Document:

exv10w2

Exhibit 10.2

WARRANT PURCHASE AGREEMENT

     This WARRANT PURCHASE AGREEMENT (this “Agreement”) is dated as of [•], 2011, by and
among Orchid Island Capital, Inc., a Maryland corporation (the “Issuer”), and Bimini
Capital Management, Inc., a Maryland corporation (the “Purchaser”).

W I T N E S S E T H:

     WHEREAS, the Issuer is entering into an underwriting agreement on the date hereof (the
“Underwriting Agreement”), a copy of which is attached hereto as Annex I, with the
underwriters named therein (the “Underwriters”) pursuant to which the Issuer will, subject
to the satisfaction of the terms and conditions set forth in the Underwriting Agreement, issue and
sell to the Underwriters [•] shares (the “IPO Shares”) of common stock, par value $0.01 per
share, of the Issuer (the “Common Stock”) in connection with an offering to the public (the
“IPO”) of the IPO Shares for $[•] per share (the “IPO Price”); and

     WHEREAS, concurrently with the consummation of the Issuer’s issuance and sale of the IPO
Shares to the Underwriters upon the satisfaction of the terms and conditions set forth in the
Underwriting Agreement, the Purchaser desires to purchase 4,500,000 warrants (the “Warrants”) to
purchase an aggregate of 4,500,000 shares of Common Stock (the “Warrant Shares”), with each
Warrant being exercisable for one share of Common Stock at an exercise price of $[•] per share for
an aggregate purchase price of $2,475,000, and the Issuer desires to issue and sell such Warrants to the
Purchaser pursuant to a warrant agreement to be dated [•], 2011 by and between the Company and
Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agreement”).

     NOW THEREFORE, in consideration of the premises and of the mutual agreements, covenants and
provisions herein contained and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:

ARTICLE I

PURCHASE AND SALE

     1.1 Purchase and Sale of Subject Warrants. Subject to (a) the terms and conditions set
forth in this Agreement and (b) the completion of the IPO (the “IPO Closing”), the Issuer
agrees to issue to the Purchaser the Warrants, and the Purchaser agrees to purchase the Warrants
for $[•] (the “Warrants Purchase Price”).

     1.2 Closing. Subject to the terms and conditions of this Agreement and the occurrence
of the IPO Closing, the closing of the purchase and sale of the Warrants (the “Closing”)
shall take place on the date of the IPO Closing at the offices of counsel to the Issuer, Hunton &
Williams LLP located at Riverfront Plaza, East Tower, 951 East Byrd Street, Richmond, Virginia
23219, or at such other place as the applicable parties to such closing shall agree in writing.

     1.3 Delivery at Closing. At the Closing, (a) Purchaser shall deliver to Issuer the
Warrants Purchase Price by wire transfer of immediately available funds to an account

 

 

designated by the Issuer in writing by 10:30 a.m. Eastern Time, and (b) the Issuer shall
deliver certificates representing the Warrants to the Purchaser.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

     The Issuer represents and warrants to the Purchaser as follows:

     2.1 Formation and Good Standing. The Issuer is a corporation duly incorporated and is
validly existing under and by virtue of the laws of the State of Maryland and is in good standing
with the State Department of Assessments and Taxation of Maryland.

     2.2 Authorization and Validity of Agreements. The Issuer has all requisite power and
authority to execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of this Agreement, the
performance by the Issuer of its obligations hereunder and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite corporate action of the Issuer. This
Agreement constitutes a legal, valid and binding obligation of the Issuer, enforceable against the
Issuer in accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general
principles or equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law).

     2.3 No Conflicts. The execution, delivery and performance of this Agreement by the
Issuer and the consummation by the Issuer of the transactions contemplated hereby do not and will
not conflict with, contravene, result in a violation or breach of or default under (with or without
the giving of notice or the lapse of time, or both), permit any party to terminate, amend or
accelerate the provisions of, or result in the imposition of any claim, lien, pledge, deed of
trust, option, charge, security interest, hypothecation, encumbrance, right of first offer, voting
trust, proxy, right of third parties or other restriction or limitation of any nature whatsoever
(each, a “Lien”), or any obligation to create any Lien, upon any of the property or assets
of the Issuer under (a) any contract, agreement, indenture, letter of credit, mortgage, security
agreement, pledge agreement, deed of trust, bond, note, guarantee, surety obligation, warranty,
license, franchise, permit, power of attorney, lease, instrument or other agreement (each, a
“Contract”) to which the Issuer is a party or by which any of its property or assets may be
bound or (b) any provision of the charter or bylaws of the Issuer.

     2.4 Authorization of the Warrants and the Warrant Shares. The Warrants and the Warrant
Shares have been duly authorized and, when issued in accordance with this Agreement and the Warrant
Agreement, (i) the Warrants will be duly and validly issued and (ii) the Warrant Shares will be
duly and validly issued and fully paid and non-assessable and will be free and clear of all Liens,
other than restrictions on transfer imposed by the Securities Act of 1933, as amended (the
“Securities Act”), and applicable state securities laws, and will be free of statutory and
contractual preemptive rights, rights of first refusal and similar rights.

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     2.5 Consents. No consent, approval, authorization or order of, or filing with, any
governmental agency or body is required for the consummation of the transactions contemplated by
this Agreement in connection with the issuance and sale of the Warrants and the Warrant Shares by
the Issuer, except such as have been obtained or made, or will be obtained or made on or before the
Closing, and such as may be required by the New York Stock Exchange or under state securities laws
or the laws of any foreign jurisdiction.

     2.6 Exemption from Registration; No Integration; No General Solicitation.

     (a) Subject to the accuracy of the representations and warranties of the Purchaser, it
is not necessary in connection with the offer, sale and delivery of the Warrants to the
Purchaser in the manner contemplated by this Agreement to (i) register the Warrants on the
date hereof or as of the date of Closing or (ii) register the Warrant Shares in connection
with the offer and sale of the Warrants on the date hereof or as of the date of Closing
under the Securities Act.

