EXHIBIT 10.4
INVESTMENT MANAGEMENT TRUST
AGREEMENT
This Agreement is made as of
, 2005 by and between India Globalization Capital, Inc. (the
“Company”) and Continental Stock Transfer & Trust
Company (“Trustee”).
WHEREAS, the Company’s
Registration Statement on Form S-1, No. 333-124942
(“Registration Statement”), for its initial public
offering of securities (“IPO”) has been declared
effective as of the date hereof by the Securities and Exchange
Commission (“Effective Date”); and
WHEREAS, Ferris, Baker Watts,
Incorporated (“FBW”) is acting as the representative of
the underwriters in the IPO; and
WHEREAS, as described in the
Company’s Registration Statement, $57,210,600 of the gross
proceeds of the IPO and the Placement as herein provided as herein
provided ($65,615,250 if the underwriters over-allotment option is
exercised in full) (the “Base Deposit”) will be
delivered to the Trustee to be deposited and held in a trust
account for the benefit of the Company, FBW and the holders of the
Company’s common stock, par value $.0001 per share, issued in
the IPO (the amount to be delivered to the Trustee will be referred
to herein as the “Property”; the stockholders for whose
benefit the Trustee shall hold the Property will be referred to as
the “Public Stockholders,” and the Public Stockholders,
FBW and the Company will be referred to together as the
“Beneficiaries”) and in the event the securities
offered in the IPO are registered in Colorado, pursuant to
Section 11-51-302(6) of the Colorado Revised Statutes (the
“CRS”). A copy of Section 11-51-302(6) of the CRS
is attached hereto and made a part hereof and
WHEREAS, a portion of the
Property consists of $1,769,400 attributable to the
underwriters’ non-accountable expenses allowance which FBW,
on behalf of the underwriters, has agreed to deposit in the Trust
Account (defined below); and
WHEREAS, the Company has agreed
to issue securities in a private placement (the
“Placement”); and
WHEREAS, the Company and the
Trustee desire to enter into this Agreement to set forth the terms
and conditions pursuant to which the Trustee shall hold the
Property
IT IS AGREED:
1.
AGREEMENTS AND COVENANTS
OF TRUSTEE. The Trustee hereby agrees and covenants to:
(a)
Hold the Property in trust for the
Beneficiaries in accordance with the terms of this Agreement,
including, without limitation, the terms of
Section 11-51-302(6) of the CRS, in a segregated trust account
(“Trust Account”) established by the Trustee at a
branch of United Bank, Inc. selected by the Trustee;
(b)
Manage, supervise and administer the
Trust Account subject to the terms and conditions set forth
herein;
(c)
In a timely manner, upon the
instruction of the Company, to invest and reinvest the Property in
any “Government Security.” As used herein, Government
Security means any Treasury Bill issued by the United States,
having a maturity of one hundred and eighty days or
less;
(d)
Collect and receive, when due, all
principal and income arising from the Property, which shall become
part of the “Property,” as such term is used
herein;
(e)
Notify the Company and FBW of all
communications received by it with respect to any Property
requiring action by the Company;
(f)
Supply any necessary information or
documents as may be requested by the Company in connection with the
Company’s preparation of the tax returns for the Trust
Account;
(g)
Participate in any plan or proceeding
for protecting or enforcing any right or interest arising from the
Property if, as and when instructed by the written instructions of
the Company to do so;
(h)
Render to the Company and to FBW, and
to such other person as the Company may instruct, monthly written
statements of the activities of and amounts in the Trust Account
reflecting all receipts and disbursements of the Trust
Account;
(i) As of
the date of the consummation of a business combination
(“Business Combination”), commence liquidation of the
Trust Account upon receipt of the Officers’ Certificate
signed by the Chief Executive Officer and Chief Financial Officer
and in accordance with the terms of a letter (“Termination
Letter”), in a form substantially similar to that attached
hereto as Exhibit A signed on behalf of the Company by its
President, Chief Financial Officer or Chairman of the Board and
Secretary or Assistant Secretary. The Trustee shall complete the
liquidation of the Trust Account and distribute the Property in the
Trust Account to the Beneficiaries as directed in the Termination
Letter and the other documents referred to therein. The Trustee
understands and agrees that disbursements from the Trust Account
shall be made only pursuant to a duly executed Termination Letter,
together with the other documents referenced herein, including,
without limitation, an independently certified oath and report of
inspector of election in respect of the shareholder vote in favor
of the Business Combination. In all cases, the Trustee shall
provide FBW with a copy of any Termination Letters, Officers’
Certificates and/or any other correspondence that it receives with
respect to any proposed withdrawal from the Trust Account promptly
after it receives same.
