REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the
10th day of April, 2013, by and among Selway Capital Acquisition Corporation, a
Delaware corporation (the “Company”), and Gary Sekulski (the “Stockholders’
Representative”) as the representative of the stockholders (each, an “Investor”
and collectively, the “Investors”) of Healthcare Corporation of America, a New
Jersey corporation (“HCA”).

 

WHEREAS, the Investors have acquired securities of the Company pursuant to that
certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of
January 25, 2013, by and among the Company, Selway Merger Sub, Inc., a New
Jersey corporation (“Merger Sub”), HCA, Prescription Corporation of America, a
New Jersey corporation (“PCA”), the Stockholders’ Representative and Gary
Sekulski as the Buyer’s Representative, pursuant to which Merger Sub will be
merged with and into HCA (the “Acquisition Transaction”); and

 

WHEREAS, the Representative and the Company desire to enter into this Agreement
to provide the Investors with certain rights relating to the registration of the
Payment Securities the Investors acquired pursuant to the Merger Agreement;

 

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

 

1. DEFINITIONS.  The following capitalized terms used herein have the following
meanings:

 

“Agreement” means this Agreement, as amended, restated, supplemented, or
otherwise modified from time to time.

 

“Commission” means the Securities and Exchange Commission, or any other federal
agency then administering the Securities Act or the Exchange Act.

 

“Common Stock” means the common stock, par value $0.0001 per share, of the
Company.

 

“Company” is defined in the preamble to this Agreement.

 

“Company Securities” is defined in Section 2.1.4.

 

“Demand Registration” is defined in Section 2.1.1.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect at the time.

 

“Form S-3” is defined in Section 2.3.

 

“Indemnified Party” is defined in Section 4.3.

 

“Indemnifying Party” is defined in Section 4.3.

 

“Investor” is defined in the preamble to this Agreement.

 

 

 

 

“Investor Indemnified Party” is defined in Section 4.1.

 

“Maximum Number of Shares” is defined in Section 2.1.4.

 

“Notices” is defined in Section 6.3.

 

“Payment Securities” means the shares of Common Stock issued to the Investors
pursuant to the Merger Agreement in the form of Closing Payment Shares, Earnout
Payment Shares, Financing Payment Shares and Sponsor Payment Shares (as such
terms are defined in the Merger Agreement).

 

“Piggy-Back Registration” is defined in Section 2.2.1.

 

“Register,” “registered” and “registration” mean a registration effected by
preparing and filing a registration statement or similar document in compliance
with the requirements of the Securities Act, and the applicable rules and
regulations promulgated thereunder, and such registration statement becoming
effective.

 

“Registrable Securities” means (i) all of the Payment Securities issued to
Investors in connection with the Acquisition Transaction.  Registrable
Securities includes any warrants, Common Stock, preferred stock or other
securities of the Company issued as a dividend or other distribution with
respect to or in exchange for or in replacement of such securities.  As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when: (a) a Registration Statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been sold, transferred, disposed of or exchanged in
accordance with such Registration Statement; (b) such securities shall have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration under the
Securities Act; (c) such securities shall have ceased to be outstanding; or (d)
the Registrable Securities are salable without restriction pursuant to Rule 144
in the opinion of counsel to the Company.

 

“Registration Statement” means a registration statement filed by the Company
with the Commission in compliance with the Securities Act and the rules and
regulations promulgated thereunder for a public offering and sale of securities
of the Company (other than a registration statement on Form S-4 or Form S-8, or
their successors, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another entity).

 

“Repurchase Right” is defined in Section 6.10.1.

 

“Rule 144” means Rule 144 promulgated under the Securities Act or any successor
rule thereto, as such rules may be amended from time to time.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be
in effect at the time.

 

“Underwriter” means a securities dealer who purchases any Registrable Securities
as principal in an underwritten offering and not as part of such dealer’s
market-making activities.

 

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2. REGISTRATION RIGHTS.

