SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES ACT OF 1934
Date of Report (Date of Earliest Event Reported) November 26, 1997
SEMICON TOOLS, INC.
(exact name of Registrant as specified in its charter)
NEVADA 33-5820-LA 77-00882545
(State or other jurisdiction Commission (I.R.S. Employer
of incorporation or organization) File No. identification number)
111 Business Park Drive, Armonk, New York 10504
(Address of principal executive offices)
Registrant's telephone number, including area code: 914-273-1400
N/A
Former name or former address, if changed since last report
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ITEM 1. Changes in Control of Registrant
A change in control of Semicon Tools, Inc. (the "Company") occurred on
November 26, 1997, as a result of its issuance of 10,000,000 shares of its
Common Stock to Tan Khay Swee. The Company issued such shares as the
consideration for its acquisition of all of the outstanding capital stock of
Teik Tatt Holding Co., (1979) Sdn. Bhd. as described in Item 2 below. Mr. Swee
now owns beneficially, directly and indirectly, approximately 51% of the
Company's issued and outstanding shares of Common Stock.
ITEM 2. Acquisition or Disposition of Assets
Acquisition. On November 26, 1997 (the "Closing Date"), the Company
acquired all of the issued and outstanding capital stock (the "TTH Stock") of
Teik Tatt Holding Co., (1979) Sdn. Bhd. ("TTH"), a Malaysian corporation. For
the year ended December 31, 1996 TTH had consolidated revenues of US$14,016,775
and net income of US$1,798,609 (audited); and for the nine months ended
September 30, 1997 it had revenues of US$14,718,099 and net income of
US$1,592,515 (unaudited). The Company intends to continue using TTH's assets for
its business as presently conducted.
TTH is one of the leading Malaysian manufacturers of plastic ropes and
twine, which are commonly used in fishery, construction, agriculture, forestry,
shipping, transportation and sporting and household uses. Through a wholly-owned
subsidiary, TTH also manufactures rubber bands.
TTH also recovers and recycles plastics and nonferrous and precious metals
from electrical/telephone cables and electronic components, including obsolete
computers. The Company currently intends to use its existing network of
electronic and semiconductor sales representatives and distributors to expand
this product line to obtain additional sources and consumers of recyclable
materials, focusing on the United States and Europe.
Consideration Paid or Payable. Pursuant to an agreement dated the Closing
Date, among the Company, TTH and Tan Khay Swee, the stockholder of TTH, the
Company acquired the TTH Stock in exchange for an aggregate of 10,000,000 shares
of the Company's Common Stock. Such purchase price was agreed upon during arms
length negotiations between the President of the Company and Mr. Swee taking
into account TTH's revenues, earnings history, management and financial
condition. The Company did not retain any investment banker.
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ITEM 7. Financial Statements and Exhibits
Financial Statements of Acquiree.
Pursuant to the instructions to Item 7 of Form 8-K, inasmuch
as it is impracticable to presently provide the financial
statements for the acquiree required to be provided pursuant
to General Instruction C.3 to Form 8-K, the Company will file
said financial statements within 60 days of the acquisition
event reported herein.
Exhibits.
2. Acquisition Agreement
SIGNATURES
Pursuant to the requirements of the Securities Act of 1936, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: December 8, 1997 SEMICON TOOLS, INC.
By: Eugene Pian
Eugene Pian, President
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EXHIBIT 2
AGREEMENT
dated as of November 26, 1997
by and among
SEMICON TOOLS, INC.,
TEIK TATT HOLDING CO., (1979) SDN BHD.
and
TAN KHAY SEE
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TABLE OF CONTENTS
Page
ARTICLE I. SALE AND PURCHASE OF SHARES . . . . . . . . . . . . . . . 2
1.1 Purchase Price . . . . . . . . . . . . . . . . . . 2
1.2 Payment of Purchase Price. . . . . . . . . . . . . 2
1.3 Restrictions on Sale of the Semicon Shares . . . . 2
1.4 Additional Semicon Directors. . . .. . . . . . . . 2
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF TTH AND
ITS STOCKHOLDERS................................. 3
2.1 Corporate Organization.............................. 3
2.2 Authorization....................................... 4
2.3 Governmental Consents and Approvals................. 5
2.4 Capitalization...................................... 5
2.5 Ownership of the TTH Shares......................... 5
2.6 Subsidiaries; Joint Ventures........................ 6
2.7 Financial Statements................................ 6
2.8 Absence of Undisclosed Liabilities;
Books of Account.................................. 7
2.9 Absence of Certain Changes.......................... 8
2.10 Ownership of Properties.............................10
2.11 Real Property and Other Leases..................... 10
2.12 Inventory...........................................10
2.13 Machinery and Equipment.............................11
2.14 Intellectual Property.............................. 11
2.15 Accounts Receivable................................ 11
2.16 Taxes.............................................. 15
2.17 Agreements, etc.................................... 16
2.18 Agreements Regarding Employees..................... 16
2.19 Absence of Defaults.................................16
2.20 Compliance with Laws............................... 17
2.21 Compliance with Laws-Environmental................. 17
2.22 Litigation......................................... 19
2.23 Violations..........................................19
2.23 Finders' Fees...................................... 19
2.25 Restrictions on Business Activities................ 19
2.26 Board Approval..................................... 20
2.27 Questionable Payments.............................. 20
2.28 Accuracy of Representations and Warranties..........20
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SEMICON............... 21
3.1 Organization....................................... 21
3.2 Corporate Authority, Etc........................... 21
3.3 Governmental Consents and Approvals................ 22
3.4 Capitalization......................................22
3.5 Litigation......................................... 23
3.6 Finders' Fees..................................... 23
3.7 Absence of Undisclosed Liabilities................. 23
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ARTICLE IV. SURVIVAL OF TTH REPRESENTATIONS AND
INDEMNITY . . . . . . . . . . . . . . . . 23
4.1 Survival........................................... 23
ARTICLE V. INDEMNIFICATION ........................................ 24
ARTICLE VI. MISCELLANEOUS........................................... 26
6.1 Schedules.......................................... 26
6.2 Expenses............................................26
6.3 Public Announcements................................26
6.4 Further Assurances................................. 26
6.5 Notices.............................................26
6.6 No Assignment.......................................27
6.7 Entire Agreement................................... 27
6.8 Governing Law.......................................27
6.9 Interpretation..................................... 27
6.10 Counterparts....................................... 28
6.11 Parties in Interest................................ 28
6.12 Choice of Language..................................28
6.13 Severability........................................28
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AGREEMENT (the "Agreement") dated as of November 26, 1997
(the "Closing Date") by and between SEMICON TOOLS, INC.
