Document:

Unassociated Document

INVESTMENT MANAGEMENT TRUST AGREEMENT

 

This Agreement is made as of _________, 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, [___] 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 $[__________] 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 $[_________] 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 $[_________] (or $[________] 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 $[_________] if the Representative's over-allotment option is not exercised, or a minimum of $[________], 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 First Republic Bank;

 

(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

 

(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, Exhibit E or Exhibit F, 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 G, 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 $[__] and an annual fee of $[__] (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;

 

  

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(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 $[_____]; 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.

 

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

 

  

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(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).

 

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):

 

Rodman & Renshaw, LLC

[Address]

Attn: [Name, Title]

Fax No.: [__]

 

and

 

Z.A.G./S&W LLP

1290 Avenue of the Americas

29th Floor

New York, New York 10104 

Attn: Oded Har - Even

Fax .: (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.

 

(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:

	  
	 	
Name:

	  
	 	
Title:

	  
	 	  
	 	
SELWAY CAPITAL ACQUISITION CORPORATION

	 	  
	 	
By:

	  
	 	
Name:

	
Yaron Eitan

	 	
Title:

	
Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Management

 

Trust Agreement

  

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EXHIBIT A

 

[Letterhead of Company]

 

[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 _________, 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

 

[Letterhead of Company]

 

[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 ______, 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.

 

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.

 

 

  

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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

 

[Letterhead of Company]

 

[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 ______, 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.

 

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.

 

 

  

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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:

	  

	 	  	  

  

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EXHIBIT D

 

[Letterhead of Company]

 

[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 ______, 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] 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.

 

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.

 

 

  

14

  

 

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:

	  

	 	  	  

  

15

  

 

EXHIBIT E

 

 [Letterhead of Company]

 

[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 ________, 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.

 

	 	
Very truly yours,

	 	  
	 	
SELWAY CAPITAL ACQUISITION CORPORATION

	 	  
	 	
By:

	  
	 	
Name:

	  
	 	
Title:

	  

 

  

16

  

EXHIBIT F

[Letterhead of Company]

[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 _________, 2011 (“Trust Agreement”), the Company hereby requests that you deliver to the Company $_______ of the Property as of the date hereof. The Company needs such funds to settle purchases of its units or callable Series A Shares pursuant to its 10b-5 plan. 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 brokerage account at:

[WIRE INSTRUCTION INFORMATION]

 

	 	
Very truly yours,

	 	  
	 	
SELWAY CAPITAL ACQUISITION CORPORATION

	 	  
	 	
By:

	  
	 	
Name:

	  
	 	
Title:

	  

 

  

17

  

 

EXHIBIT G

 

[Letterhead of Company]

 

[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 ________, 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:

	  

 

  

18Unassociated Document

 

SECURITIES ESCROW AGREEMENT

 

SECURITIES ESCROW AGREEMENT, dated as of __________, 2011 (“Agreement”) by and among Selway Capital Acquisition Corporation, a Delaware corporation (“Company”), Selway Capital Holdings, LLC (the “Initial Shareholder”) and American Stock Transfer & Trust Company, LLC, as escrow agent (the “Escrow Agent”).

 

WHEREAS, the Company has entered into an Underwriting Agreement, dated _________, 2011 (“Underwriting Agreement”) with Rodman & Renshaw, LLC (“Rodman”), as representative  of the underwriters named therein (collectively, the “Underwriters”) in connection with a public offering (the “Public Offering”) by the Company of Units (as hereafter defined), pursuant to which, among other matters, the Underwriters have agreed to purchase up to 3,000,000 units (“Units”) of the Company, each consisting of one Series A Share of the Company, par value $0.0001 per share (the “Series A Shares”), and one Warrant (a “Warrant”). Each Warrant evidences the right of the holder thereof to purchase one share of common stock for $7.50, subject to adjustment, as described in the Warrant Agreement dated as of __________, 2011 by and between the Company and American Stock Transfer & Trust Company as Warrant Agent; and

 