     (b) Neither the Issuer nor any affiliate (as defined in Rule 501(b) of Regulation D
under the Securities Act) of the Issuer has directly, or through any agent, (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be integrated with the sale of
the Warrants (including the offer of the Warrant Shares in connection with the sale of the
Warrants) as of the date of Closing in a manner that would require the registration under
the Securities Act, on the date hereof or as of the date of Closing, of the Warrants or the
Warrant Shares, (ii) offered, solicited offers to buy or sold the Warrants on the date
hereof and as of the date of Closing or (iii) offered, or solicited offers to buy, the
Warrant Shares on the date hereof and as of the date of Closing by any form of general
solicitation or general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     The Purchaser represents and warrants to the Issuer as follows:

     3.1 Formation and Good Standing. The Purchaser is a corporation duly incorporated and
is validly existing under and by virtue of the laws of the State of Maryland and is in good
standing with the State Department of Assessments and Taxation of Maryland.

     3.2 Authorization and Validity of Agreements. The Purchaser has all requisite power
and authority to execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of this Agreement, the
performance by the Purchaser of its obligations hereunder and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite corporate action of the Purchaser.
This Agreement constitutes a legal, valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as may be

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limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, and by general principles or equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

     3.3 No Conflicts. The execution, delivery and performance of this Agreement by the
Purchaser and the consummation by the Purchaser of the transactions contemplated hereby do not and
will not conflict with, contravene, result in a violation or breach of or default under (with or
without the giving of notice or the lapse of time, or both), permit any party to terminate, amend
or accelerate the provisions of, or result in the imposition of any Lien (or any obligation to
create any Lien) upon any of the property or assets of the Purchaser under (a) any Contract to
which the Purchaser is a party or by which any of its property or assets may be bound or (b) any
provision of the organizational document of the Purchaser.

     3.4 Consents. No consent, approval, authorization or order of, or filing with, any
governmental agency or body is required for the consummation of the transactions contemplated by
this Agreement in connection with the purchase of the Warrants and the Warrant Shares by the
Purchaser, except such as have been obtained or made, or will be obtained or made on or before the
Closing, and such as may be required by the New York Stock Exchange, or under state securities laws
or the laws of any foreign jurisdiction.

     3.5 Investment Purpose; Accredited Purchaser; Access to Information.

     (a) The Purchaser hereby acknowledges that the Warrants (as of the date hereof and the
date of Closing) and the Warrant Shares (as of the date hereof and the date of Closing) have
not been and will not be registered under the Securities Act and may not be offered or sold
except pursuant to registration or an exemption from the registration requirements of the
Securities Act and that the certificates evidencing the Warrants (and the Warrant Shares, as
applicable) will bear a legend to that effect. The Warrants to be acquired by the Purchaser
pursuant to this Agreement are being acquired for the Purchaser’s own account and with no
intention of distributing or reselling the Warrants (including the Warrant Shares) or any
part thereof, as of the date hereof or the date of Closing, in any transaction that would be
in violation of the securities laws of the United States, any state of the United States or
any foreign jurisdiction. The Purchaser further agrees that it has not entered and prior to
the Closing will not enter into any Contract with respect to the distribution, sale,
transfer or delivery of the Warrants or the Warrant Shares.

     (b) The Purchaser is an “accredited investor” as such term is defined in Section 2(15)
of the Securities Act and within the meaning of Rule 501 of Regulation D under the
Securities Act, as presently in effect.

     (c) The Purchaser is sufficiently experienced in financial and business matters to be
capable of evaluating the merits and risks involved in purchasing the Warrants (as of the
date hereof and the date of Closing) and the Warrant Shares (as of the date hereof and the
date of Closing) and to make an informed decision relating thereto. The Purchaser has been
furnished with the materials relating to the business, operations, financial condition,
assets, liabilities of the Issuer and other matters relevant to

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Purchaser’s investment in the Warrants (as of the date hereof and the date of Closing)
and the Warrant Shares (as of the date hereof and the date of Closing), which have been
requested by the Purchaser. The Purchaser has had adequate opportunity to ask questions of,
and receive answers from, the officers, agents, accountants, and representatives of the
Issuer concerning the business, operations, financial condition, assets, liabilities of the
Issuer and all other matters relevant to its investment in the Warrants (as of the date
hereof and the date of Closing) and the Warrant Shares (as of the date hereof and the date
of Closing).

ARTICLE IV

COVENANTS

     4.1 Registration Rights. Subject to the occurrence of the IPO Closing and the Closing,
each of the parties hereto covenants to enter into (i) that certain Registration Rights Agreement,
a copy of which is attached hereto as Annex II, and (ii) that certain Warrant Agreement, a
copy of which is attached hereto as Annex III.

     4.2 Further Assurances. Each party hereto shall execute and deliver such instruments
and take such other actions prior to or after the Closing as any other party may reasonably request
in order to carry out the intent of this Agreement, including without limitation obtaining any
required consents or approvals from third parties.

     4.3 Tax Reporting. The Issuer and the Purchaser each represents and covenants that it
will consistently report the ownership, sale and purchase of the Warrants, for U.S. federal income
tax and other applicable tax purposes, unless otherwise required by applicable law.

ARTICLE V

CONDITIONS PRECEDENT TO THE OBLIGATIONS

     5.1 Mutual Conditions. The obligations of the Issuer and the Purchaser to consummate
the purchase and sale of the Warrants contemplated hereby are subject to the following conditions:
(a) the occurrence of the IPO Closing, (b) the execution and delivery of the Warrant Agreement, (c)
the absence of any order, decree, judgment or injunction of a court of competent jurisdiction or
other governmental or regulatory authority precluding the consummation of the purchase and sale of
the Warrants contemplated hereby, and (d) there shall not have been any action taken or any
statute, rule or regulation enacted, promulgated or deemed applicable to, the purchase and sale of
the Warrants contemplated hereby by any court, governmental agency or regulatory or administrative
authority that makes consummation of such transactions illegal.

     5.2 Conditions to the Obligations of the Issuer. The obligations of the Issuer under
this Agreement to consummate the purchase and sale of the Warrants contemplated hereby are subject
to the fulfillment (or waiver by the Issuer) of the conditions that (a) the representations and
warranties of the Purchaser contained in or made pursuant to this Agreement shall be deemed to have
been made again at and as of the Closing and shall then be true and accurate, and

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(b) the Purchaser shall have performed and complied in all material respects with all
agreements required by this Agreement to be performed or complied with by it prior to or at the
Closing.

     5.3 Conditions to the Obligations of the Purchaser. The obligations of the Purchaser
under this Agreement to consummate the purchase and sale of the Warrants contemplated hereby are
subject to the fulfillment (or waiver in writing by the Purchaser) of the condition that (a) all
representations and warranties of the Issuer shall be deemed to have been made again at and as of
the Closing and shall then be true and accurate, and (b) the Issuer shall have performed and
complied in all material respects with all agreements required by this Agreement to be performed or
complied with by it prior to or at the Closing.

