Exhibit 10.2

 

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   Continuing Security Agreement

Name of Debtor: Syntel, Inc.

State Organization No.:

Debtor’s Address: 525 East Big Beaver Road, Troy, MI 48083

Name of Debtor: Syntel Consulting Inc.

State Organization No.:

Debtor’s Address: 525 East Big Beaver Road, Troy, MI 48083

Name of Debtor: SkillBay LLC

State Organization No.:

Debtor’s Address: 525 East Big Beaver Road, Troy, MI 48083

Grant of Security Interest. Syntel, Inc., a Michigan corporation, Syntel
Consulting Inc., a Michigan corporation, and SkillBay LLC, a Michigan limited
liability company (whether one or more, the “Debtor”, individually and
collectively if more than one) grant(s) to JPMorgan Chase Bank, N.A., whose
address is 28660 Northwestern Hwy, Southfield, MI 48034 (together with its
successors and assigns the “Bank”), a continuing security interest in, pledge(s)
and assign(s) to the Bank all of the “Collateral” (as hereinafter defined) owned
by the Debtor, all of the collateral in which the Debtor has rights or power to
transfer rights and all Collateral in which Debtor later acquires ownership,
other rights or rights or power to transfer rights to secure the payment and
performance of the Liabilities.

Borrower. “Borrower” means Syntel, Inc., a Michigan corporation.

Liabilities. “Liabilities” means all obligations, indebtedness and liabilities
of the Borrower whether individual, joint and several, absolute or contingent,
direct or indirect, liquidated or unliquidated, now or hereafter existing in
favor of the Bank, including without limitation, all liabilities, all interest,
costs and fees arising under or from any note, open account, overdraft, letter
of credit application, endorsement, surety agreement, guaranty, credit card,
lease, Rate Management Transaction, acceptance, foreign exchange contract or
depository service contract, whether payable to the Bank or to a third party and
subsequently acquired by the Bank, any monetary obligations (including interest)
incurred or accrued during the pendency of any bankruptcy, insolvency,
receivership or other similar proceedings, regardless of whether allowed or
allowable in such proceeding, and all renewals, extensions, modifications,
consolidations, rearrangements, restatements, replacements or substitutions of
any of the foregoing. “Rate Management Transaction” means any transaction
(including an agreement with respect thereto) that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option, derivative transaction or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures. The
Debtor and the Bank specifically contemplate that Liabilities include
indebtedness hereafter incurred by the Borrower to the Bank.

Collateral. Accounts; Chattel Paper; Deposit Accounts and other payment
obligations of a financial institution (including the Bank); Documents;
Commercial Tort Claims; Equipment; General Intangibles; Instruments; Inventory;
Investment Property; Letter of Credit Rights; and Farm Products.

Description of Collateral. As used in this agreement, the term “Collateral”
means all of the Debtor’s property whether owned individually or jointly with
others of the types indicated above and defined below, whether now owned or
hereafter acquired, whether now existing or hereafter arising, and wherever
located, including but not limited to any items listed on any schedule or list
attached hereto. In addition, the term “Collateral” includes all “proceeds,”
“products” and “supporting obligations” (as such terms are defined in the “UCC”,
meaning the Uniform Commercial Code of Michigan, as in effect from time to time)
of the Collateral indicated above, including but not limited to all stock
rights, subscription rights, dividends, stock dividends, stock splits, or
liquidating dividends, and all cash, accounts, chattel paper, “instruments,”
“investment property,” “financial assets,” and “general intangibles” (as such
terms are defined in the UCC) arising from the sale, rent, lease, casualty loss
or other disposition of the Collateral, and any Collateral returned to,
repossessed by or stopped in transit by the Debtor, and all

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insurance claims relating to any of the Collateral (defined above). The term
“Collateral” further includes all of the Debtor’s right, title and interest in
and to all books, records and data relating to the Collateral identified above,
regardless of the form of media containing such information or data, and all
software necessary or desirable to use any of the Collateral identified above or
to access, retrieve, or process any of such information or data. Where the
Collateral is in the possession of the Bank or the Bank’s agent, the Debtor
agrees to deliver to the Bank any property that represents an increase in the
Collateral or profits or proceeds of the Collateral. Notwithstanding the
foregoing, Collateral shall not include the stock of any Foreign Subsidiary or
the assets owned directly by any Foreign Subsidiary. As used herein, “Foreign
Subsidiary” means any subsidiary of the Borrower that is incorporated or
organized under the laws of any jurisdiction other than the United States of
America, any State or other political subdivision thereof, or the District of
Columbia.

