Exhibit 10.41

 

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of June 29, 2006, by
and among NYFIX, Inc., a Delaware corporation, with headquarters located at 100
Wall Street, New York, NY 10005 (the “Company”), and the investors listed on the
Schedule of Buyers attached hereto (each, a “Buyer” and collectively, the
“Buyers”).

BACKGROUND

A.           The Company and the Buyers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended (as so amended, the “1933 Act”);

B.           The Company has authorized the issuance and sale of up to Two
Million Seven Hundred Thirteen Thousand (2,713,000) shares of its common stock,
par value $0.001 per share (the “Common Stock”), pursuant to the terms of this
Agreement;

C.           The Buyers wish to purchase, upon the terms and conditions stated
in this Agreement, an aggregate of up to Two Million Seven Hundred Thirteen
Thousand (2,713,000) shares of Common Stock (the “Offered Shares”) in the
respective amounts set forth opposite each Buyer’s name on the Schedule of
Buyers; and

D.           Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement (the “Registration Rights Agreement”), pursuant to which the Company
has agreed to provide certain registration rights under the 1933 Act and the
rules and regulations promulgated thereunder, and applicable state securities
laws.

NOW, THEREFORE, the Company and the Buyers hereby agree as follows:

1.

PURCHASE AND SALE OF OFFERED SHARES.

(a)          Purchase of Offered Shares. Subject to the satisfaction (or waiver)
of the conditions set forth in Sections 6 and 7 below, the Company shall issue
and sell to each Buyer and each Buyer severally agrees to purchase from the
Company the respective number of Offered Shares set forth opposite such Buyer’s
name on the Schedule of Buyers at the respective purchase price (the “Purchase
Price”) set forth opposite such Buyer’s name on the Schedule of Buyers (the
“Closing”).

(b)          Closing Dates. The date and time of the Closing shall be 10:00 a.m.
New York Time, on July 5, 2006 (the “Closing Date”), subject to notification of
satisfaction (or waiver) of the conditions to the Closing set forth in Sections
6 and 7 below (or such later date or different time as is mutually agreed to by
the Company and the Buyers). The Closing shall occur on the Closing Date at the
offices of Thelen Reid & Priest LLP, 875 Third Avenue, New York, NY 10022.

(c)          Form of Payment. On the Closing Date, (i) each Buyer shall pay an
amount equal to the Purchase Price to the Company for the Offered Shares to be
issued and sold to such Buyer at the Closing, by wire transfer of immediately
available funds in accordance with

 

 

the Company’s written wire instructions, and (ii) the Company shall deliver to
each Buyer, stock certificates (in the denominations as such Buyer shall request
(the “Common Stock Certificates”) representing such number of the Offered Shares
which such Buyer is then purchasing (as indicated opposite such Buyer’s name on
the Schedule of Buyers).

2.

BUYERS’ REPRESENTATIONS AND WARRANTIES.

Each Buyer represents and warrants, severally and not jointly, that:

(a)          Investment Purpose. Such Buyer (i) is acquiring the Offered Shares
for its own account for investment only and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempt from registration under the 1933 Act;
provided, however, that by making the representations herein, such Buyer does
not agree to hold any of the Offered Shares for any minimum or other specific
term and reserves the right to dispose of them at any time in accordance with or
pursuant to a registration statement or an exemption under the 1933 Act and
otherwise in accordance with applicable law.

(b)          Accredited Investor Status. Such Buyer is an “accredited investor”
as that term is defined in Rule 501(a)(3) of Regulation D, and such Buyer is
also knowledgeable, sophisticated and experienced in making, and is qualified to
make decisions with respect to, investments in securities presenting an
investment decision like that involved in the purchase of the Offered Shares,
including investments in securities issued by the Company and investments in
comparable companies.

(c)          Reliance on Exemptions. Such Buyer understands that the Offered
Shares are being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws
and that the Company is relying in part upon the truth and accuracy of, and such
Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire such securities.

(d)          Information. Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Offered
Shares which have been requested by such Buyer. Such Buyer and its advisors, if
any, have been afforded the opportunity to ask questions of the Company. Neither
such inquiries nor any other due diligence investigations conducted by such
Buyer or its advisors, if any, or its representatives shall modify, amend or
affect such Buyer’s right to rely on the Company’s representations and
warranties contained in Section 3 below. Such Buyer understands that its
investment in the Offered Shares involves a high degree of risk. Such Buyer has
sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its acquisition of the
Offered Shares. Such Buyer has not requested or received, and is not relying on,
any preliminary conclusions of the Company with respect the Company’s review of
information relating to its historical stock option grants as previously
disclosed in the Company’s 1934 Act reports and related accounting issues that
are referred to in Section 2(k), as Buyer has concluded that any such
information is not pertinent to its investment decision.

(e)          No Governmental Review. Such Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made

 

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any recommendation or endorsement of the Offered Shares or the fairness or
suitability of the investment in the Offered Shares nor have such authorities
passed upon or endorsed the merits of the offering of the Offered Shares.

(f)           Transfer or Resale. Such Buyer understands that except as provided
in the Registration Rights Agreement: (i) the Offered Shares have not been and
are not being registered under the 1933 Act or any state securities laws, and
may not be offered for sale, sold, assigned or transferred unless subsequently
registered thereunder or there is an exemption from registration; (ii) any sale
of the Offered Shares made in reliance on Rule 144 promulgated under the 1933
Act, as amended, or any successor rule thereto (“Rule 144”) may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Offered Shares under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; and (iii) neither the Company nor any other person is under any
obligation to register such securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder.

(g)          Legends. Such Buyer understands that the certificates or other
instruments representing the Offered Shares, except as set forth below, shall
bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such stock certificates):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO
RULE 144 UNDER SAID ACT.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF
A SECURITIES PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE HOLDER, WHICH MAY
RESTRICT THE TRANSFER OF SUCH SECURITIES IN CERTAIN CIRCUMSTANCES. A COPY OF
SUCH AGREEMENT MAY BE OBTAINED, WITHOUT CHARGE, AT THE COMPANY’S PRINCIPAL
OFFICE.

The legends set forth above shall be removed and the Company shall issue a
certificate without such legends to the holder of the Offered Shares upon which
it is stamped, if, unless otherwise required by state securities laws, (i) such
Offered Shares are registered for resale under the 1933 Act, (ii) in connection
with a sale transaction, such holder provides the Company with an opinion of
counsel, in a generally acceptable form, to the effect that a public sale,
assignment or transfer of the Offered Shares may be made without registration
under the 1933 Act, or (iii) such holder provides the Company with reasonable
assurances that the Offered Shares can be sold pursuant to Rule 144 without any
restriction as to the number of securities acquired as of a particular date

 

 

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that can then be immediately sold. Such Buyer acknowledges, covenants and agrees
to sell the Offered Shares represented by a certificate(s) from which the
legends have been removed, only pursuant to (i) a registration statement
effective under the 1933 Act or (ii) advice of counsel that such sale is exempt
from registration required by Section 5 of the 1933 Act, including, without
limitation, a transaction pursuant to Rule 144.

(h)          Validity; Enforcement. Such Buyer has full right, power, authority
and capacity to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly authorized,
executed and delivered on behalf of such Buyer and is a valid and binding
agreement of such Buyer enforceable against such Buyer in accordance with its
terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

(i)           Residency. Such Buyer is a resident of that state and country
specified in its address on the Schedule of Buyers.

(j)           Brokers or Finders. The Company will not incur, directly or
indirectly, as a result of any action taken by the Buyers, any liability for
brokerage or finders’ fees or agents’ commissions or any similar charges in
connection with this Agreement or any transactions contemplated hereby.
Notwithstanding the forgoing, as payment for services in connection with the
transactions contemplated by this Agreement, the Company shall issue to Rhône
Group Advisors, LLC, at the Closing hereof 157,693 shares of Common Stock.

(k)          Acknowledgement as to Status of Company. The Buyers acknowledge the
following:

i.             The Company is delinquent in its reporting obligations under the
1934 Act and has failed to file (a) quarterly reports on Form 10-Q for the
quarters ended June 30, 2005, September 30, 2005, and March 31, 2006 and (b) an
annual report on Form 10-K for the fiscal year ended December 31, 2005.

ii.            The Company’s delinquency in reporting under the 1934 Act is a
result of the Company’s review of information relating to its stock option
grants as previously disclosed in the Company’s 1934 Act reports and additional
historic accounting issues which have surfaced as part of an internal review by
management and the re-audit of financial statements for 2004 and 2003 by the
Company’s new independent registered public accounting firm. The additional
issues include the accounting for investments in and acquisitions of affiliates
and subsidiaries, derivative liabilities embedded within the Company’s $7.5
million convertible note issued in December 2004 and certain revenue recognition
issues prior to 2005. The Company expects to include restated prior period
amounts in its 2005 Annual Report on Form 10-K and its Quarterly Reports on Form
10-Q, for the periods ended June 30, 2005 and September 30, 2005, to reflect
additional charges related to stock option grants and to one or more of the
additional accounting issues noted above.

iii.          The Company can make no representation as to when it will cure
such delinquency in its reporting under the 1934 Act.