ARTICLE VI

MISCELLANEOUS

     6.1 Termination. This Agreement shall be terminated prior to the consummation of the
transactions contemplated hereby if, prior to the consummation of the IPO Closing, the Underwriting
Agreement is terminated pursuant to its terms. In the event of any termination of this Agreement,
this Agreement shall become void and have no effect, without any liability to any person in respect
hereof on the part of any party hereto, except for any liability resulting from such party’s breach
of this Agreement prior to such termination.

     6.2 Survival. Each of the representations and warranties contained in this Agreement
shall survive indefinitely. Each of the covenants contained in this Agreement shall survive the
Closing until performed in accordance with their terms.

     6.3 Amendments; Waivers. The provisions of this Agreement may not be amended or
modified except by a writing signed by each of the parties. No waiver of any term or condition
hereof or obligation hereunder shall be valid unless made in writing and signed by the party to
which performance is due.

     6.4 Severability of Provisions. Each provision of this Agreement shall be considered
severable and if for any reason any provision or provisions herein are determined to be invalid,
unenforceable or illegal under any existing or future law, such invalidity, unenforceability or
illegality shall not impair the operation of or affect those portions of this Agreement which are
valid, enforceable and legal.

     6.5 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland, without giving effect to any conflict of laws principles
thereof that would cause the application of the laws of another jurisdiction.

     6.6 Waiver of Trial By Jury. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY
HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM,
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER.

     6.7 Remedies and Waivers. No delay or omission on the part of any party to this
Agreement in exercising any right, power or remedy provided by law or under this agreement

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shall (i) impair such right, power or remedy; or (ii) operate as a waiver thereof. The single
or partial exercise of any right, power or remedy provided by law or under this Agreement shall not
preclude any other or further exercise of any other right, power or remedy. The rights, powers and
remedies provided in this Agreement are cumulative and not exclusive of any rights, powers and
remedies provided by law.

     6.8 Notices. All notices, requests, demands, waivers and other communications to be
given by either party hereunder shall be in writing and shall be (i) mailed by first-class,
registered or certified mail, postage prepaid, (ii) sent by hand delivery or reputable overnight
delivery service or (iii) transmitted by fax (provided that a copy is also sent by reputable
overnight delivery service) addressed to the Secretary of the Issuer or the Secretary of the
Purchaser, as applicable, in each case at 3305 Flamingo Drive, Vero Beach, Florida 32963, or such
other address as may be specified in writing to the other party hereto. All such notices, requests,
demands, waivers and other communications shall be deemed to have been given and received (i) if by
personal delivery or fax, on the day of such delivery, (ii) if by first-class, registered or
certified mail, on the fifth business day after the mailing thereof, or (iii) if by reputable
overnight delivery service, on the day delivered.

     6.9 Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such counterparts shall together
constitute but one and the same instrument.

     6.10 Headings. The Article and Section headings contained herein are for the
convenience of the parties only and shall not affect the construction or interpretation of this
Agreement.

     6.11 Entire Agreement. This Agreement, including the Exhibits hereto, contains the
entire understanding of the parties with respect to the subject matter hereof, and supersedes all
prior agreements and understandings, both written and oral, among the parties with respect to the
subject matter hereof.

[signature page follows.]

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

	 	 	 	 	 	 	 	 	 

	 	 	ISSUER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ORCHID ISLAND CAPITAL, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Robert E. Cauley	 	 
	 

	 	 	 	Title:
	 	Chief Executive Officer and President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BIMINI CAPITAL MANAGEMENT, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	G. Hunter Haas, IV	 	 
	 

	 	 	 	Title:
	 	President, Chief Investment Officer

and Chief Financial Officer	 	 

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Annex I

UNDERWRITING AGREEMENT

 

 

Annex II

REGISTRATION RIGHTS AGREEMENT

 

 

Annex III

WARRANT AGREEMENTexv10w3

Exhibit 10.3

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT, dated as of [•], 2011, is entered into by and between
Orchid Island Capital, Inc., a Maryland corporation (the “Company”), and Bimini Capital
Management, Inc., a Maryland corporation (the “Sponsor Investor”).

     WHEREAS, the Sponsor Investor acquired, and owns as of the date hereof, [ ] shares of the
Company’s Common Stock, par value $0.01 per share, (the “Common Stock”) in connection with
the initial capitalization of the Company (the “Sponsor Shares”); and further

     WHEREAS, as of the date hereof, the Sponsor Investor has acquired, and owns warrants (the
“Sponsor Warrants”) to purchase an aggregate of [ ] shares of Common Stock (the
“Warrant Shares,” and together with the Sponsor Shares, the “Shares”).

     NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:

Section 1. Certain Definitions.

     In addition to the terms defined elsewhere in this Agreement, the following terms, as used
herein, shall have the following meanings:

     (a) “Affiliate” of any Person means any other Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under common control with,
such Person. The term “control” (including the terms “controlled by” and “under common control
with”) as used with respect to any Person means 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 through the ownership of voting securities, by contract or
otherwise.

     (b) “Agreement” means this Registration Rights Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the foregoing, and shall
refer to this Registration Rights Agreement as the same may be in effect at the time such reference
becomes operative.

     (c) “Business Day” means any day other than Saturday, Sunday or a day on which
commercial banks in New York, New York are directed or permitted to be closed.

     (d) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     (e) “Holder” means (i) the Sponsor Investor as the holder of record of Registrable
Common Stock, and (ii) any direct or indirect transferee of such Registrable Common Stock from the
Sponsor Investor. For purposes of this Agreement, the Company may deem and treat the registered
holder of Registrable Common Stock as the Holder and absolute owner thereof, and the Company shall
not be affected by any notice to the contrary.

 

 

     (f) “Person” means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, incorporated organization, association, corporation, institution,
public benefit corporation, government (whether federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division, agency, body or department
thereof) or any other entity.

     (g) “Prospectus” means the prospectus or prospectuses included in any Registration
Statement (including, without limitation, any prospectus subject to completion and a prospectus
that includes any information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the Securities Act and any term
sheet filed pursuant to Rule 434 under the Securities Act), as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion of the Registrable
Common Stock covered by such Registration Statement and by all other amendments and supplements to
the prospectus, including post-effective amendments and all material incorporated by reference or
deemed to be incorporated by reference in such prospectus or prospectuses.

