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Biotech / Medical : ARIAD Pharmaceuticals
ARIA 23.990.0%Feb 17 4:00 PM EST
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To: Jongmans who wrote (477)2/7/1999 10:00:00 PM
From: Dr. John M. de Castro  Read Replies (1) of 4474
 
Martin, This is an interesting debate. I guess that you and I still disagree. The statement is that the $7 million must come from:

"revenue and/or net proceeds from equity investments or the issuance of Qualified Subordinated Debt"

Note the "from equity investments". I agree that this is somewhat ambiguous. But, I'd argue that the other payments for services rendered don't qualify. They were not obtained from equity investments.

In any case ARIA and the "investors" knew in advance of the closing of the bottomless convertible that ARIA would get $5.7 million from HMR and would receive the research payments. These were all a matter of public record. It would make no sense for them to enter into an agreement knowing that the conversion would be at 100% rather than the 90%. They'd have to be pretty dumb to enter into such a deal. These folks may be scoundrals but they're not stupid. This is how they make their living and they know very well what they are doing. My problem is that I sense that what is to their benefit is to the detriment of existing shareholders. If that's not bad enough, there may be more to come with the second and maybe a third closing. What a deal! I hope that ARIA management is held accountable in public by ARIA shareholders for descending to this level.

Best regards,
John de C
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