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bmnm8k20120730x41.htm

 

 EXHIBIT 4.1

CLASS A PREFERRED SHARES

 

1.      Class of Shares. A total of 1,000,000 Class A Preferred shares of the Company, no par value (hereinafter referred to as the “Class A Preferred Shares”).

 

2.      Rank. The Class A Preferred Shares shall, with respect to rights (including to redemption payments) upon liquidation, dissolution or winding-up of the affairs of the Company, rank pari passu with the Ordinary Shares on an as-converted basis into Ordinary Shares.

 

3.      Dividends. Dividends as and when declared on the Ordinary Shares may be declared and paid on the Preferred Shares from funds legally available therefore as and when determined by the Board of Directors, it being the intent that the Preferred Shares shall, with respect to the payment of dividends, rank pari passu with the Ordinary Shares on an as-converted basis into Ordinary Shares; provided, however, that the Preferred Shares shall not be eligible to receive any, or participate in the dividends of US$1,000,000 in cash and up to 2,295,500 warrants to purchase Ordinary Shares (the “Initial Dividend”) to be declared and paid to holders of Ordinary Shares post-Merger by the Company in accordance with the terms of that certain Agreement and Plan of Reorganization, by and among the Company, FTWA Orchid Merger Sub LLC, Orchid Island Capital, Inc., Bimini Capital Management, Inc., Bimini Advisors, LLC and FWAC Holdings Limited, dated July 26, 2012.

 

4.      Liquidation Preference. The Preferred Shares, in case of the voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Company (a “Liquidation Event”), shall share ratably in such distribution of assets on an as-converted basis into Ordinary Shares, and with all of the same rights, privileges and restrictions thereto.

 

5.      Conversion.

 

(a)      Right to Convert. Each Holder shall have the right to convert, at any time after the established and announced record date for the Initial Dividend and from time to time thereafter, all or any part of the Preferred Shares held by such Holder into such number of fully paid Ordinary Shares (the “Conversion Shares”) as is determined in accordance with the terms hereof (a “Conversion”).

 

(b)      Conversion Notice. In order to convert Preferred Shares, a Holder shall send to the Company by facsimile transmission, at any time prior to 3:00 p.m., Eastern Time, on the Business Day (as used herein, the term “Business Day” shall mean any day except a Saturday, Sunday or day on which banks in New York, New York are closed in the ordinary course of business) two (2) Business Days prior to the date on which such Holder wishes to effect such Conversion (the “Conversion Date”), a notice of conversion in substantially the form attached as Annex I hereto (a “Conversion Notice”), stating the number of Preferred Shares to be converted, and a calculation of the number of Ordinary Shares issuable upon such Conversion in accordance with the formula set forth in paragraph 5(c) below setting forth the basis for each component thereof. The Holder shall promptly thereafter send the Conversion Notice and the certificate or certificates (if applicable) in respect of the Preferred Shares being converted to the Company. Such Preferred Shares shall be converted into Ordinary Shares by the repurchase by the Company of such Preferred Shares and the immediate re-issue to the Holder of such number of Ordinary Shares as the Holder shall be entitled in accordance with this paragraph 5, whereupon the Preferred Shares repurchased shall be cancelled and shall not thereafter be reissued. The Company shall issue a new certificate for Preferred Shares to the Holder in respect of any Preferred Shares not converted in the event that less than all of the Preferred Shares represented by a certificate are converted; provided, however, that the failure

 

 

  

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of the Company to deliver such new certificate shall not affect the right of the Holder to submit a further Conversion Notice with respect to such Preferred Shares and, in any such case, the Holder shall be deemed to have submitted the original of such new certificate at the time that it submits such further Conversion Notice. Except as otherwise provided herein, upon delivery of a Conversion Notice by a Holder in accordance with the terms hereof, such Holder shall, as of the applicable Conversion Date, to the fullest extent allowed by the Act be deemed for all purposes to be the registered holder of the Ordinary Shares to which such Conversion Notice relates. In the case of a dispute between the Company and a Holder as to the calculation of the Conversion Price or the number of Conversion Shares issuable upon a Conversion (including, without limitation, the calculation of any adjustment to the Conversion Price following any adjustment thereof), the Company shall issue to such Holder the number of Conversion Shares that are not disputed within the time periods specified in paragraph 5(d) below and shall submit the disputed calculations to a certified public accounting firm (other than the Company’s regularly retained accountants) within two (2) Business Days following the Company’s receipt of such Holder’s Conversion Notice. The Company shall cause such accountant to calculate the Conversion Price as provided herein and to notify the Company and such Holder of the results in writing no later than three (3) Business Days following the day on which such accountant received the disputed calculations (the “Dispute Procedure”). Such accountant’s calculation shall be deemed conclusive absent manifest error. The fees of any such accountant shall be borne by the party whose calculations were most at variance with those of such accountant.

