities  or phantom or other equity  interests of the
Company (the items in clauses (i), (ii) and (iii) being referred to collectively
as the  "Company  Securities").  There  are no  outstanding  obligations  of the
Company, actual or contingent,  to issue or deliver or to repurchase,  redeem or
otherwise acquire any Company Securities.

         3.06.  Subsidiaries.  The  Company  does not have and never has had any
Subsidiaries  or any  ownership  or equity  interest in or control of (direct or
indirect) any other person.

         3.07. Financial Statements.  The Company has previously furnished Buyer
with a true and  complete  copy of (i) the  balance  sheet of the  Company as of
December 31, 1997 and the statements of operations of the Company for the fiscal
year then ended  (collectively,  the "Financial  Statements"  which are attached
hereto as  Schedule  3.07).  The  consolidated  balance  sheet  included  in the
Financial  Statements  fairly  presents in all material  respects the  financial
position of the Company as of its date, and the other statements included in the
Financial  Statements  fairly  present in all  material  respects the results of
operations  of the  Company for the periods  therein  set forth.  The  Financial
Statements were prepared in accordance with the books and records of the Company
and were prepared in accordance with generally accepted  accounting  principles,
consistently  applied.  The balance  sheet of the Company as of the Closing Date
will reflect at least $1.00 of working capital.

         3.08.  Absence of Certain  Changes.  Since the Balance Sheet Date,  the
Company has conducted its business in the ordinary  course  consistent with past
practices and, except as set forth on Schedule 3.08, there has not been:

                  (a) any  Material  Adverse  Change or any  event,  occurrence,
development  or state  of  circumstances  or facts  which  could  reasonably  be
expected to result in a Material Adverse Change;

                  (b) any declaration,  setting aside or payment of any dividend
or other  distribution with respect to any Company Securities or any repurchase,
redemption  or other  acquisition  by the Company of any  outstanding  shares of
capital  stock or other  securities  of, or other  ownership  interests  in, the
Company;

                  (c)  any amendment of any outstanding security of the Company;

                  (d) any incurrence,  assumption or guarantee by the Company of
any  indebtedness  for  borrowed  money  other  than in the  ordinary  course of
business and in amounts and on terms consistent with past practices;

                  (e)  any creation or assumption by the Company of any Lien on
any asset;

                  (f)  any making of any loan, advance or capital contributions
to or investment in any Person; or

                  (g) any damage, destruction or other casualty loss (whether or
not covered by insurance) affecting the business or assets of the Company which,
individually  or in the  aggregate,  has had or would  reasonably be expected to
have a Material Adverse Effect.

         3.09. Property and Equipment.  The Company has good title to, or in the
case of leased  property  have valid  leasehold  interests  in, all property and
assets  (whether  real or  personal,  tangible or  intangible)  reflected on the
Balance Sheet or acquired after the Balance Sheet Date.


         3.10.  No  Undisclosed  Material  Liabilities.  Except  as set forth in
Schedule 3.10,  there are no liabilities of the Company of any kind  whatsoever,
whether accrued, contingent,  absolute,  determined,  determinable or otherwise,
and there is no existing  condition,  situation  or set of  circumstances  which
could reasonably be expected to result in such a liability, other than:

                  (i) liabilities provided for in the Balance Sheet; and

                  (ii)  liabilities  incurred in the ordinary course of business
         consistent  with past practice  since the Balance Sheet Date,  which in
         the aggregate are not material to the Company.

         3.1  1.  Litigation.   There  is  no  action,  suit,  investigation  or
proceeding pending against,  or to the knowledge of Seller threatened against or
affecting, the Company or any of its properties or the transactions contemplated
hereby before any court or arbitrator or any governmental body, agency, official
or authority.

         3.12. Material Contracts.

                  Except for agreements,  contracts, plans, leases, arrangements
or  commitments  disclosed  in Schedule  3.12,  the Company is not a party to or
subject to:

                  (i) any lease providing for annual rentals of $25,000 or more;

                  (ii) any  contract for the  purchase of  materials,  supplies,
         goods,  services,  equipment  or  other  assets  providing  for  annual
         payments by the Company of $25,000 or more;

                  (iii)   any-partnership,   joint   venture  or  other  similar
         arrangement  or  agreement  or any  license  agreement  under which the
         Company is the licensee, or any agency, distributor, dealer, franchise,
         sales representative or other similar contract or commitment; or

                  (iv) except for trade  indebtedness  incurred in the  ordinary
         course of business,  any loan or credit  agreements  or any  instrument
         evidencing  or  related  in any  way to  indebtedness  incurred  in the
         acquisition  of  any  asset,  business,  company  or  other  entity  or
         indebtedness  for borrowed  money by way of direct  loan,  sale of debt
         securities, purchase money obligation,  conditional sale, guarantee, or
         otherwise,  or  agreement  relating  to  the  mortgaging,  pledging  or
         otherwise  placing a lien on any assets of the Company or any  guaranty
         of indebtedness or performance of others by the Company.

