Item 1.01.
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Entry into a Material Definitive Agreement.
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Arrangement Agreement
On August 2, 2018, Coeur Mining, Inc. (“Coeur”) entered into an Arrangement Agreement (the “Arrangement Agreement”) between Coeur and Northern Empire Resources Corp., a corporation governed under the laws of British Columbia (“Northern Empire”). The Arrangement Agreement provides for the implementation of a Plan of Arrangement (the “Plan of Arrangement”) under the Business Corporations Act (British Columbia) which will be subject to approval by the Supreme Court of British Columbia, pursuant to which Coeur will acquire all of the issued and outstanding common shares of Northern Empire not already owned by Coeur, subject to the satisfaction of the conditions contained therein.
Under the terms of the Plan of Arrangement, each common share of Northern Empire will be exchanged for 0.1850 common shares of Coeur (the “
Exchange Ratio
”). Based on the closing price of Coeur’s common shares on the New York Stock Exchange on August 1, 2018, the transaction values each Northern Empire share at C$1.64. The Plan of Arrangement will be subject to the approval of at least 66-⅔% of the votes cast by Northern Empire securityholders present in person or represented by proxy at a special meeting of Northern Empire securityholders and, if required by applicable law, the approval of a majority of the votes cast by the securityholders present in person or by proxy at the Northern Empire special meeting, other than Coeur and its subsidiaries (the “Required Vote”). In addition to the Required Vote, the Plan of Arrangement is also subject to the receipt of certain regulatory and court approvals. Under the Plan of Arrangement, Coeur will also acquire all of the outstanding options and warrants exercisable for Northern Empire common shares at the in-the-money value of such securities, satisfied by delivery of Coeur common shares based on the Exchange Ratio.
The Arrangement Agreement contains representations and warranties and covenants customary for a transaction of this nature. Northern Empire has agreed, among other things, subject to certain exceptions, to conduct its business in the ordinary course during the period between the execution of the Arrangement Agreement and the Effective Time (as defined in the Plan of Arrangement). Northern Empire is subject to restrictions on its ability to solicit alternative acquisition proposals and to provide information to, and engage in discussion with, or approve or recommend an alternative acquisition proposal with third parties regarding such proposals during the period between the execution of the Arrangement Agreement and the Effective Time, except under circumstances further described in the Arrangement Agreement.
The Arrangement Agreement provides that Coeur and Northern Empire may mutually agree to terminate the Arrangement Agreement at any time prior to the Effective Time. In addition, either party may decide to terminate the Arrangement Agreement at any time prior to the Effective Time if: (i) the transactions are not consummated by December 31, 2018, subject to possible extensions as described in the Arrangement Agreement and only if the failure to consummate the transactions by such date is not due to a breach by either party under the Arrangement Agreement; (ii) there is a new or amended law or an injunction or court order that makes consummation of the Arrangement (as defined in the Arrangement Agreement) illegal or otherwise prohibits or enjoins the parties from consummating the Arrangement; or (iii) the Required Vote is not obtained as required by the Arrangement Agreement. Coeur may also terminate the Arrangement Agreement if there is a Change in Recommendation (as defined in the Arrangement Agreement) by Northern Empire, or if Northern Empire fails to reaffirm its approval of the transactions or its recommendation that Northern Empire securityholders vote in favor of the transaction in certain circumstances, or takes certain other actions in respect of a competing acquisition proposal. Northern Empire may also terminate the Arrangement Agreement if it proposes to amend, modify or withdraw its approval of the Arrangement and/or approves a definitive agreement for the implementation of a Superior Proposal (as defined in the Arrangement Agreement), provided that concurrent with such termination, Northern Empire pays a termination fee as set out in the Arrangement Agreement in the amount of C$
4.7 million
(the “Termination Fee”). Each of Coeur and Northern Empire may also terminate the Arrangement Agreement if the other party is in breach of its representations and warranties or is in default of its covenants, subject to the right of the breaching party to cure the breach within 20 business days. The Arrangement Agreement also provides for the payment of the Termination Fee by Northern Empire if the Arrangement Agreement is terminated in certain circumstances or reciprocal expense reimbursements by either party payable under certain circumstances, as set out in therein.
Concurrently with execution of the Arrangement Agreement, Coeur entered into a voting agreement with certain securityholders of Northern Empire (the “Voting Agreement”) pursuant to which, among other things and subject to the terms and conditions therein, such securityholders have agreed to vote all of their securities, in the aggregate representing approximately 8.4% of the currently outstanding shares of Northern Empire, beneficially owned by them, in favor of (i) the Arrangement and each of the other transactions contemplated by the Arrangement Agreement and (ii) any other matter necessary for consummation of the Arrangement or any other transaction contemplated by the Arrangement Agreement.
The foregoing description of the Arrangement Agreement and the Plan of Arrangement do not purport to be complete and are qualified in their entirety by reference to the copy of the Arrangement Agreement, including the Plan of Arrangement attached as Schedule A thereto, which is attached as Exhibit 2.1 hereto and is incorporated herein by reference. The foregoing description of the Voting Agreement does not purport to be complete and is qualified in its entirety by reference to the copy of the Voting Agreement, which is attached as Exhibit 10.1 hereto and is incorporated herein by reference.
The Arrangement Agreement has been attached as an exhibit to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about Coeur or any of its respective affiliates or businesses. Any representations, warranties, covenants and agreements contained in the Arrangement Agreement were made only for the purposes of such agreement and as of specified dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties. Investors and security holders are not third-party beneficiaries under the Arrangement Agreement and should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of Coeur or any of its affiliates or businesses.