A123 Systems Announces Private Offering of $50 Million of Convertible Notes and Warrants

A!23 Systems

, today announced a private offering of $50 million aggregate principal amount of its Senior Unsecured Convertible Notes and Warrants to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Act"). The Company intends to use the proceeds from the sale of the Notes for general corporate purposes. The Notes will bear interest at a rate of 6.00% per year, subject to certain adjustments, and mature in July, 2013. The Notes will be convertible, at the holder's option, into shares of the Company's common stock initially at a fixed conversion price, subject to certain adjustments. The Company will be required to redeem 1/28th of the principal amount of Notes, subject to certain adjustments, semi-monthly. Interest and amortization payments may be settled in common stock of the Company, subject to certain conditions. Holders of the Notes will also have certain number of optional voluntary conversion rights.