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Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (1237)	10/2/2000 12:09:54 PM
From: Perspective	Read Replies (1) \| Respond to of 1438

Zeev - Have a look at this. I haven't yet found what the floor is. With a delayed reset feature like this, when would the bond holders begin shorting? Do they typically push it right to the floor? biz.yahoo.com Superconductor Technologies Inc. Completes $37.5 Million Private Equity Financing SANTA BARBARA, Calif.--(BUSINESS WIRE)--Oct. 2, 2000-- Superconductor Technologies Inc. (NASDAQ: SCON - news; ``STI''), a leading developer and manufacturer of superconducting products for wireless communications and wireless Internet access, today announced the closing of a $37.5 million private equity investment by RGC International Investors LDC (RGC). RGC purchased 37,500 shares of a new Series E convertible preferred stock and warrants to purchase up to an additional 1,044,568 shares of common stock. Chase Securities Inc. acted as financial advisor and placement agent in this transaction. The Company plans to use the net proceeds to increase manufacturing capacity, fund operating/working capital needs, increase marketing efforts and for general corporate purposes. The preferred stock has a stated value of $1,000 per share and is convertible into common stock at an initial conversion price of $17.95 per common share for the first nine months. After nine months, the preferred stock is convertible at the lower of $17.95 per common share or the market price of the common stock at the time of conversion, subject to a floor. The preferred stock automatically converts into common stock on the second anniversary of the closing. The optional and automatic conversions of preferred stock are limited to a maximum of 3,544,656 shares of common stock. The preferred stock carries a 7% premium, payable in cash or common stock subject to certain limitations, at the Company's option. The Company also issued to RGC two five-year warrants to purchase shares of common stock at $21.54 per share. The first warrant is for the purchase of up to 313,370 shares. The second warrant entitles RGC to purchase of up to 731,198 additional shares of common stock if RGC holds the preferred stock for at least one year. The warrant is not exercisable until the first anniversary and size of the warrant will be reduced proportionately to reflect any conversions of the preferred stock prior to the first anniversary. M. Peter Thomas, President and Chief Executive Officer of Superconductor Technologies Inc., stated: ``The worldwide wireless markets are undergoing explosive growth. All of the major carriers are rapidly expanding their voice networks and are in the process of upgrading these networks to handle high speed data. With STI's excellent manufacturing capability and strong installed base with the top ten U.S. service providers, we believe this additional capital will enable the resources needed to support our continued growth in these worldwide wireless markets, bring into production our newly announced PCS family of HTS filter products and accelerate the Company's entry into the global 2.5G (high speed data) and 3G (broadband) networks. We are particularly pleased to have the financial support of the people at RGC. We believe their investment philosophy gives us a strong financial partner as we continue to execute on our business plan.'' STI's SuperFilter® System utilizes high-temperature superconducting technology, along with proprietary cryogenic cooling, to create a front-end filter and amplifier system utilized in wireless base stations to enhance their performance. These enhancements include extending the range of the base station, lowering dropped calls, enabling otherwise difficult handoffs, improving call quality and, in general, improving customer service and cell site traffic for the wireless service provider... BC