INVESTMENT MANAGEMENT TRUST AGREEMENT

 

This Agreement is made as of November 7, 2011 by and between Selway Capital
Acquisition Corporation (the “Company”) and American Stock Transfer & Trust
Company, LLC, as trustee (the “Trustee”).

 

WHEREAS, the Company’s Registration Statement on Form S-1, No. 333-172714 (as
amended from time to time) (“Registration Statement”), for its initial public
offering of securities (“IPO”) has been declared effective as of the date hereof
by the Securities and Exchange Commission (“Effective Date”); and

 

WHEREAS, Aegis Capital Corp. is acting as the representative (the
“Representative”) of the underwriters in the IPO; and

 

WHEREAS, the Company has issued securities in a private placement that will
occur immediately prior to the IPO (the “Placement”); and

 

WHEREAS, as described in the Company’s Registration Statement, and in accordance
with the Company’s Amended and Restated Certificate of Incorporation, a maximum
of $20,200,000 of the proceeds of the Placement and the IPO, net of all
discounts and commissions including the Deferred Compensation (as defined
below), if the over-allotment option is not exercised (or a minimum
of $23,140,000 if the underwriters’ over-allotment option is exercised in full)
will be delivered to the Trustee to be deposited and held in a trust account
(the “Trust Account”) for the benefit of the Company and the holders of the
Company’s Series A shares of common stock, par value $0.0001 per share (the
“Series A Shares”), issued in the IPO (the “IPO Shares”) as hereinafter
provided, and in the event the units issued in the IPO are registered in
Colorado, pursuant to Section 11-51-302(6) of the Colorado revised statutes (the
“CRS”). A copy of Section 11-51-302(6) of the CRS is attached hereto and made a
part hereof; and

 

WHEREAS, pursuant to the Underwriting Agreement, an additional $400,000 (or
$460,000 if the Representative’s over-allotment option is exercised in full) (or
the amount specified in the notice delivered pursuant to Section 2(d) hereof),
representing a portion of the underwriters’ discount (the “Deferred
Compensation”) which the Representative, on behalf of the underwriters, has
agreed to deposit into the Trust Account; and

 

WHEREAS, the amount to be delivered to the Trustee, including the proceeds of
the IPO, the Placement and the Deferred Compensation (a maximum of
$20,600,000 if the Representative’s over-allotment option is not exercised, or a
minimum of $23,600,000, if the over-allotment option is exercised in full) will
be referred to herein as the “Property,” the holders of IPO Shares for whose
benefit the Trustee shall hold the Property will be referred to as the “Public
Shareholders;” and the Public Shareholders, the Representative and the Company
will be referred to together as the “Beneficiaries;” and

 

WHEREAS, the Company and the Trustee desire to enter into this Agreement to set
forth the terms and conditions pursuant to which the Trustee shall hold the
Property;

 

 

 

 

IT IS AGREED:

 

1.            Agreements and Covenants of Trustee.  The Trustee hereby agrees
and covenants to:

 

(a)         Hold the Property in trust for the Beneficiaries in accordance with
the terms of this Agreement, including without limitation, the terms of Section
11-51-302(6) of the CRS, in a segregated trust account established by the
Trustee at a branch of Wells Fargo Investments;

 

(b)         Manage, supervise and administer the Trust Account subject to the
terms and conditions set forth herein;

 

(c)         In a timely manner, upon the instruction of the Company, to invest
and reinvest the Property in cash or any “Government Security.”  As used herein,
Government Security means any Treasury Bill issued by the United States, having
a maturity of 180 days or less or any open ended investment company registered
under the Investment Company Act of 1940 that holds itself out as a money market
fund meeting the conditions of Rule 2a-7 promulgated under the Investment
Company Act of 1940;

 

(d)         Collect and receive, when due, all principal and income arising from
the Property, which shall become part of the “Property,” as such term is used
herein;

 

(e)         Notify the Company and the Representative of all communications
received by it with respect to any Property requiring action by the Company;

 

(f)          Supply any necessary information or documents as may be requested
by the Company in connection with the Company’s preparation of the tax returns
for the Trust Account;

 

(g)         Participate in any plan or proceeding for protecting or enforcing
any right or interest arising from the Property if, as and when instructed by
the Company and/or the Representative to do so;

 

(h)         Render to the Company and to the Representative, and to such other
person as the Company may instruct, monthly written statements of the activities
of and amounts in the Trust Account reflecting all receipts and disbursements of
the Trust Account; and

 

(i)         If there is any tax obligation relating to the Property in the Trust
Account or to fund the working capital of the Company, then, only at the written
instruction of the Company in a form substantially similar to that attached
hereto as Exhibit A, to make available in cash or by check from the Property in
the Trust Account an amount specified by the Company by electronic funds
transfer, account debit or other method of payment; provided, however , that
such distributions may only be made if and to the extent that interest has been
earned on the amount initially deposited in the Trust Account sufficient to pay
for such distribution (it being expressly understood that the principal of the
Property shall not be used to pay any such distribution); and

