Document:

ACTUATE CORPORATION LETTERHEAD

[Name of Officer]

[Address]

Dear ____________________:

You currently participate in a special severance benefit program (the "Program") which the Compensation Committee of the Company's Board of Directors  approved for you and other senior executives. .  The  terms and conditions governing  your severance benefits are currently set forth in a letter agreement between you and the Company dated __________, 200_ (the "Original Letter Agreement").  

Recent changes to the federal tax laws relating to executive severance benefits have made it necessary to restate the terms and provisions of your Original Letter Agreement so that you will not incur any adverse tax consequences as a result of your continued participation in the Program.  Accordingly,  the purpose of this new letter agreement is to replace and supersede the Original Letter Agreement and to conform the terms and conditions of your participation in the Program to the applicable requirements of the new tax laws and regulations.   

As was the case under your Original Letter Agreement, your severance package will become payable should your employment terminate under certain circumstances following the Company's execution of a definitive agreement to effect a change in ownership or control of the Company. To understand the full scope of your benefits, you should familiarize yourself with the definitional provisions of Part One of this new letter agreement.  The benefits comprising your severance package are detailed in Part Two, and the dollar limitation on the overall value of your benefit package and other applicable restrictions are specified in Part Three.  Part Four deals with ancillary matters affecting your severance arrangement.

Your Original Letter Agreement is no longer in effect, and your rights under the Program will be governed solely by the terms of this new letter agreement.  

Part One -- DEFINITIONS

For purposes of this letter agreement, the following definitions will be in effect:

Average Bonus means the greater of (i) the average of the bonuses paid to you   under the Company's cash incentive bonus program for the three (3) fiscal years of the Company  (or such fewer number of fiscal years during which you were employed with the Company) ended immediately prior to the fiscal year in which the Change of Control is effected, or (ii) the average of the bonuses paid to you  under such program for the three (3) fiscal years of the Company (or such fewer number of fiscal years during which you were employed with the Company) ended immediately prior to the fiscal year in which your Involuntary Termination occurs.  Any bonus payment for a partial year of employment will be annualized before inclusion in your Average Compensation.  

Average Compensation means the average of your W-2 wages from the Company for the five (5) calendar years (or such fewer number of calendar years of your employment with the Company) completed immediately prior to the calendar year in which the Change in Control is effected.  Any W-2 wages for a partial year of employment will be annualized, in accordance with the frequency which such wages are paid during such partial year, before inclusion in your Average Compensation.  

Base Salary means the annual rate of base salary in effect for you immediately prior to the Change in Control or (if greater) the annual rate of base salary in effect at the time of your Involuntary Termination.

Board means the Company's Board of Directors.

Change in Control means:
(i)the consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, provided and only if more than fifty percent (50%) of the combined voting power of the continuing or surviving entity's securities outstanding immediately after such merger, consolidation or other reorganization is owned by persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization; 

(ii)the sale, transfer or other disposition of all or substantially all of the Company's assets; 

(iii)any transaction as a result of which any person becomes the "beneficial owner" (as defined in Rule 13d-3 of the Securities Exchange Act or 1934, as amended (the "Exchange Act")), directly or indirectly, of securities of the Company representing at least fifty percent (50%) of the total voting power represented by the Company's then outstanding securities; or 

(iv)a change in the composition of the Board over a period of twelve (12) months or less such that a majority of the Board is no longer comprised of  individuals  who either (A) were members of the Board on the start date of that twelve (12)-month or shorter period  (the "Original Directors") or (B) were elected or nominated for election to the Board with the affirmative vote of at least a majority of theaggregate number of  Original Directors who were still in office at the time of the election or nomination plus any new  Board members  whose election or nomination was previously so approved by such aggregate majority.  

For purposes of subparagraph (iii) above, the term "person" shall have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act, but shall exclude (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a parent or a subsidiary and (ii) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company.

A transaction shall not constitute a Change of Control if its sole purpose is to change the state of the Company's incorporation or to create a holding company that will be owned in the same proportions by the persons who held the Company's securities immediately before such transaction.  

Change in Control Severance Benefits means the various payments and benefits to which you may become entitled under Part Two of this Agreement upon your Involuntary Termination in connection with a Change in Control or upon any earlier termination of your employment by the Company during the Pre-Closing Period other than a Termination for Cause.  Such Change in Control Severance Benefits may include one or more of the following: the accelerated vesting of your Options, a lump sum severance payment and continued health care coverage provided for you and your spouse and eligible dependents at the Company's expense.

Code means the Internal Revenue Code of 1986, as amended.

Common Stock means the Company's common stock.

Company means Actuate Corporation, a Delaware corporation, and any successor corporation, whether or not resulting from a Change in Control.

Fair Market Value means, with respect to the shares of Common Stock subject to your Options, the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq National Market and published in The Wall Street Journal.  If there is no closing selling price reported for the Common Stock on the date in question, then the Fair Market Value will be the closing selling price on the last preceding date for which such report exists.

Independent Auditors means the accounting firm serving as the Company's independent certified public accountants immediately prior to the Change in Control; provided, however, that in the event such accounting firm also serves as the independent certified public accountants for the corporation or other entity effecting the Change in Control transaction with the Company or such accounting firm concludes that the services required of it hereunder would adversely affect its independent status under applicable accounting standards or the performance of such services would otherwise be in contravention of applicable law, then the Independent Auditors shall mean a  nationally-recognized public accounting firm mutually acceptable to both you and the Company. 

Involuntary Termination means the termination of your Service which occurs by reason of:

(i)your involuntary and unilateral dismissal or discharge by the Company other than a Termination For Cause, or

(ii)your voluntary resignation within one hundred eighty (180) days following (A) a change in your position with the Company which materially reduces your duties and  responsibilities, (B) a material change in your reporting responsibilities such that you are required to report to a person whose duties, responsibilities and authority are materially less than those of the person to whom you report as of  the date of this letter agreement (including any change which would no longer require you to report directly to the Board, if your reporting responsibility is to the Board as  the date of this letter agreement),(C)  a material reduction in the aggregate  level of your annual base salary and target bonus under any corporate-performance based bonus or incentive program, ), with an aggregate reduction of  fifteen percent (15%) or more to be deemed material for purposes of the Program or (D) a material change in the geographic location of your place of employment, with a relocation of  more than fifty (50) miles to be deemed material for purposes of the Program; provided, however, a. greater than ten percent (10%)  reduction in the aggregate level of your base salary and target bonus shall not constitute grounds for an Involuntary Termination under clause (ii)(C)if substantially all of the other executive officers of the Company are subject to the same aggregate reduction to their base salary and target bonuses. 

In no event shall you have the right to resign for any of the reasons listed in subparagraph (ii) above and thereby trigger an Involuntary Termination unless (i) you first notify  the Corporation in writing of the existence of the relevant event or transaction constituting grounds for such an Involuntary Termination within ninety (90) days after the occurrence of such 

event or transaction and (b) the Corporation fails to remedy the event or transaction constituting grounds for such Involuntary Termination within a reasonable cure period of at least thirty (30) days after receipt of such notice.

Option means any option granted you to purchase shares of Common Stock under the Plan or other arrangement which is outstanding at the time of the Change in Control (or, if earlier, upon the Company's termination of your employment during the Pre-Closing Period ) or upon your Involuntary Termination following such Change in Control.  Your Options will be divided into two (2) separate categories as follows:
Acquisition-Accelerated Options: any outstanding Option (or installment thereof) which automatically accelerates, pursuant to the acceleration provisions of the agreement evidencing that Option, upon a Change in Control.

Severance-Accelerated Options: any outstanding Option (or installment thereof) which, pursuant to Part Two of this letter agreement, accelerates upon the termination of your employment by the Company during the Pre-Closing Period for any reason other than a Termination for Cause or upon your Involuntary Termination following the Change in Control.

Option Parachute Payment means, with respect to any Acquisition-Accelerated Option or any Severance-Accelerated Option, the portion of that Option deemed to be a parachute payment under Code Section 280G and the Treasury Regulations issued thereunder.  The portion of such Option which is categorized as an Option Parachute Payment will be calculated in accordance with the valuation provisions established under Code Section 280G and the applicable Treasury Regulations. 

Other Parachute Payment means any payments in the nature of compensation (other than your Option Parachute Payment and any other Change in Control Severance Benefits to which you become entitled under Part Two of this letter agreement) which are made to you in connection with the Change in Control and which accordingly qualify as parachute payments within the meaning of Code Section 280G(b)(2) and the Treasury Regulations issued thereunder.  

Parachute Payment means (i) any Change in Control Severance Benefits provided you under Part Two of this letter agreement which is deemed to constitute a parachute payment within the meaning of Code Section 280G(b)(2) and the Treasury Regulations issued thereunder and (ii) any  Option Parachute Payment attributable to your Acquisition-Accelerated Options.  

Plan means (i) the Company's 1998 Equity Incentive Plan, as amended or restated from time to time, and (ii) any other stock incentive plan implemented or established by the Company. 

