Item
1.01 Entry into a Material
Definitive Agreement
DOWN
PAYMENT FOR THE ACQUISITION OF
SHARES OF SRICON INFRASTRUCTURE PRIVATE LIMITED
Amendment
to the Share Subscription Cum
Purchase Agreement Dated September 15, 2007, entered into on December 19,
2007
On
December 19, 2007, India
Globalization Capital, Inc. (“IGC”) entered into an Amendment to the Share
Subscription Cum Purchase Agreement (“Amended Sricon Subscription
Agreement”) dated September 15, 2007 with Sricon Infrastructure Private
Limited (“Sricon”) and certain individuals (collectively, the
“Promoters”). The Amended Sricon Subscription Agreement amends the
Share Subscription Cum Purchase Agreement (the “Original Sricon Subscription
Agreement”) dated September 15, 2007 by and among IGC, Sricon and the
Promoters. Pursuant to the Original Sricon Subscription Agreement,
IGC will acquire (the “Original Sricon Acquisition”) 4,041,676
newly-issued
equity shares (the “Original Sricon Shares”) directly from Sricon and
351,840 equity shares from Mr. R. L. Srivastava (the “Sale Shares” and
collectively with the Original Sricon Shares, the “Sricon Shares”) so that at
the conclusion of the transactions contemplated by the Original Sricon
Subscription Agreement, IGC will own approximately 63%
of the outstanding
equity shares of Sricon. The Original Sricon Subscription Agreement was
previously filed on Form 8-K as Exhibit 10.4 with the Securities and Exchange
Commission on September 27, 2007.
In
order to secure the transaction and
provide Sricon with a refundable down payment in a form consistent with
Indian
law, in advance of completing the Original Sricon Acquisition, IGC,
pursuant to the Amended Sricon Subscription Agreement, agreed to provide
a
deposit in the form of an advance (“Sricon Advance”) towards the
purchase of shares. The money is refundable by Sricon in the
event certain conditions precedent, which include a vote by IGC
shareholders for the consummation of the transaction, are not
met. In the event that conditions precedent are met, including
an affirmative vote by the IGC shareholders in favor of the consummation
of the
transaction, the Sricon Advance would be applied towards the purchase of
shares
of Sricon.
IGC
agreed to advance INR 128,342,500
(approximately USD $3,250,000 at current exchange rates) to Sricon towards
the
purchase of 503,620 (the “Sricon Portion of
Subscription Shares”) of the 4,041,676 Original Sricon Shares
(constituting approximately
14.66%
of the post issued paid up share capital of Sricon) offered pursuant to
the
Original Sricon Subscription Agreement.
The
following description summarizes the material amendments made by the Amended
Sricon Subscription Agreement to the Original Sricon Subscription
Agreement. The description below is qualified in its entirety by the text
of the form of the Amended Sricon Subscription Agreement filed as an exhibit
to
this Current Report on Form 8-K as Exhibit 10.1 and is incorporated into
this
Current Report on Form 8-K by reference.
Validity
of Original Sricon Subscription Agreement
Except
as
modified by the Amended Sricon Subscription Agreement, all terms and conditions
of the Original Sricon Subscription Agreement survive and continue to remain
valid and binding on IGC, Sricon and the Promoters.
Purchase
Price - Funding
At
the
Sricon Completion (defined below), IGC will
advance Sricon INR 128,342,500 (approximately
USD
$3,250,
000 at current exchange rates) in
cash.
IGC
anticipates using the
proceeds of the secured debt offering described in Item 2.03 below to fund the Sricon Advance
and the TBL Advance (as defined
below). The information set forth under Item 2.03 of this
Current Report on Form 8-K is hereby incorporated by reference into this
Item
1.01.
Completion
of Funding the Sricon Advance
The
completion of the advance towards the Sricon Portion of Subscription
Shares (the “Sricon Completion”) will take place on a date mutually
agreed upon by IGC, Sricon and the Promoters (the “Sricon Completion
Date”).
