MicroTel - MCTL - Reaches Agreement to Limit Conversion Rate for Preferred Shares

Business Wire, Nov 12, 1998

ONTARIO, Calif.--(BUSINESS WIRE)--Nov. 12, 1998--MicroTel International, Inc. (NASDAQ Small Cap: MCTL) today announced that all three institutional holders of its July 1998 $2 million Convertible Preferred equity offering have agreed to limit their minimum conversion price to $0.50 per common share.

This agreement places a maximum on the number of common shares to be issued upon conversion where, previously, no maximum existed. As consideration, the Preferred shareholders received a reduction from $1.25 to $0.75 in the exercise price of warrants issued to them in the original transaction. On the effective date of the agreement, the conversion price represented a 14% premium to the market price of the Company's stock.

Commenting on the agreement, Chairman and Chief Executive Officer Carmine T. Oliva stated, "We are pleased that a limit has been established on the potential number of common shares which otherwise could have been issued under the original agreement. By placing a floor under the conversion of their preferred shares, our institutional investors have demonstrated their endorsement of the upside potential of the Company's common stock price."

MicroTel International, Inc. is a holding company for its three wholly-owned subsidiaries - CXR Telcom Corporation, in Fremont, CA; CXR, S.A., in Paris, France and XIT Corporation in Ontario, CA. CXR Telcom Corporation and CXR, S.A. design, manufacture and market electronic telecommunication test instruments, voice and data transmission and networking equipment. XIT Corporation designs, manufactures and markets information technology products, including input and display components, subsystem assemblies, power supplies, hybrid microelectronic and other circuits. The company operates from facilities in the U.S., France, England and Japan. Approximately 60% of the Company's sales are to customers in the telecommunications industries, including AT&T and the Regional Bell Operating Companies domestically, and France Telecom in Europe. The remainder of sales are information technology products for industrial, medical, military and aerospace applications. The Company's products are distributed under each subsidiary's well-known brand names.