Document:

ex10-6.htm

    

    EXHIBIT
      10.6

     

     

    EXECUTION
      VERSION

     

     

    PLEDGE
      AGREEMENT

     

    THIS
      PLEDGE AGREEMENT (this “Agreement”),
      effective as of December 24, 2007, is by and among INDIA GLOBALIZATION CAPITAL,
      INC., a Maryland corporation (“Pledgor”), and each
      of the other parties that is a signatory hereto (each a “Secured Party” and,
      collectively the “Secured
      Parties”).

     

    WHEREAS,
      the Secured Parties have extended credit to Pledgor (the “Loan”) and, in
      exchange therefor, Pledgor has executed and delivered to each Secured Party
      a
      Promissory Note, dated as of the date hereof (each a “Note” and,
      collectively the “Notes”), for the
      respective principal amount stated therein, and the Secured Parties and Pledgor
      have executed and delivered a Note Purchase Agreement, dated as of the date
      hereof (the “Purchase
      Agreement”), setting forth certain terms and conditions relating to the
      Notes;

     

    WHEREAS,
      in accordance with the terms of the Purchase Agreement, additional lenders
      may
      also extend credit to Pledgor from time to time in the future, in which event
      each such additional lender shall become party to this Pledge Agreement as
      an
      additional “Secured Party” hereunder and Schedule 1
      hereto shall be revised in order to reflect such additional Secured Party’s
      Percentage Interest in and to the Collateral and the Obligations (each as
      hereinafter defined), without any further action, signature, or consent by
      the
      Secured Parties who are signatories hereto on the date hereof;

     

    WHEREAS,
      it is in the best interests of Pledgor to execute this Agreement, as Pledgor
      will derive substantial benefits from the Loan made to Pledgor; and

     

    WHEREAS,
      any capitalized terms used in this Agreement not otherwise defined herein are
      defined in the Note.

     

    NOW,
      THEREFORE, for valuable consideration, and to induce Secured Party to make
      the
      Loan to Pledgor and to accept as evidence of the Loan the Note, the parties
      hereto agree as follows:

     

    1. Certain
      Definitions.  The following terms shall have the following
      meanings (such meanings to be equally applicable to both the singular and plural
      forms of the terms defined):

     

    “Collateral”
shall
      have the meaning specified in Section 2(a).

     

    “Event
      of Default”
shall have the meaning specified in Section 8.

     

    “Governmental
      Authority” shall mean any federal, state, local, foreign or other
      governmental or administrative (including self-regulatory) body,
      instrumentality, department or agency or any court, tribunal, administrative
      hearing body, arbitration panel, commission, or other similar dispute resolving
      panel or body.

     

    “Indemnitees”
shall
      have the meaning specified in Section 14(a).

     

    “Lien”
shall
      mean any
      mortgage, pledge, assignment, security interest, encumbrance, lien or charge
      of
      any kind, any conditional sale or other title retention agreement or any lease
      in the nature thereof (including any agreement to give any of the
      foregoing).

     

    “Note”
shall
      have the
      meaning specified in the recitals hereto.

     

    
      
        
        

      

      
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    “Obligations”
shall
      have the meaning specified in Section 5.

     

    “Percentage
      Interest”
shall mean, as to each Secured Party, its percentage interest in and
      to the
      Collateral or of the Obligations, as applicable, in the amount set forth on
      Schedule 1
      attached hereto.

     

    “Person”
shall
      mean
      and include any individual, partnership, limited liability company, joint
      venture, firm, corporation, association, trust or other enterprise or any
      Governmental Authority.

     

    “Pledgor”
shall
      have
      the meaning specified in the preamble hereto.

     

    “Proceeds”
shall
      have
      the meaning specified in the UCC.

     

    “UCC”
shall
      mean the
      Uniform Commercial Code as in effect in the State of Maryland from time to
      time.

     

    “Secured
      Party” shall
      have the meaning specified in the preamble hereto.

     

    “Securities
      Act” shall
      mean the Securities Act of 1933, as amended.

     

    “Securities”
shall
      have the meaning specified in Sections 2(a) and
(b).

     

    “Third
      Party Claims”
shall have the meaning specified in Section 14(a).

     

    2. Grant
      of a Security
      Interest.

     

    (a) As
      security for the prompt and complete payment and performance when due of all
      the
      Obligations, Pledgor hereby pledges, assigns, transfers and grants to each
      Secured Party, a continuing first priority security interest in and to such
      Secured Party’s Percentage Interest in Pledgor’s right, title and interest in,
      to and under (i) the shares of capital stock of India Globalization
      Capital, Mauritius, Limited, a Mauritius company, held or owned by Pledgor
      (the
“Securities”),
      (ii) all certificates evidencing such Securities (the “Certificates”), and
      (iii) any and all Proceeds therefrom (the foregoing collectively referred
      to as the “Collateral”).  Pledgor
      shall deliver, simultaneously with the execution of this Agreement, to each
      Secured Party the Certificate, together with appropriate stock powers relating
      thereto, duly endorsed in blank, to be held by Secured Party pursuant to the
      terms of this Agreement.