Conditions
Precedent
to the Funding of the Sricon Advance
The
obligations of IGC to fund the Sricon Advance is subject to the
fulfillment of certain conditions prior to or simultaneously upon the Sricon
Completion Date, including the following:
• The
representations and warranties as provided in the Original Sricon Subscription
Agreement remaining true and correct as of the Sricon Completion;
•
Receipt of approvals of the Sricon Board of Directors of the Amended Sricon Subscription
Agreement
and the transactions contemplated thereunder;
•
The performance and completion of certain agreements, obligations
and
conditions to be performed by Sricon and the Promoters under the Amended
Sricon
Subscription Agreement;
•
Amendment of Sricon’s Memorandum and Articles of
Association;
•
The appointment of one nominee of IGC as a member of the Board of
Director of Sricon by the shareholders of Sricon effective upon the Sricon
Completion;
• Sricon
opening a new bank account with Citibank N.A;
• Written
evidence from the Promoters that Mr. Ram Mukunda has become an authorized
signatory on certain existing Sricon bank accounts subject to certain
undertakings by Sricon. Mr. Mukunda is to be the sole signatory on
the Citibank N.A. bank account subject to certain undertakings by
Sricon;
•
The Promoters and Sricon providing written confirmation that (i)
they
have given written instructions to the banks with whom certain
existing Sricon bank accounts are maintained for automatic transfer into
the
Citibank N.A. bank account, every month, effective April 1, 2008, of 20%
of the
receivables paid into certain existing Sricon bank accounts,
including without limitation, the receivables due to Sricon pursuant to
the
Joint Venture Agreement entered into by Sricon with Hindustan Steel Works
Constructions Limited; (ii) no lender or third party has any rights over
funds
lying to the credit of the existing Sricon bank accounts; (iii) Sricon
has not
entered into any agreement whereby any party other than IGC has priority
over
the funds in the certain existing Sricon bank accounts or the Citibank
N.A. bank
account; and
• Sricon
obtaining a certificate from an independent accountant indicating the fair
value
of the Sricon Portion of Subscription Shares .
Funding
Events
Upon funding, certain provisions
of the
Shareholders Agreement (the “Sricon Shareholders Agreement”) dated September 15,
2007 by and among IGC, Sricon and Promoters, as previously filed on Form
8-K as
Exhibit 10.5 with the Securities and Exchange Commission on September 27,
2007,
relating to, among other things, voting, Board meetings and action without
a
meeting, committees, veto rights of IGC and dividends, shall become effective
and the Promoters and Sricon shall be bound by the terms contained
therein.
The
Amended Sricon Subscription
Agreement provides for certain covenants of the Promoters and Sricon to
take effect upon funding, including the following:
• The
Promoters and Sricon shall not propose any resolution at a Sricon shareholders
meeting if such resolution is not approved by the IGC nominated Director
at a
meeting of the Sricon Board of Directors;
• Until
the Sricon Completion, the Promoters shall not transfer all or any part
of their
shareholdings in Sricon to any person;
• Approval
of the director
nominated by IGC shall be required for passing any resolution which will
have
the effect of changing the signatories to the existing bank accounts and
the
Citibank N.A. account and for opening any account with any bank;
• Where
a resolution for
allotment of shares in favor of IGC is proposed by an IGC nominated Sricon
Director, the Promoters (if they are also Sricon Directors) shall cause
the
Directors nominated by them to vote in favor of the resolution;
• The
Sricon shareholders
shall vote to approve an amendment to the Sricon Articles of Association;
and
• The
Promoters shall deliver to IGC certain documents creating a pledge (the
“Pledge”) on 53.88% (1,579,711 shares) of Sricon’s existing share
capital in favor of IGC to ensure that the Promoters will fulfill their
obligations under the Amended Sricon Subscription Agreement.
Completion
Events
Upon
fulfillment of all the conditions precedent set forth in the Original Sricon
Subscription Agreement, the parties shall proceed to complete the acquisition
of
the Sricon Portion of Subscription Shares.
At
the
Sricon Completion, Sricon shall issue to IGC the Sricon Portion of Subscription
Shares.
If
one or
more conditions precedent set forth in the Original Sricon Subscription
Agreement are not satisfied and cured by Sricon within seven (7) days of
receipt
of a notice of non-compliance from IGC, then the Promoters shall cause
Sricon to
refund the Sricon Advance . If Sricon fails to repay the Sricon
Advance within the seven (7) days of receipt of the notice of
non-compliance from IGC, then IGC shall instruct Citibank N.A. to repatriate
funds in such bank account to IGC.
