Network CN exchanges 3% convertibles for 1% convertibles, common stock

By Devika Patel

Knoxville, Tenn., April 6 - Network CN Inc. has negotiated into a note exchange agreement with holders of the company's $50 million in convertible notes, which were sold in a November 2007 private placement, according to an 8-K filed Monday with the Securities and Exchange Commission.

The holders of $5 million of the 3% senior secured convertible notes due June 30, 2011 agreed on April 2 to exchange their securities for the company's new 1% unsecured senior convertible notes due April 2, 2012.

The new notes are convertible at any time into common shares at a conversion price of $0.02326 per share, which is subject to adjustment.

In the event of a default, the holders may force redemption of the notes at 110 plus interest.

The remaining notes are held by Keywin Holdings Ltd. Keywin agreed on April 2 to exchange its $45 million in notes for 307,035,463 common shares and an option to purchase 122,814,185 additional shares for $2 million. This option is exercisable for three months.

Network CN is a Chinese media and travel-network company with headquarters in New York.

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