("Semicon"), TEIK TATT HOLDING CO., (1979) SDN BHD. ("TTH"), and
TAN KHAY SEE (the "Stockholders").
WHEREAS, (i) Semicon is a corporation organized and existing
under the laws of the State of Nevada; (ii) TTH is a corporation organized and
existing under the laws of Malaysia and (iii) the Stockholder is the owner of
all of the issued and outstanding shares of capital stock of TTH; and
WHEREAS, the Stockholder wishes to sell to Semicon, and
Semicon wishes to purchase from the Stockholder, all of the issued and
outstanding capital stock of TTH upon the terms and conditions hereinafter set
forth; and
WHEREAS, the Boards of Directors of Semicon and TTH (each
hereinafter referred as a "Board of Directors") deem it advisable and in the
best interests of their stockholders to engage in the transactions contemplated
hereby pursuant to which Semicon will acquire all of the issued and outstanding
capital stock of TTH (the "Acquisition"); and
WHEREAS, the respective parties desire to make certain
representations, warranties and agreements in connection with the Acquisition.
NOW, THEREFORE, in consideration of the foregoing, the
representations, warranties, covenants and agreements set forth herein and such
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
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Article I. Sale and Purchase of Shares.
1.1 Purchase Price. The Stockholder does hereby sell and
deliver to Semicon, and Semicon does hereby purchase from the Stockholder, all
of the issued and outstanding capital stock of TTH for an aggregate of
10,000,000 shares of Semicon's common stock (the "Semicon Shares")
(collectively, the "Purchase Price").
1.2 Payment of Purchase Price. Semicon hereby delivers the
Semicon Shares to the Stockholder, and simultaneously therewith the Stockholder
hereby delivers to Semicon stock certificates representing all of the issued and
outstanding shares of TTH, endorsed to Semicon or accompanied by a signed stock
power transferring such shares to Semicon, together with all applicable stock
transfer tax stamps relative to said certificates.
1.3 Restrictions on Sale of the Semicon Shares. The
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Stockholder acknowledges that he is acquiring the Semicon Shares for his own
account for investment and not with a view to distribution or resale, and at
Semicon's request Stockholder shall execute and deliver to Semicon additional
documentation confirming his investment intent. The issuance of the Semicon
Shares is intended to be exempt from the registration requirements of the
Securities Act of 1933, as amended, and the Stockholder understands that no
Semicon Shares may be sold until after the first anniversary of the Closing Date
and thereafter only in accordance with Rule 144 promulgated under such
Securities Act.
1.4 Additional Semicon Directors. As soon as
practicable after the Closing Date Semicon shall expand the size of
its Board of Directors and cause its Board of Directors to fill the
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existing vacancies with two nominees of the Stockholder who shall
be reasonably acceptable to Semicon.
Article II. Representations and Warranties of TTH and Stockholders. TTH
and the Stockholder jointly and severally represent and warrant to Semicon as
follows:
2.1 Corporate Organization. TTH is a corporation duly
organized, validly existing and in good standing under the laws of Malaysia and
is duly authorized to carry on its business where and as now conducted and to
own, lease and operate properties as it now does and is qualified to do business
as a foreign corporation, and is in good standing, in each jurisdictions in
which the nature of the business conducted by it or the properties owned or
leased by it requires qualification. The sole subsidiary of TTH is Teik Siang
Industries Sdn. Bhd. (the "Subsidiary"). The Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of Malaysia, is
duly authorized to carry on its business where and as now conducted and to own,
lease and operate properties as it now does, and is qualified to do business and
is in good standing in all jurisdictions in which the nature of its business or
the properties it owns or leases requires qualification. The copies of the
respective certificates of incorporation and by-laws of TTH and of the
Subsidiary that have been delivered to Semicon are complete and correct as of
the date of this Agreement, and the minute books of TTH and of the Subsidiary
which have been exhibited to Semicon are complete and accurately reflect all
material actions taken prior to the date of
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this Agreement by the respective Boards of Directors and
stockholders of TTH and of the Subsidiary.