 

1. “Accounts” means all of the Debtor’s “accounts” as defined in Article 9 of
the UCC.

 

2. “Commercial Tort Claims” means all of the Debtor’s “Commercial Tort Claims”
as defined in Article 9 of the UCC.

 

3. “Chattel Paper” means all of the Debtor’s “chattel paper” as defined in
Article 9 of the UCC.

 

4. “Deposit Accounts” means all of the Debtor’s “deposit accounts” as defined in
Article 9 of the UCC and other payment obligations of a financial institution
(including the Bank) to the Debtor.

 

5. “Documents” means all of the Debtor’s “documents” as defined in Article 9 of
the UCC.

 

6. “Equipment” means all of the Debtor’s “equipment” as defined in Article 9 of
the UCC. In addition, “Equipment” includes any “documents” (as defined in
Article 9 of the UCC) issued with respect to any of the Debtor’s “equipment” (as
defined in Article 9 of the UCC) and certificates of title relating to the
foregoing. Without limiting the security interest granted, the Debtor represents
and warrants that the Debtor’s Equipment is presently located at the address set
forth in this agreement or in a separate Collateral Location Schedule delivered
to the Bank.

 

7. “Farm Products” means all of the Debtor’s “farm products” as defined in
Article 9 of the UCC.

 

8. “General Intangibles” means all of the Debtor’s “general intangibles”, as
defined in Article 9 of the UCC. In addition, “General Intangibles” further
includes any right to a refund of taxes paid at any time to any governmental
entity.

 

9. “Instruments” means all of the Debtor’s “instruments” as defined in Article 9
of the UCC.

 

10. “Inventory” means all of the Debtor’s “inventory” as defined in Article 9 of
the UCC. In addition, “Inventory” includes any “documents” and certificates of
title issued with respect to any of the Debtor’s “inventory” (as defined in
Article 9 of the UCC). Without limiting the security interest granted, the
Debtor represents and warrants that the Debtor’s Inventory is presently located
at the address set forth in this agreement or in a separate Collateral Location
Schedule delivered to the Bank.

 

11. “Investment Property” means all of the Debtor’s “investment property” as
defined in Article 9 of the UCC and all of the Debtor’s “financial assets,” as
defined in Article 8 of the UCC.

 

12. “Letter of Credit Rights” means all of the Debtor’s “letter of credit
rights” as defined in Article 9 of the UCC.

Collateral Location Schedule. “Collateral Location Schedule” means a schedule in
the form attached to this agreement. The Debtor agrees to complete, execute and
deliver a Collateral Location Schedule to the Bank with respect to any
Collateral for which the Debtor has identified a location in this agreement:
(i) concurrently with the execution of this agreement, if the initial location
of the Collateral is other than the address of the Debtor set forth above; and
(ii) within ten (10) days prior to the relocation of any Collateral to any place
other than the address of the Debtor set forth above or the location identified
in any previously submitted Collateral Location Schedule.

Representations, Warranties and Covenants. The Debtor represents and warrants
to, and covenants and agrees with the Bank that each of the following is true
and will remain true until termination of this agreement and full and final
payment of all Liabilities:

 

1. Its principal residence or chief executive office is at the address shown
above;

 

2. The Debtor’s name as it appears in this agreement is its exact name as it
appears in the Debtor’s organizational documents, as amended, including any
trust documents;

 

3. It is or will become the owner of the Collateral free from any liens,
encumbrances or security interests, except for this security interest and
existing liens disclosed to and accepted by the Bank in writing, and it will
defend the Collateral against all claims and demands of all persons at any time
claiming any interest in the Collateral;

 

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4. It will keep the Collateral free of liens, encumbrances and other security
interests, except for this security interest, maintain the Collateral in good
repair, not use it illegally and exhibit the Collateral to the Bank on demand;

 