 

(c)      Number of Conversion Shares. The number of Conversion Shares to be delivered by the Company to a Holder for each Preferred Share a Holder properly indicates on the Conversion Notice that such Holder desires to convert pursuant to a Conversion shall be equal to ten (10), subject to adjustment pursuant to paragraph 5(e) below (the “Conversion Price”).

 

(d)      Delivery of Conversion Shares. The Company shall, no later than the close of business on the third (3rd) Business Day following the later of the date on which the Company receives a Conversion Notice from a Holder by facsimile transmission pursuant to paragraph 5(b), above, and the date on which the Company receives the related Preferred Shares certificate (such third Business Day, the “Delivery Date”), issue and deliver or cause to be delivered to such Holder the number of Conversion Shares determined pursuant to paragraph 5(c) above; provided, however, that any Conversion Shares that are the subject of a Dispute Procedure shall be delivered no later than the close of business on the third (3rd) Business Day following the determination made pursuant thereto.

 

(e)      Adjustments. The Conversion Price shall be subject to adjustment from time to time in the event that the number of outstanding Ordinary Shares is increased by a bonus issue of Ordinary Shares (other than the Initial Dividend), or by a division of Ordinary Shares, or decreased by a share combination of Ordinary Shares, or other similar event. In such case, on the effective date of such bonus issue, division, combination, or similar event, the number of Conversion Shares issuable on conversion of each Class A Preferred Share shall be increased, or decreased, in proportion to such increase, or decrease, in outstanding Ordinary Shares.

 

6.      Voting Rights. Each Preferred Share in the Company confers on the Holder the right to vote at a meeting of the members of the Company or on any resolution of the members of the Company on an as-converted basis into Ordinary Shares.

 

  

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EXHIBIT 4.2

 

SPECIMEN WARRANT CERTIFICATE

 

	
NUMBER

W-___________

	
WARRANTS

 

 

 

(THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO 5:00 P.M.

NEW YORK CITY TIME, ON [THREE YEARS AFTER THE EFFECTIVE DATE])

 

FLATWORLD ACQUISITION CORP.

 

USIP [ ]

WARRANT

 

 

THIS WARRANT CERTIFIES THAT, for value received

 

 

or registered agents, is the registered holder of a Warrant or Warrants expiring on [three years after the Effective Date] (the “Warrant”) to purchase one fully paid and non-assessable ordinary share, no par value per share (the “Shares”), of FLATWORLD ACQUISITION CORP., a British Virgin Islands business company limited by shares (the “Company”), for each Warrant evidenced by this certificate (the “Warrant Certificate”).

 

    Each Warrant entitles the holder to purchase one (1) Share, at a price of $[9.25 for New Sponsor Warrants][9.50 for New Public Warrants] per Share (the “Warrant Price”), subject to adjustment. Each Warrant is exercisable upon issuance and will expire unless exercised before 5 p.m. New York City time on the date that is [three years after the Effective Date], or earlier upon redemption (the “Expiration Date”). The Company shall only be obligated to issue ordinary shares upon surrender of this Warrant Certificate and payment of the Warrant Price at the office or agency of the Warrant Agent, Continental Stock Transfer & Trust Company (such payment to be made in accordance with the terms of the Warrant Agreement (defined below)). Except as set forth in the Warrant Agreement, in no event shall the registered holder(s) of this Warrant be entitled to receive a net-cash settlement, Shares or other consideration in lieu of physical settlement in Shares of the Company. The term Warrant Price as used in this Warrant Certificate refers to the price per Share at which Shares may be purchased at the time the Warrant is exercised.

 

    No fraction of a Share will be issued upon any exercise of a Warrant. If, upon exercise of a Warrant, a holder would be entitled to receive a fractional interest in a Share, the Company will, upon exercise, round up to the nearest whole number the number of Shares to be issued to the warrant holder.

 

    Upon any exercise of the Warrant for less than the total number of full Shares provided for herein, there shall be issued to the registered holder(s) hereof or its assignee(s) a new Warrant Certificate covering the number of Shares for which the Warrant has not been exercised.

