EXHIBIT 10.2
 
REGISTRATION RIGHTS AGREEMENT
 
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the
[ ]th day of [ ], 2012, by and between FlatWorld Acquisition Corp., a British
Virgin Islands business company organized with limited liability (the
“Company”), and Bimini Capital Management, Inc., a Maryland corporation (the
“Shareholder”).
 
 
WHEREAS, Orchid Island Capital, Inc., a Maryland corporation (“Orchid Island”),
the Shareholder, Bimini Advisors, LLC, a Maryland limited liability company, the
Company, FTWA Orchid Merger Sub LLC, a Maryland limited liability company and
wholly-owned subsidiary of the Company (“Merger Sub”), and FWAC Holdings
Limited, a British Virgin Islands company limited by shares (“FWAC Holdings”)
entered into the Agreement and Plan of Reorganization, dated as of July 26, 2012
(the “Merger Agreement”), pursuant to which, at the Effective Time (as defined
in the Merger Agreement), Orchid Island will merge with and into Merger Sub (the
“Merger”), with Merger Sub continuing as the surviving entity in the Merger; and
 
 
WHEREAS, pursuant to the Merger Agreement, as a result of the Merger, all of the
issued and outstanding equity interests of Orchid Island (“Equity Interests”),
all of which are owned by Shareholder, will automatically be converted into the
right to receive 141,873 Class A Preferred Shares, no par value, of the Company
(such shares, as they may be adjusted as provided in the Merger Agreement, the
“Preferred Shares”), as consideration for the Equity Interests; and
 
 
WHEREAS, at the Effective Time, the Company shall issue the Preferred Shares to
the Shareholder; and
 
 
WHEREAS, Shareholder and the Company desire to enter into this Agreement to
provide Shareholder with certain rights relating to the registration of the
Preferred Shares.
 
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
 
1.  
DEFINITIONS. The following capitalized terms used herein have the following
meanings:

 
“Code” means the Internal Revenue Code of 1986, as amended.
 
 
“Commission” means the U.S. Securities and Exchange Commission, or any successor
agency.
 
 
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder, all as the
same shall be in effect at the time.
 

 
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“Register,” “Registered” and “Registration” mean a registration effected by
preparing and filing a registration statement or similar document in compliance
with the requirements of the Securities Act, and such registration statement
becoming effective.
 
 
“Registrable Securities” means (i) the Preferred Shares (and the ordinary
shares, no par value, of the Company (the “Ordinary Shares”) into which they are
convertible) and (ii) any other equity security of the Company issued or
issuable with respect to any such Preferred Shares or Ordinary Shares by way of
a stock dividend or stock split or in connection with a combination of shares,
recapitalization, amalgamation, consolidation or reorganization. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when: (a) a Registration Statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been sold, transferred, disposed of or exchanged in
accordance with such Registration Statement; (b) such securities shall have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration under the
Securities Act; (c) such securities shall have ceased to be outstanding; or (d)
the entire amount of the Registrable Securities held by any holder may be sold
in a single sale, in the opinion of counsel reasonably satisfactory to the
Company without any limitation as to volume or manner of sale pursuant to Rule
144 (or any successor rule or regulation) under the Securities Act.
 
 
“Registration Statement” means a registration statement filed by the Company
with the Commission in compliance with the Securities Act for a public offering
and sale of equity securities, or securities or other obligations exercisable or
exchangeable for, or convertible into, equity securities (other than a
registration statement on Form F-4, F-8, S-4 or S-8, or their successors, or any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another entity).
 
 
“Release Date” means the date on which the Preferred Shares are released from
their lockup restrictions pursuant to the Lockup Agreement between the
Shareholder and FWAC Holdings, dated as of the date hereof.
 
 
“Securities Act” means the U.S. Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect at the time.
 
 
“Underwriter” means a securities dealer who purchases any Registrable Securities
as principal in an underwritten offering and not as part of such dealer’s
market-making activities.
 
2.           REGISTRATION RIGHTS.
 
2.1           Demand Registration.
 
2.1.1 Request for Registration. At any time and from time to time on or after
the Release Date with respect to the Preferred Shares (or Ordinary Shares into
which they are convertible), the holders of a majority-in-interest of the
Preferred Shares (or
 

 

 
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Ordinary Shares into which they are convertible), as a class, may make a written
demand for registration under the Securities Act of all or part of such
Registrable Securities (a “Demand Registration”). Any demand for a Demand
Registration shall specify the type and number of such Registrable Securities
proposed to be sold and the intended method(s) of distribution thereof. The
Company will then notify all holders of Registrable Securities of the demand,
and each holder of Registrable Securities who wishes to include all or a portion
of such holder’s Registrable Securities in the Demand Registration (each such
holder including shares of Registrable Securities in such registration, a
“Demanding Holder”) shall notify the Company of the number and type of
Registrable Securities for which registration is requested within fifteen (15)
calendar days of the receipt by the holder of such notice from the Company. Upon
any such request, the Demanding Holders shall be entitled to have their
Registrable Securities included in the Demand Registration, subject to Section
2.1.4 and the provisos set forth in Section 3.1.1. The Company shall not be
obligated to effect more than three (3) Demand Registrations with respect to the
Preferred Shares (or Ordinary Shares into which they are convertible) under this
Section 2.1.1.
 
