Document:

EXHIBIT
10.1

 

EXECUTION COPY

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this
“Agreement”) is made and entered into as of December 19, 2003, by
and among Bimini Mortgage Management, Inc., a Maryland corporation (the “Company”)
and the initial Holders (as defined herein) listed on Schedule A hereto.

 

THIS AGREEMENT is
made in connection with the Subscription Agreements for the purchase of the
Company’s Class A Common Stock, par value $0.001 per share (the “Common
Stock”) between the Company and each initial Holder (the “Subscription
Agreements”) and the Placement Agreement (the “Placement Agreement”),
dated as of December 11, 2003, among the Company, Flagstone Securities,
LLC (“Flagstone”) and Avondale Partners, LLC (“Avondale”) made in
connection with the offering and sale (the “Offering”) of up to
10,000,000 shares of Common Stock.  In
order to induce the initial Holders to purchase Common Stock and to induce
Flagstone and Avondale to enter into the Placement Agreement, the Company agrees
to provide the registration rights provided for in this Agreement to the
initial Holders and their respective direct and indirect transferees.

 

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

 

1.                                       Definitions.  

 

As used in this Agreement, the following terms shall have the following
meanings:

 

Additional Shares:  Shares or other securities issued in respect
of the Shares by reason of or in connection with any stock dividend, stock
distribution, stock split, or similar issuance.

 

Agreement: 
As defined in the Introductory Paragraph of
this Agreement.

 

Affiliate: 
As to any specified Person, (i) any Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the specified Person, (ii) any
executive officer, director, trustee or general partner of the specified
Person, (iii) any Person who is an immediate family member of the Specified
Person and (iii) any legal entity for which the specified Person acts as an
executive officer, director, trustee or general partner.  For purposes of this definition, “control”
(including the correlative meanings of the terms “controlled by” and “under
common control with”), as used with respect to any Person, shall mean the
possession, directly, or indirectly through one or more intermediaries, of the
power to direct or cause the direction of the management and policies of such
Person, whether by contract, through the ownership of voting securities,
partnership interests or other equity interests or otherwise.

 

 

Business Day:  With respect to any act to be performed
hereunder, each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
day on which banking institutions in New York, New York are authorized or
obligated by applicable law, regulation or executive order to close.

 

Closing Time:  December 19, 2003.

 

Commission: 
The  Securities
and Exchange Commission.

 

Common Stock:  As  defined
in Recital A hereof.

 

Company: 
As defined in the Introductory Paragraph of
this Agreement, and any successor thereto.

 

Controlling Person.  As defined in Section 6(a) hereof.

 

End of Suspension Notice:  As defined in
Section 5(b) hereof.

 

Exchange Act:  The Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission pursuant
thereto.

 

Flagstone: 
As defined in the Introductory Paragraph of
this Agreement, and any successor thereto.

 

Holder: 
Each record owner of any Registrable Shares
from time to time.

 

Indemnified Party:  As  defined
in Section 6(c) hereof.

 

Indemnifying Party:  As defined in Section 6(c) hereof.

 

IPO Registration Statement:  As defined in
Section 2(b) hereof.

 

Liabilities: 
As defined in Section 6(a) hereof.

 

Mandatory Shelf Registration Statement:  As  defined in Section 2(a) hereof.

 

NASD: 
The National Association of Securities Dealers,
Inc.

 

Offering:  As defined in Recital A hereof.

 

Person: 
An individual, partnership, corporation, trust,
unincorporated organization, government or agency or political subdivision
thereof, or any other legal entity.

 

Proceeding: 
An action, claim, suit or proceeding (including
without limitation, an investigation or partial proceeding, such as a
deposition), whether commenced or, to the knowledge of the Person subject
thereto, threatened.

 

2

 

Prospectus: 
The prospectus included in any Registration
Statement, including any preliminary prospectus, and all other amendments and
supplements to any such prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference, if any, in such prospectus.

 

Placement Agreement:  As defined in
Recitals of this Agreement, as amended from time to time.

 

Purchaser Indemnitee:  As defined in
Section 6(a) hereof.

 

Registrable Shares:  Each of the Shares and any Additional Shares,
upon original issuance thereof, and at all times subsequent thereto, including
upon the transfer thereof by the original holder or any subsequent holder,
until, in the case of any such Shares or Additional Shares, as applicable, the
earliest to occur of:

 

(i)                                     the
second anniversary of the initial effective date of the Mandatory Shelf
Registration Statement;

 

(ii)                                  the date on which
such Share or Additional Share has been sold pursuant to a Registration
Statement or distributed to the public pursuant to Rule 144;

 

(iii)                               the date on which, in
the opinion of counsel to the Company, such Shares or Additional Shares not
held by Affiliates of the Company are eligible for purchase without
registration under the Securities Act pursuant to subparagraph (k) of Rule 144
(or any successor or analogous rule) and the restrictive legend on such
certificate has been removed; or

 

(iv)                              the date on which such
Shares or Additional Shares are sold to the Company or any of its subsidiaries.

 

Registration Expenses:  Any and all
expenses incident to the performance of or compliance with this Agreement,
including, without limitation:  (i) all
Commission, securities exchange, NASD registration, listing, inclusion and
filing fees, (ii) all fees and expenses incurred in connection with compliance
with international, federal or state securities or blue sky laws (including,
without limitation, any registration, listing and filing fees and reasonable
fees and disbursements of counsel in connection with blue sky qualification of
any of the Registrable Shares and the preparation of a blue sky memorandum and
compliance with the rules of the NASD), (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, duplicating, printing,
delivering and distributing any Registration Statement, any Prospectus, any
amendments or supplements thereto, any underwriting agreements, securities
sales agreements, certificates and any other documents relating to the
performance under and compliance with this Agreement, (iv) all fees and
expenses incurred in connection with the listing or inclusion of any of the
Registrable Shares on any securities exchange or the Nasdaq Stock Market
pursuant to Section 4(m) of this Agreement, (v) the fees and disbursements
of counsel for the Company and of the independent public accountants of the
Company (including, without limitation, the expenses of any special audit and
“cold comfort”

 

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letters required by or incident to such performance), and reasonable
fees and disbursements of one counsel for the selling Holders to review the
Mandatory Shelf Registration Statement, any Subsequent Shelf Registration
Statement, and, if the Company notifies the Holders pursuant to
Section 2(b) hereof of its intent to file an IPO Registration Statement
within one year of the date of this Agreement, the IPO Registration Statement,
provided that such fees and disbursements of counsel for the selling Holders do
not exceed an aggregate of $20,000, and (vi) any fees and disbursements
customarily paid by issuers in issues and sales of securities (including the
fees and expenses of any experts retained by the Company in connection with any
Registration Statement), provided, however, that
Registration Expenses shall exclude brokers’ or underwriters’ discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Shares by a Holder and the fees and disbursements of any counsel to
the Holders other than as provided for in subparagraph (v) above.

 

Registration Statement:  Any Shelf
Registration Statement or the IPO Registration Statement (that covers the
resale of any Registrable Shares), including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre-and
post-effective amendments, all exhibits thereto and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such
registration statement.

 

Regulation D:  Regulation D (Rules 501-508) promulgated
by the Commission 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 as a replacement thereto having substantially the same effect as
such regulation.

 

Rule 144: 
Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such rule.

 

Rule 144A: 
Rule 144A promulgated by the Commission
pursuant to the Securities Act, as such rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission as a
replacement thereto having substantially the same effect as such rule.

 

Rule 158: 
Rule 158 promulgated by the Commission pursuant
to the Securities Act, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such rule.

 

Rule 415: 
Rule 415 promulgated by the Commission pursuant
to the Securities Act, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such rule.

 

4

 

Rule 424: 
Rule 424 promulgated by the Commission pursuant
to the Securities Act, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such rule.

 

Rule 429: 
Rule 429 promulgated by the Commission pursuant
to the Securities Act, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such rule.

 

Securities Act:  The Securities Act of 1933, as amended,
and the rules and regulations promulgated by the Commission thereunder.

 

Shares: 
As defined in the Placement Agreement.

 

Shelf Registration Statement:  The Mandatory Shelf
Registration Statement or any Subsequent Shelf Registration Statement.

 

Subsequent Shelf Registration Statement:  As defined in
Section 2(c) hereof.

 

Suspension Event:  As defined in Section 5(b) hereof.

 

Suspension Notice:  As defined in Section 5(b) hereof.

 

Underwritten Offering:  A sale of
securities of the Company to an underwriter or underwriters for reoffering to
the public.

 

2.                                       Registration
Rights.

 

(a)                                  Mandatory Shelf Registration.  As set forth in Section 4
hereof, the Company agrees to file with the Commission as soon as reasonably
practicable, but in no event later than one hundred twenty (120) days from the
date hereof, a shelf Registration Statement on Form S-11 or such other form
under the Securities Act then available to the Company providing for the resale
pursuant to Rule 415 from time to time by the Holders of any and all
Registrable Shares (including for the avoidance of doubt any Additional Shares
that are issued prior to the effectiveness of such shelf registration
statement) (including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective amendments,
all exhibits thereto and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement, the
“Mandatory Shelf Registration Statement”). 
The Company shall use its best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission as promptly as practicable
following such filing.  Any Shelf
Registration Statement shall provide for the resale from time to time, and
pursuant to any method or combination of methods legally available (including,
without limitation, an Underwritten Offering, a direct sale to purchasers, a
sale through brokers or agents, or a sale over the internet) by the Holders of
any and all Registrable Shares.

