WARRANT
AGREEMENT
Agreement made as of March __, 2006 between
Global Technology Industries, Inc., a Delaware corporation, with
offices at 375 Park Avenue, Suite 1505, New York, NY 10152 (“
Company ”), and Continental Stock
Transfer & Trust Company, a New York corporation, with offices
at 17 Battery Place, New York, New York 10004 (“
Warrant Agent ”).
WHEREAS, the Company is engaged in a public
offering (“ Public Offering ”)
of Units, (“ Units ”),
consisting of one share of the Company’s common stock, par
value $0.0001 per share (“ Common
Stock ”) and, one warrant, each warrant to
purchase one share of Common Stock, in connection therewith, has
determined to issue and deliver (i) up to 11,500,000 Warrants
(“ Public Warrants ”) to the
public investors, each of such Public Warrants evidencing the right
of the holder thereof to purchase one share of Common Stock for
$6.00, subject to adjustment as described herein, (ii) 416,667
Warrants sold separately and 250,000 Warrants underlying the
250,000 Units (the “ Insider Warrants
” ) to GTI Holdings, LLC in the private placement
which will occur immediately prior to the offering, each of such
Insider Warrants evidencing the right of the holder thereof to
purchase one share of Common Stock for a price of
$6.00, and (iii) an option to purchase up to 500,000
Warrants to Morgan Joseph & Co. Inc. (“ Morgan
Joseph ”) or its designees (“
Representative’s Warrants ”
and, together with the Public Warrants and the Insider
Warrants, the “ Warrants ”),
each such Representative’s Warrant evidencing the right of
the holder thereof to purchase one share of Common Stock for $7.50,
subject to adjustment as described herein; and
WHEREAS, the Company has filed with the
Securities and Exchange Commission a Registration Statement, No.
333-[-] on Form S-1 (“ Registration
Statement ”) for the registration, under the
Securities Act of 1933, as amended (“
Act ”) of, among other securities,
the Warrants and the Common Stock issuable upon exercise of the
Warrants; and
WHEREAS, the Company desires the Warrant Agent
to act on behalf of the Company, and the Warrant Agent is willing
to so act, in connection with the issuance, registration, transfer,
exchange, redemption and exercise of the Warrants; and
WHEREAS, the Company desires to provide for the
form and provisions of the Warrants, the terms upon which they
shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant
Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and
performed which are necessary to make the Warrants, when executed
on behalf of the Company and countersigned by or on behalf of the
Warrant Agent, as provided herein, the valid, binding and legal
obligations of the Company, and to authorize the execution and
delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual
agreements herein contained, the parties hereto agree as
follows:
1.
Appointment of Warrant
Agent . The Company hereby appoints the Warrant Agent to act as
agent for the Company for the Warrants, and the Warrant Agent
hereby accepts such appointment and agrees to perform the same in
accordance with the terms and conditions set forth in this
Agreement.
2.1 Form of Warrant . Each Warrant
shall be issued in registered form only, shall be in substantially
the form of Exhibit A hereto, the provisions of which are
incorporated herein and shall be signed by, or bear the facsimile
signature of, the Chairman of the Board, Chief Executive Officer or
President, and Chief Financial Officer, Secretary or Assistant
Secretary of the Company and shall bear a facsimile of the
Company’s seal. In the event the person whose facsimile
signature has been placed upon any Warrant shall have ceased to
serve in the capacity in which such person signed the Warrant
before such Warrant is issued, it may be issued with the same
effect as if he or she had not ceased to be such at the date of
issuance. All of the Warrants shall initially be represented by one
or more book-entry certificates (each a “ Book
Entry Warrant Certificate ” ).
2.2 Effect of Countersignature .
Unless and until countersigned by the Warrant Agent pursuant to
this Agreement, a Warrant shall be invalid and of no effect and may
not be exercised by the holder thereof.