 

    Warrant Certificates, when surrendered at the office or agency of the Warrant Agent by the registered holder(s) hereof in person or by attorney duly authorized in writing, may be exchanged in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants.

 

    Upon due presentment for registration of transfer of the Warrant Certificate at the office or agency of the Warrant Agent, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any applicable tax or other governmental charge.

 

    The Company and the Warrant Agent may deem and treat the registered holder(s) as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone) for the purpose of any exercise hereof, of any distribution to the registered holder(s), and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

 

    This Warrant does not entitle the registered holder(s) to any of the rights of a shareholder of the Company.

 

    The Company reserves the right to redeem the Warrant at any time prior to its exercise, with a notice of redemption in writing to the holder(s) of record of the Warrant, giving 30 days’ notice of such redemption at any time after the Warrant becomes exercisable if the volume weighted average price of the Shares as reported on Bloomberg has been at least $[10.50] per share on each of 20 trading days within a 30 trading day period ending on the third business day prior to the date on which notice of such redemption is given and there is an effective registration statement covering the Shares underlying the Warrants for the continuous period beginning on the date on which notice is given and ending on the date of redemption. The redemption price of the Warrants is to be $.01 per Warrant. Any Warrant either not exercised or tendered back to the Company by the end of the date specified in the notice of redemption shall be canceled on the books of the Company and have no further value except for the $.01 redemption price.

 

 

  

  

  

 

    The terms of the Warrants are subject to and qualified in their entirety by that certain Warrant Agreement (the “Warrant Agreement”) between the Company and Continental Stock Transfer & Trust Company, as Warrant Agent, dated [August ], 2012, all of which terms and provisions the holder of this certificate consents to by acceptance hereof. Copies of the Warrant Agreement are on file at the office of the Warrant Agent at 17 Battery Place, New York, New York, 10004, and are available to any Warrant holder on written request and without cost. Further, the Warrant Agreement provides that, upon the occurrence of certain events, the Warrant Price and the number of Warrant Shares purchasable hereunder, set forth on the face hereof, may be adjusted, subject to certain conditions.

 

 

COUNTERSIGNED:

CONTINTENTAL STOCK TRANSFER & TRUST COMPANY

WARRANT AGENT

BY:

AUTHORIZED OFFICER

 

 

DATED:

 

 

(Signature)

CHIEF EXECUTIVE OFFICER

 

(Seal)

 

 

(Signature)

SECRETARY

 

 

 

  

  

  

 

 

 

 

[REVERSE OF CERTIFICATE]

 

SUBSCRIPTION FORM

 

To Be Executed by the Registered Holder(s) in Order to Exercise Warrants

 

The undersigned Registered Holder(s) irrevocably elect(s) to exercise _________ Warrants represented by this Warrant Certificate, and to purchase the Shares issuable upon the exercise of such Warrants, and requests that Certificates for such shares shall be issued in the name(s) of

 

 

(PLEASE TYPE OR PRINT NAME(S) AND ADDRESS)

 

 

 

 

 

 

(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER(S))

 

and be delivered to

       (PLEASE PRINT OR TYPE NAME(S) AND ADDRESS)

 

 

and, if such number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the Registered Holder(s) at the address(es) stated below:

 

Dated:

 

 

(SIGNATURE(S))

 

(ADDRESS(ES))

 

 

(TAX IDENTIFICATION NUMBER(S))

 

 

  

  

  

 

ASSIGNMENT

 

 

To Be Executed by the Registered Holder in Order to Assign Warrants

 

 

For Value Received,_____________________hereby sell(s), assign(s), and transfer(s) unto

 

 

_____________________________________________________

(PLEASE TYPE OR PRINT NAME(S) AND ADDRESS(ES))

 

 

 

 

_____________________________________________________

(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER(S))

 

 

and be delivered to    _____________________________________________________

             (PLEASE PRINT OR TYPE NAME(S) AND ADDRESS(ES))

 

 

of the Warrants represented by this Warrant Certificate, and hereby irrevocably constitute and

 

appoint________________________________Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises.

 

 

Dated:

 

 

_____________________________

(SIGNATURE(S))

 

 

Notice: The signature(s) to this assignment must correspond with the name(s) as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.

 

 

Signature(s) Guaranteed:

 

 

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

 

 

THE SIGNATURE(S) TO THE ASSIGNMENT OF THE SUBSCRIPTION FORM MUST CORRESPOND TO THE NAME(S) WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR CHICAGO STOCK EXCHANGE.

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