         3.13. Insurance Coverage. The Company has furnished to Buyer a list of,
and true and complete  copies of, all  insurance  policies  covering the assets,
business, equipment, properties,  operations,  employees, officers and directors
of the Company.

         3.14.  Compliance with Laws.

                  The Company is not  currently in  violation of any  applicable
provisions  of  any  laws,  statutes,   ordinances  or  regulations  except  for
violations  that have not had and  would not  reasonably  be  expected  to have,
individually or in the aggregate, a Material Adverse Effect.

         3.15.  Finder' Fees. There is no investment banker,  broker,  finder or
other  intermediary which has been retained by or is authorized to act on behalf
of Seller or the Company who might be  entitled  to any fee or  commission  from
Buyer,  the Company or any of their respective  Affiliates upon  consummation of
the transactions contemplated by this Agreement.

         3.16. Intellectual Property.

                  (a) Schedule 3.16 includes a list of all Intellectual Property
Rights which are material to the operations of the Company.

                  (b) The execution,  delivery and performance of this Agreement
and the  consummation  of the other  transactions  contemplated  hereby will not
breach,  violate or conflict  with any  instrument  or agreement  governing  any
Intellectual  Property  Right,  will not cause the  forfeiture or termination or
give rise to a right of forfeiture or termination of any  Intellectual  Property
Right or in any way impair the right of the  Company  to sue,  sell,  license or
dispose of, or to bring any action for other  infringement  of, any Intellectual
Property Right or portion thereof.

                  (c) There is no pending  or, to the  knowledge  of the Company
and  Seller,  threatened  claim or  litigation  against  the  Company or Seller,
contesting the validity,  ownership or right to use, sell, license or dispose of
any Intellectual  Property Right nor, to the knowledge of the Company or Seller,
is there any basis  that may  reasonably  be  expected  to give rise to any such
claims,  nor has either Seller or the Company received any notice asserting that
the proposed use, sale,  license or disposition of any of the Company's products
conflicts or will conflict with the rights of any other party,  nor is there, to
the  knowledge  of  Seller or the  Company,  any basis  that may  reasonably  be
expected to give rise to any such assertion.

                  (d) Schedule 3.16 contains a complete and accurate list of all
computer software and databases owned by the Company (the "Owned Software"). The
Company has exclusive title to the Owned  Software,  free and clear of all Liens
or  claims,  including  claims  or  rights of  employees,  agents,  consultants,
customers,  licensees or other parties  involved in the  development,  creation,
marketing, maintenance, enhancement or licensing of such computer software.

                  (e) Schedule 3.16 contains a complete and accurate list of all
software and databases  material to the Company's  business (other than standard
office  software  such as word  processing  programs) for which the Company is a
licensee,  lessee or otherwise has obtained from a third party the right to use,
market,  distribute,  sublicense  or  otherwise  transfer  the right to use such
software and databases (the "Licensed Software").

                  (f) The Owned  Software and License  Software  constitute  all
software and databases used by the Company in the conduct of its business.

         3.17.  Inventories.  The Company has no inventories.

         3.18. Receivables. All accounts, notes receivable and other receivables
(other than receivables collected since the Balance Sheet Date) reflected on the
Balance  Sheet are, and all accounts and notes  receivable of the Company at the
Closing Date will be, valid,  genuine and fully collectible (using  commercially
reasonable  collection  efforts) within ninety (90) days in the aggregate amount
thereof, subject to normal and customary trade discounts,  less any reserves for
doubtful accounts recorded on the Balance Sheet. All accounts,  notes receivable
and  other  receivables  of the  Company  at the  Balance  Sheet  Date have been
included in the Balance Sheet.

         3.19.  Taxes.

                  (a) The term "Taxes" as used herein means all federal,  state,
local, foreign and other net income,  gross income, gross receipts,  sales, use,
ad valorem, transfer,  franchise, profits, license, lease, service, service use,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs duties, or other Taxes, fees, assessments or
other  charges  of any  kind  whatever,  together  with  any  interest  and  any
penalties,  additions to Tax or additional amounts with respect thereto, and the
term "Tax" means any one of the  foregoing  taxes.  The term  "Returns"  as used
herein, means all returns, declarations, reports, statements and other documents
required  to be filed in respect  of Taxes,  and  "Return"  means any one of the
foregoing  Returns.  The term "Code" means the Internal Revenue Code of 1986, as
amended.  All  citations to the Code,  or the Treasury  regulations  promulgated
thereunder,  shall  include  any  amendments  or  any  substitute  or  successor
provisions thereto.