If
funds
in the Citibank N.A. bank account are less than the Sricon Advance , the
Promoters will cause Sricon to fund the Citibank N.A. bank account with
such
amount by which the funds lying in the Citibank N.A. bank account fall
short of
the Sricon Advance . If the Promoters cause Sricon to fail to fund the
shortfall
in the Sricon Advance , or upon the Promoters or Sricon committing a breach
of
their obligations under the Amended Sricon Subscription Agreement and failing
to
cure the breach within seven (7) days of being notified by IGC, then IGC
shall
have the right to exercise the Pledge and be registered as a “member” in respect
of the 53.88% (1,579,711 shares) of Sricon’s existing share
capital. If the Promoters or Sricon is in breach of their respective
obligations as set forth in this paragraph and/or IGC is unable to
exercise the Pledge or be registered as a “member” in respect of the 53.88%
(1,579,711 shares) of Sricon’s existing share capital, then IGC shall be
entitled to receive the Sricon Portion of Subscription Shares and to
subscribe to such number of additional shares in Sricon as will bring IGC’s
shareholding to 51% of the paid up share capital of Sricon on such date
(the
“Additional Sricon Subscription Shares”). Upon IGC subscribing for
the Additional Sricon Subscription Shares, IGC shall be
entitled to appoint a majority of the Sricon Board of Directors.
In
the
event IGC exercises the Pledge or IGC subscribes for the Additional Sricon
Subscription Shares, the provisions of the Sricon Shareholders
Agreement shall be triggered. However, IGC shall not be subject to any
restrictions on transfer of the Sricon Subscription Shares, the
Additional Sricon Subscription Shares or the shares obtained through
enforcing the Pledge.
Board
Representation
IGC
shall be entitled to appoint one director on the Sricon Board of Directors
after
funding of the Sricon Advance. Such director shall not be removed by
Sricon or the Promoters unless required by law. IGC may remove from
office such appointed director. If IGC desires that such director
nominated or appointed by IGC cease to be a director of IGC, the Promoters
shall
vote to ensure such removal and appointment of a new director nominated
by IGC
to replace the director so removed.
If
IGC or
any of its affiliates cease to be a shareholder of IGC, then all rights
of IGC
as a shareholder shall automatically terminate and IGC shall cause its
nominee
Directors to resign from the Sricon Board of Directors.
Resolution
of Disputes
The
parties to the Amended Sricon Subscription Agreement agree to resolve disputes
amicably. If such a dispute is not resolved within sixty (60) days of
the dispute date, the parties shall refer, in writing, the dispute, not
later
than thirty (30) days after expiry of the aforesaid period, to Mr. Ram
Mukunda
and R.L. Srivastava for resolution. If such dispute is not resolved
within thirty (30) days of the written referral, any party shall be entitled
to
serve notice to the other parties of its right to refer the dispute to
binding
arbitration in Mumbai, India.
Assignment
The
Amended Sricon Subscription Agreement including the pledge of Promoter
Shares
may be assigned to an affiliate of IGC without the consent of Sricon or
its
Promoters.
DOWN
PAYMENT FOR THE ACQUISITION OF
SHARES OF TECHNI BHARATHI LIMITED
Amendment
to the Share Subscription
Agreement Dated September 16, 2007, entered into on December 21,
2007
On
December 21, 2007, India
Globalization Capital, Inc. (“IGC”) entered into an Amendment to the Share
Subscription Agreement (“Amended TBL Subscription Agreement”) dated
September 16, 2007 with Techni Bharathi Limited (“TBL”) and certain individuals
(collectively, the “Promoters”). The Amended TBL Subscription
Agreement amends the Share Subscription Agreement (the “Original TBL
Subscription Agreement”) dated September 16, 2007 by and among IGC, TBL and the
Promoters. Pursuant to the Original TBL Subscription Agreement,
IGC agreed to acquire (the “Original
TBL
Acquisition”) 7,150,000 newly-issued equity shares (the “Original TBL
Shares”) and 1,250,000 newly-issued 6% compulsorily convertible shares directly
from TBL so that at the conclusion of the transactions contemplated by
the
Original TBL Subscription Agreement and by the Share Purchase Agreement
between
IGC and Odeon Limited (“Odeon”) dated September 21, 2007 (the “Odeon Share
Purchase Agreement”) (pursuant to which IGC acquired 5,000,000 convertible
preference shares of TBL from Odeon ) IGC would own approximately
77% of the
outstanding equity shares of TBL on a fully-diluted basis. The
Original TBL Subscription Agreement and the Share Purchase Agreement were
previously filed on Form 8-K as Exhibit 10.1 and 10.3, respectively, with
the
Securities and Exchange Commission on September 27, 2007.