Pre-Closing Period means the period commencing with the Company's execution of the definitive agreement for a Change in Control transaction and ending upon the earliest to occur of (i) the closing of the Change in Control contemplated by such definitive agreement, or (ii) the termination of such definitive agreement without the consummation of the contemplated Change in Control.

Present Value means the value, determined as of the date of the Change in Control, of any payment in the nature of compensation to which you become entitled in connection with the Change in Control or your subsequent Involuntary Termination, including (without limitation) the Option Parachute Payment attributable to your Severance-Acceleration Options and the additional Change in Control Severance Benefits to which you become entitled under Part Two of this letter agreement. The Present Value of each such payment will be determined in accordance with the provisions of Code Section 280G(d)(4), utilizing a discount rate equal to one hundred twenty percent (120%) of the applicable Federal rate in effect at the time of such determination, compounded semi-annually to the effective date of the Change in Control.

Separation from Service means the cessation of your Employee status and shall be deemed to occur at such time as the level of the bona fide services you are to perform in Employee status (or as a consultant or other independent contractor)  permanently decreases to a level that is not more than twenty percent (20%) of the average level of services you rendered in Employee status during the immediately preceding thirty-six (36) months (or such shorter period for which you may have rendered such service). Any such determination as to Separation from Service, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Section 409A of the Code.

For such purpose, you will be deemed to continue in "Employee" status for so long as you remain in the employ of one or more members of the Employer Group, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance."Employer Group" means the Company and any other corporation or business controlled by, controlling or under common control with, the Company, as determined in accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder, except that in applying Sections 1563(1), (2) and (3) for purposes of determining the controlled group of corporations under Section 414(b), the phrase "at least 50 percent" shall be used instead of "at least 80 percent" each place the latter phrase appears in such sections and in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses that are under common control for purposes of Section 414(c), the phrase "at least 50 percent" shall be used instead of "at least 80 percent" each place the latter phrase appears in Section  1.4.14(c)-2 of the Treasury Regulations. 

 Specified Employee means a "key employee" (within the meaning of that term under Code Section 416(i)) who is subject to the delayed payment provisions of subparagraph (ii) of Paragraph 1 of Part Four.  Accordingly,  if you are at any time during the twelve (12)-month period ending on the last day of any calendar year: 

(i)an officer of the Company whose annual compensation is greater than the compensation limit in Section 416(i)(1)(A)(i) of the Code, provided that no more than fifty officers of the Company shall be determined to be Specified  Employees as of the relevant determination date;

(ii) a  five percent owner of the Company; or

(iii)a one percent owner of the Company whose annual compensation from the Company is more than $150,000.

then you will be considered a Specified Employee for purposes of the Program for the twelve (12)-month period beginning on the April 1 of the following calendar year and ending on the March 31 of the next year thereafter.

Termination for Cause means the termination of your employment for any of the following reasons: (i) your conviction of a felony or your commission of any act of personal dishonesty involving the property or assets of the Company intended to result in your financial enrichment, (ii) your material breach of one or more of your obligations under your Proprietary Information and Inventions Agreement with the Company or your unauthorized use or disclosure of any material trade secrets or other material confidential information of the Company or any affiliate, (iii) any intentional misconduct on your part which has a materially adverse effect upon the Company's business or reputation, (iv) your failure to perform the major duties, functions and responsibilities of your executive position with the Company,  (v) your material breach of any of your fiduciary obligations as an officer of the Company or (vi) your intentional and knowing participation in the preparation or release of false or materially misleading financial statements relating to the Company's operations and financial condition or your intentional and knowing submission of any false or erroneous certification required of you under the Sarbanes-Oxley Act of 2002 or any securities exchange on which shares of the Common Stock are at the time listed for trading.  However, prior to any termination of your employment for any of the reasons specified in clauses (ii) through (iv), the Company shall give you written notice of the actions or omissions deemed to constitute the grounds for a Termination for Cause, and you shall have a period of not less than thirty (30) days in which to cure the specified  default in performance and thereby remedy the actions or omissions which would otherwise constitute grounds for a Termination for Cause.

Part Two -- CHANGE IN CONTROL BENEFITS

Should your employment with the Company terminate by reason of an Involuntary Termination within twelve (12) months after a Change in Control, or should your employment be unilaterally terminated by the Company during the Pre-Closing Period for any reason other than a Termination for Cause, then you will become entitled to receive the applicable Change in Control Severance Benefits provided under this Part Two, provided and only if you execute and deliver to the Company, within twenty-one (21) days after the date of your termination of employment, a general release (substantially in the form of attached Exhibit A) which becomes effective under applicable law (the "Required Release") and pursuant to which you release the Company and its officers, directors, stockholders, employees and agents from any and all claims you may otherwise have with respect to the terms and conditions of your employment with the Company and the termination of that employment. In no event, however, shall such release cover any claims, causes of action, suits, demands or other obligations or liabilities relating to:

 (a) any payments, benefits or indemnification to which you are or become entitled pursuant to the provisions of this Agreement (including, without limitation, the severance benefits provided under this Part Two and the continued indemnification coverage under Paragraph 2 of Part Four of this Agreement); and

(b)any claims for workers' compensation benefits under any of the Company's workers' compensation insurance policy or fund.

 

The Change in Control Severance Benefits provided under this Part Two shall be in lieu of any other severance benefits to which you might otherwise become entitled under any other severance plan, program or arrangement of the Company upon a termination of your employment either during the Pre-Closing Period or within twelve (12) months following a Change in Control. 

1.Accelerated Vesting.

Each outstanding Option which you hold at the time of your Involuntary Termination or at any earlier termination of your employment by the Company during the Pre-Closing Period other than a Termination for Cause, to the extent that Option is not otherwise exercisable for all the shares of Common Stock or other securities at the time subject to that Option, will immediately vest and become exercisable for all those option shares and may be exercised for any or all of those shares as fully vested shares.  Each such accelerated Option will remain so exercisable until the earlier of (i) the expiration of the option term or (ii) the post-service exercise period specified in the agreement evidencing your Option.  Any Options not exercised prior to the expiration of the applicable post-service exercise period will terminate and cease to remain exercisable for any of the option shares.

2.Severance Payment. 

(a)In the event your employment terminates pursuant to an Involuntary Termination within twelve (12) months following a Change in Control, the Company will make a lump-sum cash severance payment to you, in an amount equal to xxx times the sum of your annual rate of Base Salary and Average Bonus (the "Severance Payment").  The Severance Payment shall made to you within five (5) business days after  the date your Required Release becomes effective under applicable law and shall be subject to the Company's collection of all applicable withholding taxes, and you will only be paid the amount remaining after such withholding taxes have been collected.  

(b)In the event your employment is involuntarily terminated by the Company during the Pre-Closing Period for any reason other than a Termination for Cause, you will subsequently become entitled to the Severance Payment upon the closing of the Change in Control, provided and only if that Change in Control is in fact consummated prior to the expiration of the Pre-Closing Period. The Company will make such lump-sum cash Severance Payment to you , within five (5) business days following the later of (i) the date your Required Release becomes effective under applicable law  or (ii)  the effective date of the Change in Control. The Severance Payment shall be subject to the Company's collection of all applicable withholding taxes, and you will only be paid the amount remaining after such withholding taxes have been collected.  In no event, however, will you become entitled to all or any portion of the Severance Payment if the Change in Control is not consummated prior to the expiration of the Pre-Closing Period.

3.Continued Health Care Coverage.  

           Should you elect under Code Section 4980B to continue health care coverage under the Company's group health plan for yourself, your spouse and your eligible dependents following your Involuntary Termination or any earlier termination of your employment by the Company during the Pre-Closing Period other than a Termination for Cause, then the Company shall provide such continued health care coverage for you and your spouse and other eligible dependents at its sole cost and expense. Such health care coverage at the Company's expense shall continue until the earliest of (i) the expiration of the xxx period measured from the date of your Involuntary Termination or any earlier termination of your employment by the Company during the Pre-Closing Period, (ii) the first date you are covered under another employer's heath benefit program which provides substantially the same level of benefits without exclusion for pre-existing medical conditions or (iii) the date the definitive agreement for the Change in Control is terminated without consummation of that Change in Control prior to the expiration of the Pre-Closing Period. Should the Company's provision of such continued health care coverage result in the recognition of taxable income (whether for federal, state or local income tax purposes) by you or your spouse or other eligible dependent, then each of you will be responsible for the payment of the income and employment tax liability resulting from such coverage, and the Company will not provide any tax gross-up payments to you (or any other person) with respect to such tax liability.  

Part Three -- LIMITATION ON BENEFITS

1.Benefit Limit.