 

2.1 Demand Registration.

 

2.1.1 Request for Registration.  At any time and from time to time on or after
the date that is six months following the consummation of the Acquisition
Transaction, the Stockholders’ Representative may, on behalf of the Investors,
make a written demand for registration under the Securities Act of all or part
of the Registrable Securities (a “Demand Registration”).  Any demand for a
Demand Registration shall specify the number of Registrable Securities proposed
to be sold and the intended method(s) of distribution thereof.  The Company will
notify all holders of Registrable Securities of the demand.   The Company shall
not be obligated to effect more than an aggregate of two (2) Demand
Registrations under this Section 2.1.1 in respect of Registrable Securities. 

 

2.1.2 Effective Registration.  A registration will not count as a Demand
Registration until the Registration Statement filed with the Commission with
respect to such Demand Registration has been declared effective and the Company
has complied with all of its obligations under this Agreement with respect
thereto; provided, however, that if, after such Registration Statement has been
declared effective, the offering of Registrable Securities pursuant to a Demand
Registration is interfered with by any stop order or injunction of the
Commission or any other governmental agency or court, the Registration Statement
with respect to such Demand Registration will be deemed not to have been
declared effective, unless and until, (i) such stop order or injunction is
removed, rescinded or otherwise terminated, and (ii) the Stockholders’
Representative thereafter elects to continue the offering; provided, further,
that the Company shall not be obligated to file a second Registration Statement
until a Registration Statement that has been filed is counted as a Demand
Registration or is terminated or withdrawn.

 

2.1.3 Underwritten Offering.  If the Stockholders’ Representative so advises the
Company as part of its written demand for a Demand Registration, the offering of
such Registrable Securities pursuant to such Demand Registration shall be in the
form of an underwritten offering.  In such event, the right of any holder to
include its Registrable Securities in such registration shall be conditioned
upon such holder’s participation in such underwriting and the inclusion of such
holder’s Registrable Securities in the underwriting to the extent provided
herein.  All holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the Underwriter or Underwriters selected for such underwriting by the
Stockholders’ Representative; provided that the selection of the Underwriter or
Underwriters shall be subject to the approval of the Company, which approval
will not be unreasonably withheld or delayed.

 

2.1.4 Reduction of Offering.  If the managing Underwriter or Underwriters for a
Demand Registration that is to be an underwritten offering advises the Company
and the Stockholders’ Representative in writing that the dollar amount or number
of Registrable Securities to be sold, taken together with all other securities
of the Company (such securities of the Company generally, the “Company
Securities”) which the Company desires to sell and the Company Securities, if
any, as to which registration has been requested pursuant to written contractual
piggy-back registration rights held by other stockholders of the Company who
desire to sell, exceeds the maximum dollar amount or maximum number of shares
that can be sold in such offering without adversely affecting the proposed
offering price, the timing, the distribution method, or the probability of
success of such offering (such maximum dollar amount or maximum number of
shares, as applicable, the “Maximum Number of Shares”), then the Company shall
include in such registration: (i) first, the Registrable Securities (pro rata in
accordance with the number of Registrable Securities held by each Investor) that
can be sold without exceeding the Maximum Number of Shares; (ii) second, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clause (i), the Company Securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares; (iii) third, to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (i) and (ii), the Company Securities for the account of other
persons that the Company is obligated to register pursuant to written
contractual arrangements with such persons and that can be sold without
exceeding the Maximum Number of Shares; and (v) fourth, to the extent that the
Maximum Number of Shares have not been reached under the foregoing clauses (i),
(ii), and (iii), the Company Securities that other stockholders desire to sell
that can be sold without exceeding the Maximum Number of Shares.

 

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2.1.5 Withdrawal.  If the Stockholders’ Representative disapproves of the terms
of any underwriting or not all of the Registrable Securities may be included in
any offering, the Stockholders’ Representative may elect to withdraw the
Registrable Securities from such offering by giving written notice to the
Company and the Underwriter or Underwriters of the request to withdraw prior to
the effectiveness of the Registration Statement with respect to such Demand
Registration.  If the Stockholders’ Representative withdraws from a proposed
offering relating to a Demand Registration, then such registration shall not
count as a Demand Registration.

