| Item 1.01 | Entry into a Material Definitive Agreement. |
Business Combination Agreement
On September 25, 2022, NioCorp Developments Ltd., a company organized
under the laws of the Province of British Columbia (“NioCorp” or the “Company”), GX Acquisition Corp. II, a Delaware
corporation (“GXII”), and Big Red Merger Sub Ltd, a Delaware corporation and a direct, wholly owned subsidiary of NioCorp
(“Merger Sub”), entered into a business combination agreement (the “Business Combination Agreement”). As a result
of the Transaction (as defined below), GXII will become a subsidiary of NioCorp.
The terms of the Business Combination Agreement, which contains customary
representations and warranties, covenants, closing conditions and other terms relating to the Transaction, are summarized below. Capitalized
terms used in this Current Report on Form 8-K but not otherwise defined herein have the meanings given to them in the Business Combination
Agreement.
Structure
Pursuant to the Business Combination Agreement, among other transactions,
the following transactions will occur: (i) Merger Sub will merge with and into GXII, with GXII surviving the merger (the “First
Merger”), (ii) all Class A shares in GXII (the “GXII Class A Shares”) that are held by shareholders who have not elected
to exercise their redemption rights in connection with the Transaction (the “GXII Public Shareholders”) shall be converted
into shares of Class A common stock in GXII (such shares, the “First Merger Class A Shares”), as the surviving company in
the First Merger, (iii) NioCorp will purchase all First Merger Class A Shares in exchange for common shares, no par value, of NioCorp
(“NioCorp Common Shares”) (the “Exchange”), (iv) NioCorp will assume the GX Warrant Agreement and each GX Warrant
that was issued and outstanding immediately prior to the effective time of the Exchange will be converted into a warrant to acquire NioCorp
Common Shares (a “NioCorp Warrant”), (v) all of the First Merger Class A Shares will be contributed by NioCorp to 0896800
B.C. Ltd., a company organized under the laws of the Province of British Columbia and a direct, wholly owned subsidiary of NioCorp (“Intermediate
Holdco”), in exchange for additional shares of Intermediate Holdco, resulting in GXII becoming a direct subsidiary of Intermediate
Holdco, (vi) Elk Creek Resources Corporation, a Nebraska corporation and a direct, wholly owned subsidiary of Intermediate Holdco (“ECRC”),
will merge with and into GXII, with GXII surviving the merger as a direct subsidiary of Intermediate Holdco (the “Second Merger”),
and (vii) following the effective time of the Second Merger, each of NioCorp and GXII, as the surviving company of the Second Merger,
will effectuate a reverse stock split with the ratio to be mutually agreed by the parties. The transactions contemplated by the Business
Combination Agreement and the Ancillary Agreements (as defined below) are referred to, collectively, as the “Transaction.”
Consideration
Pursuant to the Business Combination Agreement, upon consummation
of the First Merger, each GXII Class A Share that is held by a GXII Public Shareholder shall be converted into a First Merger Class A
Share. In connection with the Exchange, NioCorp will exercise its unilateral option to purchase each First Merger Class A Share in exchange
for 11.1829212 NioCorp Common Shares. As a result, each GXII Public Shareholder (excluding those who elect to exercise their redemption
rights in connection with the Transaction) will ultimately be issued NioCorp Common Shares.
Pursuant to the Business Combination Agreement, upon consummation
of the First Merger, each Class B share in GXII (other than certain shares that may be forfeited in accordance with the GXII Support Agreement
(as defined below)) will be converted into one share of Class B common stock in GXII (such shares, the “First Merger Class B Shares”),
as the surviving company in the First Merger. Upon consummation of the Second Merger, each of the First Merger Class B Shares will be
converted into 11.1829212 Class B common shares of GXII (each, a “Second Merger Class B Share”), as the surviving company
in the Second Merger. Each Second Merger Class B Share will be exchangeable into NioCorp Common Shares on a one-for-one basis, subject
to certain equitable adjustments, in accordance with the terms of the Exchange Agreement (further described below).