The amount of the Change in Control Severance Benefits otherwise due you under Part Two of this Agreement shall be reduced to the extent necessary to assure that the Present Value of the Parachute Payment attributable to those Change in Control Severance Benefits does not exceed the greater of the following dollar amounts (the "Benefit Limit"): 

-  the dollar amount equal to (i) 2.99 times your Average Annual Compensation less (ii) the aggregate Present Value of the Option Parachute Payment attributable to your Acquisition-Accelerated Options and any Other Parachute Payments to which you may be entitled, or

-  the greatest after-tax amount of Change in Control Severance Benefits which can be paid to you under Part Two after taking into account any excise tax imposed under Code Section 4999 on those payments, the Option Parachute Payment attributable to your Acquisition-Accelerated Options and any Other Parachute Payments to which you might be entitled.

The Option Parachute Payment attributable to the accelerated vesting of your Acquisition-Accelerated Options at the time of the Change in Control shall also be subject to the Benefit Limit.

2.Benefit Reduction.

(a)To the extent the aggregate Present Value, measured as of the Change in Control, of (i) the Option Parachute Payment attributable to the Acquisition-Accelerated and Severance-Accelerated Options (or installments thereof) plus (ii) the Parachute Payment attributable to your other Change in Control Severance Benefits under Part Two of the Agreement would, when added to the Present Value of all of your Other Parachute Payments, exceed the Benefit Limit, then the following reductions shall be made to the Change in Control Severance Benefits to which you are otherwise entitled under Part Two of this Agreement and your Acquisition-Accelerated Options, to the extent necessary to assure that such Benefit Limit is not exceeded: 

first, the dollar amount of the Severance Payment to which you would otherwise be entitled shall be reduced, and

then the number of shares which would otherwise be purchasable under your Acquisition-Accelerated and Severance-Accelerated Options shall be reduced (based on the amount of the Option Parachute Payment attributable to each such Option) to the extent necessary to eliminate such excess, with the actual Options to be so reduced to be determined by you. 

(b)In the event your employment is terminated by the Company during the Pre-Closing Period for any reason other than a Termination for Cause,   the Benefit Limit shall be calculated in good faith first at the time of such termination, with such calculation to be based upon the probability of the consummation of the contemplated Change in Control within the Pre-Closing Period, and any benefit reduction required by Paragraph 2 of this Part Three on the basis of such good-faith calculation shall be applied at that time.  The Benefit Limit shall be recalculated in accordance with this Part Three as soon as administratively practicable following the expiration of the Pre-Closing Period. To the extent any Options are reduced and terminated in connection with the initial calculation made at the time of your termination of employment, those Options will not be subsequently restored in connection with the re-calculation of the Benefit Limit following the expiration of the Pre-Closing Period, even if those terminated Options could have otherwise fallen within the Benefit Limit as so re-calculated.  

3.Resolution Procedures.

 In the event there is any disagreement between you and the Company as to whether one or more payments to which you become entitled in connection with the Change in Control or your subsequent Involuntary Termination constitute Parachute Payments, Option Parachute Payments or Other Parachute Payments or as to the determination of the Present Value thereof, such dispute will be resolved as follows:

(i)In the event the Treasury Regulations under Code Section 280G (or applicable judicial decisions) specifically address the status of any such payment or the method of valuation therefor, the characterization afforded to such payment by the Regulations (or such decisions) will, together with the applicable valuation methodology, be controlling.

(ii)In the event Treasury Regulations (or applicable judicial decisions) do not address the status of any payment in dispute, the matter will be submitted for resolution to the Independent Auditors. The resolution reached by the Independent Auditors will be final and controlling; provided, however, that if in the judgment of the Independent Auditors, the status of the payment in dispute can be resolved through the obtainment of a private letter ruling from the Internal Revenue Service, a formal and proper request for such ruling will be prepared and submitted by the Independent Auditors, and the determination made by the Internal Revenue Service in the issued ruling will be controlling.  All expenses incurred in connection with the retention of the Independent Auditors and (if applicable) the preparation and submission of the ruling request shall be shared equally by you and the Company. 

(iii)In the event Treasury Regulations (or applicable judicial decisions) do not address the appropriate valuation methodology for any payment in dispute, the Present Value thereof will, at the Independent Auditor's election, be determined through an independent third-party appraisal, and the expenses incurred in obtaining such appraisal shall be shared equally by you and the Company. 

Part FOUR -- MISCELLANEOUS 

1.Special Payment Provisions.   Notwithstanding any provision in this letter agreement to the contrary, the following special provisions shall govern the payment date of your Severance Payment in the event that payment is deemed to constitute an item of deferred compensation under Section 409A of the Code:
(i).The Severance Payment will not be made at any time prior to the date of your Separation from Service or (in the event of a unilateral termination of your employment during the Pre-Closing Period) the effective date of the Change in Control.

(ii) If the payment date for your Severance Payment is tied to your Separation from Service, then in no event will the Severance Payment be made prior to the earlier of (i) the first day of the seven (7)-month period measured from the date of your Separation from Service or (ii) the date of your death, if you are deemed at the time of such Separation from Service to be a Specified Employee and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2).  Upon the expiration of the applicable deferral period, the Severance Payment will be made 

in a lump sum on the first day of the seventh (7th) month after the date of your Separation from Service, or if earlier, the first day of the month immediately following the date the Company receives proof of your death.

(iii)Should your Severance Payment be deferred pursuant to the foregoing provisions of this Paragraph 1, then you shall be entitled to interest on your deferred Severance Payment  for the period that  payment  is delayed by reason of subparagraph (ii) above, , with such interest to accrue at the prime rate in effect from time to time during that period and to be paid in a lump sum upon the expiration of the deferral period. 

2.Continued Indemnification.  The indemnification provisions for Officers and Directors under the Company's bylaws, the Directors and Officers Liability Insurance Policy (if any) and any Indemnification Agreement between you and the Company shall (to the maximum extent permitted by law) be extended to you during the period following your resignation or termination of employment for any reason (other than a Termination for Cause), whether or not in connection with a Change in Control, with respect to all matters, events or transactions occurring or effected during your period of employment with the Company.  

3.No Mitigation Duty.  The Company shall not be entitled to set off  any of the following amounts against the Change in Control Severance Benefits to which you may become entitled under Part Two of this Agreement: (i) any amounts which you may subsequently earn through other employment or service following his termination of employment with the Company or (ii) any amounts which you might have potentially earned in other employment or service had you sought such other employment or service.

4.Death.  Should you die before your receive the full amount of payments and benefits to which you may become entitled under this Agreement, then the balance of such payments shall be made, on the due dates hereunder had you survived, to the executors or administrators of your estate.  Should you die before you exercise all your outstanding Options as accelerated hereunder, then such Options may be exercised, within the applicable exercise period following your death, by the executors or administrators of your estate or by the persons to whom those Options are transferred pursuant to your will or in accordance wit the laws of inheritance.  In no event, however, may any such Option be exercised after the specified expiration date of the option term.

5.Successors and Assigns.  The provisions of this Agreement shall inure to the benefit of, and shall be binding upon, (i) the Company and its successors and assigns, including any successor entity by merger, consolidation or transfer of all or substantially all of the Company's assets (whether or not such transaction constitutes a Change in Control), and (ii) you, the personal representative of your estate and your heirs and legatees.  

6.General Creditor Status.  The benefits to which you may become entitled under Part Two of this Agreement shall be paid, when due, from the Company's general assets. No trust fund, escrow arrangement or other segregated account shall be established as a funding vehicle for such payments.  Your right (or the right of the executors or administrators of your estate) to receive such benefits shall at all times be that of a general creditor of the Company and shall have no priority over the claims of other general creditors.

7.Amendment and Termination.  

(a)This letter agreement may only be amended by written instrument signed by you and an authorized officer of the Company.   

(b)Once a Change in Control has been effected, this letter agreement may not be terminated at any time prior to the expiration of the twelve (12)-month period following the effective date of that Change of Control, and no subsequent termination of this letter agreement shall adversely affect your right to receive any benefits to which you may have previously become entitled hereunder in connection with your Involuntary Termination following that Change in Control.  

(c)In the event your employment is involuntarily terminated by the Company during the Pre-Closing Period for any reason other than a Termination for Cause, then the termination of this letter agreement shall not adversely affect your right to receive any benefits which previously became due and payable to you, in accordance with the applicable provisions of Part Two. 

8.Termination for Cause.  In the event of your Termination for Cause or your resignation under circumstances which would otherwise constitute grounds for a Termination for Cause, the Company will only be required to pay you (i) any unpaid compensation earned for services previously rendered through the date of such termination and (ii) any accrued but unpaid vacation benefits or sick days, and no benefits will be payable to you under Part Two of this letter agreement.

9.Governing Law/Other Agreements. This letter agreement is to be construed and interpreted under the laws of the State of California.  This letter agreement supersedes all prior agreements between you and the Company relating to the subject of severance benefits payable upon a change in control or ownership of the Company, and you will not be entitled to any other severance benefits upon such a termination other than those that are provided in this letter agreement.  

10.At Will Employment.  Nothing in this letter agreement is intended to provide you with any right to continue in the employ of the Company (or any subsidiary) for any period of specific duration or interfere with or otherwise restrict in any way your rights or the rights of the Company (or any subsidiary), which rights are hereby expressly reserved by each, to terminate your employment at any time and for any reason, with or without cause.

