exv10w18





Exhibit 10.18



FIFTH LOAN MODIFICATION AGREEMENT




     This Fifth Loan Modification Agreement (this “Loan Modification Agreement”) is
entered into as of June 18, 2009, and is effective as of March 17, 2009, by and among
SILICON VALLEY BANK, a California corporation (“SVB”), as collateral agent (the
“Collateral Agent”) for the Lenders and administrative agent (the “Administrative
Agent”) for the Lenders (Collateral Agent and Administrative Agent are collectively
the “Agent”), and the Lenders listed on Schedule 1.1 and otherwise party hereto,
including, without limitation, SVB and JPMORGAN CHASE BANK, N.A. (“JPMorgan”) (SVB
and JPMorgan are, collectively, the “Joint Bookrunners”) and GAIN CAPITAL HOLDINGS,
INC., a Delaware corporation (“Borrower”).


1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and obligations which may be owing by Borrower to the Lenders, Borrower
is indebted to the Lenders pursuant to a loan arrangement dated as of March 29, 2006,
evidenced by, among other documents, a certain Loan and Security Agreement dated as
of March 29, 2006, between Borrower and the Lenders, as amended by a certain First
Loan Modification Agreement dated as of October 16, 2006, between Borrower and
Lenders, as further amended by a certain Second Loan Modification Agreement dated as
of March 20, 2007, between Borrower and Lenders, as further amended by a certain
Third Loan Modification Agreement dated as of June 6, 2007, between Borrower and
Lenders, and as further amended by a certain Fourth Loan Modification Agreement dated
as of March 18, 2008, between Borrower and Lenders (as amended, the “Loan
Agreement”). Capitalized terms used but not otherwise defined herein shall have the
same meaning as in the Loan Agreement.



2.
DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the Loan Agreement (together with any other collateral
security granted to Agent, for the ratable benefit of the Lenders, the “Security
Documents”). Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the “Existing Loan
Documents”.



3.
DESCRIPTION OF CHANGE IN TERMS.




     A. Modifications
to Loan Agreement.




	 	1.	 	The Loan Agreement shall be amended by deleting the
following text appearing in Section 2.3 thereof:






     “(b) Interest Rate.




     (i) Credit Extensions (other than Advances). Each
Credit Extension (other than Advances) shall bear interest
on the outstanding principal amount thereof from the date
when made, continued or converted until paid in full at a
rate per annum equal to the Prime Rate plus the Prime Rate
Margin or the LIBOR Rate plus the LIBOR Rate Margin, as the
case may be. On and after the expiration of any Interest
Period applicable to any LIBOR Credit Extension outstanding
on the date of occurrence of an Event of Default or
acceleration of the Obligations, the Effective Amount of
such LIBOR Credit Extension shall, during the continuance of
such Event of Default or after acceleration, bear interest
at a rate per annum equal to the Default Rate (as defined
below). Pursuant to the terms hereof, interest on each
Credit Extension (other than Advances) shall be paid in
arrears on each Interest Payment Date. Interest shall also
be paid on the date of any prepayment of any Credit
Extension (other than Advances)



 









 






pursuant to this Agreement for the portion of any Credit Extension
(other than Advances) so prepaid and upon payment (including
prepayment) in full thereof. All accrued but unpaid interest on the
Credit Extensions (other than Advances) shall be due and payable on
the Term Loan Maturity Date.




     (ii) Advances. Subject to Section 2.3(c), the
principal amount outstanding under the Revolving Line shall accrue
interest at a floating per annum rate equal to three quarters of one
percentage point (0.75%) above the Prime Rate, which interest shall
be payable monthly in accordance with Section 2.3(g) below.”




	 	 	 	and inserting in lieu thereof the following:






     “(b) Interest Rate.




     (i) Credit Extensions (other than Advances). Each Credit Extension (other than Advances)
shall bear interest on the outstanding principal amount thereof from the date when made,
continued or converted until paid in full at a rate per annum equal to the greater of (A) four
and three-quarters of one percent (4.75%), and (B) the Prime Rate plus the Prime Rate Margin or
the LIBOR Rate plus the LIBOR Rate Margin, as the case may be. On and after the expiration of any
Interest Period applicable to any LIBOR Credit Extension outstanding on the date of occurrence of
an Event of Default or acceleration of the Obligations, the Effective Amount of such LIBOR Credit
Extension shall, during the continuance of such Event of Default or after acceleration, bear
interest at a rate per annum equal to the Default Rate (as defined below). Pursuant to the terms
hereof, interest on each Credit Extension (other than Advances) shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any prepayment of any Credit
Extension (other than Advances) pursuant to this Agreement for the portion of any Credit
Extension (other than Advances) so prepaid and upon payment (including prepayment) in full
thereof. All accrued but unpaid interest on the Credit Extensions (other than Advances) shall be
due and payable on the Term Loan Maturity Date.