     (h) “Registrable Common Stock” means the Shares, upon original issuance thereof and at
all times subsequent thereto, including upon the transfer thereof by the original Holder or any
subsequent Holder and any securities issued in respect of such Shares by reason of or in connection
with any exchange for or replacement of such securities or any stock dividend, stock distribution,
stock split, purchase in any rights offering or in connection with any combination of shares,
recapitalization, merger or consolidation, or any other equity securities issued pursuant to any
other pro rata distribution with respect to the Shares, until, in the case of any such securities,
the earliest to occur of (i) the date on which such securities have been registered effectively
pursuant to the Securities Act and disposed of in accordance with the Registration Statement
relating to such securities or (ii) the date on which either such securities are distributed to the
public or are saleable, in each case pursuant to Rule 144 promulgated by the SEC pursuant to the
Securities Act.

     (i) “Registration Statement” means any registration statement of the Company filed
with the SEC under the Securities Act which covers any of the Registrable Common Stock pursuant to
the provisions of this Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits and all materials
incorporated by reference or deemed to be incorporated by reference in such Registration Statement.

     (j) “Rule 415” means Rule 415 promulgated by the SEC 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 SEC as a replacement thereto having substantially the same effect as such rule.

     (k) “SEC” means the Securities and Exchange Commission.

     (l) “Securities Act” means the Securities Act of 1933, as amended.

     (m) “Underwritten registration or underwritten offering” means a registration in which
securities of the Company are sold to underwriters for reoffering to the public.

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Section 2. Demand Registrations.

     (a) Right to Request Registration. Beginning on [ ], 2012, any Holder or Holders
(the “Initiating Holders”) may request registration under the Securities Act of all or part
of the Registrable Common Stock (a “Demand Registration”) at any time and from time to
time; provided, however, that no Initiating Holder may request more than two (2) Demand
Registrations. Notwithstanding anything to the contrary in this Agreement, for purposes of this
Section 2(a), a Holder’s Registrable Common Stock shall include any and all unissued Warrant Shares
issuable upon exercise of such Holder’s Sponsor Warrants.

     Within ten (10) Business Days after receipt of any such request for Demand Registration, the
Company shall give written notice of such request to all other Holders of Registrable Common Stock,
if any, and shall, subject to the provisions of Sections 2(b) and 2(c) hereof,
include in such registration all such Registrable Common Stock with respect to which the Company
has received written requests for inclusion therein within ten (10) Business Days after the receipt
of the Company’s notice.

     (b) Priority on Demand Registrations. If the managing underwriters of a requested
Demand Registration advise the Company in writing that in their opinion the number of shares of
Registrable Common Stock proposed to be included in any such registration exceeds the number of
securities that can be sold in such offering and/or that the number of shares of Registrable Common
Stock proposed to be included in any such registration would materially adversely affect the price
per share of the Company’s equity securities to be sold in such offering, the Company shall include
in such registration only the number of shares of Registrable Common Stock that, in the opinion of
such managing underwriters, can be sold. If the number of shares that the managing underwriters
believe may be sold is less than the number of shares of Registrable Common Stock proposed to be
registered, the Company shall allocate the amount of Registrable Common Stock to be so sold among
the Holders pro rata on the basis of Registrable Common Stock offered for such registration by each
Holder electing to participate in such registration but only after giving first priority to any
shares of Common Stock that the Company may desire to sell in the offering. If the number of
shares that the managing underwriters believe may be sold exceeds the number of shares of
Registrable Common Stock proposed to be sold, such excess shall be allocated pro rata among the
other holders of Common Stock, if any, desiring to participate in such registration based on the
amount of such Common Stock initially requested to be registered by such holders or as such holders
may otherwise agree but only after giving first priority to any shares of Common Stock that the
Company may desire to sell in the offering.

     (c) Restrictions on Demand Registrations. The Company shall not be obligated to effect
any Demand Registration within six (6) months after the effective date of a previous Demand
Registration or a previous registration under which the Initiating Holders had piggyback rights
pursuant to Section 3 hereof wherein the Initiating Holders were permitted to register, and
sold, at least 50% of the shares of Registrable Common Stock requested to be included therein. The
Company may in connection with any and each Demand Registration (i) postpone for up to ninety (90)
days the filing, the effectiveness or withdraw of a Registration Statement for a Demand
Registration if, based on the good faith judgment of the Company’s board of directors, such
postponement or withdrawal is necessary in order to avoid premature disclosure of a matter

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the board has determined would not be in the best interest of the Company to be disclosed at
such time or (ii) postpone the filing of a Demand Registration in the event the Company shall be
required to prepare audited financial statements as of a date other than its fiscal year end
(unless the Holders requesting such registration agree to pay the expenses of such an audit);
provided, however, that in no event shall the Company withdraw a Registration Statement under
clause (i) after such Registration Statement has been declared effective; and provided, further,
however; that in any of the events described in clause (i) or (ii) above, the Initiating Holders
requesting such Demand Registration shall be entitled to withdraw such request. The Company shall
provide written notice to the Initiating Holders requesting such Demand Registration of (x) any
postponement or withdrawal of the filing or effectiveness of a Registration Statement pursuant to
this Section 2(c), (y) the Company’s decision to file or seek effectiveness of such
Registration Statement following such withdrawal or postponement and (z) the effectiveness of such
Registration Statement.

     (d) Selection of Underwriters. If any of the Registrable Common Stock covered by a
Demand Registration hereof is to be sold in an underwritten offering, the Initiating Holders
holding at least 50% of the Shares of Registrable Common Stock requested to be included therein
shall have the right to select the managing underwriter(s) to administer the offering subject to
the approval of the Company, which approval shall not be unreasonably withheld.

     (e) Effective Period of Demand Registrations. After any Registration Statement filed
pursuant to a Demand Registration has become effective, the Company shall use its best efforts to
keep such Registration Statement effective until such date on which no Holders hold Registrable
Common Stock registered thereunder. If the Company shall withdraw or reduce the number of shares of
Registrable Common Stock that is subject to any Registration Statement pursuant to subsection (b)
of this Section 2 (a “Withdrawn Demand Registration”), the Initiating Holders of
the Registrable Common Stock remaining unsold and originally covered by such Withdrawn Demand
Registration shall be entitled to a replacement Registration Statement (subject to the provisions
of this Section 2), and such additional Registration Statement otherwise shall be subject
to all of the provisions of this Agreement. The Company shall use its best efforts to keep
effective for a period commencing on the effective date of such Registration Statement and ending
on the date on which no Holders hold Registrable Common Stock registered thereunder. If the
Company has an effective 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
Common Stock, register any Registrable Common Stock registered but not yet distributed under the
effective Registration Statement on such short-form registration statement (which shall thereupon
constitute a Registration Statement hereunder) and, once such short-form Registration Statement is
declared effective, de-register such Registrable Common Stock under, and withdraw, the previous
Registration Statement or transfer filing fees from the previous Registration Statement pursuant to
Rule 429 of the Securities Act.