2.1.2           Effective Registration. A registration will not count as a
Demand Registration until the Registration Statement filed with the Commission
with respect to such Demand Registration has been declared effective and the
Company has complied with all of its obligations under this Agreement with
respect thereto; provided, however, that if, after such Registration Statement
has been declared effective, the offering of Registrable Securities pursuant to
a Demand Registration is interfered with by any stop order or injunction of the
Commission or any other governmental agency or court, the Registration Statement
with respect to such Demand Registration will be deemed not to have been
declared effective, unless and until, (i) such stop order or injunction is
removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of
the Demanding Holders thereafter elect to continue the offering; provided,
further, that the Company shall not be obligated to file a second or third
Registration Statement, as the case may be, until a Registration Statement that
has been filed is counted as a Demand Registration or is terminated.
 
2.1.3           Underwritten Offering. If a majority-in-interest of the
Demanding Holders so elect and such holders so advise the Company as part of
their written demand for a Demand Registration, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. In such event, the right of any holder to include its
Registrable Securities in such registration shall be conditioned upon such
holder’s participation in such underwriting and the inclusion of such holder’s
Registrable Securities in the underwriting to the extent provided herein. All
Demanding Holders proposing to distribute their Registrable Securities through
such underwriting shall enter into an underwriting agreement in customary form
with the Underwriter or Underwriters selected for such underwriting by a
majority-in-interest of the holders initiating the Demand Registration.
 
2.1.4           Reduction of Offering. If the managing Underwriter or
Underwriters for a Demand Registration that is to be an underwritten offering
advises the Company and the Demanding Holders in writing that the dollar amount
or number of
 

 

 
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shares of Registrable Securities which the Demanding Holders desire to sell,
taken together with all other Ordinary Shares or other securities which the
Company desires to sell and the Ordinary Shares, if any, as to which
registration has been requested pursuant to written contractual piggy-back
registration rights held by other shareholders of the Company who desire to
sell, exceeds the maximum dollar amount or maximum number of shares that can be
sold in such offering without adversely affecting the proposed offering price,
the timing, the distribution method, or the probability of success of such
offering (such maximum dollar amount or maximum number of shares, as applicable,
the “Maximum Number of Shares”), then the Company shall include in such
registration: (i) first, the Registrable Securities as to which Demand
Registration has been requested by the Demanding Holders (pro rata in accordance
with the number of shares held by each such Person, regardless of the number of
shares that each such Person has requested be included in such registration
(such proportion is referred to herein as “Pro Rata”)) that can be sold without
exceeding the Maximum Number of Shares; (ii) second, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clause (i),
the Ordinary Shares or other securities that the Company desires to sell that
can be sold without exceeding the Maximum Number of Shares; (iii) third, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (i) and (ii), the Ordinary Shares or other securities for the
account of other persons that the Company is obligated to register pursuant to
written contractual arrangements with such persons and that can be sold without
exceeding the Maximum Number of Shares.
 
2.1.5           Withdrawal. If a majority-in-interest of the Demanding Holders
disapprove of the terms of any underwriting or are not entitled to include all
of their Registrable Securities in any offering, such majority-in-interest of
the Demanding Holders may elect to withdraw from such offering by giving written
notice to the Company and the Underwriter or Underwriters of their request to
withdraw prior to the effectiveness of the Registration Statement filed with the
Commission with respect to such Demand Registration. If the majority-in-interest
of the Demanding Holders withdraws from a proposed offering relating to a Demand
Registration, all Demanding Holders shall be withdrawn from such offering and
such registration shall not count as a Demand Registration provided for in
Section 2.1.
 
2.2           Piggy-Back Registration.
 
2.2.1           Piggy-Back Rights. If at any time on or after the Release Date,
the Company proposes to file a Registration Statement under the Securities Act
with respect to an offering of equity securities, or securities or other
obligations exercisable or exchangeable for, or convertible into, equity
securities, by the Company for its own account or for shareholders of the
Company for their account (or by the Company and by shareholders of the Company
including, without limitation, pursuant to Section 2.1), other than a
Registration Statement (i) filed in connection with any employee stock option or
other benefit plan, (ii) for an exchange offer or offering of securities solely
to the Company’s existing shareholders, (iii) filed in connection with a
business combination transaction in which the Company’s securities are issued to
the security holders of the other party to the transaction or (iv) for a
dividend reinvestment plan, then the Company shall: (x) give written notice of
such proposed filing to the holders of
 

 

