Exhibit 99.3
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "AGREEMENT") is entered into as of the 30th
day of December, 2004, by and among NYFIX, INC., a Delaware corporation (the
"COMPANY"), and WHITEBOX CONVERTIBLE ARBITRAGE PARTNERS L.P., a British Virgin
Islands limited partnership (the "PURCHASER").
R E C I T A L S :
WHEREAS, in consideration of $7,500,000, the Company proposes to issue to
the Purchaser, and the Purchaser desires to purchase, a $7,500,000 convertible
promissory note in the form attached as Exhibit A (the "NOTE").
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
SECTION 1. AGREEMENT TO SELL AND PURCHASE
1.1 AUTHORIZATION OF TRANSACTION. On or prior to the closing of the
transactions contemplated in this Agreement (the "CLOSING"), the Company shall
have authorized the sale and issuance to the Purchaser of the Note and the
shares of the Company's common stock, $0.001 par value per share (the "COMMON
STOCK") issuable upon conversion of the Note and upon payment on the Note
(collectively, the "SHARES").
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof, at the
Closing, the Company hereby agrees to issue and sell to the Purchaser, and the
Purchaser agrees to purchase from the Company, the Note for an aggregate
purchase price of $7,500,000 (the "PURCHASE PRICE").
SECTION 2. CLOSING, DELIVERY AND PAYMENT; OPTION FOR ADDITIONAL INVESTMENT
2.1 CLOSING. The Closing shall take place at 10:00 a.m. on the date hereof
at the offices of the Purchaser's legal counsel, Xxxxxxxx & Xxxxxx P.A., in
Minneapolis, Minnesota, or at such other time or place as the Company and the
Purchaser may mutually agree (the "CLOSING DATE"). At the Closing, subject to
the terms and conditions hereof, the Company will issue, sell and deliver to the
Purchaser the Note, against payment of the Purchase Price by certified check or
wire transfer of immediately available funds. At that time, the Company and
Purchaser shall also execute the Registration Rights Agreement in the form
attached as Exhibit B (the "REGISTRATION RIGHTS AGREEMENT").
2.2 OPTIONAL ADDITIONAL INVESTMENT BY PURCHASER. Conditioned on the Closing
under Section 2.1 above, the Purchaser may elect within 90 days after the
Closing Date (by providing written notice to the Company) to purchase up to an
additional $2,500,000 Note (the "ADDITIONAL NOTE"). The Additional Note shall
contain substantially similar provisions as the Note hereunder and shall be
executed and delivered by the Company (against delivery by the Purchaser of the
additional funds) to the Purchaser at a second closing (the "Supplemental
Closing") to be held within ten business days after receipt by the Company of
the Purchaser's written election notice. At the Supplemental Closing, the
parties will reconfirm their representations and warranties contained herein and
the Company's counsel will provide a customary bring-down legal opinion covering
the matters otherwise specified below. To the fullest extent, the Additional
Note will be covered by the provisions of this Agreement and the Registration
Rights Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as of the
Closing Date, and agrees, as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company's only active subsidiaries are the
subsidiaries listed on Schedule 3.1 (the "SUBSIDIARIES"). Except as indicated on
Schedule 3.1, each Subsidiary is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Each of the Company
and the Subsidiaries has all requisite corporate power and authority to own and
operate its respective properties and assets and to carry on its respective
business as presently conducted and as presently proposed to be conducted. The
Company has all requisite corporate power and authority to execute and deliver
this Agreement, the Note and the Registration Rights Agreement (together, the
"TRANSACTION DOCUMENTS"), to issue and sell the Shares upon conversion of the
Note and upon payment on the Note and to carry out the provisions of the
Transaction Documents. Each of the Company and the Subsidiaries is duly
qualified and is authorized to do business and is in good standing in each
jurisdiction in which the nature of its respective activities and of its
respective properties (both owned and leased) makes such qualification
necessary, except for those jurisdictions in which failure to be so qualified
would not have a materially adverse effect on the Company or its business, taken
as a whole.