WHEREAS, pursuant to the Placement Warrant Purchase Agreement, dated as of ____________, 2011, among the Company and the Initial Shareholder, the Company has issued 2,200,000 warrants (the “Private Placement Warrants”) to purchase shares of common stock in a private placement that will occur immediately prior to the IPO (the “Private Placement”); and

 

WHEREAS, the Initial Shareholder has agreed, as a condition of the Underwriters’ obligation to purchase the Units pursuant to the Underwriting Agreement and to offer them to the public, to deposit all of the Series C Shares of common stock (the “Insider Shares”) owned by the Initial Shareholder prior to the consummation of the Public Offering and the Private Placement and all of the Private Placement Warrants (collectively “Escrow Securities”; provided, however, that if Rodman does not exercise the over-allotment option in full, the Escrow Securities will equal such lesser amount as remains after the cancellation of shares held in escrow pursuant to Section 3.1), in escrow as hereinafter provided; and

 

WHEREAS, the Company and the Initial Shareholder desire that the Escrow Agent accept the Escrow Shares, in escrow, to be held and disbursed as hereinafter provided.

 

NOW, THEREFORE, IT IS AGREED:

 

1.           Appointment of Escrow Agent.  The Company and the Initial Shareholder hereby appoint the Escrow Agent to act in accordance with and subject to the terms of this Agreement and the Escrow Agent hereby accepts such appointment and agrees to act in accordance with and subject to such terms.

 

2.           Deposit of Escrow Securities.  Prior to the date of the consummation of the Private Placement and the Public Offering, the Initial Shareholder shall deliver to the Escrow Agent certificates representing his or her respective Escrow Securities to be held and disbursed subject to the terms and conditions of this Agreement.  The Initial Shareholder acknowledges and agrees that the certificates representing its Escrow Securities will be legended to reflect the deposit of such Escrow Securities under this Agreement.

 

  

1

  

 

3.           Disbursement of the Escrow Securities.

 

3.1           The Escrow Securities.  The Escrow Agent shall hold (1) the Escrow Securities listed under “Warrant Escrow” on Schedule A until it receives a certificate signed by the Chief Executive Officer or Chief Financial Officer of the Company stating that the Company’s initial Acquisition Transaction (as hereinafter defined) has occurred (the “Warrant Escrow Period”), (2) the Escrow Securities listed under “First Share Escrow” on Schedule A until it receives a certificate signed by the Chief Executive Officer or Chief Financial Officer of the Company stating that 12 months have elapsed from the closing of the initial Acquisition Transaction (the “First Share Escrow Period”) and (3) the Escrow Securities listed under “Second Share Escrow” on Schedule A until it receives a certificate signed by the Chief Executive Officer or Chief Financial Officer of the Company stating that 24 months have elapsed from the closing of the initial Acquisition Transaction (the “Second Share Escrow Period”; the Warrant Escrow Period, First Share Escrow Period and Second Share Escrow Period, each, an “Escrow Period”).  Notwithstanding the foregoing, each Escrow Period shall be extended, as applicable, if the Company has completed an Acquisition Transaction without liquidating the trust account established at the time of the Public Offering, until such trust account has been liquidated as described in the prospectus relating to the Public Offering. Following the termination of an Escrow Period, the Escrow Agent shall, upon written instructions from each of the Initial Shareholder and/or its Permitted Transferees (as defined in Section 4.3 below), disburse the applicable Escrow Securities to the Initial Shareholder and/or such Permitted Transferees; provided however, that if, after the Company consummates an Acquisition Transaction, it (or the surviving entity) subsequently consummates a liquidation, merger, share exchange or if there is a tender offer for the Company’s securities, or other similar transaction which results in all of the shareholders of such entity having the right to exchange their Insider Shares or Warrants for cash, securities or other property, then the Escrow Agent will, upon receipt of a certificate, executed by the Chief Executive Officer or Chief Financial Officer of the Company, in form reasonably acceptable to the Escrow Agent, stating that such transaction is then being consummated, release the Escrow Securities to the Initial Shareholder or its Permitted Transferees immediately prior to the consummation of such transaction so that they can similarly participate; provided further, that if the Escrow Agent is notified by the Company pursuant to Section 6.7 hereof that the Company is being liquidated at any time during the applicable Escrow Period, then the Escrow Agent shall promptly destroy the certificates representing the Escrow Securities; and provided further, that if the Escrow Agent is notified by the Company that Rodman did not exercise its over-allotment option (as further described in the Registration Statement) or exercised it in part, an amount such that the remaining Insider Shares included in the Escrow Securities shall not exceed 20% of the outstanding common stock post-Public Offering (but in no event more than [112,500] Insider Shares) shall be forfeited by the Initial Shareholder and any Permitted Transferee and cancelled by the Company and the Escrow Agent shall promptly destroy the certificates representing such Insider Shares. For purposes of this Agreement, an “Acquisition Transaction” shall mean an acquisition of one or more operating businesses by a merger, stock exchange, asset acquisition, stock purchase or other similar acquisition transaction, or control and pursuant to which holders of Units sold in the Public Offering have been granted redemption rights with respect to such Units.