Please indicate your agreement with the foregoing terms and conditions of your change in control severance package by signing the Acceptance section of the enclosed copy of this letter and returning it to the Company.
Very truly yours,

ACTUATE CORPORATION 

	 	 
	
By:
	 
	 	
Kenneth E. Marshall

	
Title:
	
Director

 

 

 

ACCEPTANCE

I hereby agree to all the terms and provisions of the foregoing letter agreement governing the special benefits to which I may become entitled in the event my employment should terminate under certain prescribed circumstances following a substantial change in control or ownership of the Company. 

	
Signature:
	 
	 	 
	
Dated:
	 
	 	 
	
Address
	
____________________________________

___________________________________

 

 

EXHIBIT A

GENERAL RELEASE

RELEASE AND WAIVER OF CLAIMS

In consideration of the severance payments and other benefits to which I have become entitled, pursuant to that certain letter agreement between Actuate Corporation, a Delaware corporation (the "Company"), and myself dated ___________, 200__ (the "Severance Agreement), in connection with the termination of my employment on this date, I, _______________________,   hereby furnish the Company with the following release and waiver ("Release and Waiver").

I hereby release and forever discharge the Company, its officers, directors, agents, employees, stockholders, successors, assigns and affiliates from any and all claims, liabilities, demands, causes of action, costs, expenses, attorney fees, damages, indemnities and obligations of every kind and nature, in law, equity or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising from or relating to my employment with the Company and the termination of that employment, including (without limitation) claims of wrongful discharge, emotional distress, defamation, fraud, breach of contract, breach of the covenant of good faith and fair dealing, discrimination claims based on sex, age, race, national origin, disability or any other basis under Title VII of the Civil Rights Act of 1964, as amended, the California Fair Employment and Housing Act, the Federal Age Discrimination in Employment Act of 1967, as amended ("ADEA"),  the Americans with Disability Act,  contract claims, tort claims, and wage or benefit claims, including (without limitation) claims for salary, bonuses, commissions, stock grants, stock options, vacation pay, fringe benefits, severance pay or any other form of compensation (other than the payments and benefits to which I am entitled under the Severance Agreement, my vested rights under the Company's Section 401(k) Plan and any worker's compensation benefits under any Company workers' compensation insurance policy or fund).

In releasing claims unknown to me at present, I am waiving all rights and benefits under Section 1542 of the California Civil Code, and any law or legal principle of similar effect in any jurisdiction:  "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor."

This Release and Waiver does not pertain to any claims which may subsequently arise in connection with the Company's default in any of its payment obligations under the Severance Agreement or its indemnification obligations to me thereunder. 

I acknowledge that, among other rights subject to his Release and Waiver, I am hereby waiving and releasing any rights I may have under ADEA, that this release and waiver is knowing and voluntary, and that the consideration given for this release and waiver is in addition to anything of value to which I was already entitled as an executive of the Company.  I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that:  (a) the release and waiver granted herein does not relate to claims which may arise after this release and waiver is executed; (b) I have the right to consult with an attorney prior to executing this release and waiver (although I may choose voluntarily not to do so); and if I am 

over 40 years old upon execution of this (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider this release and waiver (although I may choose voluntarily to execute this release and waiver earlier); (d) I have seven (7) days following the execution of this release and waiver to revoke my consent to this release and waiver; and (e) this release and waiver shall not be effective until the seven (7)-day revocation period has expired.

	 	 
	
Date: __________________
	 
	 	
                           EXECUTIVEex10-1.htm

    EXHIBIT
      10.1

     

    

    AMENDMENT
      TO THE SHARE SUBSCRIPTION CUM PURCHASE AGREEMENT DATED 15TH DAY OF SEPTEMBER,
      2007

    

    THIS
      Amendment to the Share
      Subscription cum Purchase Agreement dated 15th
      September, 2007 (hereinafter referred to as “Agreement”) is entered on
      this 19th day of December, 2007 at Mumbai

    

    BY
      AND AMONG

    

    INDIA
      GLOBALIZATION
      CAPITAL, INC. a company
      organized under the laws of the State of Maryland and
      having its office address at 4336
      Montgomery Avenue Bethesda, MD 20814, acting
      directly or indirectly through
      one or more of its newly formed non US Affiliates, alongwith such newly formed
      non-US Affiliates (hereinafter collectively referred to as “Investor”,
      which expression shall, unless it be
      repugnant to the context or meaning thereof, be deemed to mean and include
      its
      successors and assigns) of the FIRST PART;

    

    AND

    

    SRICON
      INFRASTRUCTURE PRIVATE
      LIMITED, a company incorporated under the Indian Companies Act, 1956,
      having its registered office at Sricon House 25, Pragati Layout, Rajeev Nagar,
      Nagpur, India (hereinafter referred to as "Company" which expression
      shall, unless repugnant to the context or meaning thereof, be deemed to mean
      and
      include its successors) of the SECOND PART;

    

    AND

    

    THE
      PERSONS whose names and
      addresses are set out in Schedule 1 hereto (hereinafter
      referred to as "Promoters", which expression
      shall, unless repugnant to the context or meaning thereof, be deemed to mean
      and
      include their heirs, legal representatives, executors, and administrators)
      of
      the THIRDPART.

    

    (The
      Investor, the Promoters and the Company may hereinafter be referred to
      individually as “Party”
      and collectively as “Parties”, as the context may
      require).

    

    WHEREAS

    

    
      	
              A.

            	
              The
                Parties entered into a Share Subscription cum Purchase Agreement
                on the
                15th
                day of September, 2007 (the “SSA”), setting out the terms and conditions
                subject to which the Investor would subscribe to the Subscription
                Shares;
                

            

    

    

    
      	
              B.

            	
              Clause
                3 of the SSA sets out the conditions to be satisfied by the Parties
                prior
                to the Investor subscribing to the Subscription Shares. Some of the
                conditions to be satisfied by the Parties are as under: (i) completion
                of
                a business, financial, accounting, tax, technical, legal and regulatory
                due diligence on the Company by the Investor and resolution of all
                issues
                arising therefrom to the satisfaction of the Investor on or before
                45
                Business Days from the date of this Agreement, (ii) resolution being
                passed at a duly constituted meeting of the board of directors of
                Investor
                and a resolution being passed at duly constituted meeting of the
                shareholders of the Investor, approving the subscription to the
                Subscription Shares and the satisfaction of all other conditions
                for the
                Investor to effect a Business Combination as set forth in the Investor's
                Prospectus dated March 3, 2006 as filed with the US Securities and
                Exchange Commission, (iii) the Promoters obtaining written consents
                from
                all banks, financial institutions, lenders of the Company and all
                other
                third parties as may be required for change in shareholding of the
                Company
                in form and substance satisfactory to the Investor, (iv) each of
                the
                Promoters delivering to the Investor a no-objection certificate in
                the
                form contained in Schedule 4 to the SSA and a no-objection certificate
                from the Company in the form contained in Schedule 4A to the SSA;
                

            

    

    

    
      	
              C.

            	
              The
                Company is in need of urgent funds and pending satisfaction of the
                conditions precedent set out in Clause 3 of the SSA, has requested
                the
                Investor to infuse the Portion of Subscription Price (as defined
                below),
                towards subscription to Portion of Subscription Shares (as defined
                below);
                

            

    

    

    
      	
              D.

            	
              The
                Investor has agreed to subscribe to the Portion of Subscription Shares
                in
                the Company subject to the terms and conditions set out in this Agreement.
                

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    NOW,
      THEREFORE, IN CONSIDERATION OF THE
      MUTUAL PROMISES COVENANTS AND AGREEMENTS HEREIN CONTAINED, THE PARTIES AGREE
      AS
      FOLLOWS:

    

    
      	
              1.  

            	
              DEFINITIONS
                AND
                INTERPRETATION

            

    

    

    “Account”
      means the account to be opened by the Parties with Citibank N.A.

    

    “Completion”
      means completion of the events specified in Clause 5 hereof and the Investor
      being registered as a member in respect of the Portion of the Subscription
      Shares in the register of members of Company.

    

    ‘Completion
      Date' shall mean the date specified by the Investor for Completion.

    

    

    “Existing
      Accounts” means the current accounts maintained by the Company with Allahabad
      Bank, Manish Nagar branch, Nagpur, bearing account no. 20075 and State Bank
      of
      India, Jaiprakash Nagar branch, Sonalwada, Nagpur, bearing account no.
      30095731720,

    

    “Funding”
      means the funding of the Portion of Subscription Price by the Investor upon
      fulfillment, or waiver, of the conditions precedent prescribed in Clause
      4;

    

    “Funding
      Date” means the date on which the Funding occurs;

    

    “Portion
      of Subscription Price” means Rs. 12,83,42,500/- (Rupees Twelve Crores Eighty
      Three Lacs Forty Two Thousand Five Hundred only) forming part of the
      Subscription Price.

