Exhibit
10.1
INDIA GLOBALIZATION CAPITAL,
INC.
Common Stock
ATM AGENCY
AGREEMENT
October 13, 2009
INDIA GLOBALIZATION CAPITAL, INC., a Maryland
corporation (the “ Company ”), proposes, subject
to the terms and conditions stated herein, to issue and sell from
time to time through ENCLAVE CAPITAL LLC, as sales agent (the
“ Agent ”), shares of the Company’s common
stock, par value $.0001 per share (the “ Common Shares
”), having an aggregate offering price of up to $4,000,000 on
the terms set forth in this agreement (this “
Agreement ”).
ARTICLE I
DEFINITIONS
Section 1.01 Certain
Definitions . For purposes of this Agreement,
capitalized terms used herein and not otherwise defined shall have
the following respective meanings:
“ Actual Sold Amount ” means
the number of Shares that the Agent has sold during the Selling
Period.
“ Affiliate ” of
a Person means another Person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under
common control with, such first- mentioned Person. The term
“control” (including the terms
“controlling,” “controlled by” and
“under common control with”) means the possession,
direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through the
ownership of voting securities, by contract or
otherwise.
“ Agency Period ” means the
period commencing on the Effective Date and expiring on the
earliest to occur of (x) the date on which the Agent shall have
sold the Maximum Program Amount pursuant to this Agreement, (y) the
date this Agreement is terminated pursuant to Article VII
and (z) the third anniversary of the date of the Effective
Date .
“ Agent ” has the meaning set
forth in the introductory paragraph of this
Agreement.
“ Agreement ” has the meaning
set forth in the introductory paragraph of this
Agreement.
“ Annual Report ” has the
meaning set forth in Section 3.02 .
“ Base Prospectus ” has the
meaning set forth in Section 3.01 .
“ Code ” has the meaning set
forth in Section 3.21 .
“ Commission ” means the U.S.
Securities and Exchange Commission.
“ Common Shares ” has the
meaning set forth in the introductory paragraph of this
Agreement .
“ Company ” has the meaning
set forth in the introductory paragraph of this
Agreement.
“ Debt Repayment Triggering Event
” has the meaning set forth in Section 3.15
.
“ Default ” has the meaning
set forth in Section 3.15 .
“Effective Date ” has the meaning set forth in Section
2.01(b) .
“ Engagement Letter ” has the
meaning set forth in Section 2.04.
“ Environmental Laws ” has
the meaning set forth in Section 3.28.
“ ERISA ” has the meaning set
forth in Section 3.29 .
“ ERISA Affiliate ” has the
meaning set forth in Section 3.29 .
“ Exchange Act ” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder.
“ Existing Instrument ” has
the meaning set forth in Section 3.15 .
“ FINRA ” has the meaning set
forth in Section 3.15 .
“ Floor Price ”
means the minimum price set by the Company in the Issuance Notice
below which the Agent shall not sell Shares during the applicable
Selling Period, which may be adjusted by the Company at any time
during the Selling Period by delivering written notice of such
change to the Agent and which in no event shall be less than $1.00
without the prior written consent of the Agent, which may be
withheld in the Agent’s sole discretion.
“ Free Writing Prospectus ”
has the meaning set forth in Section 2.03 .
“ Governmental Licenses ” has
the meaning set forth in Section 3.19 .
“ Hazardous Materials ” has
the meaning set forth in Section 3.28 .
“ Governmental Licenses ” has
the meaning set forth in Section 3.18 .
“ Issuance ”
means each occasion on which the Company elects to exercise its
right to deliver an Issuance Notice requiring the Agent to use its
commercially reasonable efforts to sell the Common Shares as
specified in such Issuance Notice, subject to the terms and
conditions of this Agreement.
“ Issuance Amount ” means the
aggregate Sales Price of the Shares to be sold by the Agent with
respect to any Issuance.
“ Issuance Date ” means any
Trading Day during the Agency Period that an Issuance Notice is
delivered pursuant to Section 2.03(b) .
“ Issuance Notice
” means a written notice delivered to the Agent by the
Company in accordance with this Agreement in the form attached
hereto as Exhibit A that is executed by its Chief Executive
Officer , the President or the Chief Financial Officer
.
“ Issuance Price ” means
the Sales Price less the Selling Commission .
“ Issuance Supplement ”
has the meaning set forth in Section 3.01 .
“ Intellectual Property Rights
” has the meaning set forth in Section 3.17
.
“ Investment Company Act ”
has the meaning set forth in Section 3.21 .
“ Material Adverse Change ”
has the meaning set forth in Section 3.07 .