  

3.2           Company Covenants.  The Company hereby covenants and agrees to (i) cause its officers to act in good faith regarding the release of the Escrow Securities pursuant to Section 3.1, and (ii) to promptly release the Escrow Securities after the end of each Escrow Period, as applicable.

 

3.3           Duties.  The Escrow Agent shall have no further duties hereunder after the disbursement or destruction of the Escrow Securities in accordance with this Section 3.

 

4.           Rights of the Initial Shareholder in Escrow Securities.

 

4.1           Voting Rights as a Shareholder.  Subject to the terms of the Insider Letter described in Section 4.4 hereof and except as herein provided, the Initial Shareholder and each of its affiliates and designees shall retain all of their rights as shareholders of the Company during the applicable Escrow Period, including, without limitation, the right to vote such shares.

 

  

2

  

 

4.2           Dividends and Other Distributions in Respect of the Escrow Securities.  During the applicable Escrow Period, all dividends payable in cash with respect to the Escrow Securities shall be paid to the Initial Shareholder or its Permitted Transferees, but all dividends payable in shares or other non-cash property (“Non-Cash Dividends”) shall be delivered to the Escrow Agent to hold in accordance with the terms hereof.  As used herein, the term “Escrow Securities” shall be deemed to include the Non-Cash Dividends distributed thereon, if any.

 

4.3           Restrictions on Transfer.  During the applicable Escrow Period, no sale, transfer, assignment or other disposition may be made of any or all of the Escrow Securities except (i) by gift to an affiliate or (or a member of the immediate family of the Initial Shareholder’s officers or directors) or to a trust or other entity, the beneficiary of which is the Initial Shareholder or one of its officers, directors (or member of their respective immediate families), (ii) by virtue of the laws of descent and distribution upon death of any Initial Shareholder, or (iii) pursuant to a qualified domestic relations order (such transferees, the “Permitted Transferees”); provided, however, that such permissive transfers may be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of this Agreement and of the Insider Letter signed by the Initial Shareholder and its affiliates and designees transferring the Escrow Securities.  During the applicable Escrow Period, no Initial Shareholder or Permitted Transferee shall pledge or grant a security interest in his, her or its Escrow Securities or grant a security interest in his, her or its rights under this Agreement.

 

4.4           Insider Letters.  Each of the Initial Shareholder and its affiliates and designees has executed a letter agreement with Rodman and the Company, dated as indicated on Schedule A hereto (“Insider Letter”), and which is filed as an exhibit to the Company’s Registration Statement on Form S-1, Registration No. 333-172714 with respect to the Units to be issued in the Public Offering (the “Registration Statement”), respecting the rights and obligations of such Initial Shareholder and its affiliates and designees in certain events, including but not limited to the liquidation of the Company.

 

5.           Concerning the Escrow Agent.

 

5.1           Good Faith Reliance.  The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise of its own best judgment, and 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 Escrow Agent), 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 Escrow Agent to be genuine and to be signed or presented by the proper person or persons.  The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.