     (f) Underwritten Offerings. Notwithstanding the foregoing, in no event shall the
Company be obligated to effect more than one (1) underwritten offering hereunder in any single six
(6) month period, with the first such period measured from the effective date of the

- 4 -

 

Registration Statement filed pursuant to the first Demand Registration and ending six (6)
months after such effective date, whether or not a Business Day.

Section 3. Piggyback Registrations.

     (a) Right to Piggyback. From and after the date hereof, whenever the Company proposes
to register any of its common equity securities under the Securities Act (other than a registration
statement on Form S-8 or on Form S-4 or any similar successor forms thereto), whether for its own
account or for the account of one or more stockholders of the Company, and the registration form to
be used may be used for any registration of Registrable Common Stock (a “Piggyback
Registration”), the Company shall give prompt written notice (in any event within ten (10)
business days after its receipt of notice of any exercise of other demand registration rights) to
the Sponsor Investor of its intention to effect such a registration and, subject to Sections
3(b) and 3(c), shall include in such registration all Registrable Common Stock with
respect to which the Company has received a written request from the Sponsor Investor for inclusion
therein within ten (10) days after the receipt of the Company’s notice. The Company may postpone
or withdraw the filing or the effectiveness of the Registration Statement relating to a Piggyback
Registration at any time in its sole discretion. Notwithstanding anything to the contrary in this
Agreement, only the Sponsor Investor shall have the right to register its Registrable Common Stock
in a Piggyback Registration.

     (b) Priority on Primary Registrations. If the Registration Statement relating to a
Piggyback Registration is a Registration Statement relating to an underwritten primary offering of
securities on behalf of the Company, and the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be included in such registration
exceeds the number that can be sold in such offering and/or that the number of shares of
Registrable Common Stock proposed to be included in any such registration would adversely affect the price per share of the Company’s equity securities to be sold in such
offering, the underwriting shall be allocated (i) first, to the Company and (ii)
second, to the Sponsor Investor but only after giving first priority to the Shares of
Common Stock that the Company decides to sell in such offering.

     (c) Priority on Secondary Registrations. If a Piggyback Registration is an
underwritten secondary registration on behalf of a holder of the Company’s securities other than
Registrable Common Stock (the “Non-Holder Securities”), and the managing underwriters
advise the Company in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number that can be sold in such offering and/or that the
number of shares of Registrable Common Stock proposed to be included in any such registration would
adversely affect the price per share of the Company’s equity securities to be sold in
such offering, the underwriting shall be allocated among the holders of Non-Holder Securities and
the Sponsor Investor pro-rata on the basis of the Non-Holder Securities and Registrable Common
Stock offered in such offering by the holder of Non-Holder Securities and the Sponsor Investor,
respectively, electing to participate in such registration.

     (d) Selection of Underwriters. If any Piggyback Registration is an underwritten
primary offering, the Company shall have the sole right to select the managing underwriter or
underwriters and all other underwriters to administer any such offering.

- 5 -

 

     (e) Other Registrations. If the Company has previously filed a Registration Statement
with respect to Registrable Common Stock pursuant to Section 2 hereof or pursuant to this
Section 3, and if such previous Registration Statement has not been withdrawn or abandoned,
the Company shall not be obligated to cause to become effective any other Registration Statement
registering any of its securities under the Securities Act, whether on its own behalf or at the
request of any holder or holders of such securities, until a period of at least three (3) months
has elapsed from the effective date of such previous Registration Statement.

Section 4. Holdback Agreement.

     In connection with an underwritten primary or secondary offering to the public, each Holder
agrees, subject to any exceptions and extensions that may be agreed upon at the time of such
offering, not to sell, pledge or otherwise transfer or dispose of or enter into any swap or
derivatives transaction with respect to any shares of Registrable Common Stock (or other
securities) of the Company held by them (other than Registrable Common Stock included in such
offering in accordance with the terms hereof) for a period equal to the lesser of one hundred
eighty (180) days following the effective date of a Registration Statement of the Company filed
under the Securities Act or such shorter period as the managing underwriters shall agree to with
the officers and directors of the Company for the similar agreement, if any, executed by such
officers and directors in connection with such offering, but, in each case, subject to customary
exceptions upon the occurrence of certain events as provided in such holdback agreement; provided
that all other stockholders who own more than ten percent (10%) of the outstanding Common Stock of
the Company and all officers and directors of the Company enter into similar agreements. Such
agreement shall be in writing in form reasonably satisfactory to the Company and the managing
underwriters. The Company may impose stop-transfer instructions with respect to the shares of
Registrable Common Stock (or other securities) subject to the foregoing restriction until the end
of such period.

Section 5. Registration Procedures.

     Whenever the Holders request that any Registrable Common Stock be registered pursuant to this
Agreement, the Company shall use its commercially reasonable efforts to effect and maintain the
registration and the sale of such Registrable Common Stock in accordance with the intended methods
of disposition thereof, and pursuant thereto the Company shall as soon as commercially practicable:

     (a) prepare and file with the SEC a Registration Statement with respect to such Registrable
Common Stock and use its commercially reasonable efforts to cause such Registration Statement to
become effective as soon as practicable thereafter; and before filing a Registration Statement or
Prospectus or any amendments or supplements thereto, furnish to the Holders of Registrable Common
Stock covered by such Registration Statement and the underwriter or underwriters, if any, copies of
all such documents proposed to be filed, including, if requested by such Holders, documents
incorporated by reference in the Prospectus and, if requested by such Holders, the exhibits
incorporated or deemed incorporated by reference, and such Holders shall have the opportunity to
object to any information pertaining to such Holders that is contained therein and the Company will
make the corrections reasonably requested by

- 6 -

 

such Holders with respect to such information prior to filing any Registration Statement or
amendment thereto or any Prospectus or any supplement thereto;