In
order to secure the transaction and
provide TBL with a refundable down payment in a form consistent with Indian
law,
in advance of completing the Original TBL Acquisition, IGC, pursuant
to
the Amended TBL Subscription Agreement, agreed to provide a deposit in
the form
of an advance (“TBL Advance”) towards the purchase of
shares. The money is refundable by TBL in the event certain
conditions precedent, which include a vote by IGC shareholders for the
consummation of the transaction, are not met. In the event that
the conditions precedent are met, including an affirmative vote by the
IGC
shareholders in favor of the consummation of the transaction, the TBL
Advance would be applied towards the purchase of shares of
TBL.
IGC
agreed to advance up to INR
105,598,500 (approximately USD $2,670,000 at current exchange rates) to
TBL
towards the purchase of 2,745,671 (the “TBL Portion of Subscription Shares”) of
the 7,150,000 Original TBL Shares (constituting approximately
39.04% of
the post issued paid up share capital of TBL) offered pursuant to the Original
TBL Subscription Agreement.
The
following description summarizes the material amendments made by the Amended
TBL
Subscription Agreement to the Original TBL Subscription Agreement. The
description below is qualified in its entirety by the text of the form
of the
Amended TBL Subscription Agreement filed as an exhibit to this Current
Report on
Form 8-K as Exhibit 10.2 and is incorporated into this Current Report on
Form
8-K by reference.
Validity
of Original TBL Subscription Agreement
Except
as
modified by the Amended TBL Subscription Agreement, all terms and conditions
of
the Original TBL Subscription Agreement survive and continue to remain
valid and
binding on IGC, TBL and the Promoters.
Purchase
Price - Funding
At
the
TBL Completion (defined below), IGC will advance TBL up to INR 105,598,500 (approximately
USD
$2,600,000 at current exchange rates) in cash.
IGC
anticipates using the
proceeds of the secured debt offering described in Item 2.03 below to fund the Sricon and TBL
Advance. The information set forth under Item 2.03 of this Current
Report on Form 8-K is hereby incorporated by reference into this Item 1.01.
Completion
of Funding the TBL Advance
The
completion of the Advance towards the TBL Portion of Subscription
Shares (the “TBL Completion”) will take place on a date mutually
agreed upon by IGC, TBL and the Promoters (the “TBL Completion
Date”).
Representations
and Warranties
The
Amended TBL Subscription Agreement contains customary representations and
warranties that TBL and the Promoters made to IGC. The Amended
TBL Subscription Agreement also incorporates by reference the Original
TBL
Subscription Agreement which contains customary representations and warranties
that TBL and the Promoters made to IGC and which IGC made to TBL and the
Promoters.
Indemnification
The
Promoters have agreed to hold IGC and its directors, advisors, officers,
employees and agents harmless from or in connection with (i) any inaccuracy
in
or breach by the Promoters or TBL of any representation, warranty, covenant
or
obligations of TBL or the Promoters under the Original TBL Subscription
Agreement; (ii) liability arising out of non-compliance of any obligation
undertaken by TBL or the Promoters; (iii) any litigation, claim or governmental
investigation relating to the business or operations of TBL or the Promoters
prior to the date of execution of the Original TBL Subscription Agreement
or the
Amended TBL Subscription Agreement and as on the TBL Completion Date; and
(iv)
any non-compliance of any applicable law, rules or regulations prior to
the
execution of the Amended TBL Subscription Agreement and on the TBL Completion
Date.