 

(b)                                 IPO Registration. 
If prior to the Mandatory Shelf Registration Statement being
declared effective by the Commission, the Company proposes to file a
registration statement on

 

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Form S-11 or
such other form under the Securities Act providing for the initial public
offering by the Company of shares of Common Stock (including the Prospectus,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such registration statement, the “IPO Registration Statement”), the Company
will notify each Holder of the proposed filing and afford each Holder an
opportunity to include in such IPO Registration Statement all or any part of
the Registrable Shares then held by such Holder.  Each Holder desiring to include in any such IPO Registration
Statement all or part of the Registrable Shares held by such Holder shall,
within twenty (20) days after delivery of the above-described notice by the
Company, so notify the Company in writing, and in such notice shall inform the
Company of the number of Registrable Shares such Holder wishes to include in
such IPO Registration Statement.  Any election
by any Holder to include any Registrable Shares in such IPO Registration
Statement will not affect the inclusion of such Registrable Shares in the Shelf
Registration Statement until such Registrable Shares have been sold under the
IPO Registration Statement; provided,
however, that at such time, the Company shall have the right to
remove from the Shelf Registration Statement the Registrable Shares sold
pursuant to the IPO Registration Statement.

 

(i)                                     Right to Terminate IPO Registration.  At any time, the Company shall
have the right to terminate or withdraw any IPO Registration Statement referred
to in this Section 2(b) whether or not any Holder has elected to include
Registrable Shares in such registration.

 

(ii)                                  Underwriting. 
The Company shall advise the Holders of the managing
underwriters for the Underwritten Offering proposed under the IPO Registration
Statement.  The right of any such
Holder’s Registrable Shares to be included in any IPO Registration Statement
pursuant to this Section 2(b) shall be conditioned upon such Holder’s
participation in such Underwritten Offering and the inclusion of such Holder’s
Registrable Shares in the Underwritten Offering to the extent provided
herein.  All Holders proposing to
distribute their Registrable Shares through such Underwritten Offering shall
enter into an underwriting agreement in customary form with the managing
underwriters selected for such underwriting and complete and execute any
questionnaires, powers of attorney, indemnities, securities escrow agreements
and other documents reasonably required under the terms of such underwriting,
and furnish to the Company such information in writing as the Company may
reasonably request for inclusion in the Registration Statement; provided, however, that no Holder shall be
required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or
agreements as are customary and reasonably requested by the underwriters.  Notwithstanding any other provision of this
Agreement, if the managing underwriters determine in good faith that marketing
factors require a limitation on the number of shares to be included, then the
managing underwriters may exclude shares (including Registrable Shares) from
the IPO Registration Statement and the Underwritten Offering and any Shares
included in the IPO Registration Statement and the Underwritten Offering shall
be allocated, first, to the Company, and second, to each of the
Holders requesting inclusion of their Registrable Shares in such IPO

 

6

 

Registration Statement on a pro rata
basis based on the total number of Registrable Shares then held by
each such Holder which is requesting inclusion.  If any Holder disapproves of the terms of any Underwritten
Offering, such Holder may elect to withdraw therefrom by written notice to the
Company and the underwriter, delivered at least ten (10) Business Days prior to
the effective date of the IPO Registration Statement.  Any Registrable Shares excluded or withdrawn from such
Underwritten Offering shall be excluded and withdrawn from the IPO Registration
Statement.

 

(iii)                               Hold-Back Agreement. 
Each Holder agrees not to effect (except through the
offering) any sale or distribution of securities of the Company of the same or
similar class or classes of the securities included in the Registration
Statement or any securities convertible into or exchangeable or exercisable for
such securities, including a sale pursuant to Rule 144 or Rule 144A under the
Securities Act, during such periods as reasonably requested (but in no event
for a period longer than ninety (90) days following the effective date of the
IPO Registration Statement, provided each of the executive officers and directors
of the Company that hold shares of Common Stock of the Company or securities
convertible into or exchangeable or exercisable for shares of Common Stock of
the Company are subject to the same restriction for the entire time period
required of the Holders hereunder) by the representatives of the underwriters,
if an Underwritten Offering.

 

(iv)                              Shelf Registration not Impacted by IPO Registration
Statement.  The Company’s
obligation to file any Shelf Registration Statement shall not be affected by
the filing or effectiveness of the IPO Registration Statement unless and to the
extent Registrable Shares are sold in the Underwritten Offering.

 

(c)                                  Subsequent Shelf Registration for Additional Shares
Issued after Effectiveness of the Mandatory Shelf Registration Statement.  If any Additional Shares are issued or
distributed to Holders after the effectiveness of the Mandatory Shelf
Registration Statement, or such Additional Shares were otherwise not included
in a prior Shelf Registration Statement, then the Company shall as soon as
practicable file an additional shelf registration statement (including the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto
and all material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement, a “Subsequent Shelf
Registration Statement”) covering such Additional Shares on behalf of the
Holders thereof in the same manner, and subject to the same provisions in this
Agreement as the Mandatory Shelf Registration Statement, provided that the
provisions of Section 2(a) or 2(b) hereof will not apply to any such
Subsequent Shelf Registration Statement.

 

(d)                                 Expenses.  The
Company shall pay all Registration Expenses in connection with the registration
of the Registrable Shares pursuant to this Agreement.  Each Holder participating in a registration pursuant to this
Section 2 shall bear such Holder’s proportionate share (based on the total
number of Registrable Shares sold in such registration) of all discounts and
commissions payable to underwriters or brokers and all transfer taxes in
connection with a registration of Registrable Shares pursuant to this Agreement
and any other expense of the

 

7

 

Holders not specifically allocated to the Company pursuant to this
Agreement relating to the sale or disposition of such Holder’s Registrable
Shares pursuant to any Registration Statement.

 

3.                                       Rules
144 and 144A Reporting.

 

With a view to making available the benefits of certain rules and
regulations of the Commission that may permit the sale of the Registrable
Shares to the public without registration, the Company agrees to, so long as
any Holder owns any Registrable Shares:

 

(a)                                  at
all times after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public make and keep public information available, as those terms are
understood and defined in Rule 144(c) under the Securities Act;

 

(b)                                 use
its best efforts to file with the Commission in a timely manner all reports and
other documents required to be filed by the Company under the Securities Act
and the Exchange Act (at any time after it has become subject to such reporting
requirements);

 

(c)                                  if
the Company is not required to file reports and other documents under the
Securities Act and the Exchange Act, it will make available other information
as required by, and so long as necessary to permit sales of Registrable Shares
pursuant to, Rule 144A; and

 

(d)                                 to
furnish to any Holder promptly upon request a written statement by the Company
as to its compliance in all material respects with the reporting requirements
of Rule 144 (at any time after ninety (90) days after the effective date of the
first registration statement filed by the Company for an offering of its
securities to the general public), and of the Securities Act and the Exchange
Act (at any time after it has become subject to the reporting requirements of
the Exchange Act), a copy of the most recent annual or quarterly report of the
Company as filed under the Exchange Act, and such other reports and documents
of the Company, and take such reasonable further actions consistent with this
Section, as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such Registrable
Shares without registration.

 

4.                                       Registration
Procedures.

 

In connection with the obligations of the Company with respect to any
registration pursuant to this Agreement, the Company shall use its commercially
reasonable efforts to effect or cause to be effected the registration of the
Registrable Shares under the Securities Act to permit the resale of such
Registrable Shares by the Holder or Holders in accordance with the Holders’
intended method or methods of resale and distribution (which methods shall be
commercially reasonable), and the Company shall:

 

(a)                                  prepare
and file with the Commission, as specified in this Agreement, a Shelf
Registration Statement, which Shelf Registration Statement shall comply as to
form with the requirements of the applicable form and include all financial
statements required by the Commission to be filed therewith, and use its best
efforts to cause such Registration Statement to become effective as soon as
practicable after filing and to remain effective, subject to Section 5
hereof, until the date on which no Holders hold Registrable Shares, provided, however, that the

 

8

 

Company shall not be required to cause any IPO Registration Statement
to become effective; provided, further, that
if the Company has an effective Shelf Registration Statement on Form S-11 under
the Securities Act and becomes eligible to use Form S-3 or such other
short-form registration statement under the Securities Act, the Company may,
upon thirty (30) Business Days’ prior written notice to all Holders of
Registrable Shares, register any Registrable Shares registered but not yet
distributed under the effective Shelf Registration Statement on such a
short-form Shelf Registration Statement and, once the short-form Shelf
Registration Statement is declared effective, de-register such shares under the
previous Registration Statement or transfer filing fees from the previous
Registration Statement (such transfer pursuant to Rule 429) unless any Holder
of Registrable Shares registered under the initial Shelf Registration Statement
notifies the Company within twenty (20) Business Days of receipt of the Company
notice that such a registration under a new Registration Statement and
de-registration of the initial Shelf Registration Statement would materially
interfere with its distribution of Registrable Shares already in progress, in
which case the Company shall delay the implementation of the short-form Shelf
Registration Statement and de-registration until not later than forty (40)
Business Days from the date that the Company provides the notice referenced
above to the Holder(s);

 

(b)                                 subject
to Section 4(i) hereof, (i) prepare and file with the Commission such
amendments and post-effective amendments to each such Shelf Registration
Statement as may be necessary to keep such Shelf Registration Statement
effective for the period described in Section 4(a) hereof, (ii) cause each
Prospectus contained therein to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 or any
similar rule that may be adopted under the Securities Act, and (iii) comply
with the provisions of the Securities Act with respect to the disposition of
all securities covered by each Shelf Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the selling Holders thereof;

 

(c)                                  furnish
to the Holders, without charge, as many copies of each Prospectus, including
each preliminary Prospectus, and any amendment or supplement thereto and such
other documents as such Holder may reasonably request, in order to facilitate
the public sale or other disposition of the Registrable Shares; the Company
consents to the use of such Prospectus, including each preliminary Prospectus,
by the Holders, if any, in connection with the offering and sale of the
Registrable Shares covered by any such Prospectus;

 

(d)                                 use
its commercially reasonable efforts to register or qualify, or obtain exemption
from registration or qualification for, all Registrable Shares by the time the
applicable Registration Statement is declared effective by the Commission under
all applicable state securities or “blue sky” laws of such domestic
jurisdictions as any Holder covered by a Registration Statement shall
reasonably request in writing, keep each such registration or qualification or
exemption effective during the period such Registration Statement is required
to be kept effective pursuant to Section 4(a) and do any and all other
acts and things that may be reasonably necessary or advisable to enable such
Holder to consummate the disposition in each such jurisdiction of such
Registrable Shares owned by such Holder; provided,
however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction or to register as a broker or dealer
in such jurisdiction where it would not otherwise be required to qualify but
for this Section 4(d) and except as may be required by the Securities Act,
(ii) subject

