Item
1.01 Entry into a Material
Definitive Agreement
DOWN
PAYMENT FOR THE ACQUISITION OF
SHARES OF SRICON INFRASTRUCTURE PRIVATE LIMITED
Second
Amendment
to the Share Subscription Cum
Purchase Agreement Dated September 15, 2007, entered into on January 14,
2008
On
January
14, 2007, India Globalization
Capital,
Inc. (“IGC”) entered into a SecondAmendment
to the Share Subscription Cum
Purchase Agreement (“Second 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, as previously
amended by the Amendment to the Share
Subscription Cum Purchase Agreement (“Original Amended
Sricon Subscription Agreement”)
dated December 19,
2007. Pursuant
to the Original Sricon Subscription Agreement, as amended, 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, and the
Original
Amended Sricon Subscription
Agreement was
previously filed on Form 8-K as Exhibit 10.1with
the Securities and Exchange
Commission on December
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 Original 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.
Pursuant
to the Original Amended Sricon Subscription
Agreement, 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 Second 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 Second Amended
Sricon Subscription Agreement,
all terms and conditions of the Original Sricon Subscription
Agreement, as previously
amended,survive and
continue to remain valid and binding on IGC, Sricon and the
Promoters.
Purchase
Price -
Funding
IGC
may elect from time to time to
increase the amount of the Sricon Advance beyond the amount set forth in
the
Original Amended Sricon
Subscription Agreementon
the terms set forth in the Original Amended Sricon Subscription
Agreement, which terms were
described in IGC’s
Form 8-K filedwith the Securities
and Exchange
Commission on December
27, 2007 which
is incorporated herein by
reference. Upon
execution of the Second Amended
Sricon Subscription Agreement, IGC advanced an additional USD $500,000 to
Sricon.
Assignment
The
Second
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. IGC intends
to assign the
Second Amended Sricon Subscription Agreement, along with the other agreements
relating to the acquisition of the Sricon Shares and the Odeon Purchase
Agreement and TBL Subscription Agreement (as defined below), to India
Globalization Capital, Mauritius, Limited (IGC-M), a wholly-owned subsidiary
of
IGC. IGC-M was formed on February 19, 2007 under the laws of
Mauritius as a company that will hold assets in India. The
governments of India and Mauritius have a tax treaty that treats investments
routed through Mauritius favorably, including favorable treatment of corporate,
dividend and capital gain taxes. India also has a Bilateral
Investment Protection Agreement with Mauritius (June 2000). The assignment
is
intended to allow IGC to obtain the benefits of these tax and trade
agreements.
ACQUISITION
OF SHARES OF TECHNI BHARARTI LIMITED
Share
Purchase Agreement
On
September 21, 2007, India Globalization Capital, Inc. (“IGC”) entered into a
Share Purchase Agreement (the “Odeon Purchase Agreement”) with Odeon
Limited (“Odeon”), pursuant to which IGC will acquire (the “Odeon Acquisition”)
5,000,000 convertible preference shares (the “TBL Preference Shares”)
of Techni Bhararti Limited (“TBL”) from Odeon. The Odeon Purchase Agreement
was previously filed as Exhibit
10.3 to IGC’s
Form
8-K filed with
the Securities and Exchange
Commission on September 27, 2007, which 8-K summarized
the terms of the
Odeon Purchase Agreement and is incorporated by reference
herein.
On
January 8, 2008, IGC entered into a
letter agreement (the “Odeon Amendment”) with Odeon and TBL amending the terms
of the Odeon Purchase Agreement. The following description
summarizes the material provisions of the Odeon Amendment. Stockholders
should read carefully the Odeon Amendment, which is attached as Exhibit 10.2
to
this Current Report on Form 8-K.
Closing
of the Odeon Acquisition
The
Odeon
Amendment extends the deadline of the closing of the Odeon Acquisition from
January 31, 2008 to April 30, 2008.
Conditions
to Closing of the Odeon Acquisition
The
Odeon
Amendment provides that the closing of the Odeon Acquisition will be conditioned
on the repayment by TBL of certain obligations (the “SAAG Obligations”) owed by
TBL to SAAG RR Infra Limited (“SAAG”). IGC and TBL agree that
the proceeds from the purchase by IGC of 7,150,000 newly-issued
equity shares and 1,250,000 newly-issued 6% compulsorily convertible shares
directly from TBL September 21, 2007 pursuant to a Share Subscription
Agreement dated as of September 16, 2007 ,as amended between IGC, TBL and
certain individuals (the “TBL Subscription Agreement”) be used by TBL to repay
the SAAG Obligations.
Validity
of Original Sricon Subscription
Agreement
Except
as modified by the Odeon Amendment,
all terms and conditions of the
OdeonAgreement,
as previously amended,survive and continue
to remain valid and
binding on IGCand
Odeon.
As
previously disclosed, India
Globalization Capital,
Inc.
(the “Company”)has
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”). The details of the Bridge
Offering, including the initial
closing of the issuance of $5,300,000 aggregate principal amount of Notes
on
December 24, 2007, were
previously disclosed in Item 2.03 of a Current Report on Form 8-K filed by the Company
on December
27,
2007 (the “December 27 Form
8-K”), and are incorporated
into this Item 2.03 as if fully set forth herein. On
January
10, 2008,
the
Company consummated a subsequent
closing with 14 investors (the “Additional Investors”) in the aggregate
principal amount of $1,975,000 under the
same terms and
conditions described in Item 2.03 of the December 27 Form 8-K. As
provided in the Note Purchase Agreement filed as Exhibit 10.3 to the December
27
Form 8-K (the “the Note Purchase Agreement”), as additional
consideration
for the investment in the Notes, the Company shall issue an aggregate of
204,953
shares of Common Stock to the Additional 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 Company’s 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
the Company 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 Company’s stockholders or
otherwise not consummated, the Company will have no obligation to
issue shares of its Common Stock to the Investors. For the purposes
of the Note Purchase Agreement a “Business Combination” means the acquisition by
the Company 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 the Company’s net assets at the time of such acquisition; provided, that
any acquisition of multiple operating businesses shall occur contemporaneously
with one another.
Item
3.02
Unregistered
Sales of Equity Securities