 
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Registrable Securities as soon as practicable but in no event less than twenty
(20) days before the first anticipated filing date of the Registration Statement
with the Commission, which notice shall describe the amount and type of
securities to be included in such offering, the intended method(s) of
distribution, and the name of the proposed managing Underwriter or Underwriters,
if any, of the offering, and (y) offer to the holders of Registrable Securities
in such notice the opportunity to register the sale of such number of shares of
Registrable Securities as such holders may request in writing within ten (10)
days following receipt of such notice (a “Piggy-Back Registration”). The Company
shall use its best efforts to cause such Registrable Securities to be included
in such registration and shall use its best efforts to cause the managing
Underwriter or Underwriters of a proposed underwritten offering to permit the
Registrable Securities requested to be included in a Piggy-Back Registration on
the same terms and conditions as any similar securities of the Company and to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method(s) of distribution thereof. All holders of
Registrable Securities proposing to distribute their securities through a
Piggy-Back Registration that involves an Underwriter or Underwriters shall enter
into an underwriting agreement in a form reasonably acceptable to the
Underwriter or Underwriters selected for such Piggy-Back Registration.
 
2.2.2           Reduction of Offering. If the managing Underwriter or
Underwriters for a Piggy-Back Registration that is to be an underwritten
offering advises the Company and the holders of Registrable Securities in
writing that the dollar amount or number of Ordinary Shares which the Company
desires to sell, taken together with Ordinary Shares, if any, as to which
registration has been demanded pursuant to written contractual arrangements with
persons other than the holders of Registrable Securities hereunder, the
Registrable Securities as to which registration has been requested under this
Section 2.2, and the Ordinary Shares, if any, as to which registration has been
requested pursuant to the written contractual piggy-back registration rights of
other shareholders of the Company, exceeds the Maximum Number of Shares, then
the Company shall include in any such registration:
 
(a)           If the registration is undertaken for the Company’s account: (i)
first, the Ordinary Shares or other securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares; (ii) second, to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (i), collectively, the Ordinary Shares or other securities, if
any, comprised of Registrable Securities and the Ordinary Shares or other
securities for the account of other persons that the Company is obligated to
register pursuant to written contractual piggy-back registration rights with
such persons, Pro Rata, and that can be sold without exceeding the Maximum
Number of Shares;
 
(b)           If the registration is a “demand” registration undertaken at the
demand of persons other than the holders of Registrable Securities, (i) first,
the Ordinary Shares or other securities for the account of the demanding persons
that can be sold without exceeding the Maximum Number of Shares; (ii) second, to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (i), the Ordinary Shares or other securities that the Company

 

 
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desires to sell that can be sold without exceeding the Maximum Number of Shares;
(iii) third, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (i) and (ii), collectively, the Ordinary
Shares or other securities comprised of Registrable Securities and the Ordinary
Shares or other securities for the account of other persons that the Company is
obligated to register pursuant to written contractual piggy-back arrangements
with such persons, Pro Rata, that can be sold without exceeding the Maximum
Number of Shares.
 
2.2.3           Withdrawal. Any holder of Registrable Securities may elect to
withdraw such holder’s request for inclusion of Registrable Securities in any
Piggy-Back Registration by giving written notice to the Company of such request
to withdraw prior to the effectiveness of the Registration Statement. The
Company (whether on its own determination or as the result of a withdrawal by
persons making a demand pursuant to written contractual obligations) may
withdraw a Registration Statement at any time prior to the effectiveness of such
Registration Statement. Notwithstanding any such withdrawal, the Company shall
pay all expenses incurred by the holders of Registrable Securities in connection
with such Piggy-Back Registration as provided in Section 3.3.
 
2.2.4           Registrations on Form S-3 or F-3. The holders of a
majority-in-interest of the Registrable Securities may at any time and from time
to time, request in writing that the Company register the resale of any or all
of such Registrable Securities on Form S-3, Form F-3 or any similar short-form
registration which may be available at such time (“Form S-3/F-3”); provided,
however, that the Company shall not be obligated to effect such request through
an underwritten offering. Upon receipt of such written request, the Company will
promptly give written notice of the proposed registration to all other holders
of Registrable Securities, and, as soon as practicable thereafter, effect the
registration of all or such portion of such holder’s or holders’ Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities or other securities of the Company, if any, of any
other holder or holders joining in such request as are specified in a written
request given within fifteen (15) days after receipt of such written notice from
the Company; provided, however, that the Company shall not be obligated to
effect any such registration pursuant to this Section 2.2: (i) if Form S-3/F-3
is not available for such offering; or (ii) if the holders of the Registrable
Securities, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at any aggregate price to the
public of less than $500,000. Registrations effected pursuant to this Section
2.2 shall not be counted as Demand Registrations effected pursuant to Section
2.1.
 