 

9

 

itself to
taxation in any such jurisdiction, or (iii) submit to the general service of
process in any such jurisdiction;

 

(e)                                  use
its commercially reasonable efforts to cause all Registrable Shares covered by
such Registration Statement to be registered and approved by such other
domestic governmental agencies or authorities, if any, as may be necessary to
enable the Holders thereof to consummate the disposition of such Registrable
Shares;

 

(f)                                    notify
each Holder with Registrable Shares covered by a Registration Statement
promptly and, if requested by any such Holder, confirm such advice in writing
(i) when such Registration Statement has become effective and when any
post-effective amendments and supplements thereto become effective, (ii) of the
issuance by the Commission or any state securities authority of any stop order
suspending the effectiveness of such Registration Statement or the initiation
of any proceedings for that purpose, (iii) of any request by the Commission or
any other federal or state governmental authority for amendments or supplements
to such Registration Statement or related Prospectus or for additional
information, and (iv) of the happening of any event during the period such
Registration Statement is effective as a result of which such Registration
Statement or the related Prospectus or any document incorporated by reference
therein contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading (which information shall be accompanied by an
instruction to suspend the use of the Registration Statement and the Prospectus
until the requisite changes have been made);

 

(g)                                 during
the period of time referred to in Section 4(a) above, use its best efforts
to avoid the issuance of, or if issued, to obtain the withdrawal of, any order
enjoining or suspending the use or effectiveness of a Shelf Registration
Statement or suspending the qualification (or exemption from qualification) of
any of the Registrable Shares for sale in any jurisdiction, as promptly as
practicable;

 

(h)                                 upon
request, furnish to each requesting Holder with Registrable Shares covered by a
Registration Statement, without charge, at least one (1) conformed copy of such
Registration Statement and any post-effective amendment or supplement thereto
(without documents incorporated therein by reference or exhibits thereto,
unless requested);

 

(i)                                     except
as provided in Section 5, upon the occurrence of any event contemplated by
Section 4(f)(iv) hereof, use its best efforts to promptly prepare a
supplement or post-effective amendment to a Shelf Registration Statement or the
related Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Shares, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and, upon request,
promptly furnish to each requesting Holder a reasonable number of copies of
each such supplement or post-effective amendment;

 

(j)                                     if
requested by the representative of the underwriters, if any, or any Holders of
Registrable Shares being sold in connection with an Underwritten Offering, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment
such material information

 

10

 

as the
representative of the underwriters, if any, or such Holders indicate relates to
them or otherwise reasonably request be included therein and (ii) make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;

 

(k)                                  in
the case of an Underwritten Offering, use its commercially reasonable efforts
to furnish or caused to be furnished to each Holder of Registrable Shares
covered by such Registration Statement and the underwriters a signed
counterpart, addressed to each such Holder and the underwriters, of:  (i) an opinion of counsel for the Company,
dated the date of each closing under the underwriting agreement, in customary
form; and (ii) a “comfort” letter, dated the effective date of such
Registration Statement and the date of each closing under the underwriting
agreement, signed by the independent public accountants who have certified the
Company’s financial statements included in such Registration Statement,
covering substantially the same matters with respect to such Registration
Statement (and the Prospectus included therein) and with respect to events
subsequent to the date of such financial statements, as are customarily covered
in accountants’ letters delivered to underwriters in underwritten public
offerings of securities and such other financial matters as such Holder and the
underwriters may reasonably request and customarily obtained by underwriters in
underwritten offerings;

 

(l)                                     enter
into customary agreements (including in the case of an Underwritten Offering,
an underwriting agreement in customary form) and take all other action in
connection therewith in order to expedite or facilitate the distribution of the
Registrable Shares included in such Registration Statement and, in the case of
an Underwritten Offering, make representations and warranties to the Holders of
Registrable Shares covered by such Registration Statement and to the
underwriters in such form and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same to the extent
customary if and when requested;

 

(m)                               in
connection with an Underwritten Offering, use its commercially reasonable
efforts to make available for inspection by representatives of the Holders of
the Registrable Shares and the representative of any underwriters participating
in any disposition pursuant to a Shelf Registration Statement and any special
counsel or accountants retained by such Holders or underwriters, all financial
and other records, pertinent corporate documents and properties of the Company
and cause the respective officers, directors and employees of the Company to
supply all information reasonably requested by any such representatives, the
representative of the underwriters, counsel thereto or accountants in
connection with a Shelf Registration Statement; provided, however, that such records, documents or
information that the Company determines, in good faith, to be confidential and
notifies such representatives, representative of the underwriters, counsel
thereto or accountants are confidential shall not be disclosed by the holders,
their representatives, representative of the underwriters, counsel thereto or
accountants unless the release of such records, documents or information is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, or such records, documents or information have been generally
made available to the public; provided
further, that to the extent practicable, the foregoing inspection
and information gathering shall be coordinated on behalf of the Holders and the
other parties entitled thereto by one counsel designated by and on behalf of
the Holders and the other parties, which counsel the Company determines in good
faith is reasonably acceptable.

 

11

 

(n)                                 As
soon as practicable after the Registrable Shares have become eligible for such
listing, use its commercially reasonable efforts (including, without
limitation, seeking to cure in the Company’s listing or inclusion application
any deficiencies cited by the exchange or market) to list or include all
Registrable Shares on the New York Stock Exchange or the Nasdaq Stock Market;

 

(o)                                 prepare
and file in a timely manner all documents and reports required by the Exchange
Act and, to the extent the Company’s obligation to file such reports pursuant
to Section 15(d) of the Exchange Act expires prior to the expiration of
the effectiveness period of the Registration Statement as required by
Section 4(a) hereof, the Company shall register the Registrable Shares
under the Exchange Act and shall maintain such registration through the effectiveness
period required by Section 4(a) hereof;

 

(p)                                 provide
a CUSIP number for all Registrable Shares, not later than the effective date of
the Registration Statement;

 

(q)                                 (i)
otherwise use its commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission, (ii) make generally available to its
stockholders, as soon as reasonably practicable, earnings statements covering
at least twelve (12) months that satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 (or any similar rule promulgated under the
Securities Act ) thereunder, no later than forty-five (45) days after the end
of each fiscal year of the Company and (iii) delay filing any Registration
Statement or Prospectus or amendment or supplement to such Registration
Statement or Prospectus to which any Holder of Registrable Shares covered by
any Registration Statement shall have reasonably objected on the grounds that
such Registration Statement or Prospectus or amendment or supplement does not
comply in all material respects with the requirements of the Securities Act,
such Holder having been furnished with a copy thereof at least two (2) Business
Days prior to the filing thereof, provided that the Company may file such
Registration Statement or Prospectus or amendment or supplement following such
time as the Company shall have made a good faith effort to resolve any such
issue with the objecting Holder and shall have advised the Holder in writing of
its reasonable belief that such filing complies with the requirements of the
Securities Act;

 

(r)                                    provide
and cause to be maintained a registrar and transfer agent for all Registrable
Shares covered by any Registration Statement from and after a date not later
than the effective date of such Registration Statement;

 

(s)                                  in
connection with any sale or transfer of the Registrable Shares (whether or not
pursuant to a Registration Statement) that will result in the security being
delivered no longer being Registrable Shares, cooperate with the Holders and
the representative of the underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing the Registrable Shares to
be sold, which certificates shall not bear any transfer restrictive legends
(other than as required by the Company’s charter) and to enable such
Registrable Shares to be in such denominations and registered in such names as
the representative of the underwriters, if any, or the Holders may request at
least three (3) Business Days prior to any sale of the Registrable Shares; and

 

12

 

(t)                                    upon
effectiveness of the first registration statement filed by the Company, the
Company will take such actions and make such filings as are necessary to effect
the registration of the Common Stock under the Exchange Act simultaneously with
or immediately following the effectiveness of the Registration Statement.

 

The Company may require the Holders to furnish to the Company such
information regarding the proposed distribution by such Holder as the Company
may from time to time reasonably request in writing or as shall be required to
effect the registration of the Registrable Shares and no Holder shall be
entitled to be named as a selling stockholder in any Registration Statement and
no Holder shall be entitled to use the Prospectus forming a part thereof if
such Holder does not provide such information to the Company.  Any Holder that sells Registrable Shares
pursuant to a Registration Statement or as a selling stockholder pursuant to an
Underwritten Offering shall be required to be named as a selling stockholder in
the related prospectus and to deliver a prospectus to purchasers.  Each Holder further agrees to furnish
promptly to the Company in writing all information required from time to time
to make the information previously furnished by such Holder not misleading.

 

Each Holder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 4(f)(iii) or
4(f)(iv) hereof, such Holder will immediately discontinue disposition of
Registrable Shares pursuant to a Registration Statement until such Holder’s
receipt of copies of the supplemented or amended Prospectus.  If so directed by the Company, such Holder
will deliver to the Company (at the reasonable expense of the Company) all
copies in its possession, other than permanent file copies then in such
Holder’s possession, of the Prospectus covering such Registrable Shares current
at the time of receipt of such notice.