 

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(j)         Commence liquidation of the Trust Account or commence liquidation of
a portion thereof only after receipt of and only in accordance with the terms of
a letter (“Termination Letter”), in a form substantially similar to that
attached hereto as either Exhibit B, Exhibit C, Exhibit D, or Exhibit E, signed
on behalf of the Company by its Chief Executive Officer or Chief Financial
Officer, and complete the liquidation of the Trust Account and disburse the
Property in the Trust Account (which disbursement shall include, in the event of
an Acquisition Transaction (as hereafter defined), Post-Acquisition Tender Offer
(as hereinafter defined), a trust liquidation in the event the Company does not
commence a Post-Acquisition Tender Offer within 30 days of the consummation of
the Acquisition Transaction as required by its Amended and Restated Articles of
Incorporation or a Post-Acquisition Automatic Trust Liquidation (as hereinafter
defined), payment of the Deferred Compensation to the Representative) only as
directed in the Termination Letter and the other documents referred to
therein.  The Trustee understands and agrees that, except as provided in this
paragraph and paragraphs 1(i), 1(k) and 6(a) hereof, disbursements from the
Trust Account shall be made only pursuant to a duly executed Termination Letter,
together with the other documents referenced herein.  For purposes of this
Agreement, (i) an “Acquisition Transaction” shall mean an acquisition through a
merger, stock exchange, asset acquisition, stock purchase or similar acquisition
transaction of one or more operating businesses, (ii) a “Post-Acquisition Tender
Offer” shall mean an issuer tender offer for all IPO Shares following the
consummation of an Acquisition Transaction where the Company has elected to
grant Public Shareholders their redemption rights by means of such issuer tender
offer and (iii) a “Post-Acquisition Automatic Trust Liquidation” shall mean a
liquidation of the Trust Account following the consummation of an Acquisition
Transaction where each Share of Series B Common Stock is automatically converted
into the right to receive a pro rata portion of the Trust Account;

 

(k)         If the Company structures the Acquisition Transaction to require a
Post-Acquisition Tender Offer, then it may, after a Current Report on Form 8-K
describing the terms of the Acquisition Transaction is filed with the SEC, seek
that holders of 5% or more of the Series A Shares who are also accredited
investors elect to convert all of their Series A Shares into shares of Series C
common stock (the “Series C Shares”) immediately prior to consummation of the
Acquisition Transaction, with any remaining Series A Shares automatically
converting to shares of Series B common stock (the “Series B Shares”)
immediately following consummation of the Acquisition Transaction. The exchange
ratio may be on a one-for-one basis, or at other exchange ratios to be
negotiated with the individual shareholders. Such opportunity to convert would
only be available to these certain shareholders, and not to our other holders of
Series A Shares. Holders of shares of Series A Shares who elect to convert their
shares into Series C Shares prior to consummation of the Acquisition Transaction
shall not be entitled to participate in the Post-Acquisition Tender Offer, while
holders of shares of Series A Shares that have their shares automatically
converted to shares of Series B Shares shall be entitled to participate in the
Post-Acquisition Tender Offer.  Upon written confirmation from the Company of
the date of consummation of an Acquisition Transaction (the “Consummation Date”)
and the conversion of Series A Shares into Series C Shares, in a form
substantially similar to that attached hereto as Exhibit F, signed on behalf of
the Company by its Chief Executive Officer or Chief Financial Officer, the
Trustee shall distribute to the Company a pro rata share of the amounts in the
Trust Account as of two business days prior to the Consummation Date in the
Trust Account for each such share of Series A Shares converted to Series C
Shares on the Consummation Date; and

 

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(l)         Permit or effect no distribution from the Trust Account except in
accordance with Sections 1(i), 1(j), 1(k) and 6(a).

 

2.            Agreements and Covenants of the Company.  The Company hereby
agrees and covenants to:

 

(a)         Provide all instructions to the Trustee hereunder in writing, signed
by the Company’s Chief Executive Officer or Chief Financial Officer.  In
addition, except with respect to its duties under Section 1(i) above, the
Trustee shall be entitled to rely on, and shall be protected in relying on, any
verbal or telephonic advice or instruction which it in good faith believes to be
given by the Chief Executive Officer or the Chief Financial Officer;

 

