AGREEMENT AND PLAN OF MERGER AND REORGANIZATION dated as of June 1, 2000 (the
"Agreement") by and among Brilliant Sun Industry Co., a Florida corporation
("Brilliant Sun") and Yi Wan Group Inc., a Florida corporation ("your name").
R E C I T A L S
The respective Boards of Directors of Brilliant Sun and Yi Wan Group deem
it desirable and in the best interests of their respective corporations, and of
their respective shareholders, subject to, among other things, the approval of
the shareholders of Brilliant Sun and Yi Wan Group, Yi Wan Group shall merge
with and into Brilliant Sun; as a result of which the holders of shares of
capital stock of Yi Wan Group will, in the aggregate, receive the consideration
hereinafter set forth (collectively, the "Merger"). Upon the terms and subject
to the conditions of this Agreement, at the Effective Date (as defined in
Section 2.3 of this Agreement) in accordance with the merger laws of the state
of Florida ("MERGER LAWS"), Yi Wan Group shall be merged with and into Brilliant
Sun and the separate existence of Yi Wan Group shall thereupon cease. Brilliant
Sun shall be the surviving corporation in the Merger and is hereinafter
sometimes referred to as the "Surviving Corporation."
NOW, THEREFORE, in consideration of the terms, conditions, agreements and
covenants contained herein, and in reliance upon the representations and
warranties contained in this Agreement, the parties hereto agree as follows:
I. RECITALS; TRUE AND CORRECT
The above stated recitals are true and correct and are incorporated into
this Agreement.
II. MERGER
2.1 Merger. In the manner and subject to the terms and conditions set forth
herein, Yi Wan Group shall merge with and into Brilliant Sun, and Brilliant Sun
shall be the surviving corporation after the Merger and shall continue to exist
as a corporation governed by the laws of Florida.
2.2 Incorporation and Name Change. Prior to the closing of the merger,
Brilliant Sun shall change its state of incorporation to Florida and in so doing
adopt Yi Wan Group's Articles of Incorporation and Bylaws (the
"Reincorporation"). Upon the Closing of the Merger, Brilliant Sun shall change
its name to Yi Wan Group, Inc. (the "Name Change").
2.3 Effective Date. If all of the conditions precedent to the obligations
of each of the parties hereto as hereinafter set forth shall have been satisfied
or shall have been waived, the Merger shall become effective on the date (the
"Effective Date") the Articles of Merger, together with Plans of Merger
reflecting the Merger, shall be accepted for filing by the Secretary of State of
Florida.
2.4 Securities of the Corporations. The authorized capital stock of Yi Wan
Group is comprised of 50,000,000 shares of Common Stock, (the "Yi Wan Group
Stock"), of which 15,762,500 shares are issued and outstanding. The authorized
capital stock of Brilliant Sun is comprised of 50,000,000 shares of Common
Stock, no par value per share (the "Brilliant Sun Stock"), of which 487,500
shares will be issued and outstanding as of the date of closing of the Merger.
In addition, Brilliant Sun and Yi Wan Group have authorized but unissued
20,000,000 shares of no par value Preferred Stock
2.5 Shares of the Constituent and Surviving Corporations. The manner and
basis of converting the shares of Yi Wan Group Stock into shares of Brilliant
Sun Stock shall be as follows:
At the Effective Date, by virtue of the Merger and without any action on the
part of any holder of any capital stock of either Brilliant Sun or Yi Wan Group,
each share of Yi Wan Group Stock issued and outstanding shall be converted into
the right to receive one share of Brilliant Sun Stock (the "Exchange Ratio").
2.6 Effect of the Merger. As of the Effective Date, all of the following shall
occur:
(a) The separate existence and corporate organization of Yi Wan Group
shall cease (except insofar as it may be continued by statute), Brilliant Sun
shall exist as a surviving corporation.
(b) Except as otherwise specifically set forth herein, the corporate
identity, existence, purposes, powers, franchises, rights and immunities of
Brilliant Sun shall continue unaffected and unimpaired by the Merger, and the
corporate identity, existence, purposes, powers, franchises and immunities of Yi
Wan Group shall be merged with and into Brilliant Sun as the surviving
corporation, shall be fully vested therewith.
(c) Neither the rights of creditors nor any liens upon or security
interests in the property of Yi Wan Group shall be impaired by the Merger.
(d) All corporate acts, plans, policies, agreements approvals and
authorizations of the shareholders and Board of Directors of Yi Wan Group and of
its respective officers, directors and agents, which were valid and effective
immediately prior to the Effective Date, shall be the acts, plans, policies,
agreements, approvals and authorizations of Brilliant Sun and shall be as
effective and binding on Brilliant Sun as the same were on Yi Wan Group.
(e) Brilliant Sun shall be liable for all of the obligations and
liabilities of Yi Wan Group.
(f) The rights, privileges, goodwill, inchoate rights, franchises and
property, real, personal and mixed, and debts due on whatever account and all
other things in action belonging to Yi Wan Group, shall be, and they hereby are,
bargained, conveyed, granted, confirmed, transferred, assigned and set over to
and vested in Brilliant Sun, without further act or deed.
(g) No claim pending at the Effective Date by or against any of Yi Wan
Group, or any stockholder, officer or director thereof, shall xxxxx or be
discontinued by the Merger, but may be enforced, prosecuted, settled or
compromised as if the Merger had not occurred.
(h) All rights of employees and creditors and all liens upon the
property of Yi Wan Group shall be preserved unimpaired, limited in lien to the
property affected by such liens at the Effective Date, and all the debts,
liabilities and duties of Yi Wan Group shall attach to Brilliant Sun and shall
be enforceable against Brilliant Sun to the same extent as if all such debts,
liabilities and duties had been incurred or contracted by Yi Wan Group.
(i) The Articles of Incorporation of Brilliant Sun, as in effect on
the Effective Date, shall continue to be the Articles of Incorporation of
Brilliant Sun without change or amendment.
(j) The Bylaws of Brilliant Sun, as in effect on the Effective Date,
shall continue to be the Bylaws of Brilliant Sun without change or amendment
until such time, if ever, as it is amended thereafter in accordance with the
provisions thereof and applicable laws.
(k) Upon the Effective Date, the Board of Directors of Brilliant Sun
shall consist of those persons set forth in the registration statement, and the
officers of Brilliant Sun shall be the officers specified in the registration
statement.
2.7. Merger Fee. Yi Wan Group shall pay Brilliant Sun a merger fee of $45,000
for this transaction. It is payable $15,000 upon any agreement, formal or
informal, written or oral, to proceed with the transaction, $15,000 when the
registration statement is filed and $15,000 immediately prior to the date the
registration statement is declared effective.
As Brilliant Sun goes through the due diligence and filing process, facts and
circumstances not known to it when it started the process leading to closing the
merger may come to light that make proceeding with the transaction inadvisable
in the opinion of Brilliant Sun. If this occurs or if Yi Wan Group cancels the
agreement after paying the first installment, all fees previously received by
Brilliant Sun will be retained.
III. CONDUCT OF BUSINESS PENDING CLOSING; STOCKHOLDER APPROVAL
Yi Wan Group and Brilliant Sun covenant that between the date hereof and
the date of the Closing:
3.1 Access to Yi Wan Group. Yi Wan Group shall (a) give to Brilliant Sun
and to Brilliant Sun's counsel, accountants and other representatives reasonable
access, during normal business hours, throughout the period prior to the Closing
Date (as defined in Section 6.1), to all of the books, contracts, commitments
and other records of Yi Wan Group and shall furnish Brilliant Sun during such
period with all information concerning Yi Wan Group that Brilliant Sun may
reasonably request; and (b) afford to Brilliant Sun and to Brilliant Sun's
representatives, agents, employees and independent contractors reasonable
access, during normal business hours, to the properties of Yi Wan Group, in
order to conduct inspections at Brilliant Sun's expense to determine that Yi Wan
Group is operating in compliance with all applicable federal, state, local and
foreign statutes, rules and regulations, and all material building, fire and
zoning laws or regulations and that the assets of Yi Wan Group are substantially
in the condition and of the capacities represented and warranted in this
Agreement; provided, however, that in every instance described in (a) and (b),
Brilliant Sun shall make arrangements with Yi Wan Group reasonably in advance
and shall use its best efforts to avoid interruption and to minimize
interference with the normal business and operations of Yi Wan Group. Any such
investigation or inspection by Brilliant Sun shall not be deemed a waiver of, or
otherwise limit, the representations, warranties or covenants of Yi Wan Group
contained herein.