    

    “Portion
      of Subscription Shares” means 5,03,620 equity shares, constituting 14.66% of the
      post issued paid up share capital of the Company and forming part of the
      Subscription Shares.

    

    “Promoters
      Shares” means 15,79,711 Shares representing 53.88% of the existing Share Capital
      of the Company.

    

    “SSA”
      shall have the meaning ascribed to it in Recital A.

    

    All
      capitalized expressions not defined in the Agreement, but defined in the SSA,
      shall have the same meaning ascribed to it in the SSA.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              2.  

            	
              SUBSCRIPTION
                FOR SHARES AND
                INITIAL ADVANCE AGAINST SHARES
                

            

    

    

    
      	
               

            	
              (a)

            	
              Subject
                to the terms of this Agreement, the Investor hereby agrees to subscribe
                for, and the Company agrees to allot and issue to the Investor at
                Completion, the Portion of Subscription Shares, provided that subject
                to
                Clause 3, the Portion of Subscription Price shall be funded as advance
                against Shares of the Company. 

            

    

    

    
      	
               

            	
              (b)

            	
              The
                consideration payable by the Investor to the Company for the Portion
                of
                Subscription Shares shall be the Portion of Subscription Price or
                thereabout as the Parties may mutually agree.

            

    

    

    
      	
              3.  

            	
              CONDITIONS
                PRECEDENT

            

    

    

    The
      obligation of the Investor to fund the Portion of Subscription Price is subject
      to the fulfillment, prior to or simultaneously on the Funding Date (or at the
      time specified below), of the following conditions and delivery and execution
      of
      the following items in form and substance satisfactory to the Investor, any
      one
      or more of which may be waived in writing by the Investor in its sole
      discretion:

    

    
      	
               

            	
              (a)

            	
              the
                Representations and Warranties as provided in Clause 5 and Schedule
                3 of
                the SSA and under this Agreement, remaining true and correct on the
                Funding Date; 

            

    

    

    
      	
               

            	
              (b)

            	
              approval
                of the Board for (i) the execution, delivery and performance by the
                Company of this Agreement, (ii) creation of an Account in the manner
                and
                for the purposes contemplated in this Agreement, (iii) appointment
                of the
                Investor’s nominee as an authorized signatory to the Existing Accounts and
                the Account to be created pursuant to this Agreement, (iv) deposit
                into
                the Account, 20% of the receivables paid into the Existing Accounts,
                including without limitation, the receivables due to the Company
                pursuant
                to the Joint Venture Agreement entered into by the Company with Hindustan
                Steel Works Constructions Limited, (v) granting irrevocable authority
                to
                the Investor’s nominee being the authorized signatory to the Account, to
                operate and withdraw the amounts lying to the credit of the Account
                at any
                time and for any reason whatsoever,  (vi) subject to the
                approval of the members, amending the Articles of Association of
                the
                Company to give effect to the matters set out in Clause 4, (vii)
                in-principle allotment of such number of shares to the Investor,
                at the
                specific request of the Investor, pending subscription to the entire
                Subscription Shares, as will increase the Investor’s shareholding in the
                Company to 51%, and an undertaking that such allotment will be completed
                within 2 working days of the Investor infusing funds towards subscription
                to the share capital of the Company and requesting the Company to
                allot
                Shares, and (viii) implementing the relevant transactions set forth
                in
                this Agreement to which the Company is a party or which require approval
                by the Board; 

            

    

    

    
      	
               

            	
              (c)

            	
              each
                of the Company and the Promoters having performed and complied with
                all
                agreements, obligations and conditions contained in this Agreement
                that
                are required to be performed or complied with by it on or before
                the
                Funding; 

            

    

    

    
      	
               

            	
              (d)

            	
              memorandum
                and articles of association of the Company being amended to reflect,
                to
                the extent permitted by law, the provisions of this Agreement;
                

            

    

    

    
      	
               

            	
              (e)

            	
              one
                (1) nominee of the Investor having been duly elected/appointed as
                Director, effective upon Funding; 

            

    

    

    
      	
               

            	
              (f)

            	
              the
                Company having opened the Account; 

            

    

    

    
      	
               

            	
              (g)

            	
              evidence
                being adduced by the Promoters, of written instructions issued to
                the
                banks with whom the Existing Accounts are maintained by the Company,
                of
                the inclusion of Mr. Ram Mukunda as an authorized signatory to the
                Existing Accounts and evidence being adduced of written instructions
                issued to Citibank N.A of the change in authorized signatories and
                appointment of Mr. Ram Mukunda of the sole authorized signatory of
                the
                Account with Citibank; 

            

    

    

    
      	
               

            	
              (h)

            	
              certificate
                from the Promoters and the Company confirming that (i) they have
                given
                written instructions to the banks with whom Existing Accounts are
                maintained, for automatic transfer into the Account, every month,
                with
                effect from April 1, 2008, of 20% of the receivables paid into the
                Existing Accounts, including without limitation, the receivables
                due to
                the Company pursuant to the Joint Venture Agreement entered into
                by the
                Company with Hindustan Steel Works Constructions Limited, and that
                they
                have taken all necessary steps to ensure automatic and regular transfer
                of
                funds as contemplated herein, (ii) no lender or third party has any
                rights
                over the funds lying to the credit of the Existing Accounts (iii)
                the
                Company has not entered into any agreement or understanding whereby
                any
                party other than the Investor has priority over the funds in the
                Existing
                Accounts or the Account; 

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (i)

            	
              the
                Company appointing the Investor’s nominee as the authorized signatory to
                the Account with an undertaking that (i) except upon specific written
                instructions of the Investor, the Investor’s nominee shall not be replaced
                and such appointment and understanding having been communicated to
                Citibank N.A (ii) they shall not open any savings or current account
                or
                any other account with any bank except with the specific written
                consent
                of the Investor; 

            

    

    

    
      	
               

            	
              (j)

            	
              the
                Company issuing irrevocable written instructions to Citibank N.A.,
                to
                honor all cheques, demand drafts and other payment instructions issued
                by
                the Investor’s nominee, without first obtaining approval of the Promoters
                or the Company; 

            

    

    

    
      	
               

            	
              (k)

            	
              the
                Company obtaining a certificate from an independent chartered accountant
                indicating the ‘fair value’ of the Shares calculated in accordance with
                the Guidelines for Valuation of Shares and Fixation of Premia.
                

            

    

    

    The
      Promoters shall fulfill all their obligations hereunder and shall, to the extent
      within their power and control, cause the Company to fulfill all its obligations
      hereunder so as to ensure that the conditions set forth in this Clause are
      fulfilled by such dates as specified above, to the satisfaction of the
      Investor.

    

    
      	
              4.  

            	
              FUNDING
                EVENTS
                

            

    

    

    
      	
               

            	
              (a)

            	
              Funding
                shall take place on the Funding Date, or at such other place as the
                Parties may agree. The Portion of Subscription Price shall be retained
                as
                advance against Shares, until Completion.

            

    

    

    
      	
               

            	
              (b)

            	
              Simultaneously
                upon Funding, the provisions of Clauses 3 (Conditions subsequent
                to
                Completion), 4.1(e) (Voting), 4.1(g) (Meeting and Minutes of Board
                Meeting), 4.1(h) (Notice), 4.1(i) (Quorum), 4.1(j) (Determination
                of
                Quorum), 4.1(k) (Resolution by Circulation), 4.2 (Management and
                other
                Committees), 4.3 (Rights of the Investor), 4.4 (Veto Rights, to the
                extent
                of meetings of the Board) (subject to Clause 4(e) herein) and 5 (Dividend
                Policy) of the Shareholders Agreement shall become effective and
                the
                Promoters and the Company shall be bound by the terms contained therein.
                

            

    

    

    
      	
               

            	
              (c)

            	
              The
                Promoters and the Company shall not propose any resolution at a
                Shareholders Meeting, if such resolution has not been approved by
                the
                director nominated by the Investor at a meeting of the Board.
                

            

    

    

    
      	
               

            	
              (d)

            	
              Until
                Completion under this Agreement, the Promoters shall not be entitled
                to
                Transfer all or any part of their Shareholding to any Person. Approval
                of
                the director nominated by the Investor shall be required for passing
                any
                resolution which will have the effect of changing the signatories
                to the
                Existing Accounts or the Account and for opening any account with
                any
                bank. 

            

    

    

    
      	
               

            	
              (e)

            	
              The
                Parties agree that where a
                resolution for allotment of shares in favour of the Investor is proposed
                by the director nominated by the Investor, the Promoters shall (if
                they
                are also Directors) / cause the directors nominated by them on the
                Board,
                to vote in favour of the
                resolution.

            

    

    

    
      	
               

            	
              (f)

            	
              A
                meeting of the shareholders shall be convened and a special resolution
                shall be passed approving amendment to the Articles of Association,
                to
                give effect to the matters set out in this Agreement.
                

