INVESTMENT MANAGEMENT TRUST AGREEMENT

 

 

 

This Agreement (this “Agreement”) is made as of _________, 2006 by and among Global Technology Industries, Inc. (the “Company”), Continental Stock Transfer & Trust Company (the “Trustee”) and Morgan Joseph & Co. Inc. (“Morgan Joseph”).

 

WHEREAS, the Company has entered into an Underwriting Agreement with Morgan Joseph acting as the representative of the underwriters (collectively, the “Underwriters”), pursuant to which, among other matters, the Underwriters have agreed to purchase from the Company, and effect a public offering (the “IPO”) of, 10,000,000 Units (“Units”), each Unit consisting of one share of the Company’s common stock, par value $.0001 per share (“Common Stock”), and one warrant (“Warrant”), each Warrant to purchase one share of Common Stock all as more fully described in the Company’s final Prospectus comprising part of the Company’s Registration Statement on Form S-1 (File No. 333-132505) under the Securities Act of 1933, as amended (“Registration Statement”);

 

WHEREAS, the Company has completed a private placement pursuant to which GTI Holdings, LLC, which is the parent holding company of Global Technology Investments, LLC and is owned by certain of the Company’s officers and directors, purchased (i) an aggregate of 250,000 Units (“Private Placement Units”) for an aggregate of $2,000,000 (the “Private Placement”) and (ii) 416,667 additional Warrants (“Private Placement Warrants”) at a price of $1.20 per Warrant or $500,000 in the aggregate (sold separately and not in combination with the Common Stock in the form of the Private Placement Units), which Private Placement Units and Private Placement Warrants shall be substantially identical to the Units and Warrants issued in the IPO, except that the Private Placement Units, and their underlying shares of Common Stock and Warrants, and the Private Placement Warrants shall not initially be registered under the Securities Act of 1933, as amended;

 

WHEREAS, the Registration Statement has been declared effective as of the date hereof by the Securities and Exchange Commission (“Effective Date”);

 

WHEREAS, as described in the Registration Statement, funds (the “Property”) constituting a portion of the proceeds of the IPO and the Private Placement will be delivered to the Trustee to be deposited and held in a trust account for the benefit of the Company and the holders of the Common Stock (the “Public Stockholders,” and collectively with the Company, the “Beneficiaries”) issued in the IPO as part of the Units (such shares, excluding shares of Common Stock issued upon exercise of Warrants issued in the IPO, the “IPO Shares”); 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 (“Trust Account”) established by the Trustee at a branch of JP Morgan Chase Bank NA selected by the Trustee;

 

(b)  Manage, supervise and administer the Trust Account subject to the terms and conditions set forth herein;

 

(c)  In a timely manner, upon the written instruction of the Company, invest and reinvest the Property in (i) money market funds meeting certain conditions under Rule 2a-7 (or any successor rule) promulgated under the Investment Company Act of 1940 as determined by the Company or (ii) securities issued or guaranteed by the United States, selected by the Company;

 

(d)  Collect and receive, when due, all principal and income arising from the Property, which shall become part of the “Property”;

 

(e)  Notify the Company 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;

 

(h)  Render to the Company and to Morgan Joseph, and to such other persons as the Company may from time to time instruct, monthly written statements of the activities of and amounts in the Trust Account reflecting all receipts and disbursements of the Trust Account;

 

(i)  Upon written instructions from the Company, deliver to the Company, on a quarterly basis, from the Property in the Trust Account, an amount equal to the taxes payable by the Company, if any, relating to interest earned on the Property;

 

(j)  Upon receipt of a letter (a “Termination Letter”), in a form substantially similar to that attached hereto as either Exhibit A or Exhibit B, signed on behalf of the Company by its Chief Executive Officer or Chairman of the Board and affirmed by a majority of its Board of Directors, comply with the instructions set forth in the letter regarding the liquidation of the Trust Account, including distribution of the Property in the Trust Account only as directed in the Termination Letter and the other documents referred to therein; and

 

(k)  If the Trustee shall not have received a Termination Letter on or prior to the Distribution Date, promptly following the Distribution Date the Trustee shall liquidate the Trust Account and distribute the Property in the Trust Account as part of the Company's plan of dissolution and liquidation approved by the Company's stockholders in accordance with the procedures set forth in the Termination Letter attached as Exhibit B to the Public Stockholders as of a record date established by the Trustee, which record date shall be within ten days of the liquidation date, or as soon thereafter as is practicable. For purposes of this Agreement, the “Distribution Date” shall mean _______ ___, 2007 [18 months from the Effective Date] or, if on or prior to such date the Trustee has received a certification from the Company substantially in the form of Exhibit C, the date that is two years from the Effective Date.

