The9 Limited inks deal on sale of senior secured convertible bonds, warrants

The9 Limited (NASDAQ: NCTY) said it has signed a definitive agreement with Splendid Days Limited on November 24, 2015, pursuant to which the Investor will subscribe for 12 percent senior secured convertible bonds of the company in an aggregate principal amount of USD40,050,000 (the “notes”) in addition to warrants in an aggregate principal amount of USD9,950,000.

The notes will be divided into three tranches, each of which will be convertible into ADSs of the company at an initial conversion price of USD2.6, USD5.2 and USD7.8, respectively, per ADS, provided that at no time shall the Investor convert any portion of the notes if subsequent to such conversion the Investor will hold more than 20 percent of the outstanding and issued shares of the company.

The notes will bear interest at a rate of 12 percent per year, payable upon redemption of the notes. The notes will be due in 2018, subject to an extension for two years at the discretion of the Investor. The completion of the transaction is subject to customary closing conditions.

The Investor is a wholly owned subsidiary of Ark Pacific Special Opportunities Fund I, L.P. APSOFI is a private equity special situations fund managed by Ark Pacific.

The9 Limited is an online game developer and operator in China. The9 Limited develops and operates, directly or through its affiliates, its proprietary MMO and mobile games including Firefall and Song of Knights. The9 Limited also engages in mobile advertising and mobile app education businesses. The9 Limited has formed a joint venture with Shanghai ZTE to develop and operate home entertainment set top box business.