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[LATHAM & WATKINS LETTERHEAD]
June 5, 2000
VIA TELECOPIER
IMP, Inc.
2830 North First Street
San Jose, California 95134
Re: Teamasia Semiconductors PTE
Dear Sirs:
We have received the letter that Messrs. Grinfas and Whitney sent to our
client, Teamasia, late on Friday. Most of it warrants no further comment from us
or our client beyond what we have already pointed out in our letter to you of
May 31.
We do want to comment on one particular point, namely the bridge
financing issue and related statements made by you on behalf of IMP. As you
know, in response to your request our client delivered to you proposed documents
for this financing on April 14, 2000. This documentation was prepared at our
client's sole expense. Mr. Whitney orally advised that IMP was unable to proceed
with the financing on the terms proposed. Mr. Davisson of this firm asked on
more than one occasion for specific comments, objections, or suggested changes
preferably in the form of a customary mark-up of the documents Teamasia had
prepared to be delivered by counsel to IMP. We have received nothing.
In any event, your latest letter not only fails to clear up Teamasia's
reasonable grounds for insecurity about IMP's intention to perform its
obligations, but indeed heightens them. Teamasia is under no obligation to carry
on with its own performance in the face of growing indications that IMP does not
intend to perform its own obligations. Indeed, Teamasia has already been burned
once, by carrying out Phase 1 of the parties' agreement in trust that IMP would
promptly and reliably perform Phase 2 -- which IMP is now balking at doing. You
cannot
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IMP, Inc.
June 5, 2000
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ask Teamasia to proceed with the bridge financing while at the same time
signalling that IMP intends to repudiate its obligations under Phase 2, which
obligations constitute the quid pro quo for both Phase 1 and the bridge
financing.
Accordingly, we again ask that IMP provide Teamasia with reasonable
assurances that it can and will perform its obligations under the parties'
agreement, and in particular its obligation to issue and sell shares as provided
in Section 1.1 of the Phase 2 Agreement In this respect, we note that your
letter identifies only one supposedly unsatisfied condition to IMP's
obligations, namely a purported failure of payment for wafers. Management of IMP
knows that there is no such failure, and that its contention to the contrary is
an obvious pretext to delay IMP's own performance. Again, there is a pattern to
such pretexts for non-performance. In May, notwithstanding our written and oral
objections, IMP intentionally delayed mailing the proxy statement in violation
of Section 6.1 of the Phase 2 Agreement due to alleged violations of the wafer
loading arrangements. Then as is presently in the case, there were no such
violations, certainly none even approaching a material scope. For example, when
you wrote to our client on June 2, 2000 complaining about payment Mr. Whitney
the Chief Executive Officer and Ms. Leo the Chief Financial Officer already knew
that a letter of credit had been delivered to Bank of America in an amount
greater than the amount due from Teamasia for May.
Accordingly, there is simply no basis for IMP to refuse to close the
transaction as provided in the contract let alone an alleged breach by Teamasia.
As we stated in our prior communication, it is the intention of our client to
complete the transactions provided for in its contract with you.
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IMP, Inc.
June 5, 2000
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It is in the interest of all parties to avoid further delay and assure
that those transactions are completed as soon as possible. Thus, we again demand
that IMP notify us of the closing date, which is required to be within 14
business days after May 31.
Very truly yours,
/s/ Anthony J. Richmond
Anthony J. Richmond
of LATHAM & WATKINS
cc: Richard Grey, Esq.
Teamasia Semiconductors PTE Ltd.
William C. Davisson III, Esq.
John J. Huber, Esq.
Charles S. Treat, Esq.
Marc W. Rappel, Esq.
Mark J. Gentile, Esq. (Richards, Layton & Finger)
