Item
1.01
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Entry
into a Material Definitive Agreement.
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On
February 16, 2021, NioCorp Developments Ltd. (the “Company”) entered into a definitive convertible security funding
agreement (the “Lind Agreement”) with an entity managed by The Lind Partners, a New York-based asset management firm
(collectively with The Lind Partners, “Lind”). Pursuant to the Lind Agreement, Lind has agreed to advance to the Company
$10 million (subject to additional set off) in consideration of which the Company has agreed to issue to Lind a convertible security
(the “Convertible Security”) with a face value of $11.7 million (representing $10 million in funding plus an implied
8.5% interest rate per annum for the term of the Convertible Security). The funding and issuance of the Convertible Security is
expected to occur on or around February 19, 2021 (the “Closing”), subject to the approval of the Toronto Stock Exchange
(the “TSX”) and the satisfaction of customary closing conditions.
The
Convertible Security will have a term of (i) 24 months after the Closing or (ii) 30 calendar days after the date on which the
face value of the Convertible Security is nil due to such amount having been fully converted and/or fully repaid (including with
any applicable premium) in accordance with the terms of the Lind Agreement, whichever is earlier. The Convertible Security will
constitute the direct, general and unconditional obligation of the Company and will rank pari-passu with the Company’s other
indebtedness.
Pursuant
to the Lind Agreement, Lind is entitled to convert the Convertible Security into common shares, without par value, of the Company
(“Common Shares”) in monthly installments over its term at a price per Common Share equal to 85% of the volume-weighted
average price of the Common Shares on the TSX for the five trading days immediately preceding to the date on which Lind provides
notice to the Company of its election to convert. Subject to certain exceptions, the Lind Agreement contains restrictions on how
much of the Convertible Security may be converted in any particular month. The Lind Agreement also provides NioCorp with the option
to buy back the remaining face amount of the Convertible Security in cash at any time; provided that, if the Company exercises
such option, Lind will have the option to convert up to 33.33% of the remaining face amount into Common Shares at the price described
above. In addition, Lind is entitled to accelerate its conversion right to the full amount of the face value of the Convertible
Security or demand repayment thereof in cash upon the occurrence of an event of default and other designated events described
in the Lind Agreement.
In
connection with the funding, Lind will be issued 8,558,000 Common Share purchase warrants of the Company (the “Warrants”),
each exercisable into one Common Share at a price of C$0.97 per share for a period of 48 months.
The
Lind Agreement provides limitations on the number of Common Shares that may be issued to Lind upon conversion of the Convertible
Security or exercise of the Warrants. Upon issuance, such Common Shares will be fully paid and non-assessable and will rank equally
in all respects with all other Common Shares then outstanding.
In
addition, pursuant to the Lind Agreement, the Company has agreed to file with the Securities and Exchange Commission a registration
statement on Form S-1 or Form S-3 (the “Registration Statement”) under the Securities Act of 1933 (the “Securities
Act”), covering the resale by Lind of the Common Shares issuable upon conversion of the Convertible Security and upon exercise
of the Warrants (the “Investor’s Shares”), promptly, but in any event no later than April 1, 2021, and to use
its best efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but in
no event later than the date that is 120 days following the Closing. The Company further agreed to use its best efforts to cause
the Registration Statement to remain continuously effective for a period that will terminate upon the first date on which all
of the Investor’s Shares may be sold without restriction, including volume and manner-of-sale restrictions, pursuant to
Rule 144 under the Securities Act or have been sold by Lind. The Company also granted to Lind certain piggyback registration rights
with respect to the Investor’s Shares.
The
Lind Agreement provides that the Company will pay all fees and expenses relating to the registration of the Investor’s Shares
pursuant to Lind’s registration rights thereunder. The Company also agreed to indemnify and hold harmless Lind, its affiliates
and their respective directors, officers, managers, shareholders, members, partners, employees and agents and permitted successors
and assigns from and against, with certain limitations and exceptions, any losses to which they may become subject under the Securities
Act or otherwise in connection with the registration of the Investor’s Shares pursuant to Lind’s registration rights
under the Lind Agreement and to reimburse such persons for any legal or other expenses reasonably incurred by them in connection
with investigating, preparing or defending any such losses.
The
above summary of the material terms of the Lind Agreement is qualified in its entirety by the actual terms and conditions of the
Lind Agreement, which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is hereby incorporated by reference into
this Item 1.01.