EXHIBIT 10.73
January 25, 1999
Xx. Xxxx Xxx Xxxx
Director and Executive Vice President
Transpac Capital Pte. Ltd.
0 Xxxxxxx Xxx #00-00
XXX Xxxxxxxx Xxxxx Xxx
Xxxxxxxxx 000000
RE: Conditional Agreement Reached on Conversion of Debt to Equity
Dear Lin Hong:
Effective as of today, Texas Instruments, Motorola and ORIX Leasing agreed to a
debt-for-equity conversion essentially as outlined in the proposal submitted by
Microelectronic Packaging, Inc. ("MPI") and its investment banker and financial
advisors, L. H, Friend, Weinress, Xxxxxxxx & Xxxxxxx, Inc. ("LH Friend"). The
acceptance of these proposals is conditional upon agreement of the same proposal
by the majority of the remaining creditors. In addition, in fairness to all
seven creditors and due to financial constraints, MPI could not complete this
conversion without the acceptance by all of the creditors.
As previously agreed, we now need Transpac's acceptance of the attached proposal
in order to complete the conversion agreement with the remaining creditors. If
you agree, your acceptance of this proposal will, of course, be subject to 1)
the completion and execution of a definitive agreement to be drafted by MPI's
legal counsel, and 2) the approval by MPI's shareholders. MPI will obtain a
fairness opinion relating to conversion on these terms from LH Friend, and MPI
anticipates its shareholders will approve the conversion at a special meeting of
shareholders to be held in mid to late March, 1999.
In the attached proposal summary, MPI will convert the Asian debt into MPI
Preferred Stock which will be convertible into MPI Common Stock on a one-for-one
basis at $0.51 per share. Considering Transpac's Settled Debt amount of
$4,112,462, Transpac would receive sufficient Preferred Stock to convert into a
minimum of 8,063,651 shares of MPI Common Stock.
Xx. Xxxx Xxx Xxxx
Page 2
As mentioned in your email dated January 15, 1999, Transpac's warrants
previously issued will be modified to have an exercise price of US$0.50, with
the other terms remaining the same. In addition, the US$1,000,000 guaranteed as
part of the IBM settlement has been converted into Preferred Stock in the
attachment. Transpac will continue to be entitled to a 30% share of the net
proceeds of the IBM litigation, less the US$1,000,000 above.
With the acceptance of a majority of the Asian creditors, we need your
concurrence by signing your acceptance at the bottom of this letter. As
indicated, we want to immediately commence preparation of the legal documents
for you and your legal advisors' review. All creditors will receive the
identical conversion rate of $0.51 per share; this will be so noted in the
agreement between MPI and each creditor.
Thank you kindly for all your help in our efforts to complete this debt-for-
equity conversion. Please call me at 000-000-0000, extension 3014 if you have
any questions or desire further information.
Best Regards,
/s/ XXXXX X. XXXXXXXXXX
-----------------------
Xxxxx X. Xxxxxxxxxx
Senior Vice President
Chief Financial Officer
CC: Xxxxxx Xxxxxx
Xxx Xxxxxx, Esq., Xxxx, Xxxxx & Xxxx
Xxxx Xxxxxxxx, Senior Vice President, LH Friend
Xxx Xxxxxxxx, Managing Director, LH Friend
AGREED AND ACCEPTED:
/s/ XXXX XXX HONG
------------------
Xxxx Xxx Hong
Executive Vice President
Transpac Capital Pte. Ltd.
MICROELECTRONIC PACKAGING, INC.
SUMMARY OF TERMS
CONVERSION OF DEBT FOR SERIES A
CONVERTIBLE PREFERRED STOCK
The Agreement to convert the debt held by the Asian creditors into Series A
Convertible Preferred Stock (the "Debt Conversion") on the following terms:
TYPE OF SECURITY: Series A Convertible Preferred Stock (the "Preferred
Stock)
PRICE PER SHARE: US$0.51
PREFERRED STOCK ISSUED
TO TRANSPAC: 8,063,651 shares
DIVIDEND RATE: Cumulative at 3.5% per annum (US$0.0179 per share)
CONVERSION RATIO: Each share of Preferred Stock will be convertible 1
share of MPI Common Stock
GENERAL: The rights, preferences and privileges of the Preferred
Stock will be senior over Common Stock, unless otherwise
noted. Usual and customary liquidation preferences,
voting and registration rights will apply.
WARRANTS: Transpac's warrants to purchase MPI Common Stock at
US$1.00 per share will be revised to US$0.50 per share.
All other terms and conditions will remain the same.
IBM POTENTIAL LAWSUIT: The US$1,000,000 million guaranteed as part of the IBM
settlement has been converted into Preferred Stock
above. Transpac will continue to be entitled to a 30%
share of the net proceeds of the IBM lawsuit, less the
US$1,000,000.
