exv10w25






Exhibit 10.25



Confidential Treatment has been requested for portions of this exhibit. The copy filed herewith
omits the information subject to the confidentiality request. Omissions are designated as “***”. A
complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.




FX PRIME BROKERAGE AGREEMENT




     This FX PRIME BROKERAGE AGREEMENT (“Agreement”), dated as of July 8, 2005, by and between UBS
AG (HUBS”) and Gain Capital, Inc. (“Customer”) sets forth certain terms and conditions relating to
the establishment of a facility (the “Facility”) through which Customer may trade foreign exchange
transactions with various Dealers.



     Scope of Agreement. The parties explicitly acknowledge and agree that whilst this Agreement
contains provisions governing a wide range of foreign exchange transactions, Transactions and
Authorized transactions (subject to any further limitations specified in any Dealer
notice/authorization) shall be limited to the following types of transactions only:




	 	(i)	 	FX Transactions;
	 
	 	(ii)	 	Currency Option Transactions
	 
	 	(iii)	 	Exotic Options.




UBS may, at its absolute
discretion, give notice to the Customer of any change, deletion or addition to this provision.





	1.	 	Definitions Capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the CP ISDA Master Agreement.
	 
	 	 	“Authorized Transactions” means foreign exchange transactions of a type that UBS has
authorized the Customer to enter into with Dealer.
	 
	 	 	“CP ISDA Master Agreement” means the ISDA Master Agreement dated October 19, 2000 by
and between Customer and UBS and the Credit Support Annex to the CP ISDA Master Agreement.
	 
	 	 	“Currency Option Transaction” shall have the meaning ascribed in the 1998 FX and
Currency Option Definitions, as amended from time to time (as published by the International Swaps
and Derivatives Association, Inc., the Emerging Markets Traders Association (“EMTA”) and The
Foreign Exchange Committee) (“FX Definitions”) and for the avoidance of doubt, shall not include
an option that would otherwise be deemed to be an Exotic Option.
	 
	 	 	“Dealer” means those banks and dealers authorized by UBS, pursuant to a Master FX
Give-Up Agreement, with whom Customer can enter into Authorized Transactions. Customer shall be
notified of such Dealers by UBS in writing from time to time, specifying the type of Authorized
Transactions and limits therefor.
	 
	 	 	“Deliverable Currency Option Transaction” shall have
the meaning ascribed in the FX Definitions.
	 
	 	 	“Deliverable FX Transaction” shall have the meaning ascribed in the FX Definitions.
	 
	 	 	“Delta” means, in respect of each Currency Option Transaction, the amount calculated
by UBS to be the change in option price for a change in the underlying price (as determined by
UBS) for such Currency Option Transaction.
	 
	 	 	“Delta Equivalent Position” means, for each Currency Option Transaction, the Delta
multiplied by the U.S. dollar equivalent (as calculated by UBS in a commercially reasonable
manner) of each currency to be received by UBS
if such Currency Option Transaction were exercised,
as calculated by UBS.





 









 





	 	 	“Exotics Net Open Position” shall be calculated in the manner specified in Attachment
1.
	 
	 	 	“Exotic Notional Limit” means the maximum notional quantity (calculated in the manner
specified in Attachment 1) of Exotic Options that Customer can trade with each Dealer on a trade
date, such limit to be advised to Customer by UBS from time to time.
	 
	 	 	“Exotic Options” means barrier options (and such other non-vanilla options as
approved by UBS from time to time).
	 
	 	 	“FX Transaction” shall have the meaning ascribed in the FX Definitions.
	 
	 	 	“Master FX Give-Up Agreement” means an agreement by and between UBS and each of the
various Dealers.
	 
	 	 	“Net Currency Position” means, for any value date, with respect to each currency of a
FX Transaction, the net U.S. dollar equivalent (as calculated by UBS in a commercially reasonable
manner) of the amount of such currency owed to UBS by the Customer as calculated by UBS in good
faith and in a commercially reasonable manner.
	 
	 	 	“Net Open Position” means for the aggregate amount owed to UBS by Customer, as
calculated by UBS in the manner specified in Attachment 1 hereto (which may be modified from time
to time by UBS in its reasonable discretion).
	 
	 	 	“Net Open Position Limit” means, the maximum Net Open Position and Exotic Net Open
Position, as an aggregate across all Tiers, that a Customer is authorized to have outstanding at
any time with UBS, as determined by UBS and advised to the Customer (such amount may be amended
from time to time by UBS upon reasonable notice to the Customer).
	 