3.           REGISTRATION PROCEDURES.
 
3.1           Filings; Information. Whenever the Company is required to effect
the registration of any Registrable Securities pursuant to Section 2, the
Company shall use its best efforts to effect the registration and sale of such
Registrable Securities in accordance with the intended method(s) of distribution
thereof as expeditiously as practicable, and in connection with any such
request:

 
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3.1.1           Filing Registration Statement. The Company shall use its best
efforts to, as expeditiously as possible after receipt of a request for a Demand
Registration pursuant to Section 2.1, prepare and file with the Commission a
Registration Statement on any form for which the Company then qualifies or which
counsel for the Company shall deem appropriate and which form shall be available
for the sale of all Registrable Securities to be registered thereunder in
accordance with the intended method(s) of distribution thereof, and shall use
its best efforts to cause such Registration Statement to become effective and
use its best efforts to keep it effective for the period required by Section
3.1.3; provided, however, that the Company shall have the right to defer any
Demand Registration for up to thirty (30) days, and any Piggy-Back Registration
for such period as may be applicable to deferment of any demand registration to
which such Piggy-Back Registration relates, in each case if the Company shall
furnish to the holders a certificate signed by the Chief Executive Officer of
the Company stating that, in the good faith judgment of the Board of Directors
of the Company, it would be materially detrimental to the Company and its
shareholders for such Registration Statement to be effected at such time;
provided further, that the Company may only exercise this “judgment rejection”
once in any 365-day period in respect of a Demand Registration made in
accordance with the terms of this Agreement.
 
3.1.2           Copies. The Company shall, prior to filing a Registration
Statement or prospectus, or any amendment or supplement thereto, furnish without
charge to the holders of Registrable Securities included in such registration,
and such holders’ legal counsel, copies of such Registration Statement as
proposed to be filed, each amendment and supplement to such Registration
Statement (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such Registration
Statement (including each preliminary prospectus), and such other documents as
the holders of Registrable Securities included in such registration or legal
counsel for any such holders may request in order to facilitate the disposition
of the Registrable Securities owned by such holders.
 
3.1.3           Amendments and Supplements. The Company shall prepare and file
with the Commission such amendments, including post-effective amendments, and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
in compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such Registration Statement have been
disposed of in accordance with the intended method(s) of distribution set forth
in such Registration Statement or such securities have been withdrawn.
 
3.1.4           Notification. After the filing of a Registration Statement, the
Company shall promptly, and in no event more than two (2) business days after
such filing, notify the holders of Registrable Securities included in such
Registration Statement of such filing, and shall further notify such holders
promptly and confirm such advice in writing in all events within two (2)
business days of the occurrence of any of the following: (i) when such
Registration Statement becomes effective; (ii) when any post-effective amendment
to such Registration Statement becomes effective; (iii) the issuance or
threatened issuance by the Commission of any stop order (and the Company shall
take
 

 

 
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all actions required to prevent the entry of such stop order or to remove it if
entered); and (iv) any request by the Commission for any amendment or supplement
to such Registration Statement or any prospectus relating thereto or for
additional information or of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the securities covered by such
Registration Statement, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and promptly make
available to the holders of Registrable Securities included in such Registration
Statement any such supplement or amendment; except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement
thereto, including documents incorporated by reference, the Company shall
furnish to the holders of Registrable Securities included in such Registration
Statement and to the legal counsel for any such holders, copies of all such
documents proposed to be filed sufficiently in advance of filing to provide such
holders and legal counsel with a reasonable opportunity to review such documents
and comment thereon, and the Company shall not file any Registration Statement
or prospectus or amendment or supplement thereto, including documents
incorporated by reference, to which such holders or their legal counsel shall
object.
 
3.1.5           State Securities Laws Compliance. The Company shall use its best
efforts to (i) register or qualify the Registrable Securities covered by the
Registration Statement under such securities or “blue sky” laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may request and (ii) take such action necessary to cause such
Registrable Securities covered by the Registration Statement to be registered
with or approved by such other governmental authorities as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be necessary or advisable to enable the holders of
Registrable Securities included in such Registration Statement to consummate the
disposition of such Registrable Securities in such jurisdictions; provided,
however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph or subject itself to taxation in any such jurisdiction.
3.1.6           Agreements for Disposition. The Company shall enter into
customary agreements (including, if applicable, an underwriting agreement on
terms and conditions reasonable to the Company in its sole discretion) and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities. The representations, warranties
and covenants of the Company in any underwriting agreement which are made to or
for the benefit of any Underwriters, to the extent applicable, shall also be
made to and for the benefit of the holders of Registrable Securities included in
such registration statement. No holder of Registrable Securities included in
such registration statement shall be required to make any representations or
warranties in the underwriting agreement except, if applicable, with respect to
such holder’s organization, good standing, authority, title to Registrable
Securities, lack of conflict of such sale with such holder’s material agreements
and organizational documents, and with respect to written information relating
to such holder

 
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that such holder has furnished in writing expressly for inclusion in such
Registration Statement.
 
3.1.7           Cooperation. The principal executive officer of the Company, the
principal financial officer of the Company, the principal accounting officer of
the Company and all other officers and members of the management of the Company
shall cooperate fully in any offering of Registrable Securities hereunder, which
cooperation shall include, without limitation, the preparation of the
Registration Statement with respect to such offering and all other offering
materials and related documents, and participation in meetings with
Underwriters, attorneys, accountants and potential investors.
 