 

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iv.           The Company believes that the aforementioned restatement and other
failures in its internal controls as described in reports filed by the Company
under the 1934 Act constitute material weaknesses under Section 404 of the
Sarbanes-Oxley Act of 2002.

v.            In connection with the restatement of the Company’s 1999 through
2002 consolidated financial statements in May 2004, the Division of Enforcement
of the SEC informed the Company by letter dated July 14, 2004 that it was
conducting an informal inquiry. On January 25, 2005, the Company filed a current
report on Form 8-K, which indicated that this inquiry was a formal inquiry (the
“First 2004 Inquiry”). By letter dated October 28, 2004, the Division of
Enforcement of the SEC informed the Company that it was conducting a second
informal inquiry, which related to stock options granted by the Company. On
February 25, 2005, the Company filed current report on Form 8-K, which indicated
that this inquiry was a formal inquiry (the “Second 2004 Inquiry”). On March 14,
2006, SEC Enforcement Staff advised that the Company that it was recommending
that the SEC close the First 2004 Inquiry without any action being taken against
NYFIX or any individual. However, this recommendation remained subject a formal
approval process within the SEC, and, to the Company’s knowledge, was never
approved. To the Company’s knowledge both the First 2004 Inquiry and the Second
2004 Inquiry remain open as of the date hereof.

vi.           On May 17, 2006, the Company received a grand jury subpoena from
the United States Attorney’s Office for the Southern District of New York. The
subpoena calls for the production of all documents referring to, relating to or
involving the granting of stock options for the time period from 2000 to the
present.

vii.         Prior to the Buyers’ execution of this Agreement, the Company
provided to the Buyers, and Buyers have had an opportunity to review, (A) a copy
of a press release of the Company issued prior to the execution of this
Agreement, relating to the Company’s unaudited revenues for 2005 and update on
accounting restatements, and (B) a draft of a press release relating to the
transactions contemplated hereby, which the Company expects to issue prior to
the opening of the trading markets on June 30, 2006.  Copies of both such
releases are attached hereto as Exhibit 2(k).

3.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each of the Buyers that:

(a)          Organization and Qualification. The Company and its “Subsidiaries”
(which for purposes of this Agreement means a “Subsidiary” as defined in Rule
405 under the 1933 Act) are corporations duly organized and validly existing in
good standing under the laws of the jurisdiction in which they are incorporated,
and have the requisite corporate power and authorization to own their properties
and to carry on their business as now being conducted, except where the failure
of any Subsidiary to be duly organized, validly existing and in good standing
would not have a Material Adverse Effect. Each of the Company and its
Subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which its ownership of property or the
nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect. As used in this Agreement, “Material
Adverse Effect” means any material adverse effect on the business, properties,
assets, operations, results of operations, financial condition or prospects of
the Company and its Subsidiaries, if any, taken as a whole, or on the
transactions contemplated hereby or by the

 

 

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agreements and instruments to be entered into in connection herewith, or on the
authority or ability of the Company to perform its obligations under the
Transaction Documents (as defined below). The Company has no Subsidiaries except
as set forth on Schedule 3(a).

(b)          Authorization; Enforcement; Validity. (i) The Company has the
requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement, the Irrevocable Transfer Agent
Instructions (as defined in Section 5), and each of the other agreements entered
into by the parties hereto in connection with the transactions contemplated by
this Agreement (collectively, the “Transaction Documents”), and to issue the
Offered Shares in accordance with the terms hereof and thereof, (ii) the
execution and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including without limitation the issuance of the Offered Shares, have been duly
authorized by the Company’s Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or its
stockholders, (iii) the Transaction Documents have been duly executed and
delivered by the Company, (iv) the Transaction Documents constitute the valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies.

(c)          Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of (i) 60,000,000 shares of Common Stock, of which as of
the date hereof, 32,596,003 shares are issued and outstanding, 2,380,167 shares
are reserved for issuance pursuant to the Company’s stock option and purchase
plans, 105,576 shares are issuable and reserved for issuance pursuant to
securities exercisable or exchangeable for, or convertible into, shares of
Common Stock, and 1,188,290 are treasury shares, and (ii) 5,000,000 shares of
Preferred Stock, of which as of the date hereof, no shares are issued and
outstanding. All of such outstanding shares have been, or upon issuance will be,
validly issued and are fully paid and nonassessable. Except as disclosed in
Schedule 3(c), (i) no shares of the Company’s capital stock are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company, (ii) none of the Company or any of its
Subsidiaries has any outstanding debt securities, (iii) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, (iv) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the
sale of any of their securities under the 1933 Act (except the Registration
Rights Agreement), (v) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries, (vi) there
are no securities or instruments containing antidilution or similar provisions
that will be triggered by the issuance of the Offered Shares as described in
this Agreement, and (vii) the Company does not have any stock appreciation
rights or stock “phantom stock” plans or agreements or any similar plan or
agreement, other than claims against the Company by those individuals whose
stock

 

 

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option grants are voided as a result of the Company’s current analysis of its
historic stock option grants, as more fully described in Section 2(k). The
Company has furnished to the Buyer true and complete copies of the Company’s
Certificate of Incorporation, as amended and as in effect on the date hereof
(the “Certificate of Incorporation”), and the Company’s By-laws as amended and
as in effect on the date hereof (the “By-laws”), and the terms of all securities
convertible into or exercisable for Common Stock and the material rights of the
holders thereof in respect thereto.

(d)          Issuance of Offered Shares. The Offered Shares are duly authorized
and, upon issuance in accordance with the terms hereof, shall be (i) validly
issued, fully paid and nonassessable, (ii) free from all taxes, liens and
charges with respect to the issue thereof and (iii) entitled to the rights and
preferences set forth in the Certificate of Incorporation. The issuance by the
Company of the Offered Shares is exempt from registration under the 1933 Act.

(e)          No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company, the performance by the Company of its
obligations under the Certificate of Incorporation and the consummation by the
Company of the transactions contemplated hereby and thereby will not (i) result
in a violation of the Certificate of Incorporation or the By-laws or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations) applicable
to the Company or any of its Subsidiaries or by which any property or asset of
the Company or any of its Subsidiaries is bound or affected. Neither the Company
nor its Subsidiaries is in violation of any term of or in default under its
Certificate of Incorporation or By-laws or their organizational charter or
by-laws, respectively, except, in each case, where such violation, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect on the Company. Except as set forth in Schedule 3(e), neither the Company
nor any of its Subsidiaries is in violation of any term of or in default under
any material contract, agreement, mortgage, indebtedness, indenture, instrument,
judgment, decree or order or any statute, rule or regulation applicable to the
Company or its Subsidiaries, except, in each case, where such violation could
not reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect on the Company. Except as set forth in Schedule 3(e), the
business of the Company and its Subsidiaries is not being conducted in violation
of any law, ordinance or regulation of any governmental entity, except for
violations the sanctions for which either individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect. Except as
specifically contemplated by this Agreement and as required under the 1933 Act,
the Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental agency or any
regulatory or self-regulatory agency in order for it to execute, deliver or
perform any of its obligations under or contemplated by the Transaction
Documents or to perform its obligations under the Certificate of Designations,
in each case in accordance with the terms hereof or thereof. All consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof.

(f)           Absence of Litigation. Except as set forth in Schedule 3(f), there
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the Company or any of its Subsidiaries, threatened
against or affecting the Company or any of its

 

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Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or
directors in their capacities as such, which could have a Material Adverse
Effect.

(g)          No General Solicitation. Neither the Company, nor any of its
affiliates, nor, to the Company’s knowledge, any person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of the
Offered Shares.

(h)          No Integrated Offering. Neither the Company, nor any of its
affiliates, nor, to the Company’s knowledge, any person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would require
registration of any of the Offered Shares under the 1933 Act or cause this
offering of the Offered Shares to be integrated with prior offerings by the
Company for purposes of the 1933 Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of
any exchange or automated quotation system on which any of the securities of the
Company are listed or designated, nor will the Company or any of its
Subsidiaries take any action or steps that would require registration of any of
the Offered Shares under the 1933 Act (except pursuant to the Registration
Rights Agreement) or cause the offering of the Offered Shares to be integrated
with other offerings.

(i)           Employee Relations. Neither the Company nor any of its
Subsidiaries is involved in any union labor dispute nor, to the knowledge of the
Company or any of its Subsidiaries, is any such dispute threatened. None of the
Company’s or its Subsidiaries’ employees is a member of a union, neither the
Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and its Subsidiaries believe that their relations
with their employees are good.

(j)           Intellectual Property Rights. The Company and its Subsidiaries own
or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted or as proposed to be conducted, except where the
failure to own or possess such rights could not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect. Except as set
forth in Schedule 3(j), the Company and its Subsidiaries do not have any
knowledge of any infringement by the Company or its Subsidiaries of trademark,
trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service mark registrations, trade secret or other
similar rights of others, and, there is no claim, action or proceeding being
made or brought against, or to the Company’s knowledge, being threatened
against, the Company or its Subsidiaries regarding trademark, trade name,
patents, patent rights, invention, copyright, license, service names, service
marks, service mark registrations, trade secret or other infringement; and the
Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing. The Company and its Subsidiaries have
taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their intellectual properties, and the Company is not aware of
any third party making any unauthorized or infringing use of the intellectual
properties of the Company or any of its Subsidiaries.

(k)          Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic

 

 

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substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval except where, in each of the three foregoing cases, the failure to so
comply could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

(l)           Title. Except as set forth in Schedule 3(l), the Company and its
Subsidiaries have sufficient title to all real property, if any, owned by it and
good and valid title to all personal property owned by it which, in each case,
is material to the business of the Company and its Subsidiaries, in each case
free and clear of all liens, encumbrances and defects, except such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and any of its
Subsidiaries. Any real property and facilities held under lease by the Company
and any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.

(m)         Insurance. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged, and all of such insurance is in full force and effect. Neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that could not reasonably
be expected to, individually or in the aggregate, have a Material Adverse
Effect.

(n)          Regulatory Permits. The Company and its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess any such certificate,
authorization or permit could not reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect, and neither the Company nor any
such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit.

(o)          Tax Status. Except as set forth in Schedule 3(o), the Company and
each of its Subsidiaries has made or filed all federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject unless and only to the extent that the Company and each of
its Subsidiaries has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.