2.3.1 Warrant Register . The Warrant
Agent shall maintain books (“ Warrant
Register ”), for the registration of original
issuance and the registration of transfer of the Warrants. Upon the
initial issuance of the Warrants, the Warrant Agent shall issue and
register the Warrants in the names of the respective holders
thereof in such denominations and otherwise in accordance with
instructions delivered to the Warrant Agent by the Company. All of
the Warrants shall initially be represented by one or more
Book-Entry Warrant Certificates deposited with The Depository Trust
Company (the “ Depository ” )
and registered in the name of Cede & Co., a nominee of the
Depository. Ownership of beneficial interests in the Warrants shall
be shown on, and the transfer of such ownership shall be effected
through, records maintained by (i) the Depository or its nominee
for each Book-Entry Warrant Certificate, or (ii) institutions that
have accounts with the Depository (such institution, with respect
to a Warrant in its account, a “ Participant
” ).
If the Depository subsequently ceases to make
its book-entry settlement system available for the Warrants, the
Company may instruct the Warrant Agent regarding making other
arrangements for book-entry settlement. In the event that the
Warrants are not eligible for, or it is no longer necessary to have
the Warrants available in, book-entry form, the Warrant Agent shall
provide written instructions to the Depository to deliver to the
Warrant Agent for cancellation each Book-Entry Warrant Certificate,
and the Company shall instruct the Warrant Agent to deliver to the
Depository definitive Warrant Certificates in physical form
evidencing such Warrants. Such definitive Warrant Certificates
shall be in the form annexed hereto as Exhibit A with appropriate
insertions, modifications and omissions, as provided
above.
2.3.2 Registered Holder . Prior to due
presentment for registration of transfer of any Warrant, the
Company and the Warrant Agent may deem and treat the person in
whose name such Warrant shall be registered upon the Warrant
Register (“ Registered Holder
”), as the absolute owner of such Warrant and of each Warrant
represented thereby (notwithstanding any notation of ownership or
other writing on the Warrant Certificate made by anyone other than
the Company or the Warrant Agent), for the purpose of any exercise
thereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the
contrary.
2.4 Detachability of Warrants . The
securities comprising the Units will not be separately transferable
until 90 days after the date hereof unless Morgan Joseph informs
the Company of its decision to allow earlier separate trading, but
in no event will Morgan Joseph allow separate trading of the
securities comprising the Units until the Company files a Current
Report on Form 8-K which includes an audited balance sheet
reflecting the receipt by the Company of the gross proceeds of the
Public Offering including the proceeds received by the Company from
the exercise of the Underwriter’s over-allotment option, if
the over-allotment option is exercised prior to the filing of the
Form 8-K.
2.5 Other Warrants . The
Representative’s Warrants shall have the same terms and be in
the same form as the Public Warrants except with respect to the
Warrant Price as set forth below in Section 3.1. The Insider
Warrants shall have the same terms and be in the same form as the
Public Warrants, except that, in consideration of the restrictions
on transfer of the Insider Warrants, they are exercisable on a
cashless basis as provided in Section 3.3.1 hereof.
3.
Terms and Exercise of
Warrants
3.1 Warrant Price . Each Public
Warrant and Insider Warrant shall, when countersigned by the
Warrant Agent, entitle the registered holder thereof, subject to
the provisions of such Public Warrant or Insider Warrant and of
this Warrant Agreement, to purchase from the Company the number of
shares of Common Stock stated therein, at the price of $6.00 per
whole share, subject to the adjustments provided in Section 4
hereof and in the last sentence of this Section 3.1. Each
Representative’s Warrant shall, when countersigned by the
Warrant Agent, entitle the registered holder thereof, subject to
the provision of such Representative’s Warrant and of this
Warrant Agreement, to purchase from the Company the number of
shares of Common Stock stated therein, at the price of $7.50 per
whole share, subject to the adjustments provided in Section 4
hereof. The term “ Warrant Price
” as used in this Warrant Agreement refers to the price per
share at which Common Stock may be purchased at the time a Warrant
is exercised. The Company in its sole discretion may lower the
Warrant Price at any time prior to the Expiration Date; provided,
however, that the any change in the Warrant Price must apply
equally to all of the Warrants.
