GFIG » Topics » LOANS FROM JERSEY PARTNERS

This excerpt taken from the GFIG DEF 14A filed Apr 13, 2006.

LOANS FROM JERSEY PARTNERS

        In connection with our reorganization that took place in November 2001, our subsidiary, GFI Group LLC, paid a dividend to its then-parent Jersey Partners consisting of $30.0 million in cash and certain accounts receivable. Simultaneously, Jersey Partners loaned the cash and accounts receivable back to GFI Group LLC in exchange for (i) two notes in the original principal amounts of $5.0 million and $20.0 million, respectively and (ii) a collection agency note in the original principal amount of $5.0 million. The collection agency note was repaid in full in 2002.

        The notes were guaranteed by the material non-regulated subsidiaries of GFI Group LLC, and were secured by, among other things, liens on and security interests in substantially all of the assets of GFI Group LLC and its material subsidiaries. However, the notes were, by their terms, subordinated in right of payment to our senior indebtedness, including the indebtedness under our credit agreement. The $5.0 million note was repaid by us in two installments of $2.5 million on November 30, 2002 and November 30, 2003. In connection with the issuance of our Series C Preferred Stock, we repaid $10.75 million of the principal amount of the $20.0 million note in June 2002.

        Pursuant to the terms of the $20 million note, Jersey Partners required us to use up to 20% of the aggregate net proceeds we received from our IPO to repay the note. On January 31, 2005, we used a portion of the net proceeds received by us in our IPO to prepay in full the $9.25 million outstanding principal amount as of such date, plus accrued interest of approximately $400,000.

This excerpt taken from the GFIG 10-K filed Mar 31, 2005.

Loans from Jersey Partners

        In connection with our reorganization that took place in November 2001, our subsidiary, GFI LLC, paid a dividend to its then-parent Jersey Partners consisting of $30.0 million in cash and certain accounts receivable. Simultaneously, Jersey Partners loaned the cash and accounts receivable back to GFI LLC in exchange for (i) two notes in the original principal amounts of $5.0 million and $20.0 million, respectively and (ii) a collection agency note in the original principal amount of $5.0 million. The collection agency note was repaid in full in 2002.

        The notes were guaranteed by the material non-regulated subsidiaries of GFI LLC, and were secured by, among other things, liens on and security interests in substantially all of the assets of GFI LLC and its material subsidiaries. However, the notes are, by their terms, subordinated in right of payment to our senior indebtedness, including the indebtedness under our credit agreement. The $5.0 million note was repaid by us in two installments of $2.5 million on November 30, 2002 and November 30, 2003. In connection with the issuance of our Series C Preferred Stock, we repaid $10.75 million of the principal amount of the $20.0 million note in June 2002.

        Pursuant to the terms of the $20 million note, Jersey Partners required us to use up to 20% of the aggregate net proceeds we received from our IPO to repay the note. On January 31, 2005, we used a portion of the net proceeds received by us in our IPO to prepay in full the $9.25 million outstanding principal amount as of December 31, 2004, plus accrued interest of approximately $0.4 million.

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