“ Maximum Program Amount ”
means Common Shares with an aggregate Sales Price of the lesser of
(1) $4,000,000 and (2) the aggregate amount of Shares registered
under the Registration Statement.
“ Money Laundering Laws ” has
the meaning set forth in Section 3.33 .
“ OFAC ” has the meaning set
forth in Section 3.34 .
“ Original Registration
Statement ” has the meaning set forth in Section
3.01 .
“ PCAOB ” has the meaning set
forth in Section 3.08 .
“ Person ” means
an individual or a corporation, partnership, limited liability
company, trust, incorporated or unincorporated association, joint
venture, joint stock company, governmental authority or other
entity of any kind.
“ preliminary prospectus ”
has the meaning set forth in Section 3.01.
“ Principal Market ” means
the NYSE Amex or such other national securities exchange on which
the Common Shares, including any Shares, are then
listed.
“ Prospectus ” has the
meaning set forth in Section 3.01 .
“ PTO ” has the meaning set
forth in Section 3.17 .
“ Registration Statement ”
has the meaning set forth in Section 3.01 .
“ Regulation M ” has the
meaning set forth in Section 3.23 .
“ Related Judgment ” has the
meaning set forth in Section 8.02 .
“ Related Proceedings ” has
the meaning set forth in Section 8.02 .
“ Representation Date ” has
the meaning set forth in the introductory paragraph of
Article III .
“ Rule 102 ” has the
meaning set forth in the introductory paragraph of this
Agreement.
“ Sales Price ”
means the actual sale execution price of each Share placed by the
Agent pursuant to this Agreement, whether on the Principal Market
in the case of ordinary brokers’ transactions or as otherwise
agreed by the parties in other methods of sale.
“ Securities Act ” means the
Securities Act of 1933, as amended, and the rules and regulations
of the Commission thereunder.
“ Selling Commission ” means
3% of the aggregate proceeds received by the Company pursuant to
the sale of Shares hereunder.
“ Selling Period ” means the
period of one to twenty consecutive Trading Days (as determined by
the Company in the Company’s sole discretion and specified in
the applicable Issuance Notice) following the Trading Day on which
an Issuance Notice is delivered pursuant to Section 2.03(b)
.
“ Settlement Date
” means the third
(3 rd ) business day following each Trading Day during
the Selling Period on which Shares are sold pursuant to this
Agreement, when the Company shall deliver to the Agent the amount
of Shares sold on such Trading Day and the Agent shall deliver to
the Company the Issuance Price received on such sales
.
“ Shares ” shall mean the
Company’s Common Shares issued or issuable pursuant to this
Agreement.
“ Side Letter ” has the
meaning set forth in the definition of Selling
Commission.
“ Subsidiary ” or “
Subsidiaries ” has the meaning set forth in
Section 3.12 .
“ Specified Courts ” has the
meaning set forth in Section 8.02 .
“ Trading Day ” means any day
on which the Principal Market is open for trading.
“ Triggering Event ” has the
meaning set forth in Section 4.13 .
ARTICLE II
ISSUANCE AND SALE OF COMMON
SHARES
Section 2.01 (a)
Agreement Regarding Issuance and Sale of Shares
. Upon the terms and subject to the conditions of this
Agreement, the Company may issue Shares through the Agent and the
Agent shall use its commercially reasonable efforts to place such
Shares, with an aggregate Sales Price of up to the Maximum Program
Amount, based on and in accordance with such Issuance Notices as
the Company may deliver to the Agent, during the Agency
Period.
(b)
Agreement Effectiveness . This Agreement shall be
deemed effective on the date on which each of the following
conditions has been satisfied (the “ Effective Date
”):
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the execution
and delivery of this Agreement by the parties hereto;
and
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the
satisfaction by the Company of the conditions set forth in
Section 5.01 , with the understanding that the form and
substance of (A) the comfort letters required by Section
5.01(e) shall be in the forms contained in Exhibit F and
(B) the legal opinions required by Section 5.01(f) shall be
in the forms contained in Exhibits B through E
.
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Section 2.02 Mechanics of
Issuances .
(a)
Issuance Notice . Upon the terms and subject to
the conditions set forth herein, on any Trading Day during the
Agency Period on which the conditions set forth in
Sections 5.01 and 5.02 shall have been
satisfied, the Company may exercise its right to request an
Issuance by the delivering to the Agent an Issuance Notice;
provided, however , that (i) in no event may the Company
deliver an Issuance Notice to the extent that (I) the sum of (x)
the Sales Price of the requested Issuance Amount, plus (y) the
aggregate Sales Price of all Shares issued under all previous
Issuances effected pursuant to this Agreement, would exceed the
Maximum Program Amount; and (ii) prior to delivery of any Issuance
Notice, the Selling Period for any previous Issuance Notice shall
have expired or been terminated. An Issuance Notice shall be
considered delivered on the Trading Day that it is received by
e-mail to the persons identified in Section 8.04 and
confirmed by the Company by telephone (including a voicemail
message to the persons identified in Section 8.04 ), with
the understanding that, with adequate prior written notice, the
Agent may modify the list of such persons from time to
time.