Conditions
Precedent
to the Funding of the TBL Accelerated Acquisition
The
obligation of IGC to fund the TBL Advance is subject to the fulfillment
of
certain conditions prior to or simultaneously upon the TBL Completion Date,
including the following:
• The
representations and warranties as provided in the Original TBL Subscription
Agreement remaining true and correct as of the TBL Completion;
•
Receipt of approvals of the TBL Board of Directors of the Amended
TBL
Subscription Agreement and the transactions contemplated
thereunder;
•
The performance and completion of certain agreements, obligations
and
conditions to be performed by TBL and the Promoters under the Amended TBL
Subscription Agreement;
•
Amendment of TBL’s Articles of Association;
•
The appointment of one nominee of IGC as a member of the Board of
Director of TBL by the shareholders of TBL effective upon the TBL
Completion;
• TBL
opening a new bank account with Citibank N.A;
• Written
evidence from the Promoters that Mr. Ram Mukunda and an IGC nominee have
become,
in addition to the existing signatories, authorized signatories on certain
existing TBL bank accounts subject to certain undertakings by
TBL. Mr. Mukunda and the IGC nominee are to be the exclusive
signatories on the Citibank N.A. account subject to certain undertakings
by
TBL;
•
The Promoters and TBL providing written confirmation that (i) TBL
receivables are free of encumbrances; (ii) no lender or third party has
any
rights over the TBL receivables, (iii) TBL receivables are credited to
the
Citibank N.A. bank account; (iv) TBL receivables are free to be utilized
as
contemplated under the Amended TBL Subscription Agreement; (v) TBL receivables
are not subject to any agreement whereby any party other than IGC has priority
over the receivables; and (vi) except for certain existing TBL bank accounts,
TBL does not maintain any other bank accounts;
• TBL
obtaining a certificate from an independent accountant indicating the fair
value
of the TBL Accelerated Shares;
• Promoters
causing Odeon Limited to postpone the completion date under the Odeon Share
Purchase Agreement from January 31, 2008 to April 30, 2008;
• Promoters
obtaining receipt of certain consents and certificates on behalf of
TBL;
• Promoters
and TBL undertaking to utilize the TBL Purchase Price for certain purposes
as
set forth in the Amended TBL Subscription Agreement and to provide details
at
weekly intervals;
• Promoters
and TBL confirming that except for SAAG RR Infra Limited (“SAAG”) and Odeon, the
TBL Board of Directors does not recognize any other “investors” (as identified
in the TBL Articles of Association) and no persons other than SAAG and
Odeon
have been granted special rights or privileges at meetings of the TBL Board
of
Directors or the TBL shareholders;
• Promoters
causing TBL to recognize IGC as an “investor” under its Articles of
Association;
• Promoters
causing TBL to execute the necessary forms to enable the refund of the
TBL
Advance to IGC if the conditions precedent to the Original TBL
Subscription Agreement are not satisfied;
• Promoters
transferring 10 equity shares of TBL to Mr. Sujjain Talwar or any other
person
nominated by IGC at a price to be determined by IGC;
• Promoters
and TBL obtaining a letter from SAAG confirming that SAAG will not exercise
its
right to subscribe for TBL securities and will release TBL from all claims
upon
receipt of repayment of a certain loan; and
• Promoters
delivering to IGC a non-objection certificate.
Funding
Events
Upon
funding, certain provisions of the Shareholders Agreement (the “TBL Shareholders
Agreement”) dated September 16, 2007 by and among IGC, TBL and Promoters, as
previously filed on Form 8-K as Exhibit 10.2 with the Securities and Exchange
Commission on September 27, 2007, relating to, among other things, voting,
Board
meetings and action without a meeting, committees, veto rights of IGC and
dividends, shall become effective and the Promoters and TBL shall be bound
by
the terms contained therein.
The
Amended TBL Subscription Agreement provides for certain covenants of the
Promoters and TBL to take effect upon funding, including the
following:
• Promoters
and TBL shall not propose any resolution at a TBL shareholders meeting
if such
resolution is not approved by the IGC nominated Director at a meeting of
the TBL
Board of Directors;
• Until
the TBL Completion, the Promoters shall not transfer all or any part of
their
shareholdings in TBL to any person;
• Where
a
resolution for allotment of shares in favor of IGC is proposed by an IGC
nominated TBL Director, the Promoters (if they are also TBL Directors)
shall
cause the Directors nominated by them to vote in favor of the
resolution;
• The
TBL shareholders shall vote to approve an amendment to the TBL Articles
of
Association; and
• The
Promoters shall deliver to IGC certain documents creating a pledge (the
“Pledge”) on 100% (4,287,500 shares) of TBL’s share capital in favor
of IGC to ensure that the Promoters will fulfill their obligations under
the
Amended TBL Subscription Agreement.
Completion
Events
Upon
fulfillment of all the conditions precedent set forth in the Original TBL
Subscription Agreement, the parties shall proceed to complete the acquisition
of
the TBL Portion of Subscription Shares.
At
the
TBL Completion, TBL shall issue to IGC the TBL Portion of
Subscription Shares.