3.2 Conduct of Business. During the period from the date hereof to the
Closing Date, Yi Wan Group shall and shall use reasonable efforts, to the extent
such efforts are within Yi Wan Group's control, to cause its business to be
operated in the usual and ordinary course of business and in material compliance
with the terms of this Agreement.
3.3 Exclusivity to Brilliant Sun. Until either the merger agreement is
terminated or the merger closed, Yi Wan Group agrees not to solicit any other
inquiries, proposals or offers to purchase or otherwise acquire, in a merger
transaction or another type of transaction, the business of Yi Wan Group or the
shares of capital stock of Yi Wan Group. Any person inquiring as to the
availability of the business or shares of capital stock of Yi Wan Group or
making an offer therefor shall be told that Yi Wan Group is bound by the
provisions of this Agreement. Yi Wan Group as well as its officers, directors,
representatives or agents further agree to advise Brilliant Sun promptly of any
such inquiry or offer.
3.4 Access to Brilliant Sun. Brilliant Sun shall (a) give to Yi Wan Group
and to Yi Wan Group's counsel, accountants and other representatives reasonable
access, during normal business hours, throughout the period prior to the Closing
Date, to all of the books, contracts, commitments and other records of Brilliant
Sun and shall furnish Yi Wan Group during such period with all information
concerning Brilliant Sun that Yi Wan Group may reasonably request; and (b)
afford to Yi Wan Group and to Yi Wan Group's representatives, agents, employees
and independent contractors reasonable access, during normal business hours, to
the properties of Brilliant Sun in order to conduct inspections at Yi Wan
Group's expense to determine that Brilliant Sun is operating in compliance with
all applicable federal, state, local and foreign statutes, rules and
regulations, and all material building, fire and zoning laws or regulations and
that the assets of Brilliant Sun are substantially in the condition and of the
capacities represented and warranted in this Agreement; provided, however, that
in every instance described in (a) and (b), Yi Wan Group shall make arrangements
with Brilliant Sun reasonably in advance and shall use its best efforts to avoid
interruption and to minimize interference with the normal business and
operations of Brilliant Sun. Any such investigation or inspection by Yi Wan
Group shall not be deemed a waiver of, or otherwise limit, the representations,
warranties or covenants of Brilliant Sun contained herein.
3.5 Conduct of Business. During the period from the date hereof to the
Closing Date, the business of Brilliant Sun shall be operated by Brilliant Sun
in the usual and ordinary course of such business and in material compliance
with the terms of this Agreement.
3.6 Exclusivity to Yi Wan Group. Until either the merger agreement is
terminated or the merger closed, Brilliant Sun has agreed not to make any other
inquiries, proposals or offers to purchase or otherwise acquire, in a merger
transaction or another type of transaction, the business or the shares of
capital stock of any other company. Any person inquiring as to the possibility
of being acquired by Brilliant Sun or making an offer therefore shall be told
that Brilliant Sun is bound by the provisions of this Agreement. Each of
Brilliant Sun and its officers, directors, representatives or agents further
agree to advise PC Universe promptly of any such inquiry or offer.
3.7 Stockholder Approval.
(a) As promptly as reasonably practicable following the date of this
Agreement, Brilliant Sun shall take all action reasonably necessary in
accordance with the laws of the State of Florida and its Articles of
Incorporation and Bylaws to secure written consents for the approval and
adoption of the Merger and the Merger Agreement, as well as the Reincorporation
and Name Change. The Board of Directors of Brilliant Sun shall unanimously
recommend that Brilliant Sun's shareholders vote to approve and adopt the
Merger, this Agreement and any other matters to be submitted to Brilliant Sun's
shareholders in connection therewith. Brilliant Sun shall, subject as aforesaid,
use its best efforts to solicit and secure from shareholders of Brilliant Sun
such approval and adoption.
(b) As promptly as reasonably practicable following the date of this
Agreement, Brilliant Sun shall prepare and file with the SEC under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations promulgated by the SEC thereunder a registration statement on Form
S-4 (or other form of registration statement as agreed by the parties) (the
"registration statement")covering all shares of Brilliant Sun Stock issuable as
a consequence of the Merger. Brilliant Sun may also register shares of existing
shareholders for resale on a companion S-1 or SB-2 filing. Yi Wan Group shall
cooperate fully with Brilliant Sun in the preparation and filing of the
Registration Statement and any amendments and supplements thereto, including,
without limitation, the furnishing to Brilliant Sun of such information
regarding Yi Wan Group as shall be required by each of the Securities Act and
the Exchange Act and the respective rules and regulations promulgated by the SEC
thereunder.
(d) As promptly as practicable but in no event later than the Effective
Date, Brilliant Sun shall prepare and forward to a market maker to file with the
NASD OTC Bulletin Board ("BB"), an application to have the Brilliant Sun Stock
listed for trading on BB.
IV. REPRESENTATIONS AND WARRANTIES OF Yi Wan Group
Yi Wan Group represents and warrants to Brilliant Sun as follows, with the
knowledge and understanding that Brilliant Sun is relying materially upon such
representations and warranties:
4.1 Organization and Standing. Yi Wan Group is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Florida. Yi Wan Group has all requisite corporate power to carry on its business
as it is now being conducted and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where such
qualification is necessary under applicable law, except where the failure to
qualify (individually or in the aggregate) does not have any material adverse
effect on the assets, business or financial condition of Yi Wan Group, and all
states in which each is qualified to do business as of the date hereof, are
listed in the information in the registration statement concerning Yi Wan Group.
The copies of the Articles of Incorporation and Bylaws of Yi Wan Group, as
amended to date, delivered to Brilliant Sun, are true and complete copies of
these documents as now in effect. Except as otherwise set forth in the
information in the registration statement concerning Yi Wan Group, Yi Wan Group
does not own any interest in any other corporation, business trust or similar
entity. The minute book of Yi Wan Group contains accurate records of all
meetings of its respective Board of Directors and shareholders since its
incorporation.
4.2 Capitalization. The authorized capital stock of Yi Wan Group, the
number of shares of capital stock which are issued and outstanding and par value
thereof are as set forth in the Registration Statement. All of such shares of
capital stock are duly authorized, validly issued and outstanding, fully paid
and nonassessable, and were not issued in violation of the preemptive rights of
any person. There are no subscriptions, options, warrants, rights or calls or
other commitments or agreements to which Yi Wan Group is a party or by which it
is bound, calling for any issuance, transfer, sale or other disposition of any
class of securities of Yi Wan Group. There are no outstanding securities
convertible or exchangeable, actually or contingently, into shares of common
stock or any other securities of Yi Wan Group. Yi Wan Group has no subsidiaries
except as set forth in the registration statement.
4.3 Authority. This Agreement constitutes, and all other agreements
contemplated hereby will constitute, when executed and delivered by Yi Wan Group
in accordance therewith (and assuming due execution and delivery by the other
parties hereto), the valid and binding obligation of Yi Wan Group, enforceable
in accordance with their respective terms, subject to general principles of
equity and bankruptcy or other laws relating to or affecting the rights of
creditors generally.
4.4 Properties. Except as set forth on the information in the registration
statement concerning Yi Wan Group, Yi Wan Group has good title to all of the
assets and properties which it purports to own as reflected on the balance sheet
included in the Financial Statements (as hereinafter defined), or thereafter
acquired. Yi Wan Group has a valid leasehold interest in all material property
of which it is the lessee and each such lease is valid, binding and enforceable
against Yi Wan Group, as the case may be, and, to the knowledge of Yi Wan Group,
the other parties thereto in accordance with its terms. Neither Yi Wan Group nor
the other parties thereto are in material default in the performance of any
material provisions thereunder. Neither the whole nor any material portion of
the assets of Yi Wan Group is subject to any governmental decree or order to be
sold or is being condemned, expropriated or otherwise taken by any public
authority with or without payment of compensation therefor, nor, to the
knowledge of Yi Wan Group, any such condemnation, expropriation or taking been
proposed. None of the assets of Yi Wan Group is subject to any restriction which
would prevent continuation of the use currently made thereof or materially
adversely affect the value thereof.