(b)         Hold the Trustee harmless and indemnify the Trustee from and against
any and all expenses, including reasonable counsel fees and disbursements, or
loss suffered by the Trustee in connection with any action, suit or other
proceeding brought against the Trustee involving any claim, or in connection
with any claim or demand which in any way arises out of or relates to this
Agreement, the services of the Trustee hereunder, or the Property or any income
earned from investment of the Property, except for expenses and losses resulting
from the Trustee’s gross negligence or willful misconduct.  Promptly after the
receipt by the Trustee of notice of demand or claim or the commencement of any
action, suit or proceeding, pursuant to which the Trustee intends to seek
indemnification under this paragraph, it shall notify the Company in writing of
such claim (hereinafter referred to as the “Indemnified Claim”).  The Trustee
shall have the right to conduct and manage the defense against such Indemnified
Claim, provided, that the Trustee shall obtain the consent of the Company with
respect to the selection of counsel, which consent shall not be unreasonably
withheld.  The Trustee may not agree to settle any Indemnified Claim without the
prior written consent of the Company.  The Company may participate in such
action with its own counsel;

 

(c)         Pay the Trustee an initial acceptance fee of $3,000 (it being
expressly understood that the Property shall not be used to pay such fee).  The
Company shall pay the Trustee the initial acceptance fee and first year’s fee at
the consummation of the IPO and shall thereafter pay the annual fee on the
anniversary of the Effective Date.  The Trustee shall refund to the Company the
fee (on a pro rata basis) with respect to any period after the liquidation of
the Trust Fund.  The Company shall not be responsible for any other fees or
charges of the Trustee except as may be provided in Section 2(b) hereof (it
being expressly understood that the Property shall not be used to make any
payments to the Trustee under such Section) and for accountable out-of-pocket
expenses actually incurred by the Trustee acting as Trustee of the Property in
accordance with this Agreement;

 

(d)         Within five business days after the Representative’s over-allotment
option (or any unexercised portion thereof) expires or is exercised in full,
provide the Trustee notice in writing (with a copy to the Representative) of the
total amount of the Deferred Compensation, which shall in no event be less than
$400,000; and

 

(e)         In connection with a vote of the Company’s shareholders regarding a
Acquisition Transaction, if any, provide to the Trustee an affidavit or
certificate of a firm regularly engaged in the business of soliciting proxies
and tabulating shareholder votes verifying the vote of the Company’s
shareholders and the Company’s Public Shareholders regarding such Acquisition
Transaction.

 

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3.            Limitations of Liability.  The Trustee shall have no
responsibility or liability to:

 

(a)         Take any action with respect to the Property, other than as directed
in Section 1 hereof and the Trustee shall have no liability to any party except
for liability arising out of its own gross negligence or willful misconduct;

 

(b)         Institute any proceeding for the collection of any principal and
income arising from, or institute, appear in or defend any proceeding of any
kind with respect to, any of the Property unless and until it shall have
received written instructions from the Company given as provided herein to do so
and the Company shall have advanced or guaranteed to it funds sufficient to pay
any expenses incident thereto;

 

(c)         Change the investment of any Property, other than in compliance with
Section 1(c);

 

(d)         Refund any depreciation in principal of any Property;

 

(e)         Assume that the authority of any person designated by the Company or
the Representative to give instructions hereunder shall not be continuing unless
provided otherwise in such designation, or unless the Company or the
Representative shall have delivered a written revocation of such authority to
the Trustee;

 

(f)         The other parties hereto or to anyone else for any action taken or
omitted by it, or any action suffered by it to be taken or omitted, in good
faith and in the exercise of its own best judgment, except for its gross
negligence or willful misconduct.  The Trustee may rely conclusively and shall
be protected in acting upon any order, notice, demand, certificate, opinion or
advice of counsel (including counsel chosen by the Trustee), statement,
instrument, report or other paper or document (not only as to its due execution
and the validity and effectiveness of its provisions, but also as to the truth
and acceptability of any information therein contained) which is believed by the
Trustee, in good faith, to be genuine and to be signed or presented by the
proper person or persons.  The Trustee shall not be bound by any notice or
demand, or any waiver, modification, termination or rescission of this Agreement
or any of the terms hereof, unless evidenced by a written instrument delivered
to the Trustee signed by the proper party or parties and, if the duties or
rights of the Trustee are affected, unless it shall give its prior written
consent thereto;

 

(g)         Verify the correctness of the information set forth in the
Registration Statement or to confirm or assure that any acquisition made by the
Company or any other action taken by it is as contemplated by the Registration
Statement, unless an officer of the Trustee has actual knowledge thereof, or
written notice of such event is sent to the Trustee or as otherwise required
under Section 1(j) hereof; and

 

(h)         Pay any taxes on behalf of the Trust Account (it being expressly
understood that, as set forth in Section 1(i), if there is any income tax
obligation relating to the income of the Property in the Trust Account, then, at
the written instruction of the Company, the Trustee shall make available by
check or in cash for transfer by account debit or wire in the amount indicated
by the Company).

