Document:

Exhibit 10.3

 

EXHIBIT 10.3

ADVENTRX PHARMACEUTICALS, INC.

CONSULTING AGREEMENT

     This Consulting Agreement (this “Agreement”) is entered into effective as of September
7, 2006 (the “Effective Date”) by and between ADVENTRX Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and Carrie Carlander, an individual resident of the State of
California (“Consultant”).

     1. Consulting Relationship. During the term of this Agreement, Consultant will
provide consulting services (the “Services”) to the Company as described on Exhibit
A attached to this Agreement. Consultant represents that Consultant is duly licensed (as
applicable) and has the qualifications, the experience and the ability to properly perform the
Services. Consultant shall use Consultant’s best efforts to perform the Services such that the
results are satisfactory to the Company. Consultant shall provide Services only as requested by
the Company.

     2. Fees. As consideration for the Services to be provided by Consultant and other
obligations, the Company shall pay to Consultant the amounts specified in Exhibit B
attached to this Agreement at the times specified therein.

     3. Expenses. Consultant shall not be authorized to incur on behalf of the Company any
expenses.

     4. Term and Termination. Consultant shall serve as a consultant to the Company for a
period commencing on the Effective Date and terminating upon notice of termination from the Company
to Consultant or from Consultant to the Company.

     5. Independent Contractor. Consultant’s relationship with the Company will be that of
an independent contractor and not that of an employee.

          (a) Method of Provision of Services. Consultant shall be solely responsible for
determining the method, details and means of performing the Services. Consultant may not employ or
engage the service of any third parties to perform the Services required by this Agreement.

          (b) No Authority to Bind Company. Neither Consultant, nor any partner, agent or
employee of Consultant, has authority to enter into contracts that bind the Company or create
obligations on the part of the Company without the prior written authorization of the Company.

          (c) No Benefits. Consultant acknowledges and agrees that Consultant (or Consultant’s
employees, if Consultant is an entity) will not be eligible for any Company employee benefits and,
to the extent Consultant (or Consultant’s employees, if Consultant is an entity) otherwise would be eligible for any Company employee benefits but for the express
terms of this Agreement, Consultant (on behalf of itself and its employees) hereby expressly
declines to participate in such Company employee benefits.

 

 

          (d) Withholding; Indemnification. Consultant shall have full responsibility for
applicable withholding taxes for all compensation paid to Consultant, its partners, agents or its
employees under this Agreement, and for compliance with all applicable labor and employment
requirements with respect to Consultant’s self-employment, sole proprietorship or other form of
business organization, and Consultant’s partners, agents and employees, including state worker’s
compensation insurance coverage requirements and any US immigration visa requirements. Consultant
agrees to indemnify, defend and hold the Company harmless from any liability for, or assessment of,
any claims or penalties with respect to such withholding taxes, labor or employment requirements,
including any liability for, or assessment of, withholding taxes imposed on the Company by the
relevant taxing authorities with respect to any compensation paid to Consultant or Consultant’s
partners, agents or its employees.

     6. Supervision of Consultant’s Services. All of the Services to be performed by
Consultant, including but not limited to the Services, will be as agreed between Consultant and
Robert Daniel. Consultant will be required to report to Mr. Daniel concerning the Services
performed under this Agreement. The nature and frequency of these reports will be left to the
discretion of Mr. Daniel.

     7. Confidentiality Agreement. Consultant shall sign, or has signed, the Company’s
current Confidential Information and Invention Assignment Agreement (the “Confidentiality
Agreement”) on or before the Effective Date.

     8. Conflicts with this Agreement. Consultant represents and warrants that neither
Consultant nor any of Consultant’s partners, employees or agents is under any pre-existing
obligation in conflict or in any way inconsistent with the provisions of this Agreement. Consultant
represents and warrants that Consultant’s performance of all the terms of this Agreement will not
breach any agreement to keep in confidence proprietary information acquired by Consultant in
confidence or in trust prior to commencement of this Agreement. Consultant warrants that Consultant
has the right to disclose and/or or use all ideas, processes, techniques and other information, if
any, which Consultant has gained from third parties, and which Consultant discloses to the Company
or uses in the course of performance of this Agreement, without liability to such third parties.
Notwithstanding the foregoing, Consultant agrees that Consultant shall not bundle with or
incorporate into any deliveries provided to the Company herewith any third party products, ideas,
processes, or other techniques, without the express, written prior approval of the Company.
Consultant represents and warrants that Consultant has not granted and will not grant any rights or
licenses to any intellectual property or technology that would conflict with Consultant’s
obligations under this Agreement. Consultant will not knowingly infringe upon any copyright,
patent, trade secret or other property right of any former client, employer or third party in the
performance of the Services required by this Agreement.

     9. Miscellaneous.

          (a) Amendments and Waivers. Any term of this Agreement may be amended or waived only
with the written consent of the parties.

-2-

 

          (b) Sole Agreement. This Agreement, including the Exhibits hereto, constitutes the
sole agreement of the parties and supersedes all oral negotiations and prior writings with respect
to the subject matter hereof. The foregoing notwithstanding, the Company and Consultant
acknowledge that this Agreement is entered into in connection with that certain Severance Agreement
and Release of All Claims, dated of even date herewith (the “Severance Agreement”), and that this
Agreement has no effect on the Severance Agreement or any of the documents or other agreements
referenced therein or executed in connection therewith.

          (c) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight
delivery service or confirmed facsimile, 48 hours after being deposited in the regular mail as
certified or registered mail (airmail if sent internationally) with postage prepaid, if such notice
is addressed to the party to be notified at such party’s address or facsimile number as set forth
below, or as subsequently modified by written notice.

          (d) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within California.

          (e) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.
In the event that the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of
the Agreement shall be enforceable in accordance with its terms.

          (f) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.

          (g) Arbitration. Any dispute or claim arising out of or in connection with any
provision of this Agreement will be finally settled by binding arbitration in San Diego County,
California, in accordance with the rules of the American Arbitration Association by one arbitrator
appointed in accordance with said rules. The arbitrator shall apply California law, as applied to
agreements among California residents entered into and to be performed entirely within California,
to the resolution of any dispute. Judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to
any court of competent jurisdiction for preliminary or interim equitable relief, or to compel
arbitration in accordance with this paragraph, without breach of this arbitration provision. This
Section 10(g) shall not apply to the Confidentiality Agreement.

          (h) Advice of Counsel. EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT,
SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ
AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS

-3-

 

AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION
HEREOF.

[Signature Page Follows]

-4-

 

     The parties have executed this Agreement on the respective dates set forth below.

	 	 	 	 	 
	 	ADVENTRX PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/ Evan M. Levine
 	 
	 	Title:  	Chief Executive Officer 	 

	 	 	 
	Address:

	 	6725 Mesa Ridge Road, Suite 100

San Diego, CA 92121

	 	 	 	 	 
	 	CARRIE CARLANDER

 	 
	 	/s/ Carrie Carlander
 	 
	 	Signature 	 

	 	 
	Address:

	13140 Avenida Granada

Poway, CA 92064

 

 

EXHIBIT A

DESCRIPTION OF CONSULTING SERVICES

	 	 	 
	Description of Services	 	Schedule/Deadline
	 
	 	 
	1.       Respond to inquiries of the Company’s personnel
regarding financial and accounting matters, and
such other matters related to the Company
regarding which Consultant has knowledge.

	 	Not applicable

 

 

EXHIBIT B

COMPENSATION

	 	 	 
	 

	 	Check applicable payment terms:
	 
	 	 
	o

	 	For Services rendered by Consultant under this Agreement, the Company
shall pay Consultant at the rate of $      per hour, payable
                    . Unless otherwise agreed upon in writing by Company,
Company’s maximum liability for all Services performed during the
term of this Agreement shall not exceed $                    .
	 
	 	 
	o

	 	Consultant shall be paid $                     upon the execution of this
Agreement and $                     upon completion of the Services specified
on Exhibit A to this Agreement.
	 
	 	 
	o

	 	The Company will recommend that the Board grant a non-qualified
option to purchase                      shares of the Company’s Common Stock, at
an exercise price equal to the fair market value (as determined by
the Company’s Board of Directors) on the date of grant, and which
will vest and become exercisable as follows:
	 
	 	 
	 

	 	 

	 
	 	 
	 

	 	 

	 
	 	 
	o

	 	Consultant is authorized to incur the following expenses:
	 
	 	 
	 

	 	 

	 
	 	 
	 

	 	 

	 
	 	 
	þ

	 	Other:

The Company will compensate Consultant at the rate of $16,666.67 per calendar month plus the
actual amount paid by Consultant for COBRA continuation coverage following employment with the
Company (pro-rated for any portion of a calendar month during which this Agreement is effective
based on a 30-day month) beginning on the Effective Date and ending when this Agreement
terminates. Payment by the Company is due within 15 days of the end of each calendar month;
provided, however, that, the first payment will be due within 15 days of the end of October.Securities Purchase Agreement between NYFIX, Inc. and Warburg Pincus Private
      Equity IX, L.P.

    Exhibit
      10.1

     

    

     

    
      
        

      

      
        

      

    

     

    SECURITIES
      PURCHASE AGREEMENT

     

    BY
      AND BETWEEN

     

    THE
      INVESTORS LISTED ON EXHIBIT A HERETO

     

    AND

     

    NYFIX,
      INC.

     

    DATED
      AS OF SEPTEMBER 4,
      2006

     

    
      
        

      

      
        

      

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF CONTENTS

       

      
        	
                SECTION
                  1.

              	
                INTERPRETATION
                  OF THIS AGREEMENT

              	
                2

              
	
                1.1.

              	
                Defined
                  Terms

              	
                2

              
	 	 	 
	
                SECTION
                  2.

              	
                AUTHORIZATION
                  OF SHARES; PURCHASE AND SALE OF SHARES

              	
                7

              
	
                2.1.

              	
                Authorization
                  of Shares

              	
                7

              
	
                2.2.

              	
                Issuance
                  of Shares

              	
                7

              
	
                2.3.

              	
                Closing
                  and Closing Date

              	
                8

              
	
                2.4.

              	
                Delivery

              	
                8

              
	 	 	 
	
                SECTION
                  3.

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE COMPANY

              	
                8

              
	
                3.1.

              	
                Corporate
                  Organization

              	
                8

              
	
                3.2.

              	
                Subsidiaries

              	
                8

              
	
                3.3.

              	
                Capitalization

              	
                9

              
	
                3.4.

              	
                Corporate
                  Proceedings, etc.

              	
                10

              
	
                3.5.

              	
                Consents
                  and Approvals

              	
                11

              
	
                3.6.

              	
                Absence
                  of Defaults, Conflicts, etc.

              	
                11

              
	
                3.7.

              	
                Financial
                  Statements

              	
                12

              
	
                3.8.

              	
                Absence
                  of Certain Developments

              	
                12

              
	
                3.9.

              	
                Compliance
                  with Law

              	
                12

              
	
                3.10.

              	
                Litigation

              	
                13

              
	
                3.11.

              	
                Absence
                  of Undisclosed Liabilities

              	
                13

              
	
                3.12.

              	
                Employees

              	
                13

              
	
                3.13.

              	
                Tax
                  Matters

              	
                14

              
	
                3.14.

              	
                Intellectual
                  Property

              	
                14

              
	
                3.15.

              	
                Material
                  Contracts

              	
                17

              
	
                3.16.

              	
                Title
                  to Tangible Assets

              	
                17

              
	
                3.17.

              	
                Condition
                  of Properties

              	
                18

              
	
                3.18.

              	
                Transactions
                  with Related Parties

              	
                18

              
	
                3.19.

              	
                Registration
                  Rights

              	
                18

              
	
                3.20.

              	
                Brokerage

              	
                18

              
	
                3.21.

              	
                Illegal
                  or Unauthorized Payments; Political Contributions

              	
                18

              
	
                3.22.

              	
                Takeover
                  Statute

              	
                18

              
	
                3.23.

              	
                No
                  Manipulation of Common Stock

              	
                19

              
	
                3.24.

              	
                Accountants

              	
                19

              
	
                3.25.

              	
                Internal
                  Accounting Controls

              	
                19

              
	
                3.26.

              	
                Environmental
                  Matters

              	
                19

              
	
                3.27.

              	
                Insurance

              	
                20

              
	
                3.28.

              	
                Transfer
                  Taxes

              	
                20

              
	
                3.29.

              	
                Investment
                  Company

              	
                20

              
	
                3.30.

              	
                No
                  Integration; General Solicitation

              	
                20

              
	
                3.31.

              	
                Officers,
                  Directors and 5% Stockholders

              	
                20

              
	
                3.32.

              	
                Vote
                  Required.

              	
                21

              
	 	 	 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                SECTION
                  4.

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE INVESTORS

              	
                21

              
	 	 	 
	
                SECTION
                  5.

              	
                PRE-CLOSING
                  COVENANTS

              	
                22

              
	
                5.1.

              	
                Resale
                  of Shares

              	
                22

              
	
                5.2.

              	
                Covenants
                  Pending Closing

              	
                22

              
	
                5.3.

              	
                Further
                  Assurances

              	
                23

              
	
                5.4.

              	
                Access
                  to Information

              	
                24

              
	
                5.5.

              	
                Exclusivity

              	
                24

              
	
                5.6.

              	
                Public
                  Disclosure

              	
                24

              
	
                5.7.

              	
                HSR
                  Act Filing

              	
                25

              
	
                5.8.

              	
                Consents
                  and Approvals

              	
                25

              
	
                5.9.

              	
                Use
                  of Proceeds

              	
                25

              
	
                5.10.

              	
                Takeover
                  Statute

              	
                25

              
	
                5.11.

              	
                Form
                  D and Blue Sky

              	
                25

              
	 	 	 
	
                SECTION
                  6.

              	
                INVESTORS’
                  CLOSING CONDITIONS

              	
                26

              
	
                6.1.

              	
                Representations
                  and Warranties

              	
                26

              
	
                6.2.

              	
                Compliance
                  with Agreement

              	
                26

              
	
                6.3.

              	
                Injunction

              	
                26

              
	
                6.4.

              	
                Regulatory
                  Approvals; Third Party Consents

              	
                26

              
	
                6.5.

              	
                Counsel’s
                  Opinion

              	
                26

              
	
                6.6.

              	
                Adverse
                  Development

              	
                27

              
	
                6.7.

              	
                Convertible
                  Preferred Directors

              	
                27

              
	
                6.8.

              	
                Chief
                  Executive Officer

              	
                27

              
	
                6.9.

              	
                Registration
                  Rights Agreement

              	
                27

              
	
                6.10.

              	
                Issuance
                  of Warrant

              	
                27

              
	
                6.11.

              	
                Filing
                  of Certificate of Designations

              	
                27

              
	
                6.12.

              	
                Officer’s
                  Certificate

              	
                27

              
	
                6.13.

              	
                Secretary’s
                  Certificate

              	
                27

              
	 	 	 
	
                SECTION
                  7.

              	
                COMPANY
                  CLOSING CONDITIONS

              	
                28

              
	
                7.1.

              	
                Representations
                  and Warranties

              	
                28

              
	
                7.2.

              	
                Compliance
                  with Agreement

              	
                28

              
	
                7.3.

              	
                Regulatory
                  Approvals

              	
                28

              
	
                7.4.

              	
                Investors’
                  Certificates

              	
                28

              
	
                7.5.

              	
                Injunction

              	
                28

              
	 	 	 
	
                SECTION
                  8.

              	
                POST-CLOSING
                  COVENANTS

              	
                29

              
	
                8.1.

              	
                Inspection

              	
                29

              
	
                8.2.

              	
                Confidentiality

              	
                29

              
	
                8.3.

              	
                Lost,
                  etc. Certificates Evidencing Shares; Exchange

              	
                29

              
	
                8.4.

              	
                Insurance

              	
                30

              
	
                8.5.

              	
                Board
                  Seats

              	
                30

              
	
                8.6.

              	
                Subscription
                  Rights

              	
                31

              
	
                8.7.

              	
                Standstill

              	
                32

              
	
                8.8.

              	
                No
                  Manipulation or Hedging

              	
                33

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                8.9.

              	
                Listing

              	
                34

              
	
                8.10.

              	
                Authorization
                  of Additional Stock

              	
                34

              
	
                8.11.

              	
                Stock
                  Option Pool

              	
                35

              
	 	 	 
	
                SECTION
                  9.

              	
                MISCELLANEOUS

              	
                35

              
	
                9.1.

              	
                Notices

              	
                35

              
	
                9.2.

              	
                Expenses
                  and Taxes

              	
                36

              
	
                9.3.

              	
                Reproduction
                  of Documents

              	
                36

              
	
                9.4.

              	
                Termination
                  and Survival

              	
                36

              
	
                9.5.

              	
                Successors
                  and Assigns

              	
                37

              
	
                9.6.

              	
                Severability

              	
                37

              
	
                9.7.

              	
                Governing
                  Law

              	
                37

              
	
                9.8.

              	
                Waiver
                  of Jury Trial

              	
                37

              
	
                9.9.

              	
                Consent
                  to Jurisdiction

              	
                37

              
	
                9.10.

              	
                Paragraph
                  and Section Headings

              	
                38

              
	
                9.11.

              	
                Limitation
                  on Enforcement of Remedies

              	
                38

              
	
                9.12.

              	
                Counterparts

              	
                38

              
	
                9.13.

              	
                Entire
                  Agreement; Amendment and Waiver

              	
                38

              

      

       

      

        
          	
                  Exhibit
                    A

                	
                  Schedule
                    of Investors

                
	
                  Exhibit
                    B

                	
                  Certificate
                    of Designations

                
	
                  Exhibit
                    C

                	
                  Form
                    of Warrant

                
	
                  Exhibit
                    D

                	
                  Restated
                    Certificate of Incorporation

                
	
                  Exhibit
                    E

                	
                  Amended
                    Bylaws

                
	
                  Exhibit
                    F-1

                	
                  Form
                    of General Counsel Legal Opinion

                
	
                  Exhibit
                    F-2

                	
                  Form
                    of Covington & Burling LLP Legal Opinion

                
	
                  Exhibit
                    G

                	
                  Registration
                    Rights Agreement

                
	
                  Exhibit
                    H

                	
                  Indemnification
                    Agreement

                

        

         

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

NYFIX,
        INC.

    

     

    SECURITIES
      PURCHASE AGREEMENT

     

    
      Dated
        as
        of September 4, 2006

       

      TO
        THE
        INVESTORS LISTED

        
        ON EXHIBIT A HERETO

      

      Ladies
        and Gentlemen:

       

      NYFIX,
        Inc., a Delaware corporation (the “Company”),
        hereby agrees with each of the Investors (each an “Investor”
and
        collectively the “Investors”)
        listed
        on Exhibit
        A
        hereto
        as follows:

       

      SECTION
        1.       
INTERPRETATION
        OF THIS AGREEMENT

       

      1.1.     
        Defined
        Terms

       

      As
        used
        in this Agreement, the following terms have the respective meanings set forth
        below or set forth in the Section hereof following such term:

       

      Affiliate:
        shall
        mean any Person or entity, directly or indirectly, controlling, controlled
        by or
        under common control with such Person or entity.

       

      Agreement:
        shall
        mean this Securities Purchase Agreement, as the same may be amended or modified
        from time to time in accordance with its terms.

       

      Antitrust
        Division:
        shall
        have the meaning set forth in Section
        5.7.

       

      Board:
        shall
        have the meaning set forth in Section
        3.3(c).

       

      Business
        Day:
        shall
        mean a day other than a Saturday, Sunday or other day on which banks in the
        State of New York are required or authorized to close.

       

      Certificate
        of Designations:
        shall
        mean the Certificate of Designations, Number, Voting Powers, Preferences
        and
        Rights of Convertible Preferred Stock of the Company, a copy of which is
        attached hereto as Exhibit
        B.

       

      Change
        of Control:
        shall
        have the meaning set forth in the Certificate of Designations. 

       

      Closing:
        shall
        have the meaning set forth in Section
        2.3.

       

      Closing
        Date:
        shall
        have the meaning set forth in Section
        2.3.

       

      Code:
        shall
        mean the Internal Revenue Code of 1986, as amended, and the rules and
        regulations promulgated thereunder.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      

      Common
        Stock:
        shall
        mean the common stock, par value $0.001 per share, of the Company.

       

      Company:
        shall
        have the meaning set forth in the Introduction hereto.

       

      Company
        Stockholder Meeting:
        shall
        have the meaning set forth in Section
        8.10(b).

       

      Competition
        Laws:
        shall
        mean the HSR Act, the Sherman Antitrust Act, as amended, the Clayton Antitrust
        Act, as amended, the Federal Trade Commission Act, as amended, and all other
        applicable laws issued by a Governmental Authority that are designed or intended
        to prohibit, restrict or regulate actions having the purpose or effect of
        monopolization or restraint of trade or lessening of competition through
        merger
        or acquisition, including any foreign antitrust laws.

       

      Contract:
        shall
        mean any material agreement, contract, indenture, indebtedness, mortgage,
        commitment, understanding, arrangement, restriction or other instrument to
        which
        the Company or one of its Subsidiaries is a party or by which its properties
        or
        assets are subject, and which is or would be required to be filed as an exhibit
        to any filing by the Company with the SEC pursuant to the Exchange Act (assuming
        for this purpose that the Company had complied with all of its filing
        obligations under the Exchange Act).

       

      Conversion:
        shall
        mean the conversion of the Convertible Preferred Stock or the Exchange Preferred
        Stock for shares of Common Stock in accordance with the terms of the Certificate
        of Designations.

       

      Conversion
        Shares:
        shall
        mean those shares of Common Stock to be issued upon conversion of the
        Convertible Preferred Stock or the Exchange Preferred Stock.

       

      Convertible
        Preferred Director:
        shall
        have the meaning set forth in the Certificate of Designations.

       

      Convertible
        Preferred Stock:
        shall
        have the meaning set forth in Section
        2.1.

       

      DGCL:
        shall
        mean the Delaware General Corporation Law.

       

      Disclosure
        Schedule:
        shall
        mean the Disclosure Schedule of the Company delivered concurrently herewith
        and
        incorporated herein by reference.

       

      Environmental
        Laws:
        shall
        mean federal, state, local and foreign laws, regulations and codes, as well
        as
        orders, decrees, judgments or injunctions, issued, promulgated, approved
        or
        entered thereunder relating to pollution, hazardous or toxic substances,
        wastes
        or contaminants, protection of the environment or public health and
        safety.

       

      Exchange
        Act:
        shall
        mean the Securities Exchange Act of 1934, as amended, and the rules and
        regulations promulgated thereunder.

       

      
        
          
            
            

          

          
            -3-

            
              

            

          

          
            
            

          

        

      

      

      Exchange
        Preferred Shares:
        shall
        mean the shares of Exchange Preferred Stock to be issued upon exchange of
        the
        Convertible Preferred Stock or Common Stock Owned by the Investors in excess
        of
        45% of the Common Stock (on an as converted basis) on the terms and conditions
        set forth in Section
        8.7(b)
        of this
        Agreement. 

       

      Exchange
        Preferred Stock:
        shall
        have the meaning set forth in Section
        2.1.

       

      FTC:
        shall
        have the meaning set forth in Section
        5.7.

       

      GAAP:
        shall
        have the meaning set forth in Section
        3.7.

       

      Governmental
        Authority:
        shall
        mean the government of any nation, state, city, locality or other political
        subdivision thereof, any entity exercising executive, legislative, judicial,
        regulatory or administrative functions of or pertaining to government, and
        any
        corporation or other entity owned or controlled, through stock or capital
        ownership or otherwise, by any of the foregoing.

       

      HSR
        Act:
        shall
        mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
        amended.

       

      Indemnification
        Agreement:
        shall
        have the meaning set forth in Section
        8.5(b).
        

       

      Independent
        Director:
        shall
        mean a member of the Board (i) who is not an officer or employee of the Company,
        the Investors or any of their respective Affiliates, or of an entity that
        derived more than 5% of its revenues or earnings in its most recent fiscal
        year
        from transactions involving the Company, the Investors or any of their
        respective Affiliates and (ii) who has no relationship or affiliation or
        compensation, consulting or contracting arrangement with the Company, the
        Investors or any of their respective Affiliates or any other entity such
        that a
        reasonable person could regard such director as likely to be unduly influenced
        by the Company, the Investors or their respective Affiliates.

       

      Intellectual
        Property:
        means
        all of the following owned or used by the Company and its Subsidiaries: (a)
        trademarks and service marks, trade dress, product configurations, trade
        names
        and other indications of origin, applications or registrations in any
        jurisdiction pertaining to the foregoing and all goodwill associated therewith;
        (b) patentable inventions, discoveries, improvements, ideas, know-how, formula
        methodology, models, algorithms, systems, processes, technology, software
        (including Proprietary Software) and applications and patents in any
        jurisdiction pertaining to the foregoing, including re-issues, continuations,
        divisions, continuations-in-part, renewals or extensions; (c) trade secrets,
        including confidential information and the right in any jurisdiction to limit
        the use or disclosure thereof; (d) copyrights in writings, designs, software,
        mask works or other works, applications or registrations in any jurisdiction
        for
        the foregoing and all moral rights related thereto; (e) database rights;
        (f) Internet Web sites, domain names and applications and registrations
        pertaining thereto and all intellectual property used in connection with
        or
        contained in all versions of the Company’s and its Subsidiaries’ Web sites; (g)
        rights under all agreements relating to the foregoing; and (h) claims or
        causes
        of action arising out of or related to past, present or future infringement
        or
        misappropriation of the foregoing.

       

      
        
          
            
            

          

          
            -4-

            
              

            

          

          
            
            

          

        

      

      

      Investor(s):
        shall
        have the meaning set forth in the Introduction hereto.

       

      Licensed
        Software:
        shall
        have the meaning set forth in Section
        3.14(g).

       

      Listed
        Intellectual Property:
        shall
        have the meaning set forth in Section
        3.14(b).

       

      Material
        Adverse Effect:
        shall
        mean an event, change or occurrence that individually, or together with any
        other event, change or occurrence, has had or reasonably could be expected
        to
        have a material adverse effect on (a) the business, properties, operations,
        assets, liabilities or condition (financial or otherwise) of the Company
        and its
        Subsidiaries, taken together as a whole, or (b) the ability of the Company
        to
        perform its obligations pursuant to the transactions contemplated by this
        Agreement. Notwithstanding the foregoing, none of the following shall be
        deemed
        (either alone or in combination) to constitute, and none of the following
        shall
        be taken into account in determining whether there has been or will be, a
        Material Adverse Effect: (i) any adverse change, event or effect arising
        from or
        relating to general business or economic conditions; (ii) any adverse change,
        event or effect relating to or affecting the financial services industry
        generally; and (iii) any legal action, suit or proceeding, brought or threatened
        by any shareholder or employee of the Company against the Company, its officers
        or directors, arising out of or relating to this Agreement or the transactions
        contemplated hereby (other than, in the case of clauses (i) and (ii) above,
        any
        such change, event or effect that affects the Company or its Subsidiaries
        in a
        materially disproportionate manner when compared to the impacts of such changes,
        events or effects on other Persons engaged in the same industry as the Company
        and its Subsidiaries).

       

      Material
        Contract:
        shall
        have the meaning set forth in Section
        3.15.

       

      Meeting
        Deadline:
        shall
        have the meaning set forth in Section 8.10(b).

       

      NASD:
        shall
        mean the National Association of Securities Dealers, Inc.

       

      Organizational
        Documents:
        shall
        mean the Restated Certificate of Incorporation and the Amended Bylaws of
        the
        Company.

       

      Owns,
        Own,
        Owned:
        shall
        mean the aggregate beneficial ownership, within the meaning of Rule 13d-3
        under
        the Exchange Act, of an Investor and any of its Affiliates.

       

      Person:
        shall
        mean an individual, partnership, joint-stock company, corporation, limited
        liability company, trust or unincorporated organization, and a government
        or
        agency or political subdivision thereof.

       

      Preference
        Share Purchase Rights:
        shall
        mean the preference share purchase rights that the Board declared as a dividend
        to the holders of outstanding Common Stock on September 19, 1997 at a rate
        of
        one preference share purchase right per share of Common Stock, each right
        representing the right to purchase one one-hundredth of a share of Series
        A
        Preferred Stock, par value $1.00 per share, of the Company upon the terms
        and
        conditions set forth in the Rights Plan. 

      

      
        
          
            
            

          

          
            -5-

            
              

            

          

          
            
            

          

        

      

      

      Preferred
        Stock:
        shall
        mean the preferred stock, par value $1.00 per share, of the
        Company.

       

      Principal
        Market:
        shall
        have the meaning set forth in Section
        8.9.

       

      Proposed
        Securities:
        shall
        have the meaning set forth in Section
        8.6(a)(1).

       

      Proprietary
        Software:
        means
        all operating and applications computer software programs and databases
        including password unprotected interpretive code or Source Code, object code,
        development documentation, programming tools, drawings, specifications and
        data
        created by or on behalf of or owned by the Company or its
        Subsidiaries.

       

      Proxy
        Statement:
        shall
        have the meaning set forth in Section
        8.10(a).

       

      Registration
        Rights Agreement:
        shall
        have the meaning set forth in Section
        6.9.

       

      Rights
        Plan:
        shall
        have the meaning set forth in Section
        3.22.
        

       

      Sarbanes-Oxley
        Act:
        shall
        mean the Sarbanes-Oxley Act of 2002, and the rules and regulations promulgated
        thereunder. 

       

      SEC:
        shall
        mean the Securities and Exchange Commission.

       

      Securities
        Act:
        shall
        mean the Securities Act of 1933, as amended, and the rules and regulations
        promulgated thereunder. 

       

      Shares:
        shall
        mean the shares of Convertible Preferred Stock to be purchased by the Investors
        hereunder.

       

      Software:
        shall
        have the meaning set forth in Section
        3.14(g).
        

       

      Source
        Code:
        means,
        collectively, any software source code, or any material portion or aspect
        of the
        software source code of (i) any Intellectual Property owned by the Company
        or
        any of its Subsidiaries or (ii) any other product or service marketed or
        currently proposed to be marketed by the Company or any of its
        Subsidiaries.

       

      Standstill
        Period:
        shall
        have the meaning set forth in Section
        8.7(a).
        

       

      Stock
        Option Plans:
        shall
        mean following plans of the Company: (i) the 2001 Stock Option Plan, (ii)
        the
        Javelin 1999 Stock Option Plan and (iii) the Amended and Restated 1991 Incentive
        and Nonqualified Stock Option Plan.

       

      Subsidiary:
        shall
        mean an entity of which a Person owns, directly or indirectly, more than
        50% of
        the Voting Stock.

       

      Subsidiary
        Organizational Documents:
        shall
        have the meaning set forth in Section 3.2(a).

      

      
        
          
            
            

          

          
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      Takeover
        Statute:
        shall
        mean any corporate takeover provision under laws of the State of Delaware
        or any
        other state or federal “fair price”, “moratorium”, “control share acquisition”
or other similar antitakeover statute or regulation.

       

      Unaudited
        Financial Statements:
        shall
        have the meaning set forth in Section
        3.7.

       

      Voting
        Proposal:
        shall
        have the meaning set forth in Section 8.10(a).

       

      Voting
        Stock:
        shall
        mean securities of any class or classes of an entity, the holders of which
        are
        ordinarily, in the absence of contingencies, entitled to elect a majority
        of the
        corporate directors (or Persons performing similar functions).

       

      Warrant:
        shall
        mean the Warrant to acquire an aggregate of 2,250,000 shares of Common Stock,
        substantially in the form of Exhibit
        C.

       

      Warrant
        Shares:
        shall
        mean the shares of Common Stock issuable upon exercise of the
        Warrant.

       

      Works:
        shall
        have the meaning set forth in Section
        3.14(f).

       

      WP:
        shall
        mean Warburg Pincus Private Equity IX, L.P., a Delaware limited
        partnership.

       

      WP
        Board Members:
        shall
        have the meaning set forth in Section
        8.5(a).
        