 

5.                                       Black-Out
Period.

 

(a)                                  Subject
to the provisions of this Section 5 and a good faith determination by a
majority of the Board of Directors of the Company that it is in the best
interests of the Company to suspend the use of the Registration Statement,
following the effectiveness of a Registration Statement (and the filings with
any international, federal or state securities commissions), the Company, by
written notice to the Holders, may direct the Holders to suspend sales of the
Registrable Shares pursuant to a Registration Statement for such times as the
Company reasonably may determine is necessary and advisable (but in no event
for more than an aggregate of ninety (90) days in any twelve (12)-month period
commencing on the Closing Time), if any of the following events shall
occur:  (i) an Underwritten Offering of
primary shares by the Company where the Company is advised by the
representative of the underwriters for such Underwritten Offering that the sale
of Registrable Shares pursuant to the Registration Statement would have a
material adverse effect on the Company’s primary offering; (ii) pending
negotiations relating to, or the consummation of, a transaction or the
occurrence of an event (x) that would require additional disclosure of material
information by the Company in the Registration Statement (or such filings) and
which has not been so disclosed, (y) as to which the Company has a bona fide
business purpose for preserving confidentiality, or (z) that renders the
Company unable to comply with Commission requirements, in each case under
circumstances that would make it impractical or inadvisable to cause the
Registration Statement (or such filings) to become effective or to promptly
amend or supplement the Registration Statement on a

 

13

 

post-effective
basis, as applicable; or (iii) the Board of Directors of the Company shall have
determined in good faith that it is in the best interests of the Company and
its stockholders to suspend the use of the Registration Statement for reasons
other than as set forth in subparagraphs (i) and (ii) above.  Upon the occurrence of any such suspension,
the Company shall use its commercially reasonable efforts to cause the
Registration Statement to become effective or to promptly amend or supplement
the Registration Statement on a post-effective basis or to take such action as
is necessary to make resumed use of the Registration Statement compatible with
the Company’s best interests, as applicable, so as to permit the Holders to resume
sales of the Registrable Shares as soon as possible.

 

(b)                                 In
the case of an event that causes the Company to suspend the effectiveness of a
Registration Statement (a “Suspension Event”), the Company shall give written
notice (a “Suspension Notice”) to the Holders to suspend sales of the
Registrable Shares and such notice shall state that such suspension shall
continue only for so long as the Suspension Event or its effect is continuing
and the Company is taking all reasonable steps to terminate suspension of the
effectiveness of the Registration Statement as promptly as possible.  The Holders shall not effect any sales of
the Registrable Shares pursuant to such Registration Statement (or such
filings) at any time after it has received a Suspension Notice from the Company
and prior to receipt of an End of Suspension Notice (as defined below).  If so directed by the Company, each Holder
will deliver to the Company (at the expense of the Company) all copies other
than permanent file copies then in such Holder’s possession of the Prospectus
covering the Registrable Shares at the time of receipt of the Suspension
Notice.  The Holders may recommence
effecting sales of the Registrable Shares pursuant to the Registration Statement
(or such filings) following further notice to such effect (an “End of
Suspension Notice”) from the Company, which End of Suspension Notice shall be
given by the Company to the Holders in the manner described above promptly
following the conclusion of any Suspension Event and its effect.

 

(c)                                  Notwithstanding
any provision herein to the contrary, if the Company shall give a Suspension
Notice pursuant to this Section 5, the Company agrees that it shall extend
the period of time during which the applicable Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days during
the period from the date of the giving of the Suspension Notice to and
including the date when Holders shall have received the End of Suspension
Notice and copies of the supplemented or amended Prospectus necessary to resume
sales.

 

6.                                       Indemnification
and Contribution.

 

(a)                                  The
Company agrees to indemnify and hold harmless (i) each Holder, (ii) each
Person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act), any of the foregoing
(any of the Persons referred to in this clause (ii) being hereinafter referred
to as a “Controlling Person”), and (iii) the respective officers, directors,
partners, employees, representatives and agents of each Holder or any
Controlling Person (any Person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as a “Purchaser Indemnitee”) from and against any
and all losses, claims, damages, judgments, actions, reasonable out-of-pocket
expenses, and other liabilities (the “Liabilities”), including, without
limitation and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing or defending any claim or action, or any
investigation or proceeding by any

 

14

 

governmental
agency or body, commenced or threatened, including the reasonable fees and
expenses of outside counsel to any Purchaser Indemnitee, joint or several,
directly or indirectly related to, based upon, arising out of or in connection
with any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus (as amended or
supplemented if the Company shall have furnished to such Purchaser Indemnitee
any amendments or supplements thereto), or any preliminary Prospectus or any
other document prepared by the Company used to sell the Registrable Shares, or
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as
such Liabilities arise out of or are based upon (i) any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Purchaser Indemnitee furnished to
the Company or any underwriter in writing by such Purchaser Indemnitee
expressly for use therein, or (ii) any untrue statement contained in or omission
from a preliminary Prospectus if a copy of the Prospectus (as then amended or
supplemented, if the Company shall have furnished to or on behalf of the Holder
participating in the distribution relating to the relevant Registration
Statement any amendments or supplements thereto) was not sent or given by or on
behalf of such Holder to the Person asserting any such Liabilities who
purchased Shares, if the untrue statement contained in or omitted from such
preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented).  The indemnity
provided for herein shall remain in full force and effect regardless of any
investigation made by or on behalf of any Purchaser Indemnitee.

 

(b)                                 In
connection with any Registration Statement in which a Holder is participating,
such Holder agrees, severally and not jointly, to indemnify and hold harmless
the Company, each Person who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act
and the respective partners, directors, officers, members, representatives,
employees and agents of such Person or Controlling Person to the same extent as
the foregoing indemnity from the Company to each Purchaser Indemnitee, but only
with reference to untrue statements or omissions or alleged untrue statements
or omissions made in reliance upon and in strict conformity with information
relating to such Purchaser Indemnitee furnished to the Company in writing by
such Purchaser Indemnitee expressly for use in any Registration Statement or
Prospectus, any amendment or supplement thereto, or any preliminary
Prospectus.  The liability of any
Purchaser Indemnitee pursuant to this paragraph shall in no event exceed the
net proceeds received by such Purchaser Indemnitee from sales of Registrable
Shares giving rise to such obligations. 
If the Holder elects to include Registrable Shares in an Underwritten
Offering, the Holder shall be required to agree to such customary indemnification
provisions as may reasonably be required by the underwriter in connection with
such Underwritten Offering.

 

(c)                                  If
any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any Person
in respect of which indemnity may be sought pursuant to paragraph (a) or (b)
above, such Person (the “Indemnified Party”), shall promptly notify the Person
against whom such indemnity may be sought (the “Indemnifying Party”), in
writing of the commencement thereof (but the failure to so notify an
Indemnifying Party shall not relieve it from any liability which it may have
under this Section 6, except to the extent the Indemnifying Party is
materially prejudiced by the failure to give notice), and the Indemnifying Party,
upon request of the Indemnified Party, shall retain

 

15

 

counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party and any others the Indemnifying Party may reasonably designate in such
proceeding and shall assume the defense of such proceeding and pay the
reasonable fees and expenses actually incurred by such counsel related to such
proceeding.  Notwithstanding the
foregoing, in any such proceeding, any Indemnified Party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Party, unless (i) the Indemnifying Party and
the Indemnified Party shall have mutually agreed in writing to the contrary, (ii)
the Indemnifying Party failed within a reasonable time after notice of
commencement of the action to assume the defense and employ counsel reasonably
satisfactory to the Indemnified Party, (iii) the Indemnifying Party and its
counsel do not pursue in a reasonable manner the defense of such action or (iv)
the named parties to any such action (including any impleaded parties), include
both such Indemnified Party and the Indemnifying Party, or any affiliate of the
Indemnifying Party, and such Indemnified Party shall have been reasonably
advised by counsel that, either (x) there may be one or more legal defenses
available to it which are different from or additional to those available to
the Indemnifying Party or such affiliate of the Indemnifying Party or (y) a
conflict may exist between such Indemnified Party and the Indemnifying Party or
such affiliate of the Indemnifying Party, then the Indemnifying Party shall not
have the right to assume nor direct the defense of such action on behalf of
such Indemnified Party, it being understood, however, that the Indemnifying
Party shall not, in connection with any one such action or separate but
substantially similar or related actions arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one (1) separate firm of attorneys (in addition to any local counsel), for all
such indemnified parties, which firm shall be designated in writing by those
indemnified parties who sold a majority of the Registrable Shares sold by all
such indemnified parties and any such separate firm for the Company, the
directors, the officers and such control Persons of the Company as shall be
designated in writing by the Company. 
The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, which consent shall not be
unreasonably withheld or delayed, but if settled with such consent or if there
be a final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify any Indemnified Party from and against any loss or liability by
reason of such settlement or judgment. 
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
proceeding.

 

(d)                                 If
the indemnification provided for in paragraphs (a) and (b) of this
Section 6 is for any reason held to be unavailable to an Indemnified Party
in respect of any Liabilities referred to therein (other than by reason of the
exceptions provided therein) or is insufficient to hold harmless a party
indemnified thereunder, then each Indemnifying Party under such paragraphs, in
lieu of indemnifying such Indemnified Party thereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
Liabilities (i) in such proportion as is appropriate to reflect the relative
benefits of the Indemnified Party on the one hand and the Indemnifying Parties
on the other in connection with the statements or omissions that resulted in
such Liabilities, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Indemnifying Parties and

 

16

 

the
Indemnified Party, as well as any other relevant equitable considerations.  The relative fault of the Company, on the
one hand, and any Purchaser Indemnitees, on the other, 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 the Company or by such
Purchaser Indemnitees and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

 

(e)                                  The
parties agree that it would not be just and equitable if contribution pursuant
to this Section 6 were determined by pro
rata allocation (even if such indemnified parties were treated as
one entity for such purpose), or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph 6(d)
above.  The amount paid or payable by an
Indemnified Party as a result of any Liabilities referred to paragraph 6(d)
shall be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses actually incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this
Section 6, in no event shall a Purchaser Indemnitee be required to contribute
any amount in excess of the amount by which proceeds received by such Purchaser
Indemnitee from sales of Registrable Shares exceeds the amount of any damages
that such Purchaser Indemnitee has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.  For purposes of this Section 6, each
Person, if any, who controls (within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act) a Holder shall have the same rights
to contribution as such Holder, as the case may be, and each Person, if any,
who controls (within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) the Company, and each officer,
director, partner, employee, representative, agent or manager of the Company
shall have the same rights to contribution as the Company.  Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from
whom contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this Section 6 or
otherwise, except to the extent that any party is materially prejudiced by the
failure to give notice.  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.