2.2 Authorization. (a) TTH and the Stockholder each has full
power and authority to enter into this Agreement and to perform this Agreement
in accordance with its terms; the execution, delivery and performance of this
Agreement by TTH has been duly authorized by its Board of Directors; neither TTH
nor the Stockholder is bound by any contractual or other obligation that would
be violated by its or his execution or performance of this Agreement; and this
Agreement is a valid and binding obligation of TTH and the Stockholder
enforceable in accordance with its terms.
(b) Neither the execution and delivery of this
Agreement nor the consummation by TTH or the Stockholder of any of the
transactions contemplated herein nor compliance by TTH or the Stockholder with
the terms, conditions and provisions hereof or of any agreement or instrument
contemplated hereby will (i) conflict with, result in a breach of, or constitute
an event of default under (1) the certificate of incorporation or by-laws of TTH
or the Subsidiary, (2) any material instrument, agreement, lease, license,
franchise, permit, or other authorization, right, or obligation to which TTH,
the Subsidiary or the Stockholder is a party or any of their properties is
subject or by which they are bound, or (3) any statute, ordinance, rule,
regulation, judgment, order, award or decree applicable to TTH, the Subsidiary
or the Stockholder, or (ii) require the approval, consent or authorization of,
or the making of any declaration, filing or registration with, any third
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party or any foreign, federal, state or local court, governmental authority or
regulatory body in Malaysia or elsewhere.
2.3 Governmental Consents and Approvals. The execution,
delivery and performance of this Agreement by TTH and the Stockholders requires
no action by or in respect of, or filing with, any governmental body, agency,
official or authority in Malaysia or elsewhere.
2.4 Capitalization. The authorized capitalization of TTH is
set forth on Schedule 2.4. All the outstanding shares of TTH were duly
authorized for issuance and are validly issued, fully-paid and non-assessable.
There are no outstanding options, warrants, calls, commitments or rights of any
kind relating to the issued or unissued capital stock or other securities or
equity interests of TTH (collectively, "TTH Securities"), except as set forth in
Schedule 2.4. There are no existing arrangements that require or permit any
shares of TTH to be voted by or at the discretion of anyone other than the
Stockholders. TTH does not own any capital stock or other interest in any
corporation or other business entity except as set forth in Schedule 2.4. Except
as disclosed on Schedule 2.4, neither TTH nor any Subsidiary is obligated to
purchase, redeem or otherwise acquire any securities of TTH or its Subsidiaries
or of any other party.
2.5 Ownership of TTH's Shares. The Stockholder is the record
owner and the beneficial owner of the issued and outstanding capital stock of
TTH as of the date hereof. The Stockholder owns all of the TTH stock free and
clear of all liens and encumbrances, and he has the full and complete right and
power to dispose of said
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stock in accordance with the terms of this Agreement. The Stockholder will
transfer to Semicon all shares of stock of TTH free and clear of all liens and
encumbrances.
2.6 Subsidiary; Joint Ventures.
(a) The Subsidiary has all corporate powers and all
governmental authorizations required to carry on its business as now conducted.
For purposes of this Agreement, "Joint Ventures" means entities in which TTH or
the Subsidiary, either jointly or individually, is, directly or indirectly, the
beneficial owner of 40% or more of any class of equity securities or equivalent
profit participation interest. Neither TTH nor the Subsidiary is a participant
in a Joint Venture.
(b) All of the outstanding capital stock of, or
other ownership interests in, the Subsidiary that is owned by TTH, directly or
indirectly, is free and clear of all liens and encumbrances and of any other
limitation or restriction on TTH's rights as owner thereof (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests, other than those imposed by applicable law).
There are no outstanding options, warrants, calls, commitments or rights of any
kind relating to the issued or unissued capital stock or other securities or
equity interests (collectively, the "TTH Subsidiary Securities") of the
Subsidiary.
2.7 Financial Statements. The following consolidated financial
statements of TTH and its Subsidiary, which are set forth on Schedule 2.7, have
been prepared in United States Dollars and in accordance with generally accepted
accounting principles applied on
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a consistent basis and present fairly the consolidated financial condition of
TTH and its Subsidiary at the dates indicated and the consolidated results of
their operations for the periods indicated:
(a) audited, consolidated balance sheets of TTH and
its Subsidiary as at December 31, 1996 and 1995, together with the related
consolidated statements of operations, stockholders' equity and cash flows for
the years then ended, reported on by KPMG Peat Marwick LLP; and
(b) unaudited, consolidated balance sheet of TTH
and its Subsidiary as at September 30, 1997 and 1996, together with the related
consolidated statements of operations and stockholders' equity for the three and
nine month periods then ended.