 

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4.            Certain Rights Of Trustee.

 

(a)         Before the Trustee acts or refrains from acting, it may require an
Officer’s Certificate or opinion of counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officer’s Certificate or opinion of counsel. The Trustee may consult with
counsel and the advice of such counsel or any opinion of counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

 

(b)         The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.

 

(c)         The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Agreement.

 

(d)         The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Agreement; it shall not be accountable
for the Company’s use of the proceeds from the Trust Account. Notwithstanding
the effective date of this Agreement or anything to the contrary contained in
this Agreement, the Trustee shall have no liability or responsibility for any
act or event relating to this Agreement or the transactions related thereto
which occur prior to the date of this Agreement, and shall have no contractual
obligations to the Beneficiaries until the date of this Agreement.

 

5.            No Right of Set-Off.   The Trustee waives any right of set-off or
any right, title, interest or claim of any kind that the Trustee may have
against the Property held in the Trust Account.  In the event that the Trustee
has a claim against the Company under this Agreement, including, without
limitation, under Section 2(b), the Trustee will pursue such claim solely
against the Company and not against the Property held in the Trust Account.

 

6.            Termination.  This Agreement shall terminate as follows:

 

(a)         If the Trustee gives written notice to the Company that it desires
to resign under this Agreement, the Company shall use its reasonable efforts to
locate a successor trustee.  At such time that the Company notifies the Trustee
that a successor trustee has been appointed by the Company and has agreed to
become subject to the terms of this Agreement, the Trustee shall transfer the
management of the Trust Account to the successor trustee, including but not
limited to the transfer of copies of the reports and statements relating to the
Trust Account, whereupon this Agreement shall terminate; provided, however,
that, in the event that the Company does not locate a successor trustee within
ninety days of receipt of the resignation notice from the Trustee, the Trustee
may submit an application to have the Property deposited with the United States
District Court for the Southern District of New York, and upon such deposit, the
Trustee shall be immune from any liability whatsoever that arises due to any
actions or omissions to act by any party after such deposit; or

 

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(b)         At such time that the Trustee has completed the liquidation of the
Trust Account in accordance with the provisions of Section 1(j) hereof, and
distributed the Property in accordance with the provisions of the Termination
Letter, this Agreement shall terminate except with respect to Section 2(b).

 

7.            Miscellaneous.

 

(a)         The Company and the Trustee will each restrict access to
confidential information relating to such security procedures to authorized
persons.  Each party must notify the other party immediately if it has reason to
believe unauthorized persons may have obtained access to such information, or of
any change in its authorized personnel.  In executing funds transfers, the
Trustee will rely upon account numbers or other identifying numbers of a
Beneficiary, Beneficiary’s bank or intermediary bank, rather than names.  The
Trustee shall not be liable for any loss, liability or expense resulting from
any error in an account number or other identifying number, provided it has
accurately transmitted the numbers provided.

 

(b)         This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to
conflicts of law principles that would result in the application of the
substantive laws of another jurisdiction.  It may be executed in several
counterparts, each one of which shall constitute an original, and together shall
constitute but one instrument.

 

(c)         This Agreement contains the entire agreement and understanding of
the parties hereto with respect to the subject matter hereof.  This Agreement or
any provision hereof may only be changed, amended or modified by a writing
signed by each of the parties hereto; provided, however, that no such change,
amendment or modification (other than to correct a typographical or similar
technical error) may be made to Sections 1(i), 1(j), 1(k), and 1(l) hereof
without the consent of the holders of 80% of the IPO Shares, it being the
specific intention of the parties hereto that each Public Shareholder is and
shall be a third-party beneficiary of this Section 7(c) with the same right and
power to enforce this Section 7(c) as either of the parties hereto.  For
purposes of this Section 7(c), the “consent of the holders of 80% of the IPO
Shares” shall mean receipt by the Trustee of a certificate from an entity
certifying that (i) such entity regularly engages in the business of serving as
inspector of elections for companies whose securities are publicly traded, and
(ii) either (a) the holders of record of 80% of the IPO Shares of record as of a
record date established in accordance with the applicable provisions of the
Delaware General Corporation Law (the “DGCL”), have voted in favor of such
amendment or modification or (b) the holders of record of 80% of the IPO Shares
of record as of a record date established in accordance with the applicable
provisions of the DGCL have delivered to such entity a signed writing approving
such amendment or modification.

 

(d)         As to any claim, cross-claim or counterclaim in any way relating to
this Agreement, each party waives the right to trial by jury.

 

(e)         The parties hereto consent to the jurisdiction and venue of any
state or federal court located in the City of New York, Borough of Manhattan,
for purposes of resolving any disputes hereunder.