3.2 CAPITALIZATION. The Company is authorized to issue 60,000,000 shares of
Common Stock, par value $0.001 per share, of which 32,425,630 shares are issued
and outstanding as of December 27, 2004, and 5,000,000 shares of preferred
stock, par value $1.00 per share, of which no shares are issued and outstanding
as of the date hereof. Except as set forth on Schedule 3.2 or in the Company's
current, quarterly, annual and other periodic filings (the "SEC REPORTS") with
the U.S. Securities and Exchange Commission (the "COMMISSION"), there are no
outstanding options, warrants or other rights to acquire any of the Company's
capital stock, or securities convertible or exchangeable for the Company's
capital stock or for securities themselves convertible or exchangeable for the
Company's capital stock (together, "CONVERTIBLE SECURITIES"). Except as set
forth on Schedule 3.2 or in the SEC Reports, the Company has no agreement or
commitment to sell or issue any shares of capital stock or Convertible
Securities. All issued and outstanding shares of the Company's capital stock (i)
have been duly authorized and validly issued, (ii) are fully paid and
nonassessable, (iii) are free from any preemptive and cumulative voting rights
and (iv) were issued pursuant to an effective registration statement filed with
the Commission and applicable state securities authorities or pursuant to valid
exemptions under federal and state securities laws. Except as set forth on
Schedule 3.2 or in the SEC Reports, there are no outstanding rights of first
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refusal or proxy or shareholder agreements of any kind relating to any of the
Company's securities to which the Company or any of its executive officers and
directors is a party or as to which the Company otherwise has knowledge of. When
issued in compliance with the provisions of the Note, the Shares will be validly
issued, fully paid and nonassessable, and will be free of any liens or
encumbrances; provided, however, that the Shares may be subject to restrictions
on transfer under state and/or federal securities laws as set forth herein or as
otherwise required by such laws at the time a transfer is proposed.
3.3 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the part of
the Company, its officers, directors and shareholders necessary for the
authorization of the Transaction Documents, the performance of all obligations
of the Company hereunder and thereunder at the Closing, including authorization,
sale, issuance and delivery of the Shares upon conversion of the Note and upon
payment on the Note, has been taken. The Transaction Documents, when executed
and delivered, will be valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights, (ii) according
to general principles of equity that restrict the availability of equitable
remedies and (iii) to the extent that the enforceability of the indemnification
provisions of the Registration Rights Agreement may be limited by applicable
laws. The sale of the Shares upon conversion of the Note or upon payment on the
Note is not and will not be subject to any preemptive rights or rights of first
refusal.
3.4 FINANCIAL STATEMENTS. The audited consolidated balance sheets at
December 31, 2003 of the Company and the audited consolidated statements of
operations, cash flows and stockholders' deficit of the Company for the year
ended December 31, 2003 and the unaudited consolidated balance sheet at, and the
unaudited consolidated statements of operations and cash flows for, the nine
months ended September 30, 2004 of the Company (all of the foregoing together,
the "FINANCIAL STATEMENTS," with September 30, 2004 being the "LATEST STATEMENT
DATE" and the consolidated financial statements at and for the nine months ended
September 30, 2004 being the "LATEST FINANCIAL STATEMENTS"), as contained in the
SEC Reports, fairly present the consolidated financial condition, results of
operations and cash flows of the Company and its Subsidiaries on a consolidated
basis as of the respective dates and for the respective periods covered thereby
(subject, in the case of unaudited financial statements, to normal year-end
audit adjustments) and have been prepared in accordance with generally accepted
accounting principles in the United States applied on a consistent basis (except
as may be indicated in the notes thereto) and the rules and regulations of the
Commission.
3.5 LIABILITIES. Except as reflected or expressly reserved in the Latest
Financial Statements or disclosed on SCHEDULE 3.5, neither the Company nor any
Subsidiaries has any material liabilities or obligations and there is no known
basis for any material contingent liabilities, except current liabilities
incurred after the Latest Statement Date in the ordinary course of business of
the Company and the Subsidiaries.
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3.6 CERTAIN AGREEMENTS AND ACTIONS. Except as disclosed on SCHEDULE 3.6 or
in the SEC Reports, neither the Company nor any Subsidiary has (i) declared or
paid any dividends, or authorized or made any distribution upon or with respect
to any class or series of its capital stock, (ii) since the Latest Statement
Date, incurred any indebtedness for money borrowed or any other material
liabilities out of the ordinary course of business, (iii) made any loans or
advances to any person, other than ordinary advances for travel or entertainment
expenses or (iv) sold, exchanged or otherwise disposed of any of its assets or
rights, other than in the ordinary course of business.
3.7 OBLIGATIONS OF OR TO RELATED PARTIES. Except as disclosed on SCHEDULE
3.7 or in the SEC Reports, there are no obligations of the Company or any
Subsidiary to executive officers, directors, 1% or greater shareholders or key
employees (listed in the Company's most recent proxy materials) of the Company
or any Subsidiary or to any members of their immediate families or other
affiliates, other than (i) for accrued salaries, (ii) reimbursement for expenses
reasonably incurred on behalf of the Company or any Subsidiary and (iii) for
other standard employee benefits made generally available to all employees
(including stock option agreements outstanding under any stock option plan
approved by the Board of Directors of the Company). Except as disclosed on
SCHEDULE 3.7 or in the SEC Reports, none of the executive officers, directors,
1% or greater shareholders or key employees (listed in the Company's most recent
proxy materials) of the Company or any Subsidiary, or any members of their
immediate families or other affiliates, are indebted to the Company or any
Subsidiary or have any direct or indirect ownership interest in any firm,
corporation or other entity with which the Company or any subsidiary is
affiliated or with which the Company or any Subsidiary has a business
relationship, or any firm, corporation or other entity that competes with the
Company or any Subsidiary. Except as disclosed in the SEC Reports, no executive
officer, director, 1% or greater shareholder or key employee (listed in the
Company's most recent proxy materials) of the Company or any Subsidiary, or, to
the Company's knowledge, any member of their immediate families or other
affiliates, is, directly or indirectly, interested in or a party to any material
contract with the Company or any Subsidiary. Except as disclosed on SCHEDULE 3.7
or in the SEC Reports, the Company or any Subsidiary is not a guarantor or
indemnitor of any indebtedness of any other person, firm, corporation or other
entity, other than the Company or its Subsidiaries.