 

2.2 Piggy-Back Registration.

 

2.2.1 Piggy-Back Rights.  If at any time on or after the date that is six months
following the consummation of the Acquisition Transaction the Company proposes
to file a Registration Statement under the Securities Act with respect to an
offering of equity securities, or securities or other obligations exercisable or
exchangeable for, or convertible into, equity securities, by the Company for its
own account or for stockholders of the Company for their account (or by the
Company and by stockholders of the Company including, without limitation,
pursuant to Section 2.1), other than a Registration Statement (i) filed in
connection with any employee stock option or other benefit plan, (ii) for an
exchange offer or offering of securities solely to the Company’s existing
stockholders, (iii) for an offering of debt that is convertible into equity
securities of the Company or (iv) for a dividend reinvestment plan, then the
Company shall (x) give written notice of such proposed filing to the
Stockholders’ Representative as soon as practicable but in no event less than
ten (10) days before the anticipated filing date, which notice shall describe
the amount and type of Company Securities to be included in such offering, the
intended method(s) of distribution, and the name of the proposed managing
Underwriter or Underwriters, if any, of the offering, and (y) offer to the
Stockholders’ Representative the opportunity to register the sale of the
Registrable Securities by notice within five (5) days following receipt of such
notice (a “Piggy-Back Registration”).  The Company shall cause the Registrable
Securities to be included in such registration and shall use its commercially
reasonable efforts to cause the managing Underwriter or Underwriters of a
proposed underwritten offering to permit the Registrable Securities requested to
be included in a Piggy-Back Registration to be included on the same terms and
conditions as any similar Company Securities and to permit the sale or other
disposition of such Registrable Securities in accordance with the intended
method(s) of distribution thereof.  All holders of Registrable Securities
proposing to distribute their securities through a Piggy-Back Registration that
involves an Underwriter or Underwriters shall enter into an underwriting
agreement in customary form with the Underwriter or Underwriters selected for
such Piggy-Back Registration.  

 

2.2.2 Reduction of Offering.  If the managing Underwriter or Underwriters for a
Piggy-Back Registration that is to be an underwritten offering advises the
Company and the Stockholders’ Representative in writing that the dollar amount
or number of Company Securities exceeds the Maximum Number of Shares, then the
Company shall include in any such registration:

 

(i) If the registration is undertaken for the Company’s account: (A) first, the
Company Securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; (B) second, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clause (A),
the Company Securities, if any, including the Registrable Securities, as to
which registration has been requested pursuant to written contractual piggy-back
registration rights of security holders (pro rata in accordance with the number
of securities elected to be included in such registration, regardless of the
number of Company Securities with respect to which such persons have the right
to request such inclusion) that can be sold without exceeding the Maximum Number
of Shares; and

 

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(ii) If the registration is a “demand” registration undertaken at the demand of
persons other than the holders of Registrable Securities pursuant to written
contractual arrangements with such persons, (A) first, the securities for the
account of the demanding persons that can be sold without exceeding the Maximum
Number of Shares; (B) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (A), the securities or other
securities that the Company desires to sell that can be sold without exceeding
the Maximum Number of Shares; and (C) third, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clauses (A) and (B),
the Company Securities, if any, including the Registrable Securities, as to
which registration has been requested pursuant to written contractual piggy-back
registration rights of security holders (pro rata in accordance with the number
of Company Securities elected to be included in such registration, regardless of
the number of securities with respect to which such persons have the right to
request such inclusion) that can be sold without exceeding the Maximum Number of
Shares.

 

2.2.3 Withdrawal.  The Stockholders’ Representative may elect to withdraw such
request for inclusion of Registrable Securities in any Piggy-Back Registration
by giving written notice to the Company of such request to withdraw prior to the
effectiveness of the Registration Statement.  The Company may also elect to
withdraw a Piggy-Back Registration statement at any time prior to the
effectiveness of the Registration Statement.  Notwithstanding any such
withdrawal, the Company shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy-Back Registration as
provided in Section 3.3.

 

2.3 Registrations on Form S-3.  The Stockholders’ Representative may at any time
and from time to time, request in writing that the Company register the resale
of the Registrable Securities on Form S-3 or any similar short-form registration
which may be available at such time (“Form S-3”); provided, however, that the
Company shall not be obligated to effect such request through an underwritten
offering.  Upon receipt of such written request, the Company shall, as soon as
practicable thereafter, effect the registration of the Registrable Securities;
provided, however, that the Company shall not be obligated to effect any such
registration pursuant to this Section 2.3 if Form S-3 is not available for such
offering.  Registrations effected pursuant to this Section 2.3 shall not be
counted as Demand Registrations effected pursuant to Section 2.1.