 

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(f)         Any notice, consent or request to be given in connection with any of
the terms or provisions of this Agreement shall be in writing and shall be sent
by express mail or similar private courier service, by certified mail (return
receipt requested), by hand delivery or by facsimile transmission:

 

if to the Trustee, to:

 

American Stock Transfer & Trust Company, LLC

59 Maiden Lane

New York, New York 10038

Attn: Compliance Department

Fax No.: (718) 921-8355

 

if to the Company, to:

 

Selway Capital Acquisition Corporation
74 Grand Avenue, 2nd Floor
Englewood, NJ 07631
Attn: Yaron Eitan, Chief Executive Officer
Fax No.: (201) 541-1084

 

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

 

Aegis Capital Corp.
810 Seventh Avenue, 11th Floor
New York, New York 10019
Attn: General Counsel
Fax No.: (212) 813-1010

 

and

 

Z.A.G./S&W LLP
1290 Avenue of the Americas
29th Floor
New York, New York 10104
Attn: Oded Har – Even
Fax No.: (212) 660-3001

 

and

 

Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Attn: Mitchell S. Nussbaum, Esq.
Fax No.: (212) 407-4990

 

(g)         This Agreement may not be assigned by the Trustee without the prior
written consent of the Company.

 

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(h)         Each of the Trustee and the Company hereby represents that it has
the full right and power and has been duly authorized to enter into this
Agreement and to perform its respective obligations as contemplated
hereunder.  The Trustee acknowledges and agrees that it shall not make any
claims or proceed against the Trust Account, including by way of set-off, and
shall not be entitled to any funds in the Trust Account under any circumstance.

 

[Signature page follows]

 

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

 

  AMERICAN STOCK TRANSFER & TRUST
COMPANY, LLC, as Trustee         By: /s/ Felix Orihuela   Name: Felix Orihuela  
Title: Vice President         SELWAY CAPITAL ACQUISITION
CORPORATION         By: /s/ Yaron Eitan   Name: Yaron Eitan   Title: Chief
Executive Officer

 

Investment Management

Trust Agreement

 

10

 

 

EXHIBIT A

 

SELWAY CAPITAL ACQUISITION CORPORATION

74 Grand Avenue

2nd Floor

Englewood, NJ 07631

 

[Insert date]

 

American Stock Transfer & Trust Company, LLC
59 Maiden Lane
New York, New York 10038
Attn:

 

Re:         Trust Account No. [                  ]

 

Gentlemen:

 

Pursuant to paragraph 1(i) of the Investment Management Trust Agreement between
Selway Capital Acquisition Corporation (“Company”) and American Stock Transfer &
Trust Company, LLC (“Trustee”), dated as of November 7, 2011 (“Trust
Agreement”), the Company hereby requests that you deliver to the Company
$_______ of the income earned on the Property as of the date hereof. The Company
needs such funds [for working capital purposes] [to pay for the tax obligations
as set forth on the attached tax return or tax statement]. In accordance with
the terms of the Trust Agreement, you are hereby directed and authorized to
transfer (via wire transfer) such funds promptly upon your receipt of this
letter to the Company’s operating account at:

 

[WIRE INSTRUCTION INFORMATION]

 

  Very truly yours,       SELWAY CAPITAL ACQUISITION
CORPORATION       By:     Name:   Title:

 

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EXHIBIT B

 

SELWAY CAPITAL ACQUISITION CORPORATION

74 Grand Avenue

2nd Floor

Englewood, NJ 07631

 

 [Insert date]

 

American Stock Transfer & Trust Company, LLC
59 Maiden Lane
New York, New York 10038

 

Attn:

 

Re:         Trust Account No. [                    ] Termination Letter

 

Gentlemen:

 

Pursuant to Section 1(j) of the Investment Management Trust Agreement between
Selway Capital Acquisition Corporation (“Company”) and American Stock Transfer &
Trust Company, LLC (“Trustee”), dated as of November 7, 2011 (“Trust
Agreement”), this is to advise you that the Company has entered into an
agreement (“Business Agreement”) with __________________ (“Target Business”) to
consummate an acquisition transaction with Target Business (“Acquisition
Transaction”) on or about [insert date] and has elected to grant Public
Shareholders their redemption rights at the time of the consummation of the
Acquisition Transaction.  The Company shall notify you at least 48 hours in
advance of the actual date of the consummation of the Acquisition Transaction
(“Consummation Date”) and shall provide you with a certificate or affidavit [in
accordance with Section 2(e) of the Trust Agreement][verifying that a vote of
shareholders is not required].  Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Trust Agreement.

 

In accordance with the terms of the Trust Agreement, we hereby authorize you to
commence liquidation of the Trust Account to the effect that, on the
Consummation Date, all of funds held in the Trust Account will be immediately
available for transfer to the account or accounts that the Company shall direct
on the Consummation Date.

