WARRANT AGREEMENT
Agreement
made as of March __, 2006 between Global Technology Industries, Inc., a Delaware
corporation, with offices at 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000
(“Company”),
and
Continental
Stock Transfer & Trust Company,
a New
York corporation, with offices at 00 Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
(“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
Xxxxxx Xxxxxx & Co. Inc. (“Xxxxxx
Xxxxxx”)
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. Warrants.
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 Registration.
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.
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2.4 Detachability
of Warrants.
The
securities comprising the Units will not be separately transferable until 90
days after the date hereof unless Xxxxxx Xxxxxx informs the Company of its
decision to allow earlier separate trading, but in no event xxxx Xxxxxx Xxxxxx
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.
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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.
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(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 all of the Warrants evidenced by a Warrant
Certificate are exercised, a new Warrant Certificate for the number of
unexercised Warrants remaining shall be executed by the Company and
countersigned by the Warrant Agent as provided in Section 2 hereof, and
delivered to the holder of this Warrant Certificate at the address specified
on
the books of the Warrant Agent or as otherwise specified by such Registered
Holder. If fewer than all the Warrants evidenced by a Book-Entry Warrant
Certificate are exercised, a notation 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 of the Warrants remaining
after such exercise.
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(v)
The
Company shall not be required to pay any stamp or other tax or governmental
charge required to be paid in connection with any transfer involved in the
issue
of the Shares upon the exercise of Warrants; and in the event that any such
transfer is involved, the Company shall not be required to issue or deliver
any
Shares until such tax or other charge shall have been paid or it has been
established to the Company’s satisfaction that no such tax or other charge is
due.
3.3.2 Issuance
of Certificates.
As soon
as practicable after the exercise of any Warrant and the clearance of the
funds
in payment of the Warrant Price, the Company shall issue to the registered
holder of such Warrant a certificate or certificates for the number of full
shares of Common Stock to which he is entitled, registered in such name or
names
as may be directed by him, her or it, and if such Warrant shall not have
been
exercised in full, a new countersigned Warrant for the number of shares as
to
which such Warrant shall not have been exercised. 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,
subject
to the Company’s satisfying its obligations under Section 7.4 to use its best
efforts. In the event that a registration statement with respect to the Common
Stock underlying the Warrants is not effective under the Act, or because
such
exercise would be unlawful with respect to a registered holder in any state,
the
holder of such Warrant shall not be entitled to exercise such Warrant and
such
Warrant may have no value and expire worthless. In no event will the Company
be
required to net cash settle the warrant exercise. Warrants may not be exercised
by, or securities issued to, any registered holder in any state in which
such
exercise would be unlawful. The shares of common stock issuable upon exercise
of
Insiders’ Warrants shall be unregistered shares. In the event that a
registration statement is not effective for the exercised Warrants, the
purchaser of a unit containing such Warrant will have paid the full purchase
price for the unit solely for the shares included in such
unit.
3.3.3 Valid
Issuance.
All
shares of Common Stock issued upon the proper exercise of a Warrant in
conformity with this Agreement shall be validly issued, fully paid and
nonassessable.
3.3.4 Date
of Issuance.
Each
person in whose name any such certificate for shares of Common Stock is issued
shall for all purposes be deemed to have become the holder of record of such
shares on the date on which the Warrant was surrendered and payment of the
Warrant Price was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is a date
when the stock transfer books of the Company are closed, such person shall
be
deemed to have become the holder of such shares at the close of business on
the
next succeeding date on which the stock transfer books are open.
4. Adjustments.
4.1 Stock
Dividends - Split-Ups.
If
after the date hereof, and subject to the provisions of Section 4.6 below,
the
number of outstanding shares of Common Stock is increased by a stock dividend
payable in shares of Common Stock, or by a split-up of shares of Common Stock,
or other similar event, then, on the effective date of such stock dividend,
split-up or similar event, the number of shares of Common Stock issuable on
exercise of each Warrant shall be increased in proportion to such increase
in
outstanding shares of Common Stock.
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4.2 Aggregation
of Shares.
If
after the date hereof, and subject to the provisions of Section 4.6, the number
of outstanding shares of Common Stock is decreased by a consolidation,
combination, reverse stock split or reclassification of shares of Common Stock
or other similar event, then, on the effective date of such consolidation,
combination, reverse stock split, reclassification or similar event, the number
of shares of Common Stock issuable on exercise of each Warrant shall be
decreased in proportion to such decrease in outstanding shares of Common
Stock.