4.5 Contracts Listed; No Default. All contracts, agreements, licenses,
leases, easements, permits, rights of way, commitments, and understandings,
written or oral, connected with or relating in any respect to present or
proposed future operations of Yi Wan Group (except employment or other
agreements terminable at will and other agreements which, in the aggregate, are
not material to the business, properties or prospects of Yi Wan Group and except
governmental licenses, permits, authorizations, approvals and other matters
referred to in Section 4.17), which would be required to be listed as exhibits
to a Registration Statement on Form S-4 or an Annual Report on Form 10-K if Yi
Wan Group were subject to the reporting requirements of the Exchange Act
(individually, the "Yi Wan Group Contract" and collectively, the "Yi Wan Group
Contracts"), are listed and described in the information in the registration
statement concerning Yi Wan Group. Yi Wan Group is the holder of, or party to,
all of the Yi Wan Group Contracts. To the knowledge of Yi Wan Group, the Yi Wan
Group Contracts are valid, binding and enforceable by the signatory thereto
against the other parties thereto in accordance with their terms. Neither Yi Wan
Group nor any signatory thereto is in default or breach of any material
provision of the Yi Wan Group Contracts. Yi Wan Group's operation of its
business has been, is, and will, between the date hereof and the Closing Date,
continue to be, consistent with the material terms and conditions of the Yi Wan
Group Contracts.
4.6 Litigation. Except as disclosed in the information in the registration
statement concerning Yi Wan Group, there is no claim, action, proceeding or
investigation pending or, to the knowledge of Yi Wan Group, threatened against
or affecting Yi Wan Group before or by any court, arbitrator or governmental
agency or authority which, in the reasonable judgment of Yi Wan Group, could
have any materially adverse effect on Yi Wan Group. There are no decrees,
injunctions or orders of any court, governmental department, agency or
arbitration outstanding against Yi Wan Group.
4.7 Taxes. For purposes of this Agreement, (A) "Tax" (and, with correlative
meaning, "Taxes") shall mean any federal, state, local or foreign income,
alternative or add-on minimum, business, employment, franchise, occupancy,
payroll, property, sales, transfer, use, value added, withholding or other tax,
levy, impost, fee, imposition, assessment or similar charge, together with any
related addition to tax, interest, penalty or fine thereon; and (B) "Returns"
shall mean all returns (including, without limitation, information returns and
other material information), reports and forms relating to Taxes or to any
benefit plans.
Yi Wan Group has duly filed all Returns required by any law or regulation to be
filed by it, except for extensions duly obtained. All such Returns were, when
filed, and to the knowledge of Yi Wan Group are, accurate and complete in all
material respects and were prepared in conformity with applicable laws and
regulations in all material respects. Yi Wan Group has paid or will pay in full
or has adequately reserved against all Taxes otherwise assessed against it
through the Closing Date, and the assessment of any material amount of
additional Taxes in excess of those paid and reported is not reasonably
expected.
Yi Wan Group is not a party to any pending action or proceeding by any
governmental authority for the assessment of any Tax, and no claim for
assessment or collection of any Tax has been asserted against Yi Wan Group that
has not been paid. There are no Tax liens upon the assets (other than the lien
of property taxes not yet due and payable) of Yi Wan Group. There is no valid
basis, to the knowledge of Yi Wan Group, except as set forth in the information
in the registration statement concerning Yi Wan Group, for any assessment,
deficiency, notice, 30-day letter or similar intention to assess any Tax to be
issued to Yi Wan Group by any governmental authority.
4.8 Compliance with Laws and Regulations. To its knowledge, Yi Wan Group is
in compliance, in all material respects, with all laws, rules, regulations,
orders and requirements (federal, state and local) applicable to it in all
jurisdictions where the business of Yi Wan Group is currently conducted or to
which Yi Wan Group is currently subject which has a material impact on Yi Wan
Group, including, without limitation, all applicable civil rights and equal
opportunity employment laws and regulations, and all state and federal antitrust
and fair trade practice laws and the Federal Occupational Health and Safety Act.
Yi Wan Group knows of no assertion by any party that Yi Wan Group is in
violation of any such laws, rules, regulations, orders, restrictions or
requirements with respect to its current operations, and no notice in that
regard has been received by Yi Wan Group. To the knowledge of Yi Wan Group,
there is not presently pending any proceeding, hearing or investigation with
respect to the adoption of amendments or modifications to existing laws, rules,
regulations, orders, restrictions or requirements which, if adopted, would
materially adversely affect the current operations of Yi Wan Group.
4.9 Compliance with Laws.
(a) To its knowledge, the business, operations, property and assets of Yi
Wan Group (and, to the knowledge of Yi Wan Group, the business of any sub-tenant
or licensee which is occupying or has occupied any space on any premises of Yi
Wan Group and the activities of which could result in any material adverse
liability to Yi Wan Group) (i) conform with and are in compliance in all
material respects with all, and are not in material violation of any applicable
federal, state and local laws, rules and regulations, including, but not limited
to, the Comprehensive Environmental Response Compensation and Liability Act of
1980, as amended (including the 1986 Amendments thereto and the Superfund
Amendments and Reauthorization Act) ("CERCLA"), and the Resource Conservation
and Recovery Act ("RCRA"), as well as any other laws, rules or regulations
relating to tax, product liability, controlled substances, product registration,
environmental protection, hazardous or toxic waste, employment, or occupational
safety matters; and (ii) have been conducted and operated in a manner such that,
to Yi Wan Group's knowledge, Yi Wan Group has foreseeable potential liabilities
for environmental clean-up under CERCLA, RCRA or under any other law, rule,
regulation or common or civil law doctrine.
(b) To its knowledge, no predecessor-in-title to any real property now or
previously owned or operated by Yi Wan Group, nor any predecessor operator
thereof conducted its business or operated such property in violation of CERCLA
and RCRA or any other applicable federal, state and local laws, rules and
regulations relating to environmental protection or hazardous or toxic waste
matters.
(c) Except as disclosed in the information in the registration statement
concerning Yi Wan Group, no suit, action, claim, proceeding, nor investigation,
review or inquiry by any court or federal, state, county, municipal or local
governmental department, commission, board, bureau, agency or instrumentality,
including, without limitation, any state or local health department (all of the
foregoing collectively referred to as "Governmental Entity") concerning any such
possible violations by Yi Wan Group is pending or, to the knowledge of Yi Wan
Group, threatened, including, but not limited to, matters relating to diagnostic
tests and products and product liability, environmental protection, hazardous or
toxic waste, controlled substances, employment, occupational safety or tax
matters. Yi Wan Group does not know of any reasonable basis or ground for any
such suit, claim, investigation, inquiry or proceeding. For purposes of this
Section 4.9, the term "inquiry" includes, without limitation, all pending
regulatory issues (whether before federal, state, local or inter-governmental
regulatory authorities) concerning any regulated product, including, without
limitation, any diagnostic drugs and products.
4.10 Information. Yi Wan Group has furnished Brilliant Sun all information
necessary to prepare the registration statement.
4.11 Condition of Assets. The equipment, fixtures and other personal
property of Yi Wan Group, taken as a whole, is in good operating condition and
repair (ordinary wear and tear excepted) for the conduct of the business of Yi
Wan Group as is contemplated to be conducted.
4.12 No Breaches. To its knowledge, the making and performance of this
Agreement and the other agreements contemplated hereby by Yi Wan Group will not
(i) conflict with or violate the Articles of Incorporation or the Bylaws of Yi
Wan Group; (ii) violate any material laws, ordinances, rules or regulations, or
any order, writ, injunction or decree to which Yi Wan Group is a party or by
which Yi Wan Group or any of its respective assets, businesses, or operations
may be bound or affected; or (iii) result in any breach or termination of, or
constitute a default under, or constitute an event which, with notice or lapse
of time, or both, would become a default under, or result in the creation of any
encumbrance upon any asset of Yi Wan Group under, or create any rights of
termination, cancellation or acceleration in any person under, any Yi Wan Group
Contract.
4.13 Employees. Except as set forth in the information in the registration
statement concerning Yi Wan Group, none of the employees of Yi Wan Group is
represented by any labor union or collective bargaining unit and, to the
knowledge of Yi Wan Group, no discussions are taking place with respect to such
representation.
4.14 Financial Statements. To its knowledge, the information in the
registration statement concerning Yi Wan Group contains, as to Yi Wan Group,
certain financial statements (the "Financial Statements"). The Financial
Statements present fairly, in all respects, the consolidated financial position
and results of operations of Yi Wan Group as of the dates and periods indicated,
prepared in accordance with generally accepted accounting principles
consistently applied ("GAAP"). The Financial Statements, when submitted to
Brilliant Sun for inclusion in the Registration Statement, will have been
prepared in accordance with Regulation S-X of the SEC and, in particular, Rules
1-02 and 3-05 promulgated thereunder. Without limiting the generality of the
foregoing, (i) there is no basis for any assertion against Yi Wan Group as of
the date of the Financial Statements of any debt, liability or obligation of any
nature not fully reflected or reserved against in the Financial Statements; and
(ii) there are no assets of Yi Wan Group as of the date of the Financial
Statements, the value of which is overstated in the Financial Statements. Except
as disclosed in the Financial Statements, Yi Wan Group has no known contingent
liabilities (including liabilities for Taxes), forward or long-term commitments
or unrealized or anticipated losses from unfavorable commitments other than in
the ordinary course of business. Yi Wan Group is not a party to any contract or
agreement for the forward purchase or sale of any foreign currency that is
material to Yi Wan Group taken as a whole.