 

5.2           Indemnification.  The Escrow Agent shall be indemnified and held harmless by the Company from and against any expenses, including counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which in any way, directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, or the Escrow Securities held by it hereunder, other than expenses or losses arising from the gross negligence or willful misconduct of the Escrow Agent.  Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall notify the other parties hereto in writing.  In the event of the receipt of such notice, the Escrow Agent, in its sole discretion, may commence an action in the nature of interpleader in an appropriate court to determine ownership or disposition of the Escrow Securities or it may deposit the Escrow Securities with the clerk of any appropriate court or it may retain the Escrow Securities pending receipt of a final, non-appealable order of a court having jurisdiction over all of the parties hereto directing to whom and under what circumstances the Escrow Securities are to be disbursed and delivered.  The provisions of this Section 5.2 shall survive in the event the Escrow Agent resigns or is discharged pursuant to Sections 5.5 or 5.6 below.

 

  

3

  

 

5.3           Compensation.  The Escrow Agent shall be entitled to reasonable compensation from the Company for all services rendered by it hereunder, as set forth on Exhibit A hereto.  The Escrow Agent shall also be entitled to reimbursement from the Company for all expenses paid or incurred by it in the administration of its duties hereunder including, but not limited to, all counsel, advisors’ and agents’ fees and disbursements and all taxes or other governmental charges.

 

5.4           Further Assurances.  From time to time on and after the date hereof, the Company and the Initial Shareholder shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.

 

5.5           Resignation.  The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by its giving the other parties hereto written notice and such resignation shall become effective as hereinafter provided.  Such resignation shall become effective at such time that the Escrow Agent shall turn over to a successor escrow agent appointed by the Company and approved by Rodman and the Initial Shareholder or its Permitted Transferees, the Escrow Securities held hereunder.  If no new escrow agent is so appointed within the 60 day period following the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Securities with any court it deems appropriate.

 

5.6           Discharge of Escrow Agent.  The Escrow Agent shall resign and be discharged from its duties as escrow agent hereunder if so requested in writing at any time by the Company and a majority of the Initial Shareholder or its Permitted Transferees, jointly, provided, however, that such resignation shall become effective only upon acceptance of appointment by a successor escrow agent as provided in Section 5.5.

 

5.7           Liability.  Notwithstanding anything herein to the contrary, the Escrow Agent shall not be relieved from liability hereunder for its own gross negligence or its own willful misconduct.

 

6.           Miscellaneous.

 

6.1           Governing Law.  This Agreement shall for all purposes be deemed to be made under and shall be construed in accordance with the laws of the State of New York, without giving effect to any choice-of-law provisions thereof that would compel the application of the substantive laws of any other jurisdiction.  Each of the parties hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York (each, a “New York court”), and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.  Each of the parties hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

 

6.2           Third-Party Beneficiaries.  The Initial Shareholder hereby acknowledges that Rodman is a third-party beneficiary of this Agreement and this Agreement may not be modified or changed without the prior written consent of Rodman.

 

  

4

  

 

6.3           Amendment.  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 Escrow Agent and holders of 65% or more of the Escrow Securities, and with the consent of the holders of 90% of the Series A Shares sold in the Public Offering (the “IPO Shares”), it being the specific intention of the parties hereto that each holder of an IPO Share is and shall be a third-party beneficiary of this Section 6.3 with the same right and power to enforce this Section 6.3 as any of the parties hereto.  For purposes of this Section 6.3, the “consent of the holders of 90% of the IPO Shares” shall mean receipt by the Escrow Agent 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 90% 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 90% 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.

 

6.4           Headings.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation thereof.

 

6.5           Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors and assigns.