 

(f)                                    The
indemnity and contribution agreements contained in this Section 6 will be
in addition to any liability which the indemnifying parties may otherwise have
to the indemnified parties referred to above. 
The Purchaser Indemnitee’s obligations to contribute pursuant to this
Section 6 are several in proportion to the respective number of Shares
sold by each of the Purchaser Indemnitees hereunder and not joint.

 

7.                                       Market
Stand-off Agreement.

 

Each Holder hereby agrees that it shall not, to the extent requested by
the Company or an underwriter of securities of the Company, directly or
indirectly sell, offer to sell (including without limitation any short sale),
grant any option or otherwise transfer or dispose of any

 

17

 

Registrable Shares or other shares of Common Stock of the Company or
any securities convertible into or exchangeable or exercisable for shares of
Common Stock of the Company then owned by such Holder (other than to donees or
partners of the Holder who agree to be similarly bound) for a a period of up to
ninety (90) days in connection with (i) the effective date of the IPO
Registration Statement of the Company filed under the Securities Act or (ii)
the date of an Underwritten Offering by the Company pursuant to a shelf
registration statement of the Company filed under the Securities Act; provided, however, that:

 

(a)                                  with
respect to the up to 90-day restriction in connection with the effective date
of the IPO Registration Statement, such agreement shall not be applicable to
Registrable Shares sold pursuant to such IPO Registration Statement;

 

(b)                                 all
executive officers and directors of the Company then holding shares of Common
Stock or securities convertible into or exchangeable or exercisable for shares
of Common Stock of the Company shall enter into similar agreements for not less
than the entire time period required of the Holders hereunder; and

 

(c)                                  the
Holders shall be allowed any concession or proportionate release allowed to any
executive officer or director that entered into similar agreements.

 

In order to enforce the foregoing covenant, the Company shall have the
right to place restrictive legends on the certificates representing the
securities subject to this Section 7 and to impose stop transfer
instructions with respect to the Registrable Shares and such other securities
of each Holder (and the securities of every other Person subject to the
foregoing restriction) until the end of such period.

 

8.                                       Termination
of the Company’s Obligations.

 

The Company shall have no further obligations pursuant to this
Agreement at such time as no Registrable Shares are outstanding, provided,
however, that the Company’s obligations under Sections 3, 6 and 9 through and
including 19 of this Agreement shall remain in full force and effect following
such time.

 

9.                                       Amendments
and Waivers.  

 

The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents
to or departures from the provisions hereof may not be given, without the
written consent of the Company and Holders beneficially owning not less than
fifty percent (50%) of the then outstanding Registrable Shares.  Notwithstanding the foregoing, a waiver or
consent to or departure from the provisions hereof with respect to a matter
that relates exclusively to the rights of a Holder whose securities are being
sold pursuant to a Registration Statement and that does not directly or
indirectly affect, impair, limit or compromise the rights of other Holders may
be given by such Holder; provided that
the provisions of this sentence may not be amended, modified or supplemented
except in accordance with the provisions of the immediately preceding sentence.

 

18

 

10.                                 Notices.  

 

All notices and other communications, provided for or permitted
hereunder shall be made in writing by delivered by facsimile (with receipt confirmed),
overnight courier or registered or certified mail, return receipt requested, or
by telegram

 

(a)                                  if
to a Holder, at the most current address given by the transfer agent and
registrar of the Shares to the Company; and

 

(b)                                 if
to the Company, at the offices of the Company at 3305 Flamingo Drive, Suite
100, Vero Beach, Florida  32963,
Attention:  Chief Executive Officer.

 

11.                                 Successors
and Assigns.  

 

This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.

 

12.                                 Counterparts.  

 

This Agreement may be executed in any number of counterparts and by the
parties hereto in separate 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.

 

13.                                 Governing Law.

 

THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.  EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE
COURT IN THE STATE OF NEW YORK ANY FEDERAL COURT SITTING IN NEW YORK IN RESPECT
OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

 

14.                                 Severability. 

 

If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, and the parties hereto shall
use their

 

19

 

commercially reasonable efforts to find and employ an alternative means
to achieve the same or substantially the same result as that contemplated by
such term, provision, covenant or restriction. 
It is hereby stipulated and declared to be the intention of the parties
hereto that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.

 

15.                                 Entire
Agreement.  

 

This Agreement, together with the Placement Agreement and Subscription
Agreements, is intended by the parties hereto as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.

 

16.                                 Registrable
Shares Held by the Company or its Affiliates.  

 

Whenever the consent or approval of Holders of a specified percentage
of Registrable Shares is required hereunder, Registrable Shares held by the
Company or its Affiliates shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.

 

17.                                 Survival.  

 

This Agreement is intended to survive the consummation of the
transactions contemplated by the Placement Agreement and Subscription
Agreements.  The indemnification and
contribution obligations under Section 6 of this Agreement shall survive
the termination of the Company’s obligations under Section 2 of this
Agreement.

 

18.                                 Headings.  

 

The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the provisions of this Agreement.  All references made in this Agreement to
“Section” refer to such Section of this Agreement, unless expressly stated
otherwise.

 

19.                                 Attorneys’
Fees.  

 

In any action or proceeding brought to enforce any provision of this
Agreement, or where any provision hereof is validly asserted as a defense, the
prevailing party, as determined by the court, shall be entitled to recover its
reasonable attorneys’ fees in addition to any other available remedy.

 

[Remainder of this Page Intentionally Left
Blank]

 

20

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above written.

 

	
   

  	
  BIMINI MORTGAGE MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/  JEFFREY J. ZIMMER

  	
   

  
	
   

  	
  Name:

  	
  Jeffrey J. Zimmer

  
	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FLAGSTONE SECURITIES, LLC (as

  attorney-in-fact pursuant to Paragraph 4 of the

  Subscription Agreement for each of the Initial

  Holders listed on Schedule A hereto)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/  W. COLEMAN BITTING

  	
   

  
	
   

  	
  Name:

  	
  W. Coleman Bitting

  
	
   

  	
  Title:

  	
  Managing Director

  

 

21

 

SCHEDULE A

 

INITIAL HOLDERSEXHIBIT 10.3

 

EMPLOYMENT
AGREEMENT

 

 

EMPLOYMENT AGREEMENT dated as of April 12, 2004, by and between
Bimini Mortgage Management Inc. with its principal place of business at
3305 Flamingo Drive, Suite 100, Vero Beach, Florida 32963 (the
“Company”), and Jeffrey J. Zimmer, residing at the address set forth on the
signature page hereof (the “Executive”).

 

WHEREAS, the parties have previously entered into an employment
agreement as of December 18, 2003, and wish to amend and completely
restate such agreement as forth herein; and

 

WHEREAS, the Company wishes to employ the Executive, and the Executive
wishes to accept such offer, on the terms set forth below:

 

Accordingly, the parties hereto agree as follows:

 

1.                                       Term.  The Company
hereby employs the Executive, and the Executive hereby accepts such employment,
for an initial term commencing as of the date hereof and continuing for a
three-year period, unless sooner terminated in accordance with the provisions
of Section 4 or Section 5; with such employment to continue for
successive one-year periods in accordance with the terms of this Agreement
(subject to termination as aforesaid) unless either party notifies the other
party of non-renewal in writing prior to six months before the expiration of
the initial term and each annual renewal, as applicable (the period during
which the Executive is employed hereunder being hereinafter referred to as the
“Term”).

 

2.                                       Duties.  During the
Term, the Executive shall be employed by the Company as President of the
Company and Chief Executive Officer of the Company, and, for so long as he

 

 

continues to be appointed as such, shall serve as Chairman of the Board
of Directors of the Company (the “Board”), and, as such, the Executive shall
faithfully perform for the Company the duties of said offices and shall perform
such other duties of an executive, managerial or administrative nature as shall
be specified and designated from time to time by the Board.  The Executive shall devote substantially all
of his business time and effort to the performance of his duties hereunder;
provided that in no event shall this sentence prohibit the Executive from
performing personal and charitable activities, and any other business interests
as may be approved by the Board.  It is
expressly acknowledged and understood that the Executive may in the future seek
to form and operate other companies, which may include mortgage “REITs” which
are not directly competitive with the Company, and it is agreed that the Board
will consider promptly and in good faith whether (i) any such proposed venture
is competitive and (ii) to permit the Executive to pursue such venture provided
that all of the Executive’s duties and obligations hereunder shall be capable,
in the reasonable judgment of the Board, of being fully and satisfactorily
performed during the remaining Term.

 

3.                                       Compensation.

 

3.1                                 Salary.  The Company
shall pay the Executive during the Term a salary at a minimum rate of $150,000
per annum (the “Annual Salary”), in accordance with the customary payroll practices
of the Company applicable to senior executives.  At such time as a registration statement on Form S-11 covering
the initial public offering of the Company’s Class A Common Stock has been
declared effective by the U.S. Securities and Exchange Commission (the “SEC”),
the Executive’s Annual Salary shall be increased to $400,000.  At least annually, the Board shall review
the Executive’s Annual Salary and may provide for such increases therein as it
may in its discretion deem appropriate. 
The Board shall also consider increases to the Executive’s Annual

 

2

 

Salary following the completion of each capital raising event and
following such time as a registration statement on Form S-11 covering the
resale of the Company’s Class A Common Stock has been declared effective by the
SEC.  (Any such increased salary shall
constitute the “Annual Salary” as of the time of the increase.)

 

3.2                                 Bonus.  During the
Term, in addition to the Annual Salary, for each fiscal year of the Company
ending during the Term, the Executive shall have the opportunity to receive an
annual bonus under the Company’s bonus plans or arrangements as in effect from
time to time.  In providing for bonuses,
the Board shall consider, among other things, whether the completion of a
capital raising event should result in the payment of a bonus.  In addition, the Executive shall receive a
$250,000 cash bonus at the time a registration statement on Form S-11
covering resale of the Company’s Class A Common Stock issued in
November 2003 has been declared effective by the SEC. 