 

9

 

(p)          Transactions With Affiliates. Except as set forth in Schedule 3(p)
and other than the grant of stock options disclosed on Schedule 3(c), none of
the officers, directors, or employees of the Company is presently a party to any
transaction with the Company or any of its Subsidiaries (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

(q)          Rights Agreement. Except as set forth in Schedule 3(q), the Company
has not adopted a shareholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.

(r)           No Other Agreements. The Company has not, directly or indirectly,
made any agreements with any Buyers relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as set forth in
the Transaction Documents.

(s)           Material Contracts. All material contracts of the Company that are
required by applicable rules and regulations of the SEC to be filed as exhibits
to reports filed by the Company under the 1934 Act (“Material Contracts”) have
been so filed or are listed on Schedule 3(s) and have been made available to the
Buyers. Except as noted in Schedule 3(s), the Company has not received notice of
a default and is not in default under, or with respect to, any Material
Contract. To the knowledge of the Company, no other party to any Material
Contract is in default thereunder, nor does any condition exist that, with
notice or lapse of time or both, would constitute a default by such party
thereunder.

(t)           Brokers or Finders. The Buyers will not incur, directly or
indirectly, as a result of any action taken by the Company, any liability for
brokerage or finders’ fees or agents’ commissions or any similar charges in
connection with this Agreement or any transactions contemplated hereby.
Notwithstanding the forgoing, the Buyers acknowledge that, as payment for
services in connection with the transactions contemplated by this Agreement, the
Company shall issue to Rhône Group Advisors, LLC, at the Closing hereof 157,693
shares of Common Stock.

(u)          Officers, Directors and 5% Shareholders. Each of the Company’s key
executive officers and directors and persons known to the Company to be the
beneficial owners of 5% or more of the Common Stock is listed on Schedule 3(u).

4.

COVENANTS.

(a)          Closing Conditions Compliance. Each party shall use its best
efforts to satisfy timely each of the conditions to be satisfied by it as
provided in Sections 6 and 7 of this Agreement.

(b)          Form D and Blue Sky. The Company agrees to file a Form D with
respect to the Offered Shares as required under Regulation D and to provide a
copy thereof to each Buyer promptly after such filing. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the
Offered Shares for sale to the Buyers at the Closing pursuant to this Agreement
under applicable securities or “Blue Sky” laws of the states of the United
States. The

 

10

 

Company shall make all filings and reports relating the offer and sale of the
Offered Shares required under applicable securities or “Blue Sky” laws of the
states of the United States following the Closing Date.

(c)          Use of Proceeds. The Company will use the proceeds from the sale of
the Offered Shares for substantially the same purposes and in substantially the
same amounts as indicated in Schedule 4(c).

(d)          Listing. The Company shall promptly secure the listing of all of
the Registrable Securities (as defined in the Registration Rights Agreement)
upon each national securities exchange and automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance) and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all Registrable Securities from time to time
issuable under the terms of the Transaction Documents. Subject to meeting
applicable listing requirements (it being understood that the Company does not
currently satisfy such listing requirements and may never satisfy such listing
requirements), the Company shall use reasonable business efforts to obtain
authorization of the Common Stock for quotation on the Nasdaq National Market,
the Nasdaq SmallCap Market, The New York Stock Exchange, Inc. or The American
Stock Exchange, Inc., as applicable (the “Principal Market”). Once listed for
quotation on the Principal Market, neither the Company nor any of its
Subsidiaries shall take any action which would be reasonably expected to result
in the delisting or suspension of the Common Stock on the Principal Market. The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(d).

(e)          Expenses. At the Closing, the Company shall reimburse the Buyers
their expenses (including reasonable attorneys’ fees and expenses) relating to
the preparation and negotiation of the Transaction Documents up to an aggregate
of $35,000.

(f)           Filing of Form 8-K. On or before the fourth (4th) business day
following the Closing Date, the Company shall file a Form 8-K with the SEC
describing the terms of the transactions contemplated by the Transaction
Documents in the form required by the 1934 Act.

(g)          Limitation on Filing Registration Statements. From the date hereof
through the period ending on the day following the 30th consecutive trading day
that a registration statement registering the Offered Shares for resale is
declared effective, except as set forth in Schedule 4(g), the Company shall not
register any securities other than the Offered Shares and securities on Form S-8
issued in connection with any stock option plan, stock purchase plan, stock
bonus plan or other plan for the benefit of employees, officers or directors of
the Company.

5.

TRANSFER AGENT INSTRUCTIONS.

(a)          Delivery of Legended Common Stock. Upon execution of this
Agreement, the Company shall issue irrevocable instructions to its transfer
agent, and any subsequent transfer agent, to issue certificates, registered in
the name of each Buyer or its respective nominee(s), for the Offered Shares in
such amounts as specified from time to time by each Buyer to the Company (the
“Irrevocable Transfer Agent Instructions”), which instructions shall be in the
form as provided in Exhibit A hereto. Prior to registration of the Offered
Shares under the 1933 Act, all certificates evidencing Offered Shares shall bear
the restrictive legend specified in Section 2(g) of this Agreement. The Company
warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5, and stop transfer

 

11

 

instructions to give effect to Section 2(f) hereof (prior to registration of the
Offered Shares under the 1933 Act) will be given by the Company to its transfer
agent and that the Offered Shares shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this Agreement
and the Registration Rights Agreement.

(b)          Delivery of Unlegended Common Stock. After the Offered Shares have
been registered for resale, in lieu of delivering physical certificates
representing Offered Shares, provided the Company’s transfer agent is
participating in the Depositary Trust Company (“DTC”) Fast Automated Securities
Transfer program, on the written request of a Buyer who shall have previously
instructed its broker to confirm such request to the Company’s transfer agent,
the Company shall cause its transfer agent to transmit electronically the
Offered Shares to the Buyer by crediting the account of the Buyer’s prime broker
with DTC through its Deposit Withdrawal Agent Commission system no later than
the date upon which the Company is required to deliver shares to the Buyer under
the terms of this Agreement. Nothing in this Section 5 shall affect in any way
each Buyer’s obligations to comply with all applicable prospectus delivery
requirements, if any, upon resale of the Offered Shares. If a Buyer provides the
Company with an opinion of counsel, in a generally acceptable form, to the
effect that a public sale, assignment or transfer of the Offered Shares may be
made without registration under the 1933 Act or the Buyer provides the Company
with an opinion of counsel, in a generally acceptable form, to the effect that
the Offered Shares can be sold pursuant to Rule 144 without any restriction as
to the number of securities acquired as of a particular date that can then be
immediately sold, the Company shall permit the transfer, and promptly instruct
its transfer agent to issue one or more certificates in such name and in such
denominations as specified by such Buyer and without any restrictive legend.

(c)          Timing of Delivery. Whenever the Company is required to deliver
Offered Shares under the Transaction Documents, whether with or without a
restrictive legend, such delivery shall be made within three (3) business days
of the day that request is made for delivery of such Offered Shares.

6.

CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

The obligation of the Company hereunder to issue and sell the Offered Shares to
each Buyer at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for the Company’s sole benefit and may be waived by the Company
at any time in its sole discretion by providing each Buyer with prior written
notice thereof:

(a)          Such Buyer shall have executed each of the Transaction Documents to
which it is a party and delivered the same to the Company.

(b)          Such Buyer shall have delivered to the Company the Purchase Price
for the Offered Shares being purchased by such Buyer at the Closing by wire
transfer of immediately available funds pursuant to the wire instructions
provided by the Company.

(c)          The representations and warranties of such Buyer shall be true and
correct as of the Closing Date (except for representations and warranties that
speak as of a specific date), and such Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date.

 

12

 

(d)          The offer and sale of the Offered Shares to such Buyer pursuant to
this Agreement shall be exempt from the registration requirements under the 1933
Act and shall be exempt from the registration and/or qualification requirements
of all applicable state securities laws.

(e)          Such Buyer shall have delivered to the Company such other documents
relating to the transactions contemplated by this Agreement as the Company or
its counsel reasonably request.

7.

CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

The obligation of each Buyer hereunder to purchase the Offered Shares at each
Closing is subject to the satisfaction, at or before the applicable Closing
Date, of each of the following conditions, provided that these conditions are
for each Buyer’s sole benefit and may be waived by such Buyer at any time in its
sole discretion by providing the Company with prior written notice thereof:

(a)          The Company shall have executed each of the Transaction Documents
and delivered the same to such Buyer.

 

(b)

Trading in the Common Stock shall not have been suspended.

(c)          The representations and warranties of the Company shall be true and
correct as of the Closing Date (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Closing Date. Such Buyer shall have received a certificate,
executed by the Chief Executive Officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to such other matters as may be reasonably
requested by such Buyer.

(d)          Such Buyer shall have received the opinion of the Company’s counsel
dated as of the Closing Date, in form, scope and substance reasonably
satisfactory to such Buyer and in substantially the form of Exhibit B attached
hereto.

(e)          The Company shall have executed and delivered to such Buyer the
Common Stock Certificates (in such denominations as such Buyer shall request)
for the Offered Shares being purchased by such Buyer at the Closing.

(f)           The Board of Directors of the Company shall have adopted
resolutions authorizing the issuance of the Offered Shares and the other
transactions provided by this Agreement and the Transaction Documents in a form
reasonably acceptable to such Buyer.

(g)          The Irrevocable Transfer Agent Instructions, in the form of Exhibit
A attached hereto, shall have been delivered to and acknowledged in writing by
the Company’s transfer agent.

(h)          The Company shall have delivered to such Buyer a certificate
evidencing the incorporation and good standing of the Company and each
Subsidiary in such corporation’s state of incorporation issued by the Secretary
of State of such state of incorporation as of a date within 10 business days of
the Closing Date.

