Document:

Exhibit 10.3

 

Execution Copy

 

LOAN AND COLLAR CALL AGREEMENT

 

This LOAN AND COLLAR CALL AGREEMENT, dated as of May 21, 2013 (this “Agreement”), by and between YA GLOBAL INVESTMENTS, L.P., a Cayman Islands exempt limited partnership (“YA”), and TIMIOS NATIONAL CORPORATION, a Delaware corporation (“TNC”).

 

W I T N E S S E T H:

 

WHEREAS, YA has made loans and other financial accommodations to or for the benefit of TNC and its subsidiaries and affiliates;

 

WHEREAS, on the date hereof, YA and TNC have entered into a Term Loan and Collar Agreement (the “May Term Loan and Collar Agreement”) and Stock Pledge Agreement (the “May Pledge Agreement”) pursuant to which TNC made a loan to YA in the original principal amount of Five Hundred Thousand and 00/100 Dollars ($500,000) and YA granted to TNC a security interest and lien on the May Collateral Shares (as hereinafter defined), respectively; and

 

WHEREAS, YA and TNC desire to enter into an agreement pursuant to which TNC may require YA to enter into a second loan and collar agreement, substantially similar to the May Term Loan and Collar Agreement, as more fully described herein, and pursuant to the terms and conditions set forth below.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Defined Terms

 

1.                                      The following terms shall have the following meanings:

 

“Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which banking institutions are authorized or required by law or other government action to close.

 

“Common Stock” means the common stock, par value $0.001, of TNC.

 

“Conversion Shares” means shares of Common Stock that may be issued to YA if YA elects to convert shares of Series J Preferred Stock into shares of Common Stock in accordance with the Series J Preferred Stock Certificate of Designations.

 

“Discretionary Sale” means one or more sales by the Borrower of the Discretionary Shares to an unaffiliated third party.

 

“Discretionary Shares” means 250,000 Conversion Shares.

 

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“Hedging Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, the Common Stock.

 

“Loan” shall mean the term loan to be made by TNC to YA pursuant to the Optional Term Loan and Collar Agreement.

 

“Loan Call Notice” means a written notice by TNC to YA advising that TNC has elected to require YA to enter into the Optional Term Loan and Collar Agreement and Optional Pledge Agreement.

 

“Loan Call Period” means the period beginning on the date hereof and ending on the date that is six (6) months hereafter.

 

“May Collateral Shares” means 253,434 shares of Series J Preferred Stock evidenced by Certificate No. PJ013 and pledged by YA to TNC pursuant to the May Pledge Agreement to secure YA’s obligations under the May Term Loan and Collar Agreement

 

“May Pledge Agreement” has the meaning set forth in the recitals.

 

“May Term Loan and Collar Agreement” has the meaning set forth in the recitals.

 

“Optional Collateral Shares” means 1,659,690 shares of Series J Preferred Stock to be pledged by YA to TNC pursuant to the Optional Pledge Agreement to secure YA’s obligations under the Optional Term Loan and Collar Agreement.

 

“Optional Pledge Agreement” means a pledge agreement, substantially similar to the May Pledge Agreement, pursuant to which YA pledges the Optional Collateral Shares to TNC to secure YA’s obligations under the Optional Term Loan and Collar Agreement.

 

“Optional Term Loan and Collar Agreement” means a Term Loan and Collar Agreement, substantially similar to the May Term Loan and Collar Agreement, mutually acceptable to YA and TNC, and having the following terms and conditions:  (i) the Loan shall be in an original principal amount equal to $3,274,409, and (ii) the Loan shall be secured by the Optional Collateral Shares.

 

“Series J Preferred Stock” means the Series J Preferred Stock, par value $0.01, issued pursuant to the Series J Preferred Stock Certificate of Designations.

 

“Series J Preferred Stock Certificate of Designations” means that certain Certificate of Designations, Preferences and Rights of Series J Preferred Stock filed with the Secretary of State of the State of Delaware on August 28, 2012.

