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Exhibit 99.2
MEMORANDUM OF UNDERSTANDING RELATING TO AMENDMENT
OF CONVERTIBLE DEBENTURES AND SUPPORT OF INVESTMENT TRANSACTIONS
MAY 10, 2001
This Memorandum of Understanding Relating to Amendment of Convertible
Debentures and Support of Investment Transactions (the "MOU") is entered into as
of May 10, 2001 by and among IMP, Inc., a Delaware corporation ("IMP"), the
existing majority stockholder of IMP, Teamasia Mauritius ("Teamasia Mauritius"),
and the parent company of Teamasia Mauritius, Teamasia Semiconductors (India)
Ltd. ("TSIL").
The background of this MOU is that IMP presently requires a significant
cash infusion in order to avoid an insolvency that would require a filing for
protection under applicable bankruptcy laws. Cash infusions have been sought
from multiple parties, including the existing majority stockholder and its
affiliates, but no viable offer has been obtained. In order to avoid the
insolvency of IMP, IMP has reached an agreement with Subba Rao Pinamaneni on
behalf of himself and an investment group to be formed by him including K.Y.
Mok, Dilip Kumor V. Lakhi, John Chu, Sugriva Reddy, Tarsaim Batra and Moiz
Khambaty (the "New Investor") on the material terms of a cash infusion from the
New Investor as set forth in a Memorandum of Understanding Relating to Common
Stock Issuance and Related Transactions, dated as of the date hereof, between
IMP and the New Investor (the "Investment MOU"). IMP currently is obligated to
repay $3.5 million principal amount of convertible debentures (the "Convertible
Debentures") held by TSIL in May and June of 2001. Due to the fact that the New
Investor is unwilling to fund its investment unless this obligation is deferred,
IMP and TSIL have agreed to amend the provisions of the Convertible Debentures
as set forth in this MOU. In addition, Teamasia Mauritius has agreed to support
the transactions set forth in the Investment MOU. The terms of this transaction
have been approved by the Board of Directors of IMP, including the independent
director, TSIL and Teamasia Mauritius as set forth below:
TREATMENT OF INDEBTEDNESS: Upon the execution of a definitive investment
agreement between IMP and the New Investor and the
attainment of all necessary corporate approvals to
make such agreement effective (the "Approval Date"),
the Convertible Debentures will be restructured and
evidenced by a newly issued debt security with the
following material terms: (1) IMP will use
reasonable efforts to grant a security interest to
the holders of the Convertible Debentures, which
security interest will be subordinate to the
security interest of IMP's senior lender and
equipment lessors; (2) the Convertible Debentures
will bear interest at a rate equal to the prime rate
as set forth in the Wall Street Journal from time to
time, which interest will be deferred until
maturity; (3) the Convertible Debentures, together
with accrued interest, shall be due and payable on
the one-year
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anniversary of the Approval Date; and (4) the
principal amount of the Convertible Debentures shall
be convertible, at the election of TSIL, into shares
of common stock at a conversion rate equal to $0.69
per share.
From and after the date of this MOU, the holders of
the Convertible Debentures agree to forebear from
any action to demand repayment of such obligations
so long as the New Investor is performing his
obligations under Investment MOU.
ISSUANCE OF WARRANT: IMP will grant to TSIL a warrant to purchase, at a
per share exercise price equal $0.22, an aggregate
of 1,599,000 shares of IMP common stock. The warrant
shall be exercisable for a period of three years and
have other customary terms, including cashless
exercise and anti-dilution for structural changes
such as stock splits, stock dividends,
reclassifications and the like.
STOCKHOLDER SUPPORT: Teamasia Mauritius will vote, or execute a written
consent with respect to, all of its shares of IMP
common stock in favor of the transactions
contemplated by the Investment MOU. At IMP's
request, Teamasia Mauritius will execute a voting
agreement in form reasonably satisfactory to
Teamasia Mauritius. Teamasia Mauritius and its
affiliates will take such further action as may be
reasonably necessary to grant and obtain stockholder
and other requisite approvals, including, without
limitation, delivery of a written stockholder
consent. The covenant shall attach to and follow the
5,464,408 shares of IMP common stock presently owned
by Teamasia Mauritius and any additional shares of
IMP common stock subsequently acquired by Teamasia
Mauritius or its affiliates. The stockholder consent
contained in this paragraph is for the benefit of
IMP and the New Investor and may be enforced by
either or both of them.
BOARD REPRESENTATION: For so long as Teamasia continues to hold at least
5% of the outstanding common stock of IMP, IMP
agrees to nominate a representative of Teamasia for
election to IMP's Board of Directors. To the extent
such nominee is elected to the Board of Directors by
IMP's stockholders, he or she will have the
inspection, information and other rights afforded to
directors under the Delaware General Corporation
Law.
LEGAL COUNSEL: The parties agree that Latham & Watkins has to date
represented, and shall in the future continue to
represent, solely IMP in connection with the
transactions described herein.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties have caused this Memorandum of
Understanding Relating to Amendment of Convertible Debentures and Support of
Investment Transactions to be duly executed and delivered as of the effective
date first set forth above.
IMP, INC.
By: /s/ Sugriva Reddy
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Name: Sugriva Reddy
Title: Chief Executive Officer
TEAMASIA MAURITIUS
By: /s/ Vishal Marwaha
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Name: Vishal Marwaha
Title: Authorized Signatory
TEAMASIA SEMICONDUCTORS (INDIA) LTD.
By: /s/ Vishal Marwaha
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Name: Vishal Marwaha
Title: Authorized Signatory
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