4.15 Absence of Certain Changes or Events. Except as set forth in the
information in the registration statement concerning Yi Wan Group, since the
date of the last financial statement included in the registration statement,
there has not been:
(a) Any material adverse change in the financial condition, properties,
assets, liabilities or business of Yi Wan Group;
(b) Any material damage, destruction or loss of any material properties of
Yi Wan Group, whether or not covered by insurance;
(c) Any material change in the manner in which the business of Yi Wan Group
has been conducted;
(d) Any material change in the treatment and protection of trade secrets or
other confidential information of Yi Wan Group;
(e) Any material change in the business or contractual relationship of
Yi Wan Group with any customer or supplier which might reasonably be expected to
materially and adversely affect the business or prospects of Yi Wan Group;
(f) Any agreement by Yi Wan Group, whether written or oral, to do any of
the foregoing; and
(g) Any occurrence not included in paragraphs (a) through (f) of this
Section 4.16 which has resulted, or which Yi Wan Group has reason to believe, in
its reasonable judgment, might be expected to result, in a material adverse
change in the business or prospects of Yi Wan Group.
4.16 Governmental Licenses, Permits, Etc. To its knowledge, Yi Wan Group
has all governmental licenses, permits, authorizations and approvals necessary
for the conduct of its business as currently conducted ("Licenses and Permits").
The information in the registration statement concerning Yi Wan Group includes a
list of all Licenses and Permits. All Licenses and Permits are in full force and
effect, and no proceedings for the suspension or cancellation of any thereof is
pending or threatened.
4.17 Employee Agreements. (a) For purposes of this Agreement, the following
definitions apply:
(1) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any regulations promulgated thereunder.
(2) "Multi-employer Plan" means a plan, as defined in ERISA Section
3(37), to which Yi Wan Group contributes or is required to contribute.
(3) "Employee Plan" means any pension, retirement, profit sharing,
deferred compensation, vacation, bonus, incentive, medical, vision, dental,
disability, life insurance or any other employee benefit plan as defined in
Section 3(3) of ERISA other than a Multi-employer Plan to which Yi Wan Group
contributes, sponsors, maintains or otherwise is bound to with regard to any
benefits on behalf of the employees of Yi Wan Group.
(4) "Employee Pension Plan" means any Employee Plan for the provision
of retirement income to employees or which results in the deferral of income by
employees extending to the termination of covered employment or beyond as
defined in Section 3(2) of ERISA.
(5) "Employee Welfare Plan" means any Employee Plan other than an Employee
Pension Plan.
(6) "Compensation Arrangement" means any plan or compensation
arrangement other than an Employee Plan, whether written or unwritten, which
provides to employees of Yi Wan Group, former employees, officers, directors or
shareholders of Yi Wan Group any compensation or other benefits, whether
deferred or not, in excess of base salary or wages, including, but not limited
to, any bonus or incentive plan, stock rights plan, deferred compensation
arrangement, life insurance, stock purchase plan, severance pay plan and any
other employee fringe benefit plan.
(b) The information in the registration statement concerning Yi Wan Group
lists, all (1) employment agreements and collective bargaining agreements to
which Yi Wan Group is a party; (2) Compensation Arrangements of Yi Wan Group;
(3) Employee Welfare Plans; (4) Employee Pension Plans; and (5) consulting
agreements under which Yi Wan Group has or may have any monetary obligations to
employees or consultants of Yi Wan Group or their beneficiaries or legal
representatives or under which any such persons may have any rights. Yi Wan
Group has previously made available to Brilliant Sun true and complete copies of
all of the foregoing employment contracts, collective bargaining agreements,
Employee Plans and Compensation Arrangements, including descriptions of any
unwritten contracts, agreements, Compensation Arrangements or Employee Plans, as
amended to date. In addition, with respect to any Employee Plan which continues
after the Closing Date, Yi Wan Group has previously delivered or made available
to Brilliant Sun (1) any related trust agreements, master trust agreements,
annuity contracts or insurance contracts; (2) certified copies of all Board of
Directors' resolutions adopting such plans and trust documents and amendments
thereto; (3) current investment management agreements; (4) custodial agreements;
(5) fiduciary liability insurance policies; (6) indemnification agreements; (7)
the most recent determination letter (and underlying application thereof and
correspondence and supplemental material related thereto) issued by the Internal
Revenue Service with respect to the qualification of each Employee Plan under
the provisions of Section 401(a) of the Code; (8) copies of all "advisory
opinion letters," "private letter rulings," "no action letters," and any similar
correspondence (and the underlying applications therefor and correspondence and
supplemental material related thereto) that was issued by any governmental or
quasigovernmental agency with respect to the last plan year; (9) Annual Reports
(Form 5500 Series) and Schedules A and B thereto for the last plan year; (10)
all actuarial reports prepared for the last plan year; (11) all certified
Financial Statements for the last plan year; and (12) all current Summary Plan
Descriptions, Summaries of Material Modifications and Summary Annual Reports.
All documents delivered by Yi Wan Group to Brilliant Sun as photocopies
faithfully reproduce the originals thereof, such originals are authentic and
were, to the extent execution was required, duly executed.
(c) Except as otherwise disclosed in the information in the registration
statement concerning Yi Wan Group:
(1) It is not a party to and has, in effect or to become effective
after the date of this Agreement, any bonus, cash or deferred compensation,
severance, medical, health or hospitalization, pension, profit sharing or
thrift, retirement, stock option, employee stock ownership, life or group
insurance, death benefit, welfare, incentive, vacation, sick leave, cafeteria,
so-called "golden parachute" payment, disability or trust agreement or
arrangement.
4.18 Brokers. Yi Wan Group has not made any agreement or taken any action
with any person or taken any action which would cause any person to be entitled
to any agent's, broker's or finder's fee or commission in connection with the
transactions contemplated by this Agreement.
4.19 Business Locations. Yi Wan Group does not nor does it own or lease any
real or personal property in any state except as set forth on the information in
the registration statement concerning Yi Wan Group. Yi Wan Group does not have a
place of business (including, without limitation, Yi Wan Group's executive
offices or place where Yi Wan Group's books and records are kept) except as
otherwise set forth on the information in the registration statement concerning
Yi Wan Group.
4.20 Intellectual Property. The information in the registration statement
concerning Yi Wan Group lists all of the Intellectual Property (as hereinafter
defined) used by Yi Wan Group which constitutes a material patent, trade name,
trademark, service xxxx or application for any of the foregoing. "Intellectual
Property" means all of Yi Wan Group's right, title and interest in and to all
patents, trade names, assumed names, trademarks, service marks, and proprietary
names, copyrights (including any registration and pending applications for any
such registration for any of them), together with all the goodwill relating
thereto and all other intellectual property of Yi Wan Group. Other than as
disclosed in the information in the registration statement concerning Yi Wan
Group, Yi Wan Group does not have any licenses granted by or to it or other
agreements to which it is a party, relating in whole or in part to any
Intellectual Property, whether owned by Yi Wan Group or otherwise. All of the
patents, trademark registrations and copyrights listed in the information in the
registration statement concerning Yi Wan Group that are owned by Yi Wan Group
are valid and in full force and effect. To the knowledge of Yi Wan Group, it is
not infringing upon, or otherwise violating, the rights of any third party with
respect to any Intellectual Property. No proceedings have been instituted
against or claims received by Yi Wan Group, nor to its knowledge are any
proceedings threatened alleging any such violation, nor does Yi Wan Group know
of any valid basis for any such proceeding or claim. To the knowledge of Yi Wan
Group, there is no infringement or other adverse claims against any of the
Intellectual Property owned or used by Yi Wan Group. To the knowledge of Yi Wan
Group, its use of software does not violate or otherwise infringe the rights of
any third party.
4.21 Warranties. The information in the registration statement concerning Yi
Wan Group sets forth a true and complete list of the forms of all express
warranties and guaranties made by Yi Wan Group to third parties with respect to
any services rendered by Yi Wan Group.
4.22 Suppliers. Except as set forth in the information in the registration
statement concerning Yi Wan Group, Yi Wan Group knows and has no reason to
believe that, either as a result of the transactions contemplated hereby or for
any other reason (exclusive of expiration of a contract upon the passage of
time), any present material supplier of Yi Wan Group will not continue to
conduct business with Yi Wan Group after the Closing Date in substantially the
same manner as it has conducted business prior thereto.