                  (b) The Company has filed all Returns  required to be filed by
it by the due date for such  Return and has paid all Taxes owed  (whether or not
shown as due on such  returns)  (or has paid or resolved any interest or related
penalties relative to such returns),  including,  without limitation,  all Taxes
which the Company is  obligated  to withhold  for  amounts  owing to  employees,
creditors and third parties.  Adequate  reserves have been  established  for all
Taxes  accrued but not yet payable.  The Company has not received and Seller has
not  received  any written  notices or  inquiries  from any taxing  authority in
connection with any of the Returns that have not been successfully  resolved. No
waivers of statutes of  limitation  with respect to any of the Returns have been
given by or requested from the Company. All deficiencies asserted or assessments
made as a  result  of any  examinations  have  been  fully  paid,  or are  fully
reflected  as a liability in the  financial  statements  of the Company,  or are
being  contested and an adequate  reserve  therefor has been  established and is
fully reflected in the financial  statements of the Company.  There are no liens
for Taxes (other than for current taxes not yet due and payable) upon the assets
of the Company.  All material  elections  with  respect to Taxes  affecting  the
Company, as of the date hereof, are set forth in the financial statements of the
Company,  or are set forth on Schedule  3.19. The Company has not agreed to make
any  adjustment  under  Section  481(a)  of the Code by  reason  of a change  in
accounting  method or  otherwise.  The  Company  does not have and has not had a
permanent establishment in any foreign country, as defined in any applicable Tax
treaty or  convention  between  the United  States of America  and such  foreign
country.

                  (c)  Neither  the  Company  nor any  Seller  has ever  filed a
consent  pursuant  to  Section  341(f)  of the  Code,  relating  to  collapsible
corporations.

                           ARTICLE IV

                    ADDITIONAL REPRESENTATIONS

                     AND WARRANTIES OF SELLER

         Seller  represents  and warrants  to, and agrees with,  Buyer as of the
date hereof and as of the Closing Date as follows:

         4.01.  Title to and Validity of Shares.  Seller has good and marketable
title to and unrestricted  power to vote and sell the Shares,  free and clear of
any Lien and, upon  purchase and payment  therefor and delivery to Buyer thereof
in  accordance  with the terms of this  Agreement,  Buyer will  obtain  good and
marketable  title to the  Shares  free and clear of any  Lien.  All  shares  are
registered in the name of Seller.

                             ARTICLE V

                REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to the Company and Seller that:

         5.01.   Organization  and  Existence.   Buyer  is  a  corporation  duly
incorporated,  validly existing and in good standing under the laws of the State
of Delaware and has all corporate powers and all material governmental licenses,
authorizations,  consents and approvals required to carry on its business as now
conducted.

         5.02. Corporate Authorization.  The execution, delivery and performance
by Buyer of this  Agreement and the  consummation  by Buyer of the  transactions
contemplated  hereby are within the corporate powers of Buyer and have been duly
authorized  by all  necessary  corporate  action  on the  part  of  Buyer.  This
Agreement constitutes a valid and binding agreement of Buyer.

         5.03.   Governmental   Authorization.   The  execution,   delivery  and
performance by Buyer of this Agreement require no action by or in respect of, or
filing with, any governmental body, agency,  official or authority.  No consent,
approval,  waiver or other action by any Person under any  contract,  agreement,
indenture,  lease,  instrument  or other  document to which Buyer is party or by
which it is bound is required  or  necessary  for the  execution,  delivery  and
performance of this Agreement by Buyer or the  consummation of the  transactions
contemplated hereby.

         5.04.  Non-Contravention.  The execution,  delivery and  performance by
Buyer of this  Agreement do not and will not (i) contravene or conflict with the
corporate  charter or bylaws of Buyer or (ii)  contravene  or conflict  with any
material provision of any material law, regulation,  judgment, injunction, order
or decree binding upon Buyer.

         5.05. Finders' Fees. There is no investment  banker,-broker,  finder or
other  intermediary which has been retained by or is authorized to act on behalf
of Buyer who might be entitled to any fee or commission from the Company, Seller
or  any  or  any  Affiliate   thereof  upon  consummation  of  the  transactions
contemplated by this Agreement.

         5.06. Litigation. There is no action, suit, investigation or proceeding
pending against, or to the knowledge of Buyer overtly threatened against,  Buyer
before any court or  arbitrator  or any  governmental  body,  agency or official
which in any manner challenges or seeks to prevent,  enjoin, alter or materially
delay the transactions contemplated hereby.

         5.07.  Accredited Investor.  Buyer is an "accredited  investor" as such
term is defined in Rule 501 of Regulation D promulgated under the Securities Act
of 1933, as amended (the "Securities Act"), or has such knowledge and experience
in financial and business  matters that it is capable of  evaluating  the merits
and risks of an  investment  in the Company,  or has employed the services of an
independent  investment  advisor,  attorney  or  accountant  to read  all of the
documents  furnished or made available by the Company and to evaluate the merits
and  risks  of such  investment  on  Buyer's  behalf.  Buyer is able to bear the
economic risk of an investment in the Company,  including the loss of the entire
investment.

