Document:

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EXHIBIT 10.5

PROMISSORY NOTE

$100,000

Bethesda, Maryland

India Globalization Capital, Inc. (the “Maker”) promises to pay to the order of Ram Mukunda (the
“Payee”) the principal sum of One Hundred Thousand Dollars and No Cents ($100,000.00) in lawful
money of the United States of America, together with interest on the unpaid principal balance of
this Note, on the terms and conditions described below.

1.        PRINCIPAL. The principal balance of this Note shall be repayable on the earlier of (i) April 30,
2006 or (ii) the date on which Maker consummates an initial public offering of its securities.

2.        INTEREST. The principal balance shall bear interest at the rate of four per cent per annum.

3.        APPLICATION OF PAYMENTS. All payments shall be applied first to payment in full of any costs
incurred in the collection of any sum due under this Note, including (without limitation)
reasonable attorneys’ fees, then to the payment in full of any late charges and finally to the
reduction of the unpaid principal balance of this Note.

4.        EVENTS OF DEFAULT. The following shall constitute Events of Default:

(a)      FAILURE TO MAKE REQUIRED PAYMENTS. Failure by Maker to pay the principal of or accrued interest
on this Note within five (5) business days following the date when due.

(b)      VOLUNTARY BANKRUPTCY, ETC. The commencement by Maker of a voluntary case under the Federal
Bankruptcy Code, as now constituted or hereafter amended, or any other applicable federal or state
bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it
to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Maker or for any substantial part of its property, or
the making by it of any assignment for the benefit of creditors, or the failure of Maker generally
to pay its debts as such debts become due, or the taking of corporate action by Maker in
furtherance of any of the foregoing.

(c)      INVOLUNTARY BANKRUPTCY, ETC. The entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of maker in an involuntary case under the Federal
Bankruptcy Code, as now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days.

5.        REMEDIES.

(a)      Upon the occurrence of an Event of Default specified in Section 4(a), Payee may, by written
notice to Maker, declare this Note to be due and payable, whereupon the principal

 

 

amount of this Note, and all other amounts payable thereunder, shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of which are hereby
expressly waived, anything contained herein or in the documents evidencing the same to the contrary
notwithstanding.

(b)      Upon the occurrence of an Event of Default specified in Sections 4(b) and 4(c), the unpaid
principal balance of, and all other sums payable with regard to, this Note shall automatically and
immediately become due and payable, in all cases without any action on the part of Payee.

6.        WAIVERS. Maker and all endorsers and guarantors of, and sureties for, this Note waive
presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to
the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the
terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future
laws exempting any property, real or personal, or any part of the proceeds arising from any sale of
any such property, from attachment, levy or sale under execution, or providing for any stay of
execution, exemption from civil process, or extension of time for payment; and Maker agrees that
any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any
writ of execution issued hereon, may be sold upon any such writ in whole or in part in any order
desired by Payee.

7.        UNCONDITIONAL LIABILITY. Maker hereby waives all notices in connection with the delivery,
acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its
liability shall be unconditional, without regard to the liability of any other party, and shall not
be affected in any manner by any indulgence, extension of time, renewal, waiver or modification
granted or consented to by Payee, and consents to any and all extensions of time, renewals,
waivers, or modifications that may be granted by Payee with respect to the payment or other
provisions of this Note, and agree that additional makers, endorsers, guarantors, or sureties may
become parties hereto without notice to them or affecting their liability hereunder.

8.        NOTICES. Any notice called for hereunder shall be deemed properly given if (i) sent by certified
mail, return receipt requested, (ii) personally delivered, (iii) dispatched by any form of private
or governmental express mail or delivery service providing receipted delivery, (iv) sent by
telefacsimile or (v) sent by e-mail, to the following addresses or to such other address as either
party may designate by notice in accordance with this Section:

If to Maker:

India Globalization Capital, Inc.

4336 Montgomery Avenue

Bethesda, Maryland 20814

Attn.: John Cherin, Chief Financial Officer

If to Payee:

Ram Mukunda

4336 Montgomery Avenue

Bethesda, Maryland 20814

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Notice shall be deemed given on the earlier of (i) actual receipt by the receiving party, (ii) the
date shown on a telefacsimile transmission confirmation, (iii) the date on which an e-mail
transmission was received by the receiving party’s on-line access provider (iv) the date reflected
on a signed delivery receipt, or (vi) two (2) Business Days following tender of delivery or
dispatch by express mail or delivery service.