 

3.3                                 Benefits - In General. 
Except with respect to benefits of a type otherwise provided for under
Section 3.4, the Executive shall be permitted during the Term to
participate in any group life, hospitalization or disability insurance plans,
health programs, retirement plans, fringe benefit programs and similar benefits
that may be available to other senior executives of the Company generally, on
the same terms as such other executives, in each case to the extent that the
Executive is eligible under the terms of such plans or programs. 

 

3.4                                 Certain Specific Benefits. 

 

(a)  The
Executive, shall be covered by reasonable medical, vision and dental insurance,
to be provided at no cost to the Executive. 
The Executive shall be covered by life insurance in an amount no less
than $2,500,000, at no cost to the Executive, to the extent such insurance may
be obtained at reasonable rates; provided that the Executive cooperates as

 

3

 

reasonably requested by the Company in the Company’s efforts to obtain
such insurance.  The Executive shall be
covered by long-term disability insurance, to provide replacement income in an
amount no less than 100% of Annual Salary, at no cost to the Executive, to the
extent such insurance may be obtained at reasonable rates; provided that the
Executive cooperates as reasonably requested by the Company in the Company’s
efforts to obtain such insurance.  

 

(b)  The Executive
shall be entitled to vacation of no less than 25 days per year, personal days
of no less than five days per year and holidays of no less than 14 days per
year, to be credited in accordance with regular Company policies.  

 

All of the foregoing shall be implemented within a reasonable time
after the date hereof.

 

3.5                                 Expenses - In General. 
The Company shall pay or reimburse the Executive for all ordinary and
reasonable out-of-pocket expenses actually incurred (and, in the case of
reimbursement, paid) by the Executive during the Term in the performance of the
Executive’s services under this Agreement; provided that the Executive submits
proof of such expenses, with the properly completed forms as prescribed from
time to time by the Company.  Expense reimbursement
reports should generally be submitted to the Company within 60 days of the
payment by the Executive of the out-of-pocket expense; provided that no report
for reimbursement will be accepted after more than six months’ time, other than
in the case of unusual circumstances as may be determined by the Board.

 

3.6                                 Certain Legal
Expenses.  The Company
shall pay directly or reimburse the Executive for all reasonable legal fees and
expenses incurred by the Executive in connection with the review, negotiation
and execution of this Agreement.

 

3.7                                 Automobile.  During the
Term, the Executive shall be permitted the use of an automobile reasonably commensurate with the Executive’s
positions with the Company.

 

4

 

4.                                             Termination upon Death or Disability. 
If the Executive dies during the Term, the Term shall terminate as of
the date of death, and the obligations of the Company to or with respect to the
Executive shall terminate in their entirety upon such date except as otherwise
provided under this Section 4.  If
the Executive by virtue of ill health or other disability is unable to perform
substantially and continuously the duties assigned to him for more than 180 consecutive
or non-consecutive days out of any consecutive 12-month period, the Company
shall have the right, to the extent permitted by law, to terminate the
employment of the Executive upon notice in writing to the Executive.  Upon termination of employment due to death
or disability, (i) the Executive (or the Executive’s estate or beneficiaries in
the case of the death of the Executive) shall be entitled to receive any Annual
Salary and other benefits earned and accrued under this Agreement prior to the
date of termination (and reimbursement under this Agreement for expenses
incurred prior to the date of termination); (ii) subject to
Section 5.2(c), for a period of three years after termination of
employment, the Executive (if applicable), and in the event of his death, his
spouse (or life partner) and his dependents, shall receive such continuing
coverage under the group health plans they would have received under this
Agreement (but at such costs no higher than as in effect immediately preceding
such termination) as would have applied in the absence of such termination;
(iii) without duplication of any amounts due under clause (i), the Executive
shall receive an amount equal to the annual bonus that, in the absence of such
termination, would have been payable for the fiscal year in which termination occurs,
payable at such time as would have applied in the absence of such termination,
with such amount to be multiplied by a fraction (x) the numerator of which is
the number of days in the fiscal year preceding the termination and (y) the
denominator of which is 365; (iv) all outstanding unvested equity-based awards
(including stock options and restricted

 

5

 

stock) held by the Executive shall fully vest and become immediately
exercisable, as applicable, and, in the case of options, shall continue to be
exercisable for their full terms; and (v) the Executive (or the Executive’s
estate or beneficiaries in the case of the death of the Executive) shall have
no further rights to any other compensation or benefits hereunder, or any other
rights hereunder (but, for the avoidance of doubt, shall receive such
disability and death benefits as may be provided under the Company’s plans and
arrangements in accordance with their terms).

 

5.                                       Certain Terminations of Employment;
Certain Benefits.

 

5.1                                 Termination by the Company for Cause;
Termination by the Executive without Good Reason.

 

(a)  For
purposes of this Agreement, “Cause” shall mean the Executive’s:

 

(i)                                     conviction of (or pleading nolo
contendere to) a felony (but in no event including a traffic or similar
violation), a crime of moral turpitude, dishonesty, breach of trust or
unethical business conduct, or any crime involving the Company;

 

(ii)                                  engagement in the performance of his
duties hereunder, in willful misconduct, willful or gross neglect, fraud,
misappropriation or embezzlement;

 

(iii)                               repeated failure to adhere to the
directions of the Board, to adhere to the Company’s policies and practices or
to devote his business time and efforts to the Company as required by
Section 2;

 

(iv)                              willful and continued failure to
substantially perform his duties properly assigned to him (other than any such
failure resulting from his Disability) after demand for substantial performance
is delivered by the Company specifically identifying the manner in which the
Company believes the Executive has not substantially performed such duties;

 

(v)                                 material breach of any of the provisions
of Section 6; or

 

(vi)                              breach in any material respect of the
terms and provisions of this Agreement and failure to cure such breach within
21 days following written notice from the Company specifying such breach;

 

6

 

provided that the
Company shall not be permitted to terminate the Executive for Cause except on
written notice given to the Executive at any time following the occurrence of
any of the events described in clauses (i), (ii) or (v) above and on written
notice given to the Executive at any time not more than 30 days following the
occurrence of any of the events described in clause (iii), (iv) or (vi) above
(or, if later, the Company’s knowledge thereof).  No termination for Cause shall be effective unless the Board
makes a Cause determination after notice to the Executive and the Executive has
been provided with the opportunity (with counsel of his choice) to contest the
determination at a meeting of the Board.

 

(b)                                 The Company may terminate the Executive’s
employment hereunder for Cause, and the Executive may terminate his employment
on at least 30 days’ and not more than 60 days’ written notice given to the
Company.  If the Company terminates the
Executive for Cause, or the Executive terminates his employment and the
termination by the Executive is not for Good Reason in accordance with
Section 5.2, (i) the Executive shall receive Annual Salary and other
benefits (including any bonus for a fiscal year completed before termination
and awarded but not yet paid, but not any other bonus) earned and accrued under
this Agreement prior to the termination of employment (and reimbursement under
this Agreement for expenses incurred prior to the termination of employment);
(ii) in the case of such a termination by the Executive, he shall receive an
amount equal to the annual bonus that, in the absence of such termination,
would have been payable for the fiscal year in which termination occurs,
payable at such time as would have applied in the absence of such termination,
with such amount to be multiplied by a fraction (x) the numerator of which is
the number of days in the fiscal year preceding the termination and (y) the
denominator of which is 365; and (iii) the Executive shall

 

7

 

have no further rights to any other compensation or benefits hereunder
on or after the termination of employment, or any other rights hereunder.

 

5.2                                 Termination by the Company without Cause;
Termination by the Executive for Good Reason.

 

(a)                                  For purposes of this Agreement, “Good
Reason” shall mean, unless otherwise consented to by the Executive,

 

(i)                                     the material reduction of the Executive’s
authority, duties and responsibilities, the failure to continue the Executive’s
appointment as Chairman of the Board, or the assignment to the Executive of
duties materially inconsistent with the Executive’s position or positions with
the Company;

 

(ii)                                  a reduction in Annual Salary of the
Executive;

 

(iii)                               the relocation of the Executive’s office
to more than 25 miles from Vero Beach, Florida;

 

(iv)                              the Company’s failure to pay the
Executive any amounts otherwise due hereunder or under any plan, policy,
program, agreement, arrangement or other commitment of the Company; or

 

(v)                                 the Company’s material and willful breach
of this Agreement.

 

Notwithstanding
the foregoing, (i) Good Reason shall not be deemed to exist unless notice
of termination on account thereof (specifying a termination date no later than
30 days from the date of such notice) is given no later than 30 days after the
time at which the event or condition purportedly giving rise to Good Reason
first occurs or arises; and (ii) if there exists (without regard to this
clause (ii)) an event or condition that constitutes Good Reason, the Company
shall have ten days from the date notice of such a termination is given to cure
such event or condition and, if the Company does so, such event or condition
shall not constitute Good Reason hereunder.