     (b) prepare and file with the SEC such amendments and supplements to such Registration
Statement and the Prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective, in the case of a Demand Registration, until such date on which no
Holders hold Registrable Common Stock registered thereunder and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement;

     (c) furnish to each seller of Registrable Common Stock (without charge) such number of copies
of such Registration Statement, each amendment and supplement thereto, the Prospectus included in
such Registration Statement (including each preliminary Prospectus) and such other documents as
such seller may reasonably request in order to facilitate the disposition of the Registrable Common
Stock owned by such seller, and the Company consents to the use of such Prospectus, including each
preliminary Prospectus, by Holders of Registrable Common Stock, in connection with the offering and
sale of Registrable Common Stock covered by any such Prospectus;

     (d) use its commercially reasonable efforts to register or qualify such Registrable Common
Stock under such other securities or blue sky laws of such jurisdictions as any seller reasonably
requests and do any and all other acts and things which may be reasonably necessary or advisable to
enable such seller to consummate the disposition in such jurisdictions of the Registrable Common
Stock owned by such seller (provided, that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be required to qualify
but for this subparagraph (d), (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction);

     (e) notify each seller of such Registrable Common Stock, at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of the occurrence of any
event as a result of which the Registration Statement, including the Prospectus contained therein,
contains an untrue statement of a material fact or omits any fact required to be stated therein or
necessary to make the statements therein not misleading, and, at the request of any such seller,
the Company shall prepare a supplement or amendment to such Registration Statement so that, as
thereafter delivered to the purchasers of such Registrable Common Stock, such Prospectus shall not
contain an untrue statement of a material fact or omit to state any material fact necessary to make
the statements therein not misleading;

     (f) in the case of an underwritten offering, enter into such customary agreements (including
underwriting agreements and lock-up and hold back agreements in customary form) and take all such
other actions as the Holders of a majority of number of shares of the Registrable Common Stock
being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Common Stock (including making executive officers of the Company
available to participate in, and cause them to cooperate with the underwriters in connection with,
“road-show” and other customary marketing activities (including one-on-one meetings with
prospective purchasers of the Registrable Common Stock),

- 7 -

 

and cause to be delivered to the underwriters and the sellers, if any, opinions of counsel to
the Company in customary form, covering such matters as are customarily covered by opinions for an
underwritten public offering as the underwriters may request and addressed to the underwriters and
the sellers);

     (g) subject to receipt of reasonably acceptable confidentiality agreements, make available for
inspection by representatives of a seller of Registrable Common Stock, any underwriter
participating in any disposition pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause the Company’s
officers, directors and independent accountants to supply all information reasonably requested by
any such seller, underwriter, attorney, accountant or agent in connection with such Registration
Statement;

     (h) to use its commercially reasonable efforts to cause all such Registrable Common Stock to
be listed on each securities exchange on which securities of the same class issued by the Company
are then listed or, if no such similar securities are then listed, on a national securities
exchange selected by the Company;

     (i) provide a transfer agent and registrar for all such Registrable Common Stock not later
than the effective date of such Registration Statement;

     (j) if requested, cause to be delivered, immediately prior to the effectiveness of the
Registration Statement (and, in the case of an underwritten offering, at the time of delivery of
any Registrable Common Stock sold pursuant thereto), letters from the Company’s independent
certified public accountants addressed to each selling Holder (unless such selling Holder does not
provide to such accountants the appropriate representation letter required by rules governing the
accounting profession) and each underwriter, if any, stating that such accountants are independent
public accountants within the meaning of the Securities Act and the applicable rules and
regulations adopted by the SEC thereunder, and otherwise in customary form and covering such
financial and accounting matters as are customarily covered by letters of the independent certified
public accountants delivered in connection with primary or secondary underwritten public offerings,
as the case may be;

     (k) make generally available to its stockholders a consolidated earnings statement (which need
not be audited) for the 12 months (or, if applicable, such shorter period that the Company has been
in existence) beginning after the effective date of a Registration Statement as soon as reasonably
practicable after the end of such period, which earnings statement shall satisfy the requirements
of an earning statement under Section 11(a) of the Securities Act and Rule 158 thereunder;

     (l) cooperate with each selling Holder of Registrable Common Stock and each underwriter
participating in the disposition of such Registrable Common Stock and their respective counsel in
connection with any filings required to be made with the Financial Industry Regulatory Authority,
Inc. and make reasonably available its employees and personnel and otherwise provide reasonable
assistance to the underwriters (taking into account the needs of the

- 8 -

 

Company’s businesses and the requirements of the marketing process) in the marketing of
Registrable Common Stock in any underwritten offering;

     (m) use its commercially reasonable best efforts to prevent the issuance of any stop order or
other suspension of effectiveness of a Registration Statement, or the suspension of the
qualification of any of the Registrable Common Stock for sale in any jurisdiction and, if such an
order or suspension is issued, to use reasonable efforts to obtain the withdrawal of such order or
suspension at the earliest possible moment and to notify each seller of Registrable Common Stock
being sold of the issuance of such order and the resolution thereof or its receipt of actual notice
of the initiation or threat of any proceeding for such purpose;

     (n) promptly notify each seller of Registrable Common Stock and the underwriter or
underwriters, if any:

	 	(i)	 	when the Registration Statement, pre-effective amendment, the
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement has been filed and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
	 
	 	(ii)	 	of any written request by the SEC for amendments or supplements
to the Registration Statement or Prospectus;
	 
	 	(iii)	 	of the notification to the Company by the SEC of its
initiation of any proceeding with respect to the issuance by the SEC of any
stop order suspending the effectiveness of the Registration Statement; and
	 
	 	(iv)	 	of the receipt by the Company of any notification with respect
to the suspension of the qualification of any Registrable Common Stock for sale
under the applicable securities or blue sky laws of any jurisdiction;

     (o) at all times after the Company has filed a registration statement with the SEC pursuant to
the requirements of either the Securities Act or the Exchange Act, the Company shall file all
reports and other documents required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder, and take such further action as
any Holders may reasonably request, all to the extent required to enable such Holders to be
eligible to sell Registrable Common Stock pursuant to Rule 144 under the Securities Act (or any
similar rule then in effect);

     (p) as a condition to being included in any Registration Statement, the Company may require
each seller of Registrable Common Stock as to which any registration is being effected to furnish
to the Company any other information regarding such seller and the distribution of such securities
as the Company may from time to time reasonably request in writing;