2.8 Absence of Undisclosed Liabilities; Books of Account.
Except to the extent fully reflected or reserved against in the aforesaid
September 30, 1997 consolidated balance sheet, TTH and its Subsidiary have no
liabilities of any nature, whether accrued, absolute, contingent or otherwise,
including, but not limited to, any tax or other liabilities of any nature that
were unknown or undetermined as of that date but that, if then known or
determined, would have been required to be reflected in a balance sheet prepared
in accordance with generally accepted accounting principles applied on a
consistent basis. There is no basis for the assertion against TTH or the
Subsidiary of any liability of any nature (and in any amount) not fully
reflected or reserved against in the September 30, 1997 balance sheet or not
incurred in the ordinary course of business thereafter. All the books of account
of TTH and its Subsidiary have been or will be exhibited or made
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available to Semicon and accurately record all transactions of TTH and its
Subsidiary during the periods covered by them.
2.9 Absence of Certain Changes. Since December 31, 1996, each
of TTH and its Subsidiary has operated its business in the ordinary course and
consistent with past practices and there has not been any material adverse
change in the consolidated financial condition of TTH or its Subsidiary, results
of operations or businesses of TTH and its Subsidiary, and neither of them has
taken any of the following actions which individually or in the aggregate
involved more than US$25,000:
(a) entered into any transaction or incurred any
liability or obligation other than in the ordinary course of its
business;
(b) made any declaration, set aside or paid any
dividend or other distribution in respect of any shares of capital stock of TTH,
nor purchased, redeemed or otherwise acquired any outstanding shares of capital
stock or other securities of, or other ownership interests in, TTH or the
Subsidiary;
(c) paid any dividends or made any other
distributions on, or acquired, any shares of its capital stock or, directly or
indirectly, made any other payments or loans of any kind to the Stockholder,
except compensation for services rendered and reimbursement for expenses in
amounts consistent with past practices;
(d) incurred any indebtedness for borrowed money,
other than short term borrowing in the ordinary course of business;
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(e) issued any TTH Securities, granted any options
or agreed to any amendment of any material term of any outstanding
TTH Securities or any TTH Subsidiary Securities;
(f) sustained any material damage, destruction or
other casualty loss (whether or not covered by insurance) affecting
the business or assets of TTH or any of its Subsidiaries or Joint
Ventures;
(g) made any material change in any method of
accounting or accounting practice by TTH or the Subsidiary or Joint Ventures,
except for a change required by reason of a concurrent change in generally
accepted accounting principles;
(h) other than in the ordinary course of business,
(i) granted any severance or termination pay to, or increased any compensation,
bonus or other benefits payable to, or entered into any written employment,
deferred compensation or other similar agreement (or any amendment to any such
existing agreement) with, any director of TTH or the Subsidiary, or any officer
or employee of TTH or the Subsidiary whose 1996 base annual salary exceeded
$50,000, or (ii) increased any benefit payable under any existing severance or
termination pay policies or employment agreements; or
(i) granted or agreed to grant any general increase
in any rate or rates of salaries or compensation to its employees or any
specific increase in the salary or compensation to any employee or agent, or
paid or agreed to pay any bonus to any employee of TTH or the Subsidiary, other
than in the ordinary course of business.
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2.10 Ownership of Properties. Neither TTH nor any Subsidiary
owns any real estate or interest therein. Except as set forth in Schedule 2.10,
each of TTH and its Subsidiary owns outright, free and clear of any claim, lien,
security interest, pledge, restriction, charge or encumbrance, all leasehold
improvements, equipment, inventory and other personal property used in its
business or presently located in any of its premises, except for leased property
listed on Schedule 2.10 and for the lien, if any, of current taxes not yet due
and payable. Neither TTH nor the Subsidiary uses or leases any property that is
owned by any officer, director or affiliate of TTH or the Subsidiary, or any
relative of any thereof.
2.11 Real Property and Other Leases. All leases of real
property and all material leases of other property, and amendments and
modifications thereof, are in full force and effect and have not been modified
or amended in any material respect, all rents and additional rents due to date
under each such lease have been paid, the lessee has been in peaceable
possession since the commencement of the original term of such lease, and
neither TTH nor the Subsidiary has any knowledge of a default under such leases
by TTH or its Subsidiary or by the lessor under any of such leases, nor any
event which with notice or lapse of time or both would constitute a default
thereunder by TTH or its Subsidiary.
2.12 Inventory. All of the inventory of TTH and its Subsidiary
is carried on its books at cost (on the basis of FIFO and average cost).
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2.13 Machinery and Equipment. All machinery and equipment
owned or leased by TTH or its Subsidiary is in good operating condition, normal
wear and tear excepted, and the use thereof is in conformance with all
applicable ordinances and regulations, and all building, zoning and other laws.
2.14 Intellectual Property.
(a) Neither TTH nor the Subsidiary has any
knowledge of an infringement by TTH or the Subsidiary upon the patents,
trademarks, trade names, service marks, trade secrets, copyrights or other
intellectual property rights of others ("Intellectual Property Rights").
(b) There are no inventions which are the subject
of issued letters patent or an application therefor, which are owned and used or
licensed for use by TTH or the Subsidiary.
(c) Since December 31, 1996, neither TTH nor the
Subsidiary has received notice of, or has been a defendant or plaintiff in any
claim, suit, action or proceeding which involves, a claim it is infringing any
Intellectual Property Rights, and there are no claims by any person of
infringement of Intellectual Property Rights by TTH or the Subsidiary.