4.3 Adjustments
in Exercise Price.
Whenever the number of shares of Common Stock purchasable upon the exercise
of
the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant
Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price
immediately prior to such adjustment by a fraction (x) the numerator of which
shall be the number of shares of Common Stock purchasable upon the exercise
of
the Warrants immediately prior to such adjustment, and (y) the denominator
of
which shall be the number of shares of Common Stock so purchasable immediately
thereafter.
4.4 Replacement
of Securities upon Reorganization, etc.
In case
of any reclassification or reorganization of the outstanding shares of Common
Stock (other than a change covered by Section 4.1 or 4.2 hereof or that
solely affects the par value of such shares of Common Stock), or in the case
of
any merger or consolidation of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the assets or other property
of
the Company as an entirety or substantially as an entirety in connection with
which the Company is dissolved, the Warrant holders shall thereafter have the
right to purchase and receive, upon the basis and upon the terms and conditions
specified in the Warrants and in lieu of the shares of Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise
of
the rights represented thereby, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or transfer, that the Warrant holder would have received if such
Warrant holder had exercised his, her or its Warrant(s) immediately prior to
such event; and if any reclassification also results in a change in shares
of
Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made
pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions of
this
Section 4.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other
transfers.
4.5 Notices
of Changes in Warrant.
Upon
every adjustment of the Warrant Price or the number of shares issuable upon
exercise of a Warrant, the Company shall give written notice thereof to the
Warrant Agent, which notice shall state the Warrant Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of a Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. Upon the occurrence of any event specified in
Sections 4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall
give written notice to the Warrant holder, at the last address set forth for
such holder in the warrant register, of the record date or the effective date
of
the event. Failure to give such notice, or any defect therein, shall not affect
the legality or validity of such event.
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4.6 No
Fractional Shares.
Notwithstanding any provision contained in this Warrant Agreement to the
contrary, the Company shall not issue fractional shares upon exercise of
Warrants. If, by reason of any adjustment made pursuant to this Section 4,
the
holder of any Warrant would be entitled, upon the exercise of such Warrant,
to
receive a fractional interest in a share, the Company shall, upon such exercise,
round up or down to the nearest whole number the number of the shares of Common
Stock to be issued to the Warrant holder.
4.7 Form
of Warrant.
The
form of Warrant need not be changed because of any adjustment pursuant to this
Section 4, and Warrants issued after such adjustment may state the same Warrant
Price and the same number of shares as is stated in the Warrants initially
issued pursuant to this Agreement. However, the Company may at any time in
its
sole discretion make any change in the form of Warrant that the Company may
deem
appropriate and that does not affect the substance thereof, and any Warrant
thereafter issued or countersigned, whether in exchange or substitution for
an
outstanding Warrant or otherwise, may be in the form as so changed.
5. Transfer
and Exchange of Warrants.
5.1 Registration
of Transfer.
The
Warrant Agent shall register the transfer, from time to time, of any outstanding
Warrant upon the Warrant Register, upon surrender of such Warrant for transfer,
properly endorsed with signatures properly guaranteed and accompanied by
appropriate instructions for transfer. Upon any such transfer, a new Warrant
representing an equal aggregate number of Warrants shall be issued and the
old
Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled
shall
be delivered by the Warrant Agent to the Company from time to time upon
request.
5.2 Procedure
for Surrender of Warrants.
Warrants may be surrendered to the Warrant Agent, together with a written
request for exchange or transfer, and thereupon the Warrant Agent shall issue
in
exchange therefor one or more new Warrants as requested by the registered holder
of the Warrants so surrendered, representing an equal aggregate number of
Warrants; provided, however, that except as otherwise provided herein or in
any
Book-Entry Warrant Certificate, each Book-Entry Warrant Certificate may be
transferred only in whole and only to the Depository, to another nominee of
the
Depository, to a successor depository, or to a nominee of a successor
depository; provided further, however, that in the event that a Warrant
surrendered for transfer bears a restrictive legend, the Warrant Agent shall
not
cancel such Warrant and issue new Warrants in exchange therefor until the
Warrant Agent has received an opinion of counsel for the Company stating that
such transfer may be made and indicating whether the new Warrants must also
bear
a restrictive legend. Upon any such registration of transfer, the Company shall
execute, and the Warrant Agent shall countersign and deliver, in the name of
the
designated transferee a new Warrant Certificate or Warrant Certificates of
any
authorized denomination evidencing in the aggregate a like number of unexercised
Warrants.
5.3 Fractional
Warrants.
