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January 25, 1989


By CBR Staff Writer

Prime Computer Inc quickly dismissed the additional disclosures made by MAI Basic Four Inc to Prime shareholders as still failing to meet Securities & Exchange Commission disclosure requirements, and that it will vigorously oppose any effort by MAI to overturn a preliminary injunction issued by the Massachusetts Federal Court in December. Prime reckons that the disclosures are insufficient in the applicability of the Federal Reserve Board margin requirements to the financing of the tender offer; and information on the full role of Drexel Burnham Lambert Inc in the financing of the tender offer. We believe MAI’s proposed financing through the sale of junk bonds and through bank loans raises serious questions under the Federal Reserve Board’s margin regulations, Prime said. In general, the Federal Reserve Board margin regulations specify that when financing an acquisition, a company may not borrow more than 50% of the value of the outstanding shares of the company it is seeking to acquire, when the borrowing is secured by the stock of the company to be acquired. MAI mailed the new information to Prime shareholders on Tuesday and filed in the US District Court for Massachusetts to have the orders on it lifted.

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