(d) TTH and its Subsidiary have taken all measures as each has
deemed necessary and appropriate in the circumstances to maintain the
confidentiality of the process and formulae, research and development results
and other know-how of TTH and its Subsidiary.
2.15 Accounts Receivable. All of the accounts
receivable of TTH and its Subsidiary arose from bona fide
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transactions in the ordinary course of business, and none is subject to any
defense, set-off or counterclaim, except as reflected on the financial
statements set forth in Section 2.7.
2.16 Taxes.
(a) For the purposes of this Agreement, "Tax" (and,
with correlative meaning, "Taxes" and "Taxable") means, for any entity, (i) any
net income, alternative or add-on minimum tax, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, withholding on
amounts paid to or by such entity or any subsidiary thereof, payroll,
employment, excise, severance, stamp, occupation, property, environmental or
windfall profit tax, or other tax, together with any interest or any penalty,
addition to tax or additional amount imposed by any governmental authority
responsible for the imposition of any such tax (domestic or foreign) (a "Taxing
Authority"), and (ii) liability of such entity or any subsidiary thereof for the
payment of any amounts of the type described in (i) as a result of being a
member of an affiliated, consolidated, combined or unitary group for any taxable
period, and (iii) liability of such entity or any subsidiary thereof for the
payment of any amounts of the type described in clauses (i) or (ii) as a result
of any express or implied obligation to indemnify any other person.
(b) Except as set forth in Schedule 2.16:
(i) all Tax returns, statements, reports and forms
(including estimated Tax returns and reports and information returns
and reports) required to be filed with any Taxing Authority with
respect to any Taxable period ending on or
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before the Closing Date by or on behalf of TTH or its Subsidiary
(collectively, the "TTH Tax Returns"), have been or will be filed when
due (subject to any extensions of such due date) and, to TTH's
knowledge, each TTH Tax Return is correct and complete as filed;
(ii) TTH and its Subsidiary have timely paid,
withheld or made provision on its books for all Taxes shown as due and
payable on TTH Tax Returns that have been filed;
(iii) all TTH Tax Returns relating to income or
franchise Taxes filed with respect to Taxable years of TTH and its
Subsidiary ending on or before December 31, 1996, have been examined by
appropriate income tax authorities and closed or are TTH Tax Returns
with respect to which the applicable period for assessment under
applicable law, after giving effect to extensions or waivers, has
expired;
(iv) neither TTH nor any of its Subsidiaries has
granted any extension or waiver of the limitation period applicable to
any TTH Tax Returns;
(v) there is no claim, audit, action, suit,
proceeding, or investigation now pending or threatened in a writing
received by TTH against or with respect to TTH or any Subsidiary in
respect of any Tax or assessment;
(vi) there are no requests for rulings in respect
of any Tax pending between TTH or its Subsidiary and any
Taxing Authority;
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(vii) there are no liens for Taxes upon the assets of
TTH or any of its Subsidiary except liens for current Taxes not yet
due;
(viii) to TTH's knowledge, neither it nor its
Subsidiary will be required to include any adjustment in Taxable income
for any Tax period (or portion thereof) ending after the Closing Date
as a result of a change in method of accounting for any Tax period (or
portion thereof) ending on or before the Closing Date or pursuant to
the provisions of any agreement entered into with any Taxing Authority
with regard to the Tax liability of TTH or the Subsidiary for any Tax
period (or portion thereof) ending on or before the Closing Date;
(ix) neither TTH nor its Subsidiary has been a member
of an affiliated group other than one of which TTH was the common
parent, or filed or been included in a combined, consolidated or
unitary Tax return other than one filed by TTH, or a return for a group
consisting solely of its Subsidiary or predecessors, or participated in
any other similar arrangement whereby any income, revenues, receipts,
gains, losses, deductions, credits or other Tax items of TTH or the
Subsidiary was determined or taken into account for Tax purposes with
reference to or in conjunction with any such items of another person
other than TTH or any such Subsidiary or predecessor;
(x) neither TTH nor its Subsidiary is currently under
any contractual obligation to pay to a Taxing Authority
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the income or franchise tax obligations of, or with respect to
transactions relating to, any other person or to indemnify any other
person with respect to any income or franchise tax; and
(xi) neither TTH nor its Subsidiary has signed any
letter or entered into any agreement or arrangement in writing
consenting to the surrender or sharing of any deductions, credits or
other Tax attributes with any other person or transferred or assigned
to any other person for Tax purposes any such items.
