ex10-3.htm


    EXHIBIT
      10.3

     

     

    EXECUTION
      VERSION

     

    NOTE
      PURCHASE AGREEMENT

     

    THIS
      NOTE PURCHASE AGREEMENT (the “Agreement”),
      effective as of December 24, 2007, is by and among INDIA GLOBALIZATION CAPITAL,
      INC., a Maryland corporation (the “Company”),
      and each of the other parties who is a signatory hereto (each a “Lender”
      and, collectively “Lenders”).

     

    1. The
      Loan
      Transaction and Closing.

     

    1.1 The
      Loans.  Subject
      to the terms and conditions of this Agreement, Lenders agree to make a loan
      to
      the Company in the aggregate principal amount of up to $7.275 million, to
      be governed by the terms and conditions of, and repaid in accordance with the
      Notes (as hereinafter defined).  The parties hereto agree and accept
      that there is no minimum principal amount of Notes required to be sold hereunder
      in order to consummate any sale of Notes hereunder.

     

    1.2 The
      Notesand
      Pledge
      Agreements.  A
      promissory note executed on the date hereof and delivered to each Lender (each,
      a “Note”
      and, collectively the “Notes”)
      shall evidence the loan made by each Lender to the Company pursuant to this
      Agreement in the amount indicated on Schedule
      1 (each, a “Loan
      Amount”).  In order to secure repayment of the Notes by the
      Company, the Company will enter into a Pledge Agreement with the Lenders (the
      “Pledge
      Agreement”).

     

    1.3 The
      IGC
      Shares.

     

    (a)
      Subject to the terms and conditions of this Agreement, the Company shall also
      issue, as additional consideration, shares of common stock (the “Common
      Stock”) of the Company to each Lender in such amounts as are indicated on
      Schedule
      2 attached hereto (collectively, such shares of Common Stock are referred
      to as, the “IGC
      Shares”), within 10 business days following the consummation of a
      Business Combination (as defined in the Notes) that is approved by the
      affirmative vote (the “Yes
      Vote”) of the holders of a majority of the shares of the Company’s Common
      Stock issued in its initial public offering (the “Public
      Offering”), provided that the holders of 20% or more of the shares of
      Common Stock issued in the Public Offering do not otherwise elect to exercise
      their conversion rights, as such rights are further described in the Company’s
      final prospectus for its Public Offering filed March 3,
      2007.  Regardless of whether the Notes have been timely paid-in-full,
      the Lenders shall be entitled to the issuance of the above shares of Common
      Stock should the Company enter into a Business Combination within one-year
      of
      the effective date of the Notes.  In addition to the foregoing, Ranga
      Krishna (“Krishna”)
      agrees to restrict the transfer of his IGC Shares in accordance with the terms
      and conditions of the Lock-Up Letter (the “Lock-Up
      Letter”) for the period of time following the consummation of a Business
      Combination as is set forth therein.

     

    (b)
      Between the date hereof and the Maturity Date (as defined in each Note), the
      Company shall take all steps necessary to cause its wholly owned subsidiary,
      India Globalization Capital, Mauritius, Limited, a Mauritius Company (“IGC-M”),
      to abstain from issuing any shares of its capital stock (and any other
      securities convertible into such common stock) to any party other than the
      Company.  If any such prohibited issuance is made by IGC-M during such
      period, in addition to any other rights or remedies available to Lenders under
      this Agreement, the Pledge Agreement, or otherwise at law or in equity, each
      Lender may at its option and by written notice delivered to the Company within
      10 days after such prohibited issuance, obtain payment in full of all amounts
      then owed to such Lender under its respective Note, which payment shall when
      made by the Company satisfy in full the Company’s obligations thereunder to such
      Lender.