 

3. REGISTRATION PROCEDURES.

 

3.1 Filings; Information. Whenever the Company is required to effect the
registration of any Registrable Securities pursuant to Section 2, the Company
shall use its commercially reasonable efforts to effect the registration and
sale of such Registrable Securities in accordance with the intended method(s) of
distribution thereof as expeditiously as practicable, and in connection with any
such request:

 

3.1.1 Filing Registration Statement.  The Company shall, as expeditiously as
possible and in any event within ninty (90) days after receipt of a request for
a Demand Registration pursuant to Section 2.1, prepare and file with the
Commission a Registration Statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of all Registrable Securities to be registered
thereunder in accordance with the intended method(s) of distribution thereof,
and shall use its commercially reasonable efforts to cause such Registration
Statement to become and remain effective for the period required by Section
3.1.3; provided, however, that the Company shall have the right to defer any
Demand Registration for up to thirty (30) days, and any Piggy-Back Registration
for such period as may be applicable to deferment of any demand registration to
which such Piggy-Back Registration relates, in each case if the Company shall
furnish to the holders a certificate signed by the Chief Executive Officer of
the Company stating that, in the good faith judgment of the Board of Directors
of the Company, it would be materially detrimental to the Company and its
stockholders for such Registration Statement to be effected at such time;
provided further, however, that the Company shall not have the right to exercise
the right set forth in the immediately preceding proviso more than once in any
365-day period in respect of a Demand Registration hereunder.

 

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3.1.2 Copies.  The Company shall, prior to filing a Registration Statement or
prospectus, or any amendment or supplement thereto, furnish without charge to
the holders of Registrable Securities included in such registration, and such
holders’ legal counsel, copies of such Registration Statement as proposed to be
filed, each amendment and supplement to such Registration Statement (in each
case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such Registration Statement (including each
preliminary prospectus), and such other documents as the holders of Registrable
Securities included in such registration or legal counsel for any such holders
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such holders.

 

3.1.3 Amendments and Supplements.  The Company shall prepare and file with the
Commission such amendments, including post-effective amendments, and supplements
to such Registration Statement and the prospectus used in connection therewith
as may be necessary to keep such Registration Statement effective and in
compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such Registration Statement have been
disposed of in accordance with the intended method(s) of distribution set forth
in such Registration Statement (which period shall not exceed the sum of one
hundred eighty (180) days plus any period during which any such disposition is
interfered with by any stop order or injunction of the Commission or any
governmental agency or court) or such securities have been withdrawn.

 

3.1.4 Notification.  After the filing of a Registration Statement, the Company
shall promptly, but in no event more than two (2) business days after such
filing, notify the holders of Registrable Securities included in such
Registration Statement of such filing, and shall further notify such holders
promptly and confirm such advice in writing in all events within two (2)
business days of the occurrence of any of the following: (i) when such
Registration Statement becomes effective; (ii) when any post-effective amendment
to such Registration Statement becomes effective; (iii) the issuance or
threatened issuance by the Commission of any stop order (and the Company shall
use commercially reasonable efforts to take all actions required to prevent the
entry of such stop order or to remove it if entered); and (iv) any request by
the Commission for any amendment or supplement to such Registration Statement or
any prospectus relating thereto or for additional information or of the
occurrence of an event requiring the preparation of a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of the
securities covered by such Registration Statement, such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and promptly make available to the holders of Registrable
Securities included in such Registration Statement any such supplement or
amendment; except that before filing with the Commission a Registration
Statement or prospectus or any amendment or supplement thereto, including
documents incorporated by reference, the Company shall furnish to the holders of
Registrable Securities included in such Registration Statement and to the legal
counsel for any such holders, copies of all such documents proposed to be filed
sufficiently in advance of filing to provide such holders and legal counsel with
a reasonable opportunity to review such documents and comment thereon, and the
Company shall not file any Registration Statement or prospectus or amendment or
supplement thereto, including documents incorporated by reference, to which such
holders or their legal counsel shall object.