 

Exercise of Call Option

 

2.                                      At any time during the Loan Call Period, Timios may deliver to YA a Loan Call Notice.  Within ten (10) calendar days of YA having received the Loan Call Notice, YA and TNC shall execute and deliver the Optional Term Loan and Collar Agreement, the Optional Pledge Agreement and all other documents, instruments and agreements required to be executed in connection with the Optional Term Loan and Collar Agreement and Optional Pledge Agreement.

 

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3.                                      No later than two business days after the request of TNC, on and after the date on which all conditions precedent to the effectiveness of the Optional Term Loan and Collar Agreement are met or waived, YA shall vote in favor of a resolution to amend the Series J Preferred Stock Certificate of Designations, which resolution shall set forth the following language:

 

(a)                                 Section 2.3.1.  Section 2.3.1 of the Series J Preferred Stock Certificate of Designations shall be amended by deleting the phrase “percentage of shares of the then outstanding Series J Preferred Stock equal to the sum of the percentage of the then outstanding shares of Series J Preferred Stock held by YA Global Investments, L.P., rounded down to the nearest whole percentage point, plus 2%” and inserting in lieu thereof “holders of a majority-in-interest of the Series J Preferred Stock, excluding the shares of Series J Preferred Stock beneficially owned by a Yorkville Holder (as defined in Section 4.11).”

 

(b)                                 Section 3.2.  Section 3.2 of the Series J Preferred Stock Certificate of Designations shall be deleted in its entirety and the following phrase shall be inserted in lieu thereof:  “Reserved.”

 

(c)                                  Section 4.4.  Section 4.4 of the Series J Preferred Stock Certificate of Designations shall be deleted in its entirety and the following phrase shall be inserted in lieu thereof:  “Reserved.”

 

(d)                                 Section 4.5.  Section 4.5 of the Series J Preferred Stock Certificate of Designations shall be amended by deleting “Series J Original Issue Date” in the first sentence thereof and inserting in lieu thereof “date on which the first share of Series J Preferred Stock was issued (the “Series J Original Issue Date”).

 

(e)                                  Section 4.11.  Section 4.11 of the Series J Preferred Stock Certificate of Designations shall be amended by deleting the following phrase:  “(which provision may be waived by such Yorkville Holder(s) by written notice from such Yorkville Holder(s) to the Company, which notice shall be effective sixty-five days after the date of such notice).”

 

(f)                                   Section 5.1.   Section 5.1 of the Series J Preferred Stock Certificate of Designations shall be amended by (i) deleting the phrase “or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the holders representing the Series J Approval Threshold (the time of such closing, the date and time specified or the time of the event specified in such vote or written consent” and inserting in lieu thereof “(the time of such closing.”

 

4.                                      For the period beginning on the date on which all conditions precedent to the effectiveness of the Optional Term Loan and Collar Agreement are met or waived and ending on the maturity date of the Loan, by acceleration or otherwise, YA shall not, either directly or indirectly, enter into any Hedging Agreement with respect to any of the Company’s shares.

 

5.                                      During the Loan Call Period, YA shall not sell and/or convert into Common Stock any shares of Series J Preferred Stock, other than in connection with Discretionary Sales.

 

6.                                      As a condition precedent to the effectiveness of this Agreement, on the date on which all conditions precedent have been met or waived, the price per share of Common Stock shall be at least $0.60, but not more than $0.78.