       

      SECTION
        2.       AUTHORIZATION
        OF SHARES; PURCHASE AND SALE OF SHARES

       

      2.1.     
        Authorization
        of Shares

       

      On
        or
        prior to the Closing, the Company shall have authorized the sale and issuance
        of
        up to an aggregate of 1,500,000 shares of Series B Voting Convertible Preferred
        Stock, par value $1.00 per share (the “Convertible
        Preferred Stock”),
        on
        the terms and conditions set forth in this Agreement. On or prior to the
        Closing, the Company shall have authorized the issuance of up to an aggregate
        of
        500,000 shares of Series C Non-Voting Convertible Preferred Stock, par value
        $1.00 per share (the “Exchange
        Preferred Stock”),
        on
        the terms and conditions set forth in this Agreement. The terms, limitations
        and
        relative rights and preferences of the Convertible Preferred Stock and the
        Exchange Preferred Stock shall be as set forth in the Certificate of
        Designations.

       

      2.2.     
        Issuance
        of Shares 

       

      Subject
        to the terms and conditions set forth in this Agreement, and in reliance
        upon
        the Company’s and the Investors’ representations set forth below, at the
        Closing, (i) the Company shall sell to the Investors, and the Investors shall
        purchase from the Company, the number of shares of Convertible Preferred
        Stock
        set forth opposite each Investor’s respective name on Exhibit
        A,
        at a
        purchase price per share equal to $50.00, for an aggregate purchase price
        of $75
        million and (ii) the Company shall issue to the Investors the Warrant, in
        the
        amount set forth opposite each Investor’s respective name on Exhibit
        A.

      

      
        
          
            
            

          

          
            -7-

            
              

            

          

          
            
            

          

        

      

      

      2.3.          
        Closing
        and Closing Date

       

      The
        closing of the transactions contemplated by Section
        2.2
        (the
“Closing”)
        shall
        take place at 10:00 A.M., New York City time, on the second Business Day
        following the date on which the last to be fulfilled or waived of the conditions
        set forth in Sections 6 and 7 hereof shall have been fulfilled or waived
        in
        accordance with this Agreement (excluding conditions that by their terms,
        cannot
        be satisfied until the Closing but subject to the satisfaction or waiver
        of such
        conditions at the Closing), or on such earlier date as may be mutually agreed
        by
        the Company and the Investors (the “Closing
        Date”),
        at
        the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York,
        New York 10019, or such other location as the Investors and the Company shall
        mutually select. The Company’s agreement with each Investor is a separate
        agreement and the sales to each Investor are separate sales.

       

      2.4.  Delivery

       

      The
        sale
        and purchase of the Shares shall be effected on the applicable Closing Date
        by
        the Company executing and delivering to each Investor, duly registered in
        such
        Investor’s name, duly executed stock certificates evidencing the Shares being
        purchased by it, against payment of the purchase price therefor by wire transfer
        of immediately available funds to such account as the Company shall designate
        in
        writing at least three Business Days prior to the Closing.

       

      SECTION
        3.       
REPRESENTATIONS
        AND WARRANTIES OF THE COMPANY

       

      Except
        as
        set forth in correspondingly numbered sections of the Disclosure Schedule
        delivered by the Company to the Investors on the date hereof, the Company
        represents and warrants to the Investors that:

       

      3.1.     
        Corporate
        Organization

       

      (a)    The
        Company is a corporation duly organized, validly existing and in good standing
        under the laws of the State of Delaware. Attached hereto as Exhibits
        D
        and
E,
        respectively, are
        true
        and complete copies of the Restated Certificate of Incorporate and Amended
        By-laws of the Company, as amended through the date hereof.

       

      (b)    The
        Company has all requisite corporate power and authority to carry on its business
        as now conducted. The Company has all requisite power and authority to execute
        and deliver this Agreement and to perform its obligations
        hereunder.

       

      (c)    The
        Company has filed all necessary documents to qualify to do business as a
        foreign
        corporation in each jurisdiction in which the conduct of the Company's business
        or the nature of the property owned requires such qualification, except where
        the failure to so qualify would not be reasonably likely to have a Material
        Adverse Effect.

       

      3.2.     
        Subsidiaries

       

      (a)    Each
        of
        the Company’s Subsidiaries is duly formed, validly existing and in good standing
        under the laws of its jurisdiction of organization, with full corporate power
        and

       

      
        
          
            
            

          

          
            -8-

            
              

            

          

          
            
            

          

        

      

      

      authority
        to conduct its business as currently conducted, except where the failure
        of any
        Subsidiary to be duly organized, validly existing and in good standing,
        individually or in the aggregate, would not be reasonably likely to have
        a
        Material Adverse Effect. The Company has made available to the Investors
        the
        articles of incorporation and bylaws (or comparable organizational documents)
        of
        each of the Company’s Subsidiaries (the “Subsidiary
        Organizational Documents”).
        The
        Company owns all of the capital stock or membership interests of each Subsidiary
        free and clear of any and all liens, security interest and any other
        encumbrances or restrictions, and all of the outstanding shares of capital
        stock
        of each Subsidiary are validly issued and are fully paid, non-assessable
        and
        free of preemptive and similar rights. The Company has no Subsidiaries except
        as
        set forth on Section
        3.2
        of the
        Disclosure Schedule.

       

      (b)    Each
        of
        the Company’s Subsidiaries is duly qualified to do business and is in good
        standing in each jurisdiction in which the nature of the business conducted
        by
        it or property owned by it makes such qualification necessary, except where
        the
        failure to be so qualified or in good standing, as the case may be, would
        not be
        reasonably likely to have a Material Adverse Effect and, to the knowledge
        of the
        Company, no proceeding has been instituted in any such jurisdiction revoking,
        limiting or curtailing, or seeking to revoke, limit or curtail, such corporate
        power and authority or qualification. 

       

      
        	 	
                3.3.

              	
                Capitalization

              

      

       

      (a)    The
        authorized capital stock of the Company, immediately prior to the Closing,
        shall
        consist of (i) 60,000,000 shares of Common Stock and (ii) 5,000,000 shares
        of
        Preferred Stock. As of the date hereof, the issued and outstanding shares
        of
        capital stock of the Company consisted of 36,654,986 shares of Common Stock
        and
        no shares of Preferred Stock. 

       

      (b)    All
        the
        outstanding shares of capital stock of the Company have been duly and validly
        issued and are fully paid and non-assessable, and were issued in accordance
        with
        the registration or qualification requirements of the Securities Act and
        any
        relevant state securities laws or pursuant to valid exemptions therefrom.
        As of
        the Closing Date, the Shares will be duly authorized and, upon issuance,
        sale
        and delivery as contemplated by this Agreement, the Shares will be validly
        issued, fully paid and non-assessable securities of the Company. As of the
        Closing Date, the Exchange Preferred Shares will be duly authorized and,
        upon
        issuance and delivery as contemplated by this Agreement, the Exchange Preferred
        Shares will be validly issued, fully paid and non-assessable securities of
        the
        Company. Upon their issuance in accordance with the terms of the Convertible
        Preferred Shares, the Exchange Preferred Shares and the Warrant, the Conversion
        Shares and the Warrant Shares will be free and clear of any and all security
        interests, pledges, liens, charges, claims, options, restrictions on transfer,
        preemptive or similar rights, proxies and voting or other agreements, or
        other
        encumbrances of any nature whatsoever, except for those provided for herein
        or
        otherwise created or imposed upon the Investors and other than restrictions
        on
        transfer imposed by federal or state securities laws. 

       

      (c)    Except
        for (i) 4,581,838 shares of Common Stock outstanding under the Stock Option
        Plans, (ii) 747,678 shares of Common Stock reserved for issuance and not
        yet
        granted under the Stock Option Plans, (iii) 1,325,088 shares of Common Stock
        issuable at a conversion rate of $5.66 upon conversion of the Company’s $7.5
        million Convertible Note, (iv) 100,000 shares of Series A Preferred Stock
        reserved for issuance pursuant to the Preference

      

      
        
          
            
            

          

          
            -9-

            
              

            

          

          
            
            

          

        

      

      

      Share
        Purchase Rights, (v) the Conversion Shares, (vi) the Exchange Preferred Shares,
        (vii) the Warrant Shares and (viii) 9,450,000 shares of Common Stock that
        will
        be reserved for issuance pursuant to Section
        8.11
        herein,
        there will be no shares of Common Stock or any other equity security of the
        Company issuable upon conversion, exchange or exercise of any outstanding
        security of the Company, nor will there be any rights, options, calls or
        warrants outstanding or other agreements to acquire shares of Common Stock
        nor
        will the Company be contractually obligated to purchase, redeem or otherwise
        acquire any of its outstanding shares. Except
        to
        the
        extent otherwise provided in this Agreement, (i) no stockholder of the Company
        is entitled to any preemptive or similar rights to subscribe for shares of
        capital stock of the Company and no stockholder of the Company has any rights,
        contractual or otherwise, to designate members of the Company’s Board of
        Directors (the “Board”),
        other
        than in accordance with the DGCL, (ii) there are no stockholder, voting or
        other
        agreements relating to the rights and obligations of the Company’s
        stockholders,
        and
        (iii) there are no securities or instruments containing antidilution or similar
        provisions that will be triggered by the issuance of the shares of Convertible
        Preferred Stock, Conversion Shares or Exchange Preferred Stock.

       

      (d)    None
        of
        the Company or any of its Subsidiaries (i) has issued or is bound by any
        outstanding subscriptions, options, warrants, calls, convertible or exchangeable
        securities, rights, commitments or agreements of any character providing
        for the
        issuance or disposition of any shares of capital stock, voting securities
        or
        equity interests of any Subsidiary of the Company, and (ii) there are no
        outstanding obligations of the Company or any of its Subsidiaries to repurchase,
        redeem or otherwise acquire any shares of capital stock, voting securities
        or
        equity interests (or any options, warrants or other rights to acquire any
        shares
        of capital stock, voting securities or equity interests) of any Subsidiary
        of
        the Company. There are no stockholder, voting or other agreements relating
        to
        the rights and obligations of the stockholders of any of the Company’s
        Subsidiaries. None of the Company or any of its Subsidiaries is bound to
        provide
        any funds to or make any investment in any Subsidiary of the Company that
        is not
        wholly owned by the Company or any other Person.

       

      
        	 	
                3.4.

              	
                Corporate
                  Proceedings, etc.

              

      

       

      The
        Company has authorized the execution, delivery and performance of this Agreement
        and each of the transactions and agreements contemplated hereby, including,
        without limitation, the Registration Rights Agreement, the Warrant and the
        Certificate of Designations. No other corporate action is necessary to authorize
        such execution, delivery and performance of this Agreement, the Registration
        Rights Agreement, the Warrant or the Certificate of Designations, and upon
        such
        execution and delivery, this Agreement, the Registration Rights Agreement,
        the
        Warrant and the Certificate of Designations shall constitute the valid and
        binding obligations of the Company, enforceable against the Company in
        accordance with their terms, except that such enforcement may be subject
        to
        bankruptcy, insolvency, reorganization, moratorium or other similar laws
        now or
        hereafter in effect relating to creditors’ rights and general principles of
        equity. The Company has authorized the issuance and delivery of the Shares
        and
        the Exchange Preferred Shares in accordance with this Agreement and the
        Certificate of Designations and, subject to the issuance of the Shares, the
        Company has reserved for issuance shares of Common Stock initially issuable
        upon
        conversion of the Shares and the Exchange Preferred Shares. The Company has
        authorized the issuance and delivery of the Warrant Shares in accordance
        with
        the terms of the Warrant and, subject to issuance of the

      

      
        
          
            
            

          

          
            -10-

            
              

            

          

          
            
            

          

        

      

      

      Warrant
        Shares, the Company has reserved for issuance shares of Common Stock initially
        issuable upon exercise of the Warrant.

       

      
        	 	
                3.5.

              	
                Consents
                  and Approvals

              

      

       

      Except
        as
        otherwise provided in this Agreement, the execution and delivery by the Company
        of this Agreement, the Registration Rights Agreement, the Warrant and the
        Certificate of Designations, the issuance of any of the Shares, the Warrant
        Shares, the Conversion Shares or the Exchange Preferred Shares, the performance
        by the Company of its obligations hereunder and the consummation by the Company
        of the transactions contemplated hereby do not require the Company or any
        of its
        Subsidiaries to obtain any consent, approval, clearance or action of, or
        make
        any filing, submission or registration with, or give any notice to, any
        Governmental Authority or judicial authority.

       

      
        	 	
                3.6.

              	
                Absence
                  of Defaults, Conflicts, etc.

              

      

       

      (a)    The
        execution and delivery of this Agreement by the Company does not, and the
        fulfillment of the terms hereof by the Company, and the issuance, sale and
        delivery of the Shares, the Warrant Shares, the Conversion Shares or the
        Exchange Preferred Shares will not, (i) violate or conflict with the
        Organizational Documents or the Subsidiary Organizational Documents;
        (ii) result in a breach of any of the terms, conditions or provisions of,
        or constitute a default (with or without the giving of notice or the passage
        of
        time (or both)) under, or result in the modification of, or permit the
        acceleration of rights under or amendment, cancellation or termination of,
        any
        Contract; (iii) violate any law, ordinance, standard, judgment, rule,
        regulation, order or decree of any court or federal, state or foreign regulatory
        board or body or administrative agency having jurisdiction over the Company
        or
        any of its Subsidiaries or any of their respective properties, assets or
        business; or (iv) result in the creation or imposition of any lien, encumbrance,
        claim, security interest or restriction whatsoever upon any of the material
        properties or assets of the Company or any of its Subsidiaries.
        The
        execution, delivery and performance of this Agreement by the Company and
        the
        consummation by the Company of the transactions contemplated hereby (including
        the issuance of the Shares) will not be deemed a change of control under
        any
        Contract. 

       

      (b)    Neither
        the Company nor any of its Subsidiaries is in default under or in violation
        of
        (and no event has occurred and no condition exists which, upon notice or
        the
        passage of time (or both), would constitute a default under) (i) the Company’s
        Organizational Documents or the Subsidiary Organizational Documents, (ii)
        any
        Contract, (iii) any license, permit or authorization to which the Company
        or any of its Subsidiaries is a party or by which they or any of their
        respective properties or assets may be bound or (iv) any judgment, order,
        writ,
        injunction or decree of any court or any Federal, state, municipal or other
        domestic or foreign governmental department, commission, board, bureau, agency
        or instrumentality, except, in the case of each of the foregoing clauses
        (ii),
        (iii), and (iv), where such default or violation, individually or in the
        aggregate, would not reasonably be expected to have a Material Adverse Effect.
        Each Contract is valid, binding and enforceable in all material respects
        against
        the Company or any of its Subsidiaries that is a party thereto and, to the
        Company’s knowledge, the other parties thereto, in accordance with its terms,
        and in full force and effect on the date hereof. 

      

      
        
          
            
            

          

          
            -11-

            
              

            

          

          
            
            

          

        

      

      

      3.7.          
        Financial
        Statements 

       

      The
        Company has furnished or made available to the Investors true and complete
        copies of the Company’s unaudited consolidated balance sheet as of December 31,
        2005 and December 31, 2004 and its unaudited statements of income, cash flows
        and stockholders’ equity for the fiscal years ended December 31, 2005, December
        31, 2004 and December 31, 2003 and for the six month period ended June 30,
        2006
        (the “Unaudited
        Financial Statements”).
        The
        Unaudited Financial Statements (i) have been prepared in accordance with
        U.S.
        generally accepted accounting principles (“GAAP”)
        applied on a consistent basis throughout the periods indicated, except as
        disclosed therein, (ii) present fairly, in all material respects, the financial
        position of the Company as at the dates thereof and the results of its
        operations and cash flow for the periods then ended, and (iii) have been
        prepared based on the books and records of the Company. The Company is not
        aware
        of any reason why its independent public accountants are unable or unwilling
        to
        furnish an unqualified audit opinion with respect to the financial statements
        for the years ended December 31, 2005, December 31, 2004 and December 31,
        2003.

       

      
        	 	
                3.8.

              	
                Absence
                  of Certain Developments

              

      

       

      Since
        December 31, 2005, there has been no (i) change or event which has had or
        is
        reasonably likely to have a Material Adverse Effect, (ii) declaration, setting
        aside or payment of any dividend or other distribution with respect to the
        capital stock of the Company or any of its Subsidiaries, (iii) issuance of
        capital stock (other than pursuant to (1) the exercise of options, warrants
        or
        convertible securities or (2) employee benefit plans) or options, warrants
        or
        rights to acquire capital stock (other than the rights granted pursuant to
        employee benefit plans or as disclosed in Section
        3.3
        of this
        Agreement or Section
        3.3
        of the
        Disclosure Schedule), (iv) material loss, destruction or damage to any property
        of the Company or any of its Subsidiaries, whether or not insured,
        (v) default with respect to any indebtedness for borrowed money or the
        refunding of any such indebtedness, (vi) labor trouble involving the
        Company or any of its Subsidiaries or any material change in the Company’s or
        any of its Subsidiaries’ respective personnel or the terms and conditions of
        employment, (vii) waiver of any valuable right in favor of the Company or
        any of
        its Subsidiaries, (viii) loan or extension of credit to any officer or employee
        of the Company or any of its Subsidiaries in an amount in excess of $25,000
        or
        (ix) acquisition or disposition of any material assets (or any contract or
        arrangement therefore) or any other material transaction by the Company or
        any
        of its Subsidiaries otherwise than for fair value in the ordinary course
        of
        business.

       

      
        	 	
                3.9.

              	
                Compliance
                  with Law

              

      

       

      (a)    Neither
        the Company nor any of its Subsidiaries or any of their respective businesses
        is, and since January 1, 2004 has not been, in violation of any laws,
        ordinances, governmental rules or regulations to which it is subject, including
        without limitation laws or regulations relating to the environment or to
        occupational health and safety, except for violations that would not be
        reasonably likely to have a Material Adverse Effect, and no material
        expenditures are known to be or expected to be required in order to cause
        the
        Company’s or any of its Subsidiaries’ current operations or properties to comply
        with any such laws, ordinances, governmental rules or regulations.

      

      
        
          
            
            

          

          
            -12-

            
              

            

          

          
            
            

          

        

      

      

      (b)    Each
        of
        the Company and its Subsidiaries has all licenses, permits, franchises or
        other
        governmental authorizations necessary to the ownership of its property or
        to the
        conduct of its business, which if violated or not obtained would be reasonably
        likely to have a Material Adverse Effect. Neither the Company nor any of
        its
        Subsidiaries has received any notice of proceedings relating to the revocation
        or modification of any such licenses, permits, franchises or authorizations,
        nor
        has the Company or any of its Subsidiaries been finally denied any application
        for any such licenses, permits, franchises or other governmental authorizations
        necessary to its business.

       

      (c)    Since
        January 1, 2004, neither the Company nor any of its Subsidiaries has received
        any written notice from any Governmental Authority questioning its compliance
        with (i) any laws, ordinances, governmental rules or regulations to which
        it is
        subject, or (ii) any licenses, permits, franchises or other governmental
        authorizations necessary to the ownership of its property or to the conduct
        of
        its business, and the Company is not aware of any intent to deliver any such
        written notice.

       

      (d)    The
        Company and its Subsidiaries are in material compliance with and are taking
        all
        action required to remain in material compliance with all provisions of the
        Sarbanes-Oxley Act. The Company has made all certifications and statements
        required by Sections 302 and 906 of the Sarbanes-Oxley Act.

       

      
        	 	
                3.10.

              	
                Litigation

              

      

       

      There
        is
        no legal action, suit, arbitration or other legal, administrative or other
        governmental investigation, inquiry or proceeding (whether federal, state,
        local
        or foreign) pending or, to the best of the Company's knowledge, threatened
        against or affecting the Company or any of its Subsidiaries, or any of their
        respective properties, assets, businesses or officers or directors in their
        capacities as such which would be reasonably likely to have a Material Adverse
        Effect. Neither the Company nor any of its Subsidiaries is subject to any
        order,
        writ, judgment, injunction, decree, determination or award of any court or
        of
        any Governmental Authority.

       

      
        	 	
                3.11.

              	
                Absence
                  of Undisclosed Liabilities

              

      

       

      Since
        June 30, 2006, neither the Company nor any of its Subsidiaries has incurred
        any
        liability or obligation, direct or contingent, or entered into any transaction,
        not in the ordinary course of business, that is material to the Company taken
        as
        a whole, and there has not been any change in the capital stock, or material
        increase in the short-term or long-term debt, of the Company or any of its
        Subsidiaries taken as a whole. 

       

      
        	 	
                3.12.

              	
                Employees

              

      

       

      (a)    Neither
        the Company nor any of its Subsidiaries is engaged in any unfair labor practice
        or discriminatory employment practice and no complaint of any such practice
        against the Company or any of its Subsidiaries has been filed or, to the
        best of
        the Company’s knowledge, threatened to be filed with or by the National Labor
        Relations Board, the Equal Employment Opportunity Commission or any other
        Governmental Authority that regulates labor or employment practices, nor
        is any
        grievance filed or, to the best of the Company's knowledge,

       

      
        
          
            
            

          

          
            -13-

            
              

            

          

          
            
            

          

        

      

      

      threatened
        to be filed, against the Company or any of its Subsidiaries by any employee
        pursuant to any employment agreement to which the Company or any of its
        Subsidiaries is a party or is bound which, in any such case, would be reasonably
        likely to have a Material Adverse Effect. The Company and its Subsidiaries
        are
        in compliance with all applicable foreign, federal, state and local laws
        and
        regulations regarding occupational safety and health standards except to
        the
        extent that noncompliance would not be reasonably likely to have a Material
        Adverse Effect, and have received no complaints from any Governmental Authority
        alleging such violations of any such laws and regulations.

       

      (b)    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. 

       

      (c)    Neither
        the Company nor any of its Subsidiaries is aware that any officer or key
        employee, or that any group of key employees, intends to terminate their
        employment with the Company or a Subsidiary of the Company, nor does the
        Company
        or any of its Subsidiaries have a present intention to terminate the employment
        of any of the foregoing.

       

      
        	 	
                3.13.

              	
                Tax
                  Matters

              

      

       

      There
        are
        no foreign, federal, state, county or local taxes due and payable by the
        Company
        or any of its Subsidiaries which have not been paid or will not be paid prior
        to
        the time they become delinquent. The Company and its Subsidiaries have duly
        filed (except in cases where valid extensions have been obtained) all foreign,
        federal, state, county and local tax returns, reports and declarations required
        to have been filed by them and there are in effect no waivers of applicable
        statutes of limitations with respect to taxes for any year. No tax deficiency
        has been determined adversely to the Company or any of its Subsidiaries which
        would be reasonably likely to have a Material Adverse Effect. Neither the
        Company nor any of its Subsidiaries is currently subject to a foreign, federal
        or state tax audit of any kind.

       

      
        	 	
                3.14.

              	
                Intellectual
                  Property 

              

      

       

      (a)    The
        Company and its Subsidiaries own all right, title and interest in and to,
        or
        have valid and enforceable licenses or other rights to use, all Intellectual
        Property, including, without limitation, all Proprietary Software, used or
        held
        for use by them in and material to the conduct of their businesses as currently
        conducted and as contemplated to be conducted. The Company and its Subsidiaries
        are in material compliance with all contractual obligations relating to the
        protection of such of the Intellectual Property as they use pursuant to license
        or other agreement. To the knowledge of the Company, no third party is
        infringing the Intellectual Property owned by the Company and its Subsidiaries.
        The conduct of the businesses of the Company and its Subsidiaries as currently
        conducted and as contemplated to be conducted (i) do not conflict with or
        infringe any intellectual property or other proprietary right (other than
        rights
        under issued patents) of any third party and (ii) to the knowledge of the
        Company, do not conflict with or infringe any issued patents of any third
        party.
        There is no claim, suit, action or

      

      
        
          
            
            

          

          
            -14-

            
              

            

          

          
            
            

          

        

      

      

      proceeding
        pending against the Company or any of its Subsidiaries of which the Company
        has
        received written notice nor, to the knowledge of the Company, is there any
        claim, suit, action or proceeding threatened against the Company or any of
        its
        Subsidiaries: (i) alleging any such conflict or infringement with any third
        party’s intellectual property or other proprietary rights; or (ii) challenging
        the Company’s or such Subsidiary’s ownership or use, or the validity or
        enforceability, of any Intellectual Property.

       

      (b)    Section
        3.14(b)
        of the
        Disclosure Schedule sets forth a true, accurate and complete list of all
        Proprietary Software constituting current product offerings, patents, trademark
        registrations, service mark registrations, copyright registrations, domain
        name
        registrations, and all applications for any of the foregoing, that are owned
        by
        the Company or any of its Subsidiaries anywhere in the world (“Listed
        Intellectual Property”),
        and
        the owner of record, date of application or issuance, registration or
        application number, and relevant jurisdiction as to each. All Listed
        Intellectual Property is owned by the Company and its Subsidiaries free and
        clear of all liens, encumbrances, claims and security interests. No Listed
        Intellectual Property is the subject of any proceeding before any Governmental
        Authority, registrar or other authority in any jurisdiction challenging or
        examining the right to ownership (excluding office actions or other forms
        of
        preliminary or final refusals of registration), of the Listed Intellectual
        Property by the Company or its Subsidiaries, including any opposition,
        cancellation, interference or other ex-parte legal challenges. The consummation
        of the transactions contemplated hereby will not materially impair the rights
        of
        the Company and its Subsidiaries in any Listed Intellectual
        Property.

       

      (c)    Section
        3.14(c)
        of the
        Disclosure Schedule sets forth a true, accurate and complete list of all
        third
        party software and Source Code compiled with, bundled with, incorporated
        into or
        integrated with any Proprietary Software or any software currently under
        development owned by the Company including, without limitation, open source
        software, freeware, and proprietary software of third parties used under
        a
        license granted to the Company or its Subsidiaries.

       

      (d)    The
        present employees, officers and directors of the Company or any of its
        Subsidiaries, and any agents, consultants or outside contractors or
        subcontractors of the Company or any of its Subsidiaries who conduct inventive
        work in connection with their employment or engagement have entered into
        written
        agreements with the Company or a Subsidiary whereby they have assigned all
        right, title and interest in their inventive work to the Company or a
        Subsidiary. Except as set forth on Section
        3.14(d)
        of the
        Disclosure Schedule, all inventors named on any patents or patent applications
        constituting Intellectual Property executed assignments to the Company or
        its
        Subsidiaries of their rights to such patents and patent
        applications.

       

      (e)    To
        the
        knowledge of the Company: (i) none of the Intellectual Property
        constituting trade secrets or confidential information has been used, disclosed
        or appropriated to the detriment of the Company or any of its Subsidiaries
        for
        the benefit of any Person other than the Company or its Subsidiaries; and
        (ii)
        no employee, independent contractor or agent of the Company or any of its
        Subsidiaries has misappropriated any trade secrets or other confidential
        information of any other Person in the course of the performance of his or
        her
        duties as an employee, independent contractor or agent of the Company or
        any of
        its Subsidiaries. The

      

      
        
          
            
            

          

          
            -15-

            
              

            

          

          
            
            

          

        

      

      

      Company
        and its Subsidiaries have taken commercially reasonable steps (including,
        without limitation, entering into confidentiality and nondisclosure agreements,
        inventor agreements and work for hire agreements with all officers and employees
        of and consultants to the Company and its Subsidiaries, if any, with access
        to
        or knowledge of any Intellectual Property) necessary to safeguard and maintain
        the secrecy and confidentiality of, and its and its Subsidiaries’ proprietary
        rights in, all trade secrets and other confidential information of the Company
        and its Subsidiaries.

       

      (f)    The
        Proprietary Software was developed by employees of the Company or its
        Subsidiaries within the scope of their employment and such development was
        conducted within the United States. Section
        3.14(f)
        of the
        Disclosure Schedule identifies those present employees, directors, officers
        and
        consultants of which the Company is aware have created or developed Intellectual
        Property, including Proprietary Software and Source Code, not pursuant to
        a work
        for hire agreement or agreement assigning ownership rights in the
        Company.

       

      (g)    Neither
        the Company nor any of its Subsidiaries has granted an exclusive license
        to any
        Proprietary Software to any third party.

       

      (h)    Section
        3.14(h)
        of the
        Disclosure Schedule lists all licenses granted by the Company or its
        Subsidiaries to third parties for use of Source Code of Proprietary Software,
        all customer agreements pursuant to which any Source Code is held in escrow,
        and
        all escrow agents holding any Source Code pursuant to such customer agreements.
        There have not been any instances in which any Source Code has been released
        by
        an escrow agent to a customer of the Company or its Subsidiaries. To the
        knowledge of the Company, no event has occurred, and no circumstance or
        condition exists, that (with or without notice or lapse of time) will, or
        would
        reasonably be expected to, result in the disclosure or delivery by the Company,
        any of its Subsidiaries or any other party acting on behalf of the Company
        or
        any of its Subsidiaries, of any Source Code. No third party owns any right,
        title or interest in or to any Source Code, except for such Source Code
        identified in Section
        3.14(c)
        of the
        Disclosure Schedule.

       

      (i)    The
        Company and its Subsidiaries have purchased a sufficient number of license
        seats
        for all third party software for which paid licenses are required in order
        to be
        in compliance with the obligation to obtain such licenses. Neither the Company
        nor its Subsidiaries (i) has modified any “open source” software utilized in
        Proprietary Software or (ii) is subject to any obligation (1) to refrain
        in any
        way from use, disclosure or distribution of the Proprietary Software as used,
        disclosed or distributed in their businesses as currently conducted and as
        contemplated to be conducted or (2) to disclose any Source Code of Proprietary
        Software arising from any “open source” software used by the Company or its
        Subsidiaries.

       

      (j)    Reasonable
        steps have been taken to back up electronically stored information used in
        the
        businesses, and the Company and its Subsidiaries have in place disaster recovery
        and security arrangements in relation to the Proprietary Software and third
        party operating software, all of which match or exceed good industry practice
        and which comply with any specific obligation entered into by the Company
        and
        its Subsidiaries with any of its customers.

      

      
        
          
            
            

          

          
            -16-

            
              

            

          

          
            
            

          

        

      

      

      (k)    The
        practices of the Company and its Subsidiaries respecting maintenance of the
        confidentiality of customer data and secure electronic storage of such data
        (i)
        match or exceed good industry practice, (ii) comply with any specific obligation
        entered into by the Company and its Subsidiaries with any of its customers,
        and
        (iii) are in accordance with applicable laws, rules and
        regulations.

       

      
        	 	
                3.15.

              	
                Material
                  Contracts 

              

      

       

      Except
        for those documents filed prior to the date hereof in unredacted form with
        the
        SEC, Section
        3.15
        of the
        Disclosure Schedule sets forth a true and complete list of the following
        contracts, agreements, instruments, commitments and other arrangements to
        which
        the Company or any of its Subsidiaries is a party: (i) employment or severance
        agreements with any director or officer and consulting agreements with any
        consultant that provide for annual payments in excess of $100,000 and are
        for a
        term of one year or more (excluding such agreements that are cancelable without
        penalty or further payment with 90 days’ notice or less); (ii) any shareholder
        agreement or agreement relating to the issuance, voting or transfer of any
        securities of the Company or any subsidiary; (iii) loan, bridge loan, credit
        or
        security agreements; (iv) joint venture agreements; (v) any contract, agreement
        or understanding limiting or restraining the Company or its subsidiaries
        from
        engaging or competing in any lines of business or with any Person; (vi) any
        contract, agreement, understanding or arrangement with the top ten customers
        (and their respective Affiliates) of the Company, by revenue for the period
        from
        June 1, 2005 through May 31, 2006; (vii) any agreement or other arrangement for
        the future sale or purchase of any material assets, property or rights, or
        for
        the grant of any options or preferential rights to purchase any material
        assets,
        property or rights; and (viii) any other Contract that is required to be
        or has
        been filed with the SEC but has not yet been filed (each, a “Material
        Contract”).
        Each
        Material Contract is valid, binding and enforceable in all material respects
        against the Company or such Subsidiary and, to the Company's knowledge, the
        other parties thereto, in accordance with its terms, and in full force and
        effect on the date hereof. Neither the Company nor its Subsidiaries is in
        default or breach under any of the Material Contracts, nor is any other party
        thereto in default or breach thereunder, nor are there facts or circumstances
        which have occurred which, with or without the giving of notice or the passage
        of time or both, would constitute a default or breach under any of the Material
        Contracts, except for such breaches or defaults that would not, individually
        or
        in the aggregate, be reasonably expected to have a Material Adverse
        Effect.

       

      
        	 	
                3.16.