 

13

 

(i)           The Company shall have delivered to such Buyer a certified copy of
the Certificate of Incorporation as certified by the Secretary of State of the
State of Delaware within 10 business days of the Closing Date.

(j)           The Company shall have delivered to such Buyer a secretary’s
certificate, dated as the Closing Date, as to (i) the resolutions described in
Section 7(f), (ii) the Certificate of Incorporation and (iii) the Bylaws, each
as in effect at the Closing.

(k)          The Company shall have made all filings under all applicable
federal and state securities laws necessary to consummate the issuance of the
Offered Shares pursuant to this Agreement in compliance with such laws.

(l)           The Company shall have delivered to such Buyer such other
documents relating to the transactions contemplated by this Agreement as such
Buyer or its counsel reasonably request.

8.

GOVERNING LAW; MISCELLANEOUS.

(a)          Governing Law; Jurisdiction; Jury Trial. The corporate laws of the
State of Delaware shall govern all issues concerning the relative rights of the
Company and its stockholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the state and federal courts
sitting in the City of New York, New York, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.

(b)          Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other parties; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

(c)          Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

14

 

(d)          Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

(e)          Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Buyers, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of a majority of the Offered Shares then outstanding,
and no provision hereof may be waived other than by an instrument in writing
signed by the party against whom enforcement is sought. No such amendment shall
be effective to the extent that it applies to less than all of the holders of
the Offered Shares then outstanding.

(f)           Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:

If to the Company:

 

NYFIX, INC.

100 Wall Street – 26th Floor

New York, NY 10005

Telephone: 212-809-3542

Facsimile: 212-809-1013

Attention: Chief Executive Officer

With a copy to:

 

NYFIX, INC.

100 Wall Street – 26th Floor

New York, NY 10005

Telephone: 212-809-3542

Facsimile: 212-809-1013

Attention: General Counsel

and

Andrew F. MacDonald, Esq. and

Louis A. Bevilacqua, Esq.

Thelen Reid & Priest LLP

701 Eighth Street, NW

Suite 800

 

 

15

 

Washington, D.C. 20001

Telephone: 202-508-4000

Facsimile: 202-654-4321

If to the Transfer Agent:

 

Mellon Investor Services

480 Washington Boulevard

Jersey City, New Jersey 07310

Telephone: 860-282-3513

Facsimile: 860-528-6472

Attention: John Boryczki

If to a Buyer, to it at the address and facsimile number set forth on the
Schedule of Buyers attached hereto, with a copy to:

Wellington Management Company, LLP

75 State Street

Boston MA  02109

Telephone: 617-790-7535

Fax: 617-204-7535

Attn: Peter Ryan

, or at such other address and/or facsimile number and/or to the attention of
such other person as the recipient party has specified by written notice given
to each other party in accordance with the above provisions five (5) days prior
to the effectiveness of such change.

(g)          Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Offered Shares. A Buyer may assign some or all
of its rights hereunder without the consent of the Company, provided, however,
that any such assignment shall not release such Buyer from its obligations
hereunder unless such obligations are assumed by such assignee and the Company
has consented to such assignment and assumption.

(h)          No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

(i)           Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

(j)           No Strict Construction. The language used in this Agreement will
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

* * * * * *

 

16

 

IN WITNESS WHEREOF, the Buyers and the Company have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.

 

COMPANY:

 

NYFIX, Inc.

 

By:/s/ Robert Gasser                                            

 

Name: Robert Gasser

 

Title: Chief Executive Officer

 

BUYERS:

 

CIBC U.S. Small Companies Fund

By: Wellington Management Company, LLP

as investment adviser

 

Treasurer of the State of North Carolina

By: Wellington Management Company, LLP

as investment adviser

 

By: /s/ Julie A. Jenkins                                            

By:/s/ Julie A. Jenkins                                            

Name: Julie A. Jenkins

Name: Julie A. Jenkins

Title: Vice President and Counsel

Title: Vice President and Counsel

 

 

United of Omaha Small Company Fund

By: Wellington Management Company, LLP

as investment adviser

 

Textron Inc. Master Trust

By: Wellington Management Company, LLP

as investment adviser

 

By:/s/ Julie A. Jenkins                                            

By:/s/ Julie A. Jenkins                                            

Name: Julie A. Jenkins

Name: Julie A. Jenkins

Title: Vice President and Counsel

Title: Vice President and Counsel

 

 

British Columbia Investment Management Corporation

By: Wellington Management Company, LLP

as investment adviser

 

The Dow Chemical Employees’ Retirement Plan

By: Wellington Management Company, LLP

as investment adviser

 

By:/s/ Julie A. Jenkins                                            

By:/s/ Julie A. Jenkins                                            

Name: Julie A. Jenkins

Name: Julie A. Jenkins

Title: Vice President and Counsel

Title: Vice President and Counsel

 

 

Public Sector Pension Investment Board

By: Wellington Management Company, LLP

as investment adviser

 

Radian Group Inc.

By: Wellington Management Company, LLP

as investment adviser

 

By:/s/ Julie A. Jenkins                                            

By:/s/ Julie A. Jenkins                                            

Name: Julie A. Jenkins

Name: Julie A. Jenkins

Title: Vice President and Counsel

Title: Vice President and Counsel

 

 

[S-1 to Securities Purchase Agreement]

 

Trustees of the Building Trades United Pension Trust Fund, Milwaukee and
Vicinity

By: Wellington Management Company, LLP

as investment adviser

 

American Bar Association Members/State Street Collective Trust, Small-Cap Equity
Fund

By: Wellington Management Company, LLP

as investment adviser

 

By:/s/ Julie A. Jenkins                                            

By:/s/ Julie A. Jenkins                                            

Name: Julie A. Jenkins

Name: Julie A. Jenkins

Title: Vice President and Counsel

Title: Vice President and Counsel

 

 

The Retirement Program Plan for Employees of Union Carbide Corporation

By: Wellington Management Company, LLP

as investment adviser

 

McKesson HBOC, Inc. Profit-Sharing Investment Plan

By: Wellington Management Company, LLP

as investment adviser

 

By:/s/ Julie A. Jenkins                                            

By:/s/ Julie A. Jenkins                                            

Name: Julie A. Jenkins

Name: Julie A. Jenkins

Title: Vice President and Counsel

Title: Vice President and Counsel

 

 

Wolf Creek Investors (Bermuda) L.P.

By: Wellington Management Company, LLP

as investment adviser

 

Wolf Creek Partners, L.P.

By: Wellington Management Company, LLP

as investment adviser

 

By:/s/ Julie A. Jenkins                                            

By:/s/ Julie A. Jenkins                                            

Name: Julie A. Jenkins

Name: Julie A. Jenkins

Title: Vice President and Counsel

Title: Vice President and Counsel

 

 

WTC-CIF Emerging Companies Portfolio

By: Wellington Management Company, LLP

as investment adviser

 

WTC-CIF Small Cap 2000 Portfolio

By: Wellington Management Company, LLP

as investment adviser

 

By:/s/ Julie A. Jenkins                                            

By:/s/ Julie A. Jenkins                                            

Name: Julie A. Jenkins

Name: Julie A. Jenkins

Title: Vice President and Counsel

Title: Vice President and Counsel

 

 

WTC-CTF Emerging Companies Portfolio

By: Wellington Management Company, LLP

as investment adviser

 

WTC-CTF Small Cap 2000 Portfolio

By: Wellington Management Company, LLP

as investment adviser

 

By:/s/ Julie A. Jenkins                                            

By:/s/ Julie A. Jenkins                                            

Name: Julie A. Jenkins

Name: Julie A. Jenkins

Title: Vice President and Counsel

Title: Vice President and Counsel

 

[S-1 to Securities Purchase Agreement]

 

SCHEDULE OF BUYERS

 

Investor’s Name

 

Investor’s (and Investor’s Representative’s, if any) Address
and Facsimile Number

 

Number of Offered

Shares

 

Purchase
Price

 

Trustees of the Building Trades United Pension Trust Fund, Milwaukee and
Vicinity

 

The Bank of New York

3rd Floor, Window A

One Wall Street

New York, New York 10286 For account: US Bank N.A. #117612

18,600

 

$86,490.00

 

CIBC U.S. Small Companies Fund

 

Mellon Securities Trust Co.
120 Broadway, 13th Floor
New York, NY 10271
Reference: Acct YCEF1137002

 

34,100

 

$158,565.00

 

Treasurer of the State of North Carolina

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street JFE1

 

107,700

 

$500,805.00

 

United of Omaha Small Company Fund

 

DTC / New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez
Ref: SSB Fund # 5V1A

 

41,100

 

$191,115.00

 

Textron Inc. Master Trust

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street TX3F

 

50,800

 

$236,220.00

 

British Columbia Investment Management Corporation

 

The Bank of New York

3rd Floor, Window A

One Wall Street

New York, New York 10286

A/C # 298316

Attn: Angie Hussein

 

104,000

 

$483,600.00

 

The Dow Chemical Employees’ Retirement Plan

 

JPMorgan Chase
4 New York Plaza
Ground Floor Window
New York, NY 10004
Reference: P 50965
Reference: DOW EMPLOYEES PENSION PLAN - WELLINGTON TRUST SMALL CO

 

261,500

 

$1,215,975.00

 

Public Sector Pension Investment Board

 

Mellon Securities Trust Co.
120 Broadway, 13th Floor
New York, NY 10271
Reference: Acct TPSF0069602

 

260,000

 

$1,209,000.00

 

 

 

 

19

 

 

Investor’s Name

 

Investor’s (and Investor’s Representative’s, if any) Address
and Facsimile Number

 

Number of Offered

Shares

 

Purchase
Price

 

American Bar Association Members/State Street Collective Trust, Small-Cap Equity
Fund

 

DTC / New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez
Ref: SSB Fund #BL52

 

45,000

 

$209,250.00

 

The Retirement Program Plan for Employees of Union Carbide Corporation

 

JPMorgan Chase
4 New York Plaza
Ground Floor Window
New York, NY 10004
P 55452
UCCM-WELL US EQ SM CAP

 

145,000

 

$674,250.00

 

McKesson HBOC, Inc. Profit-Sharing Investment Plan

 

DTCC/ New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez
Account Name: State Street
Account #: EMCZ

 

10,300

 

$47,895.00

 

Radian Group Inc.