 

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Miscellaneous

 

7.                                      Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be sent in writing and will be deemed to have been delivered:  (a) upon receipt, when delivered personally; (b) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (c) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same.  The addresses and facsimile numbers for such communications shall be:

 

	
If to the Company, to:
    	
 
    	
Timios National Corporation
    
	
 
    	
 
    	
4601 North Fairfax Road, Suite 1200
    
	
 
    	
 
    	
Arlington, VA 22203
    
	
 
    	
 
    	
Attn: Chief Executive Officer
    
	
 
    	
 
    	
Facsimile: (703) 526-0649
    
	
 
    	
 
    	
Email: tmcmillen@timios.com
    
	
 
    	
 
    	
 
    
	
With a copy to (which shall not constitute notice) to:
    	
 
    	
Mintz,   Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
    
	
 
    	
 
    	
666 Third Avenue
    
	
 
    	
 
    	
New York, NY 10017
    
	
 
    	
 
    	
Attn: Jeffrey P.   Schultz, Esq.
    
	
 
    	
 
    	
Facsimile: (212) 983-3115
    
	
 
    	
 
    	
Email: jpschultz@mintz.com
    
	
 
    	
 
    	
 
    
	
If   to the Holder:
    	
 
    	
c/o   Yorkville Advisors, LLC
    
	
 
    	
 
    	
1012 Springfield Ave.
    
	
 
    	
 
    	
Mountainside, NJ 07092
    
	
 
    	
 
    	
Attention:
    	
Legal Department
    
	
 
    	
 
    	
Telephone:
    	
(201) 985-8300
    
	
 
    	
 
    	
Email: mrosselli@yorkvilleadvisors.com
    

 

 

or at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party five (5) calendar days prior to the effectiveness of such change.  Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (iii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

8.                                      Each party has full power, right and authority to enter into and perform its obligations under this Agreement, and this Agreement has been duly executed and delivered by each such party, constitutes the valid and binding obligation of each such party, and is enforceability against each such party in accordance with its terms.

 

9.                                      This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to conflicts of laws thereof.

 

10.                               This Agreement may be executed in counterparts, each of which shall be deemed an original and together shall constitute one and the same instrument.

 

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11.                               This Agreement shall be binding upon and enforceable by, and inure to the benefit of, the parties hereto and their respective successors and permitted assigns.  The rights and obligations of the parties to this Agreement or any interest in this Agreement shall not be assigned, transferred, hypothecated, pledged or otherwise disposed of without the prior written consent of the non-assigning party, which consent may be withheld in such party’s sole discretion.

 

12.                               Any determination that any provision or application of this Agreement is invalid, illegal, or unenforceable in any respect, or in any instance, shall not affect the validity, legality, or enforceability of any such provision in any other instance, or the validity, legality, or enforceability of any other provision of this Agreement.

 

 (Remainder of page intentionally left blank.  Signature page(s) to follow.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Loan and Collar Call Agreement as of the date first above written.

 

 

	
 
    	
YA   GLOBAL INVESTMENTS, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
Yorkville   Advisors, LLC
    
	
 
    	
Its:
    	
Investment   Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jerry Eicke
    
	
 
    	
 
    	
Name:
    	
Jerry   Eicke
    
	
 
    	
 
    	
Title:
    	
Managing   member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
TIMIOS   NATIONAL CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   C. Thomas McMillen
    
	
 
    	
 
    	
Name:
    	
C.   Thomas McMillen
    
	
 
    	
 
    	
Title:
    	
President   and CEOExhibit 10.1

 

 

May 23, 2013

 

William G. Bock

 

Dear Bill:

 

The following terms and conditions shall be applicable to you during your service as President of Silicon Laboratories Inc. (the “Company”) commencing with an effective date of June 30, 2013 (the “Effective Date”):

 

Your annual salary will be $375,000 payable in accordance with the Company’s normal payroll practices.

 

You will be eligible to participate in the 2013 Bonus Plan with a target annualized bonus equal to 100% of your annualized base salary.  Any such bonus shall be paid on a pro rata basis based on the number of days you serve as an employee of the Company during the applicable period.