         5.08.  Investment  for Own Account.  The Shares are being  purchased by
Buyer for its own account for investment and not for  distribution  or resale or
fractionalization  thereof or reselling  thereof or any part thereof  within the
meaning  of  the  Securities  Act  other  than  in  compliance  therewith  or in
accordance  with  an  exemption  therefrom.  Buyer  further  represents  that it
understands  that (i) the Shares have not been  registered  under the Securities
Act by reason of their  issuance in a transaction  exempt from the  registration
requirements  of the  Securities  Act,  and  (ii)  such  securities  may only be
transferred  pursuant  to a  registration  statement  filed  with  and  declared
effective by the  Securities  and  Exchange  Commission  under  Section 5 of the
Securities Act or an exemption from such registration.

                          ARTICLE VI

                COVENANTS OF THE COMPANY AND SELLER

         The Company and Seller agree that:

         6.01. Continued Use of Facilities.  From the date hereof until the date
which is 90 days after the date hereof, Seller and its Affiliates will allow the
Company to utilize,  in  accordance  with past  practice,  all of the  Company's
current  facilities  (including  its  current  space in  Seller's  data  center)
rent-free.  Thereafter the Company's current  facilities will be rented pursuant
to the letter  attached as Exhibit B hereto or  pursuant to a direct  lease from
Seller's  landlord.  Seller agrees to use its reasonable  best efforts to obtain
the  consent of its  landlord  to lease the  Company's  current  facility to the
Company in accordance with the terms of Exhibit B.

         6.02  Non-Competition Agreement.

                  (a) The  Seller  agrees  that for the  period of two (2) years
following  the Closing Date,  the Seller shall not directly or  indirectly  own,
manage,  control,  participate in, consult with,  render services for, or in any
manner engage in the  Business.  Nothing  herein shall  prohibit the Seller from
being a passive owner of not more than 4% of the outstanding  stock of any class
of a corporation  which is publicly traded,  so long as the Seller has no active
participation in the business of such corporation. For purposes of this section,
the  term  "Business"  means  distribution  of  market  data  to  the  financial
community.

                  (b) In addition,  for a period of two (2) years  commencing on
the  Closing  Date,  the  Seller  shall not (i)  induce or attempt to induce any
senior manager of the Company to leave the employ of the Company,  or in any way
interfere  with the  relationship  between the  Company  and any senior  manager
thereof,  (ii) hire  directly  or  through  another  entity any person who was a
senior manager of the Company at any time during the six month period  preceding
the final date of the two-year term,  (iii) approach any such senior manager for
any of the  foregoing  purposes,  (iv) induce or attempt to induce any customer,
supplier,  licensee  or other  business  relation  of the Company to cease doing
business with the Company,  as the case may be, or in any way interfere with the
relationship between any such customer,  supplier, licensee or business relation
and the  Company  related to the  Business,  or (v)  authorize  or assist in the
taking of any of the foregoing actions by any third party.

                  (c) The  Seller  acknowledges  that the  Company is capable of
serving customers  throughout the United States and the world. The Seller agrees
that these  restrictions on competition and solicitation shall be deemed to be a
series  of  separate   covenants   not-to-compete   and  a  series  of  separate
non-solicitation covenants for each month within the specified periods, separate
covenants  not-to-compete and  non-solicitation  covenants for each state within
the United  States,  and each county  within each such state and each country in
the world, and separate  covenants  not-to-compete for each area of competition.
If any court of competent  jurisdiction  shall  determine  any of the  foregoing
covenants to be  unenforceable  with respect to the term thereof or the scope of
the subject matter or geography covered thereby,  such remaining covenants shall
nonetheless  be enforceable by such court against such other party or parties or
upon such shorter term or within such lesser scope as may be  determined  by the
court to be  enforceable.  If the  scope of any  restriction  contained  in this
Section 6.02 is too broad to permit  enforcement of such restriction to its full
extent,  then such restriction shall be enforced to the maximum extent permitted
by law,  and the  Seller  hereby  consents  and  agrees  that such  scope may be
judicially  modified  accordingly  in any  proceeding  brought to  enforce  such
restriction.  The invalidity or unenforceability of any particular  provision of
this Agreement shall not affect the other  provisions  hereof and this Agreement
shall  be  construed  in  all  respects  as if  such  invalid  or  unenforceable
provisions were omitted.