Pursuant to the Business Combination Agreement, in connection with
the First Merger and the assumption by NioCorp of the GX Warrant Agreement, each GX Warrant that is issued and outstanding immediately
prior to the Exchange Time shall be converted into one NioCorp Warrant pursuant to the GX Warrant Agreement. Each NioCorp Warrant shall
be exercisable solely for NioCorp Common Shares, and the number of NioCorp Common Shares subject to each NioCorp Warrant shall be equal
to the number of shares of GXII common stock subject to the applicable GX Warrant multiplied by 11.1829212, with the applicable exercise
price adjusted accordingly.
Following the effective time of the Second Merger, NioCorp
will effectuate a reverse stock split of the issued NioCorp Common Shares, and GXII will effectuate a proportionate reverse stock
split of the Second Merger Class A Shares and the Second Merger Class B Shares at a to-be-determined ratio.
The NioCorp Common Shares are traded on the Toronto Stock
Exchange (the “TSX”) under the symbol “NB” and on the OTC Markets trading platform under the symbol
“NIOBF.” GXII units, GXII Class A Shares and public warrants are currently listed on The Nasdaq Stock Market LLC
(“Nasdaq”), under the symbols “GXIIU,” “GXII” and “GXIIW,” respectively. NioCorp
currently anticipates that, following the Transaction, the NioCorp Common Shares will trade on Nasdaq and will continue to trade on
the TSX. In addition, NioCorp anticipates that, following the Transaction, the NioCorp Warrants will trade on Nasdaq. NioCorp
intends to apply for listing of the NioCorp Common Shares and NioCorp Warrants on Nasdaq. See “Closing Conditions”
below. Neither Nasdaq nor the TSX has conditionally approved any NioCorp listing application in connection with the Transaction and there is
no assurance that such exchanges will approve the listing applications.
Joint Proxy Statement/Prospectus
and Shareholder Meetings
As promptly as practicable after the date of the Business
Combination Agreement, NioCorp will file with the Securities and Exchange Commission (the “SEC”) a registration
statement on Form S-4 (the “registration statement”), which will include (i) a joint proxy statement of NioCorp and GXII
to solicit proxies to obtain the Company Shareholder Approval and the GX Shareholder Approval at the Company Shareholder Meeting and the GX Shareholder Meeting, respectively, and (ii) a prospectus of NioCorp under Section 5 of the Securities Act of 1933
(the “Securities Act”) with respect to the NioCorp securities issuable in connection with the Transaction (as amended or
supplemented from time to time, the “joint proxy statement/prospectus”). The definitive joint proxy statement/prospectus
will be sent to NioCorp and GXII shareholders and will be filed with the SEC and, in the case of NioCorp, with the applicable
Canadian securities regulatory authorities.
Closing
The closing (the “Closing”) will be no later than the
second business day following the satisfaction or waiver of all of the closing conditions (the “Closing Date”). It is expected
that the Closing will occur in the first quarter of 2023.
Representations, Warranties
and Covenants
The Business Combination Agreement contains customary representations,
warranties and covenants of (i) NioCorp and Merger Sub and (ii) GXII, relating to, among other things, their respective abilities and
authority to enter into the Business Combination Agreement and their respective capitalization.
Closing Conditions
The consummation of the Transaction is subject to the
satisfaction or waiver of certain customary closing conditions contained in the Business Combination Agreement, including, among
other things, (i) obtaining required approvals of the Transaction and related matters by the respective shareholders of NioCorp and
GXII, (ii) the effectiveness of the registration statement, (iii) receipt of approval for listing the NioCorp Common Shares to be
issued in connection with the Transaction on Nasdaq, (iv) receipt of approval for listing the NioCorp Warrants on Nasdaq, (v) receipt of approval from the TSX with respect to the issuance and listing of the Common Shares issuable in connection with the Transaction,
(vi) that
NioCorp and its subsidiaries (including GXII, as the surviving company of the Second Merger) will have at least $5,000,001 of net
tangible assets upon the consummation of the Transaction and after payment of underwriters’ fees or commissions,
(vii) that, at Closing, NioCorp and its subsidiaries (including GXII, as the surviving company of the Second Merger) will have
received cash in an amount equal to or greater than $15,000,000 in connection with the Transaction, subject to certain adjustments,
and (viii) the absence of any injunctions enjoining or prohibiting the consummation of the Business Combination Agreement.