3.2 Duration of Warrants . A Warrant
may be exercised only during the period (“
Exercise Period ”) commencing on the
later of the consummation by the Company of a merger, capital stock
exchange, asset acquisition or other similar business combination
(“ Business Combination ”) (as
described more fully in the Company’s Registration Statement)
or __________, 2007, and terminating at 5:00 p.m., New York City
local time on the earlier to occur of (i) __________, 2010 or (ii)
the date fixed for redemption of the Warrants as provided in
Section 6 of this Agreement (“ Expiration
Date ”). Except with respect to the right to
receive the Redemption Price (as set forth in Section 6 hereunder),
each Warrant not exercised on or before the Expiration Date shall
become void, and all rights thereunder and all rights in respect
thereof under this Agreement shall cease at the close of business
on the Expiration Date. The Company in its sole discretion may
extend the duration of the Warrants by delaying the Expiration
Date; provided, however, that any extension of the duration of the
Warrants must apply equally to all of the Warrants.
3.3 Exercise of Warrants .
3.3.1 Payment . A Registered Holder may
exercise a Warrant by delivering, not later than 5:00 P.M., New
York City local time, on any Business Day during the Exercise
Period (the “ Exercise Date ”)
to the Warrant Agent at its corporate trust department (i) the
Warrant Certificate evidencing the Warrants to be exercised, or, in
the case of a Book-Entry Warrant Certificate, the Warrants to be
exercised (the “ Book-Entry Warrants
”) free on the records of the Depository to an account of the
Warrant Agent at the Depository designated for such purpose in
writing by the Warrant Agent to the Depository from time to time,
(ii) an election to purchase the Shares underlying the Warrants to
be exercised (“ Election to Purchase
”), properly completed and executed by the Registered Holder
on the reverse of the Warrant Certificate or, in the case of a
Book-Entry Warrant Certificate, properly delivered by the
Participant in accordance with the Depository’s procedures,
and (iii) the Warrant Price for each Warrant to be exercised in
lawful money of the United States of America by certified or
official bank check or by bank wire transfer in immediately
available funds; provided, however, that with respect to the
Insider Warrants, any holder of Insider Warrants may, in lieu of
payment of the Warrant Price, surrender its Insider Warrants for
that number of shares of Common Stock equal to the quotient
obtained by dividing (x) the product of the number of shares of
Common Stock underlying the surrendered Insider Warrants,
multiplied by the difference between the Fair Market Value (defined
below) and the Warrant Price by (y) the Fair Market Value;
provided, further, that with respect to the Warrants, other than
the Insider Warrants, the Company may require that in lieu of
providing the Warrant Price, the holder of such Warrants will
receive, upon surrender of its Warrants, that number of shares of
Common Stock equal to the quotient obtained by dividing (x) the
product of the number of shares of Common Stock underlying the
surrendered Warrants, multiplied by the difference between the Fair
Market Value and the Warrant Price by (y) the Fair Market Value.
The “Fair Market Value” shall mean the average reported
last sale price of the Common Stock for the 10 trading days ending
on the 3rd trading day prior to (i) the date on which the
notice of redemption is sent to holders of Warrant pursuant to
Section 6 hereof or (ii) in the case of a cashless exercise at the
option of a holder of Insider Warrants, the date on which such
holder delivers an Election to Purchase.
If any of (A) the Warrant Certificate or the
Book-Entry Warrants, (B) the Election to Purchase, or (C) the
Warrant Price therefor, is received by the Warrant Agent after 5:00
P.M., New York City local time, on the specified Exercise Date, the
Warrants will be deemed to be received and exercised on the
Business Day next succeeding the Exercise Date. If the date
specified as the Exercise Date is not a Business Day, the Warrants
will be deemed to be received and exercised on the next succeeding
day that is a Business Day. If the Warrants are received or deemed
to be received after the Expiration Date, the exercise thereof will
be null and void and any funds delivered to the Warrant Agent will
be returned to the Holder or Participant, as the case may be, as
soon as practicable. In no event will interest accrue on funds
deposited with the Warrant Agent in respect of an exercise or
attempted exercise of Warrants. The validity of any exercise of
Warrants will be determined by the Company in its sole discretion
and such determination will be final and binding upon the Holder
and the Warrant Agent. Neither the Company nor the Warrant Agent
shall have any obligation to inform a Holder of the invalidity of
any exercise of Warrants.