              	
                Title
                  to Tangible Assets

              

      

       

      The
        Company and its Subsidiaries have good and marketable title to their respective
        material properties and assets and good and enforceable title to all of their
        respective material leasehold estates, in each case subject to no mortgage,
        pledge, lien, lease, encumbrance, defect or charge, other than or resulting
        from
        taxes which have not yet become delinquent and minor liens and encumbrances
        which do not in any case materially detract from the value of the property
        subject thereto or materially impair the operations of the Company or any
        of its
        Subsidiaries as currently conducted and as contemplated to be conducted and
        which have not arisen otherwise than in the ordinary course of
        business.

       

      
        
          
            
            

          

          
            -17-

            
              

            

          

          
            
            

          

        

      

      

      3.17.        
        Condition
        of Properties

       

      Except
        for matters that would not, individually or in the aggregate, be reasonably
        likely to have a Material Adverse Effect, the property and assets of the
        Company
        and its Subsidiaries are in good operating condition and repair (ordinary
        wear
        and tear excepted).

       

      
        	 	
                3.18.

              	
                Transactions
                  with Related Parties

              

      

       

      Neither
        the Company nor any of its Subsidiaries is a party to any agreement with
        any of
        the Company’s or any of its Subsidiaries’ directors, officers or stockholders or
        any Affiliate or family member of any of the foregoing under which it: (i)
        leases any real or personal property (either to or from such Person); (ii)
        licenses Intellectual Property, Software or other technology (either to or
        from
        such Person); (iii) is obligated to purchase any tangible or intangible
        asset from or sell such asset to such Person; (iv) purchases products or
        services from or furnishes products or services to such Person; or (v) has
        borrowed money from or lent money to such Person. Neither the Company nor
        any of
        its Subsidiaries employs as an employee or engages as a consultant any family
        member of any of the Company’s or any of its Subsidiaries’ directors, officers
        or stockholders. To the knowledge of the Company, there exist no agreements
        among stockholders of the Company or of any of its Subsidiaries to act in
        concert with respect to the voting or holding of the Company’s
        securities.

       

      
        	 	
                3.19.

              	
                Registration
                  Rights

              

      

       

      Except
        as
        pursuant to the Registration Rights Agreement, the Company will not, as of
        the
        Closing Date, be under any obligation to register any of its securities under
        the Securities Act.

       

      
        	 	
                3.20.

              	
                Brokerage

              

      

       

      There
        are
        no claims for brokerage commissions or finder’s fees or similar compensation in
        connection with the transactions contemplated by this Agreement based on
        any
        arrangement made by or on behalf of the Company or any of its Subsidiaries,
        and
        the Company agrees to indemnify and hold the Investors harmless against any
        costs or damages incurred as a result of any such claim.

       

      
        	 	
                3.21.

              	
                Illegal
                  or Unauthorized Payments; Political
                  Contributions

              

      

       

      Neither
        the Company nor any of its Subsidiaries, nor, to the best of the Company’s
        knowledge (after reasonable inquiry of its officers and directors), any of
        the
        officers, directors, employees, agents or other representatives of the Company,
        any of its Subsidiaries or any other business entity or enterprise with which
        the Company or any of its Subsidiaries is or has been affiliated or associated,
        has, directly or indirectly taken any action prohibited by Section 30A of
        the
        Exchange Act.

       

      
        	 	
                3.22.

              	
                Takeover
                  Statute 

              

      

       

      The
        Board
        has taken all action necessary to render inapplicable, as it relates to the
        Investors, (i) the provisions of Section 203 of the DGCL and (ii) the provisions
        of the

      

      
        
          
            
            

          

          
            -18-

            
              

            

          

          
            
            

          

        

      

      

      Company’s
        Rights Agreement with Chase Mellon Shareholder Services, L.L.C., as Rights
        Agent, dated September 1, 1997, as amended from time to time (the “Rights
        Plan”),
        in
        each case, however,
        solely
        with respect to transactions (x) contemplated hereby or (y) as would be
        permitted under Section
        8.7.
        To the
        Company’s knowledge, no other Takeover Statute is applicable to the transactions
        contemplated hereby.

       

      
        	 	
                3.23.

              	
                No
                  Manipulation of Common Stock

              

      

       

      Neither
        the Company nor any of its Subsidiaries has taken action outside the ordinary
        course of business designed to or that might reasonably be expected to cause
        or
        result in unlawful manipulation of the price of the Common Stock to facilitate
        the sale or resale of the Shares, the Conversion Shares or the Exchange
        Preferred Shares.

       

      
        	 	
                3.24.

              	
                Accountants

              

      

       

      Friedman
        LLP has advised the Company that it is, and to the knowledge of the Company
        it
        is, an independent accountant as required by the Sarbanes-Oxley Act, the
        Securities Act and the Exchange Act.

       

      
        	 	
                3.25.

              	
                Internal
                  Accounting Controls 

              

      

       

      Each
        of
        the Company and its Subsidiaries maintains a system of internal accounting
        controls sufficient, in the judgment of the management of the Company or
        such
        Subsidiary, to provide reasonable assurance that: (i) transactions are executed
        in accordance with management’s general or specific authorizations; (ii)
        transactions are recorded as necessary to permit preparation of financial
        statements in conformity with generally accepted accounting principles and
        to
        maintain asset accountability; (iii) access to assets is permitted only in
        accordance with management’s general or specific authorization; and (iv) the
        recorded accountability for assets is compared with the existing assets at
        reasonable intervals and appropriate action is taken with respect to any
        differences.

       

      
        	 	
                3.26.

              	
                Environmental
                  Matters

              

      

       

      The
        Company and its Subsidiaries are in compliance with all applicable Environmental
        Laws, except where any failure to comply would not be reasonably likely to
        have
        a Material Adverse Effect. There is no civil, criminal or administrative
        judgment, action, suit, demand, claim, hearing, notice of violation,
        investigation, proceeding, notice or demand letter pending or to the Company’s
        knowledge threatened against the Company or any of its Subsidiaries pursuant
        to
        Environmental Laws. To the Company’s knowledge, there are no past or present
        events, conditions, circumstances, activities, practices, incidents, agreements,
        actions or plans which could reasonably be expected to prevent compliance
        with,
        or which have given rise to or will give rise to liability which would have
        a
        Material Adverse Effect, under Environmental Laws. The Company and its
        Subsidiaries have received all permits, licenses or other approvals required
        of
        them under applicable Environmental Laws to conduct their respective businesses,
        and are in compliance with all terms and conditions of any such permits,
        licenses and approvals except where the failure to so comply would not be
        reasonably expected to have, individually or in the aggregate, a Material
        Adverse Effect.

      

      
        
          
            
            

          

          
            -19-

            
              

            

          

          
            
            

          

        

      

      

      3.27.        
        Insurance

       

      The
        Company and its Subsidiaries have made available to WP copies of all material
        insurance policies maintained by the Company’s and its Subsidiaries’ with
        respect to their respective businesses and properties, all of which are in
        full
        force and effect. Since December 31, 2005, neither the Company nor its
        Subsidiaries have been refused insurance coverage sought or applied for by
        the
        Company or its Subsidiaries. Neither the Company nor its Subsidiaries have
        received notice from, and the Company has no knowledge of any threat by,
        any
        insurer that has issued any insurance policy to the Company or any of its
        Subsidiaries that such insurer intends to deny coverage under or cancel,
        discontinue or not renew any insurance policy presently in force. 

       

      
        	 	
                3.28.

              	
                Transfer
                  Taxes

              

      

       

      On
        the
        Closing Date, all stock transfer or other taxes (other than income taxes)
        which
        are required to be paid in connection with the sale and issuance of the Shares
        hereunder will be, or will have been, fully paid or provided for by the Company
        and the Company will have complied with all laws imposing such
        taxes.

       

      
        	 	
                3.29.

              	
                Investment
                  Company

              

      

       

      The
        Company is not an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for an investment company, within the
        meaning of the Investment Company Act of 1940, as amended.

       

      
        	 	
                3.30.

              	
                No
                  Integration; General Solicitation 

              

      

       

      Neither
        the Company nor any of its Affiliates, nor 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
        cause
        the issuance of the Shares to be integrated with any prior offering by the
        Company for purposes of the Securities Act or any applicable stockholder
        approval provisions. Neither the Company nor any of its Affiliates, nor any
        Person acting on its or their behalf, has offered or sold, or authorized
        the
        offer or sale of, any of the Shares by any form of general solicitation or
        general advertising within the meaning of Rule 502(c) under the Securities
        Act.
        The Company has not publicly distributed and will not publicly distribute
        prior
        to the Closing Date any offering material in connection with the issuance
        of the
        Shares. The Company has offered the Shares for sale only to the Investors.
        The
        Company shall not directly or indirectly take, and shall not permit any of
        its
        directors or officers indirectly to take, any action (including any offering
        or
        sale to any Person of the Shares) that will make unavailable the exemption
        from
        registration under the Securities Act being relied upon by the Company for
        the
        offer and sale to the Investors of the Shares as contemplated by this
        Agreement.

       

      
        	 	
                3.31.

              	
                Officers,
                  Directors and 5% Stockholders 

              

      

       

      Each
        of
        the Company’s officers and directors and Persons known to the Company to
        beneficially own (within the meaning of Rule 13d-3 under the Exchange Act)
        5% or
        more of the Common Stock is listed on Section
        3.31
        of the
        Disclosure Schedule.

      

      
        
          
            
            

          

          
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      3.32.        
        Vote
        Required. 

       

      No
        vote
        of the holders of any class or series of the Company’s capital stock, including
        the Common Stock, is necessary to approve the issuance of the Shares or the
        Warrant and any other transactions contemplated by this Agreement including,
        without limitation, the establishment of the new stock option plan contemplated
        by Section
        8.11
        hereof.

       

      SECTION
        4.       
REPRESENTATIONS
        AND WARRANTIES OF THE INVESTORS

       

      Each
        Investor severally represents and warrants to the Company that:

       

      (a)    It
        is
        acquiring the Shares and the Warrant for its own account for investment and
        not
        with a view towards the resale, transfer or distribution thereof, nor with
        any
        present intention of distributing the Shares or the Warrant, but subject,
        nevertheless, to any requirement of law that the disposition of the Investor’s
        property shall at all times be within the Investor’s control, and without
        prejudice to the Investor’s right at all times to sell or otherwise dispose of
        all or any part of such securities under a registration under the Securities
        Act
        or under an exemption from said registration available under the Securities
        Act.

       

      (b)    It
        has
        full power and legal right to execute and deliver this Agreement and to perform
        its obligations hereunder.

       

      (c)    It
        is a
        validly existing partnership, limited liability company, trust or corporation,
        as the case may be, duly organized under the laws of its jurisdiction of
        organization or formation.

       

      (d)    It
        has
        taken all action necessary for the authorization, execution, delivery, and
        performance of this Agreement and its obligations hereunder, and, upon execution
        and delivery by the Company, this Agreement shall constitute the valid and
        binding obligation of such Investor, enforceable against such Investor in
        accordance with its terms, except that such enforcement may be limited by
        bankruptcy, insolvency, reorganization, moratorium or other similar laws
        now or
        hereafter in effect relating to creditors' rights and general principles
        of
        equity.

       

      (e)    There
        are
        no claims for brokerage commissions or finder's fees or similar compensation
        in
        connection with the transactions contemplated by this Agreement based on
        any
        arrangement made by or on behalf of such Investor and such Investor agrees
        to
        indemnify and hold the Company harmless against any costs or damages incurred
        as
        a result of any such claim.

       

      (f)    It
        has
        such knowledge and experience in financial and business matters that it is
        capable of evaluating the merits and risks of its investment in the Company
        as
        contemplated by this Agreement, and is able to bear the economic risk of
        such
        investment for an indefinite period of time. It has been furnished access
        to
        such information and documents as it has requested and has been afforded
        an
        opportunity to ask questions of and receive answers from representatives
        of the
        Company concerning the terms and conditions of this Agreement and the purchase
        of the Shares contemplated hereby. It is a “qualified institutional buyer”
within the meaning of Rule 144A(a) of the Securities Act or an “accredited
        investor” within the meaning of Rule 501(a) of Regulation D under the Securities
        Act.

       

      
        
          
            
            

          

          
            -21-

            
              

            

          

          
            
            

          

        

      

      

      (g)    Except
        as
        contemplated by Section
        5.7
        and
        except for such consents, approvals and filings, the failure to obtain or
        make
        would not, individually or in the aggregate, have a material adverse effect
        on
        the ability of the Investor to consummate the transactions contemplated by
        this
        Agreement, the execution and delivery by it of this Agreement and the
        performance by such Investor of its obligations hereunder and the consummation
        by such Investor of the transactions contemplated hereby do not require such
        Investor to obtain any consent, approval, clearance or action of, or make
        any
        filing, submission or registration with, or give any notice to, any Governmental
        Authority or judicial authority.

       

      (h)    The
        execution and delivery of this Agreement by such Investor do not, and the
        fulfillment of the terms hereof and thereof by such Investor will not, (i)
        violate or conflict with its partnership agreement, trust agreement, the
        articles of incorporation, other constitutive documents or by-laws (or other
        similar applicable documents) of the Investor, as applicable; (ii) result
        in a breach of any of the terms, conditions or provisions of, or constitute
        a
        default (with or without the giving of notice or the passage of time (or
        both))
        under, or result in the modification of, or permit the acceleration of rights
        under or termination of, any material contract to which such Investor is
        a party
        or (iii) violate any law, ordinance, standard, judgment, rule or regulation
        of
        any court or federal, state or foreign regulatory board or body or
        administrative agency having jurisdiction over such Investor or over its
        respective properties or businesses; except, in the cases of clauses (ii)
        and
        (iii) where such event would not be reasonably likely to have a material
        adverse
        effect on the Investor’s ability to consummate the transactions contemplated by
        this Agreement.

       

      SECTION
        5.       
PRE-CLOSING
        COVENANTS

       

      
        	 	
                5.1.

              	
                Resale
                  of Shares

              

      

       

      Each
        Investor severally covenants that it will not sell or otherwise transfer
        the
        Shares, the Warrant, the Warrant Shares, the Conversion Shares or the Exchange
        Preferred Shares, except pursuant to an effective registration under the
        Securities Act or in a transaction which qualifies as an exempt transaction
        under the Securities Act and the rules and regulations promulgated
        thereunder.

       

      
        	 	
                5.2.

              	
                Covenants
                  Pending Closing

              

      

       

      Pending
        the Closing, each of the Company and its Subsidiaries will conduct its business
        in the ordinary course, and will not, without the Investors’ prior written
        consent, such consent not to be unreasonably withheld, delayed or conditioned,
        take any action which would result in any of the representations or warranties
        contained in this Agreement not being true at and as of the time immediately
        after such action, or in any of the covenants contained in this Agreement
        becoming incapable of performance. Pending the Closing, the Company will
        promptly advise the Investors of any action or event of which it becomes
        aware
        which has the effect of making materially incorrect any of such representations
        or warranties or which has the effect of rendering any of such covenants
        incapable of performance. Without limiting the generality of the foregoing,
        and
        except as otherwise expressly contemplated by this Agreement, between the
        date
        hereof and the earlier of termination of this Agreement or the Closing Date,
        the

      

      
        
          
            
            

          

          
            -22-

            
              

            

          

          
            
            

          

        

      

      

      Company
        shall not, and shall cause each of its Subsidiaries not to, without the prior
        written consent of the Investors: 

       

      (a)    make
        any
        change in its charter documents or bylaws or issue any additional shares
        of
        capital stock or equity securities or grant any option, warrant or right
        to
        acquire any capital stock or equity securities or issue any security convertible
        into or exchangeable for its capital stock or alter any term of any of its
        outstanding securities or make any change in its outstanding shares of capital
        stock or other ownership interests or in its capitalization, whether by reason
        of a reclassification, recapitalization, stock split or combination, exchange
        or
        readjustment of shares, stock dividend or otherwise;

       

      (b)    incur,
        assume or guarantee any indebtedness for borrowed money (other than ordinary
        course trade payables or pursuant to existing facilities in the ordinary
        course
        of business consistent with past practice), issue any notes, bonds, debentures
        or other corporate securities or grant any option, warrant or right to purchase
        any thereof, (B) issue any securities convertible or exchangeable for debt
        securities of the Company, or (C) issue any options or other rights to acquire
        from the Company, directly or indirectly, debt securities of the Company
        or any
        security convertible into or exchangeable for such debt securities;

       

      (c)    make
        any
        sale, assignment, transfer, abandonment or other conveyance of any of its
        assets
        or any part thereof, except transactions pursuant to existing contracts set
        forth in the Disclosure Schedule and dispositions of inventory or of worn-out
        or
        obsolete equipment for fair or reasonable value in the ordinary course of
        business consistent with past practices;

       

      (d)    redeem,
        retire, purchase or otherwise acquire, directly or indirectly, any shares
        of its
        capital stock or declare, set aside or pay any dividends or other distribution
        in respect of such shares;

       

      (e)    enter
        into any new (or amend any existing) employee benefit plan, program or
        arrangement or any new (or amend any existing) employment, severance or
        consulting agreement, grant any general increase in the compensation of officers
        or employees (including any such increase pursuant to any bonus, pension,
        profit-sharing or other plan or commitment) or grant any increase in the
        compensation payable or to become payable to any employee, except in accordance
        with pre-existing contractual provisions or as contemplated by Section
        8.11
        herein;
        or 

       

      (f)    commit
        to
        do any of the foregoing.

       

      
        	 	
                5.3.

              	
                Further
                  Assurances

              

      

       

      The
        Company and each Investor shall execute such documents and other papers and
        take
        such further actions as may be reasonably required or desirable to carry
        out the
        provisions hereof and the transactions contemplated hereby. The Company and
        each
        Investor shall use its reasonable efforts to fulfill or obtain the fulfillment
        of the conditions to the Closing as promptly as practicable.

      

      
        
          
            
            

          

          
            -23-

            
              

            

          

          
            
            

          

        

      

      

      5.4.          
        Access
        to Information 

       

      The
        Company shall, and shall cause each of its Subsidiaries to, throughout the
        period from the date hereof until the Closing has been made, (i) provide
        each Investor and its representatives with full access, upon reasonable prior
        notice and during normal business hours, to all officers, employees, agents
        and
        accountants of the Company and its Subsidiaries and their respective assets,
        properties and material books and records, but only to the extent that such
        access does not unreasonably interfere with the business and operations of
        the
        Company and its Subsidiaries, and (ii) furnish promptly to such persons
        (x) a copy of each report, statement, schedule and other document filed or
        received by the Company or any of its Subsidiaries pursuant to the requirements
        of federal or state securities laws and each material report, statement,
        schedule and other document filed with any other Governmental Authority and
        (y) all other information and data (including, without limitation, copies
        of Contracts, employee benefit plans and other material books and records
        and
        environmental assessments, investigations or studies concerning the properties
        of such party or the business or operations conducted thereon) concerning
        the
        business and operations of the Company and its Subsidiaries as the other
        party
        or any of such other persons reasonably may request. No investigation pursuant
        to this paragraph or otherwise shall affect any representation or warranty
        contained in this Agreement or any condition to the obligations of the parties
        hereto.

       

      
        	 	
                5.5.

              	
                Exclusivity

              

      

       

      From
        and
        after the date hereof to the Closing Date or the earlier termination of this
        Agreement in accordance with its terms, neither the Company nor any Subsidiary,
        nor their respective officers or directors or any Person acting on their
        behalf,
        shall directly or indirectly encourage, solicit or, except as may be required
        by
        law, engage in discussions or negotiations with, or provide any information
        to,
        any Person, firm, or other entity or group (other than the Investors or their
        representatives) concerning any merger, sale of substantial assets, purchase
        or
        sale of shares of capital stock of the Company or similar transaction involving
        the Company or any division, Subsidiary or Affiliate thereof. The Company
        shall
        promptly notify the Investors if it, or to its knowledge any of its
        Subsidiaries, receives any such inquiries or communications.

       

      
        	 	
                5.6.

              	
                Public
                  Disclosure 

              

      

       

      Before
        issuing any press release or otherwise making any public statement with respect
        to the transactions contemplated by this Agreement, the Company and the
        Investors agree to consult with each other as to its form and substance,
        and
        agree not to issue any such press release or make any public statement prior
        to
        obtaining the consent of the other (which shall not be unreasonably withheld
        or
        delayed), except to the extent that the Company or the Investors, as the
        case
        may be, is advised by outside counsel that such public statement is required
        by
        applicable law. On or before the fourth Business Day following the Closing
        Date,
        the Company shall file a Current Report on Form 8-K with the SEC describing
        the
        terms of the transactions contemplated by this Agreement and attach as an
        exhibit to such Current Report on Form 8-K this Agreement, the Registration
        Rights Agreement, the Certificate of Designations and any other agreements
        relating to the transactions contemplated by this Agreement that are required
        to
        be filed pursuant to the Exchange Act. 

      

      
        
          
            
            

          

          
            -24-

            
              

            

          

          
            
            

          

        

      

      

      5.7.          
        HSR
        Act Filing

       

      The
        Company and WP shall, as soon as practicable after the date of this Agreement,
        but in no event later than ten (10) Business Days after the date hereof,
        file
        Notification and Report Forms under the HSR Act with the Federal Trade
        Commission (the “FTC”)
        and
        the Antitrust Division of the Department of Justice (the “Antitrust
        Division”)
        relating to the transaction contemplated by this Agreement and shall use
        their
        reasonable best efforts to respond as promptly as practicable to all inquiries
        received from the FTC or the Antitrust Division for additional information
        or
        documentation.

       

      
        	 	
                5.8.

              	
                Consents
                  and Approvals

              

      

       

      From
        and
        after the date hereof, the Company shall use its reasonable best efforts
        to
        obtain as promptly as practicable any consent or approval of any Person,
        including any Governmental Authority, required in connection with the
        transactions contemplated hereby, including an application that meets the
        requirements of NASD Rule 1017(b) (the “1017
        Application”),
        and
        the Investors shall cooperate reasonably with the Company with respect
        thereto.

       

      
        	 	
                5.9.

              	
                Use
                  of Proceeds

              

      

       

      The
        proceeds received by the Company from the issuance and sale of the Shares
        shall
        be used by the Company for general corporate purposes and business development
        activities.

       

                         
        5.10.   Takeover
        Statute

       

      If
        any
        Takeover Statute shall become applicable to the transactions contemplated
        hereby, including without limitation any takeover provision under the laws
        of
        the State of Delaware, the Company and the members of the Board shall, to
        the
        extent consistent with its fiduciary duties, grant such approvals and take
        such
        actions as are necessary so that the transactions contemplated hereby may
        be
        consummated as promptly as practicable on the terms contemplated hereby and
        otherwise use their reasonable best efforts to act to eliminate or minimize
        the
        effects of such statute or regulation on the transactions contemplated hereby.
        

       

      
        	 	
                5.11.

              	
                Form
                  D and Blue Sky

              

      

       

      The
        Company agrees to timely file a Form D with the SEC with respect to the Shares
        to the extent required under Regulation D of the Securities Act and to provide,
        upon request, a copy thereof to each Investor. 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 Shares for,
        sale to the Investors at the Closing pursuant to this Agreement under applicable
        securities and “blue sky” laws of the states of the United States (or to obtain
        an exemption from such qualification), and shall provide evidence of any
        such
        action so taken to the Investors on or prior to the Closing Date. The Company
        shall make all timely filings and reports relating to the offer and sale
        of the
        Shares required under applicable securities and “blue sky” laws of the states of
        the United States following the Closing Date. The Company

      

      
        
          
            
            

          

          
            -25-

            
              

            

          

          
            
            

          

        

      

      

      shall
        pay
        all fees and expenses in connection with satisfying its obligations under
        this
Section
        5.11.

       

      SECTION
        6.       
INVESTORS’
        CLOSING CONDITIONS

       

      The
        Investors’ obligations to purchase the Shares at the Closing shall be subject to
        the performance by the Company of its agreements theretofore to be performed
        hereunder and to the satisfaction (or waiver), prior thereto or concurrently
        therewith, of the following further conditions:

       

      
        	 	
                6.1.

              	
                Representations
                  and Warranties

              

      

       

      The
        representations and warranties of the Company contained in Section 3 of this
        Agreement shall be true and correct on and as of the Closing Date in all
        material respects (except for such representations and warranties that are
        qualified as to materiality, which shall be true and correct in all respects)
        as
        though such representations and warranties were made at and as of such
        date.

       

      
        	 	
                6.2.

              	
                Compliance
                  with Agreement

              

      

       

      The
        Company shall have performed and complied in all material respects with all
        agreements, covenants and conditions contained in this Agreement which are
        required to be performed or complied with by the Company prior to or on the
        Closing Date.

       

      
        	 	
                6.3.

              	
                Injunction

              

      

       

      There
        shall be no effective injunction, writ, preliminary restraining order or
        any
        order of any nature issued by a court of competent jurisdiction directing
        that
        the transactions provided for herein or any of them not be consummated as
        herein
        provided.

       

      
        	 	
                6.4.

              	
                Regulatory
                  Approvals; Third Party Consents

              

      

       

      The
        waiting period under the HSR Act shall have been terminated or expired, or
        approval under the HSR Act shall have been received, and any consents or
        approvals under any other Competition Laws shall have been received. The
        Company
        shall have received written NASD approval of the 1017 Application, or there
        shall elapsed at least 31 days since the Company shall have filed the 1017
        Application with the NASD and the Company shall not have received any comment
        or
        notice, written or otherwise, from the NASD that in the view of Investors’
counsel could result in denial or disapproval of the 1017
        Application.

       

      
        	 	
                6.5.

              	
                Counsel’s
                  Opinion

              

      

       

      Each
        Investor shall have received an opinion, dated the Closing Date from the
        Company’s General Counsel and Covington & Burling LLP, substantially in the
        form of Exhibits
        F-1
        and
F-2
        attached
        hereto.

      

      
        
          
            
            

          

          
            -26-

            
              

            

          

          
            
            

          

        

      

      

      6.6.          
        Adverse
        Development

       

      There
        shall have been no developments in the business of the Company or any of
        its
        Subsidiaries which would be reasonably likely to have a Material Adverse
        Effect.

       

      
        	 	
                6.7.

              	
                Convertible
                  Preferred Directors

              

      

       

      Effective
        as of the Closing Date, William Janeway and Cary Davis shall have been appointed
        to the Board as the initial Convertible Preferred Directors and written evidence
        of such appointments shall be provided to the Investors. 

       

      
        	 	
                6.8.

              	
                Chief
                  Executive Officer

              

      

       

      Effective
        as of the Closing Date, Howard Edelstein shall have been appointed Chief
        Executive Officer of the Company and written evidence of such appointment
        shall
        be provided to the Investors. The Company shall have entered into an employment
        agreement with Mr. Edelstein, the terms of which are acceptable to WP.

       

      
        	 	
                6.9.

              	
                Registration
                  Rights Agreement

              

      

       

      The
        Company shall have executed the Registration Rights Agreement, the form of
        which
        is attached as Exhibit
        G
        hereto
        (the “Registration
        Rights Agreement”).

       

      
        	 	
                6.10.

              	
                Issuance
                  of Warrant

              

      

       

      The
        Company shall have executed and delivered the Warrant to the Investors in
        accordance with the terms hereof.

       

      
        	 	
                6.11.

              	
                Filing
                  of Certificate of Designations

              

      

       

      The
        Certificate of Designations shall have been filed with the Secretary of State
        of
        the State of Delaware and shall be in full force and effect as of the Closing
        Date.

       

      
        	 	
                6.12.

              	
                Officer’s
                  Certificate

              

      

       

      Each
        Investor shall have received a certificate, dated the Closing Date, signed
        by a
        duly authorized executive officer of the Company, certifying that the conditions
        specified in the foregoing Sections
        6.1,
        6.2,
        6.3,
        and
6.6
        hereof
        have been fulfilled.

       

      
        	 	
                6.13.

              	
                Secretary’s
                  Certificate

              

      

       

      Each
        Investor shall have received a certificate, dated the Closing Date, of the
        Secretary of the Company attaching: (i) a true and complete copy of the Restated
        Certificate of Incorporation of the Company, with all amendments thereto;
        (ii)
        true and complete copies of the Company's By-laws, as amended, in effect
        as of
        such date; (iii) a certificate from the Secretary of State of the State of
        Delaware as to the good standing of the Company as of a date not more than
        three
        (3) Business Days prior to the Closing Date; (iv) certificates of good standing
        from the appropriate officials of the jurisdictions in each state in which
        the
        Company is qualified to do

      

      
        
          
            
            

          

          
            -27-

            
              

            

          

          
            
            

          

        

      

      

      business
        as a foreign corporation, each as of a recent date; and (v) resolutions of
        the
        Board authorizing the execution and delivery of this Agreement, the transactions
        contemplated hereby, and the issuance of the Shares.

       

      SECTION
        7.       
COMPANY
        CLOSING CONDITIONS

       

      The
        Company’s obligation to issue and sell the Shares at the Closing shall be
        subject to the performance by each Investor of its agreements theretofore
        to be
        performed hereunder and to the satisfaction (or waiver), prior thereto or
        concurrently therewith, of the following further conditions:

       

      
        	 	
                7.1.

              	
                Representations
                  and Warranties

              

      

       

      The
        representations and warranties of the Investors contained in Section 4 of
        this
        Agreement shall be true and correct in all material respects on and as of
        the
        Closing Date (except for such representations and warranties that are qualified
        as to materiality, which shall be true and correct in all respects) as though
        such representations and warranties were made at and as of such
        date.

       

      
        	 	
                7.2.

              	
                Compliance
                  with Agreement

              

      

       

      The
        Investors shall have performed and complied in all material respects with
        all
        agreements, covenants and conditions contained in this Agreement which are
        required to be performed or complied with by them prior to or on the Closing
        Date.

       

      
        	 	
                7.3.

              	
                Regulatory
                  Approvals

              

      

       

      The
        waiting period under the HSR Act shall have been terminated or expired, or
        approval under the HSR Act shall have been received, and any consents or
        approvals under any other Competition Laws shall have been received. The
        Company
        shall have received written NASD approval of the 1017 Application, or there
        shall elapsed at least 31 days since the Company shall have filed the 1017
        Application with the NASD and the Company shall not have received any comment
        or
        notice, written or otherwise, from the NASD that in the view of the Company’s
        counsel could result in denial or disapproval of the 1017
        Application.

       

      
        	 	
                7.4.

              	
                Investors’
                  Certificates

              

      

       

      The
        Company shall have received a certificate from each Investor, dated the Closing
        Date, signed by a duly authorized representative of the Investor, certifying
        that the conditions specified in the foregoing Sections
        7.1
        and
7.2
        hereof
        have been fulfilled.

       

      
        	 	
                7.5.

              	
                Injunction

              

      

       

      There
        shall be no effective injunction, writ, preliminary restraining order or
        any
        order of any nature issued by a court of competent jurisdiction directing
        that
        the transactions provided for herein or any of them not be consummated as
        herein
        provided.

      

      
        
          
            
            

          

          
            -28-

            
              

            

          

          
            
            

          

        

      

      

      SECTION
        8.       
POST-CLOSING
        COVENANTS

       

      
        	 	
                8.1.

              	
                Inspection

              

      

       

      As
        long
        as an Investor Owns at least five percent (5%) of the outstanding Common
        Stock
        (including the Conversion Shares issuable upon the Conversion, if the Conversion
        has not occurred), the Company, upon reasonable prior notice and during normal
        business hours, shall permit the Investor, its nominee, assignee, and its
        representative to visit and inspect any of the properties of the Company
        and any
        of its Subsidiaries, to examine all its books of account, records, reports
        and
        other papers, to make copies and extracts therefrom, and provide reasonable
        access to and the right to consult with, its officers, directors, key employees
        and independent public accountants or any of them (and by this provision
        the
        Company authorizes said accountants to discuss with such Investor, its nominees,
        assignees and representatives the finances and affairs of the Company and
        its
        Subsidiaries), all at such reasonable times and as often as may be reasonably
        requested; provided,
        however, that
        the
        Company shall not be obligated under this Section
        8.1
        with
        respect to information the Company is contractually obligated to keep
        confidential or secret or which the Board determines in good faith is
        confidential and should not, therefore, be disclosed.

       

      
        	 	
                8.2.