If
one or
more conditions precedent set forth in the Original TBL Subscription Agreement
are not satisfied and cured by TBL within seven (7) days of receipt of
a notice
of non-compliance from IGC, then the Promoters shall cause TBL to refund
the TBL
Advance . If TBL fails to repay the TBL Advance within the
seven (7) days of receipt of the notice of non-compliance from IGC, then
IGC
shall instruct Citibank N.A. to repatriate funds in such bank account to
IGC.
If
funds
in the Citibank N.A. account are less than the TBL Advance , the Promoters
will
cause TBL to fund the Citibank N.A. account with such amount by which the
funds
lying in the TBL escrow account fall short of the TBL Advance . If the
Promoters
cause TBL to fail to fund the shortfall in the TBL Advance , or upon the
Promoters and/or TBL committing a breach of their obligations under the
Amended
TBL Subscription Agreement and failing to cure the breach within seven
(7) days
of being notified by IGC, then IGC shall have the right to exercise the
Pledge
and be registered as a “member” of 100% (4,287,500 shares) of TBL’s
share capital. If the Promoters or TBL is in breach of their
respective obligations as set forth in this paragraph and IGC is
unable to exercise the Pledge or be registered as a “member” of 100%
(4,287,500 shares) of TBL’s share capital, then IGC shall be entitled to receive
the TBL Portion of Subscription Shares and to subscribe to such
number of additional shares in TBL as will bring IGC’s shareholding to 51% of
the paid up share capital of TBL on such date (the “Additional TBL
Subscription Shares”). Upon IGC subscribing for the
Additional TBL Subscription Shares, IGC shall be entitled to appoint
a majority of the TBL Board of Directors.
In
the
event IGC exercises the Pledge or IGC subscribes for the Additional TBL
Subscription Shares, the provisions of the TBL Shareholders Agreement
shall be triggered. However, IGC shall not be subject to any restrictions
on
transfer of the TBL Subscription Shares, the Additional TBL
Subscription Shares or the shares obtained through enforcing the
Pledge.
Board
Representation
IGC
shall be entitled to appoint one director on the TBL Board of Directors
after
funding of the TBL Advance . Such director shall not be removed by
TBL or the Promoters unless required by law in which event, IGC
shall nominate a new director in place of the removed
director. IGC may remove from office such appointed
director. If IGC desires that such director nominated or appointed by
IGC cease to be a director of IGC, the Promoters shall vote to ensure such
removal and appointment of a new director nominated by IGC to replace the
director so removed.
No
resolution of the Board of Directors shall be validly passed except with
the
affirmative vote of the IGC nominated Director.
If
IGC or
any of its affiliates cease to be a shareholder of IGC, then all rights
of IGC
as a shareholder shall automatically terminate and IGC shall cause its
nominee
Directors to resign from the TBL Board of Directors.
Shareholders
Meetings
The
quorum at meetings of the TBL shareholders shall be as required by the
Indian
Companies Act, 1956, provided, the presence of Mr. Sujjain Talwar either
in
person or by proxy is necessary to constitute a quorum.
The
affirmative vote of Mr. Talwar or his proxy shall be necessary to pass
a valid
resolution at any shareholders meeting.
Resolution
of Disputes
The
parties to the Amended TBL Subscription Agreement agree to resolve disputes
amicably. If such a dispute is not resolved within sixty (60) days of
the dispute date, the parties shall refer, in writing, the dispute, not
later
than thirty (30) days after expiry of the aforesaid period, to Mr. Ram
Mukunda
and Mr. Jortin Antony for resolution. If such dispute is not resolved
within thirty (30) days of the written referral, any party shall be entitled
to
serve notice to the other parties of its right to refer the dispute to
binding
arbitration in Mumbai, India.
Assignment
The
Amended TBL Subscription Agreement including the pledge of Promoter Shares
may
be assigned to an affiliate of IGC without the consent of TBL or its
Promoters.
Item 2.03. Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet
Arrangement of a Registrant
To
fund
India Globalization Capital,
Inc.’s, (“IGC”) subscriptions for the Sricon
Advance and the TBL Advance described above in Item
1.01 of this Current Report on Form 8-K, IGC conducted a private placement
offering of secured promissory notes (the “Notes”) for an aggregate principal
amount of up to $7,275,000 (the “Bridge Offering”).
