EXHIBIT 10.3
 
LOCK-UP AGREEMENT

 
To:   FWAC Holdings Limited

 c/o FlatWorld Capital LLC
 220 East 42nd St., 29th Floor
 New York, NY 10017

Re: Proposed Merger Involving FlatWorld Acquisition Corp. and Orchid Island
Capital, Inc.
 
1.    Acknowledgement. The undersigned acknowledges that FlatWorld Acquisition
Corp. ("FlatWorld" or the “Company”), FTWA Orchid Merger Sub, LLC, a
wholly-owned subsidiary of FlatWorld (“Merger Sub”), FWAC Holdings Limited
(“FWAC Holdings”), Bimini Capital Management, Inc. (“Bimini Capital”), Orchid
Island Capital, Inc., a wholly-owned subsidiary of Bimini Capital ("Orchid
Island"), and Bimini Advisors, LLC (“BA”) are intending to complete a proposed
merger pursuant to the Agreement and Plan of Reorganization (the "Merger
Agreement"), dated July 26, 2012, among FlatWorld, FWAC Holdings, Orchid Island,
Bimini Capital, Merger Sub and BA, pursuant to which the shares of Orchid Island
securities held by the undersigned are to be converted into the right to
receive, as consideration for such Orchid Island securities, Class A Preferred
Shares of FlatWorld, no par value (the “Preferred Shares”) (such transaction,
the “Merger”). In consideration of the transactions contemplated by the Merger
Agreement and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged by the undersigned), with respect
to the Preferred Shares issued or issuable to the undersigned (or to persons or
entities with respect to which the undersigned would have beneficial ownership
of such shares within the rules and regulations of the Securities and Exchange
Commission), whether pursuant to the Merger Agreement or otherwise (and the
ordinary shares of FlatWorld, no par value (the “Ordinary Shares”), into which
they are convertible), and any other securities of FlatWorld that is convertible
into, or exercisable or exchangeable for the Preferred Shares or Ordinary
Shares, the undersigned covenants and agrees with FWAC Holdings, as follows.

 
2.    Lock-Up. With respect to the Preferred Shares (and the Ordinary Shares
into which they are convertible) issued to the undersigned as consideration in
the Merger (the “Merger Consideration”), the undersigned shall not, except as
described in this Paragraph 2 hereof, (i) sell, offer to sell, contract or agree
to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose
of or agree to dispose of, directly or indirectly, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder, (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of any of the Merger Consideration, whether any such transaction is to
be settled by delivery of Preferred Shares, Ordinary Shares, other securities,
cash or otherwise, or (iii) publicly announce any intention to effect any
transaction specified in clause (i) or (ii), until one year after the Effective
Time (as defined in the Merger Agreement); provided, however, that the
restrictions set forth in items (i) - (iii) above shall not apply at any time on
or after January 1, 2013, if the holders of the Company’s Ordinary Shares fail
to approve, at a duly convened meeting of the Company’s shareholders, the
Reincorporation (as defined in the Merger Agreement) on or prior to January 1,
2013 (provided that Bimini Capital or any permitted Person to whom Bimini
Capital transferred the Merger Consideration in compliance with this agreement,
voted all of the Merger Consideration, on an as-converted basis, in favor of
such Reincorporation). Notwithstanding any other terms herein, all of the Merger
Consideration will be released from the restrictions set forth in this Paragraph
2, if, following consummation of the Merger, the Company engages in a subsequent
liquidation.

The undersigned agrees and consents to the entry of stop transfer instructions
with FlatWorld’s transfer agent and registrar against, and authorizes FWAC
Holdings to cause the transfer agent and registrar to decline, the transfer of
relevant securities held by the undersigned except in compliance with the
foregoing restrictions. Notwithstanding the foregoing, the undersigned may sell,
contract to sell, dispose of, or otherwise transfer for value or otherwise, the
Preferred Shares (or the Ordinary Shares into which they are convertible) (i) by
gift, will or intestacy, (ii) by distribution to partners, members,
shareholders, or beneficiaries of the undersigned, or (iii) to any wholly-owned
direct or indirect subsidiary or subsidiaries of the undersigned; provided
however, that in the case of a transfer pursuant to (i), (ii) or (iii) above, it
shall be a condition to such transfer that the transferee execute an agreement

 
 
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stating that the transferee is receiving and holding the Preferred Shares (or
the Ordinary Shares into which they are convertible) subject to the provisions
of this Lock Up Agreement. Notwithstanding the restrictions set forth in
Paragraph 2 above, the undersigned shall not be restricted or prohibited by this
Lock Up Agreement from converting any or all of its Preferred Shares into
Ordinary Shares in accordance with the terms and conditions of the Preferred
Shares.
 
3.    Termination. This agreement may be terminated by mutual written consent of
the parties hereto. This agreement shall be terminated upon the earlier of (i)
the termination of the Merger Agreement, (ii) one calendar day following the
date that is one year following the Effective Time, in accordance with its terms
or (iii) January 1, 2013, if the holders of the Company’s Ordinary Shares fail
to approve, at a duly convened meeting of the Company’s shareholders, the
Reincorporation on or prior to January 1, 2013 (provided that Bimini Capital or
any Permitted Person to whom Bimini Capital transferred the Merger Consideration
in compliance with this agreement, voted all of the Merger Consideration, on an
as-converted basis, in favor of such Reincorporation). The undersigned further
understands that this agreement is irrevocable, and that all authority herein
conferred or agreed to be conferred shall survive death or incapacity of the
undersigned and will be binding on the undersigned and the respective
successors, heirs, personal representatives, and assigns of the undersigned.

 
4.    Authority. The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this agreement.

 
5.    Public Disclosure. The undersigned agrees not to make any public
disclosure or announcement of or pertaining to this agreement, the Merger
Agreement or the transactions contemplated thereby or hereby without the prior
written consent of FWAC Holdings except as required by law.

 
6.    Damages. The undersigned recognizes and acknowledges that this agreement
is an integral part of the Merger Agreement and that a breach by the undersigned
of any covenants or other commitments contained in this agreement will cause
FWAC Holdings to sustain injury for which it may not have an adequate remedy at
law for money damages. Therefore, the undersigned agrees that in the event of
any such breach, FWAC Holdings shall be entitled to the remedy of specific
performance of such covenants or commitments and preliminary and permanent
injunctive and other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity, and the undersigned agrees to waive any
requirement for the securing or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief.

 
7.    Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable therein (without
regard to conflict of laws principles).

 
8.    Facsimile. FWAC Holdings and the undersigned shall be entitled to rely on
delivery of a facsimile copy hereof which shall be legally effective to create a
valid and binding agreement of the undersigned and FWAC Holdings in accordance
with the terms hereof.

 
9.    Counterparts. This agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

 
10.    Entire Agreement. This agreement constitutes the entire agreement and
understanding between the parties pertaining to the subject matter of this
agreement.

[SIGNATURE PAGE FOLLOWS]
 

 
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                                  BIMINI CAPITAL MANAGEMENT, INC.

                                  By:________________________
                                  Name:
                                  Title:

_____________________________
Signature of Witness

 
Name of Witness (please print)

Address and fax number
Bimini Capital Management, Inc.
3305 Flamingo Drive
Vero Beach, Florida 32963
Fax No.: 772-231-2896
 
141,873
Number of FlatWorld Acquisition
Corp. Preferred Shares subject
to this Lock Up Agreement
 
 
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