2.17 Agreements, etc. Schedule 2.17 contains a true and
complete list of: (a) all agreements and other commitments for the purchase of
any materials, supplies or inventory which extend beyond six months and from the
Closing Date; (b) all notes and agreements relating to any indebtedness of TTH
or its Subsidiary for borrowed money; (c) all leases or other rental agreements
under which TTH or its Subsidiary is either lessor or lessee which call for
annual lease payments in excess of US$75,000 individually; (d) all other
agreements (including, but not limited to, employment agreements, commitments
and understandings, written or oral) to which TTH or its Subsidiary is a party
or by which any of them is bound which require payment by TTH or its Subsidiary
of more than US$75,000 in any calendar year and which cannot be terminated by
TTH or its Subsidiary, without liability, on notice of 30 days or less; and (e)
all fire, liability and other insurance carried by TTH and its Subsidiary with
respect to its business and properties. All leases, agreements, commitments and
understandings of TTH and its Subsidiary (including, but not limited to,
commitments for the
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purchase of inventory) were entered into in the ordinary course of business, and
all of its respective commitments for inventory were entered into on an
arm's-length basis and are at prices believed by TTH to be reasonable and
consistent with current business requirements, except as set forth in Schedule
2.18. True and complete copies of all leases, agreements, commitments and
understandings referred to on Schedule 2.18 have been delivered to Semicon.
2.18 Agreements Regarding Employees. (a) Neither TTH nor its
Subsidiary is a party to or bound by any employment agreement, or any collective
bargaining or other labor agreement, or any pension, retirement, stock option,
stock purchase, savings, profit sharing, deferred compensation, retainer,
consultant, bonus, group insurance or other incentive or welfare agreement, plan
or arrangement, except as set forth on Schedule 2.18. True and complete copies
of each agreement, plan or arrangement listed on Schedule 2.19 have been
delivered to Semicon.
(b) Since December 31, 1996, neither TTH nor its
Subsidiary has granted a salary increase to any officer or key employee, except
as set forth on Schedule 2.18.
(c) Except as set forth on Schedule 2.18, neither
TTH nor its Subsidiary maintains any employee benefit plans.
2.19 Absence of Defaults. Neither TTH nor its
Subsidiary has knowledge of any existing default by any party under any lease,
agreement, commitment or understanding to which TTH or its Subsidiary is a party
or by which it is bound.
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2.20 Compliance with Laws. Neither TTH nor its Subsidiary has
knowledge that it is in violation of or has violated, in any material respect,
any applicable provisions of any laws, statutes, ordinances or regulations or
any term of any judgment, decree, injunction or order binding against it.
2.21 Compliance with Laws-Environmental. (a) For
purposes of this Section 2.21:
"Hazardous Material" shall mean any material or substance
that, whether by its nature or use, is now or hereafter defined as hazardous
waste, hazardous substance, pollutant or contaminant under any Environmental Law
(defined below), or which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and which is now or
hereafter regulated under any Environmental Law, or which is or contains
petroleum, gasoline, diesel fuel or another petroleum hydrocarbon product, lead
paint, asbestos, asbestos-containing materials or polychlorinated biphenyls;
"Environmental Laws" means those Malaysian, provincial or
local laws, statutes, ordinances, rules, regulations, orders and decrees
(including any amendments thereto) relating to pollution or protection of the
environment, including laws relating to emissions, discharges, releases or
threatened releases of Hazardous Materials, pollutants, wastewater (other than
non-contact cooling or process water), or wastes constituting hazardous
substances in, into, onto or upon the environment (including, without
limitation, ambient air, surface water, groundwater, or land), or otherwise
relating to the processing, distribution, use, treatment,
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collection, accumulation, storage, disposal, transport, or handling
of Hazardous Materials.
(b) The operations of TTH and its Subsidiary have
been and are now in compliance with all Environmental Laws. All approvals of
government authorities required to be held by TTH and its Subsidiary concerning
the environment have been obtained, are valid and are in full force and effect,
have been and are being complied with and there are no proceedings commenced or
threatened to revoke or amend any such approvals. The business operations of TTH
and its Subsidiary have not and are not now the subject of any remedial order
(being any administrative complaint, direction, order or sanction issued, filed
or imposed by any governmental authority pursuant to any Environmental Laws). No
part of any premises occupied by TTH or its Subsidiary in the operation of their
respective businesses has ever been used as a landfill or for the disposal of
waste or for the storage, treatment or disposal of Hazardous Material. TTH and
its Subsidiary neither use nor store in or on the premises occupied by it in the
operation of its business any Hazardous Material. TTH and its Subsidiary has no
knowledge of any Hazardous Material in, on or under the premises occupied by it
in the operation of its business.
2.22 Litigation. Except as set forth on Schedule 2.22, there
is no litigation, proceeding or governmental investigation pending or
threatened, or any order, injunction or decree outstanding, against or relating
to TTH or its Subsidiary or their properties or businesses.
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2.23 Violations. The improvements located on real estate owned
or leased by TTH and its Subsidiary and the continuation of the present use,
occupancy and operation of said improvements comply in full with all current
zoning requirements and do not depend on or require, to any extent, any further
ordinance, variance, special exception or other special governmental approval
for its continuing legality. There is no violation of any recorded restriction,
condition or agreement affecting said real estate. Neither TTH nor its
Subsidiary has received notice of violation of, and continuation of the present
uses, occupancies and operations will not result in a violation of, building,
health, safety, environmental pollution control, fire or similar law, ordinance,
order or regulation respecting said real estate. Except as set forth on Schedule
2.23, no notice has been received by TTH or its Subsidiary alleging any such
violation.
2.24 Finders' Fees. Neither TTH or its Subsidiary nor the
Stockholder has employed or utilized the services of any broker, finder or other
intermediary in connection with this Agreement or the transaction contemplated
by this Agreement.