 

The Northern Trust Company
40 Broad St, 8th Floor
26-31713
Radian Emerging Companies
New York, NY 10004

 

37,000

 

$172,050.00

 

Wolf Creek Investors (Bermuda) L.P.

 

Goldman Sachs & Co.
F/A/O: Wellington
One New York Plaza, 44th Floor
New York, NY 10004
Attn: Jasmyn V. Bykowski

 

505,900

 

$2,352,435.00

 

Wolf Creek Partners, L.P.

 

Goldman Sachs & Co.
F/A/O: Wellington
One New York Plaza, 44th Floor
New York, NY 10004
Attn: Jasmyn V. Bykowski

 

277,000

 

$1,288,050.00

 

WTC-CIF Emerging Companies Portfolio

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street W61I

 

340,000

 

$1,581,000.00

 

WTC-CIF Small Cap 2000 Portfolio

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street W63I

 

102,600

 

$477,090.00

 

WTC-CTF Emerging Companies Portfolio

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street W71N

 

320,000

 

$1,488,000.00

 

WTC-CTF Small Cap 2000 Portfolio

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street W72B

 

52,400

 

$243,660.00

 

 

Totals:

2,713,000

$12,615,450.00

 

 

Exhibit A to Securities Purchase Agreement

FORM OF TRANSFER AGENT INSTRUCTIONS

NYFIX, INC.

_____________, 2006

Mellon Investor Services

480 Washington Boulevard

Jersey City, New Jersey 07310

Attn: John Boryczki

Dear Sir:

Reference is made to that certain Securities Purchase Agreement, dated June 29,
2006 (the “Agreement”), by and among NYFIX, INC., a Delaware corporation (the
“Company”), and the investors named on the Schedule of Buyers attached thereto
(collectively, the “Holders”), pursuant to which the Company is issuing to the
Holders an aggregate of up to 2,713,000 shares of Common Stock, $0.001 par value
per share (“Common Stock”).

This letter shall serve as our irrevocable authorization and direction to you to
promptly issue shares (the “Shares”) of Common Stock of the Company to the
Holders in the amounts specified opposite each Holder’s name on Exhibit I
attached hereto, effective as of ________________, 2006. Please deliver the
certificates directly to the Holders at the address specified opposite each
Holder’s name on Exhibit I attached hereto.

So long as you have previously received (a) written confirmation from counsel to
the Company that a registration statement covering resales of the applicable
Shares has been declared effective by the Securities and Exchange Commission
(the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”), and
(b) a copy of such registration statement, then you shall issue the certificates
representing the Shares within two business days after your receipt of a written
request of a Holder or the Exercise Notice (and in instances where certificates
evidencing Shares have already been issued with a Securities Act legend, upon
return of such legended certificates for cancellation by you), and such
certificates shall not bear any legend restricting transfer of the Shares
thereby and should not be subject to any stop-transfer restriction; provided,
however, that if such Shares are not registered for resale under the 1933 Act,
then the certificates for such Shares shall bear the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO
RULE 144 UNDER SAID ACT.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF
A SECURITIES PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE HOLDER, WHICH MAY
RESTRICT THE TRANSFER OF SUCH SECURITIES IN CERTAIN CIRCUMSTANCES. A COPY OF
SUCH AGREEMENT MAY BE OBTAINED, WITHOUT CHARGE, AT THE COMPANY’S PRINCIPAL
OFFICE.”

All Shares that are to be issued without a restrictive legend shall, upon
request from Holder, be issued electronically using the Depositary Trust Company
(“DTC”) Fast Automated Securities Transfer program so long as you subscribe to
such system. A form of written confirmation from counsel to the Company that a
registration statement covering resales of the Shares has been declared
effective by the SEC under the 1933 Act is attached hereto as Exhibit II.

[remainder of page intentionally left blank]

 

Please execute this letter in the space indicated to acknowledge receipt of
these instructions. Should you have any questions concerning this matter, please
contact me at 212 809-3542.

Very truly yours,

NYFIX, INC.

By: ___________________________

Name:

Title:

RECEIPT OF THE FOREGOING

INSTRUCTIONS ARE ACKNOWLEDGED

AND AGREED TO

this ____ day of _________, 2006

MELLON INVESTOR SERVICES

By: ________________________________

Name:

Title:

 

Enclosures

cc:

Wellington Management Company, LLP

 

EXHIBIT I

 

Name

 

Tax ID

 

Address

 

Number of Offered

Shares

 

Trustees of the Building Trades United Pension Trust Fund, Milwaukee and
Vicinity

 

51-6049409

 

The Bank of New York

3rd Floor, Window A

One Wall Street

New York, New York 10286

For account: US Bank N.A. #117612

 

18,600

 

CIBC U.S. Small Companies Fund

 

N/A

 

Mellon Securities Trust Co.
120 Broadway, 13th Floor
New York, NY 10271
Reference: Acct YCEF1137002

 

34,100

 

Treasurer of the State of North Carolina

 

01-6186304

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street JFE1

 

107,700

 

United of Omaha Small Company Fund

 

43-1179553

 

DTC / New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez
Ref: SSB Fund # 5V1A

 

41,100

 

Textron Inc. Master Trust

 

13-3380685

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street TX3F

 

50,800

 

British Columbia Investment Management Corporation

 

N/A

 

The Bank of New York

3rd Floor, Window A

One Wall Street

New York, New York 10286

A/C # 298316

Attn: Angie Hussein

 

104,000

 

The Dow Chemical Employees’ Retirement Plan

 

38-6184045

 

JPMorgan Chase
4 New York Plaza
Ground Floor Window
New York, NY 10004
Reference: P 50965
Reference: DOW EMPLOYEES PENSION PLAN - WELLINGTON TRUST SMALL CO

 

261,500

 

Public Sector Pension Investment Board

 

N/A

 

Mellon Securities Trust Co.
120 Broadway, 13th Floor
New York, NY 10271
Reference: Acct TPSF0069602

 

260,000

 

American Bar Association Members/State Street Collective Trust, Small-Cap Equity
Fund

 

46-6916010

 

DTC / New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez
Ref: SSB Fund #BL52

 

45,000

 

 

 

 

The Retirement Program Plan for Employees of Union Carbide Corporation

 

13-6076164

 

JPMorgan Chase
4 New York Plaza
Ground Floor Window
New York, NY 10004
P 55452
UCCM-WELL US EQ SM CAP

 

145,000

 

McKesson HBOC, Inc. Profit-Sharing Investment Plan

 

94-6114480

 

DTCC/ New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez
Account Name: State Street
Account #: EMCZ

 

10,300

 

Radian Group Inc.

 

23-2018130

 

The Northern Trust Company
40 Broad St, 8th Floor
26-31713
Radian Emerging Companies
New York, NY 10004

 

37,000

 

Wolf Creek Investors (Bermuda) L.P.

 

N/A

 

Goldman Sachs & Co.
F/A/O: Wellington
One New York Plaza, 44th Floor
New York, NY 10004
Attn: Jasmyn V. Bykowski

 

505,900

 

Wolf Creek Partners, L.P.

 

04-3539573

 

Goldman Sachs & Co.
F/A/O: Wellington
One New York Plaza, 44th Floor
New York, NY 10004
Attn: Jasmyn V. Bykowski

 

277,000

 

WTC-CIF Emerging Companies Portfolio

 

04-2767481

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street W61I

 

340,000

 

WTC-CIF Small Cap 2000 Portfolio

 

04-2767481

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street W63I

 

102,600

 

WTC-CTF Emerging Companies Portfolio

 

04-6657595

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street W71N

 

320,000

 

WTC-CTF Small Cap 2000 Portfolio

 

04-3497364

 

DTCC/New York Window
55 Water Street
New York, NY 10041
Attn: Robert Mendez for the account of State Street W72B

 

52,400

 

 

 

EXHIBIT II

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

Mellon Investor Services

480 Washington Boulevard

Jersey City, New Jersey 07310

Attn: John Boryczki

  Re:  NYFIX, INC.

Ladies and Gentlemen:

We are counsel to NYFIX, INC., a Delaware corporation (the “Company”), and have
represented the Company in connection with that certain Securities Purchase
Agreement (the “Purchase Agreement”) entered into by and among the Company and
the buyers named therein (collectively, the “Holders”) pursuant to which the
Company issued to the Holders shares of its Common Stock, par value $0.001 per
share (the “Common Shares”). Pursuant to the Purchase Agreement, the Company
also has entered into a Registration Rights Agreement with the Holders (the
“Registration Rights Agreement”) pursuant to which the Company agreed, among
other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement), including the Common Shares, under the
Securities Act of 1933, as amended (the “1933 Act”). In connection with the
Company’s obligations under the Registration Rights Agreement, on ____________
___, 200_, the Company filed a Registration Statement on Form SB-2 (File No.
333-_____________) (the “Registration Statement”) with the Securities and
Exchange Commission (the “SEC”) relating to the Registrable Securities which
names each of the Holders as a selling stockholder thereunder.

In connection with the foregoing, we advise you that a member of the SEC’s staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC’s staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.