Registration Rights Agreement and Lock-Up
Pursuant to the Business Combination Agreement, in connection with
the Closing, NioCorp, GXII, GX Sponsor II LLC, in its capacity as a shareholder of GXII (the “Sponsor”), the directors and
officers of NioCorp (the “NioCorp Holders”) and the directors and officers of GXII (the “GXII Holders” and, together
with the Sponsor and the NioCorp Holders, the “Holders”) will enter into a registration rights agreement (the “Registration
Rights Agreement”), pursuant to which, among other things, NioCorp will be obligated to file a shelf registration statement to register
the resale of certain securities of NioCorp held by the Holders after the Closing. The Registration Rights Agreement will also provide
the Holders with certain “demand” and “piggy-back” registration rights, subject to certain requirements and customary
conditions.
In addition, the Registration Rights Agreement will provide that the
Sponsor and the NioCorp Holders will be subject to “lock-up” restrictions on transfer of NioCorp securities held by them after
the Closing for the period beginning on the Closing Date and ending on the earlier of (i) one year after the Closing and (ii) subsequent
to the Closing, (a) the date on which the volume-weighted average price of the NioCorp Common Shares on the principal securities exchange
or market on which such securities are then traded has equaled or exceeded the quotient of $13.42 per share divided by 11.1829212 (as
adjusted for stock splits (including the reverse stock split), recapitalizations and similar events) for 20 trading days within any 30-trading
day period commencing at least 150 days after the Closing Date or (b) the date on which NioCorp completes a liquidation, merger, capital
stock exchange, reorganization or similar transaction that results in all of NioCorp’s shareholders having the right to exchange
their NioCorp Common Shares for cash, securities or other property.
Exchange Agreement
Pursuant to the Business Combination Agreement, in connection with
the Closing, NioCorp, GXII and the Sponsor will enter into an exchange agreement (the “Exchange Agreement”), pursuant to which,
among other things, the Sponsor will be entitled to exchange any or all of its shares of Second Merger Class B Shares in GXII for NioCorp
Common Shares on a one-for-one basis, subject to certain equitable adjustments, in accordance with the terms of the Exchange Agreement.
Under certain circumstances, and subject to certain exceptions, NioCorp may instead settle all or a portion of any exchange pursuant to
the terms of the Exchange Agreement in cash, in lieu of NioCorp Common Shares, based on a volume-weighted average price of NioCorp Common
Shares.
Alternative Proposals
The Business Combination Agreement contains certain
non-solicitation restrictions prohibiting the parties and their affiliates and representatives from soliciting alternative acquisition
proposals from third parties or providing nonpublic information to, or participating in discussions or negotiations with, third parties
regarding alternative acquisition proposals, subject to certain exceptions related to proposals received by NioCorp that constitute a
Superior Proposal.
Termination
The Business Combination Agreement may be terminated
by NioCorp or GXII under certain circumstances, including, among others, (i) if NioCorp and GXII provide mutual written consent; (ii)
by either NioCorp or GXII if, prior to the Closing, the Transaction is enjoined, prohibited or otherwise restrained by the terms of a
final, non-appealable Order of a Governmental Entity of competent jurisdiction (provided, however, that the right to terminate the Business
Combination Agreement under the clause described in this clause (ii) will not be available to a party whose breach of any provision of the Business Combination Agreement results in or materially contributes to causing such Order to be
issued or the failure of the Order to be removed); (iii) by either
NioCorp or GXII if the Closing does not occur on or before March 22, 2023, subject to certain extensions as permitted under the Business
Combination Agreement (provided, however, that the right to terminate the Business Combination Agreement under the clause described in
this clause (iii) will not be available to a party whose breach of any provision of the Business Combination Agreement results in or materially contributes to causing the Closing to fail
to occur prior to March 22, 2023, subject to certain extensions as permitted under the Business Combination Agreement); (iv) by either NioCorp or GXII if the Company Shareholder Approval
is not obtained at the Company Shareholder Meeting; (v) by either NioCorp or GXII if the GX Shareholder Approval is not obtained at
the GX Shareholder Meeting; (vi) by NioCorp if GXII breaches any representation, warranty or covenant made by it in the Business Combination
Agreement such that the conditions regarding the truth, completeness and correctness of the representations and warranties made by GXII
and the performance by GXII of its
covenants are not fulfilled as provided therein,
subject to GXII’s cure right set forth therein; (vii) by NioCorp in order to enter into a definitive agreement providing for a Superior
Proposal; (viii) by GXII if NioCorp or Merger Sub breaches any representation, warranty or covenant made by it in the Business Combination
Agreement such that the conditions regarding the truth, completeness and correctness of the representations and warranties made by NioCorp
and the performance by NioCorp and Merger Sub of their covenants are not fulfilled as provided therein, subject to NioCorp’s
cure right set forth therein; or (ix) by GXII in the event of a change of recommendation by the board of directors of NioCorp (the “NioCorp
Board”) or the failure of the NioCorp Board to publicly reaffirm its recommendation of the Business Combination Agreement and the
Transaction.
