Common use of Transaction Descriptive Summary Clause in Contracts

Transaction Descriptive Summary. CRFU and its directors and shareholders have approved the acquisition of Sun Group and the shareholders of Sun Group (“Sun Group Shareholders”) have consented to the acquisition of Sun Group by CRFU, a publicly traded company. CRFU would acquire a 70% interest (RMB 74,200,000) in Sun Group in exchange for the issuance of 30,000,000 new shares of CRFU to Sun Group Shareholders. CRFU will also grant to Sun Group a two (2) year non-transferable option to subscribe for and purchase 10,000,000 new shares of CRFU stock in exchange for RMB 31,800,000. In addition, Sun Group and/or the Sun Group Shareholders will acquire 9,500,000 freely transferable common shares of CRFU from M▇. ▇▇▇▇▇ for a payment by Sun Group and/or the Sun Group Shareholders of an amount equal to $600,000, less related expenses. The distributions of payments will be made by Sun Group to CRFU and M▇. ▇▇▇▇▇ in accordance with the Escrow Agreement. The above purchase and issuance will give Sun Group a 'controlling interest' in CRFU representing approximately 94% of the issued and outstanding shares. The transaction will not immediately close but shall be conditioned upon (1) the delivery into escrow of the 9,500,000 shares from M▇. ▇▇▇▇▇, (2) the delivery into escrow of the 30,000,000 shares for the benefit of Sun Group Shareholders, (3) grant to Sun Group of the two (2) year option for the subscription and purchase of the additional 10,000,000 new shares for RMB 31,800,000 (4) the absence of material liabilities in CRFU as defined by the Generally Accepted Accounting Principles, and (5) the delivery into escrow the copies of restricted and non-transferable stock certificates pursuant to the lock-up agreement, including 250,000 shares belonging to M▇. ▇▇▇▇▇, 200,000 shares belonging to L▇▇▇▇ ▇▇▇▇▇ and 200,000 shares belonging to R▇▇▇▇▇▇ ▇▇▇▇▇, prior to Closing. The parties intend that the transactions qualify and meet the Internal Revenue Code requirements for a tax free reorganization, in which there is no corporate gain or loss recognized by the parties, with reference to Internal Revenue Code (IRC) sections 354 and 368.