              	
                Confidentiality

              

      

       

      As
        to so
        much of the information and other material furnished under or in connection
        with
        this Agreement (including without limitation information furnished pursuant
        to
Section
        8.1
        hereof)
        as constitutes or contains confidential business, financial or other information
        of the Company, each Investor covenants for itself and its members and officers
        that it will use due care to prevent its officers, members, employees, counsel,
        accountants, consultants, advisors and other representatives from disclosing
        such information to Persons other than their respective authorized employees,
        counsel, accountants, stockholders, partners, limited partners and other
        authorized representatives or from using such information except as an Investor
        or for the benefit of the Company; provided,
        however,
        that
        such Investor may disclose or deliver any information or other material
        disclosed to or received by it should the Investor be advised by its counsel
        that such disclosure or delivery is required by law, regulation or judicial
        or
        administrative order. For purposes of this Section
        8.2,
        “due
        care”
means
        at least the same level of care that such Investor would use to protect the
        confidentiality of its own sensitive or proprietary information, and this
        obligation shall survive termination of this Agreement.

       

      
        	 	
                8.3.

              	
                Lost,
                  etc. Certificates Evidencing Shares;
                  Exchange

              

      

       

      Upon
        receipt by the Company of evidence reasonably satisfactory to it of the loss,
        theft, destruction or mutilation of any certificate evidencing any Shares,
        Warrant Shares, Conversion Shares or Exchange Preferred Shares owned by an
        Investor, and (in the case of loss, theft or destruction) of an unsecured
        indemnity satisfactory to it, and upon reimbursement to the Company of all
        reasonable expenses incidental thereto, and upon surrender and cancellation
        of
        such certificate, if mutilated, the Company will make and deliver in lieu
        of
        such certificate a new certificate of like tenor and for the number of
        securities evidenced by such certificate which remain outstanding. Each
        Investor's agreement of indemnity shall constitute indemnity satisfactory
        to the
        Company for purposes of this Section
        8.3.
        Upon
        surrender of any certificate

      

      
        
          
            
            

          

          
            -29-

            
              

            

          

          
            
            

          

        

      

      

      representing
        any Shares, Warrant Shares, Conversion Shares or Exchange Preferred Shares,
        for
        exchange at the office of the Company, the Company at its expense will cause
        to
        be issued in exchange therefor new certificates in such denomination or
        denominations as may be requested for the same aggregate number of Shares,
        Warrant Shares, Conversion Shares or Exchange Preferred Shares represented
        by the certificate so surrendered and registered as such holder may request.
        The
        Company will also pay the cost of all deliveries of certificates for such
        Shares, Warrant Shares, Conversion Shares or Exchange Preferred Shares to
        the
        office of the Investor (including the cost of insurance against loss or theft
        in
        an amount satisfactory to the holders) upon any exchange provided for in
        this
Section
        8.3.

       

      
        	 	
                8.4.

              	
                Insurance

              

      

       

      The
        Company will use its reasonable best efforts to maintain directors and officers
        insurance with responsible and reputable insurance companies or associations
        in
        at least such amounts and covering such risks as the Company has previously
        maintained.

       

      
        	 	
                8.5.

              	
                Board
                  Seats

              

      

       

      (a)    At
        such
        time as WP and its Affiliates have converted 50% of the Convertible Preferred
        Stock initially issued to WP pursuant to this Agreement, and for as long
        as WP
        and its Affiliates own at least (i) two thirds (2/3) of the Common Stock
        issued
        upon conversion of all shares of the Convertible Preferred Stock converted
        on or
        before such time, the Company shall use its reasonable best efforts to nominate
        and cause to be elected two (2) representatives designated by WP (herein
        referred to as the “WP
        Board Members”)
        to the
        Board and (ii) one third (1/3) of the Common Stock issued upon conversion
        of all
        shares of the Convertible Preferred Stock converted on or before such time,
        the
        Company shall use its best efforts to nominate and cause to be elected one
        (1)
        WP Board Member. All such WP Board Members shall be duly appointed in accordance
        with the Company’s Amended Bylaws and Restated Certificate of Incorporation and
        the DGCL. Each WP Board Member so elected shall serve until his or her successor
        is elected and qualified. In the event the Board establishes any committee
        thereof, including, without limitation, a Compensation Committee or an Audit
        Committee, at least one of the WP Board Members shall have the right, but
        not
        the obligation, to be a member of each such committee, unless prohibited
        by law
        or applicable rules of any stock exchange on which the Common Stock is listed,
        excluding any committee formed to consider a transaction between WP and the
        Company.

       

      (b)    The
        Company’s proxy statement for the election of directors shall include the WP
        Board Members and the recommendation of the Board in favor of election of
        the WP
        Board Members. The WP Board Members shall be given notice of (in the same
        manner
        that notice is given to other members of the Board) all meetings (whether
        in
        person, telephonic or otherwise) of the Board, including all committee meetings
        with respect to committees on which the WP Board Members serve. The WP Board
        Members shall be provided with the same information, and access thereto,
        provided to other members of Board. In addition to any other indemnification
        rights the WP Board Members have under law or pursuant to the Restated
        Certificate of Incorporation of the Company, the Amended Bylaws of the Company
        or any other agreements or policies of the Company providing for indemnification
        of members of the Board, each WP Board Member that serves on the Board shall
        have the right to enter into, and the

      

      
        
          
            
            

          

          
            -30-

            
              

            

          

          
            
            

          

        

      

      

      Company
        agrees to enter into, the Director and Officer Indemnification Agreement
        in the
        form attached hereto as Exhibit
        H
        (the
“Indemnification
        Agreement”),
        relating to claims against such WP Board Member resulting from, arising out
        of,
        or based upon, any events or actions that have occurred prior to the effective
        date of such WP Board Member’s appointment to the Board, with such changes as
        the WP Board Member and the Company may agree to at the time of execution
        of
        such Agreement. The Company agrees to negotiate any changes to the
        Indemnification Agreement by a WP Board Member in good faith. The Company
        shall
        reimburse the reasonable expenses incurred by the WP Board Members in connection
        with attending (whether in person or telephonically) all meetings of the
        Board
        or committees thereof or other Company related meetings to the same extent
        as
        all other members of the Board are reimbursed for such expenses (or, in case
        any
        such expense reimbursement policy shall apply only to non-employee directors,
        to
        the same extent as all other non-employee directors). 

       

      
        	 	
                8.6.

              	
                Subscription
                  Rights

              

      

       

      (a)    If
        at any
        time after the Closing Date, the Company determines to issue equity securities
        of any kind (for these purposes, the term “equity
        securities”
shall
        include, without limitation, Common Stock, warrants, options or other rights
        to
        acquire equity securities convertible or exchangeable into equity securities)
        of
        the Company (other than: (i) to the public in a firm commitment underwriting
        pursuant to a registration statement filed under the Securities Act; (ii)
        the
        issuance of equity securities to employees, officers or directors of, or
        consultants or advisors to the Company or any Subsidiary of the Company,
        in such
        amounts as are approved by the Board; (iii) any equity securities issued
        as
        consideration in connection with a bona fide acquisition, merger or
        consolidation by the Company provided such acquisition, merger or consolidation
        has been approved by the Board; (iv) securities issued in connection with
        licensing, marketing or distribution arrangements or similar strategic
        transactions approved by the Board; (v) any equity securities issued upon
        conversion, exchange or exercise of any outstanding equity securities as
        disclosed in Section
        3.3
        of this
        Agreement or Section
        3.3
        of the
        Disclosure Schedule; (vi) shares of Common Stock issued as dividends with
        respect to the Shares purchased by the Investors hereunder; or (vii) the
        Conversion Shares) then, for so long as WP and its Affiliates Own at least
        a
        majority of (i) the aggregate number of Shares (including any Conversion
        Shares)
        acquired by it on the Closing Date, or (ii) in the event the Conversion of
        all
        of the Convertible Preferred Stock occurs, the Conversion Shares, the Company
        shall:

       

      (1)    give
        written notice to WP setting forth in reasonable detail (A) the designation
        and
        all of the terms and provisions of the securities proposed to be issued (the
        “Proposed
        Securities”),
        including, where applicable, the voting powers, preferences and relative
        participating, optional or other special rights, and the qualification,
        limitations or restrictions thereof and interest rate and maturity; (B) the
        price and other terms of the proposed sale of such securities; (C) the amount
        of
        such Proposed Securities; and (D) such other information as WP may reasonably
        request in order to evaluate the proposed issuance; and

       

      (2)    offer
        to
        issue to WP upon the terms described in the notice delivered pursuant to
        Section
        8.6(a)(1)
        above, a
        portion of the Proposed Securities equal
        to
        (i) the percentage of the Common Stock (including the Conversion Shares issuable
        upon the Conversion, if the Conversion has not occurred) Owned by WP and
        its
        Affiliates

      

      
        
          
            
            

          

          
            -31-

            
              

            

          

          
            
            

          

        

      

       

      immediately
        prior to the issuance of the equity securities relative to the total number
        of
        shares of Common Stock (including the Conversion Shares issuable upon the
        Conversion, if the Conversion has not occurred) outstanding immediately prior
        to
        the issuance of the equity securities, multiplied by (ii) the total number
        of
        Proposed Securities. 

       

      (b)    WP
        must
        exercise its purchase rights hereunder within ten (10) Business Days after
        receipt of such notice from the Company. To the extent that the Company offers
        two or more securities in units, WP must purchase such units as a whole and
        will
        not be given the opportunity to purchase only one of the securities making
        up
        such unit.

       

      (c)    Upon
        the
        expiration of the offering period described above, the Company will be free
        to
        sell such Proposed Securities that WP has not elected to purchase during
        the 90
        days following such expiration on terms and conditions no more favorable
        to the
        purchasers thereof than those offered to WP. 

       

      (d)    The
        election by WP not to exercise its subscription rights under this Section
        8.6
        in any
        one instance shall not affect its right (other than in respect of a reduction
        in
        its percentage holdings) as to any subsequent proposed issuance. Any sale
        of
        such securities by the Company without first giving WP the rights described
        in
        this Section
        8.6
        shall be
        void and of no force and effect.

       

      (e)    The
        subscription rights established by this Section
        8.6
        shall
        not apply to, and shall terminate upon a consolidation, merger, reorganization
        or other form of acquisition of or by the Company in which the Company’s
        stockholders immediately prior to the transaction retain less than 50% of
        the
        voting power of or economic interest in the surviving or resulting entity
        (or
        its parent), or a sale of the Company’s assets in excess of a majority of the
        Company’s assets (valued at fair market value as determined in good faith by the
        Board). 

       

      (f)    The
        Company and WP hereby declare that it is impossible to measure in money the
        damages which will accrue to the parties hereto by reason of the failure
        of any
        party to perform any of its obligations set forth in this Section
        8.6.
        Therefore, the Company and WP shall have the right to specific performance
        of
        such obligations, and if any party hereto shall institute any action or
        proceeding to enforce the provisions hereof, each of the Company and WP hereby
        waive the claim or defense that the party instituting such action or proceeding
        has an adequate remedy at law.

       

      
        	 	
                8.7.

              	
                Standstill

              

      

       

      (a)    Each
        Investor agrees that until the expiration of five (5) years from the Closing
        Date (the “Standstill
        Period”),
        without the prior written consent of the Independent Directors of the Board,
        the
        Investor shall not, alone or as part of a “group” (within
        the meaning of Sections 13(d)(3) of the Exchange Act)
        or in
        concert with others, (i) in any manner acquire or make any public proposal
        to
        acquire, directly or indirectly, any securities of the Company that would
        result
        in the Investor or its Affiliates Owning more
        than
        40% of the outstanding shares of Common Stock of the Company on an as converted
        basis,
        except
        as permitted by the immediately following sentence, (ii) publicly make or
        offer
        to make any tender offer for

      

      
        
          
            
            

          

          
            -32-

            
              

            

          

          
            
            

          

        

      

      

      securities
        of the Company or propose to enter into, directly or indirectly, any merger
        or
        business combination involving the Company, or to purchase, directly or
        indirectly, a material portion of the assets of the Company, (iii) make or
        propose any “solicitation” of “proxies” (as such terms are used in the proxy
        rules of the SEC) with respect to any securities of the Company, including
        without limitation to vote any securities of the Company or to provide or
        withhold consents with respect to any securities of the Company, (iv) otherwise
        act to seek representation on the Board or seek to control or influence the
        Board or policies of the Company to a greater extent than expressly provided
        for
        in this Agreement and the Certificate of Designations (including without
        limitation Section
        8.5
        of this
        Agreement and Section 6 of the Certificate of Designations), or (v) initiate,
        propose or otherwise solicit stockholders for the approval of any stockholder
        proposal. Notwithstanding
        anything contained herein to the contrary, this Section
        8.7(a)
        shall
        not prohibit or limit the ability of the Investors to (i) acquire shares
        of
        Common Stock of the Company upon (x) the conversion of any shares of Convertible
        Preferred Stock or Exchange Preferred Stock held by the Investors or upon
        exercise of the Warrant or (y) the issuance or conversion of any additional
        shares of preferred stock of the Company or Common Stock acquired by the
        Investors as a result of a dividend or other distribution on or exchange
        of the
        shares of preferred stock of the Company held by the Investors from time
        to
        time, or (ii) acquire any shares of capital stock of the Company issued to
        the
        Investors as a dividend or other distribution in respect of or in exchange
        for
        any shares of capital stock of the Company held by the Investors (or acquired
        by
        the Investors (A) as a result of a dividend or other distribution in respect
        of
        or in exchange for any shares of capital stock of the Company held by the
        Investors from time to time or (B) upon the conversion of any shares of
        preferred stock of the Company held by the Investors from time to time).
        

       

      (b)    In
        the
        event at any time during the Standstill Period, an Investor becomes an Owner
        of
        45% or more of the Common Stock of the Company on an as converted fully diluted
        basis, the Investor shall exchange the shares of capital stock of the Company
        Owned by the Investor in excess of 45% for Exchange Preferred Shares. The
        Investor shall have the right, at its election, to exchange shares of Common
        Stock or Convertible Preferred Stock pursuant to this Section
        8.7(b).
        The
        exchange rate (i) for the Convertible Preferred Stock to the Exchange Preferred
        Stock shall be one (1) share of Exchange Preferred Stock for each one share
        of
        Convertible Preferred Stock surrendered for exchange and (ii) for the Common
        Stock to the Exchange Preferred Stock shall be equal to the quotient obtained
        by
        dividing (x) one by (y) the number of shares of Common Stock into which such
        share of Exchange Preferred Stock is convertible at the date of exchange.
        No
        cash or other payment beyond the surrender for exchange of the shares of
        Convertible Preferred Stock or Common Stock, as applicable, shall be required
        in
        connection with such exchange. 

       

      
        	 	
                8.8.

              	
                No
                  Manipulation or Hedging

              

      

       

      (a)    Neither
        the Company, any of its Subsidiaries, nor the Investors shall take any action
        designed to or that might reasonably be expected to cause or result in unlawful
        manipulation of the price of the Common Stock.

       

      (b)    So
        long
        as the Investor owns any shares of Convertible Preferred Stock, it will not,
        directly or indirectly, transfer or hedge, in whole or in part, any of the
        economic

      

      
        
          
            
            

          

          
            -33-

            
              

            

          

          
            
            

          

        

      

      

      consequences
        of ownership of Convertible Preferred Stock, Exchange Preferred Stock or
        shares
        of Common Stock. 

       

      
        	 	
                8.9.

              	
                Listing

              

      

       

      The
        Company shall promptly secure the listing of all 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 Convertible Preferred Stock or Exchange Preferred Stock, including any
        Conversion Shares. Subject to meeting applicable listing requirements (it
        being
        understood that the Company does not currently satisfy such listing
        requirements), the Company shall use reasonable business efforts to obtain
        authorization of the Common Stock for quotation on the Nasdaq Global Market,
        the
        Nasdaq Capital 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
        8.9.

       

      
        	 	
                8.10.

              	
                Authorization
                  of Additional Stock

              

      

       

      (a)    As
        promptly as practicable after the date hereof but in any event no later than
        30
        days after the Closing, the Company shall prepare and file with the SEC a
        preliminary proxy statement, as may be amended or supplemented (as amended
        and
        supplemented, the “Proxy
        Statement”),
        by
        which the Company’s stockholders will be asked to approve an amendment and
        restatement to the Restated Certificate of Incorporation whereby the authorized
        capital stock of the Company shall be increased to not less than 100 million
        shares of capital stock (the “Voting
        Proposal”).
        The
        Company shall use its reasonable best efforts to respond to any comments
        of the
        SEC, and to cause the Proxy Statement to be mailed to the Company’s stockholders
        at the earliest practicable time. The Company will notify the Investors of
        the
        receipt of any comments from the SEC or its staff and of any request by the
        SEC
        or its staff for amendments or supplements to the Proxy Statement or for
        additional information and will supply the Investors with copies of all
        correspondence between the Company or any of its representatives, on the
        one
        hand, and the SEC or its staff, on the other hand, with respect to the Proxy
        Statement. The Proxy Statement shall comply in all material respects with
        all
        applicable requirements of law. The Investors shall provide the Company all
        information about the Investors required to be included or incorporated by
        reference in the Proxy Statement and shall otherwise reasonably cooperate
        with
        the Company in taking the actions described in this Section
        8.10.
        Whenever
        any event occurs which is required to be set forth in an amendment or supplement
        to the Proxy Statement, the Company shall inform the Investors of such
        occurrence and cooperate in filing with the SEC or its staff, and/or mailing
        to
        stockholders of the Company, such amendment or supplement. The Proxy Statement
        shall include the recommendation of the Board that the stockholders of the
        Company vote in favor of and approve the Voting Proposal. The Company shall
        use
        its reasonable best efforts to obtain such stockholder approval.

      

      
        
          
            
            

          

          
            -34-

            
              

            

          

          
            
            

          

        

      

      

      (b)   The
        Company shall call a meeting of its stockholders (the “Company
        Stockholders Meeting”)
        no
        later than 120 days after the date which it files with the SEC its audited
        financial statements for the year ended December 31, 2005 but in no event
        later
        than June 15, 2007 (the “Meeting
        Deadline”),
        for
        the purpose of voting on the Voting Proposal, provided that should a quorum
        not
        be obtained at such meeting of the stockholders, the meeting of the stockholders
        shall be postponed or adjourned in order to permit additional time for
        soliciting and obtaining additional proxies or votes. At such meeting, the
        Company shall use its reasonable best efforts to solicit from holders of
        Common
        Stock proxies in favor of the Voting Proposal. The Investors agree that they
        shall vote, or cause to be voted, in favor of the Voting Proposal all Shares
        and
        all shares of Common Stock directly or indirectly owned by them.

       

      (c)    In
        the
        event that the Voting Proposal is approved by the Company stockholders, the
        Company shall promptly file with the Secretary of State of the State of Delaware
        the applicable amended and restated certificate of incorporation effecting
        such
        capital stock increase.

       

      
        	 	
                8.11.

              	
                Stock
                  Option Pool

              

      

       

      As
        promptly as practicable after the Closing, the Company shall institute a
        new
        stock option plan constituting 9,450,000 shares of Common Stock (in addition
        to
        the existing Stock Option Plans), representing approximately 15% of the
        aggregate shares of Common Stock then outstanding on a fully diluted basis,
        effective as of the Closing Date. 

       

      SECTION
        9.    MISCELLANEOUS

       

      
        	 	
                9.1.

              	
                Notices

              

      

       

      (a)    All
        communications under this Agreement shall be in writing and shall be delivered
        by hand or facsimile or mailed by overnight courier or by registered mail
        or
        certified mail, postage prepaid:

       

      (1)   if
        to an
        Investor, at the address or facsimile number set forth on Exhibit
        A,
        or at
        such other address or facsimile number as such Investor may have furnished
        the
        Company in writing; and

       

      (2)   if
        to the
        Company, at: NYFIX, Inc., 100 Wall Street, 26th
        Floor,
        New York, NY 10005 (facsimile: 212-809-1013), Attention: General Counsel,
        or at
        such other address or facsimile number as it may have furnished the Investors
        in
        writing, with copies (which shall not constitute notice) to Covington &
Burling LLP, 1201 Pennsylvania Avenue NW, Washington, DC 20004, Attention:
        Andrew Jack (facsimile: 202-662-6291) and Philipp Tamussino (facsimile:
        646-441-9196).

       

      (b)    Any
        notice so addressed shall be deemed to be given: if delivered by hand or
        facsimile, on the date of such delivery; if mailed by overnight courier,
        on the
        first Business Day following the date of such mailing; and if mailed by
        registered or certified mail, on the third Business Day after the date of
        such
        mailing.

      

      
        
          
            
            

          

          
            -35-

            
              

            

          

          
            
            

          

        

      

      

      9.2.          
        Expenses
        and Taxes

       

      (a)    At
        the
        Closing, the Company shall reimburse WP for all of WP’s reasonable out-of-pocket
        fees and expenses incurred in connection with the negotiation, preparation,
        execution and delivery of this Agreement and the transactions contemplated
        hereby, including, without limitation, the reasonable fees and expenses of
        WP’s
        attorneys, accountants and consultants employed in connection with WP’s
        consideration, negotiation and consummation of the transactions contemplated
        hereby, WP’s due diligence on the Company, any costs associated with clearance
        under the HSR Act and any documentation relating to the transactions
        contemplated hereby. Reimbursement of such fees, disbursements and expenses
        shall be made by wire transfer of immediately available funds to an account
        or
        accounts designated by WP and thereafter the Company will pay, promptly (but
        in
        any event within 10 days) upon receipt of a supplemental statement therefor,
        such additional reasonable fees, disbursements and expenses, if any, as may
        be
        incurred by or on behalf of WP in connection with such
        transactions.

       

      (b)    The
        Company will pay, and save and hold each Investor harmless from any and all
        liabilities (including interest and penalties) with respect to, or resulting
        from any delay or failure in paying, stamp and other taxes (other than income
        taxes), if any, which may be payable or determined to be payable on the
        execution and delivery or acquisition of the Shares, the Conversion Shares
        or
        the Exchange Preferred Shares.

       

      
        	 	
                9.3.

              	
                Reproduction
                  of Documents

              

      

       

      This
        Agreement and all documents relating thereto, including, without limitation,
        (i)
        consents, waivers and modifications which may hereafter be executed, (ii)
        documents received by the Investors on the Closing Date (except for certificates
        evidencing the Shares), and (iii) financial statements, certificates and
        other
        information previously or hereafter furnished to the Investors, may be
        reproduced by the Company and the Investors by any photographic, photostatic,
        microfilm, micro-card, miniature photographic or other similar process and
        the
        Company and the Investors may destroy any original document so reproduced.
        All
        parties hereto agree and stipulate that any such reproduction shall be
        admissible in evidence as the original itself in any judicial or administrative
        proceeding (whether or not the original is in existence and whether or not
        such
        reproduction was made by the Company or any such Investor in the regular
        course
        of business) and that any enlargement, facsimile or further reproduction
        of such
        reproduction shall likewise be admissible in evidence.

       

      
        	 	
                9.4.

              	
                Termination
                  and Survival

              

      

       

      Notwithstanding
        anything to the contrary contained herein, this Agreement may be terminated
        at
        any time (i) by mutual consent of the Company and the Investors, (ii) by
        either
        the Company or WP if the Closing shall not have occurred on or prior
        to November
        30, 2006 (unless
        such date is extended by mutual written consent); (iii) by the Investors,
        for
        any material breach of this Agreement by the Company which remains uncured
        for a
        period of ten (10) Business Days after notice is received by the Company;
        and
        (iv) by the Company, for any material breach of this Agreement by the Investors
        which remains uncured for a period of ten (10) Business Days after notice
        is
        received by the Investors. In the event of termination pursuant

      

      
        
          
            
            

          

          
            -36-

            
              

            

          

          
            
            

          

        

      

      

      to
        this
Section
        9.4,
        this
        Agreement shall become null and void and have no effect, with no liability
        on
        the part of the Company or the Investors, or their members, partners, directors,
        officers, agents or stockholders, with respect to this Agreement, except
        for the
        (i) liability of the Company for expenses pursuant to Section
        9.2
        and (ii)
        liability for any breach of any representation, warranty or covenant contained
        in this Agreement. 

       

      
        	 	
                9.5.

              	
                Successors
                  and Assigns

              

      

       

      Except
        as
        otherwise expressly provided herein, this Agreement shall inure to the benefit
        of and be binding upon the successors and assigns of each of the parties.
        The
        Company may not assign its rights or obligations hereunder without the prior
        written consent of the Investors. WP may assign its rights and obligations
        hereunder to its Affiliates; provided,
        that
        the assignee provides the Company with written representations and warranties
        substantially similar to those provided in Section 4. 

       

      
        	 	
                9.6.

              	
                Severability

              

      

       

      In
        the
        event that any part or parts of this Agreement shall be held illegal or
        unenforceable by any court or administrative body of competent jurisdiction,
        such determination shall not affect the remaining provisions of this Agreement
        which shall remain in full force and effect.

       

      
        	 	
                9.7.

              	
                Governing
                  Law

              

      

       

      This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of New York applicable to contracts made and to be performed entirely
        within such State. 

       

      
        	 	
                9.8.

              	
                Waiver
                  of Jury Trial

              

      

       

      Each
        of
        the parties hereto hereby irrevocably waives any and all rights to trial
        by jury
        in any legal proceeding arising out of or related to this Agreement or the
        transactions contemplated hereby. 

       

                       
        9.9.      Consent
        to Jurisdiction

       

      Each
        of
        the parties hereto (i) consents to submit itself to the personal
        jurisdiction of the state and federal courts in the State of New York in
        any
        action or proceeding arising out of or relating to this Agreement or any
        of the
        transactions contemplated by this Agreement, (ii) agrees that all claims in
        respect of such action or proceeding may be heard and determined in any such
        courts, (iii) agrees that it shall not attempt to deny or defeat such personal
        jurisdiction by motion or other request for leave from any such courts, and
        (iv) agrees not to bring any action or proceeding arising out of or
        relating to this Agreement or any of the transaction contemplated by this
        Agreement in any other courts. Each of the parties hereto further waives
        any
        defense of inconvenient forum to the maintenance of any action or proceeding
        so
        brought and waives any bond, surety or other security that might be required
        of
        any other party with respect thereto. Any party hereto may make service on
        another party by sending or delivering a copy of the process to the party
        to be
        served in the manner provided for the giving of notices in Section
        9.1.
        Nothing
        in

      

      
        
          
            
            

          

          
            -37-

            
              

            

          

          
            
            

          

        

      

      

      this
        Section
        9.9,
        however, shall affect the right of any party to serve legal process in any
        other
        manner permitted by law.

       

      
        	 	
                9.10.

              	
                Paragraph
                  and Section Headings

              

      

       

      The
        headings of the sections and subsections of this Agreement are inserted for
        convenience only and shall not be deemed to constitute a part
        thereof.

       

      
        	 	
                9.11.

              	
                Limitation
                  on Enforcement of Remedies

              

      

       

      The
        Company hereby agrees that it will not assert against the limited partners
        of
        any members of any Investor any claim it may have under this Agreement by
        reason
        of any failure or alleged failure by such Investor to meet its obligations
        hereunder.

       

      
        	 	
                9.12.

              	
                Counterparts

              

      

       

      This
        Agreement may be executed in one or more counterparts (including by facsimile),
        each of which shall be deemed an original and all of which together shall
        be
        considered one and the same agreement.

       

      
        	 	
                9.13.

              	
                Entire
                  Agreement; Amendment and Waiver

              

      

       

      This
        Agreement, the schedules and exhibits attached hereto constitute the entire
        understandings of the parties hereto and supersede all prior agreements or
        understandings with respect to the subject matter hereof among such parties.
        This Agreement may be amended, and the observance of any term of this Agreement
        may be waived, with (and only with) the written consent of the Company and
        the
        Investors.

       

      [Signature
        Page to Follow]

       

      
        
          
          

        

        
          -38-

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement by their
        duly
        authorized officers as of the date first written above.

      

      
        	 	 	 
	 	NYFIX,
                INC.
	 
 	 
 	 
 
	 	By:  	/s/
                Steven R. Vigliotti
	 	
                
Name:
                Steven R. Vigliotti
Title:   Chief
                Financial Officer
	 	 

      

       

      
        

        
          	 	 	 
	 	WARBURG
                  PINCUS PRIVATE EQUITY IX, L.P.
	 	 	 
	 	By:  	Warburg
                  Pincus IX LLC, its General Partner
	 	 
	 	By:    Warburg
                  Pincus
                  Partners LLC, its Managing Member
	 	 
	 	         By: 
                  Warburg Pincus & Co., its Managing
                  Member

          

          
            	 	 	 
	 
 	 
 	 
 
	 	By:  	/s/
                    Cary
                    J. Davis 
	 	
                    
Name:   Cary
                    J.
                    Davis
Title:     Managing
                    Director
	 	 

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

        

      

    

    EXHIBIT
      A

    

    SCHEDULE
      OF INVESTORS

    

    
      	
              INVESTOR
                NAME AND ADDRESS

            	
              SHARES
                OF CONVERTIBLE PREFERRED STOCK

            	
              WARRANT
                TO PURCHASE

              COMMON
                STOCK

            
	
               

              Warburg
                Pincus Private Equity IX, L.P.

              466
                Lexington Avenue

              New
                York, NY 10017

              Facsimile:
                (212) 878-9351

              Attention:
                Cary J. Davis and Adarsh Sarma

               

              with
                a copy (which shall not constitute notice) to:

              Willkie
                Farr & Gallagher LLP 

              787
                Seventh Avenue 

              New
                York, NY 10019 

              Facsimile:
                (212) 728-9222 

              Attention:
                Steven J. Gartner, Esq. and William H. Gump, Esq.

            	
               

              1,500,000

               

            	
               

              2,250,000

               

            
	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    CERTIFICATE
      OF
      DESIGNATIONS

     

    CERTIFICATE
      OF DESIGNATIONS, NUMBER, VOTING POWERS, PREFERENCES AND RIGHTS OF

    SERIES
      B VOTING CONVERTIBLE PREFERRED STOCK AND

    SERIES
      C NON-VOTING CONVERTIBLE PREFERRED STOCK

    OF

    NYFIX,
      INC.

     

    

    Pursuant
      to Section 151 of the

    General
      Corporation Law of the State of Delaware

    

    The
      undersigned DOES HEREBY CERTIFY that the following resolution was duly adopted
      by the Board of Directors of NYFIX, Inc., a Delaware corporation (hereinafter
      called the “Company”),
      with
      the preferences and rights set forth therein relating to dividends, conversion,
      redemption, dissolution and distribution of assets of the Company having been
      fixed by the Board of Directors pursuant to authority granted to it under
      Article IV of the Company's Restated Certificate of Incorporation and in
      accordance with the provisions of Section 151 of the General Corporation Law
      of
      the State of Delaware:

     

    RESOLVED:
      That, pursuant to authority conferred upon the Board of Directors by the
      Restated Certificate of Incorporation of the Company, the Board of Directors
      hereby authorizes the issuance of 1,500,000 shares of Series B Voting
      Convertible Preferred Stock, par value $1.00 per share, of the Company (the
      “Series
      B Preferred Stock”),
      and
      the issuance of 500,000 shares of Series C Non-Voting Convertible Preferred
      Stock, par value $1.00 per share, of the Company (the “Series
      C Preferred Stock”
and
      together with the Series B Preferred Stock, the “Convertible
      Preferred Stock”),
      and
      hereby fixes the designations, powers, preferences and relative, participating,
      optional or other special rights, and the qualifications, limitations or
      restrictions thereof, of such shares, in addition to those set forth in the
      Restated Certificate of Incorporation of the Company, as follows:

     

    1.    DESIGNATION.
      The
      shares of such series shall be designated (i) “Series B Voting Convertible
      Preferred Stock” and the number of shares constituting such series shall be
      1,500,000 and (ii) “Series C Non-Voting Convertible Preferred Stock” and the
      number of shares constituting such series shall be 500,000. The number of shares
      of Series B Preferred Stock and Series C Preferred Stock may be increased or
      decreased by resolution of the Board of Directors of the Company (the
“Board”)
      and
      the approval by the holders of a majority of the shares of the outstanding
      Convertible Preferred Stock voting together as a single class; provided, that
      no
      decrease shall reduce the number of shares of Convertible Preferred Stock to
      a
      number less than the number of shares then outstanding plus the number of shares
      reserved for issuance upon the payment of dividends pursuant to Section 4
      hereof.