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (g)

            	
              The
                Promoters agree and acknowledge that until Funding, they are in complete
                control over the affairs of the Company and undertake that they shall,
                to
                the extent within their power and control, cause the Company to fulfill
                all its obligations hereunder so as to ensure that the covenants
                set forth
                in this Agreement are fulfilled by such dates as specified in this
                Agreement. To secure the performance of the obligations of the Promoters
                and the Company as set out in this Agreement, the Promoters shall
                create a
                pledge on the Promoter Shares in favour of the Investor or any Person
                nominated by it. For such purpose, the Promoters shall on the Funding
                Date
                or any date thereafter, and if required, with the approval of the
                regulatory authorities, if required, deliver the following documents
                to
                the Investor, or his representative/nominee:

            

    

    

    
      	
              ·  

            	
              Original
                certificates evidencing
                right, title and interest to the Promoter
                Shares;

            

    

    
      	
              ·  

            	
              Undated
                share transfer forms
                signed by the Promoters in favour of the
                Investor;

            

    

    
      	
              ·  

            	
              A
                duly stamped, irrevocable power
                of attorney (substantially in the form and content as specified in
                Schedule
                2hereof)
                from each Promoter,
                pursuant to which each Promoter permits the Investor to take all
                necessary
                action and sign all necessary documents, letters, undertakings etc.
                as may
                be required so as to effect a transfer of the Promoter Shares to
                the
                Investor or any of his nominees, as the case may be, and be registered
                as
                a ‘member’ in respect of the Promoter
                Shares;

            

    

    
      	
              ·  

            	
              the
                shareholding pattern of the Company after the exercise of the pledge
                by
                the Investor.

            

    

    

    
      	
               

            	
              (g)

            	
              The
                Promoters unconditionally
agree,
                acknowledge, undertake and
                confirm that they shall take all necessary
                action and sign
                all necessary documents, letters, undertakings etc. as may be required
                so
                as to effect a transfer of the Promoter Shares to the Investor or
                any of
                his nominees, as the case may be, and be registered as a member
                inrespect of
                the
                Promoter Shares, if called upon by the Investor to do
                so.

            

    

    

    
      	
               

            	
              (h)

            	
              The
                Promoters and the Company agree and acknowledge that the covenants
                and
                obligations under Clauses 3 and 4 relate to special, unique and
                extraordinary matters, and that a violation of any of the terms of
                such
                covenants and obligations will cause the Investor irreparable injury
                and
                hence the Investors shall be entitled to specific performance of
                the
                obligations undertaken by the Company and/or the Promoters under
                Clauses 3
                and 4. 

            

    

    

    
      	
              5.  

            	
               COMPLETION
                EVENTS

            

    

    

    
      	
               

            	
              (a)

            	
              Upon
                fulfillment of all the Conditions Precedent set out in the SSA, to
                the
                satisfaction of the Investor or if specifically waived in writing
                by the
                Investor, the Parties shall proceed to complete the allotment of
                the
                Portion of Subscription Shares to the Investor in the manner provided
                in
                this Clause. 

            

    

    

    
      	
               

            	
              (b)

            	
              At
                Completion, the Company shall: 

            

    

    

    
      	
              ·  

            	
              allot
                and issue to the Investor,
the
                Portion of Subscription
                Shares;

            

    

    

    
      	
              ·  

            	
              deliver
                to the Investor
one
                or more original share
                certificates and other instruments, if any, evidencing the Investor’s title to
                the
                Portion of Subscription Shares;

            

    

    

    
      	
              ·  

            	
              duly
                register, as required by Law,
                the Portion of
                Subscription Shares
                in the Company's registers and provide evidence thereof to the Investor;

            

    

    

    
      	
               

            	
              (c)

            	
              If
                any one or more of the
                Conditions Precedent set out in the SSA are not satisfied
                to the
                satisfaction of the Investor or waived in writing by the Investor,
                the
                Investor shall notify the Promoters and the Company of the non
                satisfaction of the Condition Precedent. Within 7 days of receipt
                of such
                intimation from the Investor, the Promoters shall cause the Company
                to and
                the Company shall refund an amount equivalent to the Portion of
                Subscription Price to the Investor. If the Company fails to make
                repayment
                of the Portion of Subscription Price to the Investor within 7 days
                of
                receipt of notice from the Investor, the Investor’s nominee shall, without
                any further act or approval of the Promoters or the Company, issue
                instructions to the Citibank N.A., to repatriate
                funds lying in the
                Account to the Investor and the Parties shall cause Citibank
                N.A. to forthwith repatriate
                such funds to the Investor.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (d)

            	
              If
                the funds lying in the Account
                is less than the Portion of Subscription Price, the Promoters will
                cause
                the Company to fund the Account with such amount by which the funds
                lying
                in the Account fall short of the Portion of Subscription Price. If
                the
                Promoters fail to cause the Company to fund the shortfall in the
                Portion
                of Subscription Price, or upon the Promoters
                and/or the
                Company committing a breach of any of their obligations under this Agreement
                and more
                specifically under Clause 5 hereof and
                failing to remedy the
                breach within 7 days of being notified of the same by the
                Investor, then,
                without prejudice
                to any of its
                rights under this
                Agreement, the
                Investor shall have a right to forthwith exercise the pledge
                and at
                its discretion, require
                the Board to allot to
                itself, Portion of Subscription Shares andtake all necessary
                action,to
                be registered as a member of
                the Company in respect of the Promoter Sharesand or Portion
                of Subscription
                Shares.

            

    

    

    
      	
               

            	
              (e)

            	
              Upon
                the Promoters and/or the
                Company committing a breach of any of their obligations under Clause
                5(d)hereof
                and failing to remedy the
                breach within 7 days of being notified of the same by the Investor
                and the
                Investor being unable to exercise the pledge and / or be registered
                as a
                member in respect of the Promoter Shares or any part thereof, due
                to any
                reason whatsoever, the Investor shall be entitled, pending subscription
                to
                the Subscription Shares, to be allotted
                Portion of
                Subscription Shares and to subscribe
                to such number of
                shares in the Company as will bring its
                shareholding to 51% of the
                paid up share capital of the Company as on such date (“Additional
                Shares”). Upon exercise of such option by the Investor, and upon infusion
                of funds by the Investor towards subscription to the Additional Shares,
                the Company shall allot Additional Shares to the Investor and at
                such
                price as may be determined by the Investor, provided that the pricing
                shall be in accordance with the laws of India.
                Upon exercise of such option by
                the Investor, the Investor shall be entitled to appoint majority
                directors on the
                Board and exercise all rights
                available to the
                Investor under law, as a 51% shareholder in the
                Company.

            

    

    

    
      	
               

            	
              (f)

            	
              The
                Promoters and the Company
                hereby undertake that they shall, upon exercise by the Investor of
                its
                right under Clauses 5(d)and
5(e)
above,
                cooperate with the Investor
                and take all necessary steps to ensure that the name of the Investor
                or
                any Person nominated by the Investor is registered as a ‘member’ in the
                register of members of the Company in respect of the Promoter
                Sharesand Additional
                Shares.

            

    

    

    
      	
               

            	
              (h)

            	
              In
                the event of enforcement of
                pledge by the Investor, of the Promoter Shares, or in the event of
                the
                Promoters committing a breach of any of their obligations of causing
                the Company to perform
                its obligations, or
                in the event of subscription by the Investor, to Additional Shares,
                in the
                circumstances set out in Clause 5(e)above,
subject
                to the rights available to
                the Investor to appoint majority Directors on the Board and exercise
                all rights
                available
                to the Investor under law, as a 51% shareholder in the Company, the provisions
                of the
                Shareholders Agreement will get triggered. However, notwithstanding
                anything to the contrary contained in the Shareholders Agreement,
                the Investor
                shall
                not be subject to any restrictions on transfer of Portion of Subscription
Shares
                or Promoter Shares or
                Additional Shares, whether set out in the Shareholders Agreement
or
                otherwise and the provision of
                this clause shall supersede anything to the contrary contained in
                the
                Shareholders
                Agreement or under
                any other agreement entered into between the Parties.However, the
                Promoters and the
                Company agree that they shall be bound by Clauses 6, 7, 8 and 9 of
                the
                Shareholders Agreement.

            

    

    

    
      	
              6.  

            	
              BOARD
                REPRESENTATION

            

    

    

    
      	
               

            	
              (a)

            	
              The
                Parties agree and acknowledge that the Investor shall be entitled
                to
                appoint one director on the Board effective upon Funding and that
                such
                director shall be appointed under Section 255(2) of the Act. The
                Promoters
                and the Company shall not be entitled to remove the Director
                appointed/nominated by the Investor, unless required by Law.
                

            

    

    

    
      	
               

            	
              (b)

            	
              The
                right of nomination and appointment of the director conferred on
                the
                Investor under Clause 6(a) shall include the right at any time to
                remove
                from office any such persons nominated or appointed by them and from
                time
                to time determine the period for which such persons shall hold office
                as
                Director. If the Investor desires that any director nominated or
                appointed
                by it should cease to be a director of the Company, the Promoters
                shall
                cause, and shall exercise its voting rights in such manner, so as
                to
                ensure such removal and appointment of new director nominated by
                the
                Investor to replace the director so removed as soon as may be practicable.
                