The
Warrant Agent shall not be required to effect any registration of transfer
or
exchange which will result in the issuance of a warrant certificate for a
fraction of a warrant.
5.4 Service
Charges.
No
service charge shall be made for any exchange or registration of transfer of
Warrants.
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5.5 Warrant
Execution and Countersignature.
The
Warrant Agent is hereby authorized to countersign and to deliver, in accordance
with the terms of this Agreement, the Warrants required to be issued pursuant
to
the provisions of this Section 5, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrants duly executed on
behalf of the Company for such purpose.
6. Redemption.
6.1 Redemption.
Subject
to Section 6.4 hereof, not less than all of the outstanding Warrants may be
redeemed, at the option of the Company, at any time after they become
exercisable and prior to their expiration, at the office of the Warrant Agent,
upon the notice referred to in Section 6.2, at the price of $.01 per Warrant
(“Redemption
Price”),
provided that the last sales price of the Common Stock has been at least $11.50
per share, on each of twenty (20) trading days within any thirty (30)
trading day period ending on the third business day prior to the date on which
notice of redemption is given. The provisions of this Section 6.1 may not
be modified, amended or deleted without the prior written consent of Xxxxxx
Xxxxxx.
6.2 Date
Fixed for, and Notice of, Redemption.
In the
event the Company shall elect to redeem all of the Warrants, the Company shall
fix a date for the redemption. Notice of redemption shall be mailed by first
class mail, postage prepaid, by the Company not less than 30 days prior to
the date fixed for redemption to the registered holders of the Warrants to
be
redeemed at their last addresses as they shall appear on the registration books.
Any notice mailed in the manner herein provided shall be conclusively presumed
to have been duly given whether or not the registered holder received such
notice.
6.3 Exercise
After Notice of Redemption.
The
Warrants may be exercised in accordance with Section 3 of this Agreement at
any
time after notice of redemption shall have been given by the Company pursuant
to
Section 6.2 hereof and prior to the time and date fixed for redemption. On
and
after the redemption date, the record holder of the Warrants shall have no
further rights except to receive, upon surrender of the Warrants, the Redemption
Price.
6.4 Redemption
of Purchase Option.
Notwithstanding anything to the contrary contained herein or in that certain
Unit Purchase Option, dated as of March , 2005 (the "Unit Purchase
Option"), if the Company shall elect to redeem all of the Warrants,
(i) Xxxxxx Xxxxxx’x option to purchase up to five hundred thousand (500,000)
Units (as described in more detail in the Unit Purchase Option), if not earlier
exercised in full, shall be automatically exercised, on a cashless basis as
described in Section 2.3 thereof, immediately prior to the Redemption Date,
and
(ii) each Warrant that is part of a Unit issued thereunder upon such automatic
conversion shall be redeemed by the Company as part of such redemption for
the
Redemption Price.
7. Other
Provisions Relating to Rights of Holders of Warrants.
7.1 No
Rights as Stockholder.
A
Warrant does not entitle the registered holder thereof to any of the rights
of a
stockholder of the Company, including, without limitation, the right to receive
dividends, or other distributions, exercise any preemptive rights to vote or
to
consent or to receive notice as stockholders in respect of the meetings of
stockholders or the election of directors of the Company or any other
matter.
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7.2 Lost,
Stolen, Mutilated, or Destroyed Warrants.
If any
Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
Agent may on such terms as to indemnity or otherwise as they may in their
discretion impose (which shall, in the case of a mutilated Warrant, include
the
surrender thereof), issue a new Warrant of like denomination, tenor, and date
as
the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant
shall
constitute a substitute contractual obligation of the Company, whether or not
the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any
time
enforceable by anyone.
7.3 Reservation
of Common Stock.
The
Company shall at all times reserve and keep available a number of its authorized
but unissued shares of Common Stock that will be sufficient to permit the
exercise in full of all outstanding Warrants issued pursuant to this
Agreement.
7.4 Registration
of Common Stock.
The
Company agrees that prior to the commencement of the Exercise Period, it shall
file with the Securities and Exchange Commission a post-effective amendment
to
the Registration Statement, or a new registration statement, for the
registration, under the Act, of, and it shall take such action as is necessary
to qualify for sale, in those states in which the Warrants were initially
offered by the Company, the Common Stock issuable upon exercise of the Warrants.
In either case, the Company will use its best efforts to cause the same to
become effective and to maintain the effectiveness of such registration
statement until the expiration of the Warrants in accordance with the provisions
of this Agreement (except in connection with a going private transaction).