 

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On the Consummation Date (i) counsel for the Company shall deliver to you
written notification that (a) the Acquisition Transaction has been consummated
and [(b) the provisions of Section 11-51-302(6) and Rule 51-3.4 of the CRS have
been met,] and (ii) the Company and the Representative shall deliver to you
written instructions with respect to the transfer of the funds held in the Trust
Account (“Instructions”), and (iii) the Company and the Representative shall
deliver to you written instructions for delivery of the Deferred
Compensation.  You are hereby directed and authorized to transfer the funds,
including the Deferred Compensation, held in the Trust Account immediately upon
your receipt of the counsel’s letter and the Instructions, in accordance with
the terms of the Instructions.  Notwithstanding the foregoing, upon verification
of receipt by you of the Instruction Letter, we hereby agree and acknowledge
that the Property in the Trust Account shall be distributed as follows: (1)
first, to Public Shareholders who exercised their redemption rights in
connection with the Acquisition Transaction, in an amount equal to their pro
rata share of the amounts in the Trust Account as of two business days prior to
the Consummation Date (including the Deferred Compensation and accrued but
undistributed income, net of (i) taxes payable, and (ii) interest income earned
previously released to the Company); (2) to the Representative by wire transfer
(or as otherwise directed by the Representative) in immediately available funds,
the aggregate amount of $__________; and (3) thereafter, to any other
Beneficiary in accordance with the terms of the Instructions. In the event that
certain deposits held in the Trust Account may not be liquidated by the
Consummation Date without penalty, you will notify the Company of the same and
the Company, if the amount set forth in clause (1) shall not have been paid in
full, the Company and shall issue written instructions directing you as to
whether such funds should remain in the Trust Account and be distributed after
the Consummation Date to the Company.  Upon the distribution of all funds in the
Trust Account pursuant to the terms hereof, the Trust Agreement shall be
terminated.

 

In the event that the Acquisition Transaction is not consummated on the
Consummation Date described in the notice thereof and we have not notified you
on or before the original Consummation Date of a new Consummation Date, then the
funds held in the Trust Account shall be reinvested as provided in the Trust
Agreement on the business day immediately following the Consummation Date as set
forth in the notice.

 

  Very truly yours,       SELWAY CAPITAL ACQUISITION
CORPORATION       By:     Name:   Title:

 

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EXHIBIT C

 

SELWAY CAPITAL ACQUISITION CORPORATION

74 Grand Avenue

2nd Floor

Englewood, NJ 07631

 

 [Insert date]

 

American Stock Transfer & Trust Company, LLC
59 Maiden Lane
New York, New York 10038

 

Attn:

 

Re:         Trust Account No. [                    ] Termination Letter

 

Gentlemen:

 

Pursuant to Section 1(j) of the Investment Management Trust Agreement between
Selway Capital Acquisition Corporation (“Company”) and American Stock Transfer &
Trust Company, LLC (“Trustee”), dated as of November 7, 2011 (“Trust
Agreement”), this is to advise you that the Company entered into an agreement
(“Business Agreement”) with __________________ (“Target Business”) and
consummated an acquisition transaction with Target Business (“Acquisition
Transaction”) on [insert date] and has elected to grant Public Shareholders
their redemption rights following the consummation of the Acquisition
Transaction pursuant to a Post-Acquisition Tender Offer.  The Company shall
notify you at least 48 hours in advance of the actual date of the consummation
of the Post-Acquisition Tender Offer (“Consummation Date”) and shall provide you
with a certificate or affidavit [in accordance with Section 2(e) of the Trust
Agreement][verifying that a vote of shareholders is not required].  Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Trust Agreement.

 

In accordance with the terms of the Trust Agreement, we hereby authorize you to
commence liquidation of the Trust Account to the effect that, on the
Consummation Date, all of funds held in the Trust Account will be immediately
available for transfer to the account or accounts that the Company shall direct
on the Consummation Date.

 

14

 

 