     

    2.    CURRENCY.
      All
      Convertible Preferred Stock shall be denominated in United States currency,
      and
      all payments and distributions thereon or with respect thereto shall

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    be
      made
      in United States currency. All references herein to “$” or “dollars” refer to
      United States currency.

     

    3.    RANKING.
      The
      Convertible Preferred Stock shall, with respect to dividend rights and rights
      upon liquidation, winding up or dissolution, rank prior to each other class
      or
      series of shares of the Company ranking junior to the Convertible Preferred
      Stock, including, without limitation, the common stock of the Company, par
      value
      $0.001 per share (the “Common
      Stock”)
      (such
      junior stock being referred to hereinafter collectively as “Junior
      Stock”).
      The
      Series B Preferred Stock shall, with respect to dividend rights and rights
      upon
      liquidation, winding up or dissolution, rank pari passu with the Series C
      Preferred Stock. 

     

    4.    DIVIDENDS. 

     

    (a)    The
      holders of Convertible Preferred Stock shall be entitled to receive dividends
      per share equal to 7% per annum (the “Dividend Rate”) of the Stated Value (as
      herein defined) of such Convertible Preferred Stock then in effect, before
      any
      dividends shall be declared, set apart for or paid upon the Junior Stock. All
      dividends declared upon the Convertible Preferred Stock shall be declared pro
      rata per share and shall compound semi-annually to the extent unpaid. For
      purposes hereof, the term (i) “Series
      B Stated Value”
shall
      mean $50.00 per share of Series B Preferred Stock, subject to appropriate
      adjustment in the event of any stock dividend (excluding dividends paid in
      shares of Common Stock), stock split, stock distribution or combination with
      respect to the Series B Preferred Stock and (ii) “Series
      C Stated Value”
shall
      mean $50.00 per share of Series C Preferred Stock, subject to appropriate
      adjustment in the event of any stock dividend (excluding dividends paid in
      shares of Common Stock), stock split, stock distribution or combination with
      respect to the Series C Preferred Stock. For
      purposes hereof, the term “Stated
      Value”
shall
      mean with respect to the (i) Series B Preferred Stock, the Series B Stated
      Value
      and (ii) Series C Preferred Stock, the Series C Stated Value. Except as
      otherwise provided herein, dividends shall be paid in additional shares of
      Common Stock. 

     

    (b)    Dividends
      payable pursuant to Section 4(a) shall be payable semi-annually in arrears
      on
      June 30 and December 31 of each year, with the first payment to be made on
      December 31, 2006 (unless such day is not a Business Day, in which event such
      dividends shall be payable on the next succeeding Business Day) (each such
      payment date being a “Dividend
      Payment Date”
and
      the
      period from the Closing Date to the first Dividend Payment Date and each such
      semi-annual period thereafter being a “Dividend
      Period”).
      The
      amount of dividends payable on the Convertible Preferred Stock for any period
      shorter or longer than a full Dividend Period shall be computed on the basis
      of
      a 360-day year of twelve 30-day months. 

     

    (c)    Dividends
      on the Convertible Preferred Stock provided for in Section 4(a) shall be
      cumulative and shall continue to accrue daily whether or not declared and
      whether or not in any fiscal year there shall be net profits or surplus legally
      available for the payment of dividends in such fiscal year, so that if in any
      Dividend Period, dividends contemplated by Section 4(a) in whole or in part
      are
      not paid upon the Convertible Preferred Stock, unpaid dividends shall accumulate
      as against the holders of the Junior Stock.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (d)    Except
      as
      otherwise provided herein, if at any time the Company pays less than the total
      amount of dividends then accrued with respect to the Convertible Preferred
      Stock, such payment shall be distributed pro rata among the holders thereof
      based upon the aggregate accrued but unpaid dividends on all shares of
      Convertible Preferred Stock held by each such holder.

     

    (e)    Dividends
      on the Convertible Preferred Stock shall be paid in shares of Common Stock.
      The
      number of shares of Common Stock to be issued in payment of such dividend with
      respect to each outstanding share of Convertible Preferred Stock shall be
      determined by dividing (i) the amount of the dividend that would have been
      payable with respect to such share of Convertible Preferred Stock had such
      dividend been paid in cash by (ii) the applicable Conversion Price (as defined
      in Section 7(c) below) then in effect. To the extent that any such dividend
      would result in the issuance of a fractional share of Common Stock (which shall
      be determined with respect to the aggregate number of shares of Common Stock
      held of record by each holder) then the amount of such fraction multiplied
      by
      the Conversion Price shall be paid in cash (unless there are no legally
      available funds with which to make such cash payment, in which event such cash
      payment shall be made as soon as possible).

     

    (f)    In
      addition to the dividends referred to in Section 4(a), the Company shall not
      declare or pay any dividends on shares of Junior Stock unless the holders of
      the
      Convertible Preferred Stock then outstanding shall simultaneously receive a
      dividend on a pro rata basis as if the shares of Convertible Preferred Stock
      had
      been converted into shares of Common Stock pursuant to Section 7 immediately
      prior to the record date for determining the stockholders eligible to receive
      such dividends. 

     

    (g)    Each
      dividend shall be payable to the holders of record of shares of Convertible
      Preferred Stock as they appear on the stock records of the Company at the close
      of business on such record dates (each, a “Dividend
      Payment Record Date”),
      which
      (i) with respect to dividends payable pursuant to Section 4(f), shall be the
      same day as the record date for the payment of dividends or distributions to
      the
      holders of shares of Common Stock, and (ii) with respect to dividends payable
      pursuant to Section 4(a), shall be not more than 30 days nor less than 10 days
      preceding the applicable Dividend Payment Date.

     

    (h)    From
      and
      after the time, if any, that the Company shall have failed to pay on any
      Dividend Payment Date any dividend in accordance with this Section 4, no
      dividends shall be declared or paid or set apart for payment, or other
      distribution declared or made, upon any Junior Stock, nor shall any Junior
      Stock
      be redeemed, purchased or otherwise acquired (other than a redemption, purchase
      or other acquisition of shares of Common Stock at cost made pursuant to any
      employee or director incentive or benefit plans or arrangements of the Company
      or any subsidiary of the Company or the payment of cash in lieu of fractional
      shares in connection therewith) for any consideration (nor shall any moneys
      be
      paid to or made available for a sinking fund for the redemption of any shares
      of
      any such Junior Stock) by the Company, directly or indirectly (except by
      conversion into or exchange for Junior Stock or the payment of cash in lieu
      of
      fractional shares in connection therewith) until all such dividends have been
      paid in full.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (i)    In
      the
      event that the Company (i) fails to file the Proxy Statement within 30 days
      of
      the Initial Issuance Date (the “Proxy
      Deadline”)
      or
      (ii) within one business day of the Meeting Deadline the Company fails to duly
      increase and reserve for issuance a number of its authorized shares of Common
      Stock in an amount sufficient to provide for: (x) the conversion of, and payment
      of dividends upon, the Convertible Preferred Stock; (y) the exercise of the
      warrants issued on the date hereof to the holders of the Convertible Preferred
      Stock; and (z) the exercise of all options granted or available for grant under
      any then outstanding options or option plans of the Company (collectively,
      the
“Share Capital Condition”), then the Dividend Rate shall be increased by two (2)
      percentage points effective on the date of such Proxy Deadline or Meeting
      Deadline, as applicable (each, a “Default
      Date”),
      with
      further annual Dividend Rate increases of two (2) percentage points effective
      each succeeding anniversary of the Default Date for as long as the Share Capital
      Condition remains unsatisfied; provided, however, that with effect from the
      date
      of filing and acceptance of the amended certificate of incorporation with the
      Secretary of State of the State of Delaware satisfying the Share Capital
      Condition, the Dividend Rate shall be reset such that any increases pursuant
      to
      this Section 5(i) shall be of no further force or effect.

     

    5.    LIQUIDATION,
      DISSOLUTION OR WINDING UP. 

     

    (a)    Upon
      any
      voluntary or involuntary liquidation, dissolution or winding up of the Company
      (each, a “Liquidation”),
      before any distribution or payment shall be made to holders of any Junior Stock,
      each holder of Convertible Preferred Stock shall be entitled to receive an
      amount in cash per share of Convertible Preferred Stock equal to the greater
      of
      (i) the Stated Value per share, plus an amount equal to the greater of (x)
      any
      dividends accrued but unpaid thereon (whether or not declared) through the
      date
      of Liquidation and (y) the amount in cash that each holder would have received
      if all accrued but unpaid dividends (whether or not declared) had been paid
      in
      shares of Common Stock immediately prior to such Liquidation (the amount payable
      pursuant to this Section 5(a)(i) is referred to as the “Redemption
      Price”)
      and
      (ii) the payment such holders would have received had such holders, immediately
      prior to such Liquidation, (a) converted their shares of Convertible Preferred
      Stock into shares of Common Stock (pursuant to, and at a conversion rate
      described in, Section 7) immediately prior to such Liquidation and (b) received
      all accrued but unpaid dividends (whether or not declared) through the date
      of
      Liquidation in shares of Common Stock immediately prior to such Liquidation
      (the
      greater of (i) and (ii) is referred to herein as the “Liquidation
      Preference”).
      If,
      upon any such Liquidation, the assets of the Company shall be insufficient
      to
      make payment in full to all holders of Convertible Preferred Stock of the
      Liquidation Preference set forth in this Section 5(a), the holders of
      Convertible Preferred Stock shall share equally and ratably in any distribution
      of such assets in proportion to the full Liquidation Preference to which each
      such holder would otherwise be entitled. 

     

    (b)    After
      the
      payment of all preferential amounts required to be paid to the holders of
      Convertible Preferred Stock and any other series of Preferred Stock upon a
      Liquidation, the holders of shares of Common Stock then outstanding shall be
      entitled to receive the remaining assets and funds of the Company available
      for
      distribution to its stockholders.

     

    (c)    In
      connection with any Change of Control (as defined below), the holders of the
      Convertible Preferred Stock may, at their election, (i) treat the Convertible
      Preferred Stock as if converted into Common Stock and receive the consideration
      due to the holders of Common 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Stock
      in
      connection with the Change of Control, pursuant to provision to be made in
      accordance with Section 8(c) or 8(d), as applicable, or (ii) receive the
      Liquidation Preference; provided that if a Change of Control occurs within
      three
      (3) years after the Closing Date (as defined herein), the Liquidation Preference
      payable to the holders of outstanding shares of Convertible Preferred Stock
      shall be an amount in cash per share equal to the sum of the then current
      Liquidation Preference plus the greater of (x) the per share amount of all
      dividends that would have been payable on the Convertible Preferred Stock during
      the period commencing on the date of the Change of Control through and including
      the date that is the third anniversary of the Closing Date (the amount of such
      dividends is referred to as the “Future
      Dividends”)
      and
      (y) the amount in cash that each holder would have received if all Future
      Dividends had been paid in shares of Common Stock immediately prior to the
      Change of Control. A “Change
      of Control”
shall
      mean (i) the
      acquisition by any person, directly or indirectly, through a purchase, merger
      or
      other acquisition transaction, or series of purchases, mergers or other
      acquisition transactions, of shares of Common Stock representing 50% or more
      of
      the total shares of Common Stock then outstanding; (ii) a
      consolidation, merger, reorganization or other form of acquisition of or by
      the
      Company or other transaction in which the Company’s shareholders retain less
      than 40% (by vote or value) of the surviving entity upon consummation of such
      transaction or (iii) a sale or other transfer of all or substantially all of
      the
      Company’s assets; provided, however that any such event described in clauses
      (i), (ii) or (iii) above shall not be deemed a Change of Control unless approved
      by the Company’s Board of Directors.

     

    6.    VOTING
      RIGHTS.

     

    (a)    The
      holders of the shares of Series B Preferred Stock shall be entitled to (i)
      vote
      with the holders of the Common Stock on all matters submitted for a vote of
      holders of Common Stock other than the election of directors (as to which the
      holders of Series B Preferred Stock shall have rights voting separately as
      a
      class as set out in Sections 6(b) and (c), (ii) a number of votes equal to
      the
      number of shares of Common Stock into which each such share of Series B
      Preferred Stock is then convertible at the time of the related record date
      and
      (iii) notice of all stockholders’ meetings (or pursuant to any action by written
      consent) in accordance with the Restated Certificate of Incorporation and Bylaws
      of the Company as if the holders of Series B Preferred Stock were holders of
      Common Stock; provided,
      however,
      that
      solely for the purpose of determining the number of votes pursuant to subsection
      (ii) above, and effective only upon and following the date that the Common
      Stock
      is relisted, if ever, on the Nasdaq National Market (“Nasdaq”),
      the
      Conversion Price used to determine the number of shares of Common Stock issuable
      upon conversion of the Series B Preferred Stock pursuant to subsection (ii)
      above shall be deemed to be the greater of (x) the then applicable Conversion
      Price and (y) the closing bid price of the Common Stock as quoted on the Pink
      Sheets on the Closing Date, it being understood that this adjustment to the
      Conversion Price for the purpose of determining the voting rights of the holders
      of Series B Preferred Stock shall have no effect prior to the Company’s
      re-listing on Nasdaq. Except as provided by law, by the provisions of Sections
      6(b), 6(c) and 6(d) below or by the provisions establishing any other series
      of
      Preferred Stock, holders of Convertible Preferred Stock shall vote together
      with
      the holders of Common Stock as a single class. Except as provided by law, the
      holders of Series C Preferred Stock shall have no voting rights. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (b)    For
      as
      long as Warburg Pincus Private Equity IX, L.P. and its Affiliates (as defined
      herein) (collectively, “Warburg
      Pincus”)
      Beneficially Own at least fifty percent (50%) of the shares of the Series B
      Preferred Stock initially issued to Warburg Pincus pursuant to the Securities
      Purchase Agreement (for these purposes treating any shares of Series C Preferred
      Stock as if they were outstanding shares of Series B Preferred Stock): (i)
      the
      holders of the Series B Preferred Stock shall have the exclusive right, voting
      separately as a class, to appoint and elect two (2) directors (herein referred
      to as the “Series
      B Directors”)
      to the
      Board, which Series B Directors shall be duly appointed in accordance with
      the
      Company’s bylaws and Certificate of Incorporation and the General Corporation
      Law of the State of Delaware; (ii) each Series B Director so elected shall
      serve
      until his or her successor is elected and qualified; (iii) any vacancy in
      the position of a Series B Director may be filled only by the holders of a
      majority of the then outstanding shares of Series B Preferred Stock and not
      by
      the holders of any other class or series of capital stock; and (iv) each such
      Series B Director may, during his or her term of office, be removed at any
      time,
      with or without cause, by and only by the holders of a majority of the then
      outstanding shares of Series B Preferred Stock, at a special meeting called
      for
      such purpose or by written consent of such holders, and any vacancy created
      by
      such removal may also be filled by such holders at such meeting or by such
      consent. In the event the Board establishes any committee thereof, including,
      without limitation, a Compensation Committee or an Audit Committee, at least
      one
      of the Series B Directors shall have the right, but not the obligation, to
      be a
      member of each such committee, unless prohibited by law or applicable rules
      of
      any stock exchange on which the Common Stock is listed, excluding any committee
      formed to consider a transaction between Warburg Pincus and the
      Company.

     

    (c)    Upon
      written notice to the Company given by the holders of a majority of the then
      outstanding shares of Series B Preferred Stock at any time following and during
      the continuance of any Financial Statement Filing Default (as defined herein)
      or
      Financial Statement Breach (as defined herein) (collectively, a “Default”),
      the
      holders of Series B Preferred Stock shall as a class become entitled to Special
      Voting Rights (as hereinafter defined). Failure by the holders of Series B
      Preferred Stock to exercise their Special Voting Rights promptly upon the
      occurrence of a Default shall not be deemed to be a waiver of such rights,
      such
      rights being exercisable at any time that a Default shall have occurred or
      be
      continuing. For purposes of this Section 6(c), the term “Special
      Voting Rights”
shall
      mean the right to elect, upon the occurrence and during the continuance of
      a
      Default as provided in the foregoing paragraph, one (1) additional director
      to
      the Board (the “Default
      Director”).

     

    Immediately
      upon the accrual of the Special Voting Rights, the number of directors of the
      Company shall, ipso facto,
      be
      increased by one and the Default Director shall be elected only by vote of
      the
      holders of a majority of the then outstanding shares of Series B Preferred
      Stock, voting together as a class. If (x) a Financial Statement Breach shall
      occur or (y) any Financing Statement Filing Default shall occur and be
      continuing:

     

    (i)    the
      holders of a majority of the then outstanding shares of Series B Preferred
      Stock
      may at their option at any time exercise the Special Voting Rights to elect
      the
      Default Director either at a special meeting of the holders of Series B
      Preferred Stock or by written consent of the holders of a majority of the then
      outstanding shares of Series B Preferred Stock without a meeting in accordance
      with the DGCL;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (ii)    any
      vacancy in the position of a Default Director may be filled only by the holders
      of a majority of the then outstanding shares of Series B Preferred
      Stock;

     

    (iii)    the
      Default Director may, during his or her term of office, be removed at any time,
      with or without cause, by and only by the affirmative vote, at a special meeting
      of holders of a majority of the then outstanding shares of Series B Preferred
      Stock called for such purpose, or the written consent, of the holders of a
      majority of the then outstanding shares of Series B Preferred Stock;
      and

     

    (iv)    any
      vacancy created by such removal may also be filled at such meeting or by such
      consent.

     

    (d)    In
      addition to any other rights provided by law, so long as at least fifty percent
      (50%) of the aggregate shares of Series B Preferred Stock issued prior to the
      date of determination remain outstanding (for these purposes treating any shares
      of Series C Preferred Stock as if they were outstanding shares of Series B
      Preferred Stock), the Company shall not and shall not permit any direct or
      indirect subsidiary of the Company to, whether by reclassification, merger,
      acquisition or otherwise, without first obtaining the written consent or
      affirmative vote at a meeting called for that purpose by holders of at least
      a
      majority of the then outstanding shares of Series B Preferred
      Stock:

     

    (i)    amend,
      alter or repeal any provision of the Company’s bylaws or certificate of
      incorporation so as to adversely affect the rights, preferences or privileges
      of
      the Series B Preferred Stock, or split, reverse split, subdivide, reclassify
      or
      combine the Series B Preferred Stock;

     

    (ii)    amend,
      alter or repeal any provision of the Company’s bylaws or certificate of
      incorporation so as to adversely affect the rights, preferences or privileges
      of
      the Series C Preferred Stock, or split, reverse split, subdivide, reclassify
      or
      combine the Series C Preferred Stock;

     

    (iii)    adopt
      any
“shareholder rights plan” or similar instrument that would have the effect of,
      or amend any “shareholder rights plan” in effect on the date hereof, which as
      amended would have the effect of, diluting the economic or voting interest
      in
      the Company of the holders of the Convertible Preferred Stock resulting from
      the
      ownership of the Convertible Preferred Stock;

     

    (iv)    incur
      or
      guarantee, directly or indirectly, or permit any subsidiary to incur or
      guarantee, directly or indirectly, any indebtedness, distribute or permit any
      non-wholly owned subsidiary to distribute to any securityholders any asset,
      purchase or permit any subsidiary to purchase any securities issued by the
      Company or any subsidiary or pay or permit any non-wholly owned subsidiary
      to
      pay any dividend, if following such transaction, (x) net debt (including any
      debt to be incurred in connection with any such transactions) as of such date
      divided by (y) EBITDA for the twelve months preceding such date would be in
      excess of 3.0; 

     

    (v)    create,
      authorize or issue any Senior Securities (as defined herein) or any Parity
      Securities (as defined herein) or make any payment of dividends on Senior

     

    
      
        
        

      

      
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    Securities
      or Parity Securities other than pursuant to the terms of the certificate or
      other instrument authorizing such securities or increase the issued or
      authorized number of shares of Convertible Preferred Stock; or

     

    (vi)    except
      to
      the extent required by Section 6(c), increase the number of members of the
      Board
      to greater than twelve (12).

     

    7.    CONVERSION. 

     

    (a)    Conversion
      by the Company.
      Following the date that is the 18-month anniversary of the Closing Date, subject
      to the provisions of this Section 7, the Company shall have the right to require
      the holders of shares of Convertible Preferred Stock, from time to time, at
      the
      Company’s option, to convert the holders’ shares of Convertible Preferred Stock,
      in whole or in part, into the number of fully paid and non-assessable shares
      of
      Common Stock obtained by multiplying (a) with respect to the Series B Preferred
      Stock, the number of shares of Series B Preferred Stock subject to conversion
      pursuant to this Section
      7(a)
      by the
      quotient obtained by dividing (i) the Redemption Price for the Series B
      Preferred Stock by (ii) the Series B Conversion Price (as defined below) then
      in
      effect (such quotient is referred to herein as the “Series
      B Conversion Rate”)
      and
      (b) with respect to the Series C Preferred Stock, the number of shares of Series
      C Preferred Stock subject to conversion pursuant to this Section 7(a) by the
      quotient obtained by dividing (i) the Redemption Price for the Series C
      Preferred Stock by (ii) the Series C Conversion Price (as defined below) then
      in
      effect (such quotient is referred to herein as the “Series
      C Conversion Rate”;
      the
      Series B Conversion Rate and the Series C Conversion Rate are sometimes referred
      to herein as the “Conversion
      Rate”
and
      where used herein, shall mean the Conversion Rate of the applicable series
      of
      Convertible Preferred Stock); provided,
      however,
      the
      Company’s right to require shares of Convertible Preferred Stock to be converted
      pursuant to this Section 7(a) is subject to the requirement that the average
      closing price of a share of Common Stock for the 30 consecutive trading days
      preceding the date which is five Business Days prior to the Convertible
      Preferred Notice Date is greater than the price obtained by multiplying (x)
      the
      Applicable Multiple (as defined herein) by (y) the then applicable Conversion
      Price for the shares of Convertible Preferred Stock then being converted. The
      “Applicable
      Multiple”
is
      determined as follows: (a) for the period beginning on the day following the
      18-month anniversary of the Closing Date and ending on the 36-month anniversary
      of the Closing Date, the Applicable Multiple shall be 3.5; (b) for the period
      beginning on the day following the 36-month anniversary of the Closing Date
      and
      ending on the 60-month anniversary of the Closing Date, the Applicable Multiple
      shall be 3.0; and (c) for any date following the 60-month anniversary of the
      Closing Date, the Applicable Multiple shall be 2.5.

     

    (b)    Conversion
      by the Holders.
      Subject
      to the provisions of this Section 7, each holder of shares of Convertible
      Preferred Stock shall have the right, at any time and from time to time, at
      such
      holder’s option, to convert any or all of such holder’s shares of Convertible
      Preferred Stock, in whole or in part, into the number of fully paid and
      non-assessable shares of Common Stock obtained at the Conversion Rate then
      in
      effect. Notwithstanding the foregoing, a holder of shares of Series C Preferred
      Stock shall not have the right to convert any of such holder’s shares of Series
      C Preferred Stock, if, after giving effect to such conversion, the holder
      thereof would Beneficially Own 45% or more of the Common Stock of the Company
      on
      an as converted basis, provided,
      however,
      that a
      holder of shares of Series C Preferred Stock shall have 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    the
      right
      at such holder’s option to convert any or all of such holder’s shares of Series
      C Preferred Stock in connection with a Change of Control. 

     

    (c)    Conversion
      Price.
      The
      initial conversion price for each share of (i) Series B Preferred Stock is
      initially equal to $5.00 per share (subject to adjustment as provided herein,
      the “Series
      B Conversion Price”)
      and
      (ii) Series C Preferred Stock is initially equal to $5.00 per share (subject
      to
      adjustment as provided herein, the “Series
      C Conversion Price”).
      The
      Series B Conversion Price and the Series C Conversion Price are sometimes
      referred to herein as the “Conversion
      Price”
and
      where used herein, shall mean the Conversion Price of the applicable series
      of
      Convertible Preferred Stock. The initial (i) Series B Conversion Rate for the
      Series B Preferred Stock shall be ten (10) shares of Common Stock for each
      one
      share of Series B Preferred Stock surrendered for conversion and (ii) Series
      C
      Conversion Rate for the Series C Preferred Stock shall be ten (10) shares of
      Common Stock for each one share of Series C Preferred Stock surrendered for
      conversion. The applicable Conversion Rate and Conversion Price from time to
      time in effect is subject to adjustment as hereinafter provided.

     

    (d)    Mechanics
      of Conversion.

     

    (i)    In
      order
      to exercise the conversion privilege set forth in Section 7(a) above, the
      Company shall deliver to the holder of any Convertible Preferred Stock written
      notice (the “Convertible
      Preferred Conversion Notice”)
      of
      such conversion, at least 10 Business Days and no more than 20 Business Days
      prior to the Conversion Date, specifying: (i) the number of shares of
      Convertible Preferred Stock to be converted and, if fewer than all the shares
      held by such holder are to be converted, the number of shares to be converted
      by
      such holder; (ii) the Mandatory Conversion Date (as defined below); (iii) the
      number of shares of Common Stock to be issued in respect of each share of
      Convertible Preferred Stock that is converted; (iv) the place or places where
      certificates for such shares are to be surrendered for issuance of certificates
      representing shares of Common Stock; and (v) that dividends on the shares to
      be
      converted will cease to accrue on such Mandatory Conversion Date. The holder
      of
      the Convertible Preferred Stock to be converted shall promptly surrender his
      or
      its certificate or certificates therefor to the principal office of the transfer
      agent for the Convertible Preferred Stock (or if no transfer agent be at the
      time appointed, then the Company at its principal office). If fewer than all
      of
      the outstanding shares of Convertible Preferred Stock are to be converted
      pursuant to Section 7(a), the shares shall be converted on a pro rata basis
      (according to the number of shares of Convertible Preferred Stock held by each
      holder, with any fractional shares rounded to the nearest whole share). For
      the
      purposes of this section, the “Mandatory
      Conversion Date”
shall
      be the date specified as the conversion date in the Company’s Convertible
      Preferred Conversion Notice. 

     

    (ii)    In
      order
      to exercise the conversion privilege set forth in Section 7(b) above, the holder
      of any Convertible Preferred Stock to be converted shall surrender the
      certificate or certificates representing such shares at the principal office
      of
      the Company (or any transfer agent of the Company previously designated by
      the
      Company to the holders of Convertible Preferred Stock for this purpose) with
      a,
      irrevocable and unconditional written notice of election to convert, completed
      and signed, specifying the number of shares to be converted (it being
      understood, that in connection with a Change 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    of
      Control of the Company, a holder of Convertible Preferred Stock may make a
      conversion notice conditional upon the Change of Control, and may rescind any
      such conversion notice prior to the effective time thereof specified in any
      such
      conversion notice). Unless the shares issuable upon conversion are to be issued
      in the same name as the name in which such shares of Convertible Preferred
      Stock
      are registered, each share surrendered for conversion shall be accompanied
      by
      instruments of transfer, in forms reasonably satisfactory to the Company, duly
      executed by the holder thereof or such holder’s duly authorized attorney, and an
      amount sufficient to pay any transfer or similar tax in accordance with Section
      7(g). For the purposes of this section, the “Optional
      Conversion Date”
shall
      be the date of receipt by the transfer agent (or by the Company if the Company
      serves as its own transfer agent) of the certificates and notice. 

     

    (iii)    Unless
      the shares issuable upon conversion are to be issued in the same name as the
      name in which such shares of Convertible Preferred Stock are registered, each
      share surrendered for conversion shall be accompanied by instruments of
      transfer, in forms reasonably satisfactory to the Company, duly executed by
      the
      holder thereof or such holder’s duly authorized attorney, and an amount
      sufficient to pay any transfer or similar tax in accordance with Section 7(g).
      Within two Business Days after the surrender by the holder of the certificates
      for shares of Convertible Preferred Stock as aforesaid, the Company shall issue
      and shall deliver to such holder, or on the holder’s written order to the
      holder’s transferee, a certificate or certificates for the number of full shares
      of Common Stock issuable upon conversion of such shares, cash in an amount
      corresponding to any fractional interest in a share of Common Stock as provided
      in Section 7(h) and, if less than all shares of Convertible Preferred Stock
      represented by the certificate or certificates so surrendered are being
      converted, a residual certificate or certificates representing the shares of
      Convertible Preferred Stock not converted. 

     

    (iv)    At
      such
      time on the Mandatory Conversion Date or Optional Conversion Date, as
      applicable,

     

        (1)    the
      person in whose name or names any certificate or certificates for shares of
      Common Stock shall be issuable upon such conversion shall be deemed to have
      become the holder of record of the shares of Common Stock represented thereby
      at
      such time; and

     

        (2)    such
      shares of Convertible Preferred Stock so converted shall no longer be deemed
      to
      be outstanding, and all rights of a holder with respect to such shares (x)
      in
      the event of conversion pursuant to Section 7(a), covered by the Convertible
      Preferred Conversion Notice and (y) in the event of conversion pursuant to
      Section 7(b), surrendered for conversion, shall immediately terminate except
      the
      right to receive the Common Stock and other amounts payable pursuant to this
      Section 7.

     

    (e)    All
      shares of Common Stock delivered upon conversion of the Convertible Preferred
      Stock will, upon delivery, be duly and validly authorized and issued, fully
      paid
      and non-assessable, free from all preemptive rights and free from all taxes,
      liens, security interests and charges (other than liens or charges created
      by or
      imposed upon the holder or taxes in respect of any transfer occurring
      contemporaneously therewith). The Company will procure, at 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    its
      sole
      expense, the listing of the shares of Common Stock, subject to issuance or
      notice of issuance on the principal domestic stock exchange or inter-dealer
      quotation system on which the Common Stock is then listed or traded. The Company
      will take all commercially reasonable action as may be necessary to ensure
      that
      the shares of Common Stock may be issued without violation of any applicable
      law
      or regulation or of any requirement of any securities exchange or inter-dealer
      quotation system on which the shares of Common Stock are listed or traded.
      

     

    (f)    Upon
      any
      such conversion, all accrued but unpaid dividends (whether or not declared),
      through the date of such conversion, on the Convertible Preferred Stock
      surrendered for conversion shall be paid at the election of the Company, in
      cash
      or in shares of Common Stock. In the event such dividends are paid in additional
      shares of Common Stock, the number of shares of Common Stock to be issued in
      payment of the dividend with respect to each outstanding share of Common Stock
      shall be determined by dividing the amount of the dividend that would have
      been
      payable had such dividend been paid in cash by an amount equal to the Conversion
      Price. To the extent that any such dividend would result in the issuance of
      a
      fractional share of Common Stock (which shall be determined with respect to
      the
      aggregate number of shares of Common Stock held of record by each holder) then
      the amount of such fraction multiplied by the Conversion Price shall be paid
      in
      cash (unless there are no legally available funds with which to make such cash
      payment, in which event such cash payment shall be made as soon as
      possible).

     

    (g)    Issuances
      of certificates for shares of Common Stock upon conversion of the Convertible
      Preferred Stock shall be made without charge to any holder of shares of
      Convertible Preferred Stock for any issue or transfer tax (other than taxes
      in
      respect of any transfer occurring contemporaneously therewith or as a result
      of
      the holder being a non-U.S. person) or other incidental expense in respect
      of
      the issuance of such certificates, all of which taxes and expenses shall be
      paid
      by the Company; provided,
      however,
      that
      the Company shall not be required to pay any tax which may be payable in respect
      of any transfer involved in the issuance or delivery of shares of Common Stock
      in a name other than that of the holder of the Convertible Preferred Stock
      to be
      converted, and no such issuance or delivery shall be made unless and until
      the
      person requesting such issuance or delivery has paid to the Company the amount
      of any such tax or has established, to the satisfaction of the Company, that
      such tax has been paid.

