exv10w12






Exhibit 10.12




PLEDGE AND SECURITY AGREEMENT




     THIS PLEDGE AND SECURITY AGREEMENT is made this 29th day of March,
2006, by and among (i) GAIN CAPITAL HOLDINGS, INC. (“Pledgor”) and (ii) SILICON VALLEY
BANK, a California-chartered bank, with its principal place of business at 3003 Tasman
Drive, Santa Clara, California 95054 (“SVB”), as agent for the Lenders (“Agent”) and
JPMORGAN CHASE BANK, N.A. (“JPMORGAN”) (SVB and JPMORGAN each, individually, a “Lender”
and collectively, the “Lenders”).



Recitals




     Lenders agreed to make advances of money and to extend certain financial
accommodations to Pledgor pursuant to a Loan and Security Agreement dated as of March
29, 2006 (the “Loan Agreement”). To secure the obligations set forth in the Loan
Agreement, Pledgor has agreed to pledge to Agent and Lenders Pledgor’s membership
interest (the “Membership Interest”) in Gain Holdings, LLC (“Gain Holdings”). Any
capitalized terms used without definition herein shall have the meanings assigned to
them in the Loan Agreement.



     NOW, THEREFORE, Pledgor, Agent and Lenders agree as follows:



     1. Pledge of Membership Interest.



          (a) Pledgor hereby pledges, assigns and delivers to Agent for the ratable benefit
of Lenders and grants to Agent for the ratable benefit of Lenders a security interest in all
of the Pledgor’s right, title and interest
in and to the Membership Interest, together with all proceeds and substitutions
thereof, all cash, certificates and
other moneys and property paid thereon, all rights to subscribe for securities
declared or granted in connection
therewith, and all other cash and noncash proceeds of the foregoing (all
hereinafter called the “Pledged Collateral”),
as security for the prompt performance of all of the Obligations (the “Secured
Indebtedness”), and Pledgor’s obligations hereunder.




          (b) The term “Pledged Collateral” shall also include any securities, instruments or
distributions of any kind issuable, issued or received by Pledgor upon conversion of, in
respect of, or in exchange for any other Pledged Collateral, including, but not limited
to, those arising from a distribution, reclassification, reorganization, merger,
consolidation, sale of assets or other exchange of securities or any dividends or other
distributions of any kind upon or with respect to the Pledged Collateral.




          (c) The certificate or certificates for the Membership Interest included in the
Pledged Collateral, accompanied by an instrument of assignment duly executed in blank by
Pledgor, have been, or will be
immediately be, delivered by Pledgor to Agent. Pledgor shall cause the books of
Gain Holdings to reflect the pledge
of the Membership Interest. Upon the occurrence of an Event of Default hereunder,
Agent may effect the transfer of
any certificates included in the Pledged Collateral into the name of Agent and
cause new certificates representing
such securities to be issued in the name of Agent. Pledgor will execute and deliver
such documents, and take or
cause to be taken such actions, as Agent may reasonably request to perfect or
continue the perfection of Agent’s and Lenders’ security interest in the Pledged Collateral.




     2. Representations, Warranties and Covenants. Pledgor represents and
warrants to and covenants with Agent and each Lender that:



          (a) The Pledged Collateral is owned by Pledgor free and clear of any security
interests, liens or encumbrances;




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          (b) Pledgor has full power and authority to create a first lien on the Pledged
Collateral in favor of Agent and Lenders and no disability or contractual obligation exists which
would prohibit Pledgor from
pledging the Pledged Collateral pursuant to this Pledge Agreement, and Pledgor will
not assign, create or permit to
exist any other claim to, lien or encumbrance upon, or security interest in any of
the Pledged Collateral;




          (c) There arc no subscriptions or other options exercisable with respect to the
Membership Interest; and




          (d) The Membership Interest has been duly authorized and validly issued, and is
fully paid and non-assessable; and




          (e) The Pledged Collateral is not the subject of any present or threatened suit,
action, arbitration, administrative or other proceeding, and Pledgor knows of no reasonable
grounds for the institution of any such proceedings.




     All the above representations and warranties shall survive the making of this Agreement.



     3. Voting Prior to Demand. Unless an Event of Default (as defined below)
shall have occurred and be continuing, Pledgor shall be entitled to exercise any voting rights with respect
to the Pledged Collateral and to
give consents, waivers and ratifications in respect thereof, provided that
no vote shall be cast or consent, waiver or
ratification given or action taken which would be inconsistent with any of the
terms of this Agreement or which
would constitute or create any violation of any of such terms. All such rights of
Pledgor to vote and give consents,
waiver and ratifications shall upon notice to Pledgor cease in case such an Event
of Default hereunder shall occur and be continuing.



     4. Events of Default. Each of the following shall constitute an event of
default (“Event of Default”) hereunder:



          (a) The occurrence of an Event of Default, as defined in the Loan Agreement;




          (b) The breach of any provision of this Agreement by Pledgor or the failure by
Pledgor to observe or perform any of the provisions of this Agreement; or




          (c) The breach of any provision of the Loan Agreement by Pledgor or the failure by
Pledgor to observe or perform any of the provisions of the Loan Agreement.




     5. Remedies Upon Default.



          (a) Upon the occurrence and during the continuance of an Event of Default, Agent
and each Lender shall have the right to exercise all such rights as a secured party under
the Uniform Commercial Code of the
State of New Jersey as it, in its sole judgment, shall deem necessary or
appropriate, including the right to sell all or
any part of the Pledged Collateral at one or more public or private sales upon ten
(10) days’ written notice to
Pledgor, and any such sale or sales may be made for cash, upon credit, or for
future delivery, and in connection
therewith, Agent may grant options, provided that any such terms or options shall,
in the best judgment of Agent, be extended only in order to obtain the best possible price.