3.8 NO MATERIAL ADVERSE CHANGE. Since the Latest Statement Date, and except
as disclosed in the SEC Reports, there has not been any material adverse change
in the business, assets, liabilities, condition (financial or otherwise),
operations or prospects of the Company, and no event has occurred or
circumstance exists that may result in such a material adverse change.
3.9 TITLE TO PROPERTIES AND ASSETS; LIENS. Except as set forth on SCHEDULE
3.6 or SCHEDULE 3.9 or in the SEC Reports, the Company or any Subsidiary has
good and marketable title to its properties and assets, including the properties
and assets reflected in the Latest Financial Statements, and good title to its
leasehold estates, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (i) those resulting from taxes that have not
yet become delinquent, (ii) minor liens and encumbrances that do not materially
detract from the value of the property subject thereto or materially impair the
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operations of the Company or any Subsidiary and (iii) those that have otherwise
arisen in the ordinary course of business. All facilities, machinery, equipment,
fixtures and other properties owned, leased or used by the Company or any
Subsidiary are in good operating condition and repair and are reasonably fit and
usable for the purposes for which they are being used, reasonable wear and tear
excepted.
3.10 PATENTS AND TRADEMARKS. All issued patents used by the Company that
are based on inventions by the Company's employees are the property of the
Company. From time to time, the Company's employees may have ideas for
inventions that may or may not lead to the filing of patent applications, which
may or may not result in the issuance of a patent. It is the practice of the
Company to attempt to obtain exclusive ownership of any patents that ultimately
issue based on inventions of its employees. Except as indicated above or as set
forth on SCHEDULE 3.10 or in the SEC Reports, the Company owns or licenses all
patents, trademarks, service marks, trade names, copyrights, trade secrets,
information and other proprietary rights and processes necessary for its
business as now conducted and as proposed to be conducted, without any known
infringement of the rights of others. The Company is not aware that any of its
employees or employees of any Subsidiaries are obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with their duties to the Company or any Subsidiary
or that would conflict with the business of the Company and its Subsidiaries as
proposed to be conducted. None of the execution or delivery of, or the
performance of the transactions contemplated by, the Transaction Documents, the
carrying on of the business of the Company or any Subsidiary by the employees of
the Company or any Subsidiary nor the conduct of the business of the Company and
its Subsidiaries as currently conducted or proposed will conflict with or result
in a breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any employee is now
obligated. The Company does not believe it is or will be necessary to utilize
any inventions, trade secrets or proprietary information of any of its employees
made prior to their employment by the Company, except for inventions, trade
secrets or proprietary information that have been assigned to the Company.
3.11 COMPLIANCE WITH OTHER INSTRUMENTS. Except as disclosed in the SEC
Reports, neither the Company nor any Subsidiary is in violation or default of
any term of its Certificate of Incorporation or Bylaws, or of any provision of
any mortgage, indenture, contract, agreement, instrument or contract to which it
is party or by which it is bound or of any judgment, decree, order, writ or, to
its knowledge, any statute, rule or regulation applicable to the Company or any
Subsidiary that would materially and adversely affect the business, assets,
liabilities, condition (financial or otherwise), operations or prospects of the
Company. The execution and delivery of, and the performance of and compliance
with the transactions contemplated by, the Transaction Documents, and the
issuance and sale of the Shares upon conversion of the Note or upon payment on
the Note, will not, with or without the passage of time or giving of notice,
result in any such material violation, or be in conflict with or constitute a
default under any such term, or result in the creation of any mortgage, pledge,
lien, encumbrance or charge upon any of the properties or assets of the Company
or any Subsidiary or the suspension, revocation, impairment, forfeiture or
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nonrenewal of any permit, license, authorization or approval applicable to the
Company or any Subsidiary, the business or operations of the Company or any
Subsidiary or any of the assets or properties of the Company or any Subsidiary.