 

2.  Agreements and Covenants of the Company. The Company hereby agrees and covenants to:

 

(a)  Give all instructions to the Trustee hereunder in writing, signed by an Authorized Individual. The “Authorized Individuals” shall be those individuals from time to time designated in writing to the Trustee by the Company as “Authorized Officers,” provided that each such individual must be an executive officer or Chairman of the Board of the Company. The initial Authorized Individuals are identified in Exhibit D to this Agreement. In addition, except with respect to its duties under Section 1(j) 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 any one of the persons authorized above to give written instructions, provided that the Company shall promptly confirm such instructions in writing;

 

(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, however, 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 Company may participate in such action with its own counsel;

 

(c)  Pay the Trustee an initial acceptance fee of $1,000 and an annual fee of $3,000 (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 on the Effective Date and thereafter yearly 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) of this Agreement (it being expressly understood that the Property shall not be used to make any payments to the Trustee under such paragraph);

 

(d)  In connection with any vote of the Company’s stockholders regarding a Business Combination (as defined in the Certificate of Incorporation of the Company), provide to the Trustee an affidavit or certificate of a firm regularly engaged in the business of soliciting proxies and tabulating stockholder votes (which firm may be the Trustee) verifying the number of votes of the Company’s stockholders for and against such Business Combination.

 

(e)      In connection with any vote of the Company's stockholders regarding a plan of dissolution and liquidation, provide to the Trustee an affidavit or certificate of a firm regularly engaged in the business of tabulating stockholder votes (which firm may be the Trustee) verifying the vote of the Company's stockholders regarding such plan of dissolution and liquidation.

 

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 of this Agreement 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 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) of this Agreement;

 

(d)  Refund any depreciation in principal of any Property;

 

(e)  Assume that the authority of any Authorized Officer designated by the Company to give instructions hereunder shall not be continuing unless provided otherwise in such designation, or unless the Company 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 Business Combination consummated by the Company or any other action taken by the Company is as contemplated by the Registration Statement; or

 

(h)  Subject to the requirements of Section 1(i) of this Agreement, pay any taxes on behalf of the Trust Account to any governmental entity or taxing authority.

 

4.  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 if the Company does not locate a successor trustee within 90 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

 

(b)  At such time that the Trustee has completed the liquidation of the Trust Account in accordance with the provisions of Section 1(j) or Section 1(k) of this Agreement, and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Section 2(b) of this Agreement.

 

5.  General Provisions.

 

(a)  The Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth in this Section 5 with respect to funds transferred from the Trust Account. Upon receipt of written instructions, the Trustee will confirm such instructions with an Authorized Individual at an Authorized Telephone Number listed on the attached Exhibit D. 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 conflict of laws. 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 may be made without the prior written consent of Morgan Joseph. As to any claim, cross-claim or counterclaim in any way relating to this Agreement, each party waives the right to trial by jury.

 

(d)  The parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York for purposes of resolving any disputes hereunder.

 

(e)  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:	Continental Stock Transfer & Trust Company 17 Battery Place New York, New York 10004 Attn: Steven G. Nelson, Chairman Fax No.: (212) 509-5150
if to the Company, to:	Global Technology Industries, Inc. 375 Park Avenue, Suite 1505 New York, NY Attn: Robert Kay Fax No.: 212 ###-###-####
in either case with a copy to:	Morgan Joseph & Co. Inc. 600 Fifth Avenue, 19th Floor New York, New York 10020 Attn: Michael Powell Fax No.: (212) 218-3719
and	Benesch, Friedlander, Coplan & Aronoff LLP 2300 BP Tower 200 Public Square Cleveland, OH 44114 Attn: Douglas Haas Fax No.: (216) 363-4588
	McDermott Will & Emery LLP 340 Madison Avenue New York, NY 10017 Attn: Stephen E. Older, Esq. Fax No.: (212) 547-5444

 

(f)  This Agreement may not be assigned by the Trustee without the prior written consent of the Company and Morgan Joseph.

 

(g)  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.

 

(h)  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.

 

 

IN WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement as of the date first written above.

 

	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee
	By:
		Name: Steven G. Nelson
		Title: Chairman

 

	GLOBAL TECHNOLOGY INDUSTRIES, INC.
	By:
		Name: Robert B. Kay
		Title: Chief Executive Officer

 

	MORGAN JOSEPH & CO. INC.
	as representative of the underwriters
	By:
		Name: R. Michael Powell
		Title: Managing Director

 

 

 

[Insert date]

 

Continental Stock Transfer

& Trust Company

17 Battery Place

New York, New York 10004

Attn: Steven G. Nelson

 

Re:

Trust Account No. [     ] Termination Letter

 

Gentlemen:

 

Reference is made to that certain Investment Management Trust Agreement between Global Technology Industries, Inc. (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”) dated as of _____________, 2006 (the “Trust Agreement”). Capitalized terms used in this letter shall have the meanings ascribed to them in the Trust Agreement unless otherwise defined in this letter.