(b)
Agent Efforts . Upon the terms and subject to the
conditions set forth in this Agreement, upon the receipt of an
Issuance Notice, the Agent will use its commercially reasonable
efforts consistent with its normal sales and trading practices to
place the Shares, subject to, and in accordance with the
information specified in, the Issuance Notice into the Principal
Market and otherwise in accordance with the terms of such Issuance
Notice, unless the sale of the Shares described therein has been
suspended, cancelled or otherwise terminated in accordance with the
terms of this Agreement. For the avoidance of doubt, the
parties to this Agreement may modify an Issuance Notice at any time
provided they both agree in writing to any such
modification.
(c)
Method of Offer and Sale . The Shares may be
offered and sold (i) in privately negotiated transactions (if and
only if the parties hereto have so agreed in writing) or (ii) by
any other method or payment permitted by law deemed to be an
“at the market” offering as defined in Rule 415 under
the Securities Act, including sales made directly on the Principal
Market or sales made to or through a market maker or through an
electronic communications network. Nothing in this
Agreement shall be deemed to require either party to agree to the
method of offer and sale specified in the preceding sentence, and
the method of placement of any Shares by the Agent shall be at the
Agent’s discretion.
(d)
Confirmation to the Company . The Agent will
provide written confirmation to the Company pursuant to Section
8.04 no later than the opening of the Trading Day next
following the Trading Day on which it has placed Shares hereunder
setting forth the number of shares sold on such Trading Day, the
corresponding Sales Price and the Issuance Price payable to the
Company in respect thereof.
(e)
Settlement . Each Issuance will be settled on the
applicable Settlement Date for such Issuance and, subject to the
provisions of Article V , on or before each Settlement Date,
the Company will, or will cause its transfer agent to,
electronically transfer the Shares being sold by crediting the
Agent or its designee’s account at The Depository Trust
Company through its Deposit/Withdrawal At Custodian (DWAC) System,
or by such other means of delivery as may be mutually agreed upon
by the parties hereto and, upon receipt of such Shares, which in
all cases shall be freely tradeable, transferable, registered
shares in good deliverable form, the Agent will deliver the related
Issuance Price in same day funds delivered to an account designated
by the Company prior to the Settlement Date.
(f)
Suspension or Termination of Sales . Consistent
with standard market settlement practices, the Company or the Agent
may, upon notice to the other party hereto in writing or by
telephone (confirmed immediately by verifiable email pursuant to
Section 8.04 ), suspend any sale of Shares, and the Selling
Period shall immediately terminate; provided, however , that
(i) such suspension and termination shall not affect or impair
either party’s obligations with respect to any Shares placed
or sold hereunder prior to the receipt of such notice; (ii) if the
Company suspends or terminates any sale of Shares after the Agent
confirms such sale, the Company shall still be obligated to comply
with Section 2.03 regarding the payment of the applicable
Selling Commission and reimbursement of the Agent’s expenses;
and (iii) if the Company defaults in its obligation to deliver
Shares on a Settlement Date, the Company agrees that it will hold
the Agent harmless against any loss, claim, damage or expense
(including, without limitation, penalties, interest and reasonable
legal fees and expenses), as incurred, arising out of or in
connection with such default by the Company. The parties hereto
acknowledge and agree that, in performing its obligations under
this Agreement, the Agent may borrow Common Shares from stock
lenders, and may use the Shares to settle or close out such
borrowings. The Company agrees that no such notice shall
be effective against the Agent unless it is made to one of the
individuals named in Section 8.04.
(g)
No Guarantee of Placement, Etc. The Company
acknowledges and agrees that (i) there can be no assurance that the
Agent will be successful in placing Shares and (ii) the Agent will
incur no liability or obligation to the Company or any other Person
if it does not sell Shares. In acting hereunder, the
Agent will not be obligated to purchase any Shares for its own
account or otherwise and will be acting as agent for the Company
and not as principal.
Section 2.03 Use of Free
Writing Prospectus . Neither the Company nor the Agent has
prepared, used, referred to or distributed, or will prepare, use,
refer to or distribute, without the other party’s prior
written consent, any “written communication”
that constitutes a “free writing prospectus” as
such terms are defined in Rule 405 under the Securities Act
with respect to the offering contemplated by this Agreement
(any such free writing prospectus being referred to herein as a
“ Free Writing Prospectus ”).