3.12 LITIGATION. Except as disclosed in the SEC Reports, SCHEDULE 3.5 or
SCHEDULE 3.12, there is no action, suit, proceeding or investigation pending or,
to the Company's knowledge, currently threatened against the Company that
questions the validity of this Agreement or the other agreements contemplated
hereby or the right of the Company to enter into any of such agreements, or to
consummate the transactions contemplated hereby or thereby. Except as disclosed
in the SEC Reports, there is no action, suit, proceeding or investigation or, to
the Company's knowledge, currently threatened against the Company or any
Subsidiary that could result, either individually or in the aggregate, in any
material adverse change in the assets, condition (financial or otherwise),
business, results of operations or prospects of the Company, or any change in
the current equity ownership of the Company, nor is the Company aware that there
is any basis for the foregoing. The foregoing includes, without limitation,
actions pending or threatened (or any basis therefor known to the Company)
involving the prior employment of any of the employees of the Company or any
Subsidiary, their use in connection with the business of the Company or any
Subsidiary of any information or techniques allegedly proprietary to any of
their former employers or their obligations under any agreements with prior
employers. Except as disclosed in the SEC Reports, neither the Company nor any
Subsidiary is a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality.
3.13 TAX RETURNS AND PAYMENTS. Except as disclosed on SCHEDULE 3.13, each
of the Company and any Subsidiary has filed all tax returns (federal, state and
local) required to be filed by it. All taxes shown to be due and payable on such
returns, any assessments imposed, and, to the Company's knowledge, all other
taxes due and payable by the Company or any Subsidiary on or before the Closing
have been paid or will be paid prior to the time they become delinquent. The
Company has not been advised (i) that any of the tax returns of the Company or
any Subsidiary have been or are being audited as of the date hereof or (ii) of
any deficiency in assessment or proposed judgment to federal, state or other
taxes of the Company or any Subsidiary. The Company has no knowledge of any
liability of any tax to be imposed upon the properties or assets of the Company
or any Subsidiary as of the date of this Agreement that is not adequately
provided for.
3.14 EMPLOYEES. Neither the Company nor any Subsidiary has any collective
bargaining agreements with any of its employees. There is no labor union
organizing activity pending or, to the Company's knowledge, threatened with
respect to the Company or any Subsidiary. Except as set forth on SCHEDULE 3.14
or in the SEC Reports, no executive officer or key employee (listed in the
Company's most recent proxy materials) has any agreement or contract, written or
verbal, regarding his employment. Except as disclosed on SCHEDULE 3.14 or in the
SEC Reports, neither the Company nor any Subsidiary is a party to or bound by
any currently effective deferred compensation arrangement, bonus plan, incentive
plan, profit sharing plan, retirement agreement or other employee compensation
plan or agreement. To the Company's knowledge, no employee of the Company or any
Subsidiary, nor any consultant with whom the Company or any Subsidiary has
contracted, is in violation of any material term of any employment contract,
proprietary information agreement or any other agreement relating to the right
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of any such individual to be employed by, or to contract with, the Company or
any Subsidiary because of the nature of the business to be conducted by the
Company or any Subsidiary; and, to the Company's knowledge, the continued
employment by the Company or any Subsidiary of its present employees, and the
performance of the contracts of the Company or any Subsidiary with its
independent contractors, will not result in any such violation. The Company has
not received any notice alleging that any such violation has occurred. Except as
disclosed on SCHEDULE 3.14 or in the SEC Reports, no executive officer or key
employee (listed in the Company's most recent proxy materials) of the Company or
any Subsidiary has been granted the right to continued employment by the Company
or any Subsidiary or to any material compensation following termination of
employment with the Company or any Subsidiary. The Company is not aware that any
executive officer or key employee (listed in the Company's most recent proxy
materials), or that any group of executive officers or key employees(listed in
the Company's most recent proxy materials), intends to terminate their
employment with the Company or any Subsidiary, nor does the Company or any
Subsidiary have a present intention to terminate the employment of any executive
officer, key employee (listed in the Company's most recent proxy materials) or
group of executive officers or key employees (listed in the Company's most
recent proxy materials).
3.15 REGISTRATION RIGHTS. Except as disclosed on SCHEDULE 3.15 or
required pursuant to the Registration Rights Agreement, the Company is presently
not under any obligation, and has not granted any rights, to register (as
defined in the Registration Rights Agreement) any of the Company's presently
outstanding securities or any of its securities that may hereafter be issued.
3.16 COMPLIANCE WITH LAWS; PERMITS. Except as disclosed in the SEC
Reports, neither the Company nor any Subsidiary is in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or
foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties that would materially
and adversely affect the business, assets, liabilities, condition (financial or
otherwise), operations or prospects of the Company. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery of, and the performance of the transactions
contemplated by, the Transaction Documents or the issuance of the Shares upon
conversion of the Note or upon payment on the Note, except such as has been duly
and validly obtained or filed, or with respect to any filings that must be made
after the Closing, as will be filed in a timely manner. Each of the Company and
the Subsidiaries has all franchises, permits, licenses and any similar authority
necessary for the conduct of its business as now being conducted by it, the lack
of which could materially and adversely affect the business, assets, properties,
prospects or condition (financial or otherwise) of the Company and the Company
believes it can (and covenants to Purchaser that it will) obtain any similar
authority for the conduct of its business as planned to be conducted.