The Warrant Agent shall deposit all funds
received by it in payment of the Warrant Price in the account of
the Company maintained with the Warrant Agent for such purpose and
shall advise the Company at the end of each day on which funds for
the exercise of the Warrants are received of the amount so
deposited to its account. The Warrant Agent shall promptly confirm
such telephonic advice to the Company in writing.
(i) The Warrant Agent shall, by 11:00 A.M. on
the Business Day following the Exercise Date of any Warrant, advise
the Company and the transfer agent and registrar in respect of (a)
the shares of Common Stock (the “
Shares ”) issuable upon such exercise
as to the number of Warrants exercised in accordance with the terms
and conditions of this Agreement, (b) the instructions of each
Registered Holder or Participant, as the case may be, with respect
to delivery of the Shares issuable upon such exercise, and the
delivery of definitive Warrant Certificates, as appropriate,
evidencing the balance, if any, of the Warrants remaining after
such exercise, (c) in case of a Book-Entry Warrant Certificate, the
notation that shall be made to the records maintained by the
Depository, its nominee for each Book-Entry Warrant Certificate, or
a Participant, as appropriate, evidencing the balance, if any, of
the Warrants remaining after such exercise and (d) such other
information as the Company or such transfer agent and registrar
shall reasonably require.
(ii) The Company shall, by 5:00 P.M., New York
City local time, on the third Business Day next succeeding the
Exercise Date of any Warrant and the clearance of the funds in
payment of the Warrant Price, execute, issue and deliver to the
Warrant Agent, the Shares to which such Registered Holder or
Participant, as the case may be, is entitled, in fully registered
form, registered in such name or names as may be directed by such
Registered Holder or the Participant, as the case may be. Upon
receipt of such Shares, the Warrant Agent shall, by 5:00 P.M., New
York City local time, on the fifth Business Day next succeeding
such Exercise Date, transmit such Shares to or upon the order of
the Registered Holder or Participant, as the case may
be.
In lieu of delivering physical certificates
representing the Shares issuable upon exercise, provided the
Company’s transfer agent is participating in the Depository
Fast Automated Securities Transfer program, the Company shall use
its reasonable best efforts to cause its transfer agent to
electronically transmit the Shares issuable upon exercise to the
Registered Holder or Participant by crediting the account of
Registered Holder’s prime broker with Depository or of the
Participant through its Deposit Withdrawal Agent Commission system.
The time periods for delivery described in the immediately
preceding paragraph shall apply to the electronic transmittals
described herein. Notwithstanding the foregoing, the Company shall
not be obligated to deliver any securities pursuant to the exercise
of a Warrant unless a registration statement under the Act with
respect to the Common Stock is effective. Warrants may not be
exercised by, or securities issued to, any Registered Holder in any
state in which such exercise would be unlawful.
(iii) The accrual of dividends, if any, on the
Shares issued upon the valid exercise of any Warrant will be
governed by the terms generally applicable to the Shares. From and
after the issuance of such Shares, the former Holder of the
Warrants exercised will be entitled to the benefits generally
available to other holders of Shares and such former Holder’s
right to receive payments of dividends and any other amounts
payable in respect of the Shares shall be governed by, and shall be
subject to, the terms and provisions generally applicable to such
Shares.
(iv) Warrants may be exercised only in whole
numbers of Shares. No fractional shares of Common Stock are to be
issued upon the exercise of the Warrant, but rather the number of
shares of Common Stock to be issued shall be rounded up to the
nearest whole number. If fewer than al