On the Consummation Date (i) counsel for the Company shall deliver to you
written notification that (a) the Acquisition Transaction has been consummated
and [(b) the provisions of Section 11-51-302(6) and Rule 51-3.4 of the CRS have
been met,] and (ii) the Company and the Representative shall deliver to you
written instructions with respect to the transfer of the funds held in the Trust
Account (“Instructions”), and (iii) the Company and the Representative shall
deliver to you written instructions for delivery of the Deferred
Compensation.  You are hereby directed and authorized to transfer the funds,
including the Deferred Compensation, held in the Trust Account immediately upon
your receipt of the counsel’s letter and the Instructions, in accordance with
the terms of the Instructions.  Notwithstanding the foregoing, upon verification
of receipt by you of the Instruction Letter, we hereby agree and acknowledge
that the Property in the Trust Account shall be distributed as follows: (1)
first, to Public Shareholders who exercised their redemption rights in
connection with the Post-Acquisition Tender Offer, in an amount equal to their
pro rata share of the amounts in the Trust Account as of two business days prior
to the Consummation Date (including the Deferred Compensation and accrued but
undistributed income, net of (i) taxes payable, and (ii) interest income earned
previously released to the Company); (2) to the Representative by wire transfer
(or as otherwise directed by the Representative) in immediately available funds,
the aggregate amount of $__________; and (3) thereafter, to any other
Beneficiary in accordance with the terms of the Instructions. In the event that
certain deposits held in the Trust Account may not be liquidated by the
Consummation Date without penalty, you will notify the Company of the same and
the Company, if the amount set forth in clause (1) shall not have been paid in
full, the Company and shall issue written instructions directing you as to
whether such funds should remain in the Trust Account and be distributed after
the Consummation Date to the Company.  Upon the distribution of all funds in the
Trust Account pursuant to the terms hereof, the Trust Agreement shall be
terminated.

 

In the event that the Post-Acquisition Tender Offer is not consummated on the
Consummation Date described in the notice thereof and we have not notified you
on or before the original Consummation Date of a new Consummation Date, then the
funds held in the Trust Account shall be reinvested as provided in the Trust
Agreement on the business day immediately following the Consummation Date as set
forth in the notice.

 

  Very truly yours,       SELWAY CAPITAL ACQUISITION
CORPORATION       By:     Name:   Title:

 

15

 

 

EXHIBIT D

 

SELWAY CAPITAL ACQUISITION CORPORATION

74 Grand Avenue

2nd Floor

Englewood, NJ 07631

 

[Insert date]

 

American Stock Transfer & Trust Company, LLC
59 Maiden Lane
New York, New York 10038

 

Attn:

 

Re:         Trust Account No. [                    ] Termination Letter

 

Gentlemen:

 

Pursuant to Section 1(j) of the Investment Management Trust Agreement between
Selway Capital Acquisition Corporation (“Company”) and American Stock Transfer &
Trust Company, LLC (“Trustee”), dated as of November 7, 2011 (“Trust
Agreement”), this is to advise you that the Company entered into an agreement
(“Business Agreement”) with __________________ (“Target Business”) and
consummated an acquisition transaction with Target Business (“Acquisition
Transaction”) on [insert date] and has [elected to grant Public Shareholders
their redemption rights following consummation of the Acquisition Transaction
pursuant to a Post-Acquisition Automatic Trust Liquidation] [not initiated and
will not initiate a Post-Acquisition Tender Offer within 30 days of the closing
of the Acquisition Transaction][not consummated a Post-Acquisition Tender Offer
by the six month anniversary of the closing of the Acquisition Transaction/ 21
month anniversary of the IPO] and accordingly is required to liquidate the trust
account and distribute to Public Shareholders a pro rata portion of the Trust
Account within 5 business days (such date, the “Trust Liquidation Date”).  The
Company shall notify you at least 48 hours in advance of the actual Trust
Liquidation Date.  Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Trust Agreement.

 

In accordance with the terms of the Trust Agreement, we hereby authorize you to
commence liquidation of the Trust Account to the effect that, on the Trust
Liquidation Date, all of funds held in the Trust Account will be immediately
available for transfer to the account or accounts that the Company shall direct
on the Trust Liquidation Date.

 

16

 

 

On the Trust Liquidation Date (i) the Company and the Representative shall
deliver to you written instructions with respect to the transfer of the funds
held in the Trust Account (“Instructions”), and (ii) the Company and the
Representative shall deliver to you written instructions for delivery of the
Deferred Compensation.  You are hereby directed and authorized to transfer the
funds, including the Deferred Compensation, held in the Trust Account
immediately upon your receipt of the Instructions, in accordance with the terms
of the Instructions.  Notwithstanding the foregoing, upon verification of
receipt by you of the Instruction Letter, we hereby agree and acknowledge that
the Property in the Trust Account shall be distributed as follows: (1) first, to
Public Shareholders who have not waived their redemption rights prior to the
Trust Liquidation Date, in an amount equal to their pro rata share of the
amounts in the Trust Account as of two business days prior to the Trust
Liquidation Date (including the Deferred Compensation and accrued but
undistributed income, net of (i) taxes payable, and (ii) interest income earned
previously released to the Company); (2) to the Representative by wire transfer
(or as otherwise directed by the Representative) in immediately available funds,
the aggregate amount of up to $__________; and (3) thereafter, to any other
Beneficiary in accordance with the terms of the Instructions. In the event that
certain deposits held in the Trust Account may not be liquidated by the
Consummation Date without penalty, you will notify the Company of the same and
the Company, if the amount set forth in clause (1) shall not have been paid in
full, the Company and shall issue written instructions directing you as to
whether such funds should remain in the Trust Account and be distributed after
the Consummation Date to the Company.  Upon the distribution of all funds in the
Trust Account pursuant to the terms hereof, the Trust Agreement shall be
terminated.