     

    (b) The
      term
“Securities” as
      used herein shall also mean and include, without limitation, any securities
      into
      which the Securities are converted or for which they are exchanged, and any
      stock dividend and/or distribution or exchange of stock in connection with
      any
      reorganization, recapitalization, reclassification, or increase or reduction
      of
      capital, if any, to which Pledgor shall become entitled for any reason
      whatsoever as an addition to, in substitution for, or in exchange for any
      portion of the aforesaid securities.

     

    3. Payments;
      Distributions.  Until payment in full of the Obligations, all
      rights of the Pledgor to receive dividends, payments and distributions as to
      the
      Collateral shall cease, and Secured Parties shall have the exclusive right
      and
      authority to receive those dividends, payments and distributions in accordance
      with each Secured Party’s Percentage Interest in the Collateral.  In
      order to permit Secured Parties to receive such dividends, payments and
      distributions, the Pledgor shall, if necessary, upon the written request of
      any
      Secured Party, execute and deliver to such Secured Party appropriate dividend
      payment orders.  Any and all money or other property paid over to or
      received by any Secured Party pursuant to this Section 3 shall be
      delivered to Secured Party as additional Collateral hereunder and shall be
      applied in accordance with the provisions hereof.

     

    
      
        
        

      

      
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    4. Voting
      and Other
      Rights.

     

    (a) So
      long
      as no Event of Default shall have occurred and be continuing, the Pledgor may
      exercise all voting and other rights in respect of the Collateral, provided
      that
      the Pledgor shall not exercise any of such rights in a manner which would be
      inconsistent with any provisions of this Pledge Agreement, or any other
      agreement, document or instrument executed and delivered pursuant hereto, or
      which would otherwise have the effect of impairing the value of the
      Collateral.  In order to facilitate the Pledgor’s exercise of such
      voting and other rights, each Secured Party shall, if necessary, upon the
      written request of the Pledgor, from time to time execute and deliver to the
      Pledgor appropriate proxies.

     

    (b) Upon
      the
      occurrence of an Event of Default, all voting rights of the Pledgor with respect
      to the Collateral shall cease and each Secured Party shall have, without notice,
      the sole and exclusive right to exercise all voting and other rights with
      respect to the Collateral, on a pro rata basis (based on each Secured Party’s
      Percentage Interest) as if such Secured Party was the absolute owner
      thereof.  In order to facilitate Secured Parties’ exercise of such
      voting and other rights, the Pledgor shall, if necessary, upon the written
      request of any Secured Party, from time to time execute and deliver appropriate
      proxies to each such Secured party.

     

    5. Obligations
      Secured
      Hereby.  This Agreement secures, and each Secured Party’s
      Percentage Interest in the Collateral is collateral security for, the prompt
      payment and performance in full when due, whether at stated maturity, by
      acceleration or otherwise (including, without limitation, the payment of
      interest and other amounts which would accrue and become due but for the filing
      of a petition in bankruptcy or the operation of the automatic stay under
      Section 362(a) of the Bankruptcy Code) of all obligations of Pledgor now or
      hereafter arising under or in respect of such Secured Party’s Note (collectively, the
      “Obligations”).

     

    6. Pledgor’s
      Representations
      and Warranties.  Pledgor represents and warrants and, so long
      as this Agreement is in effect, shall be deemed continuously to represent and
      warrant that:

     

    (a) No
      Liens.  Pledgor is and will be the owner of all Collateral free
      from any Lien or other right, title or interest of any Person, other than
      Secured Parties.

     

    (b) Authority;
      Enforceability.  Pledgor has full corporate power and authority
      and has taken all corporate action necessary to execute, deliver and perform
      this Agreement and to encumber and grant security interests in the
      Collateral.  This Agreement constitutes legal, valid and binding
      obligations of Pledgor, enforceable against Pledgor in accordance with its
      terms.

     

    (c) Other
      Financing
      Statements.  There is no financing statement (or similar
      statement or instrument of registration under any jurisdiction) or any notice
      filed with any Governmental Authority covering or purporting to cover any
      interest of any kind in the Collateral, and so long as any of the Obligations
      remain unpaid, Pledgor shall not execute or authorize to be filed in any public
      office any financing statement (or similar statement or instrument of
      registration under the law of any jurisdiction) or statements relating to the
      Collateral, except financing statements filed or to be filed in respect of
      and
      covering the security interest granted hereby by Pledgor.