3.17 ENVIRONMENTAL AND SAFETY LAWS. Except as disclosed in the SEC
Reports, to the Company's knowledge, neither the Company nor any Subsidiary is
in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to the Company's knowledge,
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no material expenditures are or will be required in order to comply with any
such existing statute, law or regulation. Without limiting the foregoing, and
except as disclosed in the SEC Reports:
(a) with respect to any real property owned, leased or otherwise utilized
by the Company or any Subsidiary ("REAL PROPERTY"), neither the Company nor any
Subsidiary is or has in the past been in violation of any Hazardous Substance
Law which violation could reasonably be expected to result in a material
liability to the Company or its properties and assets;
(b) neither the Company, any Subsidiary nor, to the knowledge of the
Company, any third party has used, Released, generated, manufactured, produced
or stored, in, on, under, or about any Real Property, or transported thereto or
therefrom, any Hazardous Substances that could reasonably be expected to subject
the Company to material liability, under any Hazardous Substance Law;
(c) to the knowledge of the Company, there are no underground tanks,
whether operative or temporarily or permanently closed, located on any Real
Property that could reasonably be expected to subject the Company to material
liability under any Hazardous Substance Law;
(d) there are no Hazardous Substances used, stored or present at, or on, or
to the knowledge of the Company that could reasonably be expected to migrate
onto any Real Property, except in compliance with Hazardous Substance Laws; and
(e) to the knowledge of the Company, there neither is nor has been any
condition, circumstance, action, activity or event that could reasonably be
expected to be a material violation by the Company or any Subsidiary of any
Hazardous Substance Law, or to result in liability to the Company or any
Subsidiary under any Hazardous Substance Law.
For purposes hereof, "HAZARDOUS SUBSTANCES" means (statutory acronyms and
abbreviations having the meaning given them in the definition below of
"HAZARDOUS SUBSTANCES LAWS") substances defined as "hazardous substances,"
"pollutants" or "contaminants" in Section 101 of the CERCLA; those substances
defined as "hazardous waste," "hazardous materials" or "regulated substances" by
the RCRA; those substances designated as a "hazardous substance" pursuant to
Section 311 of the CWA; those substances defined as "hazardous materials" in
Section 103 of the HMTA; those substances regulated as a hazardous chemical
substance or mixture or as an imminently hazardous chemical substance or mixture
pursuant to Sections 6 or 7 of the TSCA; those substances defined as
"contaminants" by Section 1401 of the SDWA, if present in excess of permissible
levels; those substances regulated by the Oil Pollution Act; those substances
defined as a pesticide pursuant to Section 2(u) of the FIFRA; those substances
defined as a source, special nuclear or by-product material by Section 11 of the
AEA; those substances defined as "residual radioactive material" by Section 101
of the UMTRCA; those substances defined as "toxic materials" or "harmful
physical agents" pursuant to Section 6 of the OSHA; those substances defined as
hazardous wastes in 40 C.F.R. Part 261.3; those substances defined as hazardous
waste constituents in 40 C.F.R. Part 260.10, specifically including Appendix VII
and VIII of Subpart D of 40 C.F.R. Part 261; those substances designated as
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hazardous substances in 40 C.F.R. Parts 116.4 and 302.4; those substances
defined as hazardous substances or hazardous materials in 49 C.F.R. Part 171.8;
those substances regulated as hazardous materials, hazardous substances, or
toxic substances in 40 C.F.R. Part 1910; any chemical, material, toxin,
pollutant, or waste regulated by or in any other Hazardous Substances Laws; and
in the regulations adopted and publications promulgated pursuant to said laws,
whether or not such regulations or publications are specifically referenced
herein.
"Hazardous Substances Law" means any of:
(i) the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.)
("CERCLA");
(ii) the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et
seq.) ("CLEAN WATER ACT" or "CWA");
(iii) the Solid Waste Disposal Act, as amended (42 U.S.C. Section 6901 et
seq.) ("RCRA");
(iv) the Atomic Energy Act of 1954 (42 U.S.C. Section 2011 et seq.)
("AEA");
(v) the Clean Air Act (42 U.S.C. Section 7401 et seq.) ("CAA");
(vi) the Emergency Planning and Community Right to Know Act (42 U.S.C.
Section 11001 et seq.) ("EPCRA");
(vii) the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
Section 136 et seq.) ("FIFRA");
(viii) the Oil Pollution Act of 1990 (33 U.S.C.A. Section 2701 et seq.);
(ix) the Safe Drinking Water Act (42 U.S.C. Sections 300f et seq.)
