Cell Therapeutics, Inc. Announces Single Institutional Investor to Purchase Up to $18 Million of Senior Convertible Notes

Monday, September 15, 2008 General News
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NEW YORK, Sept. 15 Cell Therapeutics, Inc.("CTI" or the "Company") (Nasdaq: CTICD, and MTA: CTIC) today announced that asingle institutional investor has agreed to purchase, for $9 million, newlyissued 10% Convertible Senior Notes due 2012, with a conversion price of $1.27per share. The Company has a put right subject to price, volume and otherrequirements exercisable no later than October 15, 2008 for the sameinstitutional investor to purchase an additional $9 million of 10% Series BConvertible Senior Notes due in 2012.

The new Notes, and the follow-on Notes would similarly have a $9 millioninitial principal balance and feature a make-whole provision entitling theholder, upon any conversion of the Notes, to receive the interest payablethrough scheduled maturity, less any interest paid before conversion. TheCompany expects to receive net proceeds of approximately $5.4 million from theNotes (before payment of fees and expenses), after depositing amounts inescrow for the make-whole provision. The Notes will rank equal in right ofpayment with all existing and future unsecured senior indebtedness of theCompany.

Pursuant to the note agreement, CTI shall make a payment in the amount of$150,000 as an inducement for the investor and its affiliates to convert 1,000shares of Series C Preferred Stock owned by the investor into Common Stock ofthe Company pursuant to the provisions of the Company's articles ofincorporation. In connection with this securities transaction, CTI shall alsomake a payment to the investor and its affiliates in the amount of $1,225,000in exchange for the prospective satisfaction of 50% of any final judgmentwhich may ever be rendered on their pending claims against the Company. If theCompany exercises its put right, as to the second $9 million investment,additional similar payments of $150,000 and $1,225,000 would be made and thebalance of those claims would be extinguished.

Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group,Inc. (Nasdaq: RODM), acted as the exclusive placement agent for thetransaction.

A prospectus supplement relating to the Convertible Notes to be issued inthe offering will be filed with the Securities and Exchange Commission.Copies of the prospectus supplement and accompanying base prospectus may beobtained directly from Cell Therapeutics, Inc., 501 Elliot Avenue West, Suite400, Seattle, Washington 98119.

This press-release contains forward-looking statements that involve anumber of risks and uncertainties, the outcome of which could materiallyand/or adversely affect future results. This announcement is neither an offerto sell nor a solicitation of an offer to buy any of these securities andshall not constitute an offer, solicitation or sale in any jurisdiction inwhich such offer, solicitation or sale is unlawful. The Company continues tohave substantial amount of debt outstanding and the quarterly interest expenseassociated with the debt is significant; the Company's operating expensescontinue to exceed its net revenues and the Company will continue to need toraise capital to fund its operating expenses; as well as other risks listed ordescribed from time to time in the Company's most recent filings with the SECon Forms 10-K, 8-K and 10-Q. Except as required by law, the Company does notintend to update any of the statements in this press release upon furtherdevelopments.Media Contact: Cell Therapeutics, Inc. Dan Eramian T: 206.272.4343 C: 206.854.1200 Lindsey Jesch T : 206.272.4347 F : 206.272.4434 E: media@ctiseattle.com http://www.celltherapeutics.com/press_room Investors Contact: Cell Therapeutics, Inc. Ed Bell T: 206.272.4345 F: 206.272.4434 E: invest@ctiseattle.com http://www.celltherapeutics.com/investors

SOURCE Cell Therapeutics, Inc.

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