Termination Fee
The Business Combination Agreement provides that, upon termination
of the Business Combination Agreement in specified circumstances, NioCorp must pay GXII a termination fee of $15,000,000 (the “Base
Termination Fee”). Such specified circumstances include, among others, termination of the Business Combination Agreement by NioCorp
in order to enter into an agreement providing for a Superior Proposal, termination by GXII for a change of recommendation of the NioCorp
Board, or a material breach of certain of NioCorp’s covenants relating to soliciting acquisition proposals.
In addition, the Business Combination Agreement provides that, upon
termination of the Business Combination Agreement in specified circumstances, NioCorp is required to pay a termination fee in the amount
of $25,000,000 (the “Intentional Breach Termination Fee”). Such specified circumstances include, among others, termination
by GXII as a result of a willful and material breach by NioCorp such that certain conditions to Closing would not be satisfied at Closing
(subject to a cure period), or as a result of NioCorp’s failure to consummate the closing of the Transaction within five business
days after all the conditions to Closing have been satisfied and GXII has irrevocably confirmed in writing that it is prepared to consummate
the Closing.
In addition, the Business Combination Agreement provides that, upon
a termination of the Business Combination Agreement whereupon GXII will be entitled to the Base Termination Fee or the Intentional Breach
Termination Fee, NioCorp is also required to pay an amount equal to the sum of all documented and reasonable out-of-pocket expenses paid
or payable by GXII and the Sponsor in connection with the Business Combination Agreement and the Transaction, not to exceed $5,000,000.
Pursuant to the Business Combination Agreement, in no event will GXII
be entitled to both the Base Termination Fee and the Intentional Breach Termination Fee.
The foregoing description of the Business Combination Agreement is
qualified in its entirety by reference to the full text of the Business Combination Agreement, a copy of which is filed as Exhibit 2.1
to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 1.01. The Business Combination Agreement is
included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual
information about NioCorp, Merger Sub or GXII. In particular, the assertions embodied in representations and warranties by the parties
contained in the Business Combination Agreement are qualified by information in the disclosure schedules provided by the parties in connection
with the signing of the Business Combination Agreement. These disclosure schedules contain information that modifies, qualifies and creates
exceptions to the representations and warranties set forth in the Business Combination Agreement. Moreover, certain representations and
warranties in the Business Combination Agreement were used for the purpose of allocating risk between the parties, rather than establishing
matters as facts. Accordingly, investors and security holders should not rely on the representations and warranties in the Business Combination
Agreement as characterizations of the actual state of facts about NioCorp, Merger Sub or GXII.
GXII Support Agreement
On September 25, 2022, concurrently with the execution of the Business
Combination Agreement, GXII, NioCorp, the Sponsor, and the GXII Holders entered into a support agreement (the “GXII Support Agreement”),
pursuant to which the Sponsor and the GXII Holders agreed, among other things, to vote in favor of (i) an amendment to GXII’s Amended
and Restated Certificate of Incorporation (the “GXII Charter”) to eliminate the automatic conversion of shares of Class B
Common Stock of GXII, all of which are held by the Sponsor, into GXII Class A Shares at the
time of a Business Combination (as defined in the GXII Charter), (ii)
the Transaction, and (iii) any other proposals that are necessary to effectuate the Transaction. With respect to certain Second Merger
Class B Shares that are subject to an earnout period, the Sponsor and the GXII Holders also agreed not to transfer such shares until NioCorp
Common Shares achieve a trading price exceeding certain dollar thresholds set forth in the GXII Support Agreement, subject to the terms
and conditions contemplated by the GXII Support Agreement. Such shares will be forfeited if the NioCorp Common Shares do not achieve the
specified trading prices prior to the tenth anniversary of the Closing Date.