 

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3.1.5 State Securities Laws Compliance.  The Company shall use its commercially
reasonable efforts to (i) register or qualify the Registrable Securities covered
by the Registration Statement under such securities or “blue sky” laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may request and (ii) take such action necessary to cause such
Registrable Securities covered by the Registration Statement to be registered
with or approved by such other Governmental Authorities as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be necessary or advisable to enable the holders of
Registrable Securities included in such Registration Statement to consummate the
disposition of such Registrable Securities in such jurisdictions; provided,
however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph 3.1.5 or subject itself to taxation or to general service
of process in any such jurisdiction.

 

3.1.6 Agreements for Disposition.  The Company shall enter into customary
agreements (including, if applicable, an underwriting agreement in customary
form) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities.  The
representations, warranties and covenants of the Company in any underwriting
agreement which are made to or for the benefit of any Underwriters, to the
extent applicable, shall also be made to and for the benefit of the holders of
Registrable Securities included in such registration statement.  No holder of
Registrable Securities included in such registration statement shall be required
to make any representations or warranties in the underwriting agreement except,
if applicable, with respect to such holder’s organization, good standing,
authority, title to Registrable Securities, lack of conflict of such sale with
such holder’s material agreements and organizational documents, and with respect
to written information relating to such holder that such holder has furnished in
writing expressly for inclusion in such Registration Statement.

 

3.1.7 Cooperation.  The Company shall cause the principal executive officer of
the Company, the principal financial officer of the Company, the principal
accounting officer of the Company and all other officers and members of the
management of the Company to cooperate in any offering of Registrable Securities
hereunder, which cooperation shall include, without limitation, the preparation
of the Registration Statement with respect to such offering and all other
offering materials and related documents, and participation in meetings with
Underwriters, attorneys, accountants and potential investors.

 

3.1.8 Records.  The Company shall make available for inspection by the holders
of Registrable Securities included in such Registration Statement, any
Underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional retained by any
holder of Registrable Securities included in such Registration Statement or any
Underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, as shall be necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s officers, directors
and employees to supply all information requested by any of them in connection
with such Registration Statement.

 

3.1.9 Opinions and Comfort Letters.  The Company shall furnish to each holder of
Registrable Securities included in any Registration Statement a signed
counterpart, addressed to such holder, of (i) any opinion of counsel to the
Company delivered to any Underwriter and (ii) any comfort letter from the
Company’s independent public accountants delivered to any Underwriter.  In the
event no legal opinion is delivered to any Underwriter, the Company shall
furnish to each holder of Registrable Securities included in such Registration
Statement, at any time that such holder elects to use a prospectus, an opinion
of counsel to the Company to the effect that the Registration Statement
containing such prospectus has been declared effective and that no stop order is
in effect.

 

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3.1.10 Earnings Statement.  The Company shall comply with all applicable rules
and regulations of the Commission and the Securities Act, and make available to
its stockholders, as soon as practicable, an earnings statement covering a
period of twelve (12) months, beginning within three (3) months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.

 

3.2 Registration Expenses.  The Company shall bear all costs and expenses
incurred in connection with any Demand Registration pursuant to Section 2.1, any
Piggy-Back Registration pursuant to Section 2.2, and any registration on Form
S-3 effected pursuant to Section 2.3, and all expenses incurred in performing or
complying with its other obligations under this Agreement, whether or not the
Registration Statement becomes effective, including, without limitation: (i) all
registration and filing fees; (ii) fees and expenses of compliance with
securities or “blue sky” laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities); (iii)
printing expenses; (iv) the Company’s internal expenses (including, without
limitation, all salaries and expenses of its officers and employees); (v)
Financial Industry Regulatory Authority fees; (vi) fees and disbursements of
counsel for the Company and fees and expenses for independent certified public
accountants retained by the Company (including the expenses or costs associated
with the delivery of any opinions or comfort letters requested pursuant to
Section 3.1.9); (vii) the fees and expenses of any special experts retained by
the Company in connection with such registration and (viii) the reasonable fees
and expenses of one legal counsel selected by the holders of a
majority-in-interest of the Registrable Securities included in such
registration.  The Company shall have no obligation to pay any underwriting
discounts or selling commissions attributable to the Registrable Securities
being sold by the holders thereof, which underwriting discounts or selling
commissions shall be borne by such holders.  Additionally, in an underwritten
offering, all selling stockholders and the Company shall bear the expenses of
the underwriter pro rata in proportion to the respective amount of shares each
is selling in such offering.  