The
provisions of this Section 7.4 may not be modified, amended or deleted
without the prior written consent of Xxxxxx Xxxxxx.
8. Concerning
the Warrant Agent and Other Matters.
8.1 Payment
of Taxes.
The
Company will from time to time promptly pay all taxes and charges that may
be
imposed upon the Company or the Warrant Agent in respect of the issuance or
delivery of shares of Common Stock upon the exercise of Warrants, but the
Company shall not be obligated to pay any transfer taxes in respect of the
Warrants or such shares.
8.2 Resignation,
Consolidation, or Merger of Warrant Agent.
8.2.1 Appointment
of Successor Warrant Agent.
The
Warrant Agent, or any successor to it hereafter appointed, may resign its duties
and be discharged from all further duties and liabilities hereunder after giving
sixty (60) days’ notice in writing to the Company. If the office of the Warrant
Agent becomes vacant by resignation or incapacity to act or otherwise, the
Company shall appoint in writing a successor Warrant Agent in place of the
Warrant Agent. If the Company shall fail to make such appointment within a
period of 30 days after it has been notified in writing of such resignation
or
incapacity by the Warrant Agent or by the holder of the Warrant (who shall,
with
such notice, submit his Warrant for inspection by the Company), then the holder
of any Warrant may apply to the Supreme Court of the State of New York for
the
County of New York for the appointment of a successor Warrant Agent at the
Company’s cost. Any successor Warrant Agent, whether appointed by the Company or
by such court, shall be a corporation organized and existing under the laws
of
the State of New York, in good standing and having its principal office in
the
Borough of Manhattan, City and State of New York, and authorized under such
laws
to exercise corporate trust powers and be subject to supervision or examination
by federal or state authority. After appointment, any successor Warrant Agent
shall be vested with all the authority, powers, rights, immunities, duties,
and
obligations of its predecessor Warrant Agent with like effect as if originally
named as Warrant Agent hereunder, without any further act or deed; but if for
any reason it becomes necessary or appropriate, the predecessor Warrant Agent
shall execute and deliver, at the expense of the Company, an instrument
transferring to such successor Warrant Agent all the authority, powers, and
rights of such predecessor Warrant Agent hereunder; and upon request of any
successor Warrant Agent the Company shall make, execute, acknowledge, and
deliver any and all instruments in writing for more fully and effectually
vesting in and confirming to such successor Warrant Agent all such authority,
powers, rights, immunities, duties, and obligations.
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8.2.2 Notice
of Successor Warrant Agent.
In the
event a successor Warrant Agent shall be appointed, the Company shall give
notice thereof to the predecessor Warrant Agent and the transfer agent for
the
Common Stock not later than the effective date of any such
appointment.
8.2.3 Merger
or Consolidation of Warrant Agent.
Any
corporation into which the Warrant Agent may be merged or with which it may
be
consolidated or any corporation resulting from any merger or consolidation
to
which the Warrant Agent shall be a party shall be the successor Warrant Agent
under this Agreement without any further act.
8.3 Fees
and Expenses of Warrant Agent.
8.3.1 Remuneration.
The
Company agrees to pay the Warrant Agent reasonable remuneration for its services
as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand
for all expenditures that the Warrant Agent may reasonably incur in the
execution of its duties hereunder.
8.3.2 Further
Assurances.
The
Company agrees to perform, execute, acknowledge, and deliver or cause to be
performed, executed, acknowledged, and delivered all such further and other
acts, instruments, and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing of the provisions of this
Agreement.
8.4 Liability
of Warrant Agent.
8.4.1 Reliance
on Company Statement.
Whenever in the performance of its duties under this Warrant Agreement, the
Warrant Agent shall deem it necessary or desirable that any fact or matter
be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a statement signed by the Chief Executive Officer, President
or
Chairman of the Board of the Company and delivered to the Warrant Agent. The
Warrant Agent may rely upon such statement for any action taken or suffered
in
good faith by it pursuant to the provisions of this Agreement.
8.4.2 Indemnity.
The
Warrant Agent shall be liable hereunder only for its own negligence, willful
misconduct or bad faith. The Company agrees to indemnify the Warrant Agent
and
save it harmless against any and all liabilities, including judgments, costs
and
reasonable counsel fees, for anything done or omitted by the Warrant Agent
in
the execution of this Agreement except as a result of the Warrant Agent’s
negligence, willful misconduct, or bad faith.
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8.4.3 Exclusions.