     

    (d) Security
      Interest; Necessary
      Filings.  This Agreement creates a valid security interest for
      each Secured Party in such Secured Party’s Percentage Interest in the Collateral
      securing payment of such Secured Party’s Percentage Interest in the
      Obligations.  All filings, registrations and recordings necessary,
      appropriate or reasonably requested by Secured Parties to create, preserve,
      protect and perfect the security interest granted by Pledgor to Secured Parties
      hereby in respect of the Collateral have or will be made on or before the date
      of this Agreement.  The security interest granted to each Secured
      Party pursuant to this Agreement in and to such Secured Party’s Percentage
      Interest in the Collateral constitutes and hereafter will constitute a perfected
      security interest therein, superior and prior to the rights of all other persons
      therein and subject to no other Liens.

     

    (e) No
      Consents,
      etc.  No other consent of any other Person (including, without
      limitation, stockholders or creditors of Pledgor) and no consent, authorization,
      approval, or other action by, and no notice to or filing with, any Governmental
      Authority (other than a court in connection with the exercise of judicial
      remedies by Secured Parties) or regulatory body is required either (i) for
      the pledge by Pledgor of the Collateral pursuant to this Agreement, or for
      the
      execution, delivery or performance of this Agreement by Pledgor, or
      (ii) for the exercise by Secured Parties of the rights provided for in this
      Agreement or the remedies in respect of the Collateral pursuant to this
      Agreement.

     

    (f) Collateral.  The
      Securities were validly issued and are fully paid and
      nonassessable.  Pledgor has delivered or will deliver to Secured
      Parties the Certificates, each duly endorsed in favor the of Secured Party
      to
      whom the Securities evidence thereby are pledged hereunder.  All
      information set forth herein relating to the Collateral is accurate and complete
      in all material respects.

     

    
      
        
        

      

      
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    7. Pledgor’s
      Covenants.  Pledgor agrees and covenants for itself, its
      successors and permitted assigns that:

     

    (a) Protection
      of Secured
      Parties’ Security.  Pledgor shall not take any action that
      impairs the rights of any Secured Party in the such Secured Party’s Percentage
      Interest in the Collateral.  Pledgor will mark all books and records
      to indicate the security interests.  Pledgor will defend the
      Collateral against the claims and demands of all other parties against Pledgor
      or Secured Parties; will keep the Collateral free from all Liens; and will
      not
      sell, transfer, assign, deliver, pledge, hypothecate or otherwise dispose of
      any
      Secured Party’s Percentage Interest in the Collateral (or any interest therein)
      without the prior written consent of such Secured Party.

     

    (b) Financing
      Statements.  Pledgor shall, at no cost to Secured Parties,
      execute, acknowledge and deliver all such other documents, as Secured Parties
      reasonably deem necessary to create, perfect and continue the security interest
      in the Collateral contemplated hereby.  Pledgor will pay all costs of
      title searches and filing of financing statements, assignments and other
      documents in all public offices reasonably requested by Secured Parties, and
      will not, without the prior written consent of Secured Parties, file or
      authorize or permit to be filed in any public office any financing statement
      naming Pledgor as Pledgor and not naming Secured Parties as secured
      parties.

     

    (c) Further
      Actions.  Pledgor shall at any time and from time to time take
      such steps as Secured Parties may reasonably request to insure the continued
      perfection and priority of Secured Parties’ security interest in any of the
      Collateral and of the preservation of its rights therein in any
      jurisdiction.  Without limiting the foregoing, Pledgor will deliver,
      at its own expense, to Secured Parties, upon demand, all documents, instruments
      or other writings constituting, representing or relating to the Collateral
      or
      any part thereof.

     

    (d) After
      Acquired
      Collateral.  Any and all Collateral described or referred to in
      the granting clauses hereof which is hereafter acquired shall, and without
      any
      further conveyance, assignment or act on the part of Pledgor or Secured Parties,
      become and be subject to the security interests herein granted as fully and
      completely as though specifically described herein.