Section 2.04 Fees &
Reimbursement of Expenses . (a) Fees
. As compensation for services rendered, on or before
the any Settlement Date, the Company shall pay to the Agent the
Selling Commission regarding the applicable Issuance Amount
(including with respect to any suspended or terminated sale
pursuant to Section 2.01(f)) , by wire transfer of
immediately available funds to an account or accounts designated by
the Agent.
(b)
Reimbursement of Expenses . The Company agrees,
whether or not any Shares are placed or sold pursuant to this
Agreement, to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and,
from time to time upon receipt of an invoice, to reimburse the
Agent for its reasonable expenses (including out-of-pocket expenses
and the fees and expenses of counsel to the Agent) as set forth in
the Side Letter, provided that all such expenses that have accrued
by the Agreement Closing Date shall be paid on such
date. The payment of the Agent’s expenses pursuant
to this paragraph shall be paid by wire transfer of immediately
available funds to an account or accounts designated by the
Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
The Company represents and warrants to the Agent
that as of (1) the Effective Date, (2) each Issuance Date, (3) each
Settlement Date and (4) any time that the Registration Statement or
the Prospectus shall be amended or supplemented (each of the times
referenced above is referred to herein as a “
Representation Date ”), except as may be disclosed in
the Prospectus (including any documents incorporated by reference
therein and any supplements thereto) on or before a Representation
Date:
Section 3.01 Registration
Statement . The Company has prepared and filed with
the Commission a shelf registration statement on Form S-3
(File No. 333-160993) that contains a base prospectus (the
“ Base Prospectus ”). Such
registration statement registers the issuance and sale by the
Company of the Shares under the Securities Act. Such
registration statement (and any further registration statements
that may be filed by the Company for the purpose of registering
additional Shares to be sold pursuant to this Agreement), including
any information deemed to be a part thereof pursuant to Rule 430B
under the Securities Act, including all documents incorporated or
deemed to be incorporated therein by reference pursuant to Item 12
of Form S-3 under the Securities Act as from time to time amended
or supplemented, is herein referred to as the “
Registration Statement ,” and the prospectus
constituting a part of such registration statement, together with
any prospectus supplement and any pricing supplement filed with the
Commission pursuant to Rule 424(b) under the Securities Act
relating to a particular issuance of the Shares (each, an “
Issuance Supplement ”), including all documents
incorporated or deemed to be incorporated therein by reference
pursuant to Item 12 of Form S-3 under the Securities Act, in each
case, as from time to time amended or supplemented, is referred to
herein as the “ Prospectus ,” except that if any
revised prospectus is provided to the Agent by the Company for use
in connection with the offering of the Shares that is not required
to be filed by the Company pursuant to Rule 424(b) under the
Securities Act, the term “ Prospectus ” shall
refer to such revised prospectus from and after the time it is
first provided to the Agent for such use. The
Registration Statement at the time it originally became effective
is herein called the “ Original Registration Statement
.” As used in this Agreement, the terms
“amendment” or “supplement” when applied to
the Registration Statement or the Prospectus shall be deemed to
include the filing by the Company with the Commission of any
document under the Exchange Act after the date hereof that is or is
deemed to be incorporated therein by reference.
All references in this Agreement to
financial statements and schedules and other information which is
“contained,” “included” or
“stated” in the Registration Statement or the
Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be
incorporated by reference in or otherwise deemed under the
Securities Act to be a part of or included in the Registration
Statement or the Prospectus, as the case may be, as of any
specified date; and all references in this Agreement to amendments
or supplements to the Registration Statement or the Prospectus
shall be deemed to mean and include, without limitation, the filing
of any document under the Exchange Act which is or is deemed to be
incorporated by reference in or otherwise deemed under the
Securities Act to be a part of or included in the Registration
Statement or the Prospectus, as the case may be, as of any
specified date.
Section 3.02 Compliance
with Registration Requirements . (a) At the time the
Registration Statement was originally declared effective and at the
time the Company’s Annual Report on Form 10-K for the
fiscal year ended March 31, 2009 (the “ Annual
Report ”) was filed with the Commission, the Company met
the then applicable requirements for use of Form S-3 under the
Securities Act. The Company meets the requirements for
use of Form S-3 under the Securities Act specified in FINRA
Rule 5110(b)(7)(C)(i).
(b) The
Original Registration Statement has been declared effective by the
Commission. The Company has complied to the
Commission’s satisfaction with all requests of the Commission
for additional or supplemental information. No stop
order suspending the effectiveness of the Registration Statement is
in effect and no proceedings for such purpose have been instituted
or are pending or, to the knowledge of the Company, are
contemplated or threatened by the Commission, and any request on
the part of the Commission for additional information has been
complied with. The Registration Statement is not the
subject of a pending proceeding or examination under
Section 8(d) or Section 8(e) of the Securities Act, and
the Company is not the subject of a pending proceeding under
Section 8A of the Securities Act in connection with the
offering and sale of the Shares.
