ATLANTA, May 7, 2009 (GLOBE NEWSWIRE) -- Premier Exhibitions, Inc. (Nasdaq:PRXI) announced that it has executed an agreement to receive $12.0 million in financing from its largest shareholder, Sellers Capital Master Fund, Ltd. ("Sellers Capital"). The financing was approved by Premier's board of directors, upon the recommendation of its independent financing committee, which was charged with considering the transaction and other possible financing transactions available to Premier. The closing of the financing is subject to customary closing conditions and is expected to close next week.
In connection with the financing, Sellers Capital has agreed to acquire unsecured convertible promissory notes from Premier in the aggregate principal amount of $12.0 million. The notes would bear interest at a rate of 6.0% per year and would mature in three years. If the conversion of the notes into common stock is approved by Premier's shareholders at its 2009 annual meeting, the notes would be convertible at a conversion price of $0.75 per share, which is a premium of approximately 7.1% to today's closing price of Premier's common stock on the NASDAQ Global Market of $0.70 per share. Sellers Capital would be restricted from voting the shares issuable upon the conversion of the notes, except in the event of specific events outside of the normal course.
Premier would have the right to prepay the notes prior to the 2009 annual meeting, subject to a prepayment fee in the form of a warrant to purchase a number of Premier's shares equal to 7.0% of the number of shares into which the notes would have been convertible. The warrant would have a term of five years and an exercise price of $0.70 per share. Premier's ability to prepay the notes prior to the 2009 annual meeting would allow Premier to replace the financing from Sellers Capital in the event that financing on superior terms becomes available to Premier.
If Premier's shareholders do not approve the conversion of the notes into common stock at or within 180 days after the 2009 annual meeting, the notes would become due and payable 180 days following the annual meeting. In addition, the interest rate would increase to 18.0% per year, retroactive to the issuance of the notes, and the notes would become immediately secured by a first priority security interest in all of Premier's assets, including the stock of its subsidiaries. Premier would have the right to prepay the notes after the 2009 annual meeting, but subject to the conversion rights of Sellers Capital, assuming shareholder approval for the conversion is obtained at the annual meeting.
If Premier's shareholders approve the conversion of the notes into common stock, Premier would have the right to force the conversion of the notes into common stock at any time after the closing price of Premier's common stock has exceeded $1.00 per share for five successive trading days. If the notes are fully converted into common stock, Sellers Capital would have an economic interest in up to approximately 45.8% of Premier's outstanding shares, on a non-fully diluted basis. As discussed above, the shares issued upon conversion of the notes would be non-voting except under certain conditions outside the normal course. The shares issuable pursuant to the notes and warrant would also be subject to a customary registration rights agreement.
Premier will be filing with the Securities and Exchange Commission a Current Report on Form 8-K, which will include a more complete description of the financing and include as exhibits the convertible note purchase agreement executed, and the form of convertible promissory note, form of warrant and form of registration rights agreement to be executed, between Premier and Sellers Capital in connection with the financing.
Forward-Looking Statements
Certain of the statements contained in this press release contain forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Premier has based these forward-looking statements on its current expectations and projections about future events, based on the information currently available to it. The forward-looking statements contained in this press release may also include statements relating to Premier's anticipated financial performance, business prospects, new developments, strategies and similar matters. Certain of the factors described in Premier's filings with the Securities and Exchange Commission, including the section of its Annual Report on Form 10-K for the year ended February 29, 2008 titled "Risk Factors," may affect Premier's future results and cause those results to differ materially from those expressed in the forward-looking statements. Premier disclaims any obligation to update any of its forward-looking statements, except as may be required by law.