 

This letter shall serve as our notice to you that the Common Stock is, as of
this date, freely transferable by the Holders pursuant to the Registration
Statement.

Very truly yours,

THELEN REID & PRIEST LLP

By:__________________________________

cc:

Wellington Management Company, LLP

Trustees of the Building Trades United Pension Trust Fund, Milwaukee and
Vicinity

CIBC U.S. Small Companies Fund

Treasurer of the State of North Carolina

United of Omaha Small Company Fund

Textron Inc. Master Trust

British Columbia Investment Management Corporation

The Dow Chemical Employees’ Retirement Plan

Public Sector Pension Investment Board

American Bar Association Members/State Street Collective Trust, Small-Cap Equity
Fund

The Retirement Program Plan for Employees of Union Carbide Corporation

McKesson HBOC, Inc. Profit-Sharing Investment Plan

Radian Group Inc.

Wolf Creek Investors (Bermuda) L.P.

Wolf Creek Partners, L.P.

WTC-CIF Emerging Companies Portfolio

WTC-CIF Small Cap 2000 Portfolio

WTC-CTF Emerging Companies Portfolio

WTC-CTF Small Cap 2000 Portfolio

 

Exhibit B to Securities Purchase Agreement

FORM OF LEGAL OPINION

[See attached]

 

[Attorney Letterhead]

The Buyers of the Offered Shares

As specified in the Securities Purchase Agreement

Re: Nyfix, Inc.

Ladies and Gentlemen:

[We have acted as special corporate and securities counsel][ I am general
counsel]1 to Nyfix, Inc., a Delaware corporation, (the “Company”) in connection
with the sale to you (the “Buyers”) of the Offered Shares pursuant to a
Securities Purchase Agreement, dated as of the date hereof (the “Securities
Purchase Agreement”), among the Company and the Buyers. Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to them in the
Securities Purchase Agreement.

In connection with the foregoing, we have examined the following:

(a)          The Securities Purchase Agreement;

(b)          The Registration Rights Agreement;

(c)          The Certificate of Incorporation and Bylaws of the Company as
amended through the date hereof;

(d)          Resolutions adopted by the Board of Directors of the Company
authorizing the Company to enter into the Transaction Documents and addressing
related matters; and

(e)          Such other documents, instruments and corporate records and such
questions of law as we have considered necessary or appropriate for purposes of
this opinion.

In our examination, we have assumed, with your permission and without
independent investigation, (i) the genuineness and validity of all signatures;
(ii) the authenticity of all documents submitted to us as originals; (iii) the
conformity to originals of all documents submitted to us as certified, facsimile
or photostatic copies; (iv) the authenticity of the originals of such copies;
(v) the absence of evidence extrinsic to the provisions of the written
agreements between the parties to the Transaction Documents that such parties
intended a meaning contrary to that expressed by those provisions; (vi) that
each party to any Transaction Document has obtained and will obtain, and will
maintain in full force and effect, all necessary permits and approvals for
conducting its operations; (vii) the identity and capacity of all individuals
acting or purporting to act as public officials; (viii) the validity,
truthfulness and accuracy of all factual matters contained in the
representations and warranties included within the Transaction Documents and all
certificates delivered thereunder; (ix) that the constitutionality or validity
of any relevant statute, rule, or regulation is not in issue; (x) that there has
not been any amendment or modification to any Transaction Document from the date
of such Transaction Document through the date of this opinion letter; (xi) the
due organization, valid existence and good standing of each party (other than
the Company); (xii) the due authorization of the Transaction Documents by each
party thereto (other than the Company); (xiii) the due execution and delivery of
the Transaction Documents by each party thereto (other than the Company), (xiv)
the full power, authority and legal right of each party to the Transaction
Documents to enter into the same (other than the Company); (xv) that the
Transaction Documents are the legal, valid and

_________________________

1 Note: Opinions to be divided between outside and in-house counsel, as
appropriate.

 

binding obligations of each party thereto (other than the Company); and (xvi)
the legal capacity of each natural person signatory to any of the documents
reviewed by us.

In rendering this opinion, we have made no independent investigation of the
facts referred to herein and have relied, for the purpose of rendering this
opinion, exclusively on the truth and accuracy of the representations and
warranties set forth in the Securities Purchase Agreement, and the statements
and certificates of the Company’s officers and public officials, which
representations and warranties, statements and certificates we assume are true,
accurate and correct in all respects.

Based upon the foregoing, and upon an examination of such questions of law as we
have considered necessary or appropriate, and subject to the assumptions,
exceptions, qualification and limitations set forth herein, we advise you that
in our opinion:

 

1.

The Company has been duly incorporated and is validly existing and in good
standing under the laws of the State of Delaware. The Company has all requisite
power to own, lease and operate its properties, assets and business and to carry
on its business as currently conducted and as proposed to be conducted.

 

2.

The authorized capital stock of the Company consists of 60,000,000 shares of
Common Stock, $0.001 par value per share, and 5,000,000 shares of Preferred
Stock, $1.00 par value per share. As of the Closing, the Offered Shares will be
free of any liens, claims or encumbrances in favor of the Company and free of
restrictions on transfer other than as set forth in the Transaction Documents or
under applicable state and federal securities laws. The Offered Shares have been
duly authorized and, upon issuance pursuant to the terms of the Securities
Purchase Agreement, will be validly issued, fully paid, nonassessable and free
of any liens in favor of the Company.

 

3.

The Company has all requisite corporate power and authority to enter into,
deliver and perform each of the Transaction Documents to which it is a party.
The execution, delivery and performance of the Transaction Documents and the
sale, issuance and delivery of the Offered Shares have been duly authorized by
all necessary corporate action. Each of the Transaction Documents is a valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms.

 

4.

The execution and delivery of the Transaction Documents and the performance by
the Company of its obligations thereunder and the issuance of the Offered Shares
do not, and will not, conflict with or result in a violation of any federal, New
York or Delaware corporate law, rule or regulation applicable to the Company or
any provision of the Certificate of Incorporation or Bylaws of the Company, each
as amended through the date hereof.

 

5.

No consent, approval or authorization of or designation, declaration,
notification or filing with, any governmental authority on the part of the
Company is required in connection with the valid execution, delivery and
performance of the Transaction Documents, or the offer, sale or issuance of the
Offered Shares, or the consummation of any other transaction contemplated by the
Transaction Documents except for consents, approvals, authorizations,
declarations or filings that have already been made or will be made within
applicable time periods.

 

 

6.

Assuming your representations and warranties contained in the Securities
Purchase Agreement are true and correct, the offer, sale and issuance of the
Offered Shares constitute transactions exempt from the registration requirements
of Section 5 of the Securities Act of 1933, as amended.

The foregoing opinions are subject to the following assumptions, exceptions,
qualifications and limitations:

A.           The foregoing opinions are expressly limited to matters under and
governed by the internal laws of the State of New York, the General Corporation
Law of the State of Delaware and applicable Federal laws of the United States of
America as each is in effect and in force as of the date of this opinion. Our
opinion in the first clause of paragraph 4 is limited to such laws as a
reasonable attorney would recognize as being customarily applicable to the
Company in transactions of the type contemplated by the Transaction Documents.

B.           Our opinion as to enforceability set forth in last sentence of
paragraph 3 above is subject to:

(a)         limitations imposed by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditor’s rights generally, including, without limitation, laws relating to
fraudulent transfers or conveyances, preferences and equitable subordination;

(b)        general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);

(c)         the qualification that certain rights, remedies, waivers and
procedures contained in the Transaction Documents may be limited or rendered
unenforceable by applicable laws or judicial decisions governing such
provisions, but such laws and judicial decisions do not, in our opinion, render
the Transaction Documents, as a whole, unenforceable or make the remedies and
procedures that are available to the parties legally inadequate for the
practical realization of the principal benefits purported to be provided to them
by the Transaction Documents;

(d)        the qualification that certain provisions contained in the
Transaction Documents may be unenforceable in whole or in part if such
enforcement would be unreasonable under the circumstances;

(e)         the possible requirement that actions taken, or not taken, by any
party pursuant to the Transaction Documents he taken, or not taken, in good
faith;

(f)         the qualification that certain provisions contained in the
Transaction Documents regarding the rights or remedies available to any party
for violations or breaches of any provisions which are immaterial or for
violations or breaches of any provisions if such enforcement would he
unreasonable under the circumstances, may be unenforceable in whole or in part;

(g)        the unenforceability under certain circumstances of (i) waivers or
provisions imposing penalties or liquidated damages and (ii) provisions
purporting to release or exculpate any party from liability for its acts or
omissions, or purporting to impose a duty upon any party to indemnify any other
party when any claimed damages result from the negligence, gross negligence or
willful misconduct of the party seeking such indemnity;

 

(h)        the qualification that certain provisions of any such document to the
effect that rights or remedies are not exclusive, that every right or remedy is
cumulative and may be exercised in addition to any other right or remedy, that
the election of some particular remedy does not preclude recourse to one or more
others or that failure to exercise or delay in exercising rights or remedies
will not operate as a waiver of any such right or remedy, may be unenforceable
in whole or in part;

(i)         the qualification that provisions in any such document that contain
a waiver of (A) the benefits of statutory, regulatory, or constitutional rights,
unless and to the extent the statute, regulation or constitution explicitly
allows such waivers, (B) unknown future defenses and (C) rights to damages, may
be unenforceable in whole or in part;

(j)         the qualification that certain provisions which require written
amendments or waivers of documents may be unenforceable in whole or in part
insofar as certain oral or other modifications, amendments or waivers may be
effectively agreed upon by the parties or the doctrine of promissory estoppel
may apply in certain circumstances;

(1)        the unenforceability under certain circumstances of any provision
insofar as it provides for the payment or reimbursement of costs and expenses of
indemnification for claims, losses or liabilities in excess of a reasonable
amount; and

(m)       the unenforceability, in certain circumstances, of consent to
jurisdiction clauses and forum selection clauses.

