Share Swap between Koatech Technology Corporation and Taiflex Scientific Co., Ltd (the subsidiary)

2012/3/19

Details:
  1. Integration Categories, which include such as merge, division, acquisition or share transfer : Share Swap.
  2. Base Date: 19th, March 2012.
  3. Integration Parties, which include the counter party of merge, the new company under division, the company title of the subject to be acquired or transferred: Koatech Technology Corporation, hereinafter as the Koatech, with 58.13% shares held by Taiflex Scientific Co., Ltd; and RUN Technology Corporation, hereinafter as the RUN.
  4. The counter party of trading, which includes the counter company under merge, the portion to be divided, and trading subject of acquisition or share transfer: the entire stockholders of the RUN.
  5. Related Party of the Counter Party: No.
  6. Relationship of the counter party with our company, which is such as XX% stocks of invested subject to be held by our company by investment transfer, with details of reasons for subject selection to be a related party of our company through acquisition or share transfer, and the impacts on our stockholders’ equity: For this case, it is 100% share swap and thus the entire stockholders of the RUN have to be involved.
  7. Integration Purpose: the RUN is one of the leading professional manufactures for aluminum cases, with professional capabilities of adhesive manufacturing for such cases, while the Koatech is a professional manufacturer for optical protective film, with professional capabilities for all kinds of refine coating services. In consideration of the future development strategies of the two companies, share swap is agreed as a result. By this share swap, the advantages for both companies include optimal application of the resources, lowering operational cost, reaching of scale economics and advancing of competitiveness.
  8. Potential Profits by the integration: With advantages such as business expansion, human resources optimization, and yield expansion etc. the overall operational efficiency and long-term competitiveness can be a positive donation to the long-term development for both companies.
  9. Impacts on Net Asset Per Share and Earnings Per Share under this integration: with advantages aforementioned, positive impact is expected to generated into Net Asset Per Share and Earnings Per share after this integration. Long-term operation development can be seen in the future.
  10. Share swap ratio and its calculation bases: the ratio is 1:1.3 as per share of common shares of the RUN to per share of the capital-increased common shares of the Koatech 4,745,000 shares are issued by the Koatech by capital increase while, among of those, 3,650,000shares are to be held by the stockholders of the RUN, the transferee. Calculation bases: The reference include Net Asset Per Share, profitability and status of competitors etc. as the base, as well as development status and future trends of both the industry and two companies, and comprehensive effects from the integration, and then the share swap ratio is determined as a result.
  11. Completion Date, expected: the base date of share swap is 15th, April 2012 for the time being.
  12. Right and obligation of the dissolved, or divided, company to be succeeded by the continuing company or newly found company; please refer to the Remarks A: Not applied.
  13. Basic information of the company under the integration; please refer to the Remarks B: The Koatech is one of leading professional manufactures for optical films, with its business scope of optical, heat-resistant or general protective films, and of OCA adhesive and professional services of production processes etc. The RUN is with its business scope of production of plastic films and bags and of glass fiber reinforced plastic (GFRP), and surface treatment, as well as business not prohibited or restricted by laws.
  14. Matters regarding division, including operation and asset evaluation value that are expected to be transferred to the continuing or newly found company; total, classification and amount of the shares that are acquired by the divided company or its stockholders; information related to capital decrease if capital decrease occurred to the divided company; with exception of non-division-announcement: Not applied.
  15. Conditions or restrictions for future transfer of integrated shares: None.
  16. Other significant agreement: adjustment of share swap ratio is allowed by the chairman of both companies, the Koatech and the RUN, under authorization from the both board of meetings, with compliance to the clauses related to share swap ratio under the agreement herein; odd shares that are less than one full share are allowed to be integrated into one share and transferred to one person under the intention of the stockholders, or to be proportionately paid by the Koatech on cash(no less than 1 dollar) on basis of issued face value, and the purchaser shall be under contact by the chairman authorized.
  17. Disagreement or other comments from the directors for the trading: None.
  18. Other details: According to the “Share Swap” manners that are regulated by the 29th clauses of Business Mergers and Acquisitions Act under laws of Taiwan, the Koatech and the RUN are agreed to follow strategies alliance, and after share swap the RUN will become the subsidiary of the Koatech with 100% of its shares held by the Koatech. For the new issued shares under this share swap, the right and obligations shall follow the same as which of the previous issuance under our company.
Remarks A: Matters related to right and obligations that are succeed from the dissolved company to the continuing or newly found company include management criteria of treasury shares and valuable securities that are already issued and featured with share nature.
Remarks B: Basic information for the companies under the integration includes company titles and main operation business.

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