(c)
The Registration Statement, as amended complies in all
material respects with the requirements of the Securities Act, and
the Registration Statement, as amended, does not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus, as amended or
supplemented, conforms in all material respects to the requirements
of the Securities Act and does not contain an untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. There are no contracts or
other documents required to be described in the Prospectus or to be
filed as exhibits to the Registration Statement that have not been
described or filed as required.
The representations and warranties in this
Section 3.02 shall not apply to statements in or omissions
from the Registration Statement or any post-effective amendment
thereto or the Prospectus or any amendments or supplements thereto
made in reliance upon and in conformity with information furnished
to the Company in writing by the Agent expressly for use in the
Registration Statement or any post-effective amendment thereto or
the Prospectus or any amendment or supplement thereto.
(d)
Ineligible Issuer Status . At the time of filing the
Original Registration Statement, at the earliest time thereafter
that the Company or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2) under the Securities
Act) of the Shares, and at the date hereof, the Company was not and
is not an “ineligible issuer,” as defined in Rule 405
under the Securities Act.
Section 3.03 Incorporated
Documents . The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with
the requirements of the Exchange Act, as applicable, and, when read
together with the other information in the Prospectus, (i) at the
time the Original Registration Statement became effective, (ii) at
the Effective Date, (iii) at each Issuance Date and (iv) at each
Settlement Date did not, do not and will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading.
Section 3.04 Authorization,
Execution, Delivery . This Agreement has been duly authorized,
executed and delivered by the Company.
Section 3.05 Authorization
of the Shares . The Shares have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement, will be
validly issued, fully paid and nonassessable; the Shares conform in
all material respects to the description thereof in the
Registration Statement and the Prospectus, and such description
conforms to the rights set forth in the Company’s Amended and
Restated Articles of Incorporation and By-Laws; no holder of the
Shares shall be subject to any personal liability solely by reason
of being such a holder; and the issuance and sale of the Shares is
not subject to any preemptive rights, rights of first refusal or
other similar rights to subscribe for or purchase the
Shares
Section 3.06 No Applicable
Registration or Other Similar Rights . Except as set forth in
the Registration Statement and the Prospectus, there are no persons
with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration
Statement or included in the offering contemplated by this
Agreement.
Section 3.07 No Material
Adverse Change . Except as otherwise disclosed in the
Registration Statement and the Prospectus, subsequent to the
respective dates as of which information is given in the
Registration Statement and the Prospectus: (i) there has been
no material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in
the condition, financial or otherwise, or in the earnings,
business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and
the Subsidiaries, considered as one entity (any such change is
called a “ Material Adverse Change ”);
(ii) the Company and the Subsidiaries, considered as one
entity, have not incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of
business or entered into any material transaction or agreement not
in the ordinary course of business; and (iii) there has been
no dividend or distribution of any kind declared, paid or made by
the Company or, except for dividends paid to the Company or other
Subsidiaries, any of the Subsidiaries on any class of capital stock
or repurchase or redemption by the Company or any of the
Subsidiaries of any class of capital stock.
Section 3.08 Independent
Accountants . Yoganandh & Ram, who have expressed their
opinion with respect to the financial statements (which term as
used in this Agreement includes the consolidated financial
statements of the Company and the related notes thereto) and
supporting schedules filed with the Commission as a part of the
Registration Statement and included in the Prospectus, are, to the
knowledge of the Company, after due inquiry, (i) independent public
or certified public accountants as required by the Securities Act
and the Exchange Act, (ii) in compliance with the applicable
requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X and (iii) a registered
public accounting firm as defined by the Public Company Accounting
Oversight Board (the “ PCAOB ”) whose
registration has not been suspended or revoked and who has not
requested such registration to be withdrawn.
Section 3.09 Preparation of
the Financial Statements . The financial statements filed with
the Commission as a part of the Registration Statement and included
in the Prospectus present fairly, in all material respects, the
consolidated financial position of the Company and its subsidiaries
as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. The
supporting schedules included in the Registration Statement present
fairly, in all material respects, the information required to be
stated therein. Such financial statements and supporting
schedules have been prepared in conformity with generally accepted
accounting principles as applied in the United States applied on a
consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No other
financial statements or supporting schedules are required to be
included in the Registration Statement or the
Prospectus. The financial data set forth in or
incorporated by reference into the Prospectus under the caption
“Selected Financial Data” fairly presents, in all
material respects, the information set forth therein on a basis
consistent with that of the audited financial statements contained
in the Registration Statement and the Prospectus. To the
knowledge of the Company, no person who has been suspended or
barred from being associated with a registered public accounting
firm, or who has failed to comply with any sanction pursuant to
Rule 5300 promulgated by the PCAOB, has participated in or
otherwise aided the preparation of, or audited, the financial
statements, supporting schedules or other financial data filed with
the Commission as a part of the Registration Statement and included
in the Prospectus.
