STOCK ESCROW AGREEMENT
This
Stock Escrow Agreement (this “Agreement”)
is
made and entered into as of March ___, 2006, by and among Continental Stock
Transfer and Trust Company, a New York corporation (“Escrow
Agent”),
Global Technology Industries, Inc., a Delaware corporation (the “Company”),
and
GTI Capital Partners LLC (“Capital
Partners”),
with
reference to the following facts:
A. The
Company has entered into an Underwriting Agreement dated March ___, 2006
(“Underwriting
Agreement”),
with
Xxxxxx Xxxxxx & Co. Inc., acting as representative (“Representative”)
of the
underwriters (collectively, the “Underwriters”),
pursuant to which, among other matters, the Underwriters have agreed to purchase
10,000,000 units (“Units”)
of the
Company. Each Unit consists of one share of the Company’s common stock, par
value $.0001 per share (“Common
Stock”),
and
one Warrant, each Warrant to purchase one share of Common Stock, all as more
fully described in the Company’s final prospectus, dated _________, 2006
(“Prospectus”)
comprising part of the Company’s Registration Statement on Form S-1 (File No.
333 ___) under the Securities Act of 1933, as amended (“Registration
Statement”).
B. In
order
to facilitate the public offering of the Units, Capital Partners has agreed
to
deposit all shares of Common Stock that it owns as of the date hereof (the
“Escrow
Shares”),
in
escrow as hereinafter provided.
C. The
Company and Capital Partners desire that the Escrow Agent accept the Escrow
Shares, in escrow, to be held and disbursed as hereinafter
provided.
NOW,
THEREFORE, with reference to the foregoing facts, the parties agree as follows:
1. Appointment
of Escrow Agent.
The
Company and Capital Partners 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 Shares.
On or
before the effective date of the Registration Statement, Capital Partners shall
deliver to the Escrow Agent a certificate representing its Escrow Shares, to
be
held and disbursed subject to the terms and conditions of this Agreement.
Capital Partners acknowledges that the certificate representing its Escrow
Shares is legended to reflect the deposit of such Escrow Shares under this
Agreement.
3. Disbursement
of the Escrow Shares.
3.1 The
Escrow Agent shall hold the Escrow Shares from the date of delivery until the
Release Date (the “Escrow
Period”).
3.2 For
purposes of this Agreement:
3.2.1 “Business
Combination”
shall
mean a
merger,
capital stock exchange, asset or stock acquisition or other similar business
combination with one or more operating businesses.
3.2.2 “Release
Date”
shall
mean the earliest to occur of: (a) eighteen (18) months following the closing
of
the Business Combination; (b) the Sale Date; and (c) the Trust Account
Liquidation Date.
3.2.3 “Sale
Date”
shall
mean the date that a Stockholder Liquidation Event occurs.
3.2.4 “Stockholder
Liquidation Event”
shall
mean: (a) the merger, consolidation, reorganization or similar transaction
involving the Company (or a successor to the Company) in which the common
stockholders of the Company (or such successor) have the right to exchange
their
shares of Common Stock (or successor securities) for cash, securities or other
property, but excluding a reorganization in which the common stockholders
exchange their shares for shares of a newly formed holding company and have
substantially the same proportionate interests in the holding company that
they
had in the Company (or successor); (b) the liquidation of the Company; or (c)
the sale of all or substantially all of the assets of the Company.
3.2.5 “Trust
Account”
shall
mean a trust
account at XX Xxxxxx Chase NY Bank, maintained by Continental Stock
Transfer & Trust Company, acting as trustee.
3.2.6 “Trust
Account Liquidation Date”
shall
mean the date prior to the completion of a Business Combination that the Trust
Account is liquidated and the funds in the Trust Account are distributed to
the
beneficial owners of the Trust Account.
3.3 Upon
the
Release Date, the Escrow Agent shall disburse to Capital Partners its respective
Escrow Shares to the address on record of Capital Partners or as may otherwise
be directed by Capital Partners in writing.
3.4 The
Company agrees to notify the Escrow Agent in advance of any anticipated
Stockholder Liquidation Event or Trust Account Liquidation Date and upon the
occurrence thereof. The Escrow Agent shall rely upon a certificate (the
“Officer’s Certificate”), executed by the Chief Executive Officer or Chief
Financial Officer of the Company, in form reasonably acceptable to the Escrow
Agent, that certifies that the Release Date has occurred, and shall not be
required to disburse the Escrow Shares unless and until it receives the
Officer’s Certificate.