     (ii) Advances. Subject to Section 2.3(c), the
principal amount outstanding under the Revolving Line shall accrue
interest at a floating per annum rate equal to the greater of (A)
four and three-quarters of one percent (4.75%), and (B) three
quarters of one percentage point (0.75%) above the Prime Rate, which
interest shall be payable monthly in accordance with Section 2.3(g)
below.”




	 	2.	 	The Loan Agreement shall be amended by deleting the following appearing as Section
6.7 thereof:






“6.7 Financial Covenants.




          Borrower and its Subsidiaries shall maintain at all times, to be tested
as of the last day of each quarter, on a consolidated basis, unless otherwise
noted:



 









 






          (a)
Debt Service Coverage Ratio. A ratio of EBITDA (plus all
other non-cash and/or non-recurring expenses) for the subject quarter to the
aggregate amount of Borrower’s quarterly principal payment and monthly
interest payments for borrowed money (with respect to the three (3) months
during such quarter), in each case calculated as of the last day of each
fiscal quarter, of at least (i) 2.0 to 1.0 as of the quarters ending March
31, 2006, June 30, 2006, and September 30, 2006, (ii) 1.50 to 1.0 as of the
quarters ending December 31, 2006, March 31, 2007 and June 30, 2007, (iii)
1.75 to 1.0 as of the quarters ending September 30, 2007, December 31, 2007,
March 31, 2008 and June 30, 2008, and (iv) 2.0 to 1.0 as of the quarter
ending September 30, 2008 and as of the last day of each subsequent fiscal
quarter.




          (b) Total Funded Debt/EBITDA. A Total Funded Debt Ratio (with
respect to the immediately preceding twelve (12) month period) of a maximum
of (i) 2.0 to 1.0 as of the quarters ending March 31, 2006, June 30, 2006,
and September 30, 2006, (ii) 1.75 to 1.0 as of the quarter ending December
31, 2006, (iii) 1.50 to 1.0 as of the quarter ending March 31, 2007, (iv) 2.0
to 1.0 as of the quarters ending June 30, 2007 and September 30, 2007, (v)
1.75 to 1.0 as of the quarter ending December 31, 2007, and (vi) 1.50 to 1.0
as of the quarter ending March 31, 2008 and as of the last day of each
quarter thereafter. With respect to the quarter ending March 31, 2009 and
each quarter thereafter, the Total Funded Debt Ratio covenant levels shall be
set by Lenders in their sole discretion based upon Borrower’s 2009 operating
plan/forecast, but not less than 1.50 to 1.0 (unless Borrower and Lenders
mutually agree to a lower covenant level); provided, however, in the event
that Borrower does not agree in writing to such covenant levels on or before
February 28, 2009, then all Obligations shall be due and payable in full on
March 31, 2009. The failure of Borrower to deliver a 2009 operating plan to
Agent on or prior January 31, 2009 shall result in an immediate Event of Default for
which there shall be no grace or cure period.”




	 	 	 	and inserting in lieu thereof the following:






“6.7 Financial Covenants.




     Borrower and its Subsidiaries shall maintain at all times, to be tested
as of the last day of each quarter, on a consolidated basis, unless otherwise
noted:




     (a)
Debt Service Coverage Ratio. A ratio of EBITDA for the
subject quarter to the aggregate amount of Borrower’s quarterly principal
payment and monthly interest payments for borrowed money (with respect to the
three (3) months during such quarter), in each case calculated as of the last
day of each fiscal quarter, of at least (i) 2.0 to 1.0 as of the quarters
ending March 31, 2006, June 30, 2006, and September 30, 2006, (ii) 1.50 to
1.0 as of the quarters ending December 31, 2006, March 31, 2007 and June 30,
2007, (iii) 1.75 to 1.0 as of the quarters ending September 30, 2007,
December 31, 2007, March 31, 2008 and June 30, 2008, and (iv) 2.0 to 1.0 as
of the quarter ending September 30, 2008 and as of the last day of each
subsequent fiscal quarter.