4.23 Accounts Receivable. The accounts receivable reflected on the balance
sheets included in the Financial Statements, or thereafter acquired by Yi Wan
Group, consists, in the aggregate in all material respects, of items which are
collectible in the ordinary and usual course of business.
4.24 Governmental Approvals. To its knowledge, other than as set forth
herein, no authorization, license, permit, franchise, approval, order or consent
of, and no registration, declaration or filing by Yi Wan Group with, any
governmental authority, federal, state or local, is required in connection with
Yi Wan Group's execution, delivery and performance of this Agreement.
4.25 No Omissions or Untrue Statements. None of the information relating to
Yi Wan Group supplied or to be supplied in writing by it specifically for
inclusion in the Registration Statement, at the respective times that the
Registration Statement becomes effective (or any registration statement included
therein), the Proxy Statement is first mailed to Brilliant Sun's shareholders
and the meeting of Brilliant Sun's shareholders takes place, as the case may be,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Brilliant Sun shall give notice to Yi Wan Group
in advance of the dates of such effectiveness, mailing and meeting sufficient to
permit Yi Wan Group to fulfill its obligations under the second sentence of this
Section.
4.26 Information in the Registration Statement concerning Yi Wan Group
Complete. Yi Wan Group shall promptly provide to Brilliant Sun notice concerning
any of the information in the registration statement concerning Yi Wan Group if
events occur prior to the Closing Date that would have been required to be
disclosed had they existed at the time of executing this Agreement. The
information provided to Brilliant Sun concerning Yi Wan Group, as supplemented
prior to the Closing Date, will contain a true, correct and complete list and
description of all items required to be set forth therein. The information
provided to Brilliant Sun for inclusion in the registration statement concerning
Yi Wan Group, as supplemented prior to the Closing Date, is expressly
incorporated herein by reference. Notwithstanding the foregoing, any such
supplement to the information in the registration statement concerning Yi Wan
Group following the date hereof shall not in any way affect Brilliant Sun 's
right not to consummate the transactions contemplated hereby as set forth in
Section 8.2 hereof.
V. REPRESENTATIONS AND WARRANTIES OF Brilliant Sun
Brilliant Sun represents and warrants to Yi Wan Group as follows, with the
knowledge and understanding that Yi Wan Group is relying materially on such
representations and warranties:
5.1 Organization and Standing of Brilliant Sun. Brilliant Sun is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida, and has the corporate power to carry on its business as
now conducted and to own its assets and it not required to qualify to transact
business as a foreign corporation in any state or other jurisdiction. The copies
of the Articles of Incorporation and Bylaws of Brilliant Sun, delivered to Yi
Wan Group, are true and complete copies of those documents as now in effect.
Brilliant Sun does not own any capital stock in any other corporation, business
trust or similar entity, and is not engaged in a partnership, joint venture or
similar arrangement with any person or entity. The minute books of Brilliant Sun
contain accurate records of all meetings of its incorporator, shareholders and
Board of Directors since its date of incorporation.
5.2 Brilliant Sun's Authority. Brilliant Sun's Board of Directors has
approved and adopted this Agreement and the Merger and has resolved to recommend
approval and adoption of this Agreement and the Merger by Brilliant Sun's
shareholders.
5.3 Due Execution. This Agreement constitutes, and all other agreements
contemplated hereby will constitute, when executed and delivered by Brilliant
Sun in accordance herewith (and assuming due execution and delivery by the other
parties hereto), the valid and binding obligations of Brilliant Sun, enforceable
in accordance with their respective terms, subject to general principles of
equity and bankruptcy or other laws relating to or affecting the rights of
creditors generally.
5.4 No Breaches. To its knowledge, the making and performance of this
Agreement (including, without limitation, the issuance of the Brilliant Sun
Stock) by Brilliant Sun will not (i) conflict with the Articles of Incorporation
or the Bylaws of Brilliant Sun; (ii) violate any order, writ, injunction, or
decree applicable to Brilliant Sun; or (iii) result in any breach or termination
of, or constitute a default under, or constitute an event which, with notice or
lapse of time, or both, would become a default under, or result in the creation
of any encumbrance upon any asset of Brilliant Sun under, or create any rights
of termination, cancellation or acceleration in any person under, any agreement,
arrangement or commitment, or violate any provisions of any laws, ordinances,
rules or regulations or any order, writ, injunction or decree to which Brilliant
Sun is a party or by which Brilliant Sun or any of its assets may be bound.
5.5 Capitalization. The authorized capital stock of Brilliant Sun , the
number of shares of capital stock which are issued and outstanding and par value
thereof are as set forth in the Registration Statement. All of the outstanding
Brilliant Sun Stock is duly authorized, validly issued, fully paid and
nonassessable, and was not issued in violation of the preemptive rights of any
person. The Brilliant Sun Stock to be issued upon effectiveness of the Merger,
when issued in accordance with the terms of this Agreement shall be duly
authorized, validly issued, fully paid and nonassessable. Other than as stated
in this Section 5.5, there are no outstanding subscriptions, options, warrants,
calls or rights of any kind issued or granted by, or binding upon, Brilliant
Sun, to purchase or otherwise acquire any shares of capital stock of Brilliant
Sun, or other equity securities or equity interests of Brilliant Sun or any debt
securities of Brilliant Sun. There are no outstanding securities convertible or
exchangeable, actually or contingently, into shares of Brilliant Sun Stock or
other stock of Brilliant Sun.
5.6 Business. Brilliant Sun, since its formation, has engaged in no
business other than to seek to serve as a vehicle for the acquisition of an
operating business, and, except for this Agreement, is not a party to any
contract or agreement for the acquisition of an operating business.
5.7 Governmental Approval; Consents. To its knowledge, except for the
reports required to be filed in the future by Brilliant Sun, as a reporting
company, under the Exchange Act, and under the Securities Act with respect to
the shares of Brilliant Sun Stock issuable upon exercise of the Brilliant Sun
Warrants, the filing of the Registration Statement under the Securities Act, the
Proxy Statement under the Exchange Act for the purpose of seeking stockholder
approval of the Merger referred to in Section 2.1 and the issuance of the
Brilliant Sun Stock pursuant to the Merger and the filing of the S-4
Registration Statement (or other form of registration statement as agreed by the
parties), no authorization, license, permit, franchise, approval, order or
consent of, and no registration, declaration or filing by Brilliant Sun with,
any governmental authority, federal, state or local, is required in connection
with Brilliant Sun's execution, delivery and performance of this Agreement. No
consents of any other parties are required to be received by or on the part of
Brilliant Sun to enable Brilliant Sun to enter into and carry out this
Agreement.
5.8 Financial Statements. To its knowledge, the financial statements of
Brilliant Sun previously furnished to Yi Wan Group (collectively, the "Brilliant
Sun Financial Statements") present fairly, in all material respects, the
financial position of Brilliant Sun as of the respective dates and the results
of its operations for the periods covered in accordance with GAAP. Without
limiting the generality of the foregoing, (i) except as set forth in the
Brilliant Sun Disclosure Schedule, there is no basis for any assertion against
Brilliant Sun as of the date of said balance sheets of any material debt,
liability or obligation of any nature not fully reflected or reserved against in
such balance sheets or in the notes thereto; and (ii) there are no assets of
Brilliant Sun, the value of which (in the reasonable judgment of Brilliant Sun)
is materially overstated in said balance sheets. Except as disclosed therein,
Brilliant Sun has no known material contingent liabilities (including
liabilities for taxes), unusual forward or long-term commitments or unrealized
or anticipated losses from unfavorable commitments. Brilliant Sun is not a party
to any contract or agreement for the forward purchase or sale of any foreign
currency.
5.9 Adverse Developments. Except as expressly provided or set forth in, or
required by, this Agreement, or as set forth in the Brilliant Sun Financial
Statements, since the last date of its financial information in the registration
statement, there have been no materially adverse changes in the assets,
liabilities, properties, operations or financial condition of Brilliant Sun, and
no event has occurred other than in the ordinary and usual course of business or
as set forth in Brilliant Sun's Registration statement or in the Brilliant Sun
Financial Statements which could be reasonably expected to have a materially
adverse effect upon Brilliant Sun, and Brilliant Sun does not know of any
development or threatened development of a nature that will, or which could be
reasonably expected to, have a materially adverse effect upon Brilliant Sun's
operations or future prospects.
5.10 Contracts Listed. All material contracts, agreements, licenses,
leases, easements, permits, rights of way, commitments, and understandings,
written or oral, connected with or relating in any respect to the present
operations of Brilliant Sun are, with the exception of this Agreement, described
in Brilliant Sun's Registration statement.