 

8

 

(b)  The
Company may terminate the Executive’s employment at any time for any reason or
no reason and the Executive may terminate the Executive’s employment with the
Company for Good Reason.  If the Company
terminates the Executive’s employment and the termination is not covered by
Section 4 or 5.1, or the Executive terminates his employment for Good
Reason:

 

(i)                  the Executive shall receive Annual Salary and other
benefits (including any bonus for a fiscal year completed before termination,
but not any other bonus) earned and accrued under this Agreement prior to the
termination of employment (and reimbursement under this Agreement for expenses
incurred prior to the termination of employment); 

 

(ii)               if (and only if) the Executive provides a general
release in a form reasonably acceptable to the Company which is or has become
irrevocable, 

 

(A)                    the
Executive shall receive (I) a single-sum cash payment equal to 300% of the
sum of (x) the Executive’s Annual Salary (as in effect immediately before
such termination) plus (y) the average bonus to the Executive for the
three fiscal years ending coincident with or immediately preceding such
termination (such amount to be deemed to be $500,000 if termination occurs
before the end of the first year, and, in addition, such amount in all events
to include for the first year any $250,000 bonus payable in accordance with the
last sentence of Section 3.2), payable no later than ten days after such
termination (but subject to the release provided for above having become
irrevocable), (II) subject to Section 5.2(c), for a period of three
years after termination of employment, such continuing coverage under the group
health plans the Executive would have received under this Agreement (but at
such costs (if any) to the Executive no higher than as in effect immediately
preceding such termination) as would have applied in the absence of such
termination; (III)  an amount equal to the annual bonus that, in the
absence of such termination, would have been payable for the fiscal year in
which termination occurs, payable at such time as would have applied in the
absence of such termination, with such amount to be multiplied by a fraction
(x) the numerator of which is the number of days in the fiscal year preceding
the termination and (y) the denominator of which is 365; and

 

9

 

(IV)  at the Company’s cost (not to exceed $7,500), outplacement
services reasonably selected by the Company; and 

 

(B)                      all
outstanding unvested equity-based awards (including stock options and
restricted stock) held by the Executive shall fully vest and become immediately
exercisable, as applicable, and, in the case of options, shall continue to be
exercisable for their full terms; and 

 

(iii)            the Executive shall have no further rights to any
other compensation or benefits hereunder on or after the termination of employment,
or any other rights hereunder. 

 

(c)                                  Notwithstanding clause (ii) of the third
sentence of Section 4 or clause (ii)(A)(II) of the second sentence of
Section 5.2(b), (i) nothing herein shall restrict the ability of the
Company to amend or terminate with general application the plans and programs
referred to in such clauses from time to time in its sole discretion, and
(ii) the Company shall in no event be required to provide any benefits
otherwise required by such clauses after such time as the Executive becomes
entitled to receive benefits of the same type from another employer or
recipient of the Executive’s services. 

 

5.3                                 Change of Control.

 

(a)                                  Without duplication of the foregoing,
upon a “Change of Control” (as defined below) while the Executive is employed,
all outstanding unvested equity-based awards (including stock options and
restricted stock) shall fully vest and become immediately exercisable, as
applicable.  In addition, if, after a
Change of Control, the Executive terminates his employment with the Company as
of the three-month anniversary of the Change of Control, such termination shall
be deemed a termination by the Executive for Good Reason covered by
Section 5.2.

 

(b)                                 For purposes of this Agreement, “Change
in Control” shall mean the happening of any of the following:

 

10

 

(i)                  any “person,” including a “group” (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), but excluding the Company, any entity
controlling, controlled by or under common control with the Company, any
employee benefit plan of the Company or any such entity, and Executive and any
“group” (as such term is used in Section 13(d)(3) of the Exchange Act) of
which the Executive is a member) is or becomes the “beneficial owner” (as
defined in Rule 13(d)(3) under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of either (A) the combined
voting power of the Company’s then outstanding securities or (B) the then
outstanding Common Stock of the Company (in either such case other than as a
result of an acquisition of securities directly from the Company); provided,
however, that, in no event shall a Change in Control be deemed to have occurred
upon an initial public offering or a subsequent public offering of the Common
Stock under the Securities Act of 1933, as amended; or

 

(ii)               any consolidation or merger of the Company where the
stockholders of the Company, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, beneficially own (as
such term is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, shares representing in the aggregate 50% or more of the combined
voting power of the securities of the corporation issuing cash or securities in
the consolidation or merger (or of its ultimate parent corporation, if any); or

 

(iii)            there shall occur (A) any sale, lease, exchange or
other transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company, other than a sale or disposition by the Company of all
or substantially all of the Company’s assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by “persons”
(as defined above) in substantially the same proportion as their ownership of
the Company immediately prior to such sale or (B) the approval by stockholders
of the Company of any plan or proposal for the liquidation or dissolution of
the Company; or

 

(iv)           the members of the Board at the beginning of any
consecutive 24-calendar-month period (the “Incumbent Directors”) cease for any
reason other than due to death to constitute at least a majority of the members
of the Board; provided that any director whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a
majority of the

 

11

 

members of the Board then
still in office who were members of the Board at the beginning of such
24-calendar-month period, shall be deemed to be an Incumbent Director.

 

6.                                       Covenants of the Executive.

 

6.1                                 Covenant Against Competition; Other
Covenants.  The Executive acknowledges that (i) the
principal business of the Company (which expressly includes for purposes of
this Section 6 (and any related enforcement provisions hereof), its
successors and assigns) is the acquiring, owning and selling residential
mortgage-related securities and/or debt securities issued or guaranteed by the
U.S. government, U.S. government sponsored or chartered enterprises or U.S.
government agencies  (such business
herein being referred to as the “Business”); (ii) the Company is one of
the limited number of persons who have developed such a business;
(iii) the Company’s Business is, in part, national in scope; (iv) the
Executive’s work for the Company has given and will continue to give him access
to the confidential affairs and proprietary information of the Company;
(v) the covenants and agreements of the Executive contained in this
Section 6 are essential to the business and goodwill of the Company; and
(vi) the Company would not have entered into this Agreement but for the
covenants and agreements set forth in this Section 6.  Accordingly, the Executive covenants and
agrees that:

 

(a)                                  By and in consideration of the salary and
benefits to be provided by the Company hereunder, including the severance arrangements
set forth herein, and further in consideration of the Executive’s exposure to
the proprietary information of the Company, the Executive covenants and agrees
that, during the period commencing on the date hereof and ending one year
following the date upon which the Executive shall cease to be an employee of
the Company and its affiliates, he shall not in the United States, directly or
indirectly, except with the prior approval of the Board, (i) engage in the
Business (other than for the Company or its affiliates) or otherwise compete
with the Company or its affiliates, (ii) render any services to

 

12

 

any person, corporation, partnership or other entity (other than the
Company or its affiliates) engaged in the elements of the Business, or
(iii) become interested in any person, corporation, partnership or other
entity (other than the Company or its affiliates) engaged in the elements of
the Business, as a partner, shareholder, principal, agent, employee, consultant
or in any other relationship or capacity; provided, however, that,
notwithstanding the foregoing, the Executive may invest in securities of any
entity, solely for investment purposes and without participating in the
business thereof, if (A) such securities are traded on any national
securities exchange or the National Association of Securities Dealers, Inc.
Automated Quotation System, (B) the Executive is not a controlling person
of, or a member of a group which controls, such entity and (C) the
Executive does not, directly or indirectly, own 5% or more of any class of
securities of such entity. 
Notwithstanding the foregoing, the restrictions in this
Section 6(a) shall not apply upon and after (i) a termination covered by
Section 5.2 or (ii) a termination by the Executive after a Change in
Control.  In addition, the restrictions
of this Section 6(a) shall not apply to any existing investments or other
activities of the Executive which have been disclosed in writing to the Board
prior to the date hereof.

 

(b)                                 During and after the period of the
Executive’s employment with the Company and its affiliates, the Executive shall
keep secret and retain in strictest confidence, and shall not use for his
benefit or the benefit of others, except in connection with the business and
affairs of the Company and its affiliates, all confidential matters relating to
the Company’s Business and the business of any of its affiliates and to the
Company and any of its affiliates, learned by the Executive heretofore or hereafter
directly or indirectly from the Company or any of its affiliates (the
“Confidential Company Information”); and shall not disclose such Confidential
Company Information to anyone outside of the Company except with the

 

13

 

Company’s express written consent and except for Confidential Company
Information which is at the time of receipt or thereafter becomes publicly
known through no wrongful act of the Executive or is received from a third
party not under an obligation to keep such information confidential and without
breach of this Agreement. 

 

(c)                                  During the period commencing on the date
hereof and ending one year following the date upon which the Executive shall
cease to be an employee of the Company and its affiliates, (i) the Executive
shall not, without the Company’s prior written consent, directly or indirectly,
knowingly (i) solicit or encourage to leave the employment or other service of
the Company, or any of its affiliates, any employee or independent contractor
thereof or (ii) hire (on behalf of the Executive or any other person or entity)
any employee or independent contractor who has left the employment or other
service of the Company or any of its affiliates within the one-year period which
follows the termination of such employee’s or independent contractor’s
employment or other service with the Company and its affiliates, and (ii) the
Executive will not, whether for his own account or for the account of any other
person, firm, corporation or other business organization, intentionally
interfere with the Company’s or any of its affiliates’ relationship with, or
endeavor to entice away from the Company or any of its affiliates, any person
who during the Term is or was a customer or client of the Company or any of its
affiliates.  

 

(d)                                 All memoranda, notes, lists, records,
property and any other tangible product and documents (and all copies thereof),
whether visually perceptible, machine-readable or otherwise, made, produced or
compiled by the Executive or made available to the Executive concerning the
business of the Company or its affiliates, (i) shall at all times be the
property of the Company (and, as applicable, any affiliates) and shall be
delivered to the Company at any

 

14

 

time upon its request, and (ii) upon the Executive’s termination of
employment, shall be immediately returned to the Company (except that in all
events the Executive may retain a copy of his contacts list).

 

6.2                                 Rights and Remedies upon Breach. 
The Executive acknowledges and agrees that any breach by him of any of
the provisions of Section 6.1 (the “Restrictive Covenants”) would result
in irreparable injury and damage for which money damages would not provide an
adequate remedy.  Therefore, if the
Executive breaches, or threatens to commit a breach of, any of the provisions
of Section 6.1, the Company and its affiliates, in addition to, and not in
lieu of, any other rights and remedies available to the Company and its affiliates
under law or in equity (including, without limitation, the recovery of
damages), shall have the right and remedy to have the Restrictive Covenants
specifically enforced by any court having equity jurisdiction, including,
without limitation, the right to an entry against the Executive of restraining
orders and injunctions (preliminary, mandatory, temporary and permanent)
against violations, threatened or actual, and whether or not then continuing,
of such covenants.