     

    8. Events
      of
      Default.  The occurrence of any of the following events with
      respect to a Secured Party shall constitute an “Event of Default”
under this
      Agreement as to such Secured Party:

     

    (a) any
      default in the performance, or any breach, of any representation, warrant,
      covenant or agreement for the benefit of such Secured Party contained in this
      Agreement;

     

    (b) any
      default in the payment of the principal or interest on such Secured Party’s
      Note, when and as the same shall become due and payable; or

     

    (c) the
      entry
      of a decree or order by a court of competent jurisdiction adjudging Pledgor
      bankrupt or insolvent, or approving a petition seeking reorganization,
      arrangement, adjustment or composition of or in respect of Pledgor, under
      federal bankruptcy law, as now or hereafter constituted, or any other applicable
      federal or state bankruptcy, insolvency or other similar law, and the
      continuance of any such decree or order unstayed and in effect for a period
      of
      60 days; or the commencement by Pledgor of a voluntary case under federal
      bankruptcy law, as now or hereafter constituted, or any other applicable federal
      or state bankruptcy, insolvency or similar law, or the consent by Pledgor to
      the
      institution of bankruptcy or insolvency proceedings against it, or the filing
      by
      Pledgor of  a petition or answer or consent seeking reorganization or
      relief under federal bankruptcy law or any other applicable federal or state
      law, or the consent by Pledgor to the filing of such petition or to the
      appointment of a receiver, liquidator, assignee, trustee, sequestrator or
      similar official of Pledgor or of any substantial part of the property of
      Pledgor, or the making by Pledgor of an assignment for the benefit of creditors,
      or the admission by Pledgor in writing of its inability to pay its debts
      generally as they become due, or the taking of corporate action by Pledgor
      in
      furtherance of any such action.

     

    
      
        
        

      

      
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    9. Remedies.

     

    (a) Acceleration
      of
      Note.  Upon the occurrence of an Event of Default, each Secured
      Party may, by notice to Pledgor, declare the aggregate unpaid principal balance
      of its Note, together with all unpaid accrued interest thereon, to be
      immediately due and payable and thereupon all such amounts shall be and become
      immediately due and payable to such Secured Party.

     

    (b) Obtaining
      the Collateral
      Upon Event of Default.  If any Event of Default shall have
      occurred and be continuing, then and in every such case, each Secured Party
      may,
      at any time or from time to time during the continuance of such Event of Default
      take any or all of the following actions, all if which shall be at Pledgor’s
      expense, which expenses shall constitute Obligations secured by the
      Collateral:

     

    (i) Personally,
      or by agents or attorneys, immediately take possession of such Secured Party’s
      Percentage Interest in the Collateral or any part thereof not already in such
      Secured Party’s possession, from Pledgor or any other Person who then has
      possession of any part thereof with or without notice or process of law, and
      for
      that purpose may enter upon Pledgor’s premises where any of such Collateral is
      located and remove such Collateral, and use in connection with such removal
      any
      and all services, supplies, aids and other facilities of Pledgor;

     

    (ii) Instruct
      the obligor or obligors on any agreement, instrument or other obligation
      constituting such Secured Party’s Percentage Interest in Collateral, to make any
      payment required by the terms of such instrument or agreement directly to such
      Secured Party; provided, however,
      in the event
      that any such payments are made directly to Pledgor, Pledgor shall hold such
      payments in trust and shall segregate all amounts received pursuant thereto
      in a
      separate account and pay the same promptly to such Secured Party;
      and

     

    (iii) To
      the
      extent permitted by law, including any federal or state securities laws, sell,
      assign or otherwise liquidate, or direct Pledgor to sell, assign or otherwise
      liquidate, the Secured Party’s Percentage Interest in the Collateral, or any
      part thereof, and take possession of the proceeds of any such sale, assignment
      or liquidation.

     

    (c) Other
      Rights and
      Remedies.  Upon the occurrence and during the continuance of an
      Event of Default, each Secured Party may from time to time exercise in respect
      of its Percentage Interest in the Collateral, in addition to other rights and
      remedies provided for herein or otherwise available to it, all the rights and
      remedies of a secured party under the UCC at the time of an event of
      default.

     

    (d) Waiver
      of
      Claims.  Except as otherwise provided herein, Pledgor hereby
      waives, to the fullest extent permitted by applicable law, notice or judicial
      hearing in connection with any Secured Party taking possession, or Secured
      Parties’ disposition of any of the Secured Party’s Percentage Interest in the
      Collateral, including, without limitation, any and all prior notice and hearing
      for any prejudgment remedy or remedies and any such right which Pledgor would
      otherwise have under law, and Pledgor hereby further waives to the extent
      permitted by applicable law:  (i) all damages, occasioned by such
      taking of possession, (ii) all other requirements as to the time, place and
      terms of sale or other requirements with respect to the enforcement of such
      Secured Party’s rights hereunder, and (iii) all rights of redemption,
      appraisal, valuation, stay, extension or moratorium now or hereafter in force
      under any applicable law.  Any sale of, or the grant of options to
      purchase, or any other realization upon, any Collateral shall operate to divest
      all rights, title, interest, claim and demand, either at law or in equity,
      of
      Pledgor therein and thereto, and shall be a perpetual bar both at law and in
      equity against Pledgor and against any and all Persons claiming or attempting
      to
      claim the Collateral so sold, optioned or realized upon, or a thereof, from,
      through or under Pledgor.