	 	 	“Netted Option” means, a Currency Option Transaction sold by Prime Broker and owned
by the Customer which may be discharged and terminated together with a Currency Option Transaction
sold by the Customer and owned by Prime Broker upon satisfying the following criteria:






(i) each Currency Option Transaction being with respect to the same Put Currency and Call
Currency; 


(ii) each
having the same Expiration Date and Expiration Time; 


(iii) each being of the
same style, i.e. either both being American Style Options or both being European Style Options;




(iv) each having the same Strike Price; and




(v) neither of which shall have been exercised by
delivery of a Notice of Exercise (as defined below); and




(vi) the case of a partial discharge and
termination (Le., where the relevant Currency Option Transactions are for different amounts of the
Currency Pair), only the portion discharged and terminated shall be considered a Netted Option.




“Non-Deliverable Currency Option Transaction” shall have the meaning ascribed in the
FX Definitions.



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“Non-Deliverable FX Transaction” shall have the meaning ascribed in the FX
Definitions.




“Notice of Exercise” means telex, telephonic or other electronic notification
(excluding facsimile transmission), given by the owner of an Option prior to or at the Expiration
Time on the Expiration Date as agreed to at the time the Option is entered into, as evidenced by
the Confirmation.




“Notice of Barrier Event” means telex, telephone or other electronic notification
(excluding facsimile transmission) given by the Dealer as the determination agent of an Exotic
Option immediately following a barrier event as agreed to at the time the Exotic Option is entered
into, as evidenced in a Confirmation.




“Options” includes Currency Option Transactions (Deliverable and Non-Deliverable) and
Exotic Options.




“Risk Add-On” means, for Exotic Options, such amount as determined by UBS in a
commercially reasonable manner taking each Currency Pair and determining the close-out risk on
such trade, in accordance with UBS’s internal model (based on the underlying volatility of
Currency Pairs as determined by UBS, having aggregated offsetting transactions on a value date
basis and across value dates where possible, in UBS’s sole and absolute discretion).




“Tier I Currencies” means those currencies determined by UBS, in its sole discretion,
to be of low volatility (such currencies to be advised to Customer by UBS from time to time and
subject to change by UBS at any time).




“Tier II Currencies” means those currencies determined by UBS, in its sole
discretion, to be of medium volatility (such currencies to be advised to Customer by UBS from time
to time and subject to change by UBS at any time).




“Tier III Currencies” means those currencies determined by UBS, in its sole
discretion, to be of high volatility (such currencies to be advised to Customer by UBS from time
to time and subject to change by UBS at any time).




“Tiers” means Tier I Currencies, Tier II Currencies and Tier III Currencies
collectively.




“Transactions” means Deliverable and Non-Deliverable FX Transactions, Deliverable and
Non-Deliverable Currency Options Transactions and Exotic Options.




	2.	 	The Facility
	 
	(a)	 	UBS may {in its sole discretion} establish and maintain dealing lines for use by Customer in
trading Transactions in the name of UBS with one or more Dealers. UBS will provide each Dealer
with such authorization and other agreements and instruments as it deems appropriate in order to
permit Customer to execute Authorized Transactions with the Dealers in the name of UBS in
accordance with the terms hereof.
	 
	(b)	 	Customer acknowledges and agrees that the establishment and maintenance of dealing lines by
UBS under the Facility is subject to UBS’s sole discretion, including but not limited to,
discretion regarding credit, documentation, available currencies, size or tenor of lines (which
may vary according to currency) and UBS’s line usage for business outside of the Facility.
Customer 




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	 	 	further acknowledges and agrees that such dealing lines may be changed by UBS in its
sole discretion at any time without prior notice. UBS is not and shall not be responsible for and
does not warrant the sufficiency or availability of the dealing lines for any purpose. In the
event that UBS does not establish or maintain adequate dealing lines for the Facility, Customer’s
only remedy shall be to terminate this Agreement. In this respect, Customer waives all other
claims and remedies against UBS.
	 