5. At its own expense, the Debtor will maintain comprehensive casualty insurance
on the Collateral against such risks, in such amounts, with such deductibles and
with such companies as may be satisfactory to the Bank. Each insurance policy
shall contain a lender’s loss payable endorsement in form and substance
satisfactory to the Bank and a prohibition against cancellation or amendment of
the policy or removal of the Bank as loss payee without at least thirty
(30) days’ prior written notice to the Bank. In all events, the amounts of such
insurance coverages shall conform to prudent business practices and shall be in
such minimum amounts that the Debtor will not be deemed a co-insurer. The
policies and certificates evidencing them, shall, if the Bank so requests, be
deposited with the Bank. The Debtor authorizes the Bank to endorse on the
Debtor’s behalf and to negotiate drafts reflecting proceeds of insurance of the
Collateral, provided that the Bank shall remit to the Debtor such surplus, if
any, as remains after the proceeds have been applied, at the Bank’s option, to
the satisfaction of all of the Liabilities (in such order of application as the
Bank may elect) or to the establishment of a cash collateral account for the
Liabilities;

 

6. It will not sell, lease, license or offer to sell, lease, license or
otherwise transfer the Collateral or any rights in or to the Collateral, without
the written consent of the Bank, except in the ordinary course of business;

 

7. It will not change the location of the Collateral from the locations of the
Collateral described in this agreement and any separate Collateral Location
Schedule provided to the Bank, without providing at least ten (10) days’ prior
written notice to the Bank by means of submitting a Collateral Location
Schedule;

 

8. It will pay promptly when due all taxes and assessments upon the Collateral,
or for the use or operation of the Collateral;

 

9. No financing statement covering all or any part of the Collateral or any
proceeds is on file in any public office, unless the Bank has approved that
filing. From time to time at the Bank’s request, the Debtor will execute one or
more financing statements or similar record and a control agreement with respect
to the proceeds in form satisfactory to the Bank and will pay the cost of filing
them in all public offices where filing is deemed by the Bank to be necessary or
desirable. In addition, the Debtor shall execute and deliver, or cause to be
executed and delivered, such other documents as the Bank may from time to time
request to perfect or to further evidence the security interest created in the
Collateral by this agreement including, without limitation: (a) any certificate
or certificates of title to the Collateral with the security interest of the
Bank noted thereon or executed applications for such certificates of title in
form satisfactory to the Bank; (b) any assignments of claims under government
contracts which are included as part of the Collateral, together with any
notices and related documents as the Bank may from time to time request; (c) any
assignment of any specific account receivable as the Bank may from time to time
request; (d) a notice of and acknowledgment of the Bank’s security interest and
a control agreement with respect to any Collateral, all in form and substance
satisfactory to the Bank; (e) a notice to and acknowledgment from any person
holding or in possession of any Collateral that such persons holds the
Collateral as a bailee for the Bank’s benefit, all in form and substance
satisfactory to the Bank; and (f) any consent to the assignment of proceeds of
any letter of credit, all in form and substance satisfactory to the Bank;

 

10. It will not, without the Bank’s prior written consent, change the Debtor’s
name, the Debtor’s business organization, the jurisdiction under which the
Debtor’s business organization is formed or organized, or the Debtor’s chief
executive office, or of any additional places of the Debtor’s business;

 

11. It will provide any information that the Bank may reasonably request and
will permit the Bank or the Bank’s agents to inspect and copy its books,
records, data and the Collateral at any time during normal business hours;

 

12. The Bank shall have the right now, and at any time in the future in its sole
and absolute discretion, without notice to the Debtor, to (a) prepare, file and
sign the Debtor’s name on any proof of claim in bankruptcy or similar document
against any owner of the Collateral and (b) prepare, file and sign the Debtor’s
name on any financing statement, notice of lien, assignment or satisfaction of
lien or similar document in connection with the Collateral. The Debtor hereby
authorizes the Bank to file financing statements covering Collateral or such
lesser amount of assets as the Bank may determine, or the Bank may, at its
option, file financing statements or similar records containing any collateral
description which reasonably describes the Collateral in which a security
interest is granted under this agreement;

 

13. Immediately upon the Debtor’s receipt of any Collateral evidenced by an
agreement, “instrument,” “chattel paper,” certificated “security” or “document”
(as such terms are defined in the UCC) (collectively, “Special Collateral”), the
Debtor shall mark the Special Collateral to show that it is subject to the
Bank’s security interest and shall deliver the original to the Bank together
with appropriate endorsements and other specific evidence of assignment or
transfer in form and substance satisfactory to the Bank;

 