5.11; No Default. All of the contracts, agreements, leases, commitments and
understandings, written or oral, and any other contract, agreement, lease,
commitment or understanding, written or oral, binding upon Brilliant Sun
referred to in section 5.10 above, are listed in the Brilliant Sun Disclosure
Schedule (the "Brilliant Sun Contracts"). To the knowledge of Brilliant Sun, the
Brilliant Sun Contracts are valid, binding and enforceable by Brilliant Sun
against the other parties thereto in accordance with their terms. Neither
Brilliant Sun nor, to the knowledge of Brilliant Sun, any of the other parties
thereto is in default or breach of any material provision of the Brilliant Sun
Contracts. Brilliant Sun has furnished Yi Wan Group with a true and complete
copy of each Brilliant Sun Contract, as amended.
5.12 Taxes. Brilliant Sun has duly filed all Returns required by any law or
regulation to be filed by it except for extensions duly obtained. All such
Returns were, when filed, and to the best of Brilliant Sun's knowledge are,
accurate and complete in all material respects and were prepared in conformity
with applicable laws and regulations. Brilliant Sun has paid or will pay in full
or has adequately reserved against all Taxes otherwise assessed against it
through the Closing Date, and the assessment of any material amount of
additional Taxes in excess of those paid and reported is not reasonably
expected.
Brilliant Sun is not a party to any pending action or proceeding by any
governmental authority for the assessment of any Tax, and no claim for
assessment or collection of any Tax has been asserted against Brilliant Sun that
has not been paid. There are no Tax liens upon the assets of Brilliant Sun
(other than the lien of personal property taxes not yet due and payable). There
is no valid basis, to the best of Brilliant Sun's knowledge, except as set forth
in the Brilliant Sun Disclosure Schedule, for any assessment, deficiency,
notice, 30-day letter or similar intention to assess any Tax to be issued to
Brilliant Sun by any governmental authority.
5.13 Litigation. Except as disclosed in the Brilliant Sun Disclosure
Schedule, there is no claim, action, proceeding or investigation pending or, to
Brilliant Sun's knowledge, threatened against or affecting Brilliant Sun before
or by any court, arbitrator or governmental agency or authority which, in the
reasonable judgment of Brilliant Sun, could have a materially adverse effect on
Brilliant Sun. There are no decrees, injunctions or orders of any court,
governmental department, agency or arbitration outstanding against Brilliant
Sun.
5.14 Compliance with Laws and Regulations. To its knowledge, Brilliant Sun
is in compliance, in all material respects, with all laws, rules, regulations,
orders and requirements (federal, state and local) applicable to it in all
jurisdictions in which the business of Brilliant Sun is currently conducted or
to which Brilliant Sun is currently subject, which may have a material impact on
Brilliant Sun, including, without limitation, all applicable civil rights and
equal opportunity employment laws and regulations, all state and federal
antitrust and fair trade practice laws and the Federal Occupational Health and
Safety Act. Brilliant Sun does not know of any assertion by any party that
Brilliant Sun is in violation of any such laws, rules, regulations, orders,
restrictions or requirements with respect to its current operations, and no
notice in that regard has been received by Brilliant Sun. To Brilliant Sun's
knowledge, there is not presently pending any proceeding, hearing or
investigation with respect to the adoption of amendments or modifications of
existing laws, rules, regulations, orders, restrictions or requirements which,
if adopted, would materially adversely affect the current operations of
Brilliant Sun.
5.15 Compliance with Laws. (a) To its knowledge, the business operations,
property and assets of Brilliant Sun (and to the knowledge of Brilliant Sun, the
business of any sub-tenant or license which is occupying or has occupied any
space on any premises of Brilliant Sun and the activities of which could result
in any material adverse liability to Brilliant Sun) (i) conform with and are in
compliance in all material respects with all, and are not in material violation
of any applicable federal, state and local laws, rules and regulations,
including, but not limited to, CERCLA and RCRA, as well as any other laws, rules
or regulations relating to tax, product liability, controlled substances,
product registration, environmental protection, hazardous or toxic waste,
employment, or occupational safety matters; and (ii) have been conducted and
operated in a manner such that, to Brilliant Sun's knowledge, Brilliant Sun has
no foreseeable potential liabilities for environmental clean-up under CERCLA,
RCRA or under any law, rule, regulation or common or civil law doctrine.
(b) To its knowledge, no predecessor-in-title to any real property now or
previously owned or operated by Brilliant Sun, nor any predecessor operator
thereof conducted its business or operated such property in violation of CERCLA
and RCRA or any other applicable, federal, state and local laws, rules and
regulations relating to environmental protection or hazardous or toxic waste
matters.
(c) Except as disclosed in the Brilliant Sun Disclosure Schedule, no suit,
action, claim, proceeding nor investigation review or inquiry by any Government
Entity (as defined in Section 4.9) concerning any such possible violations by
Brilliant Sun is pending or, to Brilliant Sun's knowledge, threatened,
including, but not limited to, matters relating to diagnostic tests and products
and product liability, environmental protection, hazardous or toxic waste,
controlled substances, employment, occupational safety or tax matters. Brilliant
Sun does not know of any reasonable basis or ground for any such suit, claim,
investigation, inquiry or proceeding.
5.16 Governmental Licenses, Permits, Etc. To its knowledge, Brilliant Sun
has all governmental licenses, permits, authorizations and approvals necessary
for the conduct of its business as currently conducted. All such licenses,
permits, authorizations and approvals are in full force and effect, and no
proceedings for the suspension or cancellation of any thereof is pending or
threatened.
5.17 Brokers. Brilliant Sun has not made any agreement or taken any action with
any person or taken any action which would cause any person to be entitled to
any agent's, broker's or finder's fee or commission in connection with the
transactions contemplated by this Agreement.
5.18 Employee Plans. Except as listed in Brilliant Sun's Registration statement,
Brilliant Sun has no employees, consultants or agents, and Brilliant Sun has no
Employee Plans or Compensation Arrangements.
VI. STOCKHOLDER APPROVAL; CLOSING DELIVERIES
6.1 Stockholder Approval. Yi Wan Group shall submit the Merger and this
Agreement to its shareholders for approval and adoption at the Meeting or by
written consent as soon as practicable following the date the SEC declares the
registration statement effective in accordance with Section 3.7 hereof. Subject
to the Merger and this Agreement receiving all approvals of Yi Wan Group and Yi
Wan Group shareholders and regulatory approvals and the absence of 97% or more
of the non-affiliated shareholders of Yi Wan Group (i) voting against the
Merger; and (ii) requesting redemption of their shares of Yi Wan Group Stock in
the manner to be set forth in the Information Statement, and subject to the
other provisions of this Agreement, the parties shall hold a closing (the
"Closing") no later than the fifth business day (or such later date as the
parties hereto may agree) following the later of (a) the date of the Meeting of
Shareholders of Yi Wan Group to consider and vote upon the Merger and this
Agreement or the receipt of the requisite percentage of written consents or (b)
the business day on which the last of the conditions set forth in Articles VII
and VIII hereof is fulfilled or waived (such later date, the "Closing Date"), at
10:00 A.M. at the offices of XXXXXXXX LAW GROUP, P.A., or at such other time and
place as the parties may agree upon.
6.2 Closing Deliveries of Yi Wan Group. At the Closing, Yi Wan Group shall
deliver, or cause to be delivered, to Brilliant Sun:
(a) A certificate dated as of the Closing Date, to the effect that the
representations and warranties of Yi Wan Group contained in this Agreement are
true and correct in all material respects at and as of the Closing Date and that
Yi Wan Group has complied with or performed in all material respects all terms,
covenants and conditions to be complied with or performed by Yi Wan Group on or
prior to the Closing Date;
(b) An opinion of Yi Wan Group's counsel in form and substance
reasonably satisfactory to Brilliant Sun, in a form to be mutually agreed to
prior to the Closing;
(c) a certificate, dated as of the Closing Date, certifying as to the
Articles of Incorporation and Bylaws of Yi Wan Group, the incumbency and
signatures of the officers of each of Yi Wan Group and copies of the directors'
and shareholders' resolutions of Yi Wan Group approving and authorizing the
execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby;
(d) Such other documents, at the Closing or subsequently, as may be
reasonably requested by Brilliant Sun as necessary for the implementation and
consummation of this Agreement and the transactions contemplated hereby.