3.1.8           Records. The Company shall make available for inspection by the
holders of Registrable Securities included in such Registration Statement, any
Underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional retained by any
holder of Registrable Securities included in such Registration Statement or any
Underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, as shall be necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s officers, directors
and employees to supply all information reasonably requested by any of them in
connection with such Registration Statement.
 
3.1.9           Opinions and Comfort Letters. The Company shall furnish to each
holder of Registrable Securities included in any Registration Statement a signed
counterpart, addressed to such holder, of (i) any opinion of counsel to the
Company delivered to any Underwriter and (ii) any comfort letter from the
Company’s independent public accountants delivered to any Underwriter. In the
event no legal opinion is delivered to any Underwriter, the Company shall
furnish to each holder of Registrable Securities included in such Registration
Statement, at any time that such holder elects to use a prospectus, an opinion
of counsel to the Company to the effect that the Registration Statement
containing such prospectus has been declared effective and that no stop order is
in effect.
 
3.1.10           Earnings Statement. The Company shall comply, in all material
respects, with all applicable rules and regulations of the Commission and the
Securities Act, and make available to its shareholders, as soon as practicable,
an earnings statement covering a period of twelve (12) months, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder.
 
3.1.11           Listing. The Company shall use its best efforts to cause all
Registrable Securities included in any registration to be listed on such
exchanges or otherwise designated for trading in the same manner as similar
securities issued by the Company are then listed or designated or, if no such
similar securities are then listed or designated, in a manner satisfactory to
the holders of a majority of the Registrable Securities included in such
registration.
 

 

 
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3.1.12           FINRA. The Company shall cooperate with each Holder
participating in the offering and each underwriter, if any, and their respective
legal counsel in connection with any filings required to be made with FINRA.
 
3.2           Obligation to Suspend Distribution. Upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
3.1.4(iv), or, in the case of a resale registration on Form S-3/F-3 pursuant to
Section 2.2 hereof, upon any suspension by the Company, pursuant to a written
insider trading compliance program adopted by the Company’s Board of Directors,
of the ability of all “insiders” covered by such program to transact in the
Company’s securities because of the existence of material non-public
information, each holder of Registrable Securities included in any registration
shall immediately discontinue disposition of such Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such holder receives the supplemented or amended prospectus contemplated
by Section 3.1.4(iv) or the restriction on the ability of “insiders” to transact
in the Company’s securities is removed, as applicable, and, if so directed by
the Company, each such holder will deliver to the Company all copies, other than
permanent file copies then in such holder’s possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice.
 
3.3           Registration Expenses. The Company shall bear all costs and
expenses incurred in connection with any Demand Registration pursuant to Section
2.1, any Piggy-Back Registration pursuant to Section 2.2, and any registration
on Form S-3/F-3 effected pursuant to Section 2.2, and all expenses incurred in
performing or complying with its other obligations under this Agreement, whether
or not the Registration Statement becomes effective, including, without
limitation: (i) all registration and filing fees; (ii) fees and expenses of
compliance with securities or “blue sky” laws (including fees and disbursements
of counsel in connection with blue sky qualifications of the Registrable
Securities); (iii) printing expenses; (iv) the Company’s internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees); (v) the fees and expenses incurred in connection with the listing of
the Registrable Securities as required by Section 3.1.11; (vi) Financial
Industry Regulatory Authority fees; (vii) fees and disbursements of counsel for
the Company and fees and expenses for independent certified public accountants
retained by the Company (including the expenses or costs associated with the
delivery of any opinions or comfort letters requested pursuant to Section
3.1.9); (viii) the reasonable and documented fees and expenses of any special
experts retained by the Company in connection with such registration and (ix)
the fees and expenses of one legal counsel selected by the holders of a
majority-in-interest of the Registrable Securities included in such
registration. The Company shall have no obligation to pay any underwriting
discounts or selling commissions attributable to the Registrable Securities
being sold by the holders thereof, which underwriting discounts or selling
commissions shall be borne by such holders. Additionally, in an underwritten
offering, all selling shareholders and the Company shall bear the expenses of
the Underwriter pro rata in proportion to the respective amount of shares each
is selling in such offering.

 
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3.4           Information. The holders of Registrable Securities shall provide
such information as may reasonably be requested by the Company, or the managing
Underwriter, if any, in connection with the preparation of any Registration
Statement, including amendments and supplements thereto, in order to effect the
registration of any Registrable Securities under the Securities Act pursuant to
Section 2 and in connection with the Company’s obligation to comply with Federal
and applicable state securities laws.
 