            

    

    

    
      	
               

            	
              (c)

            	
              The
                director appointed/nominated by the Investor shall be entitled to
                receive
                all notices, agenda, etc. and to attend all General Meetings and
                Board
                Meetings and Meetings of any Committees of the Board of which they
                are
                members. 

            

    

    

    
      	
               

            	
              (d)

            	
              In
                the event the Investor or any of its Affiliates cease to (i) be
                shareholders of the Company, then all the rights of the Investor
                as a
                Shareholder shall automatically terminate and the Investor shall
                cause his
                nominee Director to resign from the Board.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
              7.  

            	
              VALIDITY
                OF
                SSA

            

    

    

    
      	
               

            	
              (a)

            	
              Except
                to the extent specifically modified by this Agreement, all the terms
                of
                the SSA shall survive and continue to remain valid and binding on
                the
                Parties. Reference in the SSA to subscription to Investor Shares
                or
                Subscription Shares respectively, wherever they appear, shall be
                deemed to
                mean subscription to Investor Shares or Subscription Shares as
                respectively reduced by the Portion of Subscription Shares and Additional
                Shares and reference to payment of Investor Price or Subscription
                Price,
                respectively, wherever they appear in the SSA, shall be deemed to
                mean
                payment of Investor Price or Subscription Price as respectively reduced
                by
                the Portion of Subscription Price and price paid for the Additional
                Shares. 

            

    

    

    
      	
               

            	
              (b)

            	
              This
                Agreement shall become effective upon the execution and delivery
                of this
                Agreement by the Investor, the Promoters and the Company.
                

            

    

    

    
      	
               

            	
              (c)

            	
              Except
                as expressly set forth in this Agreement, all agreements, covenants,
                undertakings, provisions, stipulations, and promises contained in
                the SSA
                are hereby ratified, readopted, approved, and confirmed and remain
                in full
                force and effect. 

            

    

    

    
      	
              8.  

            	
              RESOLUTION
                OF
                DISPUTES

            

    

    

    
      	
               

            	
              (a)

            	
              Amicable
                Settlement: If any dispute arises between Investor and/or the Promoters
                and/or Company during the subsistence of this Agreement or thereafter,
                in
                connection with the validity, interpretation, implementation or alleged
                breach of any provision of this Agreement or regarding a question,
                including the question as to whether the termination of this Agreement
                by
                one Party hereto has been legitimate (“Dispute”), the disputing Parties
                hereto shall endeavour to settle such Dispute amicably. The attempt
                to
                bring about an amicable settlement shall be considered to have failed
                if
                not resolved within 60 days from the date of the Dispute.
                

            

    

    

    
      	
               

            	
              (b)

            	
              Conciliation:
                If the Parties are unable to amicably settle the Dispute in accordance
                with Clause 8(a) within the period specified therein, the Parties
                shall
                forthwith but not later than 30 days after expiry of the aforesaid
                period,
                refer the Dispute to Mr. Ram Mukunda and Mr. R.L. Srivastava for
                resolution of the said Dispute. The attempt to bring about such resolution
                shall be considered to have failed if not resolved within 30 days
                from the
                date of receipt of a written notification in this regard.
                

            

    

    

    
      	
               

            	
              (c)

            	
              Arbitration:
                If the Parties are unable to amicably settle the Dispute in accordance
                with Clause 8(b) within the period specified therein, any Party to
                the
                Dispute shall be entitled to serve a notice invoking this Clause
                and
                making a reference to an arbitration panel of three arbitrators.
                Each
                party to the dispute shall appoint one arbitrator within 30 days
                of
                receipt of the notice of the Party making the reference, and the
                two
                arbitrators, so appointed shall appoint a third arbitrator. The
                Arbitration proceedings shall be held in accordance with the Arbitration
                and Conciliation Act, 1996. The decision of the arbitration panel
                shall be
                binding on all the Parties to the Dispute.

            

    

    

    
      	
               

            	
              (d)

            	
              The
                place of the arbitration shall be Mumbai, India.
                

            

    

    

    
      	
               

            	
              (e)

            	
              The
                arbitration proceedings shall be governed by the laws of India.
                

            

    

    

    
      	
               

            	
              (f)

            	
              The
                proceedings of arbitration shall be in the English language.
                

            

    

    

    
      	
               

            	
              (g)

            	
              The
                Arbitrator’s award shall be substantiated in writing. The court of
                arbitration shall also decide on the costs of the arbitration proceedings.
                The cost of arbitration shall be borne by the Company.
                

            

    

    

    
      	
               

            	
              (h)

            	
              The
                award shall be binding on the Parties subject to the Applicable Laws
                in
                force and the award shall be enforceable in any competent court of
                law.
                

            

    

    

    
      	
               

            	
              (i)

            	
              The
                Mumbai court (including any appellant court) in India shall have
                exclusive
                jurisdiction. 

            

    

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    
      	
              9.  

            	
              MISCELLANEOUS

            

    

    

    
      	
               

            	
              (a)

            	
              No
                Implied Waiver 

            

    

    

    Subject
      to the terms of this Agreement, the execution, delivery and performance of
      this
      Amendment Agreement shall not, except as expressly provided herein, constitute
      a
      waiver or modification of any provision of, or operate as a waiver of any right,
      power or remedy of the Parties under the SSA or prejudice any right or remedy
      that either Party may have or may have in the future under or in connection
      with
      the SSA or any instrument or agreement referred to therein.  The
      Parties hereto acknowledge and agree that the Representations and Warranties
      of
      the Parties contained in the SSA, the clauses on, including but not limited
      to
      indemnity and confidentiality shall survive the execution and delivery of this
      Amendment Agreement and the effectiveness hereof.

    

    
      	
               

            	
              (b)

            	
              Governing
                law 

            

    

    

    This
      Agreement shall be governed and construed in accordance with the laws of
      India.

    
      	
               

            	
              
              

            

    

    
      	
               

            	
              (c)

            	
              Costs
                

            

    

    

    Each
      Party shall bear its own expenses incurred in preparing this
      Agreement.  The Company shall pay the stamp duty and other costs in
      respect of this Agreement and the issue and allotment of the Portion of
      Subscription Shares to the Investor.

    

    
      	
               

            	
              (d)

            	
              Execution
                in Counterparts 

            

    

    

    This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original and all of which, taken together, shall constitute one and
      the same instrument.

    

    
      	
               

            	
              (e)

            	
              Assignment
                

            

    

    

    This
      Agreement and the rights and liabilities hereunder shall bind and inure to
      the
      benefit of the respective successors of the Parties hereto, but no Party shall
      assign or transfer any of its rights and liabilities hereunder to any other
      Person without the prior written consent of the other Parties, which will not
      be
      unreasonably withheld. Notwithstanding anything stated above, the Investor
      shall
      be entitled to assign its rights and obligations hereunder, including its rights
      over the pledge of Promoter Shares, to any of its Affiliates or its holding
      company or ultimate parent company or their Affiliates, without the consent
      of
      the other Parties.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF THE PARTIES TO THIS AMENDMENT AGREEMENT HAVE SET AND SCRIBED
      THEIR HANDS AT MUMBAI, ON THE DAY MONTH AND YEAR FIRST NOTED ABOVE, IN PRESENCE
      OF:

    

    
      	
              SIGNED
                AND
                DELIVERED

            	
              )

            
	
              BY
                THE WITHINNAMED "INVESTOR
                "

            	
              )

            
	
              INDIA
                GLOBALIZATION CAPITAL,
                INC.

            	
              )

            
	
              ON
                THE 19thDAY
                OF DECEMBER,2007

            	
              )

            

    

    

    
      	
              IN
                THE PRESENCE
                OF:

            	
              )

            
	
              WITNESS:

            	
              )

            
	
              NAME
                AND
                ADDRESS:

            	
              )

            
	 	 
	 	 

    

    

    
      	
              SIGNED
                AND
                DELIVERED

            	
              )

            
	
              BY
                THE WITHINNAMED "COMPANY"

            	
              )

            
	
              BY
                THE HAND OF
                Mr.