Section 3.10
Company’s Accounting System . The Company and each of
its subsidiaries make and keep accurate books and records and
maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles as applied in the United
States and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences. There has not been and is no
material weakness in the Company’s internal control over
financial reporting (whether or not remediated) and since
March 31, 2009, there has been no change in the
Company’s internal control over financial reporting that has
materially and adversely affected, or is reasonably likely to
materially and adversely affect, the Company’s internal
control over financial reporting. The Company is not an
“accelerated filer” as defined in Rule 12b-2 under
the Exchange Act.
Section 3.11 Incorporation
and Good Standing of the Company . The
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Maryland and has the power and authority (corporate or other) to
own, lease and operate its properties and to conduct its business
as described in the Prospectus and to enter into and perform its
obligations under this Agreement. The Company is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to be so
qualified and in good standing would not, individually or in the
aggregate, result in a Material Adverse Change.
Section 3.12 Incorporation
and Good Standing of the Company’s Subsidiaries.
Each “significant subsidiary” of the
Company (as such term is defined in Rule 1-02 of Regulation
S-X) (each a “ Subsidiary ” and, collectively,
the “ Subsidiaries ”) has been duly organized
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure so to qualify
or to be in good standing has not resulted, or would not reasonably
be expected to result, in a Material Adverse Change; except as
otherwise disclosed in or contemplated by the Prospectus, all of
the issued and outstanding capital stock of each such Subsidiary
has been duly authorized and validly issued, is fully paid and non
assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge or lien that reasonably would be expected to result in a
Material Adverse Change; none of the outstanding shares of capital
stock of any Subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such Subsidiary that
reasonably would be expected to result in a Material Adverse
Change. The only subsidiaries of the Company are the
subsidiaries listed in the section titled “India
Globalization Capital, Inc. – Background of India
Globalization Capital, Inc.” in the Base
Prospectus The only Subsidiaries of the Company
are Sricon Infrastructure Private Limited, Techni Bharathi Limited
and India Globalization Capital, Mauritius, Limited.
Section 3.13 Capitalization
and Other Capital Stock Matters . The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus, as of the date so presented (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in
the Prospectus or upon the exercise of outstanding options or
warrants described in the Prospectus). The capital stock
of the Company, including the Shares, conforms in all material
respects to the description thereof contained in the
Prospectus. All of the issued and outstanding shares of
Common Stock have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance
with federal and state securities laws. None of the
outstanding shares of Common Stock was issued in violation of any
preemptive rights, rights of first refusal or other similar rights
to subscribe for or purchase securities of the
Company. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into
or exchangeable or exercisable for, any capital stock of the
Company other than those accurately described in the
Prospectus. The description of the Company’s stock
option, stock bonus and other stock plans or arrangements, and the
options or other rights granted thereunder, set forth in the
Prospectus accurately and fairly presents the information required
to be shown with respect to such plans, arrangements, options and
rights.
Section 3.14 Stock Exchange
Listing . The Common Shares are duly listed, and admitted and
authorized for trading on the NYSE Amex, and the Shares are or,
upon issuance, will be duly listed, and admitted and authorized for
trading on the NYSE Amex, subject only to official notice of
issuance.