     

    (c)
      Each Lender acknowledges that if (i) the Business Combination is not approved
      by
      the holders of a majority of the shares of the Company’s Common Stock issued in
      the Public Offering, or (ii) the Business Combination is validly approved by
      the
      shareholders, but the holders of 20% or more of the shares of Common Stock
      issued in the Public Offering elect to exercise their conversion rights, or
      (iii) the date by which a Business Combination must be consummated in accordance
      with the Company’s Amended and Restated Articles of Incorporation passes without
      an extension of such date, such Lender shall not be entitled to receive any
      IGC
      Shares under this Agreement.

     

    1.4 Registration
      Rights.  The
      Company will enter into a Letter Agreement with Krishna (the “Krishna
      Letter
      Agreement”) and with Oliveira (the “Oliveira
      Letter Agreement” and, together with the Krishna Letter Agreement, the
“Letter
      Agreements”), and a Registration Rights Agreement with the remaining
      Lenders (the “Registration
      Rights Agreement”), each on the date hereof, in order to provide for
      registration with the Securities and Exchange Commission (“SEC”)
      of the resale of the IGC Shares under the Securities Act of 1933, as amended
      (the “Securities
      Act”). 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    1.5 Closing.  The
      purchase and sale of the Notes (the “Closing”)
      will take place at the offices of Shulman, Rogers, Gandal, Pordy & Ecker,
      P.A., 11921 Rockville Pike, Suite 300, Rockville, Maryland, at such time as
      the
      parties shall mutually agree.  The Company may issue and sell
      additional promissory notes and shares of Common Stock from time to time in
      such
      amounts and to such persons as the Company may determine, in one or more
      closings (each, a “Subsequent
      Closing”) after the initial Closing (the “Initial
      Closing”).  The Initial Closing and each Subsequent Closing are
      each referred to herein as a “Closing.”  Any
      such issuance and sale shall be upon substantially the same terms and conditions
      as those contained herein.  At each Subsequent Closing, (i) each
      additional Lender shall execute and deliver a counterpart signature page to
      this
      Agreement and the other agreements described in Section 1.6, as applicable,
      and such additional Lender shall become a “Lender” hereunder, and (ii) the
      Company shall cause Schedule 1
      and Schedule 2
      attached hereto and Schedule 1
      to the Pledge Agreement to be amended as appropriate to reflect the loans made
      by each such additional Lender, the additional IGC Shares to be issued to
      such Lender in accordance with the terms hereof, and the pro-rata share of
      such
      Lender in and to the collateral described in the Pledge Agreement.

     

    1.6 Deliveries.  At
      the Closing:

     

    (a) the
      Company will deliver (i) to each Lender, a Note in the applicable Loan
      Amount and the Pledge Agreement; (ii) to each Lender (other than Ranga Krishna
      (“Krishna”)
      and Oliveira Capital, LLC (“Oliveira”)),
      the Registration Rights Agreement; (iii) to Krishna, the Krishna Letter
      Agreement; and (iv) to Oliveira, the Oliveira Letter Agreement, each of
      which shall be duly executed by the Company; and

     

    (b) each
      Lender (i) will pay to the Company, by wire transfer of immediately
      available funds, the applicable Loan Amount; (ii) will deliver to the Company
      duly executed versions of the applicable Note and the Pledge Agreement;
      and

     

    (c)
      Krishna and Oliveira will deliver to the Company duly executed versions of
      the
      Krishna Letter Agreement and Oliveira Letter Agreement, respectively; and
      Krishna will deliver to the Company a duly executed version of the Lock-Up
      Letter.

     

    2. Representations,
      Warranties and Covenants of the Company.  The
      Company hereby represents and warrants to each Lender as follows:

     

    2.1 Organization,
      Standing and Power.  The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Maryland and has all requisite corporate
      power and authority to carry on its business as contemplated to be
      conducted.