 

7.                                       Other Provisions.

 

7.1                                 Severability. 
The Executive acknowledges and agrees that (i) he has had an
opportunity to seek advice of counsel in connection with this Agreement and
(ii) the Restrictive Covenants are reasonable in geographical and temporal
scope and in all other respects.  If it
is determined that any of the provisions of this Agreement, including, without
limitation, any of the Restrictive Covenants, or any part thereof, is invalid
or unenforceable, the remainder of the provisions of this Agreement shall not
thereby be affected and shall be given full effect, without regard to the
invalid portions.

 

15

 

7.2                                 Duration and Scope of Covenants. 
If any court or other decision-maker of competent jurisdiction
determines that any of the Executive’s covenants contained in this Agreement,
including, without limitation, any of the Restrictive Covenants, or any part
thereof, is unenforceable because of the duration or geographical scope of such
provision, then, after such determination has become final and unappealable,
the duration or scope of such provision, as the case may be, shall be reduced
so that such provision becomes enforceable and, in its reduced form, such
provision shall then be enforceable and shall be enforced.

 

7.3                                 Enforceability; Jurisdiction; Arbitration.

 

(a)  The Company and the
Executive intend to and hereby confer jurisdiction to enforce the Restrictive
Covenants set forth in Section 6 upon the courts of any jurisdiction
within the geographical scope of the Restrictive Covenants.  If the courts of any one or more of such
jurisdictions hold the Restrictive Covenants wholly unenforceable by reason of
breadth of scope or otherwise it is the intention of the Company and the
Executive that such determination not bar or in any way affect the Company’s
right, or the right of any of its affiliates, to the relief provided above in
the courts of any other jurisdiction within the geographical scope of such
Restrictive Covenants, as to breaches of such Restrictive Covenants in such other
respective jurisdictions, such Restrictive Covenants as they relate to each
jurisdiction’s being, for this purpose, severable, diverse and independent
covenants, subject, where appropriate, to the doctrine of res  judicata.

 

(b)  Any controversy or claim
arising out of or relating to this Agreement or the breach of this Agreement
(other than a controversy or claim arising under Section 6, to the extent
necessary for the Company (or its

 

16

 

affiliates, where
applicable) to avail itself of the rights and remedies referred to in
Section 6.2) that is not resolved by the Executive and the Company (or its
affiliates, where applicable) shall be submitted to arbitration in Vero Beach
or Palm Beach, Florida in accordance with Florida law and the procedures of the
American Arbitration Association.  The
determination of the arbitrator(s) shall be conclusive and binding on the
Company (or its affiliates, where applicable) and the Executive and judgment
may be entered on the arbitrator(s)’ award in any court having
jurisdiction.  In any action in which
the Executive is the prevailing party, the Company shall pay the Executive’s
legal fees.

 

7.4                                 Indemnification and Insurance. 
The Company agrees to indemnify (in addition to any other
indemnification provided to the Executive under any separate agreement or the
by-laws of the Company) the Executive to the fullest extent permitted by
applicable law, as the same exists and may hereafter be amended, from and
against any and all losses, damages, claims, liabilities and expenses asserted
against, or incurred or suffered by, the Executive (including the costs and
expenses of legal counsel retained by the Company to defend the Executive and
judgments, fines and amounts paid in settlement actually and reasonably
incurred by or imposed on such indemnified party) with respect to any action,
suit or proceeding, whether civil, criminal, administrative or investigative in
which the Executive is made a party or threatened to be made a party, either
with regard to his entering into this Agreement or in his capacity as an
officer or director, or former officer or director, of the Company or any
affiliate thereof for which he may serve in such capacity.  Such indemnification shall continue after
the Executive is no longer employed by the Company and shall inure to the
benefit of his heirs, executors, and administrators.  The Company also agrees to attempt to secure and maintain
reasonable officers and directors liability insurance at reasonable rates,
within a reasonable time after the date hereof, providing coverage for
Executive, which coverage would continue after termination of

 

17

 

employment for a reasonable time (but in no event for a shorter time
than is applicable to any other senior executive of the Company).

 

7.5                                 Notices.  Any notice
or other communication required or permitted hereunder shall be in writing and
shall be delivered personally, telegraphed, telexed, sent by facsimile transmission
or sent by certified, registered or express mail, postage prepaid.  Any such notice shall be deemed given when
so delivered personally, telegraphed, telexed or sent by facsimile transmission
or, if mailed, five days after the date of deposit in the United States mails
as follows:

 

(i)                                     If to the Company,
to:

 

Bimini Mortgage Management Inc.

3305 Flamingo Drive, Suite 100

Vero Beach, Florida 32963

Attention: 
Chairman of the Compensation Committee of the Board of

Directors

 

and

 

Bimini Mortgage Management Inc.

3305 Flamingo Drive, Suite 100

Vero Beach, Florida 32963

Attention:  Chief Financial
Officer

 

with a copy to:

 

Clifford Chance US LLP

200 Park Avenue

New York, New York  10166

Attention:  Robert E. King, Jr.

 

(ii)                                  If to the Executive,
to the address set forth on the signature page hereof.

 

Any such person
may by notice given in accordance with this Section 7.4 to the other
parties hereto designate another address or person for receipt by such person
of notices hereunder.

 

18

 

7.6                                 Entire Agreement. 
This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto.

 

7.7                                 Waivers and Amendments. 
This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by the parties or, in the case of a waiver, by the party waiving compliance.  No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege nor any single or partial exercise of any such right, power or
privilege, preclude any other or further exercise thereof or the exercise of
any other such right, power or privilege.

 

7.8                                 GOVERNING LAW. 
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

7.9                                 Assignment.  This
Agreement, and the Executive’s rights and obligations hereunder, may not be
assigned by the Executive; any purported assignment by the Executive in
violation hereof shall be null and void. 
In the event of any sale, transfer or other disposition of all or
substantially all of the Company’s assets or business, whether by merger,
consolidation or otherwise, the Company may assign this Agreement and its
rights hereunder.

 

7.10                           Withholding. 
The Company shall be entitled to withhold from any payments or deemed
payments any amount of tax withholding it determines to be required by law.

 

7.11                           Binding Effect. 
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, permitted assigns, heirs, executors
and legal representatives.

 

19

 

7.12                           Counterparts. 
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original
but all such counterparts together shall constitute one and the same
instrument.  Each counterpart may
consist of two copies hereof each signed by one of the parties hereto.

 

7.13                           Survival.  Anything
contained in this Agreement to the contrary notwithstanding, the provisions of
Sections 6, 7.3, 7.4 and 7.10, and the other provisions of this Section 7
(to the extent necessary to effectuate the survival of Sections 6, 7.3, 7.4 and
7.10), shall survive termination of this Agreement and any termination of the
Executive’s employment hereunder.

 

7.14                           Existing Agreements. 
The Executive represents to the Company that he is not subject or a
party to any employment or consulting agreement, non-competition covenant or
other agreement, covenant or understanding which might prohibit him from
executing this Agreement or limit his ability to fulfill his responsibilities
hereunder, except that, as previously disclosed to the Board, the Executive may
have certain non-solicitation and non-interference obligations to a former
employer.

 

7.15                           Headings.  The headings
in this Agreement are for reference only and shall not affect the
interpretation of this Agreement.

 

7.16                           Parachutes.  If any
amount payable to or other benefit receivable by the Executive pursuant to this
Agreement is deemed to constitute a Parachute Payment (as defined below), alone
or when added to any other amount payable or paid to or other benefit
receivable or received by the Executive which is deemed to constitute a
Parachute Payment (whether or not under an existing plan, arrangement or other
agreement), and would result in the imposition on the Executive of an excise
tax under Section 4999 of the Internal Revenue Code of 1986, as amended
(the “Code”), then, in addition to any other benefits to which the Executive is
entitled

 

20

 

under this Agreement, the Executive shall be paid by the Company an
amount in cash equal to the sum of the excise taxes payable by the Executive by
reason of receiving Parachute Payments plus the amount necessary to put the
Executive in the same after-tax position (taking into account any and all
applicable federal, state and local excise, income or other taxes at the
highest applicable rates on such Parachute Payments and on any payments under
this Section 7.16) as if no excise taxes had been imposed with respect to
Parachute Payments.  “Parachute Payment”
shall mean a “parachute payment” as defined in Section 280G of the
Code.  The amount of any payment under
this Section 7.16 shall be computed by a certified public accounting firm
selected by the Company and reasonably acceptable to the Executive, subject to
the last sentence of this Section 7.16. 
Notwithstanding any other provision of this Section 7.16, if a
reduction in Parachute Payments by 10% or less would cause there not to be
excise taxes imposed upon the Executive under Section 4999 of the Code (as
determined by the accounting firm referred to above, but subject to the last
sentence of this Section 7.16), then (i) no payments shall be made to the
Executive under the foregoing provisions of this Section 7.16, and (ii)
the payments and benefits provided under this Agreement shall be reduced to the
extent necessary so that no excise taxes would be imposed upon the
Executive.  In the event that the
Internal Revenue Service or a court, as applicable, finally and in a decision
that has become unappealable, decides that the determinations by the accounting
firm under this Section 7.16 are incorrect, then the parties shall within
five business days take such corrective actions as are necessary to conform to
such final decision; provided that (i) the Executive shall not initiate any
proceeding or other contests regarding these matters, other than at the direction
of the Company, and shall provide notice to the Company of any proceeding or
other contest regarding these matters initiated by the Internal Revenue
Service, and (ii) the Company shall be entitled to direct and control all such
proceeding

 

21

 

and other contests, if it commits to and does pay all costs (including
without limitation legal and other professional fees) associated therewith.

 

22

 

IN WITNESS WHEREOF, the parties hereto have signed their names as of
the day and year first above written.

 

 

	
   

  	
  BIMINI MORTGAGE
  MANAGEMENT INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Robert
  E. Cauley

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Robert E. Cauley

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/  Jeffrey
  J. Zimmer

  	
   

  
	
   

  	
   

  	
  Jeffrey J. Zimmer

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