     (q) each seller of Registrable Common Stock agrees by having its stock treated as Registrable
Common Stock hereunder that, upon notice of the happening of any event as a result of which the
Prospectus included in such Registration Statement contains an untrue statement of a material fact
or omits any material fact necessary to make the statements therein not misleading

- 9 -

 

(a “Suspension Notice”), such seller will forthwith discontinue disposition of
Registrable Common Stock until such seller is advised in writing by the Company that the use of the
Prospectus may be resumed and is furnished with a supplemented or amended Prospectus as
contemplated by Section 5(e) hereof, and, if so directed by the Company, such seller, at
its option, either will destroy or deliver to the Company (at the Company’s expense) all copies,
other than permanent file copies then in such seller’s possession, of the Prospectus covering such
Registrable Common Stock current at the time of receipt of such notice; provided, however, that
such postponement of sales of Registrable Common Stock by the Holders shall not exceed thirty (30)
days in the aggregate in any three-month period or ninety (90) days in the aggregate in any one
year period except as a result of a refusal by the SEC to declare any post-effective amendment to
the Registration Statement effective after the Company has used all commercially reasonable efforts
to cause such post-effective amendment to be declared effective, in which case the Company shall
terminate the suspension of the use of the Registration Statement immediately following the
effective date of the post-effective amendment. If the Company shall give any notice to suspend the
disposition of Registrable Common Stock pursuant to a Prospectus, the Company shall extend the
period of time during which the Company is required to maintain the Registration Statement
effective pursuant to this Agreement by the number of days during the period from and including the
date of the giving of such notice to and including the date such seller either is advised by the
Company that the use of the Prospectus may be resumed or receives the copies of the supplemented or
amended Prospectus contemplated by Section 5(e). In any event, the Company shall not be
entitled to deliver more than three (3) Suspension Notices in any one year; and

     (r) not less than three (3) Business Days prior to the filing of a Registration Statement or
any amendment thereto, the Company shall furnish to the selling Holders copies of all such
documents proposed to be filed, which documents shall be subject to the review of such selling
Holders. In connection with the selling Holders’ review of such documents, the selling Holders
agree that they shall provide to the Company within two (2) Business Days after receipt of such
document (i) a written consent relating to the inclusion of the information set forth in the
Registration Statement with respect to the selling Holder or (ii) any written comments relating to
the information set forth in the Registration Statement with respect to the selling Holder.

Section 6. Registration Expenses.

     (a) All fees and expenses incident to the Company’s performance of or compliance with this
Agreement, including, without limitation, all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, listing application fees, FINRA filing fees, printing,
word processing, telephone, messenger and delivery expenses, transfer agent’s and registrar’s fees,
cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto,
and fees and disbursements of counsel for the Company, one counsel retained by the Holders of
Registrable Common Stock and all independent certified public accountants and other Persons
retained by the Company (all such expenses being herein called “Registration Expenses”) (but not
including any underwriting discounts or commissions attributable to the sale of Registrable Common
Stock or fees and expenses of more than one counsel representing the Holders of Registrable Common
Stock, which shall be borne by the Holders), shall be borne by the Company (whether or not any
Registration Statement is declared effective or any of the transactions described herein is
consummated). In addition, the Company

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shall pay its internal expenses, the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which they are to be listed.

     (b) In connection with each registration initiated hereunder (whether a Demand Registration
(with respect to the Holders) or a Piggyback Registration (with respect to the Sponsor Investor)),
the Company shall reimburse the Holders covered by such registration or sale for the reasonable
fees and disbursements of one law firm chosen by the Holders of a majority of the number of shares
of Registrable Common Stock included in such registration sale.

     (c) The obligation of the Company to bear the expenses described in Section 6(a) and
to reimburse the Holders for the expenses described in Section 6(b) shall apply
irrespective of whether a registration, once properly demanded, if applicable, becomes effective,
is withdrawn or suspended, is converted to another form of registration and irrespective of when
any of the foregoing shall occur; provided, however, that Registration Expenses for any
Registration Statement withdrawn solely at the request of a Holder of Registrable Common Stock
(unless withdrawn following postponement of filing by the Company in accordance with Section
2(c)(i) or (ii)) or any supplements or amendments to a Registration Statement or
Prospectus resulting from a misstatement furnished to the Company by a Holder shall be borne by
such Holder.

Section 7. Indemnification.

     (a) The Company shall indemnify and hold harmless, to the fullest extent permitted by law,
each Holder, its officers, directors and, Affiliates, employees and agents of such Holder and each
Person, if any, who controls such Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) from and against all losses, claims, damages, liabilities,
judgments and expenses (including without limitation, the reasonable fees and other expenses
incurred in connection with any suit, action, investigation or proceeding or any claim asserted)
caused by, arising out of, in connection with or based upon, any untrue or alleged untrue statement
of material fact contained in any Registration Statement, Prospectus (including any preliminary
Prospectus) or any amendment thereof or supplement thereto or any omission or alleged omission of 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 (in the case of the Prospectus), not
misleading or any violation or alleged violation by the Company of the Securities Act, the Exchange
Act or applicable “blue sky” laws, except insofar as the same are made in reliance and in
conformity with information relating to such Holder furnished in writing to the Company by such
Holder expressly for use therein or caused by such Holder’s failure to deliver to such Holder’s
immediate purchaser a copy of the Prospectus or any amendments or supplements thereto (if the same
was required by applicable law to be so delivered) after the Company has furnished such Holder with
a sufficient number of copies of the same.

     (b) In connection with any Registration Statement in which a Holder of Registrable Common
Stock is participating, each such Holder shall furnish to the Company in writing such information
and affidavits as the Company reasonably requests for use in connection with any such Registration
Statement or Prospectus and, shall indemnify, to the fullest extent permitted by law, the Company,
its officers, directors, Affiliates, and each Person who “controls” the

- 11 -

 

Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act (excluding Sponsor Investor to the extent that Sponsor Investor is the Holder of the
Registrable Common Stock), against all losses, claims, damages, liabilities and expenses arising
out of or based upon any untrue or alleged untrue statement of material fact contained in the
Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of 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 (in the case of the Prospectus), not misleading, but only to the extent that the same are made
in reliance and in conformity with information relating to such Holder furnished in writing to the
Company by such Holder expressly for use therein or caused by such Holder’s failure to deliver to
such Holder’s immediate purchaser a copy of the Prospectus or any amendments or supplements thereto
(if the same was required by applicable law to be so delivered) after the Company has furnished
such Holder with a sufficient number of copies of the same; provided, however, that the obligation
to indemnify shall be several, not joint and several, among such Holders and the liability of each
such Holder shall be in proportion to and limited to the net amount received by such Holder from
the sale of Registrable Common Stock pursuant to such Registration Statement.