2.25 Restrictions on Business Activities. There is no
agreement, judgment, injunction, order or decree binding upon TTH or its
Subsidiary which has or could reasonably be expected to have the effect of
prohibiting or materially impairing (a) the ability of TTH or its Subsidiary to
conduct its business in any geographic area or field of use, (b) any acquisition
of property by TTH or its Subsidiary, or (c) the conduct of business by TTH or
its Subsidiary
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as currently conducted or as currently proposed to be conducted by
TTH.
2.26 Board Approval. The Boards of Directors of TTH has
unanimously determined that the Acquisition is in the best interests of the
Stockholder and is on terms that are fair to Stockholder.
2.27 Questionable Payments. Neither TTH nor its Subsidiary,
nor, to the best knowledge of the Stockholder, any director, officer or other
employee of TTH or its Subsidiary has: (i) made any payments or provided
services or other favors in the United States of America or in any other country
in order to obtain preferential treatment or consideration by any governmental
entity with respect to any aspect of the business of TTH or its Subsidiary; or
(ii) made any political contributions which would not be lawful under the laws
of the United States and the foreign country in which such payments were made.
Neither TTH nor its Subsidiary nor, to the best knowledge of the Stockholder,
any director, officer or other employee of TTH or its Subsidiary or the
Stockholder, customer or supplier of any of them, has been the subject of any
inquiry or investigation by any governmental entity in connection with payments
or benefits or other favors to or for the benefit of any governmental or armed
services official, agent, representative or employee with respect to any aspect
of the business of TTH or its Subsidiary or with respect to any political
contribution.
2.28 Accuracy of Representations and Warranties. No
representation or warranty by TTH or the Stockholder in this
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Agreement, and no written statement made to Semicon or contained in any
certificate or instrument delivered or to be delivered to Semicon pursuant to
this Agreement, or in connection with the transactions contemplated by this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained therein not misleading.
Article III. Representations and Warranties of Semicon.
Semicon represents and warrants to TTH as follows:
3.1 Organization. Semicon is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
is duly authorized to carry on its business where and as now conducted and to
own, lease and operate properties as it now does.
3.2 Corporate Authority, Etc.
(a) Semicon has full power and authority to enter
into this Agreement and to perform this Agreement in accordance with its terms;
the execution, delivery and performance of this Agreement by Semicon and the
consummation of the Acquisition have been duly authorized by its Board of
Directors and Semicon is not bound by any contractual or other obligation that
would be violated by the execution or performance of this Agreement; and this
Agreement is a valid and binding obligation of Semicon enforceable in accordance
with its terms; and
(b) Neither the execution and delivery of this
Agreement nor the consummation by Semicon of any of the
transactions contemplated herein nor compliance by Semicon with the
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terms, conditions and provisions hereof or of any agreement or instrument
contemplated hereby will (i) conflict with, result in a breach of, or constitute
an event of default under the certificate of incorporation or by-laws of
Semicon, or any material instrument, agreement, lease, license, franchise,
permit, judgment, order, award, decree or other authorization, right, or
obligation to which Semicon is a party or any of its properties is subject or by
which they are bound, or any statute, ordinance, rule or regulation applicable
to Semicon, or (ii) require the approval, consent or authorization of, or the
making of any declaration, filing or registration with, any third party or any
foreign, federal, state or local court, governmental authority or regulatory
body.
3.3 Governmental Consents and Approvals. The execution,
delivery and performance by Semicon of this Agreement and the consummation of
the Acquisition by Semicon requires no action by or in respect of, or filing
with, any United States, state or local governmental body, agency, official or
authority.
3.4 Capitalization. Semicon's authorized capitalization is
100,000,000 shares of capital stock, all of which is common stock, of which
9,867,500 shares are issued and outstanding. All the outstanding shares of
Semicon were duly authorized for issuance and are validly issued, fully-paid and
non-assessable. There are no outstanding options, warrants, calls, commitments
or rights of any kind relating to the issued or unissued capital stock or other
securities or equity interests of Semicon, except for issued stock options for
five million shares (including the options granted on
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the Closing Date to the finder referred to in Section 3.6 below) and unissued
stock options for six million shares.
3.5 Litigation. There is no litigation, proceeding or
governmental investigation pending or, so far as is known to Semicon,
threatened, or any order, injunction or decree outstanding, against or relating
to Semicon or any of its properties or businesses.
3.6 Finders' Fee. Semicon has not employed or utilized the
services of any broker, finder or other intermediary in connection with this
Agreement or the transactions contemplated by this Agreement except for Tan Hun
Chin.
3.7 Absence of Undisclosed Liabilities. Except to the extent
fully reflected or reserved against in its October 31, 1997 balance sheet,
Semicon has no liabilities of any nature, whether accrued, absolute, contingent
or otherwise, including, but not limited to, any tax or other liabilities of any
nature that were unknown or undetermined as of that date but that, if then known
or determined, would have been required to be reflected in a balance sheet
prepared in accordance with generally accepted accounting principles applied on
a consistent basis. There is no basis for the assertion against Semicon of any
liability of any nature (and in any amount) not fully reflected or reserved
against in the October 31, 1997 balance sheet or not incurred in the ordinary
course of business thereafter.