	(c)	 	UBS will establish trading limits for each Dealer, and advise Customer of those limits.
Customer agrees to limit the Authorized Transactions with each Dealer in such a manner as UBS may
from time to time specify. Customer acknowledges and agrees that Transactions exceeding such
limits shall not be binding on UBS unless and until UBS accepts such Transactions. UBS maintains
the right to refuse to accept any Transactions which exceed the Net Open Position Limit, Notional
Exotic Limit or for which Customer has not satisfied all of the requirements of the Credit Support
Annex (including any obligation to deliver the Independent Amount relating to any Transaction) and
Customer will indemnify UBS for any claims by Dealer as a result of UBS’s exercise of its rights
under this clause 2(c), except to the extent that such claim results from the gross negligence,
willful misconduct or fraud of UBS. In the event that UBS accepts a Transaction which exceeded
the Net Open Position Limit or the Exotic Notional Limit, Customer agrees that UBS may, in its
sole and absolute discretion and without notice, liquidate all or part of the corresponding
Customer Contract (as defined below) for the account of the Customer, in order to reduce
Customer’s Net Open Position to below the agreed Net Open Position Limit or reduce Customer’s
utilization of Exotic Notional Limit.
	 
	(d)	 	Customer agrees to promptly pay UBS such commissions and other fees set forth in the attached
Fee Schedule (as such Schedule may be amended from time to time by UBS and Customer).
	 
	3.	 	Transaction Confirmations
	 
	(a)	 	When Customer enters into an Authorized Transaction with a Dealer in the name of UBS under
the Master FX Give-up Agreement, Customer and UBS will be deemed to have automatically entered
into a Transaction (the “Customer Contract”) on identical terms, except that UBS’s position as
buyer or seller of the Transaction will be the reverse of its position with Dealer. The foregoing
is subject to UBS’s right to refuse to accept a trade under the terms of this Agreement and any
Master FX Give-Up Agreement.
	 
	(b)	 	The Authorized Transactions made between Dealer(s) and UBS shall be subject to and be
governed by the ISDA Master Agreements entered into between the respective Dealers and UBS or if
any Dealers have not entered into an ISDA Master Agreement with UBS, such other master agreements
as such Dealers and UBS may agree from time to time.
	 
	 	 	The Customer Contracts shall be governed by the CP ISDA Master Agreement.
	 
	(c)	 	Customer agrees
to promptly respond to trade notices provided by Dealer via UBS’s online automated system. In the
event that such system is not available for any reason, Customer will notify UBS by Reuters Direct
Dealing or telephone, immediately after entering into a Transaction in UBS’s name with a Dealer.
Such notice shall be made in accordance with the procedures to be set forth in Schedule 2. By 5pm
(New York time) each New York business day, Customer will give electronic, telephone or other
acceptable notice to UBS of all Authorized 




4









 






	 	 	Transactions entered into that day in the name of UBS
or that no Authorized Transactions occurred on that day.






	(d)	 	Except as otherwise provided in clause 3(f), once an Authorized Transaction with a Dealer is
entered into in the name of UBS and accepted by UBS, Customer shall have no right to amend, cancel
or otherwise affect or interfere with any such transactions, which shall be the sole
responsibility of UBS.
	 
	(e)	 	Customer acknowledges and agrees that Dealer will be the calculation agent/determination
agent for Exotic Options and any dispute that Customer may have as to the occurrence of a barrier
event (e.g. knock-out, kick-in, binary, however described,) shall be solely between Customer and
Dealer and Customer acknowledges and agrees that Prime Broker shall have no role therein and
shall be entitled to act, and Customer shall not prevent in any way Prime Broker from taking
any action, upon the Notice of Barrier Event as if no dispute existed. Solely for the purpose of
calculation agent/determination agent as defined in a Confirmation for an Exotic Option
transacted between Customer and Dealer and given-up in accordance with this Agreement and
notwithstanding anything to the contrary stated in such Confirmation, the calculation
agent/determination agent shall be Dealer.
	 
	(f)	 	Notwithstanding any terms of a Confirmation or Master Agreement that may be to the contrary,
if Customer has entered into a transaction on behalf of UBS in which UBS is the buyer of an
Option, such Option may be exercised by delivery of a Notice of Exercise by Customer to Dealer
which executed such Option which shall constitute exercise by UBS. If Customer has entered into a
transaction on behalf of UBS in which UBS is the seller of an Option, such Option will only be
exercised by the simultaneous delivery of a Notice of Exercise by Dealer which executed such
Option to each of Customer and UBS.
	 
	(g)	 	For the purposes of Non-Deliverable FX Transactions and Non-Deliverable Currency Options
Transactions, the calculation agent for the transaction between UBS and Customer shall be as
detailed on the relevant Confirmation.