On
December 24, 2007, IGC consummated the initial closing of the Bridge Offering
in
the total principal amount of $5,300,000 to two investors, Dr. Ranga Krishna,
IGC’s Chairman of the Board (“ Dr. Krishna”), and Oliveira Capital, LLC
(“Oliveira” and, together with Dr. Krishna, the “Initial
Investors”). IGC expects to consummate a second closing for the
Bridge Offering in early January, 2008 with certain investors (the “Second
Investors”) (the Initial Investors and, together with the Second Investors, the
“Investors”), although no assurances can be made that the remaining amount of
the Bridge Offering will be consummated.
Each
Note
bears interest at a rate equal to 5% per annum from the date of issuance
of the
Note until paid in full on the Maturity Date (defined below). Each
Note is payable in full on the earlier of ten (10) business days following
the
consummation of a Business Combination (defined as the acquisition by IGC
or any
of its affiliates, whether by merger, capital stock exchange, asset or
stock
acquisition or other similar type of transaction or a combination of any
of the
foregoing, of one or more operating businesses with its or their primary
operations in India having collectively, a fair market value of at least
80% of
IGC’s net assets at the time of such acquisition) or twelve (12) months from
the
date of issuance of the Note (the “Maturity Date”). IGC can
pre-pay the Note at any time without penalty or premium. Except in
the event of the consummation of a Business Combination, each Investor
shall not
be entitled to repayment of its respective Note out of the trust account
holding
the proceeds of IGC’s initial public offering and each Investor irrevocably and
unconditionally waives any right, title or interest in or to any payment
out of
such trust account.
Each
Note
is secured pursuant to a Pledge Agreement (the “Pledge Agreement”), by and among
IGC and the Investors (named as Secured Parties therein) effective as of
December 24, 2007, under which IGC grants liens, on a pro rata basis to
the
Investors, in shares of the capital stock of IGC’s wholly owned subsidiary,
India Globalization Capital – Mauritius (“IGC-M), which is the assignee of IGC’s
acquisition agreements relating to certain proposed business
combinations with Sricon, TBL and Chiranjjeevi Wind Energy Limited.
The
Notes
are not convertible into IGC Common Stock (the “Common Stock”) or other
securities. However, under the Note Purchase Agreement (the “Note
Purchase Agreement”), effective as of December 24, 2007, by and among IGC and the Investors
(named as
Lenders therein), as additional consideration for the investment in the
Notes,
IGC agrees to issue up to 754,953 shares of Common Stock to the
Investors (of which 550,000 shares may be issued to the Initial Investors)
on a
pro rata basis within the (10) business days following the consummation
of a
Business Combination that is approved by a majority of the IGC stockholders.
Regardless of whether each of the Notes have been timely paid-in-full,
each
Investor shall be entitled to the issuance of the shares of Common Stock
should
IGC enter into a Business Combination within twelve (12) months of the
effective
date of each of the respective Notes. If the Business Combination is
not approved by a majority of the IGC stockholders or otherwise not
consummated, IGC will have no obligation to issue shares of its
Common Stock to the Investors.
Between
the effective date and the Maturity Date (as defined in each respective
Note),
IGC shall cause IGC-M to abstain from issuing any shares of its capital
stock to
any party other than IGC (the “Prohibited Issuance”). If any such
Prohibited Issuance is made by IGC-M during such period, in addition to
any
other rights or remedies available to each Investor under the Note Purchase
Agreement, the Pledge Agreement, or otherwise at law or in equity, each
Investor
may at its option and by written notice delivered to IGC within ten (10)
days
after such Prohibited Issuance, obtain payment in full of all amounts then
owed
to such Investor under its respective Note.
IGC
has
also granted registration rights to the Investors pursuant to which the
Investors will have the right to have their shares of Common Stock registered
with the Securities and Exchange Commission following their issuance. On
December 24, 2007, the Initial Investors entered into letter agreements
(the
“Dr. Ranga Krishna Letter Agreement” and the “Oliveira Capital, LLC Letter
Agreement”, respectively) with IGC pursuant to which the Common Stock, issuable
upon consummation of a Business Combination, may be registered on registration
statements filed pursuant to certain previously executed registration rights
agreements with the Initial Investors. Investors in any subsequent closing
will
enter a new Registration Rights Agreement (the “Registration Rights Agreement”)
pursuant to which they will receive customary demand and piggyback registration
rights, as further described in the Registration Rights Agreement attached
hereto as an exhibit.
Dr.
Krishna has also agreed to a nine-month lock up on any shares of Common
Stock
that are issued to him as described above (the “Lock Up Letter
Agreement”).