6.3 Closing Deliveries of Brilliant Sun. At the Closing, Brilliant Sun shall
deliver to Yi Wan Group:
(a) A certificate of Brilliant Sun, dated as of the Closing Date, to
the effect that the representations and warranties of Brilliant Sun contained in
this Agreement are true and correct in all material respects and that Brilliant
Sun has complied with or performed in all material respects all terms, covenants
and conditions to be complied with or performed by Brilliant Sun on or prior to
the Closing Date;
(b) A certificate, dated as of the Closing Date, executed by the
Secretary of Brilliant Sun, certifying the Articles of Incorporation, Bylaws,
incumbency and signatures of officers of Brilliant Sun and copies of Brilliant
Sun's directors' and shareholders' resolutions approving and authorizing the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby;
(c) An opinion of Brilliant Sun's counsel, XXXXXXXX LAW GROUP, P.A., in
form and substance reasonably satisfactory to Yi Wan Group, in a form to be
mutually agreed to prior to the Closing;
(d) The written resignations of all officers, and all directors of
Brilliant Sun.
(e) Certificates representing the Brilliant Sun Stock issuable upon
consummation of the Merger;
(f) The books and records of Brilliant Sun; and
(h) Documentation satisfactory to Yi Wan Group evidencing the fact that the
signatories on all relevant bank accounts of Brilliant Sun have been changed to
signatories designated by Yi Wan Group.
VII. CONDITIONS TO OBLIGATIONS OF Yi Wan Group
The obligation of Yi Wan Group to consummate the Closing is subject to the
following conditions, any of which may be waived by Yi Wan Group in its sole
discretion:
7.1 Compliance by Brilliant Sun. Brilliant Sun shall have performed and
complied in all material respects with all agreements and conditions required by
this Agreement to be performed or complied with by Brilliant Sun prior to or on
the Closing Date.
7.2 Accuracy of Brilliant Sun's Representations. Brilliant Sun's
representations and warranties contained in this Agreement (including the
Brilliant Sun Disclosure Schedule) or any schedule, certificate or other
instrument delivered pursuant to the provisions hereof or in connection with the
transactions contemplated hereby shall be true and correct in all material
respects at and as of the Closing Date (except for such changes permitted by
this Agreement) and shall be deemed to be made again as of the Closing Date.
7.3 Material Adverse Change. No material adverse change shall have occurred
subsequent to the date of the last financial information in the registration
statement in the financial position, results of operations, assets, liabilities
or prospects of Brilliant Sun, nor shall any event or circumstance have occurred
which would result in a material adverse change in the financial position,
results of operations, assets, liabilities or prospects of Brilliant Sun within
the reasonable discretion of Yi Wan Group.
7.4 Documents. All documents and instruments delivered by Brilliant Sun to
Yi Wan Group at the Closing shall be in form and substance reasonably
satisfactory to Yi Wan Group and its counsel.
7.5 Capitalization. At the Closing Date, Brilliant Sun shall have the
number of shares as set forth in the registration statement issued and
outstanding.
7.6 Effectiveness of Registration Statement; No Stop Order. The
Registration Statement shall be effective under the Securities Act and shall not
be subject to a stop order or any threatened stop order.
7.7 Reorganization. The Merger shall qualify as a tax-free reorganization under
Section 368 of the Code.
7.8 Litigation. No litigation seeking to enjoin the transactions
contemplated by this Agreement or to obtain damages on account hereof shall be
pending or, to Yi Wan Group's knowledge, be threatened.
7.9 Dissenters' Rights. It is a condition to Yi Wan Group's obligations to
consummate the merger that the holders of no more than 10% of the outstanding
shares of Yi Wan Group's common stock are entitled to dissenters' rights. If
demands for payment are made with respect to more than 10%, of the outstanding
shares of Yi Wan Group's common stock, and, as a consequence more than 10% of
the shareholders of Yi Wan Group's become entitled to exercise dissenters'
rights, then Yi Wan Group will not be obligated to consummate the merger.
VIII. CONDITIONS TO Brilliant Sun'S OBLIGATIONS
Brilliant Sun's obligation to consummate the closing is subject to the
following conditions, any of which may be waived by Brilliant Sun in its sole
discretion:
8.1 Compliance by Yi Wan Group. Yi Wan Group shall have performed and
complied in all material respects with all agreements and conditions required by
this Agreement to be performed or complied with prior to or on the Closing Date.
8.2 Accuracy of Yi Wan Group's Representations. Yi Wan Group's
representations and warranties contained in this Agreement (including the
exhibits hereto and the Brilliant Sun Disclosure Schedule) or any schedule,
certificate or other instrument delivered pursuant to the provisions hereof or
in connection with the transactions contemplated hereby shall be true and
correct in all material respects at and as of the Closing Date (except for such
changes permitted by this Agreement) and shall be deemed to be made again as of
the Closing Date.
8.3 Material Adverse Change. No material adverse change shall have occurred
subsequent to the last date of the financial statement of Yi Wan Group in the
registration statement in the financial position, results of operations, assets,
liabilities or prospects of Yi Wan Group taken as a whole, nor shall any event
or circumstance have occurred which would result in a material adverse change in
the business, assets or condition, financial or otherwise, of Yi Wan Group taken
as a whole, within reasonable discretion of Brilliant Sun.
8.4 Litigation. No litigation seeking to enjoin the transactions
contemplated by this Agreement or to obtain damages on account hereof shall be
pending or, to Brilliant Sun's knowledge, be threatened.
8.5 Reorganization. The Merger shall qualify as a tax-free reorganization
under Section 368 of the Code and there are no material adverse tax consequences
to the Merger.
8.6 Documents. All documents and instruments delivered by Yi Wan Group to
Brilliant Sun at the Closing shall be in form and substance reasonably
satisfactory to Brilliant Sun and its counsel.
IX. INDEMNIFICATION
9.1 By Yi Wan Group. Subject to Section 9.4, Yi Wan Group shall indemnify,
defend and hold Brilliant Sun, its directors, officers, shareholders, attorneys,
agents and affiliates, harmless from and against any and all losses, costs,
liabilities, damages, and expenses (including legal and other expenses incident
thereto) of every kind, nature and description, including any undisclosed
liabilities (collectively, "Losses") that result from or arise out of (i) the
breach of any representation or warranty of Yi Wan Group set forth in this
Agreement or in any certificate delivered to Brilliant Sun pursuant hereto; or
(ii) the breach of any of the covenants of Yi Wan Group contained in or arising
out of this Agreement or the transactions contemplated hereby.
9.2 By Brilliant Sun. Subject to Section 9.4, Brilliant Sun shall
indemnify, defend, and hold Yi Wan Group its directors, officers, shareholders,
attorneys, agents and affiliates harmless from and against any and all Losses
that arise out of (i) the breach of any representation or warranty of Brilliant
Sun set forth in this Agreement or in any certificate delivered to Yi Wan Group
pursuant hereto; or (ii) the breach of any of the covenants of Brilliant Sun
contained in or arising out of this Agreement or the transactions contemplated
hereby.
9.3 Claims Procedure. Should any claim covered by Sections 9.1 or 9.2 be
asserted against a party entitled to indemnification under this Article (the
"Indemnitee"), the Indemnitee shall promptly notify the party obligated to make
indemnification (the "Indemnitor"); provided, however, that any delay or failure
in notifying the Indemnitor shall not affect the Indemnitor's liability under
this Article if such delay or failure was not prejudicial to the Indemnitor. The
Indemnitor upon receipt of such notice shall assume the defense thereof with
counsel reasonably satisfactory to the Indemnitee and the Indemnitee shall
extend reasonable cooperation to the Indemnitor in connection with such defense.
No settlement of any such claim shall be made without the consent of the
Indemnitor and Indemnitee, such consent not to be unreasonably withheld or
delayed, nor shall any such settlement be made by the Indemnitor which does not
provide for the absolute, complete and unconditional release of the Indemnitee
from such claim. In the event that the Indemnitor shall fail, within a
reasonable time, to defend a claim, the Indemnitee shall have the right to
assume the defense thereof without prejudice to its rights to indemnification
hereunder.
9.4 Limitations on Liability. Neither Yi Wan Group nor Brilliant Sun shall
be liable hereunder as a result of any misrepresentation or breach of such
party's representations, warranties or covenants contained in this Agreement
unless and until the Losses incurred by each, as the case may be, as a result of
such misrepresentations or breaches under this Agreement shall exceed, in the
aggregate, $200,000 (in which case the party liable therefor shall be liable for
the entire amount of such claims, including the first $200,000).
X. TERMINATION
10.1 Termination Prior to Closing. (a) If the Closing has not occurred by
any date as mutually agreed upon by the parties (the "Termination Date"), any of
the parties hereto may terminate this Agreement at any time thereafter by giving
written notice of termination to the other parties; provided, however, that no
party may terminate this Agreement if such party has willfully or materially
breached any of the terms and conditions hereof.