	4.	 	Representations
	 
	 	 	Each party represents to the other party (which representations will be deemed to be repeated
by each party on each date on which a transaction is entered into) that:






	 	(a)	 	It is duly organized and validly existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such laws, in good standing;
	 
	 	(b)	 	It has the power to execute this Agreement and any other documentation relating to
this Agreement to which it is a party, to deliver this Agreement and any other documentation
relating to this Agreement that is required by this Agreement to deliver and perform its obligations under this Agreement and has taken all necessary action to authorize such execution,
delivery and performance;
	 
	 	(c)	 	Such execution, delivery and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets;




5









 






	 	(d)	 	All governmental and other consents that are required to have been obtained by it with
respect to this Agreement have been obtained and are in full force and effect and all conditions
of any such consents have been complied with; and
	 
	 	(e)	 	Its obligations under this Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights
generally and subject, as to enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in equity or at law)).






	5.	 	Indemnification
	 
	 	 	Customer agrees to indemnify, hold harmless and defend UBS, its affiliates and their
respective officers, directors, employees, agents, successors and assigns, from and against any
and all claims, damages, costs, losses and liabilities (including reasonable attorneys’ fees),
which may at any time be asserted against or incurred by UBS based upon, arising from or in
connection with this Agreement, the Facility and any action or inaction on the part of Customer
under this Agreement, including but not limited to, (i) any material breach of any representation,
warranty, covenant or agreement of Customer contained in this Agreement; (ii) any failure of
Customer to comply with applicable law; (iii) Customer’s negligence or willful misconduct; (iv)
any claim by a Dealer in respect of an Authorized Transaction; and (v) any indemnification which
UBS has given to a Dealer; except to the extent that the claim, damages, costs, losses and
liabilities are due to the gross negligence, willful misconduct or fraud by UBS.
	 
	6.	 	General Provisions
	 
	(a)	 	This Agreement shall continue to be effective or be reinstated, as the case may be, if at any
time any payment or performance of any liabilities is rescinded or must otherwise be returned or
unwound by UBS upon insolvency, bankruptcy, or reorganization of Customer, or otherwise, all as
though such payment had not been made.
	 
	(b)	 	This Agreement may be terminated by either party without cause, upon prior written notice.
Termination will not affect any outstanding rights and obligations under this Agreement or any
Transactions and such rights and obligations shall continue to be governed by this Agreement and
the particular terms agreed between UBS and Customer in relation to such Transactions until all
obligations have been fully performed.
	 
	(c)	 	No indulgence or concession granted by either party and no omission or delay on the part of a
party in exercising any right. power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
	 
	(d)	 	The provisions of the FX Definitions are hereby incorporated in their entirety and shall
apply to all Transactions entered into or deemed to be entered into between (i) UBS and Dealers
and (ii) UBS and Customer, whether or not so stated in a confirmation of any such Transaction.
Authorized Transactions and Customer Contracts are Transactions under the relevant ISDA Master
Agreements and any trade confirmation is a Confirmation under such ISDA Master Agreements.





6









 






	(e)	 	Customer hereby consents to UBS effecting such disclosure as UBS may deem appropriate, to
enable UBS to transfer Customer’s records and information, to process and execute Customer’s
instructions.
	 
	(f)	 	In the event Customer is trading Non-Deliverable FX Transactions, Non-Deliverable Currency
Option Transactions and/or Exotic Options, Customer consents to the use of confirms substantially
in the form of the confirmation template for each such transaction as published by The Foreign
Exchange Committee (“FXC”), the Financial Markets Lawyers Group or EMTA, as appropriate. Customer
also agrees, hereby, to abide by such best practices as may be published by the FXC from time to
time, and such recommended market practice as may be published by EMTA from time to time.
	 
	(g)	 	In the event anyone or more of the provisions contained in this Agreement is held invalid,
illegal, or unenforceable in any respect under the law of any jurisdiction, the validity,
legality, and enforceability of the remaining provisions under the law of such jurisdiction, and
the validity, legality, and enforceability of such and any other provisions under the law of any
other jurisdiction, shall not in any way be affected or impaired thereby.
	 
	(h)	 	No amendment, modification, or waiver of this Agreement will be effective unless in writing
executed by each of the parties.
	 
	(i)	 	The parties agree that each party may electronically record all telephonic conversations
between them relating to the subject matter of this Agreement and that any such tape recordings
may be submitted in evidence in any suit, action, or other proceeding relating to this Agreement
(“Proceedings”).
	 
	7.	 	Notices




Except as otherwise provided in this Agreement, all notices, requests and other communications
hereunder shall be delivered in accordance with the notice provisions in the CP ISDA Master
Agreement.





	8.	 	Governing Law and Jurisdiction
	 
	(a)	 	This Agreement and the rights and obligations of UBS and of Customer hereunder shall be
governed by, and construed in accordance with the laws of the State of New York.
	 