("SDWA");
(x) the Surface Mining Control and Reclamation Act of 1974 (30 U.S.C.
Sections 1201 et seq.) ("SMCRA");
(xi) the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.)
("TSCA");
(xii) the Hazardous Materials Transportation Act (49 U.S.C. Section 5101
et seq.) ("HMTA");
(xiii) the Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C.
Section 7901 et seq.) ("UMTRCA");
(xiv) the Occupational Safety and Health Act (29 U.S.C. Section 651 et
seq.) ("OSHA"); and
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(xv) all other federal, state and local governmental rules which govern
Hazardous Substances, and the regulations adopted and publications
promulgated pursuant to all such foregoing laws.
3.18 PRIVATE OFFERING. Assuming the truth and accuracy of the
representations and warranties of the Purchaser contained in Section 4, the
offer, sale and issuance of the Note (and the Shares issuable upon conversion of
the Note or upon payment on the Note) will be exempt from the registration
requirements of the Securities Act of 1933, as amended (the "SECURITIES ACT"),
and will have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements of
the State of New York.
3.19 FULL DISCLOSURE. None of the Transaction Documents nor the SEC
Reports contains any untrue statement of a material fact nor, to the Company's
knowledge and belief, omit to state a material fact necessary in order to make
the statements contained herein or therein not misleading in light of the
circumstances in which they were made. There are no facts that (individually or
in the aggregate) materially adversely affect the business, assets, liabilities,
condition (financial or otherwise) or operations of the Company that have not
been set forth in the Transaction Documents, the SEC Reports or in other
documents delivered to the Purchaser or its attorneys or agents in connection
herewith.
3.20 INSURANCE. Each of the Company and the Subsidiaries has insurance
relating to its business and covering property, fire, casualty, liability,
workers' compensation and all other forms of insurance customarily obtained by
businesses in the same industry. Such insurance (i) is in full force and effect,
(ii) insures against risks of the kind customarily insured against and in
amounts customarily carried by businesses similarly situated and (iii) provides
adequate insurance coverage for the activities of each of the Company and the
Subsidiaries.
3.21 INVESTMENT COMPANY ACT. The Company is not, and will not use the
proceeds from the Note in a manner so as to become, an "investment company," or
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
3.22 BROKER-DEALER COMPLIANCE. The Company's broker-dealer subsidiaries
are in compliance with applicable net capital requirements of the National
Association of Securities Dealers, Inc. (the "NASD") and the Financial Services
Authority.
3.23 NASDAQ COMPLIANCE. The Company's Common Stock is registered pursuant
to Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), and is quoted on the Nasdaq National Market. (the "NASDAQ").
The Company has taken no action designed to, or likely to have the effect of,
and the transactions contemplated by this Agreement will not have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
de-listing of the Common Stock from the Nasdaq. Except as disclosed in the SEC
Reports, the Company has not received any notification that the Commission, the
NASD, the Nasdaq or any other self-regulatory organizational body is
contemplating terminating such registration or listing. Without limiting the
foregoing, the Transaction Documents and the transactions contemplated by them
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require no shareholder approval under the rules or interpretations of the
Nasdaq.
3.24 REPORTING STATUS. The Company has filed all documents that the
Company was required to file under the Exchange Act during the 12 months
preceding the date of this Agreement. The SEC Reports complied in all material
respects with the applicable requirements of the Securities Act or the Exchange
Act, as the case may be, and the applicable rules and regulations promulgated
thereunder as of their respective filing dates, and the information contained
therein as of the date thereof did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The Company has disclosed in Item 4 of the Company's
Report on Form 10-Q for the quarter ended September 30, 2003 the status of its
internal control systems. As of the Closing Date, the Company's testing of its
internal controls to achieve compliance with the requirements of the
Xxxxxxxx-Xxxxx Act of 2002 is in progress and the Company is not aware of any
material weaknesses (as defined in Section 404 of the Xxxxxxxx-Xxxxx Act) in
such controls.
3.25 NO MANIPULATION OF STOCK. Neither the Company, nor any of its
directors, officers or controlling persons, has taken or will, in violation of
applicable law, take, any action designed to or that might reasonably be
expected to cause or result in, or which has constituted, stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the securities issued or issuable in connection with the transactions
contemplated hereunder.
3.26 FOREIGN CORRUPT PRACTICES; XXXXXXXX-XXXXX.
(a) Neither the Company, nor to the knowledge of the Company, any agent or
other person acting on behalf of the Company, has (i) directly or indirectly,
used any corrupt funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity, (ii) made
any unlawful payment to foreign or domestic government officials or employees or
to any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company (or made by
any person acting on its behalf of which the Company is aware) which is in
violation of law, or (iv) violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended.