 

Effective upon the Effective Date, you will be granted an award of 35,000 Restricted Stock Units (the “RSU Award”).  The RSU Award will vest as follows: 50% on June 30, 2015 and 50% on June 30, 2016, contingent upon your continued service as an employee of the Company through each such date.  The RSU Award will be subject to the terms and conditions of the Restricted Stock Units Grant Notice and Restricted Stock Units Award Agreement U.S. Participants and the 2009 Stock Incentive Plan.

 

Effective upon the Effective Date, you will be granted an award of market stock units with a Target Number of Units equal 25,000 (the “MSU Award”).  The MSU Award will vest on July 31, 2016, contingent upon your continued service as an employee of the Company through such date.  The Performance Period of the MSU Award shall commence as of July 1, 2013 and end at June 30, 2016 and the vesting date shall be July 31, 2016.  The MSU Award will be subject to the terms and conditions of the Market Stock Units Grant Notice and Market Stock Units Award Agreement U.S. Participants (the “MSU Agreement”) and the 2009 Stock Incentive Plan.  The Performance Criteria and Performance Goals for the Performance Period shall be as set forth in the MSU Agreement.

 

Following your termination of service as an employee (such date of termination, the “Termination Date”) and contingent upon your continued service as a member of the Company’s Board, you will:

 

(a) be granted by the Compensation Committee of the Board an additional award of restricted stock units, with the number of units determined by dividing (i) the product of $12,500 multiplied by the number of months remaining until the first annual stockholders meeting following your Termination Date (with partial months rounded up) by (ii) the fair market value per share of Company common stock on the grant date, and, provided you have remained in continuous service as a member of the Board, such award will vest in a lump sum on the day immediately prior to the first annual stockholders meeting following such Termination Date; and

 

(b) be entitled to a cash payment with respect to each Eligible RSU Award equal to (i) the Fair Market Value of a share of the Company’s common stock on the Termination Date multiplied by (ii) the number of unvested Restricted Stock Units subject to such Eligible RSU Award that would have vested within 12 months of your Termination Date multiplied by (iii) a fraction equal to the number of months (with partial months rounded up) that you have served as an employee between the later of the effective date of grant of the Eligible RSU Award or

 

 

the most recent installment vesting date of such Eligible RSU Award (such later date, the “Starting Date”) and your Termination Date divided by the total number of months between the Starting Date and the applicable scheduled vesting date; and, subject to “Section 409A Compliance” described below, if applicable, such cash payment shall be made within 30 days following the Termination Date; and

 

(c) be entitled to a cash payment with respect to each Eligible MSU Award equal to (i) the Fair Market Value of a share of the Company’s common stock on the Termination Date multiplied by (ii) the Target Number of Units subject to such Eligible MSU Award multiplied by (iii) a fraction equal to the number of months (with partial months rounded up) that you have served as an employee since the beginning of the applicable Performance Period divided by the total number of months in the Performance Period multiplied by the Relative Return Factor determined with respect to a Performance Period which shall be deemed to end on the Termination Date; and, subject to “Section 409A Compliance” described below, if applicable, such cash payment shall be made within 30 days following the Termination Date.

 

The term “Eligible RSU Award” shall mean the RSU Award and any future award of Restricted Stock Units, but shall not include any currently outstanding award of Restricted Stock Units.

 

The term “Eligible MSU Award” shall mean the MSU Award and any future award of Market Stock Units, but shall not include any currently outstanding award of Market Stock Units.

 

Furthermore, the general requirement that a non-employee director must not have been employed by the Company for at least 6 months prior to the date of an annual stockholders meeting in order to receive the $150,000 RSU grant shall not be applicable to you (for clarity, you must still be a non-employee director on the date of such meeting in order to receive such grant).