 

Pursuant to Section 1(j) of the Trust Agreement, the Company hereby advises you that it has entered into a definitive agreement to consummate a Business Combination with _________. The Company anticipates that the Business Combination will be consummated on or about [insert date]. The Company shall notify you at least 48 hours in advance of the actual date of the consummation of the Business Combination (the “Consummation Date”).

 

In accordance with paragraph B of Article Sixth of the Certificate of Incorporation of the Company, the Business Combination has been approved by the stockholders of the Company and by the Public Stockholders holding a majority of the IPO Shares, and Public Stockholders holding less than 20% of the IPO Shares have voted against the Business Combination and given notice of exercise of their conversion rights described in paragraph C of Article Sixth of the Certificate of Incorporation of the Company. Pursuant to Section 2(d) of the Trust Agreement, we are providing you with a certificate of ________________, which verifies the number of votes of the Company’s stockholders for and against the Business Combination.

 

On the Consummation Date (a) counsel for the Company shall deliver to you written notification that the Business Combination has been consummated, and (b) the Company shall deliver to you written instructions with respect to the transfer of the funds held in the Trust Account (the “Instruction Letter”). You are hereby directed and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the counsel's letter and the Instruction Letter, in accordance with the terms of the Instruction Letter. In addition, on the Consummation date, you are hereby directed and authorized to transfer $_________, the contingent underwriting discount, held in the Trust Account directly to Morgan Joseph. If 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 shall direct 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 the funds in the Trust Account pursuant to the terms hereof, the Trust Agreement shall be terminated.

 

If the proposed Business Combination 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 you shall reinvest the funds held in the Trust Account as provided in the Trust Agreement on the business day immediately following the Consummation Date as set forth in the notice.

 

The undersigned directors constitute a majority of the Board of Directors of the Company as of the date of this letter.

 

	Very truly yours,
	GLOBAL TECHNOLOGY INDUSTRIES, INC.
	By:
		Name:
		Title:

 

 

 

[Insert date]

 

Continental Stock Transfer

& Trust Company

17 Battery Place

New York, New York 10004

Attn: Steven G. Nelson

 

Re:

Trust Account No. [     ] Termination Letter

 

Gentlemen:

 

Reference is made to that certain Investment Management Trust Agreement between Global Technology Industries, Inc. (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”) dated as of _____________, 2006 (the “Trust Agreement”). Capitalized terms used in this letter shall have the meanings ascribed to them in the Trust Agreement unless otherwise defined in this letter.

 

Pursuant to Section 1(j) of the Trust Agreement, the Company hereby advises you that the Board of Directors of the Company has voted to dissolve and liquidate the Company. Attached hereto is a copy of the minutes of the meeting of the Board of Directors and the stockholders of the Company relating thereto, certified by the Secretary of the Company as true and correct and in full force and effect.

 

In accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate the Trust Account as part of the Company's plan of dissolution and liquidation to the Public Stockholders. In connection with this liquidation, you are hereby authorized to establish a record date for the purposes of determining the Public Stockholders of record entitled to receive their pro rata share of the Trust Account. The record date shall be within ten days of the liquidation date, or as soon thereafter as is practicable.

 

You shall notify the Company in writing as to when all of the funds in the Trust Account will be available for immediate transfer (“Transfer Date”) in accordance with the terms of the Trust Agreement. You shall commence distribution of such funds in accordance with the terms of the Trust Agreement and the Amended and Restated Certificate of Incorporation of the Company and you shall oversee the distribution of the funds. Upon the payment of all the funds in the Trust Account, the Trust Agreement shall be terminated.

 

The undersigned directors constitute a majority of the Board of Directors of the Company as of the date of this letter.

 

 

 

 

 

[Insert date]

 

Continental Stock Transfer

& Trust Company

17 Battery Place

New York, New York 10004

Attn: Steven G. Nelson

 

Re:

Trust Account No. [     ] -Extension of Distribution Date

 

Gentlemen:

 

Reference is made to that certain Investment Management Trust Agreement between Global Technology Industries, Inc. (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”) dated as of _____________, 2006 (the “Trust Agreement”). Capitalized terms used in this letter shall have the meanings ascribed to them in the Trust Agreement unless otherwise defined in this letter.

 

The Company hereby advises you that it has entered into a letter of intent, an agreement in principle or a definitive agreement to complete a Business Combination, a copy of which is enclosed. As a result, the Distribution Date has been extended to _____________, 2008, the second anniversary of the Effective Date.

 

 

AUTHORIZED INDIVIDUAL(S) FOR TELEPHONE CALL BACK	AUTHORIZED TELEPHONE NUMBER(S)
Company:
Robert B. Kay	(212) 755-9100
Trustee:
Continental Stock Transfer & Trust Company 17 Battery Place New York, New York 10004 Attn: Steven G. Nelson	(212) 845-3200