     

    (h)    The
      Company shall not issue fractions of shares of Common Stock upon conversion
      of
      Convertible Preferred Stock or scrip in lieu thereof. If any fraction of a
      share
      of Common Stock would, except for the provisions of this Section 7(h), be
      issuable upon conversion of any Convertible Preferred Stock, the Company shall
      in lieu thereof pay to the person entitled thereto an amount in cash equal
      to
      the current value of such fraction, calculated to the nearest one-hundredth
      (1/100) of a share, to be computed (i) if the Common Stock is listed on any
      national securities exchange, on the basis of the last sales price of the Common
      Stock on such exchange (or the quoted closing bid price if there shall have
      been
      no sales) on the date of conversion, or (ii) if the Common Stock shall not
      be
      listed, on the basis of the mean between the closing bid and asked prices for
      the Common Stock on the date of conversion as reported by Nasdaq, or its
      successor, and if there are not such closing bid and asked prices, on the basis
      of the fair market value per share as determined in good faith by the
      Board.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (i)    Any
      shares of Convertible Preferred Stock so converted shall be retired and canceled
      and shall not be reissued, and the Company may from time to time take such
      appropriate action as may be necessary to reduce the authorized Convertible
      Preferred Stock accordingly. 

     

    8.    ANTI-DILUTION
      PROVISIONS.
      The
      Series B Conversion Price and the Series C Conversion Price shall be subject
      to
      adjustment from time to time in accordance with this Section 8. For purposes
      of
      this Section 8, the term “Common
      Stock Outstanding”
at
      any
      given time shall mean the number of shares of Common Stock outstanding at such
      time on a fully diluted basis (including (i) all options, warrants and
      securities convertible into or exchangeable for shares of Common Stock (other
      than the Convertible Preferred Stock) and (ii) without duplication, the number
      of shares of the Common Stock deemed to be outstanding under paragraphs 8(a)(i)
      to (iii), inclusive, at such time).

     

    (a)    Common
      Stock Issued at Less than Conversion Price.
      If
      after the Initial Issuance Date the Company issues or sells any Common Stock
      without consideration or for consideration per share less than the then
      applicable Conversion Price in effect as of the date of such issuance or sale,
      the applicable Conversion Price in effect immediately prior to each such
      issuance or sale will immediately (except as provided below) be reduced to
      the
      price determined by multiplying (i) the applicable Conversion Price at which
      shares of Convertible Preferred Stock were theretofore convertible by (ii)
      a
      fraction of which the numerator shall be the sum of (a) the number of shares
      of
      Common Stock Outstanding immediately prior to such issuance or sale plus (b)
      the
      number of additional shares of Common Stock that the aggregate consideration
      received by the Company for the number of shares of Common Stock so issued
      or
      sold would purchase at the Conversion Price in effect immediately preceding
      such
      issuance or sale, and of which the denominator shall be the sum of (x) the
      number of shares of Common Stock Outstanding immediately prior to such issuance
      or sale, plus (y) the number of additional shares of Common Stock so issued.
      For
      the purposes of any adjustment of the applicable Conversion Price pursuant
      to
      this Section 8(a), the following provisions shall be applicable:

     

    (i)    In
      the
      case of the issuance of Common Stock for cash, the amount of the consideration
      received by the Company shall be deemed to be the amount of the cash proceeds
      received by the Company for such Common Stock after deducting therefrom any
      discounts or commissions allowed, paid or incurred by the Company for any
      underwriting or otherwise in connection with the issuance and sale
      thereof.

     

    (ii)    In
      the
      case of the issuance of Common Stock (otherwise than upon the conversion of
      shares of capital stock or other securities of the Company) for a consideration
      in whole or in part other than cash, including securities acquired in exchange
      therefor (other than securities by their terms so exchangeable), the
      consideration other than cash shall be deemed to be the fair value thereof
      as
      determined by the Board, provided, however, that such fair value as determined
      by the Board shall not exceed the aggregate Market Price of the shares of Common
      Stock being issued as of the date the Board authorizes the issuance of such
      shares.

     

    (iii)    In
      the
      case of the issuance of (I) options, warrants or other rights to purchase or
      acquire Common Stock (whether or not at the time exercisable) or (II)

     

    
      
        
        

      

      
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    securities
      by their terms convertible into or exchangeable for Common Stock (whether or
      not
      at the time so convertible or exchangeable) or options, warrants or rights
      to
      purchase such convertible or exchangeable securities (whether or not at the
      time
      exercisable):

     

    (1)    the
      aggregate maximum number of shares of Common Stock deliverable upon exercise
      of
      such options, warrants or other rights to purchase or acquire Common Stock
      shall
      be deemed to have been issued at the time such options, warrants or rights
      are
      issued and for a consideration equal to the consideration (determined in the
      manner provided in Section 8(a)(i) and (ii)), if any, received by the Company
      upon the issuance of such options, warrants or rights plus the minimum purchase
      price provided in such options, warrants or rights for the Common Stock covered
      thereby;

     

    (2)    the
      aggregate maximum number of shares of Common Stock deliverable upon conversion
      of or in exchange for any such convertible or exchangeable securities, or upon
      the exercise of options, warrants or other rights to purchase or acquire such
      convertible or exchangeable securities and the subsequent conversion or exchange
      thereof, shall be deemed to have been issued at the time such securities were
      issued or such options, warrants or rights were issued and for a consideration
      equal to the consideration, if any, received by the Company for any such
      securities and related options, warrants or rights (excluding any cash received
      on account of accrued interest or accrued dividends), plus the additional
      consideration (determined in the manner provided in Section 8(a)(i) and (ii)),
      if any, to be received by the Company upon the conversion or exchange of such
      securities, or upon the exercise of any related options, warrants or rights
      to
      purchase or acquire such convertible or exchangeable securities and the
      subsequent conversion or exchange thereof;

     

    (3)    on
      any
      change in the number of shares of Common Stock deliverable upon exercise of
      any
      such options, warrants or rights or conversion or exchange of such convertible
      or exchangeable securities or any change in the consideration to be received
      by
      the Company upon such exercise, conversion or exchange, the applicable
      Conversion Price as then in effect shall forthwith be readjusted to such
      Conversion Price as would have been obtained had an adjustment been made upon
      the issuance of such options, warrants or rights not exercised prior to such
      change, or of such convertible or exchangeable securities not converted or
      exchanged prior to such change, upon the basis of such change;

     

    (4)    on
      the
      expiration or cancellation of any such options, warrants or rights (without
      exercise), or the termination of the right to convert or exchange such
      convertible or exchangeable securities (without exercise), if the Conversion
      Price shall have been adjusted upon the issuance thereof, the Conversion Price
      shall forthwith be readjusted to such Conversion Price as would have been
      obtained had an adjustment been made upon the issuance of such options,
      warrants, rights or such convertible or exchangeable securities on the basis
      of
      the issuance of only the number of shares of Common Stock actually issued upon
      the exercise of such options, warrants or rights, or upon the conversion or
      exchange of such convertible or exchangeable securities; and

     

    
      
        
        

      

      
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    (5)    if
      the
      Conversion Price shall have been adjusted upon the issuance of any such options,
      warrants, rights or convertible or exchangeable securities, no further
      adjustment of the Conversion Price shall be made for the actual issuance of
      Common Stock upon the exercise, conversion or exchange thereof.

     

    (b)    Stock
      Splits, Subdivisions, Reclassifications or Combinations.
      If the
      Company shall (i) declare a dividend or make a distribution on its Common Stock
      in shares of Common Stock, (ii) subdivide or reclassify the outstanding shares
      of Common Stock into a greater number of shares, or (iii) combine or reclassify
      the outstanding Common Stock into a smaller number of shares, the applicable
      Conversion Price in effect at the time of the record date for such dividend
      or
      distribution or the effective date of such subdivision, combination or
      reclassification shall be adjusted to the number obtained by multiplying the
      Conversion Price at which the shares of Convertible Preferred Stock were
      theretofore convertible by a fraction, the numerator of which shall be the
      number of shares of Common Stock outstanding immediately prior to such action,
      and the denominator of which shall be the number of shares of Common Stock
      outstanding immediately following such action.

     

    (c)    Reorganizations,
      Reclassifications, Etc.
      If any
      capital reorganization or reclassification of the capital stock of the Company,
      or consolidation or merger of the Company with another corporation, or the
      sale
      of all or substantially all of its assets to another corporation shall be
      effected in such a way that holders of Common Stock shall be entitled to receive
      stock, securities, cash or other property with respect to or in exchange for
      Common Stock, then, as a condition of such reorganization, reclassification,
      consolidation, merger or sale, lawful and adequate provision shall be made
      whereby the holders of the Convertible Preferred Stock shall have the right
      to
      acquire and receive upon conversion of the Convertible Preferred Stock, which
      right shall be prior to the rights of the holders of Junior Stock, such shares
      of stock, securities, cash or other property issuable or payable (as part of
      the
      reorganization, reclassification, consolidation, merger or sale) with respect
      to
      or in exchange for such number of outstanding shares of Common Stock as would
      have been received upon conversion of the Convertible Preferred Stock at the
      Conversion Price then in effect. The Company, the Person formed by the
      consolidation or resulting from the merger or which acquires or leases such
      assets or which acquires the Company’s shares, as the case may be, shall make
      provisions in its certificate or articles of incorporation or other constituent
      documents to establish such rights and to ensure that the dividend, liquidation
      preference, voting and other rights of the holders of Convertible Preferred
      Stock established herein are unchanged, except as permitted herein or as
      required by applicable law, rule or regulation. The certificate or articles
      of
      incorporation or other constituent documents shall provide for adjustments,
      which, for events subsequent to the effective date of the certificate or
      articles of incorporation or other constituent documents, shall be as nearly
      equivalent as may be practicable to the adjustments provided for in this Section
      8.

     

    (d)    Tender
      Offers, Exchange Offers, Etc.
      If a
      purchase, tender or exchange offer is made to and accepted by the holders of
      more than 50% of the outstanding shares of Common Stock, the Corporation shall
      not effect any consolidation, merger or sale with the person having made such
      offer or with any Affiliate of such person, unless prior to the consummation
      of
      such consolidation, merger or sale the holders of the Convertible Preferred
      Stock shall have been given a reasonable opportunity to then elect to receive
      upon conversion of the Convertible Preferred Stock either the stock, securities
      or assets then issuable with respect to 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    the
      Common Stock or the stock, securities or assets, or the equivalent, issued
      to
      previous holders of the Common Stock in accordance with such offer.

     

    (e)    Successive
      Adjustments.
      Successive adjustments in the Conversion Price shall be made, without
      duplication, whenever any event specified in Section 8(a), (b), (c) or (d)
      shall
      occur.

     

    (f)    Rounding
      of Calculations; Minimum Adjustments.
      All
      calculations under this Section 8 shall be made to the nearest one-tenth
      (1/10th) of a cent. No adjustment in the Conversion Price is required if the
      amount of such adjustment would be less than $0.01; provided, however, that
      any
      adjustments which by reason of this Section 8(f) are not required to be made
      will be carried forward and given effect in any subsequent
      adjustment.

     

    (g)    Statement
      Regarding Adjustments.
      Whenever the Conversion Price shall be adjusted as provided in this Section
      8 or
      in Section 9, the Company shall forthwith file, at each office designated for
      the conversion of Convertible Preferred Stock, a statement, signed by the
      Chairman of the Board, the President, or the Chief Financial Officer of the
      Company, showing in reasonable detail the facts requiring such adjustment and
      the Conversion Price that shall be in effect after such adjustment and the
      Company shall also cause a copy of such statement to be sent by mail, first
      class postage prepaid, to each holder of shares of Convertible Preferred Stock
      at the address appearing in the Company’s records.

     

    (h)    Notices.
      In the
      event that the Company shall give notice or make a public announcement to the
      holders of Common Stock of any action of the type described in Section 8(a)-(d)
      and (i), the Company shall, at the time of such notice or announcement, and
      in
      the case of any action which would require the fixing of a record date, at
      least
      twenty (20) days prior to such record date, give notice to each holder of shares
      of Convertible Preferred Stock, in the manner set forth in Section 8(g) above,
      which notice shall specify the record date, if any, with respect to any such
      action and the approximate date on which such action is to take place. Such
      notice shall also set forth the facts with respect thereto as shall be
      reasonably necessary to indicate the effect on the applicable Conversion Price
      and the number, kind or class of shares or other securities or property which
      shall be deliverable upon conversion of the Convertible Preferred
      Stock.

     

    (i)    Purchase
      Rights.
      If at
      any time or from to time after the Initial Issuance Date the Company shall
      grant, issue or sell any (i) options, warrants or other rights to purchase
      or
      acquire Common Stock, (ii) securities by their terms convertible into or
      exchangeable for Common Stock or options, warrants or other rights to purchase
      or acquire such convertible or exchangeable securities or (iii) rights to
      purchase property (collectively, the “Purchase
      Rights”)
      pro
      rata to the record holders of any class of Common Stock and both (1) such
      Purchase Rights are not distributed with respect to the Convertible Preferred
      Stock pursuant to Section 4(f) and (2) such grants, issuance or sales do not
      result in an adjustment of the Conversion Price under Section 8, then each
      holder of Convertible Preferred Stock shall be entitled to acquire (within
      thirty (30) days after the later to occur of the initial exercise date of such
      Purchase Rights or receipt by such holder of the notice concerning Purchase
      Rights to which such holder shall be entitled under Section 8(g)) upon the
      terms
      applicable to such Purchase Rights either:

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (1)    the
      aggregate Purchase Rights which such holder could have acquired if it had held
      the number of shares of Common Stock acquirable upon conversion of the
      Convertible Preferred Stock immediately before the grant, issuance or sale
      of
      such Purchase Rights; provided that if any Purchase Rights were distributed
      to
      holders of Common Stock without the payment of additional consideration by
      such
      holders, corresponding Purchase Rights shall be distributed to the exercising
      holders of the Convertible Preferred Stock as soon as possible after such
      exercise and it shall not be necessary for the exercising holder of the
      Convertible Preferred Stock specifically to request delivery of such rights;
      or

     

    (2)    in
      the
      event that any such Purchase Rights shall have expired or shall expire prior
      to
      the end of such thirty (30) day period, the number of shares of Common Stock
      or
      the amount of property which such holder could have acquired upon such exercise
      at the time or times at which the Corporation granted, issued or sold such
      expired Purchase Rights.

     

    (j)    The
      provisions of this Section 8 shall not apply to any Common Stock issued,
      issuable or deemed outstanding under paragraphs 8(a)(i) to (iii) inclusive:
      (i)
      to any person pursuant to any stock option, stock purchase or similar plan
      or
      arrangement for the benefit of employees of the Company or its subsidiaries
      in
      effect on the Initial Issuance Date or thereafter adopted by the Board;
      (ii) any equity securities issued as consideration in connection with a
      bona fide acquisition, merger or consolidation by the Company provided such
      acquisition, merger or consolidation has been approved by the Board; (iii)
      securities issued in connection with licensing, marketing or distribution
      arrangements or similar strategic transactions approved by the Board; (iv)
      pursuant to options, warrants and conversion rights in existence on the Initial
      Issuance Date; (v) on conversion of the Convertible Preferred Stock or the
      sale
      of any additional shares of Convertible Preferred Stock; or
      (vi)
      to any issuance of additional shares of Common Stock as a dividend pursuant
      to
      Section 4 hereof.

     

    (k)    If
      any
      event occurs as to which, in the opinion of the Board, the provisions of this
      Section 8 are not strictly applicable or if strictly applicable would not fairly
      protect the rights of the holders of the Convertible Preferred Stock in
      accordance with the essential intent and principles of such provisions, then
      the
      Board shall make an adjustment in the application of such provisions, in
      accordance with such essential intent and principles, so as to protect such
      rights as aforesaid, but in no event shall any adjustment have the effect of
      increasing the applicable Conversion Price as otherwise determined pursuant
      to
      any of the provisions of this Section 8 except in the case of a combination
      of
      shares of a type contemplated in Section 8(b) hereof and then in no event to
      an
      amount larger than the applicable Conversion Price as adjusted pursuant to
      Section 8(b) hereof.

     

    (l)    Before
      taking any action that would cause an adjustment reducing the applicable
      Conversion Price below the then par value of the shares of Common Stock issuable
      upon conversion of the Convertible Preferred Stock, the Company will take any
      corporate action that may, in the opinion of its counsel, be necessary in order
      that the Company may validly and legally issue fully-paid and nonassessable
      shares of such Common Stock at such adjusted Conversion Price.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (m)    Except
      as
      provided in this Section 8 and Section 9, no adjustment in respect of any
      dividends or other payments or distributions made to holders of Convertible
      Preferred Stock of securities issuable upon the conversion of the Convertible
      Preferred Stock will be made during the term of the Convertible Preferred Stock
      or upon the conversion of the Convertible Preferred Stock.

     

    9.    ADJUSTMENT
      UPON DEFAULT.
      

     

    (a)    In
      the
      event that the Company fails for any reason to file with the SEC its audited
      financial statements for each of the three years ended December 31, 2003, 2004
      and 2005 and its unaudited financial statements for the six month period ended
      June 30, 2006 (collectively, the “Financial
      Statements”)
      prior
      to February 15, 2007 (any such event, a “Financial
      Statement Filing Default”),
      the
      Series B Conversion Price and the Series C Conversion Price shall each be
      automatically adjusted to be the lowest average closing price of a share of
      Common Stock for each consecutive thirty (30) consecutive Business Day period
      from February 15, 2007 to and including the Filing Date (as defined below)
      (such
      price, the “Lowest
      Average Price”);
      provided,
      however,
      that in
      no event shall the Conversion Price be adjusted to greater than the then current
      Series B Conversion Price or Series C Conversion Price, as applicable. In the
      event that fewer than 30 Business Days elapse between February 15, 2007 and
      the
      Filing Date, the Lowest Average Price shall be computed on the basis of the
      average closing price of a share of Common Stock for the thirty (30) consecutive
      Business Days preceding the Filing Date. As used herein, “Filing
      Date”
means
      the date on which the Company files its Financial Statements with the SEC (the
      “Filing
      Date”).

     

    (b)    In
      the
      event that the representation and warranty of the Company in Section 3.7 of
      the
      Securities Purchase Agreement proves to have been incorrect in any material
      respect as of the date it was made (such inaccuracy, a “Financial
      Statement Breach”),
      the
      Series B Conversion Price and the Series C Conversion Price shall each be
      automatically adjusted to be the lesser of (i) the average closing price of
      a
      share of Common Stock for the thirty (30) consecutive Business Days following
      the date of public announcement by the Company that its audited results of
      operations for each of the three years ended December 31, 2003, 2004 and 2005
      and the six month period ended June 30, 2006 are complete and (ii) the average
      closing price of a share of Common Stock for the thirty (30) consecutive
      Business Days following the Filing Date (such price, the “Filing
      Date Average Price”);
      provided,
      however,
      that in
      no event shall the Conversion Price be adjusted to greater than the then current
      applicable Conversion Price. In the event the Company does not make a public
      announcement as contemplated in (i) above prior to the Filing Date, the
      Conversion Price shall be automatically adjusted to the Filing Date Average
      Price; provided,
      however,
      that in
      no event shall the Conversion Price be adjusted to be greater than the then
      current Conversion Price. 

     

    (c)    In
      the
      event the Conversion Price is required to be adjusted pursuant to both clauses
      (a) and (b) above, the Conversion Price shall equal the lower of (i) the
      Conversion Price obtained pursuant to Section 9(a) and (ii) the Conversion
      Price
      obtained pursuant to Section 9(b). 

     

    (d)    Notwithstanding
      clauses (a), (b) and (c) above, in no event shall the then current applicable
      Conversion Price be reduced pursuant to this Section 9 by more than 25%

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (calculated
      by reference to the applicable Conversion Price before giving effect to any
      such
      adjustment).

     

    10.    ISSUE
      TAXES.
      The
      Company shall pay all issue taxes, if any, incurred in respect of the issue
      of
      Common Stock on conversion. If a holder of shares surrendered for conversion
      specifies that the Common Stock to be issued on conversion is to be issued
      in a
      name or names other than the name or names in which such surrendered shares
      stand, the Company shall not be required to pay any transfer or other taxes
      incurred by reason of the issuance of such Common Stock to the name of
      another.

     

    11.    RESERVATION
      OF SHARES.
      The
      Company shall at all times when the Convertible Preferred Stock shall be
      outstanding reserve and keep available, free from preemptive rights, for
      issuance upon the conversion of Convertible Preferred Stock, such number of
      its
      authorized but unissued Common Stock as will from time to time be sufficient
      to
      permit the conversion of all outstanding Convertible Preferred Stock, including
      all dividends payable thereon in shares of Common Stock. Prior to the delivery
      of any securities which the Company shall be obligated to deliver upon
      conversion of the Convertible Preferred Stock, the Company shall comply with
      all
      applicable laws and regulations which require action to be taken by the Company.
      All Common Stock delivered upon conversion of the Convertible Preferred Stock
      will upon delivery be duly and validly issued and fully paid and nonassessable,
      free of all liens and charges and not subject to any preemptive
      rights.

     

    12.    STATUS
      OF SHARES.
      All
      shares of Convertible Preferred Stock that are at any time converted pursuant
      to
      Section 7 and all shares of Convertible Preferred Stock that are otherwise
      reacquired by the Company shall be prohibited from being reissued as Series
      B
      Preferred Stock or Series C Preferred Stock and shall (upon compliance with
      any
      applicable provisions of the laws of the State of Delaware) have the status
      of
      authorized but unissued shares of Preferred Stock, without designation as to
      series, subject to reissuance by the Board of Directors as shares of any one
      or
      more other series.

     

    13.    CERTAIN
      DEFINITIONS.
      As used
      in this Certificate of Designations, the following terms shall have the
      following meanings, unless the context otherwise requires: 

     

    “Affiliate”
with
      respect to any given person shall mean any person controlling, controlled by
      or
      under common control with the given person.

     

    “Beneficially
      Own”
or
      “Beneficial
      Ownership”
shall
      mean the aggregate beneficial ownership, within the meaning of Rule 13d-3 under
      the Exchange Act.

     

    “Business
      Day”
shall
      mean any day except a Saturday, Sunday or day on which banking institutions
      are
      legally authorized to close in the City of New York.

     

    “Closing
      Date”
shall
      mean the date of consummation of the transactions contemplated by the Securities
      Purchase Agreement.

     

    “closing
      price”
means,
      with respect to a particular security, on any given day, the closing price
      on
      the Nasdaq National Market or, if not listed on the Nasdaq National Market,
      on
      any other principal national securities exchange on which the applicable
      security is listed or 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    admitted
      to trading, as applicable, or if not quoted on the Nasdaq National Market or
      listed or admitted to trading on any other national securities exchange, (a)
      the
      average of the highest and lowest sale prices for such day reported by the
      Nasdaq Stock Market if such security is traded over-the-counter and quoted
      in
      the Nasdaq Stock Market, or (b) if such security is so traded, but not so
      quoted, the average of the highest reported asked and lowest reported bid prices
      of such security as reported by the Nasdaq Stock Market, the Pink Sheets or
      any
      comparable system, or (c) if such security is not listed on the Nasdaq Stock
      Market, the Pink Sheets or any comparable system, the average of the highest
      asked and lowest bid prices as furnished by two members of the NASD, Inc.
      selected from time to time by the Company for that purpose. 

     

    “Convertible
      Preferred Directors”
shall
      mean the Series B Directors and the representatives designated by Warburg Pincus
      upon the conversion of 50% of the Series B Preferred Stock as set forth in
      the
      Securities Purchase Agreement.

     

    “Convertible
      Preferred Notice Date”
shall
      mean the date on which the Company shall deliver to the holders of the
      Convertible Preferred Stock notice of conversion of the Convertible Preferred
      Stock pursuant to Section 7(a) hereto.

     

    “EBITDA”
shall
      mean earnings before interest, taxes, depreciation and amortization as
      calculated in accordance with U.S. generally accepted accounting
      principles.

     

    “Exchange
      Act”
shall
      mean the Securities Exchange Act of 1934, as amended, and the rules and
      regulations promulgated thereunder.

     

    “Initial
      Issuance Date”
means
      the date that is the Closing Date.

     

    “Initial
      Purchase Price”
means
      $50.00 per share of Series B Preferred Stock or Series C Preferred Stock, as
      applicable.

     

    “Market
      Price”
means,
      with respect to a particular security, on any given day, the volume weighted
      average price or, in case no such reported sales take place on such day, the
      average of the highest asked and lowest bid prices regular way, in either case
      on the Nasdaq National Market or, if not listed on the Nasdaq National Market,
      on any other principal national securities exchange on which the applicable
      security is listed or admitted to trading, as applicable, or if not quoted
      on
      the Nasdaq National Market or listed or admitted to trading on any other
      national securities exchange, (a) the average of the highest and lowest sale
      prices for such day reported by the Nasdaq Stock Market if such security is
      traded over-the-counter and quoted in the Nasdaq Stock Market, or (b) if such
      security is so traded, but not so quoted, the average of the highest reported
      asked and lowest reported bid prices of such security as reported by the Nasdaq
      Stock Market or any comparable system, or (c) if such security is not listed
      on
      the Nasdaq Stock Market or any comparable system, the average of the highest
      asked and lowest bid prices as furnished by two members of the NASD, Inc.
      selected from time to time by the Company for that purpose. If such security
      is
      not listed and traded in a manner that the quotations referred to above are
      available for the period required hereunder, the Market Price per share of
      Common Stock shall be deemed to be the fair value per share of such security
      as
      determined in good faith by the Board of Directors.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    “Meeting
      Deadline”
means
      no later than 120 days after the date which the Company files with the SEC
      its
      audited financial statements for the year ended December 31, 2005 but in no
      event later than June 15, 2007.

     

    “Parity
      Securities”
means
      each class or series of equity securities of the Company, whether currently
      issued or issued in the future, that does not by its terms expressly provide
      that it ranks senior to or junior to the Convertible Preferred Stock (whether
      with respect to payment of dividends or rights upon liquidation, dissolution
      or
      winding up of the Company).

     

    “Pink
      Sheets”
shall
      mean the daily publication compiled by the National Quotation Bureau with bid
      and ask prices of over-the-counter stocks. 

     

    “Proxy
      Statement”
shall
      mean the proxy statement filed with the SEC, as contemplated by the Securities
      Purchase Agreement.

     

    “SEC”
means
      the United States Securities and Exchange Commission. 

     

    “Securities
      Purchase Agreement”
means
      the Securities Purchase Agreement, dated as of [ ], 2006, by and between the
      Company and each of the Investors named therein, as amended from time to time
      in
      accordance with its terms. 

     

    “Senior
      Securities”
means
      each class or series of equity securities of the Company, whether currently
      issued or issued in the future, that by its terms ranks senior to the
      Convertible Preferred Stock (whether with respect to payment of dividends or
      rights upon liquidation, dissolution or winding up of the Company).

     

    14.    HEADINGS.
      The
      headings of the paragraphs of this Schedule are for convenience of reference
      only and shall not define, limit or affect any of the provisions
      hereof.

     

    15.    WAIVERS.
      Any of
      the rights of the holders of (i) Series B Preferred Stock set forth herein
      may
      be waived by any holder of Series B Preferred Stock with respect to such holder
      or by the affirmative consent or vote of the holders of a majority of the shares
      of Series B Preferred Stock then outstanding, voting together as a separate
      class, and such waiver shall be binding on all holders of Series B Preferred
      Stock, (ii) Series C Preferred Stock set forth herein may be waived by any
      holder of Series C Preferred Stock with respect to such holder or by the
      affirmative consent or vote of the holders of a majority of the shares of Series
      C Preferred Stock then outstanding, voting together as a separate class, and
      such waiver shall be binding on all holders of Series C Preferred Stock or
      (iii)
      Convertible Preferred Stock together as a class set forth herein may be waived
      by any holder of Convertible Preferred Stock with respect to such holder or
      by
      the affirmative consent or vote of the holders of a majority of the shares
      of
      Convertible Preferred Stock then outstanding, voting together as a separate
      class, and such waiver shall be binding on all holders of Convertible Preferred
      Stock. 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

       

    

    IN
      WITNESS WHEREOF, NYFIX, Inc. has caused this Certificate of Designations to
      be
      duly executed by its authorized corporate officer this ___ day of _____________,
      2006.

     

     

    
      	 	 	 
	 	NYFIX,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
	 	Title 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

     

    FORM
      OF WARRANT

     

    R
      _________

     

     

    THIS
      WARRANT AND THE WARRANT SHARES HAVE NOT BEEN REGISTERED

    UNDER
      THE SECURITIES ACT OF 1933, AS

    AMENDED,
      NOR REGISTERED OR QUALIFIED UNDER ANY STATE

    SECURITIES
      LAWS, AND MAY NOT BE PLEDGED, HYPOTHECATED,

    SOLD,
      TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS SO

    REGISTERED
      OR AN EXEMPTION THEREFROM IS AVAILABLE

    

    WARRANT
      TO PURCHASE COMMON STOCK

    OF
      NYFIX, INC.

     

    THIS
      CERTIFIES THAT, for value received, NYFIX, Inc., a Delaware corporation (the
      "Company"),
      promises to issue to ____________, the holder of this Warrant, its nominees,
      successors or assigns (the "Holder"),
      2,250,000 nonassessable shares of Common Stock, par value $0.001 per share,
      of
      the Company ("Common
      Stock"),
      upon
      the payment by the Holder to the Company of the Warrant Price (as defined
      herein) and to deliver to the Holder a certificate or certificates representing
      the Common Stock purchased. The number of shares of Common Stock purchasable
      upon exercise of this Warrant and the Warrant Price shall be subject to
      adjustment from time to time as provided herein. The initial Warrant Price
      (the
      "Warrant
      Price")
      per
      share of Common Stock shall equal $7.75 per share, subject to adjustment as
      provided herein.

     

    For
      the
      purpose of this Warrant, the term "Common
      Stock"
      shall
      mean (i) the class of stock designated as the Common Stock at the date of this
      Warrant, or (ii) any other class or classes of stock resulting from successive
      changes or reclassifications of such class of stock, and the term "Business
      Day"
      shall
      mean any day other than a Saturday or Sunday or a day on which commercial banks
      in New York, New York are required or authorized to be closed.

     

    Section
      1.    Term
      of Warrant, Exercise of Warrant. 
      (a)  Subject to the terms of this Warrant, the Holder shall have the right,
      at its option, which may be exercised in whole or in part, at any time, and
      from
      time to time, commencing at the time of the issuance of this Warrant and until
      5:00 p.m. Eastern Time on ________, 20161 
      to
      purchase from the Company the number of fully paid and nonassessable shares
      of
      Common Stock which the Holder may at the time be entitled to purchase on
      exercise of this Warrant ("Warrant
      Shares").
      Notwithstanding the foregoing, if the Holder shall have given the Company
      written notice of its intention to exercise this Warrant on or before 5:00
      p.m.
      Eastern Time on ___________, 2016, the Holder may exercise this Warrant at
      any
      time through (and including) the Business Day next following the date that
      all
      applicable required regulatory holding periods have expired and all applicable
      required governmental approvals have been obtained in connection with such
      exercise of this Warrant by the Holder, if such Business Day is later than
      on
      ___________, 2016 (_________, 

     

    
      

    

    
      
        	
                1

              	
                Tenth
                  anniversary of Closing Date.

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2016
      or such later date being herein referred to as
      the "Warrant
      Expiration Date").
      After
      the Warrant Expiration Date, this Warrant will be void.

     

    (b)    The
      purchase rights evidenced by this Warrant shall be exercised by the Holder
      surrendering this Warrant, with the form of subscription at the end hereof
      duly
      executed by the Holder, to the Company at its office in Stamford, CT (or, in
      the
      event the Company’s principal office is no longer in Stamford, CT, its then
      principal office in the United States (the “Principal Office”)), accompanied by
      payment, of an amount (the "Exercise
      Payment")
      equal
      to the Warrant Price multiplied by the number of Warrant Shares being purchased
      pursuant to such exercise, payable as follows: (i) by payment to the Company
      in
      cash, by certified or official bank check, or by wire transfer of the Exercise
      Payment, (ii) by surrender to the Company for cancellation of securities of
      the
      Company having a Market Price (as hereinafter defined) on the date of exercise
      equal to the Exercise Payment; or (iii) by a combination of the methods
      described in clauses (i) and (ii) above. In lieu of exercising the Warrant,
      the
      Holder may elect to receive a payment equal to the difference between (i) the
      Market Price on the date of exercise multiplied by the number of Warrant Shares
      as to which the payment is then being elected and (ii) the Exercise Payment
      with
      respect to such Warrant Shares, payable by the Company to the Holder only in
      shares of Common Stock valued at the Market Price on the date of exercise (a
      “Net
      Exercise”).
      For
      purposes hereof, the term "Market
      Price"
      shall
      mean, with respect to any day, the average closing price of a share of Common
      Stock or other security for the fifteen (15) consecutive trading days preceding
      such day on the principal national securities exchange on which the shares
      of
      Common Stock or securities are listed or admitted to trading or, if not listed
      or admitted to trading on any national securities exchange, the average of
      the
      reported bid and asked prices during such fifteen (15) trading day period on
      Nasdaq or, if the shares are not listed on Nasdaq, in the over-the-counter
      market or pink sheets or, if the shares of Common Stock or securities are not
      publicly traded, the Market Price for such day shall be the fair market value
      thereof determined jointly by the Company and the Holder; provided,
      however,
      that if
      such parties are unable to reach agreement within a reasonable period of time,
      the Market Price shall be determined in good faith by an independent investment
      banking firm selected jointly by the Company and the Holder or, if that
      selection cannot be made within fifteen (15) days, by an independent investment
      banking firm selected by the American Arbitration Association in accordance
      with
      its rules. All costs and expenses incurred in connection with the determination
      of Market Price shall be borne by the Company.