4.           INDEMNIFICATION AND CONTRIBUTION.
 
4.1           Indemnification by the Company. The Company agrees to indemnify
and hold harmless Shareholder and each other holder of Registrable Securities,
and each of their respective officers, employees, affiliates, directors,
partners, members, attorneys and agents, and each person, if any, who controls
Shareholder and each other holder of Registrable Securities (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an
“Investor Indemnified Party”), from and against any expenses, losses, judgments,
claims, damages or liabilities, whether joint or several, arising out of or
based upon any untrue statement (or allegedly untrue statement) of a material
fact contained in any Registration Statement under which the sale of such
Registrable Securities was registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arising out of or based upon any omission (or alleged omission) to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Securities Act or
any rule or regulation promulgated thereunder applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration; and the Company shall promptly reimburse the Investor
Indemnified Party for any legal and any other expenses reasonably incurred by
such Investor Indemnified Party in connection with investigating and defending
any such expense, loss, judgment, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such expense, loss, claim, damage or liability arises out of or is based
upon any untrue statement or allegedly untrue statement or omission or alleged
omission made in such Registration Statement, preliminary prospectus, final
prospectus, or summary prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company, in
writing, by such selling holder expressly for use therein. The Company also
shall indemnify any Underwriter of the Registrable Securities, their officers,
affiliates, directors, partners, members and agents and each person who controls
such Underwriter on substantially the same basis as that of the indemnification
provided above in this Section 4.1.
 
4.2           Indemnification by Holders of Registrable Securities. Each selling
holder of Registrable Securities will, in the event that any registration is
being effected under the Securities Act pursuant to this Agreement of any
Registrable Securities held by such selling holder, indemnify and hold harmless
the Company, each of its directors and officers and each Underwriter (if any),
and each other selling holder and each other person, if any, who controls
another selling holder or such Underwriter within the
 

 
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meaning of the Securities Act, against any expenses, losses, claims, judgments,
damages or liabilities, whether joint or several, insofar as such expenses,
losses, claims, judgments, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or allegedly untrue
statement of a material fact contained in any Registration Statement under which
the sale of such Registrable Securities was registered under the Securities Act,
any preliminary prospectus, final prospectus or summary prospectus contained in
the Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or the alleged
omission to state a material fact required to be stated therein or necessary to
make the statement therein not misleading, if the statement or omission was made
in reliance upon and in conformity with information furnished in writing to the
Company by such selling holder expressly for use therein, and shall promptly
reimburse the Company, its directors and officers, and each other selling holder
or controlling person for any legal or other expenses reasonably incurred by any
of them in connection with investigation or defending any such loss, claim,
damage, liability or action. Each selling holder’s indemnification obligations
hereunder shall be several and not joint and shall be limited to the amount of
any net proceeds actually received by such selling holder.
 
4.3           Conduct of Indemnification Proceedings. Promptly after receipt by
any person of any notice of any loss, claim, damage or liability or any action
in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such
person (the “Indemnified Party”) shall, if a claim in respect thereof is to be
made against any other person for indemnification hereunder, notify such other
person (the “Indemnifying Party”) in writing of the loss, claim, judgment,
damage, liability or action; provided, however, that the failure by the
Indemnified Party to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which the Indemnifying Party may have to
such Indemnified Party hereunder, except and solely to the extent the
Indemnifying Party is actually prejudiced by such failure. If the Indemnified
Party is seeking indemnification with respect to any claim or action brought
against the Indemnified Party, then the Indemnifying Party shall be entitled to
participate in such claim or action, and, to the extent that it wishes, jointly
with all other Indemnifying Parties, to assume control of the defense thereof
with counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume control of
the defense of such claim or action, the Indemnifying Party shall not be liable
to the Indemnified Party for any legal or other expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that in any action in
which both the Indemnified Party and the Indemnifying Party are named as
defendants, the Indemnified Party shall have the right to employ separate
counsel (but no more than one such separate counsel) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or

 
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pending or threatened proceeding in respect of which the Indemnified Party is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such judgment or settlement includes an unconditional
release of such Indemnified Party from all liability arising out of such claim
or proceeding.
 
4.4           Contribution.
 
4.4.1           If the indemnification provided for in the foregoing Sections
4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss,
claim, damage, liability or action referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage, liability or action in such proportion as is
appropriate to reflect the relative fault of the Indemnified Parties and the
Indemnifying Parties in connection with the actions or omissions which resulted
in such loss, claim, damage, liability or action, as well as any other relevant
equitable considerations. The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Indemnified Party or such Indemnifying Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
 
4.4.2           The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 4.4 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding Section
4.4.1.
 
4.4.3           The amount paid or payable by an Indemnified Party as a result
of any loss, claim, damage, liability or action referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, the reasonable and documented legal or other expenses incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 4.4, no holder
of Registrable Securities shall be required to contribute any amount in excess
of the dollar amount of the net proceeds (after payment of any underwriting
fees, discounts, commissions or taxes) actually received by such holder from the
sale of Registrable Securities which gave rise to such contribution obligation.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
 
4.5           Limitations on Indemnification.
 
4.5.1           In the event that a selling holder of Registrable Securities
(the “Indemnifying Holder”) is obligated to pay an amount to the Company during
a year that the Company qualifies as a “real estate investment trust” under
Sections 856 through 860 of the Code(a “REIT”) pursuant to Section 4.2 (the
“Indemnification Amount”), the Indemnifying Holder or its affiliates, as
applicable, shall pay to the Company, from

 
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the Indemnification Amount deposited into escrow in accordance with Section
4.5.2, an amount equal to the lesser of (I) the Indemnification Amount and (II)
the sum of (x) the maximum amount that can be paid to the Company without
causing the Company to fail to meet the requirements of Sections 856(c)(2) and
(3) of the Code determined as if the payment of such amount did not constitute
income described in Sections 856(c)(2) or 856(c)(3) of the Code (“Qualifying
Income”), as determined by the Company independent certified public accountants,
plus (y) in the event the Company receives either (1) a ruling from the Internal
Revenue Service described in Section 4.5.3 or (2) an opinion from the Company’s
outside counsel as described in Section 4.5.3, an amount equal to the
Indemnification Amount, less the amount payable under clause (x) above.
 