 

In the event that the Trust Liquidation is not consummated on the Trust
Liquidation Date described in the notice thereof and we have not notified you on
or before the original Trust Liquidation Date of a new Trust Liquidation Date,
then the funds held in the Trust Account shall be reinvested as provided in the
Trust Agreement on the business day immediately following the Trust Liquidation
Date as set forth in the notice.

 

  Very truly yours,       SELWAY CAPITAL ACQUISITION CORPORATION       By:    
Name:   Title:

 

17

 

 

EXHIBIT E

 

SELWAY CAPITAL ACQUISITION CORPORATION

74 Grand Avenue

2nd Floor

Englewood, NJ 07631

 

[Insert date]

 

American Stock Transfer & Trust Company, LLC
59 Maiden Lane
New York, New York 10038

 

Attn:

 

Re:         Trust Account No. [                    ] Termination Letter

 

Gentlemen:

 

Pursuant to Section 1(j) of the Investment Management Trust Agreement between
Selway Capital Acquisition Corporation (“Company”) and American Stock Transfer &
Trust Company, LLC (“Trustee”), dated as of November 7, 2011 (“Trust
Agreement”), this is to advise you that the Board of Directors of the Company
has adopted a plan of dissolution and liquidation relating to the winding up of
the affairs of the Company and liquidation of the Trust Account (as defined in
the Trust Agreement). Attached hereto is a copy of the minutes, including a copy
of the plan of dissolution and liquidation, of the meeting of the Board of
Directors of the Company relating thereto, certified by an executive officer of
the Company as true and correct and in full force and effect.

 

In accordance with the terms of the Trust Agreement, we hereby (a) certify to
you that, if applicable, the provisions of Section 11-51-302(6) and Rule 51-3.4
of the Colorado Statute have been met and (b) authorize you to commence
liquidation of the Trust Account as part of the Company’s plan of dissolution
and distribution.  In connection with this liquidation, you are hereby
authorized to establish a record date for the purposes of determining the
shareholders of record entitled to receive their per share portion of the Trust
Account.  The record date shall be within ten (10) days of the liquidation date,
or as soon as thereafter as is practicable.  You will notify the Company and
______________ (“Designated Paying Agent”) in writing as to when all of the
funds in the Trust Account will be available for immediate transfer (“Transfer
Date”).  The Designated Paying Agent shall thereafter notify you as to the
account or accounts of the Designated Paying Agent that the funds in the Trust
Account should be transferred to on the Transfer Date so that the Designated
Paying Agent may commence distribution of such funds in accordance with the
terms of the Trust Agreement and the Company’s Amended and Restated Certificate
of Incorporation.  Upon the payment of all the funds in the Trust Account, the
Trust Agreement shall be terminated and the Trust Account closed.

 

18

 

 

  Very truly yours,       SELWAY CAPITAL ACQUISITION
CORPORATION       By:     Name:   Title:

 

19

 

 

EXHIBIT F

 

SELWAY CAPITAL ACQUISITION CORPORATION

74 Grand Avenue

2nd Floor

Englewood, NJ 07631

 

 [Insert date]

 

American Stock Transfer & Trust Company, LLC
59 Maiden Lane
New York, New York 10038

 

Attn:

 

Re:         Trust Account No. [             ]

 

Gentlemen:

 

Pursuant to Section 1(k) of the Investment Management Trust Agreement between
Selway Capital Acquisition Corporation (“Company”) and American Stock Transfer &
Trust Company, LLC (“Trustee”), dated as of November 7, 2011 (“Trust
Agreement”), this is to advise you that the Company entered into an agreement
(“Business Agreement”) with __________________ (“Target Business”) and
consummated an acquisition transaction with Target Business (“Acquisition
Transaction”) on [insert date] (the “Consummation Date”), and in connection with
the Acquisition Transaction an aggregate of [_______] shares of Series A common
stock have been converted to shares of Series C common stock.

 

In accordance with the terms of the Trust Agreement, we hereby (a) certify to
you that, if applicable, the provisions of Section 11-51-302(6) and Rule 51-3.4
of the Colorado Statute have been met and (b) instruct you to deliver an
aggregate of $[______] from the proceeds held in trust, representing a pro rata
share of the amounts in the Trust Account as of two business days prior to the
Consummation Date in the Trust Account for each share of Series A common stock
converted to Series C common stock on the Consummation Date.

 

  Very truly yours,       SELWAY CAPITAL ACQUISITION
CORPORATION       By:     Name:   Title:

 

20