     

    2.2 Authority
      and
      Enforceability.  The
      Company has all requisite corporate power and authority to execute and deliver
      this Agreement, the Notes, the Pledge Agreement, the Letter Agreements, and
      the
      Registration Rights Agreement (collectively, the “Loan
      Agreements”) and to perform fully its obligations hereunder and
      thereunder.  The execution and delivery of this Agreement and such
      other Loan Agreements and the consummation of the transactions contemplated
      hereby and thereby have been duly authorized by all necessary corporate action
      on the part of the Company.  This Agreement and such other Loan
      Agreements have been duly executed and delivered by the Company and, assuming
      this Agreement and such other Loan Agreements constitute valid and binding
      agreements of the other parties hereto, this Agreement and such other Loan
      Agreements each constitute a legal, valid and binding obligation of the Company,
      enforceable against the Company in accordance with its respective terms, subject
      to applicable bankruptcy, insolvency, reorganization, moratorium or other
      similar laws now or hereafter in effect relating to creditors’ rights and
      remedies generally and subject, as to enforceability, to general principles
      of
      equity, regardless of whether enforceability is considered in a proceeding
      at
      law or in equity.

     

    2.3 Accuracy
      of
      Public Filings; No Adverse Change.  The
      statements of the Company contained in the Prospectus on file with the SEC
      and
      all other reports on file with SEC taken as a whole, do not contain any untrue
      statement of a material fact or omit to state a material fact necessary in
      order
      to make the statements contained therein not misleading as of the respective
      dates of such filings.  Since the date that the Company filed its last
      Form 10-Q with the SEC, there has been no material adverse change in the assets,
      business, or financial condition of the Company.

     

    2.4 Use
      of
      Proceeds.  As
      disclosed in the Company’s preliminary proxy statement on Schedule 14A
      filed with the Securities and Exchange Commission on November 23, 2007 (the
      “Proxy
      Statement”), IGC-M has previously executed transaction documents for the
      purchase of equity securities of Sricon Infrastructure Private Limited (“Sricon”)
      and Techni Bhararti Limited (“TBL”)
      by the Company, and a wind-energy farm from Chiranjjeevi Wind Energy
      Limited.  The Company intends to use the proceeds of the Notes to
      capitalize IGC-M, which will in turn fund down payments on terms acceptable
      to
      the Company and to pay for the expenses related to the offering of the Notes
      and
      for working capital.  The Company, in its sole discretion, may
      allocate the proceeds of the Notes among Sricon, TBL and the wind energy farm,
      or may restructure the transactions to accommodate different forms of
      investment, including, but not limited to, the acquisition of or investment
      in
      equity interests or bridge loans.

     

    
      
        
        

      

      
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    2.5 No
      Conflicts.  Neither
      the execution and delivery of this Agreement nor the consummation or performance
      of any of the transactions contemplated hereby will, directly or indirectly
      (with or without notice or lapse of time) (i) contravene, conflict with, or
      result in a violation of (A) any provision of the Company’s charter or
      bylaws, or (B) any resolution adopted by the Company’s board of directors;
      or (ii) contravene, conflict with, or result in a violation of, or give any
      governmental body the right to challenge any of the transactions contemplated
      hereby or to exercise any remedy or obtain any relief under, any legal
      requirement or order to which the Company may be subject.

     

    3. Representations
      and Warranties of Lenders.  Each
      Lender, severally but not jointly and as to itself only and not as to the other
      Lender, does hereby represent and warrant to the Company as
      follows:

     

    3.1 Authorization.  Lender
      has full power and authority to enter into the Loan Agreements and the Loan
      Agreements constitute valid and legally binding obligations
      of  Lender, enforceable in accordance with their respective
      terms.

     

    3.2 Purchase
      Entirely for Own Account.  Lender
      hereby acknowledges and agrees that the IGC Shares received in connection with
      a
      Yes Vote will be acquired for investment for its own account, not as a nominee
      or agent, and not with a view to the resale or distribution of any part thereof,
      and Lender has no present intention of selling, granting any participation
      in,
      or otherwise distributing the same.