(j) As of
the date 18 months from the date of this Agreement (the
“LOI Termination Date”) (or 24 months from the
date hereof in the event the Company has executed the Letter of
Intent (defined below) prior to the LOI Termination Date but failed
to consummate a Business Combination (“Second Termination
Date”)), commence liquidation of the Trust Account. The
Trustee, upon consultation with the Company and FBW, shall deliver
a notice to Public Stockholders of record as of the LOI Termination
Date or Second Termination Date, whichever the case may be, by U.S.
mail or via the Depository Trust Company (“DTC”),
within five days of the LOI Termination Date or Second Termination
Date, to notify the Public Stockholders of such event and take such
other actions as it may deem necessary to inform the Beneficiaries.
The Trustee shall deliver to each Public Stockholder its ratable
share of the Property against satisfactory evidence of delivery of
the stock certificates by the Public Stockholders to the Company
through DTC, its Deposit Withdraw Agent Commission (DWAC) system or
as otherwise presented to the Trustee. Notwithstanding the
foregoing, if the Trustee receives a bona fide, executed letter of
intent or engagement letter (the “Letter of Intent”)
for a Business Combination prior to the LOI Termination Date
accompanied by an Officers’ Certificate as described in
Section 2(e) hereof, then the Trustee shall forego or suspend any
liquidation of the Trust Account until the earlier of a Business
Combination or the Second Termination Date.
2. LIMITED
DISTRIBUTIONS OF INCOME ON PROPERTY.
(a) Upon receipt by
the Trustee of an Officer’s Certificate signed by the Chief
Executive Officer and Chief Financial Officer of the Company
certifying as true, accurate and complete a copy of any tax return
required to be filed on behalf of the Trust Account in respect of
income earned on the Property held therein, the Trustee shall
deliver to the Company for submission to the appropriate taxing
authority a check made payable to the order of such taxing
authority in the amount required to pay such taxes; provided,
however , that in no event shall the aggregate amount of all
checks issued to taxing authorities pursuant to this Section 2(a)
exceed the income in respect of which such taxes are due and
owing.
(b) Upon written
request from the Company, which may be given not more than once in
any calendar month, the Trustee shall distribute to the Company an
amount equal to the income earned on the Base Deposit, net of taxes
payable through the last day of the month immediately preceding the
date of receipt of the Company’s request; provided,
however , that the maximum amount of distributions, net of
taxes, that the Company may request and the Trustee shall
distribute pursuant to this Section 2(b) shall be
$1,855,000.
(c) Except as
provided in Sections 2(a) and 2(b) above, no other distributions
from the Trust Account shall be permitted except in accordance with
Sections 1(i) and 1(j) hereof.
3.
AGREEMENTS AND COVENANTS
OF THE COMPANY.
(a)
The Company hereby agrees and
covenants to provide all instructions to the Trustee hereunder in
writing, signed by the Company’s President or Chairman of the
Board and Chief Financial Officer. In addition, except with respect
to its duties under section 1(i) and (j) above, the Trustee shall
be entitled to rely on, and shall be protected in relying on, any
verbal or telephonic advice or instruction which it in good faith
believes to be given by any one of the persons authorized above to
give written instructions, provided that the Company and/or FBW,
whichever has the authority to issue the instructions, shall
promptly confirm such instructions in writing;
(b)
The Company hereby agrees and
covenants to hold the Trustee harmless and indemnify the Trustee
from and against, any and all expenses, including reasonable
counsel fees and disbursements, or loss suffered by the Trustee in
connection with any action, suit or other proceeding brought
against the Trustee involving any claim, or in connection with any
claim or demand which in any way arises out of or relates to this
Agreement, the services of the Trustee hereunder, or the Property
or any income earned from investment of the Property, except for
expenses and losses resulting from the Trustee’s gross
negligence or willful misconduct. Promptly after the receipt by the
Trustee of notice of demand or claim or the commencement of any
action, suit or proceeding, pursuant to which the Trustee intends
to seek indemnification under this paragraph, it shall notify the
Company in writing of such claim (hereinafter referred to as the
“Indemnified Claim”). The Trustee shall have the right
to conduct and manage the defense against such Indemnified Claim,
provided, that the Trustee shall obtain the consent of the Company
with respect to the selection of counsel, which consent
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