Section 3.15
Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required . Neither the Company nor
any of the Subsidiaries is in violation of its charter or by-laws
or operating agreement or similar organizational document, as
applicable, or is in default (or, with the giving of notice or
lapse of time, would be in default) (“ Default
”) under any indenture, mortgage, loan or credit agreement,
note, contract, franchise, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which it or any
of them may be bound (including, without limitation, any credit
agreement, indenture, pledge agreement, security agreement or other
instrument or agreement evidencing, guaranteeing, securing or
relating to indebtedness of the Company or any of the
Subsidiaries), or to which any of the property or assets of the
Company or any of the Subsidiaries is subject (each, an “
Existing Instrument ”), except for such Defaults as
would not, individually or in the aggregate, result in a Material
Adverse Change. The Company’s execution, delivery
and performance of this Agreement, consummation of the transactions
contemplated hereby and by the Prospectus and the issuance and sale
of the Shares (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the
provisions of the charter or by-laws, operating agreement or
similar organizational document of the Company or any Subsidiary,
as applicable, (ii) will not conflict with or constitute a
breach of, or Default or a Debt Repayment Triggering Event (as
defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, or require the
consent of any other party to, any Existing Instrument, except for
such conflicts, breaches, Defaults or Debt Repayment Triggering
Events as would not, individually or in the aggregate, result in a
Material Adverse Change and (iii) will not result in any
violation of any law, administrative regulation or administrative
or court decree applicable to the Company or any
Subsidiary. No consent, approval, authorization or other
order of, or registration or filing with, any court or other
governmental or regulatory authority or agency, is required for the
Company’s execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby
and by the Prospectus, except such as have been obtained or made by
the Company and are in full force and effect under the Securities
Act, applicable state securities or blue sky laws; provided
, however , the Company does not make any representation as
to any required consent, approval, authorization or other order of,
or registration or filing with, the Financial Industry Regulatory
Authority, Inc. (“ FINRA ”). As
used herein, a “ Debt Repayment Triggering Event
” means any event or condition that gives, or with the giving
of notice or lapse of time would give, the holder of any note,
debenture or other evidence of indebtedness (or any person acting
on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
the Company or any of the Subsidiaries.
Section 3.16 No Material
Actions or Proceedings . Except as otherwise disclosed in the
Prospectus, there are no legal or governmental actions, suits,
investigations, inquiries or proceedings pending or, to the
Company’s knowledge, threatened (i) against or affecting
the Company or any of the Subsidiaries, (ii) which have as the
subject thereof property owned or leased by, or to the
Company’s knowledge, any officer or director of, the Company
or any of the Subsidiaries or (iii) relating to environmental
or discrimination matters, where in any such case (A) any
such action, suit or proceeding, if so determined adversely, would
reasonably be expected to result in a Material Adverse Change or
adversely affect the consummation of the transactions contemplated
by this Agreement or (B) any such action, suit or proceeding is or
would be material in the context of the sale of
Shares. No material labor dispute with the employees of
the Company or any of the Subsidiaries, or, to the Company’s
knowledge, with the employees of any principal supplier,
manufacturer, customer or contractor of the Company, exists or, to
the Company’s knowledge, is threatened or
imminent.
Section 3.17 Intellectual
Property Rights . The Company and the Subsidiaries own, possess
or can acquire on reasonable terms sufficient trademarks,
servicemarks, trade names, patents, copyrights, and any
registrations and applications for any of the foregoing, domain
names, licenses, approvals, trade secrets, know-how, inventions,
technology and other similar rights (collectively,
“Intellectual Property Rights” ) reasonably
necessary to conduct their respective businesses as now conducted
as set forth in the Prospectus (including the commercialization of
products or services described therein), except where the failure
to own, possess or acquire such rights would not, individually or
in the aggregate, result in a Material Adverse
Change. There are no third parties who have or, to the
Company’s knowledge, will be able to establish rights to any
Intellectual Property Rights owned by the Company or any
Subsidiary, except for, and to the extent of, the ownership rights
of the owners of the Intellectual Property Rights which the
Prospectus discloses are licensed to the Company. There
are no pending actions, suits, claims or proceedings that have been
asserted or, to the Company’s knowledge, threatened against
the Company or any Subsidiary challenging the Company’s or
any Subsidiary’s rights in or to any Intellectual Property
Rights, and the Company is unaware of any facts which would form a
reasonable basis for any such action, suit, claim or
proceeding. There are no pending or, to the
Company’s knowledge, threatened actions, suits, claims, or
proceedings challenging the validity, enforceability or scope of
any Intellectual Property Rights owned by the Company or any
Subsidiary, and the Company is unaware of any facts which could
form a reasonable basis for any such action, suit, claim or
proceeding. There are no pending or, to the
Company’s knowledge, threatened actions, suits, claims or
proceedings that the Company or any Subsidiary infringes or
otherwise violates, or would, upon the commercialization of any
product or service described in the Prospectus as under
development, infringe or violate, any Intellectual Property Rights
of others, and the Company is unaware of any facts which could form
a reasonable basis for any such action, suit, claim or
proceeding. The Company and the Subsidiaries have
complied in all material respects with the terms of each agreement
pursuant to which Intellectual Property Rights have been licensed
to the Company or any Subsidiary under valid and enforceable
license agreements, and all such agreements are in full force and
effect. To the Company’s knowledge, there is no
patent or patent application that contains claims that interfere
with the issued or pending claims of any of the Intellectual
Property Rights owned by the Company or any Subsidiary or that
challenges the validity, enforceability or scope of any of the
Intellectual Property Rights owned by the Company or any
Subsidiary. To the Company’s knowledge, there is
no prior art that may render any patent application filed by the
Company or a Subsidiary within the Intellectual Property
unpatentable that has not been disclosed to the U.S. Patent and
Trademark Office (the “ PTO ”). The
Company and the Subsidiaries have duly and properly filed or caused
to be filed with the PTO or foreign and international patent
authorities all patent applications disclosed in the Prospectus as
owned by the Company or the Subsidiaries.