     (b) Total Funded Debt/EBITDA. A Total Funded Debt Ratio (with
respect to the immediately preceding twelve (12) month period) of a maximum
of (i) 2.0 to 1.0 as of the quarters ending March 31, 2006, June 30, 2006,
and September 30, 2006, (ii) 1.75 to 1.0 as of the quarter ending December
31, 2006, (iii) 1.50 to 1.0 as of the quarter ending March 31, 2007, (iv) 2.0
to 1.0 as of the quarters ending June 30, 2007 and September 30, 2007, (v)
1.75 to 1.0 as of the quarter ending December 31, 2007, and (vi) 1.50 to 1.0



 









 






as of the quarter ending March 31, 2008 and as of the last day of
each quarter thereafter.”




	 	3.	 	The Loan Agreement shall be amended by deleting the following
appearing as Section 6.7 thereof:






“7.7 Distributions; Investments; Bonuses. (a) Directly or
indirectly make any Investment other than Permitted Investments, or
permit any of its Subsidiaries to do so; or (b) pay any dividends or
make any distribution or payment or redeem, retire or purchase any
capital stock, provided, however, Borrower may pay: (i) the Dividend so
long as (A) the Capitalization Event has occurred, (B) Borrower has
unrestricted cash on hand, at the time of the Dividend, in an amount
equal to the amount Dividend minus the net proceeds of the
Capitalization Event minus the net proceeds pursuant to the advances
made by Lenders pursuant to Section 2.1.1, and (C) the Dividend does not
result in an Event of Default and does not render the Borrower insolvent
under applicable laws; and (ii) other than the Dividend, Borrower may
make a dividend or otherwise redeem, retire, or purchase any stock so
long as immediately after such dividend, redemption or repurchase,
Borrower and its Subsidiaries would have Ten Million Dollars
($10,000,000.00) in unrestricted cash or Cash Equivalents, and provided
further no Event of Default has occurred or would result; or (c) allow
Gain Holdings, LLC to transfer any of its stock or beneficial ownership
of Gain Capital Group, Inc. without the prior written consent of the
Agent.”




	 	 	 	and inserting in lieu thereof the following:






“7.7 Distributions; Investments; Bonuses. (a) Directly or
indirectly make any Investment other than Permitted Investments, or
permit any of its Subsidiaries to do so; or (b) pay any dividends or
make any distribution or payment or redeem, retire or purchase any
capital stock, provided, however, Borrower may pay: (i) the Dividend so
long as (A) the Capitalization Event has occurred, (B) Borrower has
unrestricted cash on hand, at the time of the Dividend, in an amount
equal to the amount Dividend minus the net proceeds of the
Capitalization Event minus the net proceeds pursuant to the advances
made by Lenders pursuant to Section 2.1.1, and (C) the Dividend does not
result in an Event of Default and does not render the Borrower insolvent
under applicable laws; and(ii) other than the Dividend, subject to the
final sentence of this Section 7.7, Borrower may make a dividend or
otherwise redeem, retire, or purchase any stock so long as immediately
after such dividend, redemption or repurchase, Borrower and its
Subsidiaries would have Ten Million Dollars ($10,000,000.00) in
unrestricted cash or Cash Equivalents, and provided further no Event of
Default has occurred or would result; or (c) allow Gain Holdings, LLC to
transfer any of its stock or beneficial ownership of Gain Capital Group,
Inc. without the prior written consent of the Agent. Notwithstanding the
foregoing or any terms in this Agreement to the contrary, Borrower must
pay in full all Obligations and this Agreement shall be terminated by
Borrower prior to Borrower redeeming any preferred stock of Borrower
pursuant to Section B(9) of Article FOURTH of Borrower’s Second Amended
and Restated Certificate of Incorporation (as such provision may be
amended, supplemented or replaced from time to time).”




	 	4.	 	The Loan Agreement shall be amended by deleting the following
definitions appearing in Section 13.1 thereof:






 











 






““EBITDA”shall
mean (a) Net Income, plus (b) Interest Expense, plus (c) to the extent deducted in the calculation of Net Income,
depreciation expense and amortization expense, plus (d) income
tax expense.”




