WARRANT PURCHASE AGREEMENT
Exhibit 10.2
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 &
Xxxxxxxx LLP located at Riverfront Plaza, East Tower, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000, 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 0000 Xxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxx 00000, 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: | Xxxxxx X. Xxxxxx | |||||||
| Title: | Chief Executive Officer and President | |||||||
| PURCHASER: | ||||||||
| BIMINI CAPITAL MANAGEMENT, INC. | ||||||||
| By: | ||||||||
| Name: | G. Xxxxxx Xxxx, 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 AGREEMENT