4.5.2           To secure the Indemnifying Holder’s obligation to pay these
amounts, the Indemnifying Holder shall deposit into escrow an amount in cash
equal to the Indemnification Amount with an escrow agent selected by the
Indemnifying Holder and on such customary terms (subject to Section 4.5.3) as
shall be mutually acceptable to each of the Company, the Indemnifying Holder and
the escrow agent. The payment or deposit into escrow of the Indemnification
Amount, pursuant to this Section 4.5, shall be made at the time that the payment
of the Indemnification Amount would otherwise be due without regard to this
Section 4.5.
 
4.5.3           The escrow agreement for the escrow described in Section 4.5.2
shall provide that the Indemnification Amount in escrow or any portion thereof
shall not be released to the Company unless the escrow agent receives any one or
combination of the following:
 
(a)           a letter from the Company’s independent certified public
accountants indicating the maximum amount that can be paid by the escrow agent
to the Company without causing the Company to fail to meet the requirements of
Sections 856(c)(2) and (3) of the Code determined as if the payment of such
amount did not constitute Qualifying Income or a subsequent letter from the
Company’s accountants revising or updating that amount (whether to correct an
error or to reflect the passage of time or otherwise), in which case the escrow
agent shall release such amount or, in the case of a revised or updated letter,
such additional amount to the Company, or
 
(b)           a letter from the Company’s counsel indicating that the Company
received a ruling from the Internal Revenue Service holding that the receipt by
the Company of the Indemnification Amount would either constitute Qualifying
Income or would be excluded from gross income within the meaning of Sections
856(c)(2) and (3) of the Code (or alternatively, the Company’s outside counsel
has rendered a legal opinion to the effect that the receipt by the Company of
the Indemnification Amount would either constitute Qualifying Income or would be
excluded from gross income within the meaning of Sections 856(c)(2) and (3) of
the Code), in which case the escrow agent shall release the remainder of the
Indemnification Amount to the Company. The escrow agreement shall also provide
that any portion of the Indemnification Amount held in escrow for five (5) years
shall be released by the escrow agent to the Indemnifying Holder.
 

 

 
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4.5.4           The Indemnifying Holder agrees to amend this Section 4.5 at the
reasonable request of the Company in order to (x) maximize the portion of the
Indemnification Amount that may be distributed to the Company hereunder without
causing the Company to fail to meet the requirements of Sections 856(c)(2) and
(3) of the Code, (y) improve the Company’s chances of securing a favorable
ruling described in Section 4.5.3 or (z) assist the Company in obtaining a
favorable legal opinion from its outside counsel as described in Section 4.5.3.
 
4.5.5           In the event that the Shareholder is entitled to any payments
under this Section 4, principles analogous to Section 4.5 shall apply to such
payments.
 
5.           UNDERWRITING AND DISTRIBUTION.
 
5.1           Rule 144. The Company covenants that it shall file any reports
required to be filed by it under the Securities Act and the Exchange Act and
shall take such further action as the holders of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
holders to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 under the
Securities Act, as such Rules may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission.
 
6.           MISCELLANEOUS.
 
6.1           Other Registration Rights. The Company represents and warrants
that as of the date hereof, no person, other than (i) a holder of the
Registrable Securities issued in connection with the Merger, (ii) FWAC Holdings,
pursuant to that Amended and Restated Registration Rights Agreement entered into
as of [___________], 2012, between FWAC Holdings and the Company or (iii) Rodman
& Renshaw, LLC (“Rodman & Renshaw”) or its designees pursuant to that certain
Unit Purchase Option granted in connection with the Company’s initial public
offering on December 9, 2010 (the “UPO”), has any right to require the Company
to register any Ordinary Shares for sale or to include Ordinary Shares in any
registration statement filed by the Company for the sale of Ordinary Shares for
its own account or for the account of any other person.
 
6.2           Assignment; No Third Party Beneficiaries. This Agreement and the
rights, duties and obligations of the Company hereunder may not be assigned or
delegated by the Company in whole or in part. This Agreement and the rights,
duties and obligations of the holders of Registrable Securities hereunder may be
freely assigned or delegated by such holder of Registrable Securities in
conjunction with and to the extent of any transfer of Registrable Securities by
any such holder. This Agreement and the provisions hereof shall be binding upon
and shall inure to the benefit of each of the parties and its successors and the
permitted assigns of Shareholder or holder of Registrable Securities or of any
assignee of Shareholder or holder of Registrable Securities. This Agreement is
not intended to confer any rights or benefits on any persons that are not party
hereto other than as expressly set forth in Section 4 and this Section 6.2.