     

    (e) Notice.  Without
      in any way requiring notice to be given in the following time and manner,
      Pledgor agrees that any notice by any Secured Party of sale, disposition or
      other intended action hereunder or in connection herewith, whether required
      by
      the UCC or otherwise, shall constitute reasonable notice to Pledgor if such
      notice delivered in accordance with Section 16(h).

     

    (f) Sale
      of
      Collateral.  Pledgor acknowledges that Secured Parties may be
      unable to effect a public sale of all or part of the Collateral by reason of
      certain prohibitions contained in the Securities Act and other applicable
      securities laws, or that they may be able to do so only after delay which might
      adversely affect the value that might be realized upon the sale of the
      Collateral.  Accordingly, Pledgor agrees that any Secured Party,
      without the necessity of attempting to cause any registration of the Collateral
      to be effected under the Securities Act or other applicable securities laws,
      may
      sell its Percentage Interest in the Collateral or any part thereof, in one
      or
      more private sales in any manner exempt from such
      registration.  Pledgor agrees that any such private sale may be at
      prices or on terms less favorable to the owner of such sold Collateral than
      would be the case if such Collateral were sold at public sale, and that any
      such
      private sale shall not be deemed not to have been made in a commercially
      reasonable manner by virtue of such sale having been a private
      sale.

     

    
      
        
        

      

      
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    10. Payments
      After an Event of
      Default.  All payments received and amounts realized by any
      Secured Party pursuant to Section 9,
      including all such payments and amounts received after the entire unpaid
      principal and interest amount of its Note has been declared due and payable,
      as
      well as all payments or amounts then held or thereafter received by such Secured
      Party as part of the Collateral while an Event of Default shall be continuing,
      shall be promptly applied and distributed in the following order of
      priority:

     

    (a) first,
      to the payment
      of all costs and expenses, including reasonable legal expenses and attorneys’
fees, incurred or made hereunder by any Secured Party, including any such costs
      and expenses of foreclosure or suit, if any, and of any sale or the exercise
      of
      any other remedy under Section 9, and
      of all taxes, assessments or liens superior to the lien granted under this
      Agreement, except any taxes, assessments or other superior lien subject to
      which
      any said sale under Section 9 may
      have been made;

     

    (b) second,
      to the
      payment to each Secured Party of the amount then owing or unpaid on its Note,
      with application on the Note to be made first to any cost, fees, expenses,
      indemnities or other similar amounts due and payable to such Secured Party
      pursuant to the terms of its Note, second to the unpaid interest under such
      Note, and third, to the unpaid principal under such Note, such application
      to be
      made upon presentation of the Note and the notation thereon of the payment,
      if
      partially paid, or the surrender and cancellation thereof, if fully paid;
      and

     

     (c) third,
      to the payment
      of the balance or surplus, if any, to Pledgor, its successors and assigns,
      or to
      whosoever may be lawfully entitled to receive the same.

     

    11. Power
      of
      Attorney.  Pledgor hereby appoints each Secured Party the
      attorney-in-fact of Pledgor to prepare, sign and file or record, for Pledgor
      in
      Pledgor’s name, any financing statement and to take any other action reasonably
      deemed by such Secured Party necessary or desirable to perfect and continue
      the
      perfection of the security interest of such Secured Party hereunder, and to
      perform any obligations of Pledgor hereunder, at Pledgor’s expense, but without
      obligation to do so.  Such power of attorney is coupled with an
      interest and is irrevocable so long as this Agreement is in effect.

     

    12. Secured
      Parties’ Right to
      Cure; Reimbursement.  In the event Pledgor should fail to do
      any act as herein provided, Secured Parties may, but without obligation to
      do
      so, with notice to Pledgor, and without releasing Pledgor from any obligation
      hereof, make or do the same in such manner and to such extent as Secured Parties
      may deem necessary to protect the Collateral, including, without limitation,
      the
      defense of any action purporting to affect the Collateral or the rights or
      powers of Secured Parties hereunder, at Pledgor’s expense.  Pledgor
      shall reimburse Secured Parties for expenses reasonably incurred under this
      Section 12.

     

    13. Expenses.  Pledgor
      will upon demand pay to Secured Parties the amount of any and all reasonable
      expenses, including the fees and expenses of its counsel and the allocated
      fees
      and expenses of staff counsel and the fees and expenses of any experts and
      agents, which Secured Parties may incur in connection with (i) the
      collection of the Obligations, (ii) the administration of this Agreement,
      (iii) the custody or preservation of, or the sale of, collection from, or
      other realization upon, any of the Collateral, (iv) the exercise or
      enforcement of any of the rights of Secured Parties hereunder, or (v) the
      failure by Pledgor to perform or observe any of the provisions
      hereof.  All amounts payable by Pledgor under this Section 13 shall
      be due upon demand and shall be part of the Obligations.  Pledgor’s
      obligations under this Section shall survive the termination of this Agreement
      and the discharge of Pledgor’s other obligations hereunder.

