EXHIBIT 10.4
INVESTMENT MANAGEMENT
TRUST AGREEMENT
This Agreement is made as
of
, 2005 by and between India Globalization Capital, Inc. (the
“Company”) and Continental Stock Transfer & Trust
Company (“Trustee”).
WHEREAS, the
Company’s Registration Statement on Form S-1, No.
(“Registration Statement”), for its initial public
offering of securities (“IPO”) has been declared
effective as of the date hereof by the Securities and Exchange
Commission (“Effective Date”); and
WHEREAS, Ferris, Baker
Watts, Inc. (“FBW”) is acting as the representative of
the underwriters in the IPO; and
WHEREAS, as described in
the Company’s Registration Statement, $107,498,000 of the
gross proceeds of the IPO as herein provided ($124,418,000 if the
underwriters over-allotment option is exercised in full) will be
delivered to the Trustee to be deposited and held in a trust
account for the benefit of the Company and the holders of the
Company’s common stock, par value $.0001 per share, issued in
the IPO (the amount to be delivered to the Trustee will be referred
to herein as the “Property”; the stockholders for whose
benefit the Trustee shall hold the Property will be referred to as
the “Public Stockholders,” and the Public Stockholders
and the Company will be referred to together as the
“Beneficiaries”) and in the event the securities
offered in the IPO are registered in Colorado, pursuant to
Section 11-51-302(6) of the Colorado Revised Statutes (the
“CRS”). A copy of Section 11-51-302(6) of the CRS
is attached hereto and made a part hereof and
WHEREAS, the Company and
the Trustee desire to enter into this Agreement to set forth the
terms and conditions pursuant to which the Trustee shall hold the
Property;
IT IS AGREED:
1.
AGREEMENTS AND COVENANTS
OF TRUSTEE. The Trustee hereby agrees and covenants to:
(a)
Hold the Property in trust for the
Beneficiaries in accordance with the terms of this Agreement,
including, without limitation, the terms of
Section 11-51-302(6) of the CRS, in a segregated trust account
(“Trust Account”) established by the Trustee at a
branch of United Bank selected by the Trustee;
(b)
Manage, supervise and administer the
Trust Account subject to the terms and conditions set forth
herein;
(c)
In a timely manner, upon the
instruction of the Company, to invest and reinvest the Property in
any “Government Security.” As used herein, Government
Security means any Treasury Bill issued by the United States,
having a maturity of one hundred and eighty days or less;
(d)
Collect and receive, when due, all
principal and income arising from the Property, which shall become
part of the “Property,” as such term is used
herein;
(e)
Notify the Company of all
communications received by it with respect to any Property
requiring action by the Company;
(f)
Supply any necessary information or
documents as may be requested by the Company in connection with the
Company’s preparation of the tax returns for the Trust
Account;
(g)
Participate in any plan or proceeding
for protecting or enforcing any right or interest arising from the
Property if, as and when instructed by the Company to do so;
(h)
Render to the Company and to FBW, and
to such other person as the Company may instruct, monthly written
statements of the activities of and amounts in the Trust Account
reflecting all receipts and disbursements of the Trust Account;
and
(i)
Commence liquidation of the Trust
Account only after receipt of and only in accordance with the terms
of a letter (“Termination Letter”), in a form
substantially similar to that attached hereto as either
Exhibit A or Exhibit B, signed on behalf of the Company
by its President or Chairman of the Board and Secretary or
Assistant Secretary, and complete the liquidation of the Trust
Account and distribute the Property in the Trust Account only as
directed in the Termination Letter and the other documents referred
to therein. The Trustee understands and agrees that disbursements
from the Trust Account shall be made only pursuant to a duly
executed Termination Letter, together with the other documents
referenced herein. In all cases, the Trustee shall provide FBW with
a copy of any Termination Letters and/or any other correspondence
that it receives with respect to any proposed withdrawal from the
Trust Account promptly after it receives same.
2.
AGREEMENTS AND COVENANTS
OF THE COMPANY. The Company hereby agrees and covenants to:
(a)
Give all instructions to the Trustee
hereunder in writing, signed by the Company’s President or
Chairman of the Board. In addition, except with respect to its
duties under paragraph 1(i) above, the Trustee shall be entitled to
rely on, and shall be protected in relying on, any verbal or
telephonic advice or instruction which it in good faith believes to
be given by any one of the persons authorized above to give written
instructions, provided that the Company shall promptly confirm such
instructions in writing;
(b)
Hold the Trustee harmless and
indemnify the Trustee from and against, any and all expenses,
including reasonable counsel fees and disbursements, or loss
suffered by the Trustee in connection with any action, suit or
other proceeding brought against the Trustee involving any claim,
or in connection with any claim or demand which in any way arises
out of or relates to this Agreement, the services of the Trustee
hereunder, or the Property or any income earned from investment of
the Property, except for expenses and losses resulting from the
Trustee’s gross negligence or willful misconduct. Promptly
after the receipt by the Trustee of notice of demand or claim or
the commencement of any action, suit or proceeding, pursuant to
which the Trustee intends to seek indemnification under this
paragraph, it shall notify the Company in writing of such claim
(hereinafter referred to as the “Indemnified Claim”).
The Trustee shall have the right to conduct and manage the defense
against such Indemnified Claim, provided, that the Trustee shall
obtain the consent of the Company with respect to the selection of
counsel, which consent
2
shall not be unreasonably
withheld. The Company may participate in such action with its own
counsel; and
(c)
Pay the Trustee an initial acceptance
fee of $1,000 and an annual fee of $3,000 (it being expressly
understood that the Property shall not be used to pay such fee).
The Company shall pay the Trustee the initial acceptance fee and
first year’s fee at the consummation of the IPO and
thereafter on the anniversary of the Effective Date. The Trustee
shall refund to the Company the fee (on a pro rata basis) with
respect to any period after the liquidation of the Trust Fund. The
Company shall not be responsible for any other fees or charges of
the Trustee except as may be provided in paragraph 2(b) hereof (it
being expressly understood that the Property shall not be used to
make any payments to the Trustee under such paragraph).
3.
LIMITATIONS OF LIABILITY.
The Trustee shall have no responsibility or liability to:
(a)
Take any action with respect to the
Property, other than as directed in paragraph 1 hereof and the
Trustee shall have no liability to any party except for liability
arising out of its own gross negligence or willful misconduct;
(b)
Institute any proceeding for the
collection of any principal and income arising from, or institute,
appear in or defend any proceeding of any kind with respect to, any
of the Property unless and until it shall have received
instructions from the Company given as provided herein to do so and
the Company shall have advanced or guaranteed to it funds
sufficient to pay any expenses incident thereto;
(c)
Change the investment of any
Property, other than in compliance with paragraph 1(c);
(d)
Refund any depreciation in principal
of any Property;
(e)
Assume that the authority of any
person designated by the Company to give instruct
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