 
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6.3           Notices. All notices, demands, requests, consents, approvals or
other communications (collectively, “Notices”) required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and shall be personally served, delivered by reputable air courier service with
charges prepaid, or transmitted by hand delivery, telegram, telex, electronic
mail or facsimile, addressed as set forth below, or to such other address as
such party shall have specified most recently by written notice. Notice shall be
deemed given on the date of service or transmission if personally served or
transmitted by telegram, telex, facsimile or electronic mail; provided, that if
such service or transmission is not on a business day or is after normal
business hours, then such notice shall be deemed given on the next business day.
Notice otherwise sent as provided herein shall be deemed given on the next
business day following timely delivery of such notice to a reputable air courier
service with an order for next-day delivery.
 
To the Company:
 
FlatWorld Acquisition Corp.
3305 Flamingo Drive
Vero Beach, Florida 32963
Attn: Robert E. Cauley

To Shareholder, to:

Bimini Capital Management, Inc.
3305 Flamingo Drive
Vero Beach, Florida 32963
Attn: Robert E. Cauley

and in either case, with a copy to (which shall not constitute notice):

Hunton & Williams LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219
Attn: Daniel M. LeBey

6.4           Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible that is valid and enforceable.

6.5           Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. Delivery of
a signed counterpart of this Agreement by facsimile or electronic transmission
shall constitute valid and sufficient delivery thereof.

 
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6.6           Entire Agreement. This Agreement (including all agreements entered
into pursuant hereto and all certificates and instruments delivered pursuant
hereto and thereto) constitute the entire agreement of the parties with respect
to the subject matter hereof and supersede all prior and contemporaneous
agreements, representations, understandings, negotiations and discussions
between the parties, whether oral or written.
 
6.7           Modifications and Amendments. No amendment, modification or
termination of this Agreement shall be binding upon any party unless executed in
writing by such party.
 
6.8           Titles and Headings. Titles and headings of sections of this
Agreement are for convenience only and shall not affect the construction of any
provision of this Agreement.
 
6.9           Waivers and Extensions. Any party to this Agreement may waive any
right, breach or default which such party has the right to waive, provided that
such waiver will not be effective against the waiving party unless it is in
writing, is signed by such party, and specifically refers to this Agreement.
Waivers may be made in advance or after the right waived has arisen or the
breach or default waived has occurred. Any waiver may be conditional. No waiver
of any breach of any agreement or provision herein contained shall be deemed a
waiver of any preceding or succeeding breach thereof nor shall such waiver be
deemed a waiver of any other agreement or provision herein contained. No waiver
or extension of time for performance of any obligations or acts shall be deemed
a waiver or extension of the time for performance of any other obligations or
acts.
 
6.10           Remedies Cumulative. In the event that the Company fails to
observe or perform any covenant or agreement to be observed or performed under
this Agreement, Shareholder or any other holder of Registrable Securities may
proceed to protect and enforce its rights by suit in equity or action at law,
whether for specific performance of any term contained in this Agreement or for
an injunction against the breach of any such term or in aid of the exercise of
any power granted in this Agreement or to enforce any other legal or equitable
right, or to take any one or more of such actions, without being required to
post a bond. None of the rights, powers or remedies conferred under this
Agreement shall be mutually exclusive, and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy, whether
conferred by this Agreement or now or hereafter available at law, in equity, by
statute or otherwise.
 
6.11           Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
giving effect to conflicts of law principles that would result in the
application of the substantive laws of another jurisdiction. The parties hereby:
(i) agree that any action, proceeding or claim against it arising out of or
relating in any way to this Agreement shall be brought and enforced exclusively
in any state or federal court located in New York County, New York, (ii)
irrevocably submit to the jurisdiction of any New York State or federal court,
which jurisdiction shall be exclusive and (iii) waive any objection to such
exclusive jurisdiction and that such courts represent an inconvenient forum.

 
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6.12           Waiver of Trial by Jury. Each party hereby irrevocably and
unconditionally waives the right to a trial by jury in any action, suit,
counterclaim or other proceeding (whether based on contract, tort or otherwise)
arising out of, connected with or relating to this Agreement, the transactions
contemplated hereby, or the actions of Shareholder in the negotiation,
administration, performance or enforcement hereof.
 
6.13           Mutual Drafting. This Agreement is the joint product of
Shareholder and the Company and each provision hereof has been subject to the
mutual consultation, negotiation and agreement of such parties and shall not be
construed for or against any party hereto.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 

 
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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be executed and delivered by their duly authorized representatives as of the
date first written above.

FLATWORLD ACQUISITION CORP.

By:__________________________________

Name: Jeffrey A. Valenty
Title: President

BIMINI CAPITAL MANAGEMENT, INC.

By: __________________________________

Name: Robert E. Cauley
Title: Chief Executive
 
 
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