     

    14. Indemnity.

     

    (a) Indemnity.  Pledgor
      agrees to indemnify, reimburse and hold each Secured Party and its successors,
      assigns, officers, directors, stockholders, members, managers, employees,
      agents, representatives, attorneys and servants (collectively, “Indemnitees”)
      harmless from and against any and all liabilities, obligations, damages,
      injuries, penalties, claims, demands, actions, suits, judgments and any and
      all
      reasonable costs and expenses (including, without limitation, reasonable
      attorneys’ fees and expenses) of whatsoever kind and nature imposed on, asserted
      against or incurred by any of the Indemnitees in any way relating to or arising
      out of this Agreement or its Note or in any other way connected with the
      administration of the transactions contemplated hereby or the enforcement of
      any
      of the terms hereof, or the preservation of any rights hereunder, or in any
      way
      relating to or arising out of the ownership, purchase, delivery, control,
      financing, possession, sale, or other disposition, or use of the Collateral,
      or
      the violation of the laws of any Governmental Authority (including, without
      limitation, any federal or state securities laws); provided, that
      Pledgor shall have no obligation to an Indemnitee hereunder to the extent it
      is
      judicially determined by a final order or decree that such indemnified
      liabilities arise solely from the gross negligence or willful misconduct of
      that
      Indemnitee.  Any Indemnitee shall provide Pledgor with prompt notice
      of all third party actions, suits, proceedings, claims, demands or assessments
      subject to the indemnification provisions of this Section 14(a)
      (collectively, “Third
      Party Claims”), and provide Pledgor with notice of all other claims or
      demands for indemnification pursuant to this Section 14(a);
      provided, however, that the failure to provide timely notice shall not affect
      Pledgor’s indemnification obligations except to the extent Pledgor shall have
      been materially prejudiced by such failure.  Pledgor shall, if
      requested by such Indemnitee, resist and defend any Third Party Claim or cause
      the same to be resisted and defended by counsel reasonably satisfactory to
      such
      Indemnitee.  Each Indemnitee shall, unless any other Indemnitee has
      made the request described in the preceding sentence and such request has been
      complied with, have the right to employ its own counsel (or internal counsel)
      to
      investigate and control the defense of any matter covered by the indemnity
      set
      forth in this Section 14, and
      the fees and expenses of any such outside counsel shall be paid by Pledgor;
      provided that,
      only to the extent no conflict exists between or among the Indemnitees as
      reasonably determined by the Indemnitees, Pledgor shall not be obligated to
      pay
      the fees and expenses of more than one counsel for all Indemnitees as a group
      with respect to any such matter, action, suit or proceeding.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b) Misrepresentations.  Without
      limiting the application of Section 14(a),
      Pledgor agrees to pay, indemnify and hold each Indemnitee harmless from and
      against any loss, costs, damages and expenses which such Indemnitee may suffer,
      expend or incur in consequence of or growing out of any misrepresentation by
      Pledgor in this Agreement or in any statement or writing contemplated by or
      made
      or delivered pursuant to or in connection with this Agreement.

     

    (c) Contribution.  If
      and to the extent that the obligations of Pledgor under this Section 14 are
      unenforceable for any reason, Pledgor hereby agrees to make the maximum
      contribution to the payment and satisfaction of such obligations that is
      permissible under applicable law.

     

    (d) Survival.  The
      obligations of Pledgor contained in this Section 14 shall
      survive the termination of this Agreement and the discharge of Pledgor’s other
      obligations hereunder.

     

    (e) Reimbursement.  Any
      amounts paid by an Indemnitee as to which such Indemnitee has the right to
      reimbursement shall constitute Secured Obligations secured by the
      Collateral.

     

    15. Termination;
      Release.  This Agreement shall terminate on the satisfaction in
      full of all of the Obligations and, on such termination, Secured Parties shall
      release to Pledgor the security interest granted in the Collateral hereunder
      and, upon the request and at the expense of Pledgor, forthwith assign, transfer
      and deliver to Pledgor, against receipt and without recourse to or warranty
      by
      Secured Parties, such of the Collateral to be released as may then be in the
      possession of Secured Parties and proper instruments (including UCC termination
      statements on Form UCC-3) acknowledging the termination of this Agreement
      or the release of such Collateral, as the case may be; provided, that if, after
      receipt of any payment of all or any part of the Obligations, any Secured Party
      is for any reason compelled to surrender such payment to any person or entity,
      because such payment is determined to be void or voidable as a preference,
      impermissible setoff, or a diversion of trust funds, or for any other reason,
      this Agreement shall continue in full force notwithstanding any contrary action
      which may have been taken by such Secured Party in reliance upon such payment,
      and any such contrary action so taken shall be without prejudice to such Secured
      Party’s rights under this Agreement and shall be deemed to have been conditioned
      upon such payment having become final and irrevocable.