9.        CONSTRUCTION. This Note shall be construed and enforced in accordance with the domestic,
internal law, but not the law of conflict of laws, of the State of Maryland.

10.      SEVERABILITY. Any provision contained in this Note which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly
executed by its Chief Executive Officer the day and year first above written.

	 	 	 	 	 
	 	INDIA GLOBALIZATION CAPITAL, INC.

	 
	 	By:  	/s/ John Cherin
	 
	 	 	Chief Financial Officer 
	 
	 	 	 	 
	 

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EXHIBIT 10.6

STOCK ESCROW AGREEMENT

STOCK ESCROW AGREEMENT, dated as of ___, 2005 (“Agreement”), by and among INDIA
GLOBALIZATION CAPITAL, INC., a Maryland corporation (“Company”), RAM MUKUNDA, JOHN CHERIN and RANGA
KRISHNA (collectively, the “Initial Stockholders”) and CONTINENTAL STOCK TRANSFER &
TRUST COMPANY, a New York corporation (“Escrow Agent”).

WHEREAS, the Company has entered into an Underwriting Agreement, dated ___, 2005 (“Underwriting
Agreement”), with Ferris, Baker Watts, Inc. (“FBW”) acting as representative of the several
underwriters (collectively, the “Underwriters”), pursuant to which, among other matters, the
Underwriters have agreed to purchase 20,000,000 units (“Units”) of the Company. Each Unit consists
of one share of the Company’s Common Stock, par value $.0001 per share, and two Warrants, each
Warrant to purchase one share of Common Stock, all as more fully described in the Company’s final
Prospectus, dated ___, 2005 (“Prospectus”) comprising part of the Company’s Registration
Statement on Form S-1 (File No. -___) under the Securities Act of 1933, as amended
(“Registration Statement”), declared effective on ___, 2005 (“Effective Date”).

WHEREAS, the Initial Stockholders have agreed as a condition of the sale of the Units to deposit
their shares of Common Stock of the Company, as set forth opposite their respective names in
Exhibit A attached hereto (collectively “Escrow Shares”), in escrow as hereinafter provided.

WHEREAS, the Company and the Initial Stockholders desire that the Escrow Agent accept the Escrow
Shares, in escrow, to be held and disbursed as hereinafter provided.

IT IS AGREED:

1. APPOINTMENT OF ESCROW AGENT. The Company and the Initial Stockholders hereby appoint the Escrow
Agent to act in accordance with and subject to the terms of this Agreement and the Escrow Agent
hereby accepts such appointment and agrees to act in accordance with and subject to such terms.
Capitalized terms used in this Agreement but not defined herein will have the meanings set forth in
the Registration Statement.

2. DEPOSIT OF ESCROW SHARES. On or before the Effective Date, each of the Initial Stockholders
shall deliver to the Escrow Agent certificates representing his respective Escrow Shares, to be
held and disbursed subject to the terms and conditions of this Agreement. Each Initial Stockholder
acknowledges that the certificate representing his Escrow Shares is legended to reflect the deposit
of such Escrow Shares under this Agreement.

3. DISBURSEMENT OF THE ESCROW SHARES.

3.1 The Escrow Agent shall hold the Escrow Shares until the one hundred eightieth day following the
consummation by the Company of a Business Combination (“Escrow Period”), on which date it shall,
upon written instructions from each Initial Stockholder, disburse each of the Initial Stockholder’s
Escrow Shares to such Initial Stockholder; provided, however, that if the Escrow Agent is notified
by the Company pursuant to Section 3.3 hereof that the Company is

 

 

being liquidated at any time during the Escrow Period, then the Escrow Agent shall promptly destroy
the certificates representing the Escrow Shares; provided further, however, that if, after the
Company consummates a Business Combination (as such term is defined in the Registration Statement),
it (or the surviving entity) subsequently consummates a liquidation, merger, stock exchange or
other similar transaction which results in all of the stockholders of such entity having the right
to exchange their shares of Common Stock for cash, securities or other property, then the Escrow
Agent will, upon receipt of a certificate, executed by the Chief Executive Officer or Chief
Financial Officer of the Company, in form reasonably acceptable to the Escrow Agent, that such
transaction is then being consummated, and release the Escrow Shares to the Initial Stockholders
upon consummation of the transaction so that they can similarly participate. The Escrow Agent shall
have no further duties hereunder after the disbursement or destruction of the Escrow Shares in
accordance with this Section 3.