 

3.3 Information.  The holders of Registrable Securities shall provide such
information as may reasonably be requested by the Company, or the managing
Underwriter, if any, in connection with the preparation of any Registration
Statement, including amendments and supplements thereto, in order to effect the
registration of any Registrable Securities under the Securities Act pursuant to
Section 2 and in connection with the Company’s obligation to comply with federal
and applicable state securities laws.

 

4. INDEMNIFICATION AND CONTRIBUTION.

 

4.1 Indemnification by the Company.  The Company agrees to indemnify and hold
harmless the Stockholders’ Representative, each Investor, and each other holder
of Registrable Securities, and each of their respective officers, employees,
affiliates, directors, partners, members, attorneys and agents, and each person,
if any, who controls an Investor and each other holder of Registrable Securities
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) (each, an “Investor Indemnified Party”), from and against any
expenses, losses, judgments, claims, damages or liabilities, whether joint or
several, arising out of or based upon any untrue statement (or allegedly untrue
statement) of a material fact contained in any Registration Statement under
which the sale of such Registrable Securities was registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arising out of or based upon any
omission (or alleged omission) to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
promulgated thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration; and
the Company shall promptly reimburse the Investor Indemnified Party for any
legal and any other expenses reasonably incurred by such Investor Indemnified
Party in connection with investigating and defending any such expense, loss,
judgment, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such expense,
loss, claim, damage or liability arises out of or is based upon any untrue
statement or allegedly untrue statement or omission or alleged omission made in
such Registration Statement, preliminary prospectus, final prospectus, or
summary prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by a selling
holder expressly for use therein.  The Company also shall indemnify any
Underwriter of the Registrable Securities, their officers, affiliates,
directors, partners, members and agents and each person who controls such
Underwriter on substantially the same basis as that of the indemnification
provided above in this Section 4.1.

 

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4.2 Indemnification by Holders of Registrable Securities.  Each selling holder
of Registrable Securities will, in the event that any registration is being
effected under the Securities Act pursuant to this Agreement of any Registrable
Securities held by such selling holder, indemnify and hold harmless the
Stockholders’ Representative, the Company, each Underwriter, as applicable, and
each of their respective officers, employees, affiliates, directors, partners,
members, attorneys and agents, and each other person, if any, who controls the
Company or such underwriter within the meaning of the Securities Act, against
any losses, claims, judgments, damages or liabilities, whether joint or several,
insofar as such losses, claims, judgments, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
allegedly untrue statement of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or the alleged omission to state a material fact required to be stated
therein or necessary to make the statement therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by such selling holder expressly
for use therein, and shall reimburse the Company, its directors and officers,
and each such controlling person for any legal or other expenses reasonably
incurred by any of them in connection with investigation or defending any such
loss, claim, damage, liability or action.  Each selling holder’s indemnification
obligations hereunder shall be several and not joint and shall be limited to the
amount of any net proceeds actually received by such selling holder.

 

4.3 Conduct of Indemnification Proceedings.  Promptly after receipt by any
person of any notice of any loss, claim, damage or liability or any action in
respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such
person (the “Indemnified Party”) shall, if a claim in respect thereof is to be
made against any other person for indemnification hereunder, notify such other
person (the “Indemnifying Party”) in writing of the loss, claim, judgment,
damage, liability or action; provided, however, that the failure by the
Indemnified Party to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which the Indemnifying Party may have to
such Indemnified Party hereunder, except and solely to the extent the
Indemnifying Party is actually prejudiced by such failure.  If the Indemnified
Party is seeking indemnification with respect to any claim or action brought
against the Indemnified Party, then the Indemnifying Party shall be entitled to
participate in such claim or action, and, to the extent that it wishes, jointly
with all other Indemnifying Parties, to assume control of the defense thereof
with counsel satisfactory to the Indemnified Party.  After notice from the
Indemnifying Party to the Indemnified Party of its election to assume control of
the defense of such claim or action, the Indemnifying Party shall not be liable
to the Indemnified Party for any legal or other expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that in any action in
which both the Indemnified Party and the Indemnifying Party are named as
defendants, the Indemnified Party shall have the right to employ separate
counsel (but no more than one such separate counsel) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them.  No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or pending or threatened proceeding in respect of which
the Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from all
liability arising out of such claim or proceeding.