4. Rights
of Capital Partners in Escrow Shares.
4.1 Rights
as a Stockholder.
Except
as provided in this Section 4 and the Insider Letter (as defined below), Capital
Partners shall retain all of its rights as a stockholder of the Company with
respect to its Escrow Shares during the Escrow Period, including, without
limitation:
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4.1.1 the
right
to vote; and
4.1.2 the
right
to receive dividends and distributions, if any, with cash dividends paid to
Capital Partners and dividends paid in stock or other non-cash property
(“Non-Cash
Dividends”)
delivered to the Escrow Agent to hold in accordance with the terms hereof (and
the term “Escrow
Shares”
shall
be deemed to include the Non-Cash Dividends distributed with respect to any
Escrow Shares held by the Escrow Agent prior to the distribution).
4.2 Restrictions
on Transfer.
During
the Escrow Period, Capital Partners agrees not to sell, transfer or assign
any
or all of its Escrow Shares except to its members (and the Escrow Shares may
subsequently be transferred by such members to their ancestors, descendants
or
spouse
or
to trusts established for the benefit of such persons or the member, or to
affiliated companies);
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 as a stockholder and of the Insider Letter signed
by Capital Partners transferring the Escrow Shares. During the Escrow Period,
Capital Partners agrees that it may not pledge or grant a security interest
in
the Escrow Shares or grant a security interest in its rights under this
Agreement. For purposes of this Agreement, “Insider
Letter”
means
a
letter agreement between Capital Partners, the Representative and the Company
substantially in the form of Exhibit ___ to the Registration Statement setting
forth certain rights and obligations of Capital Partners 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
Company agrees to indemnify and hold the Escrow Agent harmless from and against
any expenses, including counsel fees and disbursements, or losses 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 Shares 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 Shares or it may deposit the Escrow Shares with the clerk of any
appropriate court or it may retain the Escrow Shares 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 Shares 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.
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5.3 Compensation.
The
Escrow Agent shall be entitled to reasonable compensation from the Company
for
all services rendered by it hereunder. 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 Capital Partners
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 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 the Escrow Shares 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 Shares with any court it reasonably 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 the holders
of a majority of the Escrow Shares, 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 conflicts of law principles that would result in the application
of
the substantive laws of another jurisdiction.
6.2 Third-Party
Beneficiaries.
Capital
Partners hereby acknowledges that the Underwriters are third-party beneficiaries
of this Agreement and this Agreement may not be modified or changed without
the
prior written consent of the Representative.
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6.3 Entire
Agreement.
This
Agreement contains the entire agreement of the parties hereto with respect
to
the subject matter hereof and, except as expressly provided herein, may not
be
changed or modified except by an instrument in writing signed by the party
to be charged.
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 be mailed, certified or
registered mail, or by private courier service, return receipt requested,
postage prepaid, and shall be deemed given when so delivered personally or,
if
mailed, two days after the date of mailing, as follows:
If
to the
Company, to:
000
Xxxx
Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
XX 00000
If
to
Capital Partners to:
000
Xxxx
Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
XX 00000
and
if to
the Escrow Agent, to:
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Chairman
A
copy of
any notice sent hereunder shall be sent to:
Xxxxxx
Xxxxxx & Co. Inc.
000
Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxx Xxxxxx
and:
XxXxxxxxx
Will & Xxxxx LLP
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxxx Older, Esq.
and:
Benesch,
Friedlander, Xxxxxx & Aronoff LLP
0000 XX Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Esq.
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Any
party
may change the person and address 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 the 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
a
Business Combination within the time period(s) specified in the
Prospectus.
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WITNESS
the execution of this Agreement as of the date first above written.
| GLOBAL TECHNOLOGY INDUSTRIES, INC. | ||
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| By: | ||
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Name: Xxxxxx X. Xxx |
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| Title: Chief Executive Officer | ||
| CONTINENTAL STOCK TRANSFER & TRUST COMPANY | ||
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| By: | ||
|
Name: |
||
| Title: | ||
| GTI CAPITAL PARTNERS LLC: | ||
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| By: | ||
|
Name: |
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| Title: | ||
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