8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  August 25, 2006

NYFIX, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-21324	06-1344888
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

333 Ludlow Street, Stamford, Connecticut 06902

(Address of principal executive offices)

Registrant’s telephone number, including area code: 203-425-8000

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On August 25, 2006, NYFIX, Inc. (the “Company”) entered into a definitive agreement (the “Purchase Agreement”) to sell to G.L. Trade S.A. (“GL”) all of the capital stock of NYFIX Overseas, Inc. (“NYFIX Overseas”), a wholly-owned subsidiary which previously housed the Company’s Order Book Management Systems (OBMS) business. The closing of the transactions contemplated by the Purchase Agreement (the “Closing”) also occurred on August 25, 2006. Other than in respect to this transaction, G.L. has not had a material relationship with the Company or any of the Company’s officers, directors or affiliates or any associate of any such officer or director.

The Company expects the initial proceeds on this transaction to approximate $7.7 million. This represents the purchase price of $9,000,000 paid by GL on August 25, 2006 in cash, subject to a working capital adjustment which will be finally determined within approximately 30 days after the Closing. Under the terms of the working capital adjustment, GL is required to pay to the Company the amount, if any, by which working capital as of the closing date determined in accordance with the Purchase Agreement (the “Final Working Capital”) exceeds $1.00 and the Company is required to pay to GL the amount, if any, by which the Final Working Capital is less than $1.00. The agreement generally defines working capital as the aggregate amount of current assets less the aggregate amount of current liabilities, less $1,330,000. There is also an earn-out adjustment, under the terms of which, the Companyis eligible for additional earn-out payments based on future revenues of NYFIX Overseas through December 31, 2007. The maximum earn-out payment is $5.1 million, net of additional payments to the management team of NYFIX Overseas.

NYFIX currently estimates recording a net gain on this transaction in excess of $4.5 million after deducting legal, accounting and placement fees of approximately $0.4 million and the equity held in NYFIX Overseas just prior to the sale.

The Company also agreed to indemnify GL for claims made during the survival period which generally lasts until December 31, 2007 for covenants, agreements, representations and warranties contained in the Purchase Agreement, but continues until the applicable statutory period of limitations for covenants, agreements, representations and warranties contained in two sections of the Purchase Agreement that relate to tax and employee benefit matters. The Company is required to indemnify GL for losses arising out of or resulting from (1) any misrepresentation or breach of warranties; (2) any breach of a covenant or agreement made or to be performed by the Company under the Purchase Agreement; (3) certain patent settlements; (4) the lack of recording stock-based compensation expense related to stock options granted to the employees of NYFIX Overseas by the Company; (5) specified taxes of NYFIX Overseas pre-closing that were not previously paid or adequately reserved for by NYFIX Overseas, and (6) any obligations relating to options to purchase shares of common stock of the Company held by employees of NYFIX Overseas. The Company’s indemnification obligation is subject to a basket of $50,000 meaning that the Company is not liable to pay any indemnification until the aggregate loss incurred by GL exceeds $50,000 and then the Company is obligated to indemnify GL for the entire amount of the loss. This basket does not apply to the Company’s indemnification obligations as described in clauses (3) through (6) above. The Company’s maximum aggregate indemnification obligation is capped at $4,500,000, except with respect to liabilities for breach of the representation contained in

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the Purchase Agreement relating to the Company’s ownership and title to the capital stock of NYFIX Overseas, which is capped at the aggregate purchase price received by the Company after all adjustments have been made and any additional earn-out payments to the Company have been made.

For two years following the closing and subject to certain exceptions, the Company has agreed not to develop, or market any product that is directly competitive with the Order Book Management Systems product of NYFIX Overseas.

The Company has also agreed to provide NYFIX Overseas and GL certain transitional services until December 31, 2006.

On August 28, 2006, the Company announced pursuant to a press release that it had entered into the above-described agreement to sell all the capital stock of NYFIX Overseas. A copy of such press release is furnished as an exhibit to this report.

The Companyintends to use the proceeds of the sale for general corporate and working capital purposes.

Item 2.01. Completion of Acquisition or Disposition of Assets.

On August 25, 2006, the Company entered into the Purchase Agreement and closed the sale to GL all of the capital stock of NYFIX Overseas, a wholly-owned subsidiary which previously housed the Company’s OBMS business.

The disclosure contained in Item 1.01 of this Form 8-K is incorporated into this Item 2.01 by reference.

Item 9.01. Financial Statements and Exhibits.

(b)Pro Forma Financial Information

The Company expects to amend this 8-K to include financial statements and pro forma financial information required by this form when they are available.

(d)Exhibits.

99.1 Press Release of NYFIX, Inc., issued August 28, 2006.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NYFIX, INC.
Date:  August 31, 2006	By:	/s/ Brian Bellardo
		Name:  Brian Bellardo Title:    Secretary

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
99.1	Press Release of NYFIX, Inc., issued August 28, 2006.

EX-99.1

FOR IMMEDIATE RELEASE

Contact:

Don Duffy or Brian Prenoveau, CFA

Integrated Corporate Relations, Inc.

(203) 682-8200

NYFIX, Inc. Announces Sale of OBMS Business Unit

New York, NY August 28, 2006: NYFIX, Inc. (Pink Sheets: NYFX). NYFIX, Inc. (“NYFIX”), a leader in technology solutions for the financial marketplace, today announced it has entered into a definitive agreement to sell all of the capital stock of NYFIX Overseas, Inc., a wholly-owned subsidiary which previously housed the Company’s Order Book Management Systems (OBMS) business, to G.L. Trade S.A., (“GL”).

The initial proceeds on this transaction are expected to approximate $7.7 million after taking into account purchase price adjustments based on the closing balance sheet of NYFIX Overseas and certain deductions of $1.3 million. NYFIX currently estimates recording a net gain on this transaction in excess of $4.5 million after deducting related legal, accounting and placement fees and the equity held in NYFIX Overseas just prior to the sale.

The OBMS business specializes in electronic trading solutions for the derivatives markets and develops order management workstations and exchange interface systems, supporting trading on more than 20 of the world's leading international derivatives exchanges.

“The sale of the OBMS business allows us to more precisely focus on the market opportunities that are available to the firm’s three remaining businesses. Our Order Management Systems, FIX Network, and Transaction businesses will benefit greatly from the narrowing of our product portfolio”, commented Robert C. Gasser, CEO, NYFIX, Inc.

NYFIX intends to use the proceeds of the sale for general corporate and working capital purposes.

About NYFIX, Inc.

NYFIX, Inc. is an established provider to the domestic and international financial markets of trading workstations, trade automation and communication technologies and through its registered broker-dealer subsidiaries, execution services. Our NYFIX Network is one of the industry's largest networks, connecting broker-dealers, institutions and exchanges. We

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maintain our principal office on Wall Street in New York City, with other offices in Stamford, CT, London's Financial District, Chicago and San Francisco. We operate redundant data centers in the metropolitan New York City area, with additional data center hubs in London, Amsterdam, Hong Kong and Tokyo. For more information, please visit www.nyfix.com.

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the ability of the Company to market and develop its products, adjustments to consideration received for the sale of NYFIX Overseas, additional consideration received for the sale of NYFIX Overseas and indemnification obligations associated with the sale of NYFIX Overseas. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward- looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. All trademarks, trade names, logos, and service marks referenced herein belong to NYFIX, Inc.

SOURCE: NYFIX, Inc.

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