                  (d)  Because  the  Seller  has  had  access  to   confidential
information and strategic plans of the Company of the most valuable nature,  the
parties agree that the covenants contained in this Section 6.02 are necessary to
protect  the value of the  business of the Company and that a breach of any such
covenant would result in irreparable and continuing damage for which there would
be no adequate remedy at law. The parties agree therefore that in the event of a
breach or threatened  breach of this Agreement,  the Company may, in addition to
other  rights  and  remedies  existing  in their  favor,  apply to any  court of
competent  jurisdiction  for specific  performance  and/or  injunctive  or other
relief in order to enforce, or prevent any violations of, the provisions hereof.

                           ARTICLE VII

                        COVENANTS OF BUYER

         Buyer agrees that:

         7.01.  Access.  After the  Closing  Date,  Buyer  agrees to give Seller
reasonable  access to the books and records provided by Seller to Buyer pursuant
to Section  2.04 hereof to enable  Seller to make  required  filings  with,  and
respond  to any  inquiries  from,  state  or  federal  tax or  other  regulatory
authorities.

         7.02.  Indemnification.  Buyer  hereby  agrees  to  indemnify  and hold
harmless  Seller from and against any and all costs,  expenses  and  liabilities
arising out of or related to Seller's  obligations  under  Sections  8(d) and/or
13(a) of the Agreement  among  Seller,  the Company and Reuters  America,  Inc.,
dated May 7, 1997 ("Reuters Agreement") as in effect on the Closing Date. Seller
agrees to give Buyer  written  notice of any claims  against  Seller  under this
Section of the  Agreement and Buyer shall assume the defense of any such claims.
Seller shall not settle any claims which are indemnified  hereunder  without the
prior  written  consent of Buyer.  Seller's  failure to give timely  notice of a
claim hereunder shall not be a defense to Buyer's obligations hereunder.


                              ARTICLE VIII

                       COVENANTS OF ALL PARTIES

The parties hereto agree that:

         8.01.  Best  Efforts.  Subject  to the  terms  and  conditions  of this
Agreement, each party will use commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary or
desirable under  applicable laws and regulations to consummate the  transactions
contemplated  by this  Agreement.  Each of Buyer and Seller,  after the Closing,
agrees to execute and deliver such other documents, certificates, agreements and
other  writings and to take such other  actions as may be necessary or desirable
in order to consummate or implement expeditiously the transactions  contemplated
by this Agreement.

         8.02.  Certain Filings.  The Company,  Seller and Buyer shall cooperate
with each other (a) in  determining  whether  any action by or in respect of, or
filing with, any governmental body,  agency,  official or authority is required,
or any actions, consents,  approvals or waivers are required to be obtained from
parties to any material  contracts,  in connection with the  consummation of the
transactions  contemplated  by this  Agreement and (b) in taking such actions or
making any such filings, furnishing information required in connection therewith
and seeking timely to obtain any such actions, consents, approvals or waivers.

         8.03.  Public  Announcements.  The parties  agree to consult  with each
other  before  issuing  any press  release or making any public  statement  with
respect to this Agreement or the transactions contemplated hereby and, except as
may be required by  applicable  law or any listing  agreement  with any national
securities  exchange,  will not issue any such  press  release  or make any such
public statement prior to such consultation.

         8.04.  Tax  Treatment.  The parties  agree to work  together with their
advisors to obtain a mutually  advantageous  tax treatment for the  transactions
contemplated  by this  Agreement.  Seller agrees that it will  cooperate on such
matters to Buyer's  advantage so long as such  cooperation does not cause Seller
any disadvantage.

         8.05 Generator.  Seller and Buyer agree to use commercially  reasonable
efforts to have the Company become a party to the Expense and Operating  Sharing
Agreement,  dated August 1997 between Sherwood Securities Corp. and Spear, Leeds
& Kellogg L.P., with the rights to receive services under such agreement.  Until
Buyer  becomes a party to such  agreement  Seller shall  provide  Buyer with the
services of the  generator it requires to operate the business of the Company as
currently  operated  and to  operate  a data  room in the  Additional  Space (as
defined in Exhibit B);  provided that the Company shall pay any costs  necessary
to provide such service and Seller shall under no  circumstances be obligated to
increase the capacity of the generator.