          (b) Pledgor recognizes that Agent may be unable to effect a public sale of all or a
part of the Pledged Collateral, but may be compelled to resort to one or more private sales to
a restricted group of purchasers
who will be obliged to agree, among other things, to acquire the Pledged Collateral
for their own account, for





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investment and without a view to the distribution or resale thereof. Pledgor understands
that private sales so made may be at prices and on other terms less favorable to the
seller than if the Pledged Collateral were sold at public sales. Pledgor agrees that
private sales made under the foregoing circumstances shall be deemed to have been made
in a commercially reasonable manner.




          (c) After the sale of any of the Pledged Collateral, Agent may deduct all
reasonable legal and other expenses and attorney’s fees for preserving, collecting,
selling and delivering the Pledged Collateral and for enforcing its rights with respect
to the Secured Indebtedness, and shall apply the residue of the proceeds to the Secured
Indebtedness in such manner as Agent in its reasonable discretion shall determine, and
shall pay the balance, if any to Pledgor.




     6. Amendment of Loan Documents. Pledgor authorizes Agent, without notice or
demand and without affecting its liability hereunder, from time to time to (a) renew, extend,
or otherwise change the terms of the
Loan Documents, as defined in the Loan Agreement, or any part thereof; (b) take and
hold security for the payment
of the Loan Documents, and exchange, enforce, waive and release any such security;
and (c) apply such security and
direct the order or manner of sale thereof as Agent in its sole discretion may
determine.



     7. Intentionally omitted.



     8. Intentionally omitted.



     9. Indemnification. Pledgor agrees to defend, indemnify and hold harmless
Agent and each Lender and its officers, employees, and agents against: (a) all obligations, demands,
claims, and liabilities claimed or
asserted by any other party in connection with the transactions contemplated by
this Agreement, and (b) all losses or
expenses in any way suffered, incurred, or paid by Agent or any Lender as a result
of or in any way arising out of,
following, or consequential to transactions between Agent or any Lender and
Pledgor, under this Agreement
(including without limitation attorneys’ fees and expenses), except for
obligations, demands, claims, liabilities,
losses and Agent and/or Lender expenses caused by Agent’s and or any Lender’s gross
negligence or willful misconduct.



     10. Notices. Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other agreement entered into in connection
herewith shall be in writing and (except
for financial statements and other informational documents which may be sent by
first-class mail, postage prepaid)
shall be personally delivered or sent by certified mail, postage prepaid, return
receipt requested, or by prepaid
telefacsimile to Pledgor or to Agent, as the case may be, at its addresses set
forth below. Such notice shall be
deemed effective three (3) days after deposit if sent by first class mail, upon
actual receipt if personally delivered or
sent by certified mail, or upon confirmed transmission if sent via telefacsimile.




	 	 If to Pledgor	 	GAIN CAPITAL HOLDINGS, INC.

550 Hills Drive

Bedminster, New Jersey 07921

Attn: Chief Executive Officer

 FAX: (908) 731-0701
	 
	 	 If to Agent	 	Silicon Valley Bank

400 Madison Avenue, Suite 15A

New York, New York 10017

Attn: Mr. Michael Moretti




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	 	 	 	Fax: (212) 688-5994
	 
	 	With copy to: 	 	Riemer & Braunstein LLP

Three Center Plaza

Boston, Massachusetts 02108

Attn: David A. Ephraim, Esquire

FAX: (617) 880-3456
	 
	 	If to JPMorgan:: 	 	JPMorgan Chase Bank, N.A.

695 Route 46 West

Suite 100

Fairfield, New Jersey 07004-1592

Attn: Charles Tamayo 

FAX: (973) 439-5011





     The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.



     11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER



          The laws of the State of New Jersey shall apply to this Agreement. PLEDGOR
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN
THE STATE OF NEW JERSEY IN ANY ACTION, SUIT, OR PROCEEDING OF ANY KIND, AGAINST IT WHICH
ARISES OUT OF OR BY REASON OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON
AGENT OR ANY LENDER CANNOT AVAIL ITSELF OF THE COURTS OF THE STATE OF NEW JERSEY,
PLEDGOR ACCEPTS JURISDICTION OF THE COURTS AND VENUE IN SANTA CLARA COUNTY, CALIFORNIA.




     PLEDGOR, AGENT AND EACH LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES
A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.




     12. This Agreement may not be amended or modified except by a written
instrument signed by Agent, each Lender and Pledgor.



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     13. This Agreement and the agreements and instruments executed in connection
therewith constitute the entire agreement between Agent, Lenders and Pledgor with respect to the subject
matter hereof and supersede all
prior agreements, understandings, offers and negotiations, oral or written.



     14. This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which shall together constitute one and the same document.



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EXECUTED
as of this 29th day of March, 2006.




	 	 	 	 	 
	 	PLEDGOR:



GAIN CAPITAL HOLDINGS, INC.

 	 
	 	By  	/s/ Mark Galant
 	 
	 	 	Name:  	Mark Galant  	 
	 	 	Title:  	CEO 	 
	 
	 	LENDERS:



SILICON VALLEY BANK, as Agent and as a 

LENDER

 	 
	 	By  	/s/ Michael Moretti
 	 
	 	 	Name:  	Michael Moretti 	 
	 	 	Title:  	SVP 	 
	 
	 	JPMORGAN CHASE BANK, N.A., as LENDER

 	 
	 	By  	/s/
Bradley J. Thomson
 	 
	 	 	Name:  	Bradley J. Thomson	 
	 	 	Title:  	Vice President 	 
	 



Signature Page to Pledge Agreement





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