““LIBOR
Rate Margin” is three and one-half of one percent
(3.50%); provided, however, if at any time, Borrower’s Total
Funded Debt Ratio for the subject quarter is less than 1.0 to
1.0, then the LIBOR Rate Margin shall immediately be three
percent (3.0%) until such lime as Borrower’s Total Funded Debt
Ratio for the subject quarter is equal to or greater than 1.0
to 1.0, at which point the LIBOR Rate Margin shall be
immediately increased to three and one-half of one percent
(3.50%).”




““Prime Rate Margin” is three-quarters of one percent (0.75%);
provided, however, if at any time, Borrower’s Total Funded
Debt Ratio for the subject quarter is less than 1.0 to 1.0,
then the Prime Rate Margin shall immediately be one-quarter of
one percent (0.25%) until such time as Borrower’s Total Funded
Debt Ratio for the subject quarter is equal to or greater than
1.0 to 1.0, at which point the Prime Rate Margin shall be
immediately increased to three-quarters of one percent
(0.75%).”




““Revolving Line Maturity Date”is March 17, 2009.”


and inserting in lieu thereof the following:




““EBITDA” shall mean (a) Net Income, plus (b) Interest
Expense, plus (c) to the extent deducted in the calculation of
Net Income, depreciation expense and amortization expense,
plus (d) income tax expense; provided, however EBITDA shall
exclude non-cash expenses and gains relating solely to
Borrower’s preferred stock embedded derivative.”




““LIBOR
Rate Margin” is three and one-half of one percent (3.50%).”




““Prime Rate Margin” is three-quarters of one percent (0.75%).”




““Revolving
Line Maturity Date” is June 17, 2010.”




	 	B.	 	Waivers. Lenders hereby waive Borrower’s existing defaults under the Loan Agreement by
virtue
of Borrower’s failure to comply with the financial covenant set forth in
Section 6.7(b) thereof as of the quarters ended March 31, 2006, June 30,
2006, September 30, 2006, December 31, 2006, March 31,
2007, June 30, 2007,
September 30, 2007 and December 31, 2007. Lenders’ waiver of Borrower’s
compliance of said affirmative covenant shall apply only to the foregoing
specific periods.




4. FEES.




     (a) 2009 SVB Fee. Borrower shall pay to SVB a modification and waiver
fee in the amount set forth in the final sentence of this Section 4(a) (the “2009 SVB
Fee”), which 2009 SVB Fee shall be deemed fully earned as of the date hereof and shall
be due and payable pursuant to the terms of this Section 4(a). The 2009 SVB Fee shall be
due and payable immediately upon the earlier to occur of (such date being the “2009 SVB
Fee Due Date”): (i) when Borrower’s average daily balance in deposit accounts with SVB
is less than an amount equal to the average daily balance in Borrower’s demand deposit
accounts at SVB as reported in Borrower’s customer account analysis dated April 2009,
plus an incremental amount of Five Million Dollars ($5,000,000.00), which average daily
balance



 









 




shall be measured for each rolling two month period commencing with the period of April 1, 2009 through May 31,
2009 and ending with April 1, 2010 through May 31, 2010;
(ii) upon the occurrence of an Event of Default; or (iii)
upon the early termination of the Loan Agreement. The 2009 SVB Fee shall be an amount
equal to Seventy-Five
Thousand Dollars ($75,000.00) multiplied by a fraction, the numerator of which is the
number of calendar months
from the 2009 SVB Fee Due Date and May 2010 (inclusive of both the month in which the
2009 SVB Fee Due Date
occurs and May 2010) and the denominator of which is 12.