            	
              )

            
	
              R.
                L. SRIVASTAVAPURSUANT TO
                THE

            	
              )

            
	
              RESOLUTION
                PASSED BY THE
                BOARD

            	
              )

            
	
              ON
                THE 17th DAY
                OF DECEMBER,2007

            	
              )

            
	 	 
	
              IN
                THE PRESENCE
                OF:

            	
              )

            
	
              WITNESS:

            	
              )

            
	
              NAME
                AND
                ADDRESS:

            	
              )

            
	 	 
	 	 

    

    

    
      	
              SIGNED
                AND
                DELIVERED

            	
              )

            
	
              BY
MR.
                R. L. SRIVASTAVA FOR
                HIMSELF AND ON BEHALF
                OFTHE "Promoters"

            	
              )

            
	 	
              )

            
	
              ON
                THE 19th DAY
                OF DECEMBER,2007

            	
              )

            
	 	 
	
              IN
                THE PRESENCE
                OF:

            	
              )

            
	
              WITNESS:

            	
              )

            
	 	 
	
              NAME
                AND
                ADDRESS:

            	
              )

            

    

    

    

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    

     

    SCHEDULE
      1

     

     

    NAME
      AND DETAILS OF
      PROMOTERS

     

    

    

    
      	
              Name
                of
                Shareholder

              
              

            	
              Number
                of
                Shares

              
              

            	
              %
                shareholding on a Fully Diluted
                Basis

              
              

            
	
              Ravindra
                Lal
                Srivastava 

            	
              1579711

            	
              53.88 
                

            
	
              Indravati
                Devi Srivastava

            	
              1152640

            	
              39.31

            
	
              Sankata
                Prasad Srivastava

            	
              96640

            	
              3.30

            
	
              Bihari
                Lal Srivastava

            	
              16000

            	
              0.55

            
	
              Ramdulare
                Lal Srivastava

            	
              55168

            	
              1.88

            
	
              Ramdulari
                Devi Srivastava

            	
              32000

            	
              1.09

            
	
              Total

            	
              2932159

            	
              100

            

    

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      2

     

    FORM
      OF POWER OF
      ATTORNEY

     

    

    TO
      ALL TO WHOM THESE PRESENTS SHALL
      COME, I, Ravindra Lal
      Srivastava, an Indian
      inhabitant having my address at Sricon House 25, Pragati Layout, Rajeev
      Nagar, Nagpur, India (the
“Pledgor”) SEND GREETINGS:

    

    And
      Whereas the Pledgor is the legal and
      beneficial owner of 15,79,711 Equity Shares (“Equity
      Shares”) of
Sricon
      Infrastructure Private
      Limited, a company registered
      under the Companies Act, 1956 and having its registered office at Sricon
      House 25, Pragati Layout, Rajeev Nagar, Nagpur, India (the “Company”) having full legal
      right, title and interest in those Equity Shares with power to deal with such
      Equity Shares in any manner the Pledgor thinks fit.

    

    And
      Whereas the Pledgor, the Company and
      India Globalisation Capital, Inc. a company organised under the laws of the
      State of Maryland and having its office address at 4336 Montgomery Avenue
      Bethesda, MD 20814 (“Pledgee”) have entered into an Amendment Agreement
      dated December 19, 2007 (“Amendment
Agreement”),
      pursuant to which the
      Investor has agreed to
subscribe
      to Portion of Subscription
      Shares
(as defined in the
Amendment
Agreement).

    

    And
      Whereas the Pledgor along with the
      other Promoters of the Company (as defined in the Amendment Agreement)
      have undertaken
      to cause the Company to
      perform certain obligations under the AmendmentAgreement.

    

    And
      Whereas the Pledgor has secured the
performance by it of
      its
      obligations to cause the Company to do certain acts, by pledging and creating
      a charge on
15,79,711Equity Shares of
      the Company held by the
      Promoters (hereinafter
      referred to as the “Pledged Shares”).

    

    Pursuant
      to Clause 4(c) of
      the Amendment Agreement,
      the Pledgor has undertaken
      and agreed to irrevocably appoint the Pledgee as its attorney-in-fact to
take all necessary action
      and sign all necessary documents, letters, undertakings etc. as may be required
      so as to effect a transfer of the Pledged Shares to the Pledgee or any of his
      nominees. In pursuance of
      the above, the Pledgor is desirous of appointing the Pledgee as its
      Attorney.

    

    Capitalized
      terms not defined herein
      shall have the meanings ascribed to them in the Amendment Agreement.

    

    
      	
               

            	
              NOW
                KNOW YE ALL AND THESE PRESENTS
                WITNESS THAT

            

    

    

    The
      Pledgor does hereby irrevocably
      nominate, constitute and appoint the Pledgee (i.e. INDIA GLOBALISATION CAPITAL,
      INC. a company organised under the laws of the State of Maryland acting directly or indirectly
      through
      one or more of its newly formed non US Affiliates, alongwith such newly formed
      non-US Affiliates, and
      having its office address at 4336
      Montgomery Avenue Bethesda, MD 20814, or any hereinafter
      referred to as Attorney) to
      be the true and lawful Attorney of the Pledgor and in his name and on his behalf
      and at his risk and costs, to do or cause to be done the following acts, deeds,
      matters or things, that is to say:

    

    
      	
              1.  

            	
              at
                any time, to take any action
                and execute any instrument, deed, document, undertaking etc. that
                the
                Attorney may deem necessary or advisable to keep the charge or pledge
                created over the Pledged Shares secured and in full force and
                effect.

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
              2.  

            	
              at
                any time after the Pledgor
                and/or the Company commit a breach of the provisions of the Amendment Agreement,
                in the opinion of the
                Investor:

            

    

    

    
      	
              a)  

            	
              to
                execute any instrument, deed, document, undertaking including necessary
                transfer forms as transferor in respect of all the Pledged Shares
                in the
                name of the Pledgor including revalidation of blank transfer forms
                duly
                signed by the Pledgor in respect of the Pledged Shares so as to effect
                a
                transfer of the Pledged Shares to the Pledgee or its nominee, as
                the case
                may be, and to ensure that the name of the Pledgee and/or its nominee
                is
                incorporated in the ‘register of members’ as a ‘member’ in respect of the
                Pledged Shares;

            

    

    

    
      	
              b)  

            	
              to
                sign on behalf of the Pledgor
                the consent letter in the form as set out herein;

            

    

    

    
      	
              c)  

            	
              to
                vote at all or any meetings of
                the shareholders of the Company or otherwise to act as the Pledgor’s
                attorney or attorney’s representative(s) or proxy(ies) in respect of the
                Pledged Shares; and

            

    

    

    
      	
              d)  

            	
              to
                appoint any proxy (ies) to
                represent the Pledgor at all or any meetings of
                the  shareholders of the Company with full authority to vote at
                such meetings in such manner as the Attorney may deem
                fit.

            

    

    

    
      	
              3.  

            	
              at
                any time, to make such
                declaration in respect of the Pledged Shares as may be in the opinion
                of
                the said Attorney required or necessary in
                law.

            

    

    

    
      	
              4.  

            	
              at
                any time, to enter into, make, sign, execute, deliver, acknowledge
                and
                perform all engagements, contracts, agreements, indentures, papers,
                documents, writings, things, deeds etc. that may be necessary or
                proper to
                be entered into and signed, sealed, executed, delivered, acknowledged
                and
                performed for the purposes of giving effect to the transfer of the
                Pledged
                Shares to the Pledgee and/or its
                nominee.

            

    

    

    
      	
              5.  

            	
              at
                any time, to offer the Pledged Shares for dematerialisation or
                rematerialisation pursuant to the Depositories Act, 1996 and the
                rules
                made and to obtain registration of the names of the beneficial owners
                thereof in the records of the Depository or any other intermediary,
                and to
                do all acts, deeds and things, and to execute and deliver all deed,
                documents and writing in order to obtain and implement dematerialisation
                or rematerialisation of the Pledged
                Shares.

            

    

    

    
      	
              6.  

            	
              to
                act in relation to these
                premises as fully and effectually in all respects as we the Pledgor
                ourselves could do if personally
                present.

            

    

    

    

    AND
      WE HEREBY agree to ratify and
      confirm all and whatsoever our said Attorney shall do or purport to do or cause
      to be done by virtue of these presents.

    

    AND
      WE HEREBY declare that this Power of
      Attorney is and shall be irrevocable until the complete transfer of all the
      Promoter Shares
from
      the Promoters
to the Investor
      in accordance with the
Amendment Agreement.

    

    IN
      WITNESS WHEREOF the Pledgor has
      caused this Power of Attorney to be executed by its duly authorized signatory
      on
      the day, month and year first above written.

    

    SIGNED
      AND DELIVERED BY [Insert name of
      each Promoter whose Shares are being pledged].

    

    

    NOTARY

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
2A

     

    

     

     

    SPECIMEN
      FORM OF CONSENT LETTER OF PROMOTERS

     

    [On
      the letterhead of the Promoters]

    

    [Insert
      Date]

    

    Dear
      Sir,

    
      	
              Re:

            	
              Acquisition
                of
                15,79,711 equity shares of Sricon Infrastructure Private Limited
                (“Company”) by India Globalisation Capital, Inc. (“Purchaser”) from Indian
                resident shareholders

            

    

    

    

    I
      hereby
      accord my consent for the transfer of 15,79,711 equity shares held by me in
      Company to the Purchaser at a price of Rs. 254.84/- per share.

    

    I
      request
      you to kindly take the above 'no objection' on record.

    

     

    Yours
      faithfully,

     

    

    

    [Name
      of Promoter]

    

    

    

    
      
        
        

      

      
        13

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