 

6.6           Notices.  Any notice or other communication required or which may be given hereunder shall be in writing and either be delivered personally or by private national courier service, or be mailed, certified or registered mail, return receipt requested, postage prepaid, and shall be deemed given when so delivered personally or, if sent by private national courier service, on the next business day after delivery to the courier, or, if mailed, two business days after the date of mailing, as follows:

 

If to the Company, to:

 

Selway Capital Acquisition Corporation

74 Grand Avenue

2nd Floor

Englewood, NJ 07631

Attn: Yaron Eitan, Chief Executive Officer

 

If to the Initial Shareholder or its Permitted Transferees, to:

 

c/o Selway Capital Acquisition Corporation

74 Grand Avenue

2nd Floor

Englewood, NJ 07631

Attn: Selway Capital Holdings, LLC

 

and if to the Escrow Agent, to:

 

American Stock Transfer & Trust Company, LLC

59 Maiden Lane

New York, New York  10038

Attn:    Compliance Department

 

  

5

  

 

A copy of any notice sent hereunder shall be sent to (but which shall not constitute notice):

 

Loeb & Loeb LLP

345 Park Avenue

New York, New York 10154

Attn:    Mitchell S. Nussbaum, Esq.

 

and:

 

Rodman & Renshaw, LLC

[Address]

Attn: [Name, Title]

Fax No.: [__]

 

and:

Z.A.G./S&W LLP

1290 Avenue of the Americas

29th Floor

New York, New York 10104 

Attn: Oded Har - Even

Fax  : (212) 660-3001

 

The parties may change the persons and addresses to which the notices or other communications are to be sent by giving written notice to any such change in the manner provided herein for giving notice.

 

6.7           Liquidation of Company.  The Company shall give the Escrow Agent written notification of the liquidation and dissolution of the Company in the event that the Company fails to consummate an Acquisition Transaction within the time period(s) specified in the Registration Statement.

 

- Signature page of the Company immediately follows –

 

  

6

  

 

WITNESS the execution of this Agreement as of the date first above written.

	
SELWAY CAPITAL ACQUISITION CORPORATION

	  
	
By:

	  
	
Name:

	  
	
Title:

	  
	  
	
Initial Shareholder:

	  
	
SELWAY CAPITAL HOLDINGS, LLC

	  
	
By:

	  
	
Name:

	  
	
Title:

	  

 

- Signature page of Escrow Agent immediately follows –

 

Securities Escrow Agreement

 

  

7

  

 

WITNESS the execution of this Agreement as of the date first above written.

	
AMERICAN STOCK TRANSFER

& TRUST COMPANY, LLC, as Escrow Agent

	  
	
By:

	  
	
Name:

	  
	
Title:

	  

 

Securities Escrow Agreement

 

  

8

  

 

SCHEDULE A

	

Warrant Escrow

	 	 	 	 	 	 
	

Name of Initial Shareholder

and Affiliates/Designees

	 	

Number of

Warrants

	 	 	

Warrant

Certificate

Number

	 
	
Selway Capital Holdings, LLC

	 	 	2,200,000	 	 	 	
[_____

	]
	
Total

	 	 	2,200,000	 	 	 	 	 
	  	 	 	 	 	 	 	 	 
	

First Share Escrow

	 	 	 	 	 	 	 	 
	

Name of Initial Shareholder 

and Affiliates/Designees

	 	

Number of

Shares

	 	 	

Stock

Certificate

Number

	 
	
Selway Capital Holdings, LLC

	 	 	431,250	(1)	 	
[_____

	]
	
Total

	 	 	431,250	 	 	 	[_____	] 

	

Second Share Escrow

	 	 	 	 	 	 
	

Name of Initial Shareholder

and Affiliates/Designees

	 	

Number of

Shares

	 	 	

Stock

Certificate

Number

	 
	
Selway Capital Holdings, LLC

	 	 	431,250	(1)	 	 	
[_____

	]
	
Total

	 	 	431,250	 	 	 	[_____	] 

 

(1) Up to 56,250 shares (an aggregate of 112,500 shares) subject to forfeiture pursuant to Section 3.1 of this Agreement.

 

  

9

  

 

EXHIBIT A

 

Escrow Agent Fees

	

Description

	 	

Amount ($)

	  	 	  
	
Fee for acting as Escrow Agent

	 	
[_____]

 

  

10

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