Item 1.01
Entry into a Material Definitive Agreement.
On
November 16, 2016, in connection with a Contribution, Conveyance and Assumption Agreement executed on October 3, 2016 (the
“Contribution Agreement”), Yangtze River Development Limited (the “Company”) entered into an Amended and
Restated Limited Liability Company Agreement (the “LLC Agreement”) with Wight International Construction, LLC (“Wight”),
whereby the Company acquired 100 million preferred B membership units, representing a 62.5% non-voting equity interest in Wight
(“Preferred B Units”), which will be ultimately converted into 100 million LP units in Armada Enterprises LP (“Armada
LP”). In exchange, the Company issued a $500 million convertible promissory note (the “Note”) and 50,000,000
shares of the Company’s common stock (“Exchange Shares”) to Wight.
A
copy of the Note is attached to this report as
Exhibit 10.1
and a copy of the LLC Agreement is attached as
Exhibit
10.2
and is incorporated herein by reference.
The
LLC Agreement
Dividends
. The
Preferred B Units were specifically designated to be issued to the Company in exchange for the Note and Exchange Shares. The Company
is entitled to receive dividend distributions from Common LP Units in Armada LP upon conversion of Preferred B Units, at a rate
of 5% per annum, whether or not dividends have been declared by the Board of Directors and whether or not there are profits, surplus
or other funds available for the payment of such dividends.
Voting
Rights
. The Company has no right to vote on any matter. Preferred Units will not have any vote on Company matters unless
specifically required by the Delaware Limited Liability Company Act.
Conversion
.
Preferred B Units shall not be convertible into that number of shares of any other units in Wight.
The
Note
Interest;
Interest Payment
. The Note bears interest at a rate of 7% per annum. Interest on the notes accrues from November 16, 2016.
Payment of accrued interest shall be deferred until November 16, 2019. The interest accrued on the then outstanding principal
amount in the 4
th
year shall be due and payable at the first business day of the 5
th
year and the interest
accrued on the then outstanding principal amount in the 5
th
year shall be due and payable at the last business day
of the 5
th
year.
Maturity
.
The Note will mature on November 16, 2021, except that (i) prior to the last thirty (30) days before the Maturity Date, the Holder
shall, upon written notice to the Borrower, have the right to rollover the Note and extend the Maturity Date of the Note from
Maturity Date for up to twenty-four (24) months upon the same terms and conditions set forth in the Note; or (ii) earlier conversion
by the Holder prior to November 16, 2021; or (iii) Prepayment by the Company prior to November 16, 2021.
Conversion
Privilege
. Wight may convert their Note at their option at any time prior to November 16, 2021 at $10 per share conversion
price upon proper notification to the Company. The conversion price of the Note is fixed at $10 per share. Upon conversion, the
Company will satisfy its conversion obligation by paying cash up to the aggregate principal amount of the note being converted
and pay or deliver, as the case may be, cash, shares of our common stock or a combination thereof, at the Company’s election,
in respect of the remainder, if any, of our conversion obligation in excess of the principal amount of the note being converted.
Prepayment
.
The Note may be prepaid by the Company, in whole or in part, at any time and from time to time, without premium or penalty, upon
3 days’ prior written notice to Wight.
The
foregoing description of the Note and the LLC Agreement and the transactions contemplated thereby does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the full text of the Note and the LLC Agreement, which are attached
as
Exhibit 10.1
and
10.2
and are incorporated herein by reference.