     (b) 2009
JPMorgan Fee. Borrower shall pay to JPMorgan a modification
and waiver fee in the amount set forth in the final sentence of this Section 4(b) (the
“2009 JPMorgan Fee”), which 2009 JPMorgan Fee shall be deemed fully earned as of the
date hereof and shall be due and payable pursuant to the terms of this Section 4(b). The
2009 JPMorgan Fee shall be due and payable immediately upon the earlier to occur of
(such date being the “2009 JPMorgan Fee Due Date”): (i) when Borrower’s average daily
balance in deposit accounts with JPMorgan is less than an amount equal to the average
daily balance in Borrower’s demand deposit accounts at JPMorgan as reported in
Borrower’s customer account analysis dated April 2009, plus an incremental amount of
Five Million Dollars ($5,000,000.00), which average daily balance shall be measured for
each rolling two month period commencing with the period of April 1, 2009 through May
31, 2009 and ending with April 1, 2010 through May 31, 2010; (ii) upon the occurrence of
an Event of Default; or (iii) upon the early termination of the Loan Agreement. The 2009
JPMorgan Fee shall be an amount equal to Seventy-Five Thousand
Dollars ($75,000.00)
multiplied by a fraction, the numerator of which is the number of calendar months from
the 2009 JPMorgan Fee Due Date and May
2010 (inclusive of both the month in which the 2009 JPMorgan Fee Due Date occurs
and May 2010) and the denominator of which is 12.



     (c) Borrower shall reimburse Agent and Lenders for all legal fees and
expenses incurred in connection with this amendment to the Existing
Loan Documents.


5. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies,
confirms and reaffirms,
all and singular, the terms and disclosures contained in a certain Perfection
Certificate dated as of March 29, 2006,
between Borrower and Lenders, and acknowledges, confirms and agrees the disclosures
and information Borrower
provided to Lenders in the Perfection Certificate have not changed, as of the date
hereof.



6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to
reflect the changes described above.



7. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms
and conditions of all security or other collateral granted to the Agent, for the
ratable benefit of the Lenders, and
confirms that the indebtedness secured thereby includes, without limitation, the
Obligations.



8. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that
Borrower now has no
offsets, defenses, claims, or counterclaims against Agent or Lenders with respect to the
Obligations, or otherwise,
and that if Borrower now has, or ever did have, any offsets, defenses, claims, or
counterclaims against Agent or
Lenders, whether known or unknown, at law or in equity, all of them are hereby expressly
WAIVED and Borrower
hereby RELEASES Agent and Lenders from any liability thereunder.



9. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations,
Agent and Lenders are relying upon Borrower’s representations, warranties, and
agreements, as set forth in the
Existing Loan Documents. Except as expressly modified pursuant to this Loan Modification
Agreement, the terms
of the Existing Loan Documents remain unchanged and in full force and effect. Lenders’
agreement to
modifications to the existing Obligations pursuant to this Loan Modification Agreement
in no way shall obligate








 









 




any Lender to make any future modifications to the Obligations. Nothing in this Loan
Modification Agreement shall constitute a satisfaction of the Obligations. It is the
intention of Lenders and Borrower to retain as liable parties all makers of Existing
Loan Documents, unless the party is expressly released by Agent in writing. No maker
will be released by virtue of this Loan Modification Agreement.



10. COUNTERSIGNATURE. This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Lenders.




[The remainder of this page is intentionally left blank]




 









 





     This Loan Modification Agreement is executed as of the date first written above.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BORROWER:	 	 	 	LENDERS:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GAIN CAPITAL HOLDINGS, INC.	 	 	 	SILICON VALLEY BANK, as Agent and Lender
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Henry Lyons	 	 	 	By:	 	/s/ Michael Moretti	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Henry Lyons
	 	 	 	 	 	Name:	 	Michael
 Moretti	 	 
	 

	 	Title:
	 	CFO
	 	 	 	 	 	Title:	 	SVP	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	JPMORGAN CHASE BANK, N.A., as LENDER
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	/s/ Lawrence Normile	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Name:	 	Lawrence Normile	 	 
	 

	 	 	 	 	 	 	 	 	 	Title:	 	Vice
President	 	 






     The undersigned, GAIN HOLDINGS, LLC, ratifies, confirms and reaffirms, all and
singular, the terms and
conditions of a certain Unconditional Guaranty dated as of March 29, 2006 (the
“Guaranty”) and acknowledges,
confirms and agrees that (i) the Guaranty shall remain in full force and effect and
shall in no way be limited by the
execution of this Loan Modification Agreement, or any other documents, instruments
and/or agreements executed
and/or delivered in connection herewith, and (ii) the Guaranty shall continue
to pertain to all Obligations.



	 	 	 	 	 
	 	GAIN HOLDINGS, LLC

 	 
	 	By:  	/s/ Glenn Stevens
 	 
	 	 	Name:  	Glenn Stevens 	 
	 	 	Title:  	CEO