(b) Other than as disclosed in Item 4 of the Company's Report on Form 10-Q
for the quarter ended September 30, 2004 and in Section 3.24 above, the Company,
to its knowledge, is in compliance in all material respects with the provisions
of the Xxxxxxxx-Xxxxx Act of 2002 (and related rules of the Commission) that are
applicable to it as of the Closing Date and that relate to listed company audit
committees, improper influence on the conduct of audits, disclosures required in
periodic reports, personal loans to executives, disclosures required of
executive officers and directors, code of ethics for senior financial officers,
disclosure of audit committee financial expert and Form 8-K filings.
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3.27 NO MATERIAL TRANSACTIONS OR EVENTS. As of the Closing Date, the
Company is not aware of any pending or proposed merger, acquisition or
disposition of assets that support 20% or more of current revenues, or revenue
shortfall against publicly issued Company guidance, other than as previously
disclosed in the SEC Reports or in a publicly disseminated press release.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as of the
Closing Date, and agrees, as follows:
4.1 INVESTMENT REPRESENTATIONS. The Purchaser understands that neither
the offer nor the sale of the Note or the Shares has been registered under the
Securities Act. The Purchaser also understands that the Note is being offered
and sold pursuant to an exemption from registration contained in the Securities
Act based in part upon the Purchaser's representations contained in the
Agreement. The Purchaser hereby represents and warrants as follows:
(a) PURCHASER BEARS ECONOMIC RISK. The Purchaser has substantial experience
in evaluating and investing in private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests. The Purchaser must bear the economic risk of this investment
indefinitely unless the Note (or the Shares) are subsequently registered
pursuant to the Securities Act, or an exemption from registration is available.
Except as contemplated by the Registration Rights Agreement, the Purchaser has
no present intention of selling or otherwise transferring the Note or the
Shares, or any interest therein. The Purchaser also understands that there is no
assurance that any exemption from registration under the Securities Act will be
available and that, even if available, such exemption may not allow the
Purchaser to transfer all or any portion of the Note or the Shares under the
circumstances, in the amounts or at the times the Purchaser might propose.
(b) ACQUISITION FOR OWN ACCOUNT. Except as contemplated by the Registration
Rights Agreement, the Purchaser is acquiring the Note and the Shares for the
Purchaser's own account for investment only, and not with a view towards their
public distribution.
(c) PURCHASER CAN PROTECT ITS INTEREST. By reason of its, or of its
management's business or financial experience, the Purchaser has the capacity to
protect its own interests in connection with the transactions contemplated in
this Agreement, the Note and the Registration Rights Agreement. Further, the
Purchaser is aware of no publication of any advertisement in connection with the
transactions contemplated in the Agreement.
(d) ACCREDITED INVESTOR. The Purchaser is an accredited investor within the
meaning of Regulation D of the Securities Act.
(e) RESIDENCE. The Purchaser is organized under the laws of the British
Virgin Islands and its principal office is located in the State of Minnesota.
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(f) RULE 144. The Purchaser acknowledges and agrees that the Note and, if
issued, the Shares, must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. The Purchaser has been advised or is aware of the provisions of Rule
144 promulgated under the Securities Act, which permits limited resale of shares
purchased in a private placement subject to the satisfaction of specified
conditions, including, among other things: the availability of current public
information about the Company, the resale occurring not less than one year after
a party has purchased and paid for the security to be sold, the sale being
through an unsolicited "broker's transaction" or in transactions directly with a
market maker (as such term is defined under the Exchange Act) and the number of
shares being sold during any three-month period not exceeding specified
limitations.
(g) ACCESS TO INFORMATION. The Purchaser has had an opportunity to discuss
the Company's business, management and financial affairs with the Company's
management and to review the Company's facilities. The Purchaser acknowledges
that the Company has given such Purchaser access to the corporate records and
accounts of the Company, has made its officers and representatives available for
interview by such Purchaser and has furnished such Purchaser with all documents
and other information requested by such Purchaser to make an informed decision
with respect to the purchase of the Note.
4.2 TRANSFER RESTRICTIONS. The Purchaser acknowledges and agrees that
the Note and, if issued, the Shares, are subject to restrictions on transfer and
will bear restrictive legends.
4.3 ORGANIZATION; AUTHORIZATION; BINDING OBLIGATIONS. The Purchaser is a
limited partnership duly organized, validly existing and in good standing under
the laws of the British Virgin Islands. The Purchaser has all requisite limited
partnership power and authority to execute and deliver this Agreement and the
Registration Rights Agreement and to carry out its obligations under the
provisions of such documents. This Agreement and the Registration Rights
Agreement, when executed and delivered, will be valid and binding obligations of
the Purchaser enforceable against the Purchaser in accordance with their terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights, (ii) according to general principles of equity that restrict
the availability of equitable remedies and (iii) to the extent that the
enforceability of the indemnification provisions of the Registration Rights
Agreement may be limited by applicable laws.