 

During your employment with the Company, you and your dependents shall be eligible to participate in Medical Insurance, Dental Insurance, Vision Care, Short-Term Disability, Long-Term Disability, Life Insurance, and the 125 Cafeteria Plan for Medical and Dependent Care Reimbursements, subject to the terms of the Company’s benefit plan documents.  You will also be eligible to participate in the Company’s 401(k) Plan.  The Company will match employee 401(k) contributions dollar-for-dollar to a maximum of $5,000 annually.  You may also enroll in the Company’s employee stock purchase plan on the same terms as enjoyed by employees generally.  The Company reserves the right to change or eliminate these benefits on a prospective basis at any time.

 

You shall comply with current Company policies and Company policies adopted from time-to-time in the future.

 

Your compensation will be subject to all applicable taxes and withholding.

 

The Indemnification Agreement and the Silicon Laboratories Inc. New-Hire Proprietary Information and Inventions Agreement between the Company and you shall remain in full force and effect.

 

Your employment is “at will” and may be terminated by you or the Company at any time.

 

The provisions of this and following paragraph of this letter are referred to as “Section 409A Compliance.”  The Company intends that income provided to you pursuant to this letter will comply with the provisions of Section 409A of the Internal Revenue Code and the regulations promulgated thereunder (“Section 409A”), to the extent applicable, and all provisions of this letter shall be construed and interpreted in a manner consistent with such intent.  You may not, directly or indirectly, designate the calendar year of any payment to be made under this letter which constitutes a “deferral of compensation” for purposes of Section 409A (“Deferred Compensation”), and to the extent an amount of Deferred Compensation is payable within a specified time period, the time during such period at which such amount is paid shall be at the discretion of the Company.  Neither you nor any of your

 

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creditors or beneficiaries shall have the right to subject any amount payable pursuant this letter to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment.  Except as permitted under Section 409A, any amount of Deferred Compensation payable pursuant to this letter may not be reduced by, or offset against, any amount you owe to the Company or any of its affiliates.  Although the Company will use its best efforts to avoid the imposition of taxation, interest and penalties under Section 409A, you shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on you or your beneficiaries or any other taxpayer in connection with the payment of any amount under this letter (including any taxes and penalties under Section 409A), and neither the Company nor any of its affiliates shall have any obligation to indemnify or otherwise hold you or any beneficiary or other taxpayer harmless from any or all of such taxes or penalties.

 

No amount payable pursuant to this letter on account of your termination of employment with the Company which constitutes Deferred Compensation shall be paid unless and until you have incurred a “separation from service” within the meaning of Section 409A (including the provisions related to dual status as an employee and member of the Company’s board of directors).  Furthermore, to the extent that you are a “specified employee” within the meaning of Section 409A (determined using the identification methodology selected by Company from time to time, or if none, the default methodology) as of the date of your separation from service, no amount that constitutes Deferred Compensation which is payable on account of your separation from service shall paid to you before the date (the “Delayed Payment Date”) which is first day of the seventh month after the date of your separation from service or, if earlier, the date of your death following such separation from service.  All such amounts that would, but for this paragraph, become payable prior to the Delayed Payment Date will be accumulated and paid in a lump sum on the Delayed Payment Date.  Thereafter, any payments of Deferred Compensation that remain outstanding as of the day immediately following the Delayed Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this letter.

 

This letter and the agreements referenced herein constitute the entire agreement between you and the Company relating to this subject matter and supersede all prior or contemporaneous agreements, understandings, negotiations or representations, whether oral or written, express or implied, on this subject.  Upon the Effective Date, this letter supersedes the letter agreement dated March 13, 2013 between you and the Company.  This letter may not be modified or amended except by a specific, written agreement signed by you and an authorized Company representative.

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
/s/   G. Tyson Tuttle
    	
 
    
	
 
    	
 
    
	
G.   Tyson Tuttle
    	
 
    
	
Chief   Executive Officer
    	
 
    
	
 
    	
 
    
	
By   signing below, you acknowledge and agree to the terms set forth herein.
    	
 
    
	
 
    	
 
    
	
/s/   William G. Bock
    	
 
    
	
 
    	
 
    
	
William   G. Bock
    	
 
    

 

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