C.           We express no opinion as to the validity or enforceability of the
indemnification and contribution provisions of the Registration Rights
Agreement.

D.           We express no opinion as to compliance by the Company with the
anti-fraud provisions of federal and state securities laws, rules and
regulations.

E.            In rendering the opinions expressed in the first and third
sentences of paragraph 1 above, we have relied solely on certificates of public
officials, and have conducted no further investigation.

The opinions expressed herein are solely for the benefit of, and may only be
relied upon by, the addressees of this opinion. This opinion may not be relied
upon by any other person without the prior written consent of this firm. The
opinions expressed herein are as of the date hereof (and not as of any other
date) or, to the extent a reference to a certificate or other document is made
herein, to such date, and we make no undertaking to amend or supplement such
opinions as facts and circumstances come to our attention or changes in the law
occur which could affect such opinions.

Sincerely,

 

Exhibit 2(k) to Securities Purchase Agreement

PRESS RELEASES

[See Attached]

 

[img1.gif]

FOR IMMEDIATE RELEASE

Contact:

Don Duffy or Brian Prenoveau, CFA

Integrated Corporate Relations, Inc.

(203) 682-8200

NYFIX REPORTS UNAUDITED DIVISIONAL REVENUES FOR 2005 BY QUARTER AND FOR THE FULL
YEAR

UPDATE ON ACCOUNTING RESTATEMENTS

UNAUDITED DIVISIONAL REVENUES FOR FIRST QUARTER 2006 REPORTED

New York, NY June 29, 2006: NYFIX, Inc. (Pink Sheets: NYFX). NYFIX, a leader in
technology solutions for the financial marketplace, announced today its
divisional revenues for 2005 by quarter and for the full year, an update on
previously announced accounting restatements and divisional revenues for the
first quarter of 2006.

In late 2005, NYFIX re-aligned its business into four operating divisions: FIX
Network, Order Management Systems (OMS), Transaction Services and Order Book
Management Systems (OBMS). The results of these divisions will be separately
disclosed in the Company’s periodic filings with the SEC. The FIX Network
Division provides software to enable global financial institutions to utilize
the industry established Financial Information Exchange Protocol for messaging,
monitoring and processing transaction information. The FIX Network segment also
provides network connectivity between institutional investors, broker-dealers
and exchanges. The Transaction Services segment is comprised of three U.S.
registered broker-dealer subsidiaries: NYFIX Millennium, NYFIX Transaction
Services and NYFIX Clearing. NYFIX Millennium, an alternative trading system
registered under SEC Regulation ATS, provides anonymous matching and routing of
U.S. equity securities. NYFIX Transaction Services provides direct electronic
market access and algorithmic trading products. NYFIX Clearing clears trades on
behalf of NYFIX Millennium and NYFIX Transaction Services and operates a
matched-book stock borrow/stock loan business. The OMS segment provides software
applications for desktop and wireless handheld management of New York Stock
Exchange and Nasdaq listed trading activities. The OMS desktop platform provides
clients with access to the Company’s connectivity and transaction services. The
OBMS segment specializes in electronic trading solutions for the global
derivatives market and offers order management workstations and exchange
interfaces. Historical results have been recast to reflect the performance of
these divisions in prior periods.

NYFIX cautions that the financial information noted below is unaudited and such
amounts may differ from those included in quarterly and annual SEC filings. Due
to the review of stock option and warrant grants noted below and the evaluation
of the complex accounting implications of the results of that review, NYFIX is
not able to provide GAAP results at this time. The Company

 

does expect to report losses for the full year 2005 and the first quarter 2006
when it ultimately reports. The Company will provide detailed results once this
evaluation has been completed.

Unaudited Quarterly and Full Year Revenues for 2005

First Quarter 2005

Revenues for the first quarter 2005 were $23.8 million, an increase of 38% over
the $17.2 million of restated revenues for the same period in 2004. Recast
revenues from the Company’s four operating divisions were as follows:

 

Quarter ended March 31, (in millions) 2005

--------------------------------------------------------------------------------

2004

--------------------------------------------------------------------------------

(As Restated) (As Restated) FIX Network     $ 8 .9 $ 6 .6 OMS   $ 5 .9 $ 5 .3
Transaction Services   $ 6 .2 $ 3 .3 OBMS   $ 2 .8 $ 2 .0

--------------------------------------------------------------------------------

Total Revenues (unaudited)    $ 23 .8 $ 17 .2

 

Second Quarter 2005

Revenues for the second quarter 2005 were $23.9 million, an increase of 33% over
the $18.0 million of restated revenues for the same period in 2004. Recast
revenues from the Company’s four operating divisions were as follows:

 

Quarter ended June 30, (in millions) 2005

--------------------------------------------------------------------------------

2004

--------------------------------------------------------------------------------

  (As Restated) FIX Network     $ 9 .5 $ 7 .2 OMS   $ 5 .9 $ 5 .6 Transaction
Services   $ 6 .4 $ 3 .3 OBMS   $ 2 .1 $ 1 .9

--------------------------------------------------------------------------------

Total Revenues (unaudited)    $ 23 .9 $ 18 .0

 

Third Quarter 2005

Revenues for the third quarter 2005 were $24.4 million, an increase of 25% over
the $19.5 million of restated revenues for the same period in 2004. Recast
revenues from the Company’s four operating divisions were as follows:

 

Quarter ended September 30, (in millions) 2005

--------------------------------------------------------------------------------

2004

--------------------------------------------------------------------------------

  (As Restated) FIX Network     $ 10 .4 $ 7 .2 OMS   $ 5 .8 $ 6 .0 Transaction
Services   $ 6 .7 $ 3 .5 OBMS   $ 1 .5 $ 2 .8

--------------------------------------------------------------------------------

Total Revenues (unaudited)    $ 24 .4 $ 19 .5

 

 

Fourth Quarter 2005

Revenues for the fourth quarter 2005 were $25.5 million, an increase of 27% over
the $20.1 million of restated revenues for the same period in 2004. Recast
revenues from the Company’s four operating divisions were as follows:

 

Quarter ended December 31, (in millions) 2005

--------------------------------------------------------------------------------

2004

--------------------------------------------------------------------------------

  (As Restated) FIX Network     $ 11 .0 $ 7 .4 OMS   $ 5 .3 $ 5 .5 Transaction
Services   $ 7 .0 $ 4 .6 OBMS   $ 2 .2 $ 2 .6

--------------------------------------------------------------------------------

Total Revenues (unaudited)    $ 25 .5 $ 20 .1

 

Full Year 2005

As previously reported, revenues for the full year 2005 were $97.6 million, an
increase of 30% over the $74.8 million of restated revenues for the full year
2004. Recast revenues from the Company’s four operating divisions were as
follows:

 

Quarter ended December 31, (in millions) 2005

--------------------------------------------------------------------------------

2004

--------------------------------------------------------------------------------

  (As Restated) FIX Network     $ 39 .8 $ 28 .4 OMS   $ 22 .9 $ 22 .4
Transaction Services   $ 26 .3 $ 14 .7 OBMS   $ 8 .6 $ 9 .3

--------------------------------------------------------------------------------

Total Revenues (unaudited)    $ 97 .6 $ 74 .8

 

Network Connections and Millennium Matched Volume

As previously reported, NYFIX had some 4,150 institutional buy-side connections
to its NYFIX Network at December 31, 2005, an increase of 73% over the
approximately 2,400 institutional buy-side connections at December 31, 2004.

As previously reported, the average daily matched volume in the NYFIX Millennium
alternative trading system was 14.0 million shares for the fourth quarter 2005,
an increase of 97% over the average daily matched volume of 7.1 million shares
during the fourth quarter 2004. The average number of symbols matched daily was
577 for the fourth quarter 2005, compared to 202 for the fourth quarter 2004.
For full year 2005, the average daily matched volume in NYFIX Millennium was
11.6 million shares, an increase of 68% over the average daily matched volume of
6.9 million shares during the full year 2004. The average number of symbols
matched daily was 420 for the full year 2005, compared to 200 for full year
2004. Included in the volume and symbol figures noted above are conditional
orders that are executed against pass-through orders and other conditional
orders, and third-market trades crossed by clients and reported by NYFIX to
Nasdaq.

Update on Accounting Restatements

NYFIX has substantially completed the previously announced review of historical
stock option grants and is still evaluating the complex accounting implications
on previously reported results. Since the accounting for common stock purchase
warrants is similar to that for stock options, NYFIX expanded its review to
include such awards. NYFIX has expended significant resources

 

as part of its process to conform its accounting for stock options and warrants
to GAAP. During the year ended December 31, 2005 and the quarter ended March 31,
2006, NYFIX incurred costs of $3.1 million and $3.9 million, respectively,
related to the SEC inquiries, the financial restatements and related litigation.
The Company has performed a detailed forensic review of over 1,400 awards to
more than 500 grantees. At times the Company retained in excess of 60 contract
lawyers and accountants combined to review hundreds of thousands of documents,
such as Board and Committee meeting minutes, resolutions, schedules and emails,
and meta-data for such documents, to respond to SEC information requests and to
determine the appropriate dates to measure the accounting impact of grants and
exercises. The Company’s review has identified a number of accounting issues not
previously included in the $16.4 million restatement for stock option
compensation included in the 2004 Annual Report on Form 10-K. The Company
expects the accounting consequences of these issues to materially exceed the
$2.0 million of estimated additional stock option compensation announced in
October 2005. Some of the more significant issues include the following:

 

•

Grants where there is insufficient basis to rely on the process and
documentation to reasonably ascertain a date to measure the accounting impact.