     

    (c)    Upon
      any
      exercise of this Warrant, the Company shall issue and cause to be delivered
      with
      all reasonable dispatch, but in any event within three (3) Business Days, to
      or
      upon the written order of the Holder and, subject to Section 3, in such name
      or
      names as the Holder may designate, a certificate or certificates for the number
      of full Warrant Shares issuable upon such exercise together with such other
      property, including cash, which may be deliverable upon such exercise. If fewer
      than all of the Warrant Shares represented by this Warrant are purchased, a
      new
      Warrant of the same tenor as this Warrant, evidencing the Warrant Shares not
      purchased will be issued and delivered by the Company at the Company's expense,
      to the Holder together with the issue of the certificates representing the
      Warrant Shares then being purchased. All Warrant Certificates surrendered upon
      exercise of Warrants shall be canceled by the Company.

     

    Section
      2.    Warrant
      Register, Registration of Transfers

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Section
      2.1.    Warrant
      Register.
      The
      Company shall keep at its Principal Office, a register (the "Warrant
      Register")
      in
      which the Company shall record the name and address of the Holder from time
      to
      time and all transfers and exchanges of this Warrant. The Company shall give
      the
      Holder prior written notice of any change of the address at which such register
      is kept.

     

    Section
      2.2.    Registration
      of Transfers, Exchanges or Assignment of Warrants.
      The
      Holder shall be entitled to assign its interest in this Warrant in whole or
      in
      part to any person upon surrender thereof accompanied by a written instrument
      or
      instruments of transfer in the form of assignment at the end hereof duly
      executed by the Holder. This Warrant may also be exchanged or combined with
      warrants of like tenor at the option of the Holder for another Warrant or
      Warrants of like tenor and representing in the aggregate the right to purchase
      a
      like number of Warrant Shares upon presentation thereof to the Company as its
      Principal Office together with a written notice signed by the Holder specifying
      the denominations in which the new Warrant is or the new Warrants are to be
      issued.

     

    Upon
      surrender for transfer or exchange of this Warrant to the Company at its
      Principal Office for transfer or exchange, in accordance with this Section
      2,
      the Company shall, without charge (subject to Section 3), execute and deliver
      a
      new Warrant or Warrants of like tenor and of a like aggregate amount of Warrant
      Shares in the name of the assignee named in such instrument of assignment and,
      if the Holder's entire interest is not being assigned, in the name of the Holder
      with respect to that portion not transferred, and this Warrant shall promptly
      be
      canceled.

     

    Section
      3.    Payment
      of Taxes.
      The
      Company shall pay all documentary stamp taxes, if any, attributable to the
      initial issuance of any Warrant Shares upon the exercise of this Warrant;
provided,
      however,
      that
      the Company shall not be required to pay any tax or taxes which may be payable
      in respect of any transfer involved in the issue or delivery of any Warrant
      or
      certificate for Warrant Shares in a name other than that of the Holder as such
      name is then shown on the books of the Company.

     

    Section
      4.    Certain
      Covenants.

     

    Section
      4.1.    Reservation
      of Warrant Shares.
      Promptly following the date on which the Company amends its Restated Certificate
      of Incorporation to increase the number of authorized shares of Common Stock,
      the Company shall at all times keep reserved, out of its authorized but unissued
      Common Stock, free from any preemptive rights, rights of first refusal or other
      restrictions (other than pursuant to the Securities Act of 1933, as amended
      (the
      "Act"))
      a
      number of shares of Common Stock sufficient to provide for the exercise of
      the
      rights of purchase represented by this Warrant. The transfer agent, if any,
      for
      the Common Stock, and every subsequent transfer agent for any shares of its
      Common Stock issuable upon the exercise of any of the rights of purchase as
      set
      out in this Warrant, shall be irrevocably authorized and directed at all times
      to reserve such number of authorized shares as shall be requisite for such
      purpose.

     

    Section
      4.2.    No
      Impairment.
      The
      Company shall not by any action including, without limitation, amending its
      Restated Certificate of Incorporation, any reorganization, transfer of assets,
      consolidation, merger, dissolution, issue or sale of securities or any other
      voluntary action, avoid or seek to avoid the observance or performance of any
      of
      the terms of this Warrant, but shall at all times in good faith assist in the
      carrying out of all such terms and in the taking of 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    all
      such
      action, as may be necessary or appropriate to protect the rights of the Holder
      against impairment. Without limiting the generality of the foregoing, the
      Company shall take all such action as may be necessary or appropriate in order
      that the Company may validly issue fully paid and nonassessable shares of Common
      Stock upon the exercise of this Warrant at the then Warrant Price
      therefor.

     

    Section
      4.3.    Notice
      of Certain Corporate Action.
      In case
      the Company shall propose (a) to offer to the holders of its Common Stock rights
      to subscribe for or to purchase any shares of Common Stock or shares of stock
      of
      any class or any other securities, rights or options, or (b) to effect any
      reclassification of its Common Stock (other than a reclassification involving
      only the subdivision, or combination, of outstanding shares of Common Stock),
      or
      (c) to effect any capital reorganization, or (d) to effect any consolidation,
      merger or sale, transfer or other disposition of all or substantially all of
      its
      property, assets or business, or (e) to effect the liquidation, dissolution
      or
      winding up of the Company or (f) to offer to the holders of its Common Stock
      the
      right to have their shares of Common Stock repurchased or redeemed or otherwise
      acquired by the Company, or (g) to take any other action which would require
      the
      adjustment of the Warrant Price and/or the number of Warrant Shares issuable
      upon exercise of this Warrant, then in each such case (but without limiting
      the
      provisions of Section 5), the Company shall give to the Holder, a notice of
      such
      proposed action, which shall specify the date on which a record is to be taken
      for purposes of such dividend, distribution of offer of rights, or the date
      on
      which such reclassification, reorganization, consolidation, merger, sale,
      transfer, disposition, liquidation, dissolution, or winding up is to take place
      and the date of participation therein by the holders of Common Stock, if any
      such date is to be fixed and shall also set forth such facts with respect
      thereto as shall be reasonably necessary to indicate the effect of such action
      on the Common Stock. Such notice shall be so given at least ten (10) Business
      Days prior to the record date for determining holders of the Common Stock for
      purposes of participating in or voting on such action, or at least ten (10)
      Business Days prior to the date of the taking of such proposed action or the
      date of participation therein by the holders of Common Stock, whichever shall
      be
      the earlier. Such notice shall specify, in the case of any subscription or
      repurchase rights, the date on which the holders of Common Stock shall be
      entitled thereto, or the date on which the holders of Common Stock shall be
      entitled to exchange their Common Stock for securities or other property
      deliverable upon any reorganization, reclassification, consolidation, merger,
      sale or other action, as the case may be. Such notice shall also state whether
      the action in question or the record date is subject to the effectiveness of
      a
      registration statement under the Act or to a favorable vote of security holders,
      if either is required, and the adjustment in Warrant Price and/or number of
      Warrant Shares issuable upon exercise of this Warrant as a result of such
      reorganization, reclassification, consolidation, merger, sale or other action.
      

     

    Section
      5.    Adjustment
      of Warrant Price and Warrant Shares.

     

    Section
      5.1.   Subdivision
      or Combination of Stock.
      In case
      the Company shall at any time (i) issue a dividend payable in Common Stock
      or
      convertible securities or any rights to subscribe for or to purchase, or any
      options for the purchase of, Common Stock or convertible securities or (ii)
      subdivide its outstanding shares of Common Stock into a greater number of shares
      or combine its outstanding shares of Common Stock into a smaller number of
      shares, the Warrant Price in effect immediately prior to such subdivision or
      combination shall be adjusted to an amount that bears the same relationship
      to
      the Warrant Price in effect immediately prior to such action as the total amount
      of shares of Common Stock outstanding immediately prior to 

     

    
      4

      
        

      

    

    
    

     

    such
      action bears to the total number of shares of Common Stock outstanding
      immediately after such action, and the number of shares of Common Stock
      purchasable upon the exercise of any Warrant shall be that number of shares
      of
      Common Stock obtained by multiplying the number of shares of Common Stock
      purchasable immediately prior to such adjustment upon the exercise of such
      Warrant by the Warrant Price in effect immediately prior to such adjustment
      and
      dividing the product so obtained by the Warrant Price in effect after such
      adjustment.

     

    Section
      5.2.    Reorganization,
      Reclassification, Consolidation, Merger or Sale.
      (a) If
      any capital reorganization or reclassification of the capital stock of the
      Company, or any consolidation or merger of the Company with another corporation,
      or the sale of all or substantially all of its assets to another corporation
      shall be effected in such a way that holders of Common Stock shall be entitled
      to receive stock, securities or assets with respect to or in exchange for Common
      Stock, then, as a condition of such reorganization, reclassification,
      consolidation, exercise, merger or sale, lawful and adequate provision shall
      be
      made whereby the Holder shall thereafter have the right to receive upon the
      basis and upon the terms and conditions specified herein and in lieu of the
      shares of Common Stock immediately theretofore receivable upon the exercise
      of
      this Warrant, the highest amount of shares of stock, securities or assets
      (including cash) as may be issued or payable with respect to or in exchange
      for
      a number of outstanding shares of such Common Stock equal to the number of
      Warrant Shares for which this Warrant could have been exercised immediately
      prior to such reorganization, reclassification, consolidation, merger or sale,
      and in any such case appropriate provision shall be made with respect to the
      rights and interests of such Holder to the end that the provisions hereof shall
      thereafter be applicable, as nearly as may be, in relation to any shares of
      stock, securities or assets (including cash) thereafter deliverable upon the
      exercise of this Warrant. The Company will not effect any consolidation, merger
      or sale, unless prior to the consummation thereof the successor corporation
      (if
      other than the Company) resulting from such consolidation or merger or the
      corporation purchasing such assets shall assume, by written instrument executed
      and mailed or delivered to the Holder at the last address of such Holder
      appearing on the books of the Company, the obligation to deliver to such Holder
      such shares of stock, securities or assets (including cash) as, in accordance
      with the foregoing provisions, the Holder may be entitled to receive.

     

    (b)    Notwithstanding
      the foregoing:

     

        (i)    In
      the event
      of a merger or consolidation of the Company approved by the Board of Directors
      of the Company (the “Board”)
      in
      which the consideration otherwise receivable in such merger or consolidation
      by
      the Holder upon exercise of the Warrant consists solely of securities
      (“Merger
      Securities”),
      the
      Holder shall be entitled to receive, at such Holder's option, upon exercise
      hereof, (x) the consideration the Holder would be entitled to receive pursuant
      to Section 5.2(a) or (y) the Merger Securities issuable per share of Common
      Stock multiplied by the number of shares of Common Stock the Holder would
      receive if the Holder exercised this Warrant in full by Net Exercise immediately
      prior to such merger or consolidation.

     

           (ii)    In
      the event
      of a merger or consolidation of the Company approved by the Board in which
      the
      consideration otherwise receivable in such merger or consolidation by

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    the
      Holder upon exercise of the Warrant consists solely of cash, the Holder shall
      be
      entitled to receive at such Holder's option, upon exercise hereof, in lieu
      of an
      amounts payable pursuant to Section 5.2(a) hereof, an amount in cash equal
      to
      the number of Warrant Shares for which the Warrant is then exerciseable
      multiplied by the difference between the amount in cash per share of Common
      Stock payable in such merger or consolidation less the Exercise Payment for
      such
      Warrant Shares.

     

    Section
      5.3.    Fractional
      Shares.
      The
      Company shall not issue fractions of shares of Common Stock upon exercise of
      this Warrant or scrip in lieu thereof. If any fraction of a share of Common
      Stock would, except for the provisions of this Section 5.3, be issuable upon
      exercise of this Warrant, the Company shall in lieu thereof pay to the person
      entitled thereto an amount in cash equal to the current value of such fraction,
      calculated to the nearest one-hundredth (1/100) of a share, to be computed
      on
      the basis of the Market Price for a share of Common Stock as of the date of
      exercise.

     

    Section
      5.4.    Notice
      of Adjustment.
      Upon
      any adjustment of the Warrant Price, and from time to time upon the request
      of
      the Holder the Company shall furnish to the Holder the Warrant Price resulting
      from such adjustment or otherwise in effect and the number of Warrant Shares
      then available for purchase under this Warrant, setting forth in reasonable
      detail the method of calculation and the facts upon which such calculation
      is
      based.

     

    Section
      5.5.    Certain
      Events.
      If any
      event occurs as to which, in the good faith judgment of the Board the other
      provisions of this Section 5 are not strictly applicable or if strictly
      applicable would not fairly protect the exercise rights of the Holder in
      accordance with the essential intent and principles of such provisions, then
      the
      Board in the good faith, reasonable exercise of its business judgment shall
      make
      an adjustment in the application of such provisions, in accordance with such
      essential intent and principles so as to protect such exercise rights as
      aforesaid.

     

    SECTION
      6.    No
      Rights as a Stockholder; Notice to Holder.
      Nothing
      contained in this Warrant shall be construed as conferring upon the Holder
      the
      right to vote or to consent or to receive notice as a stockholder in respect
      of
      any meeting of stockholders for the election of directors of the Company or
      any
      other matter, or any rights whatsoever as a stockholder of the
      Company.

     

    SECTION
      7.    Replacement
      of Warrant.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and (in the case of loss, theft or
      destruction) upon delivery of an indemnity agreement (with, in the case of
      a
      Holder which is not a qualified institutional buyer within the meaning of Rule
      144A under the Act, surety) in an amount reasonably satisfactory to it, or
      (in
      the case of mutilation) upon surrender and cancellation thereof, the Company
      will issue, in lieu thereof, a new Warrant of like tenor.

     

    SECTION
      8.    Notices.
      All
      notices and other written communications provided for hereunder shall be given
      in writing and delivered in person or sent by overnight delivery service (with
      charges prepaid) or by facsimile transmission, if the original of such facsimile
      transmission is sent by overnight delivery service (with charges prepaid) by
      the
      next succeeding Business Day and (i) if to the Holder addressed to it at the
      address or fax number specified for such Holder in 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    the
      Warrant Register or at such other address or fax number as the Holder shall
      have
      specified to the Company in writing in accordance with this Section 8, and
      (ii)
      if to the Company, addressed to it at NYFIX, Inc., 100 Wall Street,
      26th
      Floor,
      New York, NY 10005 (facsimile: 212-809-1013), Attention: General Counsel, or
      at
      such other address or fax number as the Company shall have specified to the
      Holder in writing in accordance with this Section 8. Notice given in accordance
      with this Section 8 shall be effective upon the earlier of the date of delivery
      or the second Business Day at the place of delivery after dispatch.

     

    SECTION
      9.   Applicable
      Law.
      This
      Warrant shall be governed by and construed in accordance with the laws of the
      State of New York without giving effect to principles of conflict of
      laws.

     

    SECTION
      10.  Warrant
      Share Legend.
      Each
      certificate representing Warrant Shares, until such Warrant Shares have been
      distributed pursuant to a registration statement effective under the Act or
      sold
      to the public through a broker, dealer or market maker in compliance with Rule
      144 under the Act (or any similar rule then in force) shall bear the following
      legend:

     

    THE
      SHARES REPRESENTED HEREBY ARE ENTITLED TO THE BENEFITS OF A

     CERTAIN
      REGISTRATION RIGHTS AGREEMENT DATED _________, 2006

     BETWEEN
      THE ISSUER AND WARBURG PINCUS PRIVATE EQUITY IX, L.P., 

    A
      COPY OF
      WHICH WILL BE FURNISHED TO THE REGISTERED HOLDER

     HEREOF
      WITHOUT CHARGE BY THE ISSUER, UPON REQUEST.

     

    SECTION
      11.      Captions.
      The
      captions of the Sections and subsections of this Warrant have been inserted
      for
      convenience only and shall have no substantive effect.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the undersigned have executed this Warrant as of the __th
      day
      of ______, 2006.

     

    
      	
            	 	 
	 	NYFIX,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
	 	Title 
	 	 
	 Attest:________________________	 
	         Secretary	 

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    [To
      be signed only upon exercise of Warrant]

    

     

    To
      NYFIX,
      INC.:

     

    The
      undersigned, the holder (the “Holder”)
      of the
      within Warrant (the "Warrant"),
      hereby irrevocably elects to exercise the purchase right represented by the
      Warrant for, and to purchase thereunder,       
      shares
      of Common Stock of NYFIX, Inc., a Delaware corporation (the “Company”),
      and
      herewith [makes payment of $      
      therefor
      in full payment of the Exercise Payment][tenders securities having a Market
      Price of $_____ in full payment of the Exercise Payment ] [elects to receive
      a
      payment equal to the difference between (i) the Market Price (as defined in
      the
      Warrant) multiplied by ________ (the number of Warrant Shares as to which the
      payment is being elected) and (ii) ___________, which is the aggregate exercise
      price with respect to such Warrant Shares, in full payment of the Exercise
      Payment, payable by the Company to the Holder only in shares of Common Stock
      valued at the Market Price in accordance with the terms of the Warrant] and
      requests that the certificates for such shares be issued in the name of, and
      be
      delivered to            ,
      whose
      address is                      .

     

    [In
      the
      case of a merger or consolidation where Holder elects to receive consideration
      pursuant to Section 5.2(b):

     

    [Pursuant
      to Section 5.2(b)(i) of the within Warrant (the “Warrant”),
      the
      undersigned, the holder (the “Holder”)
      of the
      Warrant, hereby elects to receive, in lieu of exercising the Warrant, the Merger
      Securities issuable per share of Common Stock pursuant to the [Merger
      Agreement], multiplied by the number of shares of Common Stock the Holder would
      receive if the Holder exercised the Warrant in full by Net Exercise immediately
      prior to such transaction.] or 

     

    [Pursuant
      to Section 5.2(b)(ii) of the within Warrant, the undersigned, the holder of
      the
      within Warrant (the “Holder”),
      hereby elects to receive, in lieu of exercising the within Warrant, an amount
      in
      cash equal to the number of Warrant Shares for which the Warrant is exerciseable
      multiplied by the difference between the amount in cash per share of Common
      Stock payable pursuant to the [Merger Agreement], less the Exercise Payment
      for
      such Warrant Shares.]]

     

    Capitalized
      terms used by not defined herein shall have the meaning assigned to them in
      the
      Warrant.

     

     

    Dated:

     

    _________________________

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
                                                      _________________________
(Signature
        must conform in all respects to name of Holder as specified on the face of
        the
        Warrant)

    

     

    

                                                    _________________________

                                                               Address

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

    [To
      be signed only upon transfer of Warrant]

     

    

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto                                    
      the
      right represented by the within Warrant to purchase         
      shares
      of the Common Stock of NYFIX, Inc. to which the within Warrant relates, and
      appoints               
      attorney
      to transfer said right on the books of NYFIX, Inc. with full power of
      substitution in the premises.

     

    
      Dated:

       

      _________________________

       

       

    

    
      (Signature
        must conform in all respects to name of Holder as specified on the face of
        the
        Warrant)

       

      

                                                      _________________________

                                                                 Address

    

     

    In
      the
      presence of:

     

     

    _____________________________

     

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      G

     

    REGISTRATION
      RIGHTS AGREEMENT

     

    
      NYFIX,
        INC.

      

      REGISTRATION
        RIGHTS AGREEMENT

      

      

      REGISTRATION
        RIGHTS AGREEMENT, dated as of _________ ____, 2006 (this “Agreement”), among the
        investors whose names and addresses appear from time to time listed on
Schedule
        I
        hereto
        (the “Investors”) and NYFIX, Inc., a Delaware corporation (the “Company”).
        Capitalized terms used in this Agreement but not otherwise defined herein
        shall
        have the meaning set forth in the Purchase Agreement (as defined
        herein).

      

      R
        E C
        I T A L S

      

      WHEREAS,
        the Investors have, pursuant to the terms of the Purchase Agreement, agreed
        to
        purchase shares of Series B Voting Convertible Preferred Stock, par value
        $1.00
        per share (the “Convertible Preferred Stock”), of the Company; 

      

      WHEREAS,
        the Company has authorized the issuance of Series C Non-Voting Convertible
        Preferred Stock, par value $1.00 per share (the “Exchange Preferred
        Stock”);

      

      WHEREAS,
        the shares of Convertible Preferred Stock and Exchange Preferred Stock are
        convertible into shares of Common Stock;

      

      WHEREAS,
        the Company has agreed to grant the Investors certain registration rights;
        and

      

      WHEREAS,
        the Company and the Investors desire to define the registration rights of
        the
        Investors on the terms and subject to the conditions herein set
        forth.

      

      NOW,
        THEREFORE, in consideration of the foregoing premises and for other good
        and
        valuable consideration, the parties hereby agree as follows:

      

      SECTION
        1.  DEFINITIONS

      

      As
        used
        in this Agreement, the following terms have the respective meanings set forth
        below:

      

      Agreement: 
        shall mean this Registration Rights Agreement among the Investors and the
        Company, as the same may be amended or modified from time to time in accordance
        with its terms;

       

      Commission: 
        shall mean the Securities and Exchange Commission or any other federal agency
        at
        the time administering the Securities Act;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Demanding
        Holders: 
        shall have the meaning set forth in Section 2(b)(ii);

      

      Exchange
        Act: 
        shall mean the Securities Exchange Act of 1934, as amended (or any successor
        act), and the rules and regulations promulgated thereunder;

      

      Holder: 
        shall mean each Investor that holds Registrable Securities, any transferee
        or
        assignee thereof to whom an Investor assigns its rights under this Agreement
        and
        who agrees to become bound by the provisions of this Agreement in accordance
        with Section 3(f) and any transferee or assignee thereof to whom a transferee
        or
        assignee assigns its rights under this Agreement and who agrees to become
        bound
        by the provisions of this Agreement in accordance with Section
        3(f);

      

      Indemnified
        Party: 
        shall have the meaning set forth in Section 2(f)(iii);

      

      Indemnifying
        Party: 
        shall have the meaning set forth in Section 2(f)(iii);

      

      Initiating
        Holder(s): 
        shall mean the Investors who in the aggregate are the Holders of more than
        50%
        of all the outstanding Registrable Securities held by the
        Investors;

      

      Other
        Stockholders: 
        shall have the meaning set forth in Section 2(a);

      

      Purchase
        Agreement: 
        shall mean the Purchase Agreement, dated as of the date hereof, among the
        Company and the Investors (as defined therein), as the same may be amended
        or
        modified from time to time in accordance with its terms;

      

      Person: 
        shall mean an individual, partnership, joint-stock company, corporation,
        limited
        liability company, trust or unincorporated organization, and a government
        or
        agency or political subdivision thereof;

      

      Register,
        Registered
        and
Registration: 
        shall mean a registration effected by preparing and filing a registration
        statement in compliance with the Securities Act (and any post-effective
        amendments filed or required to be filed) and the declaration or ordering
        of
        effectiveness of such registration statement by the Commission;

      

      Registrable
        Securities: 
        shall mean (A) shares of Common Stock issuable upon conversion of the shares
        of
        Convertible Preferred Stock or Exchange Preferred Stock, (B)
        any
        other shares of Common Stock held or hereafter acquired by the Investors,
        including any shares of Common Stock issuable upon exchangeable or convertible
        Securities and
        (C)
        any Common Stock of the Company issued as a dividend or other distribution
        with
        respect to, or in exchange for or in replacement of, the shares of Convertible
        Preferred Stock, Exchange Preferred Stock or Common Stock referred to in
        clause
        (A); provided,
        however, that the foregoing definition shall exclude in all cases any
        Registrable Securities sold by a Person in a transaction in which such Person’s
        rights under this Agreement are not assigned or any Registrable Securities
        for
        which registration rights have terminated pursuant to Section 2(j); provided,
        further, that

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

      “Registrable
        Securities” shall not at any time include any Securities (i) registered and sold
        pursuant to the Securities Act or (ii) sold pursuant to Rule 144 under the
        Securities Act. 

      

      Registration
        Expenses: 
        shall mean all expenses incurred by the Company in compliance with Sections
        2(a), (b) and (c) hereof, including, without limitation, all registration
        and
        filing fees, printing expenses, reasonable fees and disbursements of counsel
        for
        the Company, reasonable fees and expenses of one counsel for all the Holders
        (which counsel shall be chosen by the Initiating Holder(s)), reasonable blue
        sky
        fees and expenses and the reasonable expense of any special audits incident
        to
        or required by any such Registration (but excluding the compensation of regular
        employees of the Company, which shall be paid in any event by the
        Company);

      

      Registration
        Period: 
        shall have the meaning set forth in Section 2(e)(i);

      

      Rule
        144: 
        shall have the meaning set forth in Section 2(h)(i);

       

      Security,
        Securities: 
        shall have the meaning set forth in Section 2(1) of the Securities
        Act;

      

      Securities
        Act: 
        shall mean the Securities Act of 1933, as amended (or any successor act),
        and
        the rules and regulations promulgated thereunder; and

      

      Selling
        Expenses: 
        shall mean all underwriting discounts and selling commissions applicable
        to the
        sale of Registrable Securities, all stamp duty and transfer taxes, if any,
        and
        all fees and disbursements of counsel for each of the Holders other than
        the
        reasonable fees and expenses of one counsel for all the Holders.

       

      SECTION
        2.  REGISTRATION
        RIGHTS

      

      (a)  Requested
        Registration.

      

      (i)  Request
        for Registration.
        If the
        Company shall receive
        a
        written request that the Company effect any Registration with respect to
        all or
        a part of the Registrable Securities from an Initiating Holder, at any time
        on
        or after the first anniversary of the date hereof, the Company
        will:

      

      (1)  promptly
        give written notice of the proposed Registration to all other Holders;
        and

      

      (2)  as
        soon
        as practicable, use its reasonable best efforts to effect such Registration
        as
        may be so requested and as would permit or facilitate the sale and distribution
        of all or such portion of such Registrable Securities as are specified in
        such
        request, together with all or such portion of the Registrable Securities
        of any
        other Holder or Holders joining in such request as are specified in a written
        request received by the Company within ten (10) business days after written
        notice from the Company is given

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

       

      under
        Section 2(a)(i)(1) above; provided
        that the
        Company shall not be obligated to effect, or take any action to
        effect:

      

      (A)  any
        such
        Registration pursuant to this Section 2(a) in any particular jurisdiction
        in
        which the Company would be required to execute a general consent to service
        of
        process in effecting such Registration, unless the Company is already subject
        to
        service in such jurisdiction and except as may be required by the Securities
        Act
        or applicable rules or regulations thereunder;

      

      (B)  any
        such
        Registration pursuant to this Section 2(a), if the Company has effected two
        (2)
        such Registrations pursuant to this Section 2(a) and such Registrations have
        been declared or ordered effective; 

      

      (C)  any
        such
        Registration pursuant to this Section 2(a) if the Registrable Securities
        requested by all Holders to be registered pursuant to any such request have
        an
        anticipated aggregate public offering price (before
        deduction
        of any
        Selling Expenses) of less than $5,000,000;

       

      (D)  any
        such
        Registration pursuant to this Section 2(a) during the period starting with
        the
        date sixty (60) days prior to the Company’s good faith estimate of the date of
        filing of, and ending on the date six (6) months immediately following the
        effective date of, any registration statement pertaining to Securities of
        the
        Company (other than a registration of Securities in a Rule 145 transaction
        under
        the Securities Act or with respect to an employee benefit plan), provided
        that the
        Company is actively employing in good faith all reasonable efforts to cause
        such
        registration statement to become effective; provided,
        however,
        that
        the Company may only delay an offering pursuant to this Section 2(a)(i)(2)(D)
        for a period of not more than sixty (60) days, if a filing of any other
        registration statement is not made within that period, and the Company may
        only
        exercise this right once in any twelve (12) month period; or

       

      (E)  any
        such
        Registration pursuant to this Section 2(a) if the Company shall furnish to
        the
        Holders a certificate signed by the Chief Executive Officer of the Company
        stating that in the good faith judgment of the Board of Directors it would
        be
        seriously detrimental to the Company or its stockholders for a registration
        statement to be filed in the near future, in which case the Company’s obligation
        to use its reasonable best efforts to comply with this Section 2 shall be
        deferred for a period not to exceed ninety (90) days from the date of receipt
        of
        written request from the Holders; provided,
        however,
        that
        the Company shall not exercise such right more than once in any twelve (12)
        month period.

      

      
        
          
          

        

        
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      The
        registration statement filed pursuant to the request of the Initiating Holder(s)
        pursuant to Section 2(a)(i) may, subject to the provisions of Section 2(a)(ii)
        below, include other Securities of the Company which are held by Persons
        who, by
        virtue of agreements with the Company, are entitled to include their Securities
        in any such Registration (“Other Stockholders”). In the event any Holder
        requests a Registration pursuant to this Section 2(a) in connection with
        a
        distribution of Registrable Securities to its partners or members, the
        Registration shall provide for the resale by such partners or members, if
        requested by such Holder.

       

      (ii) Underwriting.
        If the
        Initiating Holder(s) intend to distribute the Registrable Securities covered
        by
        their request by means of an underwriting, they shall so advise the Company
        as a
        part of their request made pursuant to Section 2(a).
        In such
        event, the right of any Holder to include such Holder’s Registrable Securities
        in such Registration shall be conditioned upon such Holder’s participation in
        the underwriting to the extent provided herein. If Other Stockholders request
        inclusion of their Securities in the underwriting, the Holders shall offer
        to
        include the Securities of such Other Stockholders in the underwriting and
        may
        condition such offer on their acceptance of the further applicable provisions
        of
        this Section 2. The Holders whose shares are to be included in such Registration
        and the Company shall (together with all Other Stockholders proposing to
        distribute their Securities through such underwriting) enter into an
        underwriting agreement in customary form with the representative of the
        underwriter or underwriters selected for such underwriting by the Initiating
        Holder(s) and reasonably acceptable to the Company; provided,
        however,
        that
        such underwriting agreement shall not provide for indemnification or
        contribution obligations on the part of the Holders materially greater than
        the
        obligations of the Holders under Section 2(f)(ii) hereof. Notwithstanding
        any
        other provision of this Section 2(a), if the representative of the underwriter
        advises the Holders in writing that marketing factors require a limitation
        on
        the number of shares to be underwritten, the Securities held by Other
        Stockholders shall be excluded from such Registration to the extent so required
        by such limitation. If, after the exclusion of such Securities held by Other
        Stockholders, further reductions are still required, the number of Registrable
        Securities included in the Registration by each Holder shall be reduced on
        a pro
        rata basis (based on the number of Registrable Securities held by such Holder),
        by such minimum number of Registrable Securities as is necessary to comply
        with
        such request. No Registrable Securities or any other Securities excluded
        from
        the underwriting by reason of the underwriter’s marketing limitation shall be
        included in such Registration. If any Other Stockholder who has requested
        inclusion in such Registration as provided above disapproves of the terms
        of the
        underwriting, such Person may elect to withdraw therefrom by providing prompt
        written notice to the Company, the underwriter and the Initiating Holder(s).
        The
        Securities so withdrawn shall also be withdrawn from Registration. In addition
        to the other rights of the Holders contained herein, if the underwriter has
        not
        limited the number of Registrable Securities or other Securities to be
        underwritten, the Company and officers and directors of the Company may include
        its or their Securities for its or their own account in such Registration
        if the
        representative of the underwriter so agrees and if the number of Registrable
        Securities and other Securities which would otherwise have been included
        in such
        Registration and underwriting will not thereby be limited.