                               ARTICLE IX

                                RELEASE

         9.01. Release.  EXCEPT AS PROVIDED IN SECTION 5.08, ARTICLE VI, ARTICLE
VII,  ARTICLE VIII AND ARTICLE X AND THE PROMISSORY  NOTE WHICH  OBLIGATIONS ARE
NOT RELEASED  HEREBY,  EFFECTIVE AS OF THE CLOSING,  EACH OF SELLER,  ON THE ONE
HAND, AND BUYER (AND, AFTER THE CLOSING,  THE COMPANY),  ON THE OTHER HAND, DOES
FOR ITSELF, AND FOR EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS,  STOCKHOLDERS,
EMPLOYEES,  AGENTS AFFILIATES,  PARTNERS, HEIRS, SUCCESSORS AND ASSIGNS, IF ANY,
RELEASE  AND  ABSOLUTELY  FOREVER  DISCHARGE  EACH  OTHER AND  THEIR  RESPECTIVE
OFFICERS,  DIRECTORS,  STOCKHOLDERS,  EMPLOYEES,  AGENTS  AFFILIATES,  PARTNERS,
HEIRS,  SUCCESSORS AND ASSIGNS,  IF ANY, FROM AND AGAINST ALL RELEASED  MATTERS.
"RELEASED  MATTERS"  MEANS  ANY  AND  ALL  CLAIMS,   DEMANDS,   DAMAGES,  DEBTS,
LIABILITIES, OBLIGATIONS, COSTS, EXPENSES (INCLUDING ATTORNEYS' AND ACCOUNTANTS'
FEES AND  EXPENSES),  ACTIONS  AND  CAUSES OF ACTION OF ANY  NATURE  WHATSOEVER,
WHETHER NOW KNOWN OR UNKNOWN,  SUSPECTED  OR  UNSUSPECTED,  THAT EITHER BUYER OR
SELLER  NOW HAS,  OR AT ANY  TIME  PREVIOUSLY  HAD,  OR SHALL OR MAY HAVE IN THE
FUTURE  ARISING BY VIRTUE OF OR 1N ANY MATTER  RELATED TO ANY ACTION OR INACTION
WITH RESPECT TO THEIR MUTUAL  CONTRACTUAL OR OTHER BUSINESS  AFFAIRS  RELATED TO
THE COMPANY ON OR BEFORE THE DATE OF THIS AGREEMENT;  EXCEPT ANY CLAIMS,  RIGHTS
OR  REMEDIES  AVAILABLE  TO EITHER  SELLER OR BUYER  RESULTING  FROM  BUYER'S OR
SELLER'S BREACH OF THIS  AGREEMENT.  IT IS THE INTENTION OF THE BUYER AND SELLER
IN EXECUTING  THIS  AGREEMENT,  AND IN GIVING AND  RECEIVING  THE  CONSIDERATION
CALLED FOR HEREIN, THAT THE RELEASE CONTAINED IN THIS SECTION SHALL BE EFFECTIVE
AS A FULL AND FINAL ACCORD AND  SATISFACTION AND GENERAL RELEASE OF AND FROM ALL
RELEASED  MATTERS AND THE FINAL  RESOLUTION  BY BUYER AND SELLER OF ALL RELEASED
MATTERS. BUYER AND SELLER EACH HEREBY REPRESENTS AND WARRANTS TO EACH OTHER THAT
SUCH PARTY HAS NOT  VOLUNTARILY  OR  INVOLUNTARILY  ASSIGNED OR  TRANSFERRED  OR
PURPORTED TO ASSIGN OR TRANSFER TO ANY PERSON ANY RELEASED MATTER.

                              ARTICLE X

                            MISCELLANEOUS

         10.01.  Notices.  All  notices  and other  communications  which by any
provision of this Agreement are required or permitted to be given shall be given
in writing  and shall be (a) mailed by  first-class  or  express  mail,  postage
prepaid,  (b)  sent  by  telex,  telegram,  telecopy  or  other  form  of  rapid
transmission,  confirmed  by mailing  (by first class or express  mail,  postage
prepaid)  written  confirmation  at  substantially  the same time as such  rapid
transmission, or (c) personally delivered to the receiving party (which if other
than an  individual  shall  be an  officer  or  other  responsible  party of the
receiving party). All such notices and communications  shall be mailed,  sent or
delivered as follows:

                  if to Buyer, to:
                           IPC Information Systems, Inc.
                           88 Pine Street
                           New York, New York 10005
                           Telecopy:  (212) 858-7990
                           Attention:  Terry Clontz

                  with a copy to:
                           IPC Information Systems, Inc.
                           88 Pine Street
                           New York, New York  10005
                           Telecopy:  (212) 858-7990
                           Attention:  David Walsh
                                          Daniel Utersky

                  if to the Company, to:
                           MXNet, Inc.
                           10 Exchange Place Centre
                           Jersey City, NJ  07302
                           Telecopy:  (201) 946-4498
                           Attention:  Paul Pluschkell, President

                  with a copy to:

                           National Discount Brokers Group, Inc.
                           10 Exchange Place Centre
                           Jersey City, NJ  07302
                           Telecopy: (201) 946-4510
                           Attention:  William Karsh, Executive Vice President

                  if to Seller:

                           National Discount Brokers Group, Inc.
                           10 Exchange Place Centre
                           Jersey City, NJ  07302
                           Telecopy: (201) 946-4510
                           Attention:  Laura Singer, General Counsel

         Notices shall be deemed duly delivered  three business days after being
sent by first class mail, postage prepaid,  or one business day after being sent
via a reputable nationwide express mail service.  Notice delivered via any other
means shall be deemed duly  delivered  upon actual receipt by the individual for
whom such notice is  intended.  Any notice sent to a party  hereto shall be sent
simultaneously, by the same means, to such party's counsel, as set forth above.