3.2 CONSUMMATION OF A BUSINESS COMBINATION. Within thirty (30) days after the consummation by the
Company of a Business Combination, the Company shall deliver to the Escrow Agent a certificate
executed by the Chief Executive Officer or the Chief Financial Officer, in form reasonably
acceptable to the Escrow Agent, stating that a Business Combination has been consummated, the date
of the Business Combination shall have been consummated and the date that is one hundred eighty
days after the date of consummation of a Business Combination.

3.3 LIQUIDATION OF THE COMPANY. The Company shall give the Escrow Agent written notification of the
liquidation and dissolution of the Company in the event that the Company fails to consummate a
Business Combination within the time period(s) specified in the Prospectus.

4. RIGHTS OF INITIAL STOCKHOLDERS IN ESCROW SHARES.

4.1 VOTING RIGHTS AS A STOCKHOLDER. Subject to the terms of the Insider Letter described in Section
4.4 hereof and except as herein provided, the Initial Stockholders shall retain all of their rights
as stockholders of the Company during the Escrow Period, including, without limitation, the right
to vote such shares.

4.2 DIVIDENDS AND OTHER DISTRIBUTIONS IN RESPECT OF THE ESCROW SHARES. During the Escrow Period,
all dividends payable in cash with respect to the Escrow Shares shall be paid to the Initial
Stockholders, but all dividends payable in stock or other non-cash property (“Non-Cash Dividends”)
shall be delivered to the Escrow Agent to hold in accordance with the terms hereof. As used herein,
the term “Escrow Shares” shall be deemed to include the Non-Cash Dividends distributed thereon, if
any.

4.3 RESTRICTIONS ON TRANSFER. During the Escrow Period, no sale, transfer or other disposition may
be made of any or all of the Escrow Shares except (i) by gift to a member of Initial Stockholder’s
immediate family or to a trust, the beneficiary of which is an Initial Stockholder or a member of
an Initial Stockholder’s immediate family, (ii) by virtue of the laws of descent and distribution
upon death of any Initial Stockholder, or (iii) pursuant to a qualified domestic relations order;
provided, however, that such permissive transfers may be implemented only upon the respective
transferee’s written agreement to be bound by the terms and conditions

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of this Agreement and of the Insider Letter signed by the Initial Stockholder transferring the
Escrow Shares. During the Escrow Period, the Initial Stockholders shall not pledge or grant a
security interest in the Escrow Shares or grant a security interest in their rights under this
Agreement.

4.4 INSIDER LETTERS. Each of the Initial Stockholders has executed a letter agreement with FBW and
the Company, dated as indicated on Exhibit A hereto, and which is filed as an exhibit to the
Registration Statement (“Insider Letter”), respecting the rights and obligations of such Initial
Stockholder in certain events, including but not limited to the liquidation of the Company.

5. CONCERNING THE ESCROW AGENT.

5.1 GOOD FAITH RELIANCE. The Escrow Agent shall not be liable for any action taken or omitted by it
in good faith and in the exercise of its own best judgment, and 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 Escrow Agent), 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 Escrow Agent to be genuine and to be signed or presented by the proper person or persons.
The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification,
termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow
Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are
affected, unless it shall have given its prior written consent thereto.

5.2 INDEMNIFICATION. The Escrow Agent shall be indemnified and held harmless by the Company from
and against any expenses, including counsel fees and disbursements, or loss suffered by the Escrow
Agent in connection with any action, suit or other proceeding involving any claim which in any way,
directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow
Agent hereunder, or the Escrow Shares held by it hereunder, other than expenses or losses arising
from the gross negligence or willful misconduct of the Escrow Agent. Promptly after the receipt by
the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or
proceeding, the Escrow Agent shall notify the other parties hereto in writing. In the event of the
receipt of such notice, the Escrow Agent, in its sole discretion, may commence an action in the
nature of interpleader in an appropriate court to determine ownership or disposition of the Escrow
Shares or it may deposit the Escrow Shares with the clerk of any appropriate court or it may retain
the Escrow Shares pending receipt of a final, non-appealable order of a court having jurisdiction
over all of the parties hereto directing to whom and under what circumstances the Escrow Shares are
to be disbursed and delivered. The provisions of this Section 5.2 shall survive in the event the
Escrow Agent resigns or is discharged pursuant to Sections 5.5 or 5.6 below.