The
Warrant Agent shall have no responsibility with respect to the validity of
this
Agreement or with respect to the validity or execution of any Warrant (except
its countersignature thereof); nor shall it be responsible for any breach by
the
Company of any covenant or condition contained in this Agreement or in any
Warrant; nor shall it be responsible to make any adjustments required under
the
provisions of Section 4 hereof or be responsible for the manner, method, or
amount of any such adjustment or the ascertaining of the existence of facts
that
would require any such adjustment; nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or reservation
of
any shares of Common Stock to be issued pursuant to this Agreement or any
Warrant or as to whether any shares of Common Stock will when issued be valid
and fully paid and nonassessable.
8.5 Acceptance
of Agency.
The
Warrant Agent hereby accepts the agency established by this Agreement and agrees
to perform the same upon the terms and conditions herein set forth and among
other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all moneys
received by the Warrant Agent for the purchase of shares of the Company’s Common
Stock through the exercise of Warrants.
9. Miscellaneous
Provisions.
9.1 Successors.
All the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Warrant Agent shall bind and inure to the benefit of their respective
successors and assigns.
9.2 Notices.
Any
notice, statement or demand authorized by this Warrant Agreement to be given
or
made by the Warrant Agent or by the holder of any Warrant to or on the Company
shall be sufficiently given when so delivered if by hand or overnight delivery
or if sent by certified mail or private courier service within five days after
deposit of such notice, postage prepaid, addressed (until another address is
filed in writing by the Company with the Warrant Agent), as
follows:
000
Xxxx
Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
XX 00000
Attn: President
Any
notice, statement or demand authorized by this Agreement to be given or made
by
the holder of any Warrant or by the Company to or on the Warrant Agent shall
be
sufficiently given when so delivered if by hand or overnight delivery or if
sent
by certified mail or private courier service within five days after deposit
of
such notice, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company), as follows:
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
XX 00000
Attn: Compliance
Department
with
a
copy in each case to:
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Benesch,
Friedlander, Xxxxxx & Xxxxxxx LLP
0000
XX
Xxxxx
000
Xxxxxx Xxxxxx
Attn: Xxxxxxx
Xxxx, Esq.
and
XxXxxxxxx
Will & Xxxxx LLP
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxxx
Older, Esq.
and
Xxxxxx
Xxxxxx & Co. Inc.
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxxx
Xxxxxx
9.3 Applicable
law.
The
validity, interpretation, and performance of this Agreement and of the Warrants
shall be governed in all respects by the laws of the State of New York, without
giving effect to conflict of laws. The Company 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,
and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The Company hereby waives any objection to such exclusive jurisdiction and
that
such courts represent an inconvenience forum. Any such process or summons to
be
served upon the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 9.2 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon
the
Company in any action, proceeding or claim.
9.4 Persons
Having Rights under this Agreement.
Nothing
in this Agreement expressed and nothing that may be implied from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the parties hereto and the registered
holders of the Warrants and, for the purposes of Sections 2.5, 6.1, 6.4, 7.4
and
9.2 hereof, Xxxxxx Xxxxxx, any right, remedy, or claim under or by reason of
this Warrant Agreement or of any covenant, condition, stipulation, promise,
or
agreement hereof. Xxxxxx Xxxxxx shall be deemed to be a third-party beneficiary
of this Agreement with respect to Sections 2.5, 6.1, 6.4, 7.4 and 9.2
hereof. All covenants, conditions, stipulations, promises, and agreements
contained in this Warrant Agreement shall be for the sole and exclusive benefit
of the parties hereto (and Xxxxxx Xxxxxx with respect to the Sections 2.5,
6.1,
6.4, 7.4 and 9.2 hereof) and their successors and assigns and of the registered
holders of the Warrants.
9.5 Examination
of the Warrant Agreement.
A copy
of this Agreement shall be available at all reasonable times at the office
of
the Warrant Agent in the Borough of Manhattan, City and State of New York,
for
inspection by the registered holder of any Warrant. The Warrant Agent may
require any such holder to submit his Warrant for inspection by it.
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9.6 Counterparts.
This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
9.7 Effect
of Headings.
The
Section headings herein are for convenience only and are not part of this
Warrant Agreement and shall not affect the interpretation thereof.
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IN
WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as
of the day and year first above written.
|
Attest:
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| By: | |||
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| Name: Xxxxxx
X. Xxx Title: President |
|
Attest:
CONTINENTAL STOCK TRANSFER & TRUST
COMPANY
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| By: | |||
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| Name: Title: |
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Exhibit
A
Form
of Warrant
A-1