         10.02.  Amendments; No Waivers.

                  (a) Any  provision of this  Agreement may be amended or waived
prior to the  Closing  Date if,  and only if,  such  amendment  or  waiver is in
writing and signed by Buyer, the Company and Seller.

                  (b) No  failure  or delay by either  party in  exercising  any
right, power or privilege  hereunder shall operate as a waiver thereof nor shall
any single or partial  exercise  thereof  preclude any other or further exercise
thereof or the exercise of any other right,  power or privilege.  The rights and
remedies  herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.

         10.03.  Expenses.  All costs and expenses  incurred in connection  with
this  Agreement  shall be paid by the  party  incurring  such  cost or  expense;
provided,  however,  that if the Closing shall occur all such costs and expenses
incurred by the Company shall be paid or reimbursed by Seller.

         10.04.  Successors and Assigns.  The provisions of this Agreement shall
be  binding  upon and  inure to the  benefit  of the  parties  hereto  and their
respective successors and assigns;  provided that no party may assign,  delegate
or  otherwise  transfer  any of his or its  rights  or  obligations  under  this
Agreement without the consent of the other parties hereto.

         10.05. Further Assurances.  From time to time after the Closing, at the
request of Buyer and without  further  consideration,  Seller  will  execute and
deliver to Buyer such other  documents,  and take such other action,  at Buyer's
cost and expense,  as Buyer may reasonably  request in order to consummate  more
effectively  the  transactions  contemplated  hereby and to vest in Buyer  good,
valid and marketable title to the Shares.

         10.06.  Governing Law. THIS AGREEMENT  SHALL BE CONSTRUED IN ACCORDANCE
WITH  THE  INTERNAL  LAWS  OF THE  STATE  OF NEW  YORK  (WITHOUT  REGARD  TO ITS
PRINCIPLES OF CONFLICT OF LAW)  APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
WITHIN SUCH STATE  EXCEPT THAT  INSOFAR AS THE  GENERAL  CORPORATION  LAW OF THE
STATE OF DELAWARE WOULD  OTHERWISE  PURPORT TO GOVERN ANY MATTER  EXISTING UNDER
THIS AGREEMENT, SUCH LAW SHALL GOVERN.

         10.07. Jurisdiction.  ANY SUIT, ACTION OR PROCEEDING SEEKING TO ENFORCE
ANY PROVISION OF, OR BASED ON ANY MATTER  ARISING OUT OF OR IN CONNECTION  WITH,
THIS  AGREEMENT OR THE  TRANSACTIONS  CONTEMPLATED  HEREBY MAY BE BROUGHT IN ANY
FEDERAL  COURT  SITTING  IN THE  STATE OF NEW YORK  EACH OF THE  PARTIES  HEREBY
CONSENTS TO THE  JURISDICTION OF SUCH COURTS (AND OF THE  APPROPRIATE  APPELLATE
COURTS THEREFROM) IN ANY SUCH SUIT, ACTION OR PROCEEDING AND IRREVOCABLY WAIVES,
TO THE  FULLEST  EXTENT  PERMITTED  BY LAW,  ANY  OBJECTION  WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
IN ANY SUCH COURT OR THAT ANY SUCH SUIT,  ACTION OR PROCEEDING  WHICH IS BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. PROCESS IN ANY SUCH
SUIT,  ACTION OR  PROCEEDING  MAY BE SERVED ON ANY PARTY  ANYWHERE IN THE WORLD,
WHETHER WITHIN OR WITHOUT THE  JURISDICTION OF ANY SUCH COURT.  WITHOUT LIMITING
THE FOREGOING,  EACH PARTY AGREES THAT SERVICE OF PROCESS ON SUCH PARTY SHALL BE
DEEMED EFFECTIVE  SERVICE OF PROCESS ON SUCH PARTY IT DELIVERED TO SUCH PARTY AT
THE ADDRESS SPECIFIED IN SECTION 10.01.

         10.08  Waiver  of  Jury  Trial.  EACH  OF  THE  PARTIES  HERETO  HEREBY
IRREVOCABLY  WAIVES  ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL  PROCEEDING
ARISING OUT OF OR RELATED TO THIS  AGREEMENT  OR THE  TRANSACTIONS  CONTEMPLATED
HEREBY.

         10.09. Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the  signatures  thereto  and hereto were upon the same  instrument.  This
Agreement  shall become  effective  when each party hereto shall have received a
counterpart hereof signed by the other parties hereto.