     

    16. Miscellaneous.

     

    (a) Entire
      Agreement;
      Amendment.  This Agreement sets forth the entire understanding
      of the parties with respect to the subject matter hereof, and supersedes all
      existing agreements among them concerning such subject matter.  This
      Agreement may only be amended or modified by a written instrument duly executed
      by Pledgor and Secured Parties.

     

    (b) Successors
      and
      Assigns.  This Agreement, together with the covenants and
      warranties contained in it, shall inure to the benefit of each Secured Party
      and
      its successors, assigns, heirs and personal representatives, and shall be
      binding upon Pledgor, its successors and permitted assigns; provided that
      Pledgor may not assign this Agreement without the prior written consent of
      all
      Secured Parties.  Any assignment by Pledgor in violation of this Section 16(b) shall
      be null and void.  No other Persons (including, without limitation,
      any other creditor of Pledgor) shall have any interest herein or any right
      or
      benefit with respect hereto.  Without limiting the generality of the
      foregoing, each Secured Party may assign or otherwise transfer any indebtedness
      held by it and secured by this Agreement to any other Person, and such other
      Person shall thereupon become vested with all the benefits in respect thereof
      granted to such Secured Party, herein or otherwise, subject however, to the
      provisions of the Note.

     

    (c) No
      Waiver; Cumulative
      Remedies.

     

    (i) No
      failure on the part of any Secured Party to exercise, no course of dealing
      with
      respect to, and no delay on the part of any Secured Party in exercising, any
      right, power or remedy hereunder shall operate as a waiver thereof; nor shall
      any single or partial exercise of any such right, power or remedy hereunder
      preclude any other or further exercise thereof or the exercise of any other
      right, power or remedy.  The remedies herein provided are cumulative
      and are not exclusive of any remedies provided by law.

     

    (ii) In
      the
      event any Secured Party shall have instituted any proceeding to enforce any
      right, power or remedy under this Agreement by foreclosure, sale, entry or
      otherwise, and such proceeding shall have been discontinued or abandoned for
      any
      reason or shall have been determined adversely to such Secured Party, then
      and
      in every such case, Pledgor and such Secured Party shall be restored to their
      respective former positions and rights hereunder with respect to the Collateral,
      and all rights, remedies and powers of such Secured Party shall continue as
      if
      no such proceeding had been instituted.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (d) Governing
      Law.  This Agreement shall be governed by, and shall be
      construed and enforced in accordance with, the laws of the State of
      Maryland.

     

    (e) Consent
      to Jurisdiction and
      Service of Process.  Pledgor irrevocably consents to the
      jurisdiction of the courts of the State of Maryland and of any federal court
      sitting in Maryland in connection with any action or proceeding arising out
      of
      or relating to this Agreement, any document or instrument delivered pursuant
      to,
      in connection with or simultaneously with this Agreement, or a breach of this
      Agreement or any such document or instrument.

     

    (f) WAIVER
      OF JURY
      TRIAL.  PLEDGOR HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
      PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
      (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
      RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
      HEREUNDER.

     

    (g) Severability
      of
      Provisions.  If any provision of this Agreement is invalid,
      illegal or unenforceable, the balance of this Agreement shall remain in effect,
      and if any provision is inapplicable to any person, party or circumstance,
      it
      shall nevertheless remain applicable to all other persons, parties and
      circumstances.

     

    (h) Notices.  All
      notices and other communications required or permitted under this Agreement
      shall be sent by registered or certified mail, postage prepaid, overnight
      courier, confirmed telex or facsimile transmission (provided, that a copy is
      also set by registered or certified mail), or delivered by hand or by messenger,
      addressed (i) if to a Secured Party, addressed at its address set forth on
      the signature page hereto, or at such other address as such Secured Party shall
      have furnished to Pledgor in writing, or (ii) if to Pledgor, at its offices
      at 4336 Montgomery Avenue, Bethesda, Maryland 20814, to the attention of the
      Chief Executive Officer, or at such other address as Pledgor shall have
      furnished to Secured Party in writing.

     

    (i) Headings.  The
      Section headings used in this Agreement are for convenience of reference only
      and shall not affect the construction or interpretation of this
      Agreement.

     

    (j) Execution
      in
      Counterparts.  This Agreement and any amendments, waivers,
      consents or supplements hereby may be executed in any number of counterparts
      and
      by different parties hereto in separate counterparts.