The foregoing description of the GXII Support Agreement is qualified
in its entirety by reference to the full text of the GXII Support Agreement, a copy of which is filed as Exhibit 10.1 to this Current
Report on Form 8-K and is hereby incorporated by reference into this Item 1.01.
Company Support Agreement
On September 25, 2022, concurrently with the execution of the Business
Combination Agreement, GXII, NioCorp and the NioCorp Holders entered into a support agreement (the “Company Support Agreement”
and, collectively with the Registration Rights Agreement, the Exchange Agreement, and the GXII Support Agreement, the “Ancillary
Agreements”), pursuant to which the NioCorp Holders agreed, among other things, to vote in favor of (i) the issuance of the NioCorp
securities issuable in connection with the Transaction, (ii) an amendment to the articles of NioCorp, as amended effective January 27,
2015, to comply with applicable listing requirements of Nasdaq, and (iii) any other proposals that are necessary to effectuate the Transaction.
The foregoing description of the Company Support Agreement is qualified
in its entirety by reference to the full text of the Company Support Agreement, a copy of which is filed as Exhibit 10.2 to this Current
Report on Form 8-K and is hereby incorporated by reference into this Item 1.01.
Key Employee Agreements
On September 25, 2022, in connection with entry into
the Business Combination Agreement, each of Neal Shah, Scott Honan and Jim Sims (collectively, the “Executives”) entered into
Employment Agreements with ECRC (collectively, the “Employment Agreements”). Subject to each Executive entering into a Restrictive
Covenant Agreement (collectively, the “Restrictive Covenant Agreements”) with ECRC prior to the Closing, the Employment Agreements
will become effective upon the Closing, and will continue until either the Executive or ECRC terminates the Executive’s employment
for any reason. Pursuant to the Employment Agreements, Mr. Shah will serve as Chief Financial Officer of NioCorp, Mr. Honan will serve
as the Chief Operating Officer of NioCorp and as President of ECRC, and Mr. Sims will serve as the Chief Communications Officer of NioCorp.
The Employment Agreements for each of Mr. Shah and Mr. Sims provide for an annual base salary of $220,000 per year, and Mr. Honan’s
Employment Agreement provides for an annual base salary of $260,000 per year. The annual base salary rates for the Executives will be
reviewed at least annually for potential increases. The Employment Agreements also provide each of the Executives with eligibility to
participate in (i) any annual cash bonus plan and/or any long-term incentive compensation plan as may be established by ECRC or its affiliates,
and (ii) any employee benefit plan, program, or policy of ECRC or its affiliates as may be in effect for senior executives of ECRC or
its affiliates generally. The Employment Agreements also include the following additional features: (i) severance benefits upon certain
qualifying terminations of employment, consisting of: (a) for a qualifying termination of the Executive’s employment by ECRC without
Cause (as such term is defined in the Employment Agreements) that does not occur within two years after a Change in Control of ECRC (as
defined in the Employment Agreements), certain accrued obligations, plus 12 months of salary continuation, and (b) for a qualifying termination
of the Executive’s employment by ECRC without Cause or by the Executive for Good Reason (as such term is defined in the Employment
Agreements) that occurs within two years after a Change in Control (a “Change in Control Termination”), certain accrued obligations,
and a lump sum cash amount equal to two times the Executive’s annual base salary as in effect at the time of such termination; and
(ii) a requirement that each Executive execute a customary release of claims in favor of ECRC to receive severance compensation. The Restrictive
Covenant Agreements will include customary restrictive covenants, including non-competition and non-solicitation obligations that remain
in effect both during the employment term and for one year following termination of the Executive’s employment other than a Change
in Control Termination (in which case the period will be two years following such Change in Control Termination), as well as other customary
restrictive covenants that remain in effect indefinitely, such as confidentiality provisions.
The foregoing description of the Employment Agreements and Restrictive
Covenant Agreements is qualified in its entirety by reference to the full text of the Employment Agreements and form of Restrictive Covenant
Agreement, copies of which are filed as Exhibits 10.3, 10.4, 10.5 and 10.6 to this Current Report on Form 8-K and are hereby incorporated
by reference into this Item 1.01.