Dot Hill Raises $6 Million of Equity

12/20/2002 - Dot Hill Systems Corp. (AMEX: HIL) announced it has raised $6 million in gross proceeds from the sale of 6,000 shares of preferred stock in a private placement led by Omicron Master Trust. The proceeds will be used primarily for working capital and product development.

"We are very pleased with the terms of this deal and our relationship with Omicron. This deal was priced to include a conversion rate that is at a premium to the recent market price of our common stock," said Preston Romm, Dot Hillís chief financial officer. "Further, the deal includes several favorable provisions, including under varying circumstances redemption at our option utilizing cash or common stock, forced conversion, or allowing the preferred stock to remain outstanding."

The preferred shares carry a 7 percent dividend and are convertible into shares of Dot Hillís common stock at a per share price of $3.25. Dot Hill has the option to redeem 1/18th (or $333,333) of the preferred stock in cash or common stock each month beginning June 2003 through December 2004. If Dot Hill chooses not to redeem the preferred stock in any month, the dividend rate for the unredeemed shares increases to 12 percent. Dot Hill is entitled to force conversion of the preferred stock to common stock in the event its common stock price exceeds $6.50 per share for 15 consecutive trading days. Dot Hill may also redeem the preferred stock at any time in cash, subject to certain conditions, for 110 percent of the cost of the outstanding shares. Dot Hill granted warrants to Omicron and others to purchase approximately 388,000 shares of its common stock at a per share price of $3.25.

Roth Capital Partners acted as sole placement agent in the transaction. Following this private placement, Dot Hill will have approximately 25 million shares of common stock outstanding and 6,000 shares of preferred stock outstanding.

Dot Hill Systems Corp. (AMEX: HIL) is a leader in the innovative design and delivery of storage networking solutions to businesses worldwide. Its products include the SANnet IITM family of storage systems and the Axis Storage ManagerTM. For more information, visit Dot Hill on the web at

Dot Hill, the Dot Hill logo, Axis Storage Manager, and SANnet are trademarks of Dot Hill Systems Corp.

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