     

    3.3 Investment
      Experience.  Lender
      is an investor in securities of companies in the development stage and
      acknowledges that it is able to fend for itself and bear the economic risk
      of
      its investment, including the complete loss thereof, and has such knowledge
      and
      experience in financial or business matters that it is capable of evaluating
      the
      merits and risks of the investment in the IGC Shares.

     

    3.4 Financial
      Risk.  Lender
      has such knowledge and experience in financial and business matters as to be
      capable of evaluating the merits and risks of its investment and has the ability
      to bear the economic risks of doing so.  Lender acknowledges that it
      has read and understands the Proxy Statement, including the risk factors
      contained therein, and that it has had the opportunity to obtain from
      representatives of the Company such information about the Company as is
      necessary for Lender to evaluate the merits and risks of the loans represented
      by each Lender’s Note.

     

    3.5 Accredited
      Investor.  Lender
      is an “accredited investor” within the meaning of the 501(a) of Regulation D of
      the Securities Act.

     

    3.6 Restricted
      Securities.  Lender
      understands that the IGC Shares are deemed “restricted securities” under the
      federal securities laws inasmuch as they are being acquired from the Company
      in
      a transaction not involving a public offering and that, under such laws and
      applicable regulations, such securities may be resold without registration
      under
      the Securities Act, only in certain limited circumstances.  In this
      connection, Lender is familiar with Rule 144, as presently in effect, and
      understands the resale limitations imposed thereby and by the Securities
      Act.  Lender understands Rule 144 is not currently available for the
      sale of the IGC Shares and may never be so available.

     

    3.7 No
      Conflicts.  Neither
      the execution and delivery of this Agreement nor the consummation or performance
      of any of the transactions contemplated hereby will, directly or indirectly
      (with or without notice or lapse of time) contravene, conflict with, or result
      in a violation of, or give any governmental body the right to challenge any
      of
      the transactions contemplated hereby or to exercise any remedy or obtain any
      relief under, any legal requirement or order to which Lender may be
      subject.

     

    4. Further
      Limitations on Disposition.  Without
      in any way limiting the representations set forth above, Lender further agrees
      not to make any disposition of all or any portion of the Securities unless
      and
      until:

     

    (a) There
      is then in effect a Registration Statement under the Securities Act covering
      such proposed disposition, and such disposition is made in accordance with
      such
      Registration Statement; or

     

    (b) (i) Lender
      shall have notified the Company of the proposed disposition and shall have
      furnished the Company with a detailed statement of the circumstances surrounding
      the proposed disposition, and (ii) if requested by the Company, Lender
      shall have furnished the Company with an opinion of counsel, reasonably
      satisfactory to the Company, that such disposition will not require registration
      of such Securities under the Securities Act or registration or qualification
      under any applicable state securities laws.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    5. Legends.  The
      certificates evidencing the Securities shall bear one or all of the following
      legends:

     

    (a) “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
      AND
      NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF,
      AND
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
      SOLD,  TRANSFERRED OR ASSIGNED UNLESS COVERED BY AN EFFECTIVE
      REGISTRATION STATEMENT UNDER SAID ACT, THE TRANSFER MEETS THE REQUIREMENTS
      OF
      RULE 144 OR REGULATION S OF THE SECURITIES AND EXCHANGE COMMISSION, OR AN
      OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH
      TRANSFER IS EXEMPT FROM SUCH REGISTRATION.”

     

    (b) Any
      additional legend required by the laws of the State of Maryland or any other
      applicable state.

     

    6. Pari
      Passu
      with All Notes.  Each
      Note shall rank equally without preference or priority of any kind with each
      of
      the other Notes issued by the Company to Lenders hereunder.  All
      payments on account of principal and interest with respect to the Notes shall
      be
      applied ratably and proportionately on each of the Notes on the basis of the
      original principal amount of outstanding indebtedness represented by such
      Note.

     

    7. Miscellaneous.

     

    7.1 Waivers
      and
      Amendments.  Any
      provision of this Agreement may be amended, waived or modified (either generally
      or in a particular instance, either retroactively or prospectively, and either
      for a specified period of time or indefinitely), only upon the written consent
      of each of the parties hereto.

