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CNE Group, Inc. Restructures $4,538,000 of Its Liabilities

NEW YORK--(BUSINESS WIRE)--Sept. 10, 2003--CNE Group, Inc., (AMEX/PCX: CNE) today announced that it has completed the restructuring of $3,587,500 of its outstanding debt and related interest, specifically $2,587,500 of its subsidiary's 12% Debentures Payable and related interest and $1,000,000 of its 8% Subordinated Promissory Notes, and the settlement of a subsidiary's $950,000 tax liability.

During August 2003, 93.75% of the holders of the Debentures Payable of a subsidiary of the Company elected to (i) convert the outstanding principal balance of their debentures amounting to approximately $2,250,000, (ii) return the related outstanding B Warrants of the Company (562,500), and (iii) waive all accrued and unpaid interest relating thereto (approximately $337,500), in consideration for (i) 1,125,000 shares of the common stock of the Company and (ii) 1,125,000 five-year common stock warrants exercisable at $3.00 per share. One half of these warrants are exercisable immediately with the balance exercisable commencing January 1, 2004. The holders of these Debentures include the Company's Chairman of the Board and two principal shareholders.

On August 31, 2003, 50% of the holders of the Company's 8% Subordinated Promissory Notes Payable, amounting to $1,000,000, elected to convert their notes, in consideration for 1,000,000 shares of the Company's newly issued Series AA 8% Cumulative Preferred Stock, par value $.00001 per share. The Series AA Preferred Stock has an aggregate liquidating preference of $1,000,000 over all other equity of the Company. The holders of these notes are two of the Company's directors, one of whom is the Company's President and Chief Operating Officer.

In addition, pursuant to a letter dated July 16, 2003, the Internal Revenue Service ("IRS") has accepted an Offer in Compromise submitted by a subsidiary of the Company. The Company's subsidiary offered the IRS a nominal payment of $50,000 cash, payable in 90 days from the date of the IRS's acceptance, to satisfy the IRS's Tax Assessment and related interest and penalties thereon of approximately $950,000.

The aggregate financial effect of the conversion of the 12% Debentures Payable and 8% Subordinated Promissory Notes, and the settlement with the IRS will be to increase the Company's Capital by approximately $4,487,500.

Commenting on these transactions, George Benoit, Chairman of CNE Group said, "We are extremely pleased by the votes of confidence that our noteholders have shown us." Michael Gutowski, President and Chief Operating Officer of CNE added, "We feel that we've only just begun adding value to the Company. Our technology has proven to be effective, useful, and helpful to motorists and municipalities around the country, and as we continue to execute our business plan, we believe that our shareholders will be pleased with the results in the not too distant future."

About CNE Group, Inc.

CNE Group, Inc. is a holding company whose primary operating subsidiary is SRC Technologies, Inc. SRC, also a holding company, is the parent of Connectivity, Inc., Econo-Comm, Inc. (d/b/a Mobile Communications) and U.S. Commlink, Ltd. Connectivity, U.S. Commlink and Mobile Communications - the "SRC group of companies" - market, manufacture, repair and maintain remote radio and cellular-based emergency response products to a variety of federal, state and local government institutions, and other vertical markets throughout the United States. SRC has intellectual property rights to certain key elements of these products - specifically, certain communication, data entry and telemetry devices.

The Company also generates revenue from its CareerEngine division that is engaged in the business of e-recruiting.

The Company and CareerEngine are located at 200 West 57th Street, New York, NY 10019 (212- 977-2200). SRC, Connectivity and Mobile Communications are located at 3733 NW 16th Street, Lauderhill, FL 33311 (954-587-1414). U.S. Commlink. is located at 6244 Preston Avenue, Livermore, CA 94550 (925-960-0097).

Certain statements in this press release constitute "forward-looking statements" relating to CNE Group, Inc. and its subsidiaries (the "Company") within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding future events, our financial performance and operating results, our business strategy and our financing plans are forward-looking statements. In some cases you can identify forward-looking statements by terminology, such as "may," "will," "would," "should," "could," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms or other comparable terminology. These statements are only predictions. Known and unknown risks, uncertainties and other factors could cause actual results to differ materially from those contemplated by the statements. In evaluating these statements, you should specifically consider various factors that may cause our actual results to differ materially from any forward-looking statements.

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