SECTION 5. CONDITIONS FOR CLOSING
5.1 CONDITIONS FOR THE COMPANY TO SATISFY. The obligation of the
Purchaser to purchase the Note as contemplated by this Agreement is subject to
satisfaction of the following contingencies at or prior to Closing:
(a) The Company shall have obtained all third party consents required in
connection herewith.
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(b) The Company shall have executed and delivered to the Purchaser at
Closing the Transaction Documents.
(c) Olshan, Grundman, Frome, Xxxxxxxxxx & Xxxxxxx LLP, legal counsel to the
Company, shall have delivered a written opinion, dated the Closing Date, to the
Purchaser, in the form attached as Exhibit C.
SECTION 6. MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York as such laws are applied to agreements between New York
residents entered into and performed entirely in New York. The Company consents
to the personal jurisdiction and forum convenience of the state and federal
courts located in Hennepin County, Minnesota, with respect to any action by the
Purchaser to enforce the provisions of this Agreement. The Purchaser consents to
the personal jurisdiction and forum convenience of the state and federal courts
located in the borough of Manhattan, New York County, New York, with respect to
any action by the Company to enforce the provisions of this Agreement.
6.2 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by the parties and the closing
of the transactions contemplated hereby until the earlier to occur of the
Maturity Date of the Note or the payment (or conversion) in full of the
principal amount of the Note and any accrued but unpaid interest thereon, except
for the representation set forth in Section 3.27 which shall survive until the
date on which the Company files its Annual Report on Form 10-K for the year
ended December 31, 2004 with the Commission. All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Note or the Shares from time to time.
6.4 ENTIRE AGREEMENT. The Transaction Documents and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and no party
shall be liable or bound to any other in any manner by any representations,
warranties, covenants and agreements, except as specifically set forth herein
and therein.
6.5 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.6 AMENDMENT AND WAIVER. This Agreement may be amended or modified, and
any provision hereunder may be waived, only upon the written consent of the
Company and the Purchaser.
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6.7 NOTICES. All notices, requests, consents, and other communications
hereunder shall be made in writing and shall be deemed given (i) when made if
made by hand delivery, (ii) one business day after being deposited with an
overnight courier if made by courier guaranteeing overnight delivery or (iii) on
the date indicated on the notice of receipt if made by first-class mail, return
receipt requested, addressed as follows:
(a) if to the Company, at
NYFIX, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
with a copy to:
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
(b) if to the Purchaser, in care of:
Whitebox Advisors, LLC
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxx Xxxx, Chief Financial Officer
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with a copy to:
Xxxxxxxx & Xxxxxx P.A.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
6.8 INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold the Purchaser harmless against any loss, liability, damage or expense
(including reasonable legal fees and costs) that the Purchaser may suffer,
sustain or become subject to as a result of or in connection with the breach by
the Company of any representation, warranty, covenant or agreement of the
Company contained in any of the Transaction Documents; provided, however, that
no indemnification shall be required hereunder for the negligence or willful
misconduct of the Purchaser or breach by the Purchaser of any of the
representations and warranties set forth in Section 4 hereof. In case any such
action is brought against the Purchaser, the Company will be entitled to
participate in and assume the defense thereof with counsel reasonably
satisfactory to the Purchaser, and after notice from the Company to the
Purchaser of its election to assume the defense thereof, the Company shall be
responsible for any legal or other expenses subsequently incurred by the latter
in connection with the defense thereof; provided, that if the Purchaser shall
have reasonably concluded that there may be one or more legal defenses available
to the Purchaser which conflict in any material respect with those available to
the Company, the Company shall not have the right to assume the defense of such
action on behalf of the Purchaser and the Company shall reimburse the Purchaser
for that portion of the fees and expenses of one counsel retained by the
Purchaser.
6.9 EXPENSES. At Closing, the Company shall pay the Purchaser's counsel,
Xxxxxxxx & Xxxxxx P.A., $20,000 for its legal fees and expenses in representing
the Purchaser in connection with the transactions contemplated hereby. In
addition, the Company agrees to pay or reimburse the Purchaser for its
reasonable legal fees and expenses that it may incur after the date hereof in
connection with the granting of any waiver with respect to, the modification of
any of the terms or provisions of, or the enforcement of any of the Transaction
Documents.
6.10 TITLES AND SUBTITLES. The titles of the sections and subsections of
the Agreement are for convenience of reference only and are not to be considered
in construing this Agreement.
6.11 COUNTERPARTS. This Agreement may be delivered via facsimile or other
means of electronic communication, and may be executed in counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
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IN WITNESS WHEREOF, the parties hereto have hereunto affixed their
signatures.
NYFIX, INC. WHITEBOX CONVERTIBLE ARBITRAGE
PARTNERS, L.P.
By By
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Its Its
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