5.3 COMPENSATION. The Escrow Agent shall be entitled to reasonable compensation from the Company
for all services rendered by it hereunder. The Escrow Agent shall also be entitled to reimbursement
from the Company for all expenses paid or incurred by it in the administration

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of its duties hereunder including, but not limited to, all counsel, advisors’ and agents’ fees and
disbursements and all taxes or other governmental charges.

5.4 FURTHER ASSURANCES. From time to time on and after the date hereof, the Company and the Initial
Stockholders shall deliver or cause to be delivered to the Escrow Agent such further documents and
instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably
request to carry out more effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected in acting hereunder.

5.5 RESIGNATION. The Escrow Agent may resign at any time and be discharged from its duties as
escrow agent hereunder by its giving the other parties hereto written notice and such resignation
shall become effective as hereinafter provided. Such resignation shall become effective at such
time that the Escrow Agent shall turn over to a successor escrow agent appointed by the Company,
the Escrow Shares held hereunder. If no new escrow agent is so appointed within the 60 day period
following the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Shares
with any court it reasonably deems appropriate.

5.6 DISCHARGE OF ESCROW AGENT. The Escrow Agent shall resign and be discharged from its duties as
escrow agent hereunder if so requested in writing at any time by the other parties hereto, jointly,
provided, however, that such resignation shall become effective only upon acceptance of appointment
by a successor escrow agent as provided in Section 5.5.

5.7 LIABILITY. Notwithstanding anything herein to the contrary, the Escrow Agent shall not be
relieved from liability hereunder for its own gross negligence or its own willful misconduct.

6. MISCELLANEOUS.

6.1 GOVERNING LAW. This Agreement shall for all purposes be deemed to be made under and shall be
construed in accordance with the laws of the State of New York.

6.2 THIRD PARTY BENEFICIARIES. Each of the Initial Stockholders hereby acknowledges that the
Underwriters are third party beneficiaries of this Agreement and this Agreement may not be modified
or changed without the prior written consent of FBW.

6.3 ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties hereto with
respect to the subject matter hereof and, except as expressly provided herein, may not be changed
or modified except by an instrument in writing signed by the party to the charged.

6.4 HEADINGS. The headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation thereof.

6.5 BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of the respective
parties hereto and their legal representatives, successors and assigns.

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6.6 NOTICES. Any notice or other communication required or which may be given hereunder shall be in
writing and either be delivered personally or be mailed, certified or registered mail, or by
private national courier service, return receipt requested, postage prepaid, and shall be deemed
given when so delivered personally or, if mailed, two days after the date of mailing, as follows:

If to the Company, to:

India Globalization Capital, Inc.

4336 Montgomery Avenue

Bethesda, Maryland 20814

Attn: Chairman

If to a Stockholder, to his address set forth in Exhibit A.

and if to the Escrow Agent, to:

Continental Stock Transfer & Trust Company 17 Battery Place

New York, New York 10004 Attn: Chairman

A copy of any notice sent hereunder shall be sent to:

Seyfarth Shaw LLP

815 Connecticut Avenue, N.W., Suite 500

Washington, DC 20006-4004

Attn: Stanley S. Jutkowitz, Esq.

Ferris, Baker Watts, Inc.

100 Light Street

Baltimore, Maryland 21202

Attn: Richard K. Prins, Senior Vice President

and:

Gersten, Savage, Kaplowitz, Wolf & Marcus, LP

600 Lexington Avenue

New York, NY 10022

Attn: Jay M. Kaplowitz, Esq.

The parties may change the persons and addresses to which the notices or other communications are
to be sent by giving written notice to any such change in the manner provided herein for giving
notice.

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WITNESS the execution of this Agreement as of the date first above written.

INDIA GLOBALIZATION CAPITAL, INC.

By:

INITIAL STOCKHOLDERS:

CONTINENTAL STOCK TRANSFER

& TRUST COMPANY

By:

Name:

Title:

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EXHIBIT A

	 	 	 	 	 	 	 	 	 
	Name and Address of	 	 	Number	 	 	Stock	 	Date of
	Initial Stockholder	 	 	of Shares	 	 	Certificate Number	 	Insider Letter
	Ram Mukunda

	 	 	2,500,000	 	 	 
	 	May ___, 2005
	John Cherin

	 	 	500,000	 	 	 	 	May ___, 2005
	Ranga Krishna

	 	 	500,000	 	 	 	 	May ___, 2005

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