Section 3.18 All Necessary
Permits, etc . The Company and each Subsidiary possess such
valid and current certificates, permits, licenses, approvals,
consents and other authorizations (collectively, “
Governmental Licenses ”) issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary
to conduct their respective businesses, except where failure to
possess any such Governmental License would not, individually or in
the aggregate, result in a Material Adverse Change; the Company and
its Subsidiaries are in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to
comply would not, individually or in the aggregate, result in a
Material Adverse Change; all of the Governmental Licenses are valid
and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses
to be in full force and effect would not, individually or in the
aggregate, result in a Material Adverse Change; and neither the
Company nor any Subsidiary has received , or has any reason
to believe that it will receive, any notice of proceedings relating
to the revocation or modification of, or non-compliance with, any
such Governmental License, which, individually or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could
result in a Material Adverse Change.
Section 3.19 Title to
Properties . The Company and each of the Subsidiaries have good
and marketable title to all of the real and personal property and
other assets reflected as owned in the financial statements
referred to in Section 3.09 above in each case free and
clear of any security interests, mortgages, liens, encumbrances,
equities, adverse claims and other defects, except such as do not
materially and adversely affect the value of such property and do
not materially interfere with the use made or proposed to be made
of such property by the Company or such Subsidiary. The
real property, improvements, equipment and personal property held
under lease by the Company or any Subsidiary are held under valid
and enforceable leases, with such exceptions as are not material
and do not materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or personal
property by the Company or such Subsidiary.
Section 3.20 Tax Law
Compliance . The Company and the Subsidiaries have filed all
necessary federal, state and local and foreign income and franchise
tax returns required to be filed through the date hereof and have
paid all taxes due thereon and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them,
except as may be being contested in good faith and by appropriate
proceedings, and no tax deficiency has been determined adversely to
the Company or any of the Subsidiaries which has had, nor does the
Company have any knowledge of any tax deficiency which, if
determined adversely to the Company or any of the Subsidiaries,
would reasonably be expected to result in, a Material Adverse
Change. The Company has made adequate charges, accruals
and reserves in the applicable financial statements referred to in
Section 3.09 above in respect of all federal, state and
foreign income and franchise taxes for all periods as to which the
tax liability of the Company or any of the Subsidiaries has not
been finally determined.
Section 3.21 Company Not an
“Investment Company.” The Company is not, and will
not be, either after receipt of payment for the Shares or after the
application of the proceeds therefrom as described under “Use
of Proceeds” in the Prospectus, (i) an “investment
company” (or a company controlled by an “investment
company”) within the meaning of the Investment Company Act
of 1940, as amended (the “ Investment Company Act
”); or (ii) a “passive foreign investment
company” as such term is defined in the Internal Revenue Code
of 1986, as amended, and the regulations and published
interpretations thereunder (the “ Code
”).
Section 3.22 Insurance
. Each of the Company and the Subsidiaries are insured by
recognized, financially sound and reputable institutions with
policies in such amounts and with such deductibles and covering
such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real
and personal property owned or leased by the Company and the
Subsidiaries against theft, damage, destruction and acts of
vandalism and policies covering the Company and the Subsidiaries
for product liability claims. The Company has no reason
to believe that it or any Subsidiary will not be able (i) to
renew its existing insurance coverage as and when such policies
expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a
Material Adverse Change.
Section 3.23 No Price
Stabilization or Manipulation; Compliance with Regulation M .
Neither the Company nor any Affiliate of the Company has taken,
directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or
manipulation of the price of the Shares or any other
“reference security” (as defined in Rule 100 of
Regulation M under the Exchange Act (“ Regulation
M ”)) whether to facilitate the sale or resale of the
Shares or otherwise, and has taken no action which would directly
or indirectly violate Regulation M. The Company
acknowledges that the Agent may engage in passive market making
transactions in the Shares on the Nasdaq Global Market in
accordance with Regulation M.
Section 3.24 Related Party
Transactions . There are no business relationships or
related-party transactions involving the Company or any of the
Subsidiaries or any other person required to be described in the
Prospectus that have not been described as required.
Section 3.25 Statistical
and Market-Related Data . The statistical,
demographic and market-related data included in the Registration
Statement and the Prospectus are base