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      (b)  Company
        Registration.

      

      (i)  Inclusion
        in Registration.
        If at
        any time on or after the first anniversary of the date hereof, the Company
        shall
        determine to register any of its equity Securities either for its own account
        or
        for the account of any Other Stockholder in any public offering solely for
        cash,
        other than a registration relating solely to employee benefit plans, or a
        registration relating solely to a Rule 145 transaction under the Securities
        Act,
        or a registration on any registration form which does not permit secondary
        sales
        or does not include substantially the same information as would be required
        to
        be included in a registration statement covering the sale of Registrable
        Securities, the Company will:

      

      (1)  promptly
        give to each of the Holders a written notice thereof (which shall include
        a list
        of the jurisdictions in which the Company intends to attempt to qualify such
        Securities under the applicable blue sky or other state securities laws);
        and

      

      (2)  include
        in such Registration (and any related qualification under blue sky laws or
        other
        compliance), and in any underwriting involved therein, all the Registrable
        Securities specified in a written request or requests, made by the Holders
        within fifteen (15) days after mailing of the written notice from the Company
        described in Section 2(b)(i)(1) above, except as set forth in Section 2(b)(ii)
        below. Such written request may specify to include in such Registration all
        or a
        part of the Holders’ respective Registrable Securities. In the event any Holder
        requests inclusion in a Registration pursuant to this Section 2(b) in connection
        with a distribution of Registrable Securities to its partners or members,
        the
        Registration shall provide for the resale by such partners or members, if
        requested by such Holder. Notwithstanding the foregoing, the Company shall
        have
        the right to terminate or withdraw any Registration initiated by it under
        this
        Section 2(b) prior to effectiveness of such Registration whether or not any
        Holder has elected to include Securities in such Registration. 

      

      (ii)  Underwriting.
        If the
        Registration of which the Company gives notice is for a registered public
        offering involving an underwriting, the Company shall so advise each of the
        Holders as a part of the written notice given pursuant to Section 2(b)(i)(1).
        In
        such event, the right of each of the Holders to Registration pursuant to
        this
        Section 2(b) shall be conditioned upon such Holders’ participation in such
        underwriting and the inclusion of such Holders’ Registrable Securities in the
        underwriting to the extent provided herein. The Holders whose shares are
        to be
        included in such Registration shall (together with the Company and the Other
        Stockholders distributing their Securities through such underwriting) enter
        into
        an underwriting agreement in customary form with the representative of the
        underwriter or underwriters selected for underwriting by the Company;
provided,
        however,
        that
        such underwriting agreement shall not provide for indemnification or
        contribution obligations on the part of the Holders materially greater than
        the
        obligations of the Holders under Section 2(f)(ii) hereof. Notwithstanding
        any
        other provision of this Section 2(b), if the representative determines that
        marketing factors require a limitation on the number of shares to be
        underwritten, the Company shall promptly advise all holders of Securities
        requesting Registration of such limitation,

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

       

      and
        the
        number of such shares of Securities that are entitled to be included in the
        Registration and underwriting shall be allocated in the following manner:
        the
        Securities of the Company held by officers, directors and Other Stockholders
        of
        the Company (other than Registrable Securities and other than Securities
        held by
        holders who by contractual right demanded such Registration (“Demanding
        Holders”)) shall be excluded from such Registration and underwriting to the
        extent required by such limitation, and, if a limitation on the number of
        shares
        is still required, the number of shares that may be included in the Registration
        and underwriting by each of the Holders and Demanding Holders shall be reduced,
        on a pro rata basis (based on the number of shares of Common Stock of the
        Company beneficially held by such Holder), by such minimum number of shares
        as
        is necessary to comply with such limitation. If any of the Holders or any
        officer, director or Other Stockholder disapproves of the terms of any such
        underwriting, he may elect to withdraw therefrom by providing prompt written
        notice to the Company and the underwriter. Any Registrable Securities or
        other
        Securities excluded or withdrawn from such underwriting shall be withdrawn
        from
        such Registration. 

      

      (c)  Form
        S-3. 
        At any time on or after the first anniversary of the date hereof, the Initiating
        Holder(s) shall have the right to request three (3) Registrations on Form
        S-3
        (such requests shall be in writing and shall state the number of shares of
        Registrable Securities to be disposed of and the intended method of disposition
        of shares by such holders), provided
        that the
        Company shall not be obligated to effect, or take any action to effect, any
        such
        Registration pursuant to this Section 2(c): 

      

      (i)  unless
        the Holder or Holders requesting Registration propose to dispose of shares
        of
        Registrable Securities having an aggregate price to the public (before deduction
        of any Selling Expenses) of more than $5,000,000;

      

      (ii)  within
        one hundred eighty (180) days of the effective date of the most recent
        Registration pursuant to this Section 2(c) in which Securities held by the
        requesting Holder could have been included for sale or
        distribution;

      

      (iii)  in
        any
        particular jurisdiction in which the Company would be required to execute
        a
        general consent to service of process in effecting such Registration,
        qualification or compliance, unless the Company is already subject to service
        in
        such jurisdiction and except as may be required by the Securities Act or
        applicable rules or regulations thereunder;

       

      (iv)  during
        the period starting with the date sixty (60) days prior to the Company’s good
        faith estimate of the date of filing of, and ending on the date six (6) months
        immediately following the effective date of, any registration statement
        pertaining to Securities of the Company (other than a Registration of Securities
        in a Rule 145 transaction under the Securities Act or with respect to an
        employee benefit plan), provided
        that the
        Company is actively employing in good faith all reasonable efforts to cause
        such
        registration statement to become effective; provided,
        however,
        that
        the Company may only delay an offering pursuant to this Section 2(c)(iv)
        for a
        period of not more than sixty (60) days, if a filing of any other registration
        statement is not made

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

       

      within
        that period, and the Company may only exercise this right once in any twelve
        (12) month period;

       

      (v)  if
        the
        Company shall furnish to the Holder(s) requesting a registration certificate
        signed by the Chief Executive Officer of the Company stating that in the
        good
        faith judgment of the Board of Directors it would be seriously detrimental
        to
        the Company or its stockholders for a registration statement to be filed
        in the
        near future, in which case the Company’s obligation to use its reasonable best
        efforts to comply with this Section 2(c) shall be deferred for a period not
        to
        exceed ninety (90) days from the date of receipt of written request from
        the
        Initiating Holder(s); provided,
        however,
        that
        the Company shall not exercise such right more than once in any twelve (12)
        month period; or 

       

      (vi)  if
        Form
        S-3 is not then available for such offering by the Holders.

       

      The
        Company shall give written notice to all Holders of the receipt of a request
        for
        Registration pursuant to this Section 2(c) and shall provide a reasonable
        opportunity for other Holders to participate in the Registration, provided
        that if
        the Registration is for an underwritten offering, the terms of Section 2(a)(ii)
        shall apply to all participants in such offering. Subject to the foregoing,
        the
        Company will use its reasonable best efforts to effect promptly the Registration
        of all shares of Registrable Securities on Form S-3 to the extent requested
        by
        the Holder or Holders thereof for purposes of disposition. In the event any
        Holder requests a Registration pursuant to this Section 2(c) in connection
        with
        a distribution of Registrable Securities to its partners or members, the
        Registration shall provide for the resale by such partners or members, if
        requested by such Holder.

      

      (d)  Expenses
        of Registration.
        All
        Registration Expenses incurred in connection with any Registration,
        qualification or compliance pursuant to this Section 2 shall be borne by
        the
        Company, and all Selling Expenses shall be borne by the Holders of the
        Securities so registered pro rata on the basis of the number of their shares
        so
        registered other than fees and expenses of counsel, which, to the extent
        not
        included in Registration Expenses, shall be borne by the Holder incurring
        such
        fees and expenses of counsel (or if incurred by a Holder or Holders on behalf
        of
        one or more Holders, pro rata on the basis of the amounts of their shares
        so
        Registered). The Company shall not, however, be required to pay for expenses
        of
        any Registration begun pursuant to Section 2(a) or 2(c), the request for
        which
        has been subsequently withdrawn by the Initiating Holders unless (a) the
        withdrawal is based upon material adverse information concerning the Company
        of
        which the Initiating Holders were not aware at the time of such request or
        (b)
        the Holders of 662⁄3% of Registrable Securities agree to forfeit their right to
        one requested Registration pursuant to Section 2(a) or Section 2(c), as
        applicable, in which event such right shall be forfeited by all
        Holders.

       

      (e)  Registration
        Procedures.
        In the
        case of each Registration effected by the Company pursuant to this Section
        2,
        the Company shall advise the Holders, as applicable, in writing as to the
        initiation of each Registration and as to the completion thereof. At its
        expense, the Company will:

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      (i)  keep
        such
        Registration effective for a period of one hundred twenty (120) days or until
        the Holders (or in the case of a distribution to the partners or members
        of such
        Holder, such partners or members), as applicable, have completed the
        distribution described in the registration statement relating thereto, whichever
        first occurs; provided,
        however,
        that,
        in the case of any Registration of Registrable Securities on Form S-3 which
        are
        intended to be offered on a continuous or delayed basis, such one hundred
        and
        twenty (120) day period shall be extended until all such Registrable Securities
        are sold, provided
        that
        Rule 415, or any successor rule under the Securities Act, permits an offering
        on
        a continuous or delayed basis, and provided
        further
        that applicable rules under the Securities Act governing the obligation to
        file
        a post-effective amendment permit, in lieu of filing a post-effective amendment
        which (y) includes any prospectus required by Section 10(a) of the Securities
        Act or (z) reflects facts or events representing a material or fundamental
        change in the information set forth in the registration statement, the
        incorporation by reference of information required to be included in (y)
        and (z)
        above to be contained in periodic reports filed pursuant to Section 12 or
        15(d)
        of the Exchange Act in the registration statement;
        provided,
        however, that the Company shall not be required to keep any registration
        statement effective for a period in excess of twenty-four (24) months (such
        period, the “Registration Period”); provided,
        further, that at any time, upon written notice to the Holders and for a period
        not to exceed sixty (60) days thereafter (the “Suspension
        Period”),
        the
        Company may delay the filing or effectiveness of any registration statement
        or
        suspend the use or effectiveness of any registration statement (and the Holders
        hereby agree not to offer or sell any Registrable Securities pursuant to
        such
        registration statement during the Suspension Period) if (1) the Board of
        Directors of the Company reasonably determines that the Company may, in the
        absence of such delay or suspension hereunder, be required under state or
        federal securities laws to disclose any corporate development the disclosure
        of
        which could reasonably be expected to have a material adverse effect upon
        the
        Company, its stockholders, a potentially significant transaction or event
        involving the Company, or any negotiations, discussions, or proposals directly
        relating thereto or (2) the Company delivers a notice to the applicable Holders
        pursuant to Section 2(e)(iv). No more than two (2) such Suspension Periods
        shall
        occur in any twelve (12) month period. The Company may extend the Suspension
        Period for an additional consecutive sixty (60) days with the consent of
        the
        Holders of a majority of the Registrable Securities registered under the
        applicable registration statement, which consent shall not be unreasonably
        withheld. 

       

      (ii)  permit
        one legal counsel to the Holders (which counsel shall be chosen by the Holders)
        to review and comment upon a registration statement filed pursuant to Section
        2
        and all amendments and supplements thereto at least three (3) days prior
        to
        their filing with the Commission, and not file any document in a form to
        which
        such legal counsel to the Holders reasonably objects; 

       

      (iii)  furnish
        to each Holder whose Registrable Securities are included in any registration
        statement, without charge, (a) promptly after the same is prepared and filed
        with the Commission, at least one copy of such registration statement and
        any
        amendment(s) thereto, including financial statements and schedules, and if
        requested by a

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

       

      Holder,
        all documents incorporated therein by reference and all exhibits thereto,
        (b)
        upon the effectiveness of any registration statement, ten (10) copies of
        the
        prospectus included in such registration statement and all amendments and
        supplements thereto (or such other number of copies as such Holder may
        reasonably request) and (c) such other documents, including copies of any
        preliminary or final prospectus, as such Holder may reasonably request form
        time
        to time in order to facilitate the disposition of the Registrable Securities
        owned by such Holder; 

      

      (iv)  notify
        each Holder of Registrable Securities covered by such Registration at any
        time
        when a prospectus relating thereto is required to be delivered under the
        Securities Act of the happening of any event as a result of which the prospectus
        included in such registration statement, as then in effect, includes an untrue
        statement of a material fact or omits to state a material fact required to
        be
        stated therein or necessary to make the statements therein, in the light
        of the
        circumstances under which they were made, not misleading, and, subject to
        Section 2(e)(i), promptly prepare a supplement or amendment to such registration
        statement to correct such untrue statement or omission, and deliver ten (10)
        copies of such supplement or amendment to each Holder (or such other number
        of
        copies as such Holder may reasonably request). The Company shall also promptly
        notify each Holder in writing (a) when a prospectus or any prospectus supplement
        or post-effective amendment has been filed, and when a registration statement
        or
        any post-effective amendment has become effective (notification of such
        effectiveness shall be delivered by facsimile on the same day of such
        effectiveness and by overnight mail), (b) of any request by the Commission
        for
        amendments or supplements to a registration statement or related prospectus
        or
        related information, and (c) of the Company’s determination that a
        post-effective amendment to a registration statement would be appropriate;
        

       

      (v)  prevent
        the issuance of any stop order or other suspension of effectiveness of a
        registration statement, or the suspension of the qualification of any of
        the
        Registrable Securities for sale in any jurisdiction. If such an order or
        suspension is issued, the Company shall procure the withdrawal of such order
        or
        suspension at the earliest possible moment and shall notify each Holder who
        holds Registrable Securities being sold of the issuance of such order and
        the
        resolution thereof or its receipt of actual notice of the initiation or threat
        of any proceeding for such purpose; 

       

      (vi)  cause
        all
        Registrable Securities covered by a registration statement to be listed
        continuously throughout the Registration Period on each securities exchange
        or
        market, if any, on which equity Securities issued by the Company are then
        listed; 

      

      (vii)  reasonably
        cooperate with the Holders who hold Registrable Securities being offered
        to
        facilitate the timely preparation and delivery of certificates (not bearing
        any
        restrictive legend) representing the Registrable Securities to be offered
        pursuant to a registration statement and enable such certificates to be in
        such
        denominations or amounts, as the case may be, as the Holders may reasonably
        request and registered in such names as the Holders may request; 

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

      (viii)   
        appoint
        a
        transfer agent and registrar with respect to all such Registrable Securities
        not
        later than the effective date of such registration statement;

       

      (ix)  provide
        each Holder with contact information for the Company’s transfer agent and
        registrar for all Registrable Securities registered pursuant to a registration
        statement hereunder and a CUSIP number for all such Registrable Securities,
        in
        each case not later than the effective date of such registration
        statement;

       

      (x)  cause
        the
        Registrable Securities covered by the applicable registration statement to
        be
        registered with or approved by such other governmental agencies or authorities
        as may be necessary to consummate the disposition of such Registrable
        Securities;

       

      (xi)  make
        generally available to its security holders as soon as possible, but not
        later
        than 90 days after the close of the period covered thereby, an earning statement
        (in form complying with the provisions of Rule 158 under the Securities Act)
        covering a twelve-month period beginning not later than the first day of
        the
        Company’s fiscal quarter next following the effective date of the registration
        statement;

       

      (xii)   
        otherwise
        comply in all material respects with all applicable rules and regulations
        of the
        Commission in connection with any Registration hereunder;

       

      (xiii)  
        within
        two (2) business days after the registration statement which includes the
        Registrable Securities is ordered effective by the SEC, the Company shall
        deliver to the transfer agent for such Registrable Securities (with copies
        to
        the Holders whose Registrable Securities are included in such registration
        statement) confirmation that the registration statement has been declared
        effective by the Commission; 

       

      (xiv)   in
        connection with any underwritten Registration, furnish, on the date that
        such
        Registrable Securities are delivered to the underwriters for sale, (1) an
        opinion, dated as of such date, of the counsel representing the Company for
        the
        purposes of such Registration, in form and substance as is customarily given
        to
        underwriters in an underwritten public offering and reasonably satisfactory
        to
        the underwriters, addressed to the underwriters and (2) a letter, dated as
        of
        such date, from the independent certified public accountants of the Company,
        in
        form and substance as is customarily given by independent certified public
        accountants to underwriters in an underwritten public offering and reasonably
        satisfactory to the underwriters, addressed to the underwriters;
        and

       

      (xv)   
        take
        all
        other reasonable actions necessary to expedite and facilitate disposition
        by the
        Holders of Registrable Securities pursuant to a registration statement.

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

       

      (f)  Indemnification.

      

      (i)  To
        the
        fullest extent permitted by law, the Company will indemnify each of the Holders,
        each of its officers, directors, partners and members, and each Person, if
        any,
        who controls each of the Holders within the meaning of the Securities Act
        or
        Exchange Act, with respect to each Registration which has been effected pursuant
        to this Section 2, against all claims, losses, damages and liabilities (or
        actions in respect thereof) arising out of or based on any untrue statement
        (or
        alleged untrue statement) of a material fact contained in any registration
        statement filed with the Commission in connection with such Registration,
        including any preliminary prospectus or final prospectus contained therein,
        any
        amendments or supplements thereto or any issuer free writing prospectus related
        thereto, or based on any omission (or alleged omission) to state therein
        a
        material fact required to be stated therein or necessary to make the statements
        therein not misleading, or any violation by the Company of the Securities
        Act or
        the Exchange Act or any rule or regulation thereunder applicable to the Company
        and relating to action or inaction required of the Company in connection
        with
        any such Registration, and will reimburse each of the Holders, each of its
        officers, directors, partners or members, and each Person, if any, who controls
        each of the Holders within the meaning of the Securities Act or the Exchange
        Act, for any legal and any other expenses reasonably incurred in connection
        with
        investigating and defending any such claim, loss, damage, liability or action,
        provided
        that the
        Company will not be liable in any such case to the extent that any such claim,
        loss, damage, liability or expense arises out of or is based on any untrue
        statement or omission based upon written information furnished to the Company
        by
        the Holders or underwriter or controlling Person or other aforementioned
        Person
        and stated to be specifically for use therein. 

      

      (ii)  To
        the
        fullest extent permitted by law, each of the Holders will, if Registrable
        Securities held by it are included in the Securities as to which any
        Registration pursuant to Section 2 is being effected, indemnify the Company,
        each of its directors and officers, each Person who controls the Company
        within
        the meaning of the Securities Act or the Exchange Act, each Other Stockholder
        and each of their officers, directors, partners or members, and each Person
        who
        controls such Other Stockholder within the meaning of the Securities Act
        or the
        Exchange Act against all claims, losses, damages and liabilities (or actions
        in
        respect thereof) arising out of or based on any untrue statement (or alleged
        untrue statement) of a material fact contained in any registration statement
        filed in connection with such Registration, including any preliminary prospectus
        or final prospectus contained therein, any amendments or supplements thereto
        or
        any issuer free writing prospectus related thereto, or any omission (or alleged
        omission) to state therein a material fact required to be stated therein
        or
        necessary to make the statements by such Holder therein not misleading, or
        any
        violation by the Company of the Securities Act or the Exchange Act or any
        rule
        or regulation thereunder applicable to the Company and relating to action
        or
        inaction required of the Company in connection with any such Registration,
        and
        will reimburse the Company and such Other Stockholders, and their respective
        directors, officers, partners, members, Persons or control persons for any
        legal
        or any other expenses reasonably incurred in connection with investigating
        or
        defending any such claim, loss, damage, liability or

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

       

      action,
        in each case to the extent, but only to the extent, that such untrue statement
        (or alleged untrue statement) or omission (or alleged omission) is actually
        made
        in such registration statement, including any preliminary or final prospectus
        contained therein, any amendments or supplements thereto or any issuer free
        writing prospectus related thereto, or such violation by the Company of the
        Securities Act or Exchange Act or any rule or regulation thereunder applicable
        to the Company occurs, in reliance upon and in conformity with written
        information furnished to the Company by such Holder and stated to be
        specifically for use in connection with such Registration (including, without
        limitation, any information relating to such Holder’s partners or members);
provided,
        however,
        that
        the obligations of each of the Holders hereunder shall be limited to an amount
        equal to the net proceeds to such Holder of securities sold in such Registration
        as contemplated herein.

      

      (iii)  Each
        party entitled to indemnification under this Section 2(f) (the “Indemnified
        Party”) shall give notice to the party required to provide indemnification (the
        “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge
        of any claim as to which indemnity may be sought, and shall permit the
        Indemnifying Party to assume the defense of any such claim or any litigation
        resulting therefrom; provided
        that
        counsel for the Indemnifying Party, who shall conduct the defense of such
        claim
        or any litigation resulting therefrom, shall be approved by the Indemnified
        Party (whose approval shall not unreasonably be withheld) and the Indemnified
        Party may participate in such defense at such party’s expense (unless the
        Indemnified Party shall have reasonably concluded that there may be a conflict
        of interest between the Indemnifying Party and the Indemnified Party in such
        action, in which case the reasonable fees and expenses of counsel shall be
        at
        the expense of the Indemnifying Party), and provided
        further
        that the failure of any Indemnified Party to give notice as provided herein
        shall not relieve the Indemnifying Party of its obligations under this Section
        2
        unless the Indemnifying Party is materially prejudiced thereby. No Indemnifying
        Party, in the defense of any such claim or litigation shall, except with
        the
        prior written consent of each Indemnified Party, consent to entry of any
        judgment or enter into any settlement which does not include as an unconditional
        term thereof the giving by the claimant or plaintiff to such Indemnified
        Party
        of a release from all liability in respect to such claim or litigation. Each
        Indemnified Party shall furnish such information regarding itself or the
        claim
        in question as an Indemnifying Party may reasonably request in writing and
        as
        shall be reasonably required in connection with the defense of such claim
        and
        litigation resulting therefrom.

      

      (iv)  If
        the
        indemnification provided for in this Section 2(f) is held by a court of
        competent jurisdiction to be unavailable to an Indemnified Party with respect
        to
        any loss, liability, claim, damage or expense referred to herein, then the
        Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder,
        shall contribute to the amount paid or payable by such Indemnified Party
        as a
        result of such loss, liability, claim, damage or expense in such proportion
        as
        is appropriate to reflect the relative fault of the Indemnifying Party on
        the
        one hand and of the Indemnified Party on the other in connection with the
        statements or omissions which resulted in such loss, liability, claim, damage
        or
        expense, as well as any other relevant equitable considerations. The
        relative

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

       

      fault
        of
        the Indemnifying Party and of the Indemnified Party shall be determined by
        reference to, among other things, whether the untrue (or alleged untrue)
        statement of a material fact or the omission (or alleged omission) to state
        a
        material fact relates to information supplied by the Indemnifying Party or
        by
        the Indemnified Party and the parties’ relative intent, knowledge, access to
        information and opportunity to correct or prevent such statement or omission.
        

      

      (v)  Notwithstanding
        the foregoing, to the extent that the provisions on indemnification and
        contribution contained in the underwriting agreement entered into in connection
        with any underwritten public offering contemplated by this Agreement are
        in
        conflict with the foregoing provisions, the provisions in such underwriting
        agreement shall be controlling.

       

      (vi)  The
        indemnity agreements contained herein shall be in addition to (i) any cause
        of
        action or similar right of any Indemnified Party against the Indemnifying
        Party
        or others and (ii) any liabilities the Indemnifying Party may be subject
        to
        pursuant to law.

       

      (g)  Obligations
        of the Holders.

      

      (i)  It
        shall
        be a condition precedent to the obligation of the Company to effect any
        Registration pursuant to this Agreement with respect to the Registrable
        Securities of a particular Holder that such Holder furnish to the Company
        such
        information regarding such Holder and the distribution proposed by such Holder
        as the Company may reasonably request in writing and as shall be reasonably
        required in connection with any such Registration.

      

      (ii)  In
        the
        event that, either immediately prior to or subsequent to the effectiveness
        of
        any registration statement, any Holder shall distribute Registrable Securities
        to its partners or members, such Holder shall so advise the Company and provide
        such information as shall be necessary to permit an amendment to such
        registration statement to provide information with respect to such partners
        or
        members, as selling security holders. Promptly following receipt of such
        information, the Company shall file an appropriate amendment to such
        registration statement reflecting the information so provided. Any incremental
        expense to the Company resulting from such amendment shall be borne by such
        Holder.

       

      (iii)  Each
        Holder by such Holder’s acceptance of the Registrable Securities agrees to
        cooperate with the Company as reasonably requested by the Company in connection
        with the preparation and filing of any Registration hereunder, unless such
        Holder has notified the Company in writing of such Holder’s election to exclude
        all of such Holder’s Registrable Securities from such
        Registration.

       

      (iv)  Each
        Holder agrees that, upon receipt of any notice from the Company of the happening
        of any event of the kind described in Section 2(e)(iv) or the commencement
        of any

       

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

       

      Suspension
        Period pursuant to Section 2(e)(i), such Holder will immediately discontinue
        disposition of Registrable Securities pursuant to any registration statement(s)
        covering such Registrable Securities until such Holder’s receipt of the copies
        of the supplemented or amended prospectus contemplated by Section 2(e)(iv)
        or the termination of the Suspension Period, and, if so directed by the Company,
        such Holder shall deliver to the Company (at the expense of the Company),
        or
        destroy all copies in such Holder’s possession of, any prospectus covering such
        Registrable Securities current at the time of receipt of such notice.

      

      (h)  Rule
        144 Reporting.

      

      With
        a
        view to making available to Holders the benefits of certain rules and
        regulations of the Commission which may permit the sale of restricted Securities
        to the public without registration, the Company agrees, subject to Section
        2(j),
        to use reasonable best efforts to:

      

      (i)  make
        and
        keep public information available as those terms are understood and defined
        in
        Rule 144 under the Securities Act (“Rule 144”), at all times from and after the
        first anniversary of the date of this Agreement;

      

      (ii)  file
        with
        the Commission in a timely manner all reports and other documents required
        of
        the Company under the Securities Act and the Exchange Act at any time after
        it
        has become subject to such reporting requirements; and

      

      (iii)  so
        long
        as a Holder owns any Registrable Securities, furnish to such Holder upon
        request, a written statement by the Company as to its compliance with the
        reporting requirements of Rule 144, and of the Securities Act and the Exchange
        Act (at any time after it has become subject to such reporting requirements),
        a
        copy of the most recent annual or quarterly report of the Company, and such
        other reports and documents so filed as such Holder may reasonably request
        in
        availing itself of any rule or regulation of the Commission allowing the
        Holder
        to sell any such Securities without registration.

      

      (i)  Additional
        Registration Rights.
        The
        Company shall not, without first obtaining the written consent of the Holders
        who are Holders of more than 50% of the then outstanding Registrable Securities,
        grant registration rights on terms more favorable than the registration rights
        granted pursuant to this Agreement.

       

      (j)  Termination.
        The
        registration rights set forth in this Section 2 shall not be available to
        any
        Holder, and the obligations of the Company set forth in Section 2(h) shall
        not
        pertain to any Holder, if, (i) in the written opinion of counsel to the Company,
        all of the Registrable Securities then owned by such Holder could be sold
        in any
        90-day period pursuant to Rule 144 (without giving effect to the provisions
        of
        Rule 144(k)) or (ii) all of the Registrable Securities held by such Holder
        have
        been sold in a Registration pursuant to the Securities Act or pursuant to
        Rule
        144. 

       

      SECTION
        3.  MISCELLANEOUS

       

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

       

      (a)  Directly
        or Indirectly.
        Where
        any provision in this Agreement refers to action to be taken by any Person,
        or
        which such Person is prohibited from taking, such provision shall be applicable
        whether such action is taken directly or indirectly by such Person.

      

      (b)  Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of New York applicable to contracts made and to be performed entirely
        within such State.

      

      (c)  Section
        Headings.
        The
        headings of the sections and subsections of this Agreement are inserted for
        convenience only and shall not be deemed to constitute a part
        thereof.

      

      (d)  Notices.

      

      (i)  All
        communications under this Agreement shall be in writing and shall be delivered
        by hand or facsimile or mailed by overnight courier or by registered or
        certified mail, postage prepaid:

      

      (1)  if
        to the
        Company, to NYFIX, Inc., 100 Wall Street, 26th
        Floor,
        New York, NY 10005, Attention: General Counsel, or at such other address
        as it
        may have furnished to the Holders in writing.

       

      (2)  if
        to the
        Investors, at the address or facsimile number listed on Schedule
        I
        hereto,
        or at such other address or facsimile number as may have been furnished the
        Company in writing.

      

      (ii)  Any
        notice so addressed shall be deemed to be given: if delivered by hand or
        facsimile, on the date of such delivery, if a business day and delivered
        during
        regular business hours, otherwise the first business day thereafter; if mailed
        by overnight courier, on the first business day following the date of such
        mailing; and if mailed by registered or certified mail, on the third business
        day after the date of such mailing.

      

      (e)  Reproduction
        of Documents.
        This
        Agreement and all documents relating thereto, including, without limitation,
        any
        consents, waivers and modifications which may hereafter be executed may be
        reproduced by the Holders by any photographic, photostatic, microfilm,
        microcard, miniature photographic or other similar process and the Holders
        may
        destroy any original document so reproduced. The parties hereto agree and
        stipulate that any such reproduction shall be admissible in evidence as the
        original itself in any judicial or administrative proceeding (whether or
        not the
        original is in existence and whether or not such reproduction was made by
        the
        Holders in the regular course of business) and that any enlargement, facsimile
        or further reproduction of such reproduction shall likewise be admissible
        in
        evidence.

      

      (f)  Successors
        and Assigns.
        This
        Agreement shall inure to the benefit of and be binding upon the successors
        and
        permitted assigns of each of the parties. The registration rights set forth
        in
        this Agreement may be assigned, in whole or in part, to any transferee
        of

       

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

       

      Registrable
        Securities (provided such transferee shall agree to be bound by all obligations
        of this Agreement).

      

      (g)  Entire
        Agreement; Amendment and Waiver.
        This
        Agreement and the Purchase Agreement constitute the entire understanding
        of the
        parties hereto relating to the subject matter hereof and supersede all prior
        understanding and agreements among such parties with respect to the subject
        matter hereof. This Agreement may be amended, and the observance of any term
        of
        this Agreement may be waived, with (and only with) the written consent of
        the
        Company and the Investors holding a majority of the then outstanding Registrable
        Securities held by Investors.

      

      (h)  Severability.
        In the
        event that any part or parts of this Agreement shall be held illegal or
        unenforceable by any court or administrative body of competent jurisdiction,
        such determination shall not affect the remaining provisions of this Agreement
        which shall remain in full force and effect.

      

      (i)  Counterparts.
        This
        Agreement may be executed in two or more counterparts (including by facsimile),
        each of which shall be deemed an original and all of which together shall
        be
        considered one and the same agreement.

      

      
        
          
          

        

        
          -17-

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
        first set forth above.

      

        
          	 	
                  NYFIX,
                    INC.

                   

                   

                
	 	
                  By:

                	
                
	 	 	
                  Name:
                    

                  Title:

                
	 	 	
                   

                   

                
	 	
                  WARBURG
                    PINCUS PRIVATE EQUITY IX, L.P.

                   

                   

                
	 	
                  By:

                	
                  Warburg
                    Pincus IX LLC, its General Partner

                
	 	
                  By:

                	
                  Warburg
                    Pincus Partners LLC, its Managing Member

                
	 	
                  By:

                	
                  Warburg
                    Pincus & Co., its Managing Member

                   

                   

                
	 	
                  By:

                	 
	 	 	
                  Name:

                  Title:

                

        

      

      

      
        
          [Registration
            Rights Agreement Signature Page]

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Schedule
        I

      

      Investors

      

      
        	
                 

                Investor
                  Name and Address

              
	 
	
                Warburg
                  Pincus Private Equity IX, L.P.

                466
                  Lexington Avenue

                New
                  York, NY 10017

                Facsimile:
                  (212) 878-9361

                Attention:
                  Cary J. Davis and Adarsh Sarma

                 

                Copy
                  to:

                 

                Willkie
                  Farr & Gallagher LLP

                787
                  Seventh Avenue

                New
                  York, NY 10019 

                Facsimile:
                  (212) 728-9222

                Attention:
                  Steven J. Gartner, Esq. and William H. Gump

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