<PAGE>


         10.10.  Entire  Agreement.  This Agreement  (including the exhibits and
schedules  hereto)  constitutes  the entire  agreement  between the parties with
respect to the  subject  matter  hereof  and  supersedes  all prior  agreements,
understandings  and negotiations,  whether written or oral,  between the parties
with  respect to the  subject  matter  hereof.  No  representation,  inducement,
promise, understanding, condition or warranty not set forth herein has been made
or relied upon by either party hereto.  Neither this Agreement nor any provision
hereof is intended to confer upon any Person  other than the parties  hereto any
rights or remedies hereunder.

         10.11.  Captions.  The captions herein are included for convenience of 
reference only and shall be ignored in the construction or interpretation 
hereof.

         10.12.  Survival of Representations and Warranties. The representations
and warranties of the Company shall not survive the Closing.

         IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly  executed  this
Agreement as of the day and year first above written.


                                            IPC INFORMATION SYSTEMS, INC.


                                            By:
                                            Name:
                                            Title:


                                            MXNET, INC.

                  By:
                  Name:
                  Title:
                  By:


                  NATIONAL DISCOUNT BROKERS GROUP, INC.

                  By:
                  Name:
                  Title:

                                                                 EXHIBIT 11

        NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                 COMPUTATION OF NET INCOME PER COMMON SHARE
<TABLE>
<CAPTION>

                                                Three Months Ended February 28,
                                                     Basic                                Diluted

                                                     -------------  ------------------   ---------------- -----------------
                                                            1998                1997               1998              1997
                                                     -------------  ------------------   ---------------- -----------------
<S>                                                   <C>              <C>                 <C>              <C> 
Common stock and common stock equivalents:
  Average common stock outstanding                      14,116,572         12,832,835         14,116,572        12,832,835
  Average common stock equivalents
    issuable under stock options                            -                   -                 28,021            52,939
                                                      -------------  ------------------   ---------------- -----------------

Total average common stock and common stock
  equivalents used for earnings per share computation  14,116,572          12,832,835         14,144,593        12,885,774
                                                      =============  ==================   ================ =================

Income:
    Net income from continuing operations             $ 1,516,600      $     (242,352)    $    1,516,600    $    (242,352)
    Net income from discontinued operations             2,704,085            -                 2,704,085          -
                                                      ---------------  ----------------   -------------     ---------------
            Net Income                                $ 4,220,685      $     (242,352)    $    4,220,685         (242,352)
                                                      ===============  =================  ================  ================

Net income per common and common equivalent share:
    Net income from continuing operations             $      0.11      $        (0.02)    $         0.11    $       (0.02)
    Net income from discontinued operations                  0.19               -                   0.19            -
                                                      ==============  ==================   ================ ================
            Net Income                                $      0.30      $        (0.02)    $         0.30    $       (0.02)
                                                      ==============  ==================   ================ ================

</TABLE>
<TABLE>
<CAPTION>

                                                                        Nine Months Ended February 28,
                                                                   Basic                                Diluted

                                                      --------------------------------------   ----------------------------------
                                                            1998                1997                 1998             1997
                                                      ------------------  ------------------   ---------------- ------------------
<S>                                                   <C>               <C>                  <C>              <C>    
Common stock and common stock equivalents:
  Average common stock outstanding                     13,168,693            12,941,668         13,168,693       12,941,668
  Average common stock equivalents
    issuable under stock options                          -                     -                   85,447           50,075
                                                      ---------------  ------------------   ---------------- -------------
                                                                                                                                 
Total average common stock and common stock
  equivalents used for earnings per share computation  13,168,693          12,941,668           13,254,140        12,991,743
                                                      ===============  ==================   ================ =================
                                                                                                                                  


Income:
    Net income from continuing operations             $ 6,312,365       $   6,055,974        $   6,312,365    $    6,055,974
    Net income from discontinued operations             2,704,085            -                   2,704,085          -
                                                     ===============   ==================   ================ =================
            Net Income                                $ 9,016,450       $   6,055,974        $   9,016,450    $    6,055,974
                                                     ===============  ==================   ================ ==================

Net income per common and common equivalent share:
    Net income from continuing operations             $      0.48       $        0.47        $        0.48    $         0.47
    Net income from discontinued operations                  0.20              -                      0.20             -
                                                    ---------------     ---------------      ---------------- ----------------
            Net Income                                $      0.68       $        0.47        $        0.68    $         0.47
                                                    ===============    ==================    ================ ================





<FN>
(a)  The sum of the  individual  quarters'  earnings  per common  share does not
     equal the total  amount for the nine  months  ended  February  28,  1998 or
     February  28, 1997 due to the effect of  averaging  the number of shares of
     common stock equivalents throughout the year.
</FN>


</TABLE>
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