Cereplast negotiates forbearance agreement for 7% convertible notes

Company revises conversion price; certain holders convert their notes

By Devika Patel

Knoxville, Tenn., June 6 - Cereplast, Inc. negotiated a forbearance agreement with the holders of its 7% senior subordinated convertible notes due 2016 on June 1, according to an 8-K filed Wednesday with the Securities and Exchange Commission. Wells Fargo Bank, NA is the trustee.

As part of the agreement, certain holders agreed to convert the notes into common shares at an exchange rate of one share for each $1.00 of notes.

In addition, certain holders agreed to forbear from exercising their rights to force the company to pay interest on June 1 until the earlier of Dec. 1, 2012 or the company's failure to meet certain milestones.

The company also agreed to amend the conversion price of the notes to $1.00.

Based in El Segundo, Calif., Cereplast manufactures bio-based renewable plastics.

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