 

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4.4 Contribution.

 

4.4.1 If the indemnification provided for in the foregoing Sections 4.1, 4.2 and
4.3 is unavailable to any Indemnified Party in respect of any loss, claim,
damage, liability or action referred to herein, then each such Indemnifying
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 loss,
claim, damage, liability or action in such proportion as is appropriate to
reflect the relative fault of the Indemnified Parties and the Indemnifying
Parties in connection with the actions or omissions which resulted in such loss,
claim, damage, liability or action, as well as any other relevant equitable
considerations.  The relative fault of any Indemnified Party and any
Indemnifying Party 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 such Indemnified Party or such Indemnifying Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

4.4.2 The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding Section
4.4.1.  The amount paid or payable by an Indemnified Party as a result of any
loss, claim, damage, liability or action referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Party in
connection with investigating or defending any such action or
claim.  Notwithstanding the provisions of this Section 4.4, no holder of
Registrable Securities shall be required to contribute any amount in excess of
the dollar amount of the net proceeds (after payment of any underwriting fees,
discounts, commissions or taxes) actually received by such holder from the sale
of Registrable Securities which gave rise to such contribution obligation.  No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

 

5. Rule 144.

 

5.1 Rule 144.  The Company covenants that it shall file all reports required to
be filed by it under the Securities Act and the Exchange Act and shall take such
further action as the holders of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144, or any similar Rule or
regulation hereafter adopted by the Commission.

 

10

 

 

6. MISCELLANEOUS.

 

6.1 Other Registration Rights.  Except as disclosed in the Company’s public
filings with the Commission, the Company represents and warrants that no person,
other than a holder of the Registrable Securities has any right to require the
Company to register any Company Securities for sale or to include any Company
Securities in any registration filed by the Company for the sale of Company
Securities for its own account or for the account of any other person.

 

6.2 Assignment; Third Party Beneficiaries.  This Agreement and the rights,
duties and obligations of the Company hereunder may not be assigned or delegated
by the Company in whole or in part.  This Agreement and the rights, duties and
obligations of the holders of Registrable Securities hereunder may be freely
assigned or delegated by such holder of Registrable Securities in conjunction
with and to the extent of any transfer of Registrable Securities by any such
holder.  This Agreement and the provisions hereof shall be binding upon and
shall inure to the benefit of each of the parties and their respective
successors and the permitted assigns of the Investor or holder of Registrable
Securities or of any assignee of the Investor or holder of Registrable
Securities.  The Investors are third party beneficiaries to this Agreement.

 

6.3 Notices.  All notices, demands, requests, consents, approvals or other
communications (collectively, “Notices”) required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and shall be personally served, delivered by reputable air courier service with
charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth below, or to such other address as such party shall have
specified most recently by written notice.  Notice shall be deemed given on the
date of service or transmission if personally served or transmitted by telegram,
telex or facsimile; provided, that if such service or transmission is not on a
business day or is after normal business hours, then such notice shall be deemed
given on the next business day.  Notice otherwise sent as provided herein shall
be deemed given on the next business day following timely delivery of such
notice to a reputable air courier service with an order for next-day delivery.

 

To the Company:

 

Selway Capital Acquisition Corporation

900 Third Avenue, 19th Fl.

New York, NY 10022

Attention: Chief Executive Officer

Telecopy: (212) 308-6623

 

with a copy to:

 

Zysman Aharoni Gayer and

Sullivan & Worcester LLP

One Post Office Square

Boston, MA 02109

Attn: Edwin L. Miller Jr.