Article IV. Survival of TTH Representations and Indemnity.
4.1 Survival. The representations, warranties,
covenants and agreements by the parties shall survive the Closing
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Date for a period of two (2) years, except that the representations contained in
Section 2.16 shall survive the Closing Date for four (4) years.
Article V. Indemnification.
(a) The Stockholder and Semicon do hereby agree to
indemnify, defend and hold harmless each other from and against any and all
claims, demands, damages, losses, injuries, liabilities, penalties, costs,
expenses (including without limitation reasonable attorneys' fees), suits,
actions, investigations, judgments and fees which may be imposed upon, incurred
or suffered by or asserted against it arising out of or in connection with any
one or more of the following:
(i) any failure to perform or comply with
any agreements, obligations or undertakings to be performed by
the Stockholder and TTH on the one hand, and by Semicon on the
other hand, pursuant to this Agreement; and
(ii) any breach of any representation,
warranty, covenant or agreement made in this Agreement, or in
respect of the facts associated therewith, by the Stockholder
and TTH on the one hand, and by Semicon on the other hand, .
(b) Notwithstanding subparagraph (a) of this
Section 5(b), no indemnifying party shall have liability under this Section 5(b)
with respect to any single or aggregate claim for less than US$50,000.
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(c) A party seeking indemnification shall notify
the indemnifying parties within a reasonable time in writing of any action,
claim or liability in respect of which it intends to claim such indemnification,
provided that the failure to give timely notice shall not release any of the
indemnifying parties from any liability to the extent the indemnifying parties
are not prejudiced thereby. The indemnifying parties shall have the right, by
prompt notice to the party seeking indemnification to assume the defense of such
claim with counsel reasonably satisfactory to the party seeking indemnification,
and at the sole cost of the indemnifying parties. If the indemnifying parties do
not so assume the defense of such claim, the party seeking indemnification may
assume such defense with counsel of its choice and at the sole cost of the
indemnifying parties. If the indemnifying parties so assume such defense, the
party seeking indemnification may participate therein through counsel of its
choice, but at its sole cost. The party not assuming the defense of any such
claim shall render all reasonable assistance to the party assuming such defense,
and all out-of-pocket costs of such assistance shall be for the account of the
Indemnifying Parties. No such claim shall be settled other than by the party
defending the same, and then only with the consent of the other party, which
shall not be unreasonably withheld; provided that the party seeking
indemnification shall have no obligation to consent to any settlement of any
such claim which imposes on Semicon any liability or obligation which cannot be
assumed and performed in full by the Indemnifying Parties.
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Article VI. Miscellaneous.
6.1 Schedules. Any information furnished in a schedule to this
Agreement shall be deemed to be furnished under any other schedule which calls
for the furnishing of the same information whether or not that information is
separately stated in such other schedule.
6.2 Expenses. Each party shall bear its own expenses incurred
in connection with the negotiation and preparation of this Agreement and in
connection with all duties and obligations required to be performed by it under
this Agreement.
6.3 Public Announcements. No public announcement about the
Acquisition shall be made by any party hereto without the prior written approval
of the other party, which approval shall not be withheld unreasonably, subject
to Semicon's obligation to comply with federal securities laws.
6.4 Further Assurances. Each party agrees to cooperate fully
with the other parties and to execute such further instructions, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to better evidence and reflect the transactions
described herein and contemplated hereby and to carry into effect the intents
and purposes of this Agreement.
6.5 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
given when delivered personally or by reputable overnight courier or mailed by
registered or certified mail, return receipt requested, to the parties at the
following addresses (or to such
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other address as a party may have specified by notice to the other parties
pursuant to this provision):
(a) if to TTH or Stockholder, at:
1774 LRG 6, Mak Mandin Industrim Estate
13400 Butterworth , Malaysia
(b) if to Semicon, at
111 Business Park Drive
Armonk, New York 10504
Attn: Eugene Pian, President.
6.6 No Assignment. This Agreement is personal to each of the
parties and may not be assigned without the written consent of the other
parties.
6.7 Entire Agreement. This Agreement (with its schedules and
exhibits) contains, and is intended as, a complete statement of all the terms of
the agreements among the parties with respect to the matters provided for,
supersedes any previous agreements and understanding among the parties with
respect to those matters, and cannot be changed or terminated except by a
writing signed by the parties.
6.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of New York,
without respect to its choice of law principles.
6.9 Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
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6.10 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
6.11 Parties in Interest. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns, and nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
6.12 Choice of Language. The parties declare that at their
request, the present Agreement, along with all notices, schedules, etc. has been
drawn up in the English language and henceforth, all communications between them
are to be in the English language.
6.13 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
or provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be signed as of the date first written above.
SEMICON TOOLS, INC.
By:/s/ Eugene Pian
Name: Eugene Pian
Title: President
TEIK TATT HOLDING CO., (1979) SDN
BHD.
By:/s/ Tan Khay Swee
Name: Tan Khay Swee
Title: Chief Executive Officer
STOCKHOLDER:
/s/ Tan Khay See
Tan Khay See
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