Cell Therapeutics, Inc. Announces Issuance of $51.7 Million of New 2012 Convertible Se...( Company raises $35.5 million in...),Health

Company raises $35.5 million in proceeds from sale of notes and

restructures balance sheet eliminating $21.5 million of Redeemable

Preferred Stock

SEATTLE, March 4 /PRNewswire-FirstCall/ -- Cell Therapeutics, Inc. ("CTI" or the "Company") (Nasdaq: CTIC; MTA) today announced that it will issue approximately $51.7 million of new 9% Convertible Senior Notes (the "Notes") due 2012 and warrants to purchase 7,326,950 shares of common stock, no par value (the "Common Stock"). The warrants will have an exercise price of $1.41 per share, which is equal to 110% of the closing bid price as reported by Nasdaq.

The Notes bear interest at 9% per annum and are convertible at any time for shares of CTI common stock at the rate of 709.22 shares per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $1.41 per share, which is equal to 110% of the closing bid price as reported by Nasdaq. The Notes feature a make-whole provision upon conversion entitling the holder to $270 per $1,000 principal amount of Notes, less any interest paid before conversion. An amount equal to the make-whole payment amount for such notes, or $13.9 million, shall be held in escrow for one year. The Notes will rank equal in right of payment with all existing and future senior indebtedness of CTI, including the Company's 6.75% Convertible Senior Notes due 2010, 7.5% Convertible Senior Notes due 2011, 5.75% Convertible Senior Notes due 2011, and rank senior in right of payment to the Company's currently outstanding 5.75% Senior Subordinated Notes due 2008, 5.75% Subordinated Notes due 2008 and 4% Convertible Senior Subordinated Notes due 2010.

CTI also announced that a substa
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