     

    7.2 Governing
      Law;
      Venue.  This
      Agreement shall be governed by and construed in accordance with Maryland law,
      without regard to the conflict of laws provisions thereof.  The
      parties agree that the United States District Court for the District of Maryland
      shall have exclusive jurisdiction to enforce the terms of this
      Agreement.  The parties consent to venue and jurisdiction and waive
      all questions and defenses of personal jurisdiction, improper venue, or forum non
      conveniens for the purpose of any action described in this
      paragraph.

     

    7.3 Survival.  The
      representations, warranties, covenants and agreements made herein shall survive
      the Closing of the transactions contemplated hereby.

     

    7.4 Successors
      and
      Assigns.  Except
      as otherwise expressly provided herein, the provisions hereof shall inure to
      the
      benefit of, and be binding upon, the successors, assigns, heirs, executors
      and
      administrators of the parties hereto.

     

    7.5 Entire
      Agreement.  This
      Agreement (including the exhibits attached hereto) constitutes the full and
      entire understanding and agreement between the parties with regard to the
      subjects hereof and thereof.

     

    7.6 Notices,
      etc.  All
      notices and other communications required or permitted hereunder shall be
      effective upon receipt, shall be in writing, and may be delivered in person,
      by
      telecopy, electronic mail, overnight delivery service or United States mail,
      in
      which event they may be mailed by first-class, certified or registered, postage
      prepaid, addressed at its address set forth on the signature page hereto, or
      at
      such other address as any party hereto may specify in writing.

     

    7.7 Severability
      of this Agreement.  If
      any provision of this Agreement shall be judicially determined to be invalid,
      illegal or unenforceable, the validity, legality and enforceability of the
      remaining provisions shall not in any way be affected or impaired
      thereby.

     

    7.8 Expenses.  Regardless
      of whether the Closing is effected, each party shall pay all costs and expenses
      that it incurs with respect to the negotiation, execution, delivery and
      performance of this Agreement.

     

    7.9 Counterparts.  This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original, but all of which together shall be deemed to constitute one
      instrument.

     

     

     

    [SIGNATURE
      PAGE FOLLOWS.]

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

     

    IN
      WITNESS WHEREOF, the Company has caused this Note Purchase Agreement to be
      duly
      executed and delivered as of the date and year first written above. 


    


     

     

    COMPANY:

     

    INDIA
      GLOBALIZATION CAPITAL, INC.

     

     

     

    By:                                                                            
       

     

    Its:                                                                            
        

     

    Address:_____________________________

                    _____________________________

                   
      _____________________________

     

    IN
      WITNESS WHEREOF, the undersigned Lender has caused this Note Purchase Agreement
      to be duly executed and delivered as of the date and year first written
      above.

     

     

    LENDER:

     

     

     

                                                                                                    
      By:                                                                            
 

    
       

       

       Its:                                                                            
          

       

       

       Address:_____________________________

                      
        _____________________________

                      
        _____________________________
 

     

    
       

       

       

      
        
        

      

      
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    SCHEDULE
      1

     

    LOAN
      AMOUNTS

     

     

     

    
      	
              Lender
                Name

            	
              Loan
                Amount

            
	
              DR.
                RANGA KRISHNA
                (CHAIRMAN OF IGC
BOARD)

            	
              4,300,000

            
	
              OLIVEIRA
                CAPITAL

            	
              1,000,000

            
	
              Total

            	
              $5,300,000

            


    

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    SCHEDULE
      2

     

    IGC
      SHARES

     

     

     

    
      	
              Lender
                Name

            	
              IGC
Share
                #

            
	
              DR.
                RANGA KRISHNA
                (CHAIRMAN OF IGC
BOARD)

            	
                       446,226.42

            
	
              OLIVEIRA
                CAPITAL

            	
                       103,773.58

            
	
              Total

            	
              550,000.00

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
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