     

     

     

     [SIGNATURE
      PAGE FOLLOWS.]

     

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

     

     

    PLEDGOR:

     

     

    INDIA
      GLOBALIZATION CAPITAL, INC

     

     

    By:                                                              

    Name:

    Title:

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

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

     

     

    SECURED
      PARTY:

     

     

                                                                       

     

    
       

      By:                                                              

      Name:

      Title:

       

    

     

    Address:                                                                         

                                                                                                                                              
      

                                                                                                                                              
      

    

     

     

     

     

     

     

     

     

     

     

     

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      1

     

     

    PERCENTAGE
      INTERESTS

     

    
      	
              Secured
                PartyName

            	
              Percentage

            
	
              DR.
                RANGA KRISHNA (CHAIRMAN OF
                IGCBOARD)

            	
              59.107%

            
	
              OLIVERIA
                CAPITAL

            	
              13.746%

            
	
              Total

            	
              72.853%

            

    

     

     

     

     

     

     

     

     

     

    
 

     

    

     

    

    
      
        
        

      

      
        11ex10-7.htm

    EXHIBIT
      10.7

     

    EXECUTION
      VERSION

     

    December
      24, 2007

     

    India
      Globalization Capital, Inc.

    4336
      Montgomery Ave.

    Bethesda,
      Maryland  20814

     

    Re:  Issuance
      of India Globalization Capital, Inc. Common Stock

     

    Dear
      Sir:

     

    This
      letter agreement (this “Agreement”) confirms the agreement between India
      Globalization Capital, Inc. (the “Company”) and the undersigned relating to
      certain restrictions on transfer of shares of the Company’s common stock (the
“Common Stock”) to be issued to the undersigned pursuant to the Note Purchase
      Agreement dated as of even date hereto.  Certain capitalized terms
      used herein are defined in the Note Purchase Agreement.

    

    The
      Company intends to raise funds in a private placement of promissory notes (the
      “Notes”) and shares of Common Stock.  Further, the Company intends to
      issue 446,226 shares of Common Stock (the “Shares”) to the undersigned upon the
      terms and conditions of the Note Purchase Agreement and in consideration of
      the
      undersigned’s guaranty of the Notes.  As a condition thereto, the
      undersigned has agreed to the terms set forth herein and recognizes that the
      private placement is of benefit to the undersigned and will benefit the
      Company.  The undersigned acknowledges further that investors in the
      private placement of the Notes are relying on the representations and agreements
      of the undersigned contained in this Agreement in purchasing the Notes in the
      private placement.

    In
      consideration of the foregoing, the
      undersigned hereby agrees that he will not, without the prior written consent
      of
      the Company (which consent may be withheld in its sole discretion), directly
      or
      indirectly, sell, offer for sale, contract or grant any option to sell, pledge
      or transfer the Shares, for a period commencing on the date of the issuance
      of
      the Shares in accordance with the Note Purchase Agreement and continuing for
      nine months following the consummation of a Business Combination (the “Lock-Up
      Period”).

    

    Notwithstanding
      the foregoing, during the Lock-Up Period, the undersigned may, without the
      prior
      written consent of the Company, transfer the Shares (i) as a bona fide gift
      or
      gifts, provided that before such transfer the donee or donees agree in writing
      to be bound by the restrictions set forth herein, (ii) to any trust for the
      direct or indirect benefit of the undersigned or immediate family of the
      undersigned, provided that before such transfer the trustee of the trust agrees
      in writing to be bound by the restrictions set forth herein, or (iii) if such
      transfer occurs by operation of law, such as rules of descent and distribution,
      statutes governing the effects of a merger or a qualified domestic order,
      provided that before such transfer the transferee agrees in writing to be bound
      by the restrictions set forth herein. For purposes of this agreement, “immediate
      family” shall mean any relationship by blood, marriage or adoption, but not more
      remote than a first cousin. 

    

    The
      provisions of this Agreement shall apply, to the full extent set forth herein
      with respect to the Shares, to any and all shares of capital stock or equity
      securities of the Company which may be issued by reason of any stock dividend,
      stock split, reverse stock split, combination, recapitalization,
      reclassification or otherwise. 

    

    This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Maryland as applied to contracts to be performed in
      Maryland.  This Agreement is irrevocable and will be binding on the
      undersigned and the respective successors, heirs, personal representatives,
      and
      assigns of the undersigned.

    Sincerely,

     

                                                                                       
      

                                                                                                                                 
      

    Ranga
      Krishna

    

    

     

    

    Acknowledged,
      Agreed, and
      Accepted:

    

    India
      Globalization Capital, Inc.

    

    

    By:____________________________

    Ram
      Mukunda

    President
      and Chief Executive Officer

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