Cell Therapeutics, Inc. Announces Single Institutional Investor to Purchase $44.5 Million of Units Consisting of Senior Convertible Notes an...( Investor Also Agrees to Increase Ori...)

Investor Also Agrees to Increase Original Warrant Amount by an Additional

$44.5 million

SEATTLE, July 24 /PRNewswire-FirstCall/ -- Cell Therapeutics, Inc. (Nasdaq and MTA: CTIC) today announced that a single institutional investor has agreed to purchase, for $44.5 million, newly issued 18.33% Convertible Senior Notes due 2011, with a conversion price of $0.79 per share, and a warrant to purchase approximately 28.2 million shares of common stock with an exercise price of $0.79 per share. Of such amount, $22.25 million will be funded this week and the remaining $22.25 million must be funded prior to August 25, 2008. Additionally, the agreement provides for the further amendment of the original warrant right which would be exercisable for an additional $44.5 million of units to the investor under the same terms if both parties agree to do so and subject to additional filings with the Nasdaq Stock Market.

This transaction constitutes an exercise of a previously granted warrant right for the investor to purchase up to $67.5 million of such unit securities. The Company and the investor have amended their original April 2008 agreements and subsequent amendment to change from 15.0% to 18.33% the interest rate on the Notes within these units being issued in July and August, and to reduce from $0.95 to $0.79 the per share exercise price of all common stock warrants arising from the April 2008 agreements and subsequent exercises, but the purchase price for the securities and the conversion price of the notes remain unchanged. The Company has also agreed to repurchase from the investor an aggregate amount of $17.5 million of outstanding 13.5% Convertible Senior Notes, of which half are being repurchased in connection with this July transaction and the other half will be repurchased in connection with the subsequent exercise prior to August 25, 2008. Warrants to purchase approximately 11 million shares of common stock which were
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