     (c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to
the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless
in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, such indemnifying party shall assume the
defense of such claim with counsel reasonably satisfactory to the indemnified party. If such
defense is assumed, the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be unreasonably
withheld, conditioned or delayed). An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one
counsel for each party indemnified by such indemnifying party with respect to such claim, unless in
the reasonable judgment of any indemnified party there may be one or more legal or equitable
defenses available to such indemnified party which are in addition to or may conflict with those
available to another indemnified party with respect to such claim. Failure to give prompt written
notice shall not release the indemnifying party from its obligations hereunder. No indemnifying
party shall, without the prior written consent of the indemnified party, consent to entry of any
judgment or enter into any settlement or other compromise (i) which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation or (ii) which includes any
statement of admission of fault, culpability or failure to act by or on behalf of such indemnified
party.

     (d) The indemnification provided for under this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified party or any
officer, director or controlling Person of such indemnified party and shall survive the transfer of
securities or the termination of this agreement.

     (e) If the indemnification provided for in or pursuant to this Section 6 is
unavailable, unenforceable or insufficient to hold harmless any indemnified party in respect of any
losses, claims, damages, liabilities or expenses referred to herein, then each applicable
indemnifying

- 12 -

 

party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection with the statements
or omissions which result in such losses, claims, damages, liabilities or expenses as well as any
other relevant equitable considerations. The relative fault of the indemnifying party on the one
hand and of the indemnified party 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 indemnifying party
or by the indemnified party, and by such party’s relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. In no event shall the liability
of any selling Holder be greater in amount than the amount of net proceeds received by such Holder
upon such sale or the amount for which such indemnifying party would have been obligated to pay by
way of indemnification if the indemnification provided for under Section 7(a) or
7(b) hereof had been available under the circumstances. The indemnity and contribution
agreements contained in this Section 7 are in addition to any liability which the
indemnifying parties may otherwise have to the indemnified parties hereunder, under applicable law
or at equity.

Section 8. Participation in Underwritten Registrations.

     No Person may participate in any registration hereunder that is underwritten unless such
Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and
(b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements, certificates and other documents and provides all legal opinions and other documents  required under the terms of such underwriting
arrangements.

Section 9. Rule 144.

     The
Company covenants that it shall use its best efforts to file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder in
accordance with the requirements of the Securities Act and the Exchange Act, and it will take such
further action as any Holder may reasonably request to make available adequate current public
information with respect to the Company meeting the current public information requirements of Rule
144(c) under the Securities Act (to the extent such information is available), to the extent
required to enable such Holder to sell Registrable Common Stock without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any Holder, the Company will deliver
to such Holder a written statement as to whether it has complied with such information and
requirements.

Section 10. Miscellaneous.

     (a) Notices. All notices, requests and other communications to any party hereunder
shall be in writing (including facsimile or similar writing) and shall be given,

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     If to the Company:

Orchid Island Capital, Inc.

3305 Flamingo Drive

Vero Beach, Florida 32963

Facsimile No.: (722) 231-8896

     If to Sponsor Investor:

Bimini Capital Management, Inc.

3305 Flamingo Drive

Vero Beach, Florida 32963

Facsimile No.: (722) 231-8896

     If to a transferee Holder, to the address of such Holder set forth in the transfer
documentation provided to the Company; or such other address or facsimile number as such party (or
transferee) may hereafter specify for the purpose by notice to the other parties. Each such notice,
request or other communication shall be effective (a) if given by facsimile, when such facsimile is
transmitted to the facsimile number specified in this Section 10(a) and the appropriate
facsimile confirmation is received or (b) if given by any other means, when delivered at the
address specified in this Section.

     (b) No Waivers. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.

     (c) Expenses. Except as otherwise provided for herein or otherwise agreed to in
writing by the parties hereto, all costs and expenses incurred in connection with the preparation
of this Agreement shall be paid by the Company.

     (d) Successors and Assigns. The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns, it being
understood that subsequent Holders of the Registrable Common Stock are intended third party
beneficiaries hereof.

     (e) Governing Law. This Agreement and the rights and obligations of the parties under
this Agreement shall be governed by, and construed and interpreted in accordance with, the law of
the State of Maryland, without regard to principles of conflicts of law. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the State of Maryland and the
United States District Court for any district within such state for the purpose of any action or
judgment relating to or arising out of this Agreement or any of the transactions contemplated
hereby and to the laying of venue in such court.

     (f) Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of,
or based on any matter arising out of or in connection with, this Agreement or the transactions

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contemplated hereby may be brought in any federal or state court located in the State of
Maryland, and each of the parties hereto hereby consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably
waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding in any such court or that any such
suit, action or proceeding which is brought in any such court has been brought in an inconvenient
forum. Process in any such suit, action or proceeding may be served on any party hereto anywhere in
the world, whether within or without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on such party as provided in Section
9(a) shall be deemed effective service of process on such party.

     (g) Waiver of Jury Trial.

     EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

     (h) Counterparts; Effectiveness. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

     (i) Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter of this Agreement and supersedes all prior agreements
and understandings, both oral and written, between the parties hereto with respect to the
transactions contemplated herein. No provision of this Agreement or any other agreement
contemplated hereby is intended to confer on any Person other than the parties hereto any rights or
remedies.

     (j) Captions. The captions herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.

     (k) Severability. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party hereto. Upon such a determination, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner in order that the transactions contemplated hereby
be consummated as originally contemplated to the fullest extent possible.

     (l) Amendments. The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given without the prior written consent of the Holders of a
majority of the Registrable Common Stock; provided, further, that the consent or agreement of the
Company shall be required with regard to any termination, amendment, modification or

- 15 -

 

supplement of, or waivers or consents to departures from, the terms hereof, which affect the
Company’s obligations hereunder.

     IN WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by each of the
parties hereto as of the date first written above

	 	 	 	 	 

	 	 	ORCHID ISLAND CAPITAL, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	Robert E. Cauley
	 

	 	Title:
	 	Chief Executive Officer and President
	 
	 	 	 	 
	 	 	BIMINI CAPITAL MANAGEMENT, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	G. Hunter Haas, IV
	 

	 	Title:
	 	President, Chief Investment Officer and Chief Financial Officer

- 16 -

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