The
description above summarizes the material terms of the Note Purchase Agreement,
Note, Registration Rights Agreement, Pledge Agreement, Lock Up Letter Agreement,
Dr. Ranga Krishna Letter Agreement and Oliveira Capital, LLC Letter
Agreement. The description above is qualified in its entirety by the
text of the forms of the Note Purchase Agreement, Note, Registration Rights
Agreement, Pledge Agreement, Lock Up Letter Agreement, Dr. Ranga Krishna
Letter
Agreement and the Oliveira Capital, LLC Letter Agreement filed as exhibits
to
this Current Report on Form 8-K as Exhibits 10.3, 10.4, 10.5, 10.6, 10.7,
10.8
and 10.9, respectively, and are incorporated into this Current Report on
Form
8-K by reference.
The
securities sold in this transaction have not been registered under the
Securities Act of 1933, as amended (the "Act") and may not be offered or
sold in
the United States in the absence of an effective registration statement
or
exemption from the registration requirements under the Act. IGC
believes that the issuance of the foregoing securities was exempt from
registration under Section 4(2) of the Act as transactions not involving
a
public offering.
Item
3.02. Unregistered Sales of Equity Securities
The
information set forth under Item 2.03 of this Current Report on Form 8-K
is
hereby incorporated by reference into this Item 3.02.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits
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10.1
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Form
of Amendment to the Share Subscription Cum Purchase Agreement
Dated
September 15, 2007, entered into on December 19, 2007 by and
among India
Globalization Capital, Inc., Sricon Infrastructure Private Limited
and the
persons named as Promoters therein.
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10.2
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Form
of Amendment to the Share Subscription Agreement Dated September
16, 2007,
entered into on December 21, 2007 by and among India Globalization
Capital, Inc., Techni Bharathi Limited and the persons named
as Promoters
therein.
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10.3
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Note
Purchase Agreement, effective as of December 24, 2007, by and
among India Globalization
Capital,
Inc.and
the persons named as Lenders therein.
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10.4
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Form
of India Globalization
Capital, Inc. Promissory Note.
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10.5
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Form
of Registration Rights Agreement by and among India Globalization
Capital, Inc.
and the personsnamed
as Investors
therein.
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10.6
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Form
of Pledge Agreement, effective as of December 24, 2007, by and
among India
Globalization Capital, Inc. and the persons named
as Secured Parties therein.
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10.7
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Form
of Lock up Letter Agreement, dated December 24, 2007 by and between
India Globalization
Capital,
Inc. and
Dr. Ranga Krishna.
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10.8
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Form
of Letter Agreement, dated
December 24, 2007, with Dr. Ranga Krishna.
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10.9
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Form
of Letter Agreement, dated
December 24, 2007, with Oliveira Capital,
LLC.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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INDIA
GLOBALIZATION CAPITAL,
INC.
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President
and Chief Executive
Officer
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Exhibit
Index
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10.1
|
Form
of Amendment to the Share Subscription Cum Purchase Agreement
Dated
September 15, 2007, entered into on December 19, 2007 by and
among India
Globalization Capital, Inc., Sricon Infrastructure Private
Limited and the
persons named as Promoters therein.
|
|
10.2
|
Form
of Amendment to the Share Subscription Agreement Dated September
16, 2007,
entered into on December 21, 2007 by and among India Globalization
Capital, Inc., Techni Bharathi Limited and the persons named
as Promoters
therein.
|
|
10.3
|
Note
Purchase Agreement, effective as of December 24, 2007, by and
among India Globalization
Capital,
Inc.and
the persons named as Lenders therein.
|
|
10.4
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Form
of India Globalization
Capital, Inc. Promissory Note.
|
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10.5
|
Form
of Registration Rights Agreement by and among India Globalization
Capital, Inc.
and the personsnamed
as Investors
therein.
|
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10.6
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Form
of Pledge Agreement, effective as of December 24, 2007, by
and among India
Globalization Capital, Inc. and the persons named
as Secured Parties therein.
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10.7
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Form
of Lock up Letter Agreement, dated December 24, 2007 by and
between India Globalization
Capital,
Inc. and
Dr. Ranga Krishna.
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10.8
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Form
of Letter Agreement, dated
December 24, 2007, with Dr. Ranga Krishna.
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10.9
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Form
of Letter Agreement, dated
December 24, 2007, with Oliveira Capital,
LLC.
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