Item
1.01 Entry into a Material Definitive Agreement.
On
October 3, 2016, Yangtze River Development Limited (the “Company”) entered into a Contribution,
Conveyance and Assumption Agreement (the “Agreement”) with Armada Enterprises GP, LLC, a Delaware limited
liability company (“Armada”) to (i) complete certain share exchange and (ii) procure $1,000,000,000 in financing
for the logistics project in Wuhan (“Wuhan Project”).
Pursuant
to the Agreement, the Company agreed to issue to Wight International Construction LLC, an entity related to Armada (“Wight”),
a convertible promissory note in the amount of $500,000,000 (the “Note”) that may be convertible into 50,000,000 shares
of Company’s common stock, par value $0.0001 per share (the “Common Stock”). The Company also agreed to contribute
60,000,000 shares of the Common Stock at $8.33 per share, 50,000,000 of which will be issued to Armada upon closing (the “Contribution
Shares”) and the remaining 10,000,000 will be reserved with Company’s transfer agent (the “Reserve Shares”)
and may be issued subject to Armada’s fulfillment of its obligation of procuring $1,000,000,000 in construction financing
for the Wuhan Project to be provided over a 3-year period or completion of the Wuhan Project. The 10,000,000 shares will be otherwise
counted as Company’s treasury shares upon Armada’s default on such obligation. As a result of the Agreement, the Company
may issue up to 110,000,000 shares of Common Stock, at a weighted-average price of $9.09 per share.
In consideration
of Company’s Note, Contribution Shares and Reserve Shares, Wight agrees to issue the Company 100,000,000 membership units
in Wight valued at a minimum of $10 per unit for an aggregate value of $1,000,000,000, which would convert to limited partnership
units in Armada Enterprise LP, upon Armada’s contribution of Wight to Armada Enterprises LP. Armada also agrees to pay the
Company a non-refundable $2 million USD ($2,000,000.00) (the “Cash Investment”) by selling and upon the exercise of
at least $12 million USD worth of the warrants issued by Armada’s subsidiary company, Bim Homes, Inc. Armada plans to convert
Bim Homes, Inc. to Armada Enterprises LP, as disclosed in its 10-Q filing for the period ended June 30, 2016. The Cash Investment
will be held by the Company in escrow as a break-up fee in the event that Armada does not obtain financing in the amount of at
least $50,000,000 for the Company (the “Break-up Fee”). The Break-up Fee shall become a working capital fund for the
Company and Wuhan Project if the Armada obtains such financing.
Pursuant
to the Agreement, the Company agreed to also engage Wight, under applicable Chinese law, as its construction firm for the Company’s
infrastructure development project in Wuhan. Armada will procure up to $1,000,000,000 in construction financing for the completion
of the Wuhan Project at approximately $200,000,000 of new financing per year for five years.
Within
a commercially reasonable time after the closing, Armada will provide the Company with proof of credit facilities of at least
$500,000,000, which includes an allocation by Armada of $50,000,000 to help the Company to meet NASDAQ listing qualifications.