(b) Prior to the Termination Date either party to this Agreement may
terminate this Agreement following the insolvency or bankruptcy of the other, or
if any one or more of the conditions to Closing set forth in Article VI, Article
VII or Article VIII shall become incapable of fulfillment and shall not have
been waived by the party for whose benefit the condition was established, then
either party may terminate this Agreement.
10.2 Consequences of Termination. Upon termination of this Agreement
pursuant to this Article X or any other express right of termination provided
elsewhere in this Agreement, the parties shall be relieved of any further
obligation to the others except as follows: As Brilliant Sun goes through the
due diligence and filing process, facts and circumstances not known to it when
it started the process leading to closing the merger may come to light that make
proceeding with the transaction inadvisable in the opinion of Brilliant Sun. If
this occurs or if Yi Wan Group cancels the agreement after paying the first
installment, all fees previously received by Brilliant Sun will be retained. No
termination of this Agreement, however, whether pursuant to this Article X
hereof or under any other express right of termination provided elsewhere in
this Agreement, shall operate to release any party from any liability to any
other party incurred before the date of such termination or from any liability
resulting from any willful misrepresentation made in connection with this
Agreement or willful breach hereof.
XI. ADDITIONAL COVENANTS
11.1 Mutual Cooperation. The parties hereto will cooperate with each other,
and will use all reasonable efforts to cause the fulfillment of the conditions
to the parties' obligations hereunder and to obtain as promptly as possible all
consents, authorizations, orders or approvals from each and every third party,
whether private or governmental, required in connection with the transactions
contemplated by this Agreement.
11.2 Changes in Representations and Warranties of Yi Wan Group. Between the
date of this Agreement and the Closing Date, Yi Wan Group shall not, directly or
indirectly, except as contemplated in the information in the registration
statement concerning Yi Wan Group, enter into any transaction, take any action,
or by inaction permit an event to occur, which would result in any of the
representations and warranties of Yi Wan Group herein contained not being true
and correct at and as of (a) the time immediately following the occurrence of
such transaction or event or (b) the Closing Date. Yi Wan Group shall promptly
give written notice to Brilliant Sun upon becoming aware of (i) any fact which,
if known on the date hereof, would have been required to be set forth or
disclosed pursuant to this Agreement and (ii) any impending or threatened breach
in any material respect of any of the representations and warranties of Yi Wan
Group contained in this Agreement and with respect to the latter shall use all
reasonable efforts to remedy same.
11.3 Changes in Representations and Warranties of Brilliant Sun. Between
the date of this Agreement and the Closing Date, Brilliant Sun shall not,
directly or indirectly, enter into any transaction, take any action, or by
inaction permit an event to occur, which would result in any of the
representations and warranties of Brilliant Sun herein contained not being true
and correct at and as of (a) the time immediately following the occurrence of
such transaction or event or (b) the Closing Date. Brilliant Sun shall promptly
give written notice to Yi Wan Group upon becoming aware of (i) any fact which,
if known on the date hereof, would have been required to be set forth or
disclosed pursuant to this Agreement and (ii) any impending or threatened breach
in any material respect of any of the representations and warranties of
Brilliant Sun contained in this Agreement and with respect to the latter shall
use all reasonable efforts to remedy same.
XII. MISCELLANEOUS
12.1 Expenses. Brilliant Sun will pay for its counsel and financial
consultant and all their costs. Yi Wan Group will pay for your accountants and
attorneys and all their costs. Yi Wan Group will be responsible for paying the
SEC filing fee, and state filing fees and all costs of converting your documents
to they can be filed with the SEC.
12.2 Survival of Representations, Warranties and Covenants. All statements
contained in this Agreement or in any certificate delivered by or on behalf of
Yi Wan Group or Brilliant Sun pursuant hereto or in connection with the
transactions contemplated hereby shall be deemed representations, warranties and
covenants by Yi Wan Group or Brilliant Sun, as the case may be, hereunder. All
representations, warranties and covenants made by Yi Wan Group and by Brilliant
Sun in this Agreement, or pursuant hereto, shall survive through the Closing
Date.
12.3 Nondisclosure. Brilliant Sun will not at any time after the date of
this Agreement, without Yi Wan Group' consent, divulge, furnish to or make
accessible to anyone (other than to its representatives as part of its due
diligence or corporate investigation) any knowledge or information with respect
to confidential or secret processes, inventions, discoveries, improvements,
formulae, plans, material, devices or ideas or know-how, whether patentable or
not, with respect to any confidential or secret aspects (including, without
limitation, customers or suppliers) ("Confidential Information") of Yi Wan
Group.
Yi Wan Group will not at any time after the date of this Agreement, without
Brilliant Sun's consent (except as may be required by law), use, divulge,
furnish to or make accessible to anyone any Confidential Information (other than
to its representatives as part of its due diligence or corporate investigation)
with respect to Brilliant Sun. The undertakings set forth in the preceding two
paragraphs of this Section 12.3 shall lapse if the Closing takes place as to
Brilliant Sun and Yi Wan Group, but shall not lapse as to the officers and
directors of Brilliant Sun, individually.
Any information, which (i) at or prior to the time of disclosure by either
of Yi Wan Group or Brilliant Sun was generally available to the public through
no breach of this covenant, (ii) was available to the public on a
non-confidential basis prior to its disclosure by either of Yi Wan Group or
Brilliant Sun or (iii) was made available to the public from a third party,
provided that such third party did not obtain or disseminate such information in
breach of any legal obligation to Yi Wan Group or Brilliant Sun, shall not be
deemed Confidential Information for purposes hereof, and the undertakings in
this covenant with respect to Confidential Information shall not apply thereto.
12.4 Succession and Assignments; Third Party Beneficiaries. This Agreement
may not be assigned (either voluntarily or involuntarily) by any party hereto
without the express written consent of the other party. Any attempted assignment
in violation of this Section shall be void and ineffective for all purposes. In
the event of an assignment permitted by this Section, this Agreement shall be
binding upon the heirs, successors and assigns of the parties hereto. Except as
expressly set forth in this Section, there shall be no third party beneficiaries
of this Agreement.
12.5 Notices. All notices, requests, demands or other communications with
respect to this Agreement shall be in writing and shall be (i) sent by facsimile
transmission, (ii) sent by the United States Postal Service, registered or
certified mail, return receipt requested, or (iii) personally delivered by a
nationally recognized express overnight courier service, charges prepaid, to the
addresses specified in writing by each party.
Any such notice shall, when sent in accordance with the preceding sentence,
be deemed to have been given and received on the earliest of (i) the day
delivered to such address or sent by facsimile transmission, (ii) the fifth
(5th) business day following the date deposited with the United States Postal
Service, or (iii) twenty-four (24) hours after shipment by such courier service.
12.6 Construction. This Agreement shall be construed and enforced in accordance
with the internal laws of the State of Florida without giving effect to the
principles of conflicts of law thereof, except to the extent that the Securities
Act or the Exchange Act applies to the Registration Statements and the Proxy
Statement.
12.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same Agreement.
12.8 No Implied Waiver; Remedies. No failure or delay on the part of the
parties hereto to exercise any right, power or privilege hereunder or under any
instrument executed pursuant hereto shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. All rights, powers and privileges granted herein shall be in addition
to other rights and remedies to which the parties may be entitled at law or in
equity.
12.9 Entire Agreement. This Agreement, including the Exhibits and Schedules
attached hereto, sets forth the entire understandings of the parties with
respect to the subject matter hereof, and it incorporates and merges any and all
previous communications, understandings, oral or written, as to the subject
matter hereof, and cannot be amended or changed except in writing, signed by the
parties.
12.10 Headings. The headings of the Sections of this Agreement, where
employed, are for the convenience of reference only and do not form a part
hereof and in no way modify, interpret or construe the meanings of the parties.
12.11 Severability. To the extent that any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect.
12.12 Public Disclosure. From and after the date hereof through the Closing
Date, Brilliant Sun shall not issue a press release or any other public
announcement with respect to the transactions contemplated hereby without the
prior consent of Yi Wan Group, which consent shall not be unreasonably withheld
or delayed. It is understood by Yi Wan Group that Brilliant Sun is required
under the Exchange Act to make prompt disclosure of any material transaction.
THE PARTIES TO THIS AGREEMENT HAVE READ THIS AGREEMENT, HAVE HAD THE
OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL OF THEIR OWN CHOICE, AND
UNDERSTAND EACH OF THE PROVISIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
Brilliant Sun Industry Co.
By:____________________________
Its:_____________________________
Yi Wan Group, Inc.
By:____________________________
Its:____________________________