 

•

Grants where there was a failure to complete the option grant process by the
effective date of the grant with respect to the number of shares to be issued,
amounts allocated to grantees and/or the subsequent identification of new
grantees.

 

•

Grants for which there were subsequent modifications.

 

•

Non-recourse loans issued by certain Officers and Directors for the exercise of
options and warrants.

 

•

As previously announced, NYFIX will restate previously reported results for
other issues in addition to stock option and warrant compensation. These issues
were identified during an overall internal accounting review by management and
the ongoing re-audit of financial statements for 2004 and 2003 by Friedman, LLP,
the independent registered public accounting firm appointed by the Company’s
Audit Committee in November 2005, and include the following (all amounts
unaudited):

 

•

$4.0 million, net, in additional pre-tax charges associated with the 2002
acquisition of an initial interest in Renaissance Trading Technologies, LLC
(“Renaissance”) and the 2003 acquisition of the remaining interest in
Renaissance not previously held by the Company. Gross charges of $2.5 million
and $2.0 million for the years ended December 31, 2003 and 2002 are offset by
reductions to amortization expense for an intangible asset left at cost of $0.1
million, $0.3 million and $0.2 million, respectively, for the first quarter 2005
and the full years 2004 and 2003.

 

•

$1.6 million, net, in additional pre-tax charges associated with the 2002
acquisition of an initial interest in EuroLink Network, Inc. (“EuroLink”) and
the 2004 acquisition of the remaining interest in EuroLink not previously held
by the Company. Of this amount, $0.1 million, $0.7 million and $0.8 million,
respectively, relate to the years ended December 31, 2004, 2003 and 2002.

 

 

•

$2.0 million pre-tax reversal of revenue recorded in 2001 with respect to
transactions with an entity operated by substantially the same principals as
EuroLink prior to the Company’s initial investment in EuroLink in 2002.

 

•

$0.9 million pre-tax net reversal of revenue recorded by the London branch
office of the Company’s NYFIX Overseas subsidiary related to the timing of
delivery of product and service periods covered. Of this net amount, $0.1
million is an increase to revenues for the first quarter 2005, $0.4 million is a
decrease to revenues for the full year 2004, $0.1 million is an increase to
revenues for 2003 and $0.7 million is a decrease to revenues for the year ended
December 31, 2002.

 

•

$0.2 million pre-tax charge in the first quarter of 2005 related to the
Company’s $7.5 million convertible note for the amortization of the debt
discount established for embedded derivatives and the fair value adjustments on
those embedded derivatives.

 

•

The Company has established a valuation allowance for deferred tax assets
effective December 31, 2000. The Company had not previously reserved for
deferred tax assets until the third quarter of 2004. As a result of this
restatement, tax benefits of $3.7 million previously recorded through
additional-paid-in capital and on acquisitions have been reversed and therefore
have not been reserved for through operations. In addition, primarily because of
the additional expense recorded for the losses incurred by Renaissance, a net
deferred tax liability recorded through operations has been reduced by $1.2
million.

NYFIX previously only recorded a portion of the operating losses of Renaissance
and EuroLink based on the percentage voting interest it held in these entities
under the equity method. Since NYFIX provided substantially all of the funding
for these entities through its investments and through loans and advances,
historical results have been restated to absorb 100% of these operating losses.
Prior to making its investment in EuroLink in March 2002, NYFIX previously
recorded $2.0 million of revenue in 2001 for transactions with IMX Group, LLC
(“IMX”). IMX had minimal assets other than cash from a $0.5 million loan from
NYFIX and was operated by substantially all of the same principals who later
operated EuroLink. The $2.0 million liability on the books of IMX was
transferred to EuroLink in March 2002 and was paid to NYFIX out of the $4.0
million investment made by NYFIX in EuroLink in March 2002.

Unaudited Revenues for First Quarter 2006

Revenues for the first quarter 2006 were $25.4 million, an increase of 7% over
the $23.8 million of restated revenues for the first quarter 2005.

Revenues from the Company’s four operating divisions were as follows:

 

Quarter ended March 31, (in millions) 2006

--------------------------------------------------------------------------------

2005

--------------------------------------------------------------------------------

  (As Restated) FIX Network     $ 11 .3 $ 8 .9 OMS   $ 5 .2 $ 5 .9 Transaction
Services   $ 7 .3 $ 6 .2 OBMS   $ 1 .6 $ 2 .8

--------------------------------------------------------------------------------

Total Revenues (unaudited)    $ 25 .4 $ 23 .8

 

 

Adjustments to Exercise Prices for Option Grants to Officers and Directors

In June 2006, the Company increased the exercise prices of certain grants still
outstanding to certain Directors and Officers where, based on the state of the
documentation or process involved, there is doubt as to the appropriateness of
the Company’s prior practices regarding grant date and/or exercise price. The
Company intends to request additional payment from a former Director and a
former Officer where similar doubts exist on grants that have been exercised.

Although Robert Gasser, NYFIX’s current Chief Executive Officer, was not
involved in the granting process when these awards were issued, he has
voluntarily agreed to be held to the same standard. As a result, the Company has
increased the exercise prices on certain grants made to him and has voided an
award given to him where the date of grant could not be ascertained.

About NYFIX, Inc.

NYFIX, Inc. is an established provider to the domestic and international
financial markets of trading workstations, trade automation and communication
technologies and through its registered broker-dealer subsidiaries, execution
services. Our NYFIX Network is one of the industry’s largest networks,
connecting broker-dealers, institutions and exchanges. We maintain our principal
office on Wall Street in New York City, with other offices in Stamford, CT,
London’s Financial District, Chicago and San Francisco. We operate redundant
data centers in the metropolitan New York City area, with additional data center
hubs in London, Amsterdam, Hong Kong and Tokyo. For more information, please
visit www.nyfix.com.

This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby. Investors are cautioned that all
forward-looking statements involve risks and uncertainty, including without
limitation, the ability of the Company to market and develop its products, the
ability of the Company to achieve and manage its strategic initiatives; the
effect of increased competition; economic, political and market conditions and
fluctuations; the impact of accounting for stock option issuances; ongoing
regulatory investigations and other factors described from time to time in the
Company’s Form 10-K and periodic reports filed with the U.S. Securities and
Exchange Commission. Although the Company believes that the assumptions
underlying the forward-looking statements contained herein are reasonable, any
of the assumptions could be inaccurate, and therefore, there can be no assurance
that the forward-looking statements included in this press release will prove to
be accurate. In light of the significant uncertainties inherent in the forward-
looking statements included herein, the inclusion of such information should not
be regarded as a representation by the Company or any other person that the
objectives and plans of the Company will be achieved. All trademarks, trade
names, logos, and service marks referenced herein belong to NYFIX, Inc.

 

[img1.gif]

FOR IMMEDIATE RELEASE

Contact:

Don Duffy or Brian Prenoveau, CFA

Integrated Corporate Relations, Inc.

(203) 682-8200

NYFIX, Inc. Announces $12.6 Million Private Placement

New York, NY June 29, 2006: NYFIX, Inc. (Pink Sheets: NYFX). NYFIX, Inc.
(“NYFIX” or “the Company”), a leader in technology solutions for the financial
marketplace, today announced it has entered into a definitive agreement with
certain clients of a large, Boston-based institutional investor for the purchase
of common shares of the Company. The offering will raise gross proceeds of $12.6
million before expenses. The Company is issuing shares of its common stock to
pay placement agent fees of 6% of the gross proceeds. The closing of the
transaction is expected to occur on July 5, 2006.

Under the terms of the agreement, NYFIX will sell 2.713 million shares of common
stock at a price of $4.65 per share, which represents a discount of
approximately 3% to the closing price of NYFIX common stock on June 29, 2006.
The shares will be issued in a private placement transaction under Regulation D
of the Securities of Act of 1933.

 

The shares of common stock sold in the private placement have not been
registered under the Securities Act of 1933, as amended, or state securities
laws and may not be offered or sold in the United States without a registration
with the Securities and Exchange Commission (SEC) or an applicable exemption
from the registration requirements. NYFIX has agreed to file a registration
statement with the SEC covering the resale of the shares of common stock issued
in the private placement once NYFIX becomes current in its reporting obligations
under the Exchange Act.

The proceeds from the transaction will be used for general corporate purposes,
including ongoing working capital needs, investments in technological
infrastructure and increasing the capital in the Company’s regulated
broker-dealer subsidiaries.

About NYFIX, Inc.

NYFIX, Inc. is an established provider to the domestic and international
financial markets of trading workstations, trade automation and communication
technologies and through its registered broker-dealer subsidiaries, execution
services. Our NYFIX Network is one of the industry’s largest networks,
connecting broker-dealers, institutions and exchanges. We maintain our principal
office on Wall Street in New York City, with other offices in Stamford, CT,
London’s Financial District, Chicago and San Francisco. We operate redundant
data centers in the metropolitan New York City area, with additional data center
hubs in London, Amsterdam, Hong Kong and Tokyo. For more information, please
visit www.nyfix.com.

This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act

 

of 1934, as amended, which are intended to be covered by the safe harbors
created thereby. Investors are cautioned that all forward-looking statements
involve risks and uncertainty, including without limitation, the ability of the
Company to market and develop its products, the ability of the Company to
achieve and manage its strategic initiatives, the effect of increased
competition, economic, political and market conditions and fluctuations, the
impact of accounting for stock option issuances, ongoing regulatory
investigations and other factors described from time to time in the Company’s
Form 10-K and periodic reports filed with the U.S. Securities and Exchange
Commission. Although the Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included in this press release will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved. All trademarks,
trade names, logos, and service marks referenced herein belong to NYFIX, Inc.