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Item 1.01
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Entry into a Material Definitive Agreement.
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On January 16, 2017, NioCorp Developments Ltd. (the “Company”)
and its Chief Executive Officer, Mark A. Smith, entered into a Credit Facility Agreement (the “Smith Credit Agreement”)
pursuant to which Mr. Smith agreed to make available to the Company a credit facility of up to $2,000,000. Under the Smith Credit
Agreement, Mr. Smith has agreed to advance amounts requested by the Company under the credit facility (the “Loan”)
up to the $2,000,000 maximum. The credit facility is non-revolving and amounts paid back under the terms of the Smith Credit Agreement
do not again become available for drawdowns at the request of the Company.
The Company will pay interest to Mr. Smith on amounts outstanding
under the Loan and on any overdue interest at a rate equal to 10% per annum, calculated monthly in arrears, through to the date
of repayment of the Loan. Interest on the Loan will be computed on the basis of a 360-day year comprised on twelve 30-day months.
Mr. Smith will also receive an establishment fee equal to 2.5% of the amount of any drawdown payable at the time of the drawdown
as consideration of the advancement of such drawdown.
Any outstanding balance on the Loan, including accrued interest,
shall be immediately due and payable by the Company on the date of termination of the Smith Credit Agreement on January 16, 2018
or upon the occurrence of an Event of Default (as described below). The Company can pre-pay the Loan at any time without notice
and without penalty or prepayment fees.
Drawdowns under the Smith Credit Agreement must be made on a
business day before the termination date for a minimum amount of $10,000 and not cause to total amount advanced to exceed $2,000,000.
Further, Mr. Smith must have received the written drawdown request along with payment of the establishment fee. Each drawdown request
is subject to the consent of Mr. Smith, which may be withheld in Mr. Smith’s sole discretion.
Under the terms of the Smith Credit Agreement, the Company has
covenanted that so long as monies are outstanding under the Loan, it will: (a) repay, or cause to be repaid, the Loan and all other
monies required to be paid to Mr. Smith in accordance with the Agreement and (b) duly observe and perform all obligations and agreement
set forth in the Agreement.
The following occurrences will trigger and Event of Default
under the Smith Credit Agreement, causing the principal amount of Loan outstanding, plus accrued interest, costs and all other
monies owing to Mr. Smith to immediately become payable upon demand by Mr. Smith: (a) if the Company shall default in any payment
of principal, interest or other amount when the same is required under the Smith Credit Agreement and such default has continued
for a period of seven (7) days after notice in writing has been given by Mr. Smith to the Company regarding such default, (b) if
the Company shall become insolvent, make a general assignment for the benefit of its creditors, or passes a resolution for the
winding-up, merger or amalgamation of the Company, or the Company declares bankruptcy or a receiver is appointed under applicable
law, or a compromise or arrangement is proposed by the Company to its creditors, or the occurrence of similar events (c) if the
Company defaults in observing or performing any other covenant or agreement of the Smith Credit Agreement and such default has
continued for a period of seven (7) days after notice in writing has been given by Mr. Smith to the Company regarding such default.
Pursuant to the Company’s related party transaction corporate
governance policies, the Smith Credit Agreement was approved by the Company’s Audit Committee and the disinterested directors
of the Board of Directors.
The above is a summary of the material terms of the Smith Credit
Agreement and is qualified in its entirety by the complete terms of the Smith Credit Agreement which is filed as Exhibit 10.1 to
this Current Report on Form 8-K and is hereby incorporated by reference.