	(b)	 	With respect to any suit, action or proceedings relating to this Agreement, each party
irrevocably 0) submits to the non-exclusive jurisdiction of the State and Federal courts located
in New York City, Borough of Manhattan and (ii) waives any objection which it may have at any time
to the laying of venue of any Proceedings brought in any such court, waives any claim that such
Proceedings have been brought in an inconvenient forum and further waives the right to object,
with respect to such Proceedings, that such court does not have jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction nor will the bringing of Proceedings in anyone or more jurisdictions preclude the
bringing of Proceedings in any other jurisdiction.
	 
	(c)	 	Waiver of Jury Trial- Each party hereby irrevocably waives any and all right to trial by jury
in any suit, action or Proceeding arising our of or relating to this Agreement or any transaction
and acknowledges that this waiver is a material inducement to 




7









 






	 	 	the other party’s entering into this
Agreement.




IN WITNESS WHEREOF, the UBS and Customer have caused this Agreement to be duly executed by
their respective authorized officers as of the date first written above.




	 	 	 	 	 	 
	UBS AG

	GAIN CAPITAL, INC.
	 
	 	 	 	 
	By:
	/s/ Sandra M. Gutierrez	 	By:  	/s/ Glenn Stevens
	Name: Sandra M. Gutierrez

	 	Name: Glenn Stevens
	Title: Director and Counsel

	 	Title: Managing Director
	Region Americas Legal

	 	Date: 7/26/05
	Fixed Income Section
	 	 	 	 
	 
	 	 	 	 
	By:   
	/s/ Sam Hooker	 	 	 
	Name: Sam Hooker
	 	 	 	 
	Title: Director
	 	 	 	 
	Region Americas Legal
	 	 	 	 
	Fixed Income Section
	 	 	 	 






8









 





SCHEDULE 1




FEE SCHEDULE



From the Effective Date *** equivalent transacted with each Dealer will be charged. Invoices will
be sent to the Client on a monthly basis. Payment is due *** after the end of the relevant month.



Payment to be made as agreed between Customer and UBS.



No commission will be charged if Customer trades direct with UBS AG.



Effective Date: July 8, 2005.




9









 








SCHEDULE 2




PROCEDURES FOR NOTIFYING TRADES





	1.	 	Upon receipt of trade details from Dealer, Customer will accept or reject trade on UBS’s
Webpage. URL and password to be advised in separate mailing.
	 
	2.	 	If procedure 1 is unavailable, trade details to be communicated via Reuters;
	 
	 	 	UBPB — New York time-zone,
7:30am-7pm



UBPB — Singapore time-zone, 7am-6pm
 

UBPB — Zurich time-zone, 8am-6pm

	 
	3.	 	If Both 1 and 2 are unavailable, trade details to be communicated via telephone;
	 
	 	 	+ 203 719 4066 — New York time-zone, 7:30am-7pm


+ 01 6568365216 — Singapore time-zone, 7am-6pm


+ 41 1 239 5040 — Zurich time-zone, 8am-6pm






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Attachment 1





	1) The Net Open Position shall be calculated by UBS in a commercially reasonable manner by
determining the sum of the following:




(i) For Transactions involving Tier 1 Currencies, the aggregate of the Net Currency Position for
each Tier 1 Currency, after making the following adjustments, to the extent applicable and to the
extent feasible at any time for UBS:





	 	(A)	 	for each Tier 1 Currency, UBS shall identify Transactions that have the same value
date, and:




(I) ***;



(II) ***; and



(III) ***.





	 	(B)	 	for Transactions involving Tier 1 Currencies that do not have the same value date,:




(I) ***;



(II) ***; and



(III) ***.





	 	(ii)	 	for Transactions involving Tier 2 Currencies, UBS shall:
	 
	 	(A)	 	***;
	 
	 	 	 	and
	 
	 	(B)	 	UBS shall aggregate the amounts calculated in clause (ii)(A).






	(iii)	 	for Transactions involving Tier 3 Currencies, UBS shall:






	 	(A)	 	***;
	 
	 	 	 	and
	 
	 	(B)	 	***.




2) Exotics
Net Open Position shall be calculated by summing (i) and (ii) below:





	(i)	 	***.
	 
	(ii)	 	***.




3) Maximum notional quantity for Exotic Notional Limit purposes shall be calculated as below, for
each trade date:




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	(i)	 	***;
	 
	(ii)	 	***; and
	 
	(iii)	 	aggregate such notional quantities.





12