Telecopy: (617) 338-2880

 

and

 

Loeb & Loeb LLP

345 Park Avenue

 

11

 

 

New York, New York 1015

Attention: Mitchell S. Nussbaum and Giovanni Caruso

 

To the Stockholders’ Representative, to:

 

Gary Sekulski

c/o Healthcare Corporation of America

66 Ford Road – Suite 230

Denville, NY 07834

Telecopy: (973) 983-6304

 

with a copy to:

 

Loeb & Loeb LLP

345 Park Avenue

New York, New York 1015

Attention: Mitchell S. Nussbaum and Giovanni Caruso

 

6.4 Severability.  This Agreement shall be deemed severable, and the invalidity
or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Agreement or of any other term or provision
hereof.  Furthermore, in lieu of any such invalid or unenforceable term or
provision, the parties hereto intend that there shall be added as a part of this
Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.

 

6.5 Counterparts.  This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.

 

6.6 Entire Agreement.  This Agreement (including all agreements entered into
pursuant hereto and all certificates and instruments delivered pursuant hereto
and thereto) constitutes the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements,
representations, understandings, negotiations and discussions between the
parties, whether oral or written.

 

6.7 Modifications and Amendments.  No amendment, modification or termination of
this Agreement shall be binding upon any party unless executed in writing by
such party.

 

6.8 Titles and Headings.  Titles and headings of sections of this Agreement are
for convenience only and shall not affect the construction of any provision of
this Agreement.

 

6.9 Waivers and Extensions.  Any party to this Agreement may waive any right,
breach or default which such party has the right to waive, provided that such
waiver will not be effective against the waiving party unless it is in writing,
is signed by such party, and specifically refers to this Agreement.  Waivers may
be made in advance or after the right waived has arisen or the breach or default
waived has occurred.  Any waiver may be conditional.  No waiver of any breach of
any agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or provision
herein contained.  No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.

 

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6.10 Specific Performance.  Each of the parties acknowledges and agrees that the
other parties would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached.  Accordingly, each of the parties agrees that the other
parties shall be entitled to an injunction or injunctions (without the necessity
of posting a bond or other security) to prevent breaches of the provisions of
this Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state or other foreign court or governmental body having jurisdiction over
the parties and the matter, in addition to any other remedy to which they may be
entitled, at law or in equity.

 

6.11 Remedies Cumulative.  In the event that the Company fails to observe or
perform any covenant or agreement to be observed or performed under this
Agreement, the Stockholders’ Representative, any Investor or any other holder of
Registrable Securities may proceed to protect and enforce its rights by suit in
equity or action at law, whether for specific performance of any term contained
in this Agreement or for an injunction against the breach of any such term or in
aid of the exercise of any power granted in this Agreement or to enforce any
other legal or equitable right, or to take any one or more of such actions,
without being required to post a bond.  None of the rights, powers or remedies
conferred under this Agreement shall be mutually exclusive, and each such right,
power or remedy shall be cumulative and in addition to any other right, power or
remedy, whether conferred by this Agreement or now or hereafter available at
law, in equity, by statute or otherwise.

 

6.12 Governing Law.  This Agreement and the legal relations between the parties
arising hereunder shall be governed by and interpreted in accordance with the
laws of the State of New York without reference to its conflicts of laws
provisions (other than sections 5-1401 and 5-1402 of the New York General
Obligations law, which shall apply to this Agreement).

 

6.13 Waiver of Trial by Jury.  Each party hereby irrevocably and unconditionally
waives the right to a trial by jury in any action, suit, counterclaim or other
proceeding (whether based on contract, tort or otherwise) arising out of,
connected with or relating to this Agreement, the transactions contemplated
hereby, or the actions of the Stockholders’ Representative in the negotiation,
administration, performance or enforcement hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be executed and delivered by their duly authorized representatives as of the
date first written above.

 

  SELWAY CAPITAL ACQUISITION CORPORATION       By:

/s/ Edmundo Gonzalez

  Name: Edmundo Gonzalez   Title: Chief Financial Officer

 

  STOCKHOLDERS’ REPRESENTATIVE       /s/ Gary Sekulski   Gary Sekulski

 

[Signature Page to Registration Rights Agreement]