14. The Debtor shall keep all tangible Collateral in good order and repair and
shall not waste or destroy any of the Collateral, nor use any of the Collateral
in violation of any applicable law or any policy of insurance thereon. To the
extent that the Collateral consists of “farm products” (as defined in the UCC),
the Debtor shall attend to and care for the crops and livestock in accordance
with the best practices of good husbandry, and do, or cause to be done, any and
all acts that may at any time be appropriate or necessary to grow, raise,
harvest, care for, preserve and protect the farm products;

 

15. Except as may be otherwise disclosed in writing by the Debtor to the Bank,
none of the Collateral is attached to real estate so as to constitute a
“fixture” (as defined in the UCC) and none of the Collateral shall at any time
hereafter be attached to real estate so as to constitute a fixture. If any of
the Collateral is now or at any time hereafter becomes so attached to real
estate so as to constitute a fixture, the Debtor shall, at any time upon the
Bank’s request, furnish the Bank with a disclaimer of interest in the Collateral
executed by each person or entity having an interest in such real estate.

 

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16. Debtor has no Commercial Tort Claims, and Debtor agrees to promptly notify
Bank if it has any Commercial Tort Claim at any time and promptly deliver to the
Bank all information, documents and agreements requested by the Bank to further
evidence and perfect the Bank’s security interest in all such Commercial Tort
Claims.

Accounts; Chattel Paper; General Intangibles and Instruments. If the Collateral
includes the Debtor’s “Accounts, Chattel Paper, General Intangibles and
Instruments” and until the Bank gives notice to the Debtor to the contrary, the
Debtor will, in the usual course of its business and at its own expense, on the
Bank’s behalf but not as the Bank’s agent, demand and receive and use its best
efforts to collect all moneys due or to become due with respect to the
Collateral. Until the Bank gives notice to the Debtor to the contrary or until
the Debtor is in default, it may use the funds collected in its business. Upon
notice from the Bank or upon default, the Debtor agrees that all sums of money
it receives on account of or in payment or settlement of the Accounts, Chattel
Paper, General Intangibles and Instruments shall be held by it as trustee for
the Bank without commingling with any of the Debtor’s other funds, and shall
immediately be delivered to the Bank with endorsement to the Bank’s order of any
check or similar instrument. It is agreed that, at any time the Bank so elects,
the Bank shall be entitled, in its own name or in the name of the Debtor or
otherwise, but at the expense and cost of the Debtor, to collect, demand,
receive, sue for or compromise any and all Accounts, Chattel Paper, General
Intangibles, and Instruments, and to give good and sufficient releases, to
endorse any checks, drafts or other orders for the payment of money payable to
the Debtor and, in the Bank’s discretion, to file any claims or take any action
or proceeding which the Bank may deem necessary or advisable. It is expressly
understood and agreed, however, that the Bank shall not be required or obligated
in any manner to make any demand or to make any inquiry as to the nature or
sufficiency of any payment received by it or to present or file any claim or
take any other action to collect or enforce the payment of any amounts which may
have been assigned to the Bank or to which the Bank may be entitled at any time
or times. All notices required in this paragraph will be immediately effective
when sent. Such notices need not be given prior to the Bank’s taking action. The
Debtor appoints the Bank or the Bank’s designee as the Debtor’s attorney-in-fact
to do all things with reference to the Collateral as provided for in this
section including without limitation (1) to notify the post office authorities
to change the Debtor’s mailing address to one designated by the Bank, (2) to
receive, open and dispose of mail addressed to the Debtor, (3) to sign the
Debtor’s name on any invoice or bill of lading relating to any Collateral, on
assignments and verifications of account and on notices to the Debtor’s
customers, and (4) to do all things necessary to carry out this agreement or to
perform any of the obligations of the Debtor under this agreement. The Debtor
ratifies and approves all acts of the Bank as attorney-in-fact. The Bank shall
not be liable for any act or omission, nor any error of judgment or mistake of
fact or law, but only for its gross negligence or willful misconduct. This power
being coupled with an interest is irrevocable until all of the Liabilities have
been fully satisfied and shall survive the death or disability of the Debtor.

Farm Products. If the Collateral includes the Debtor’s “Farm Products”, the
Debtor agrees as follows: (1) the Debtor will not sell or otherwise dispose of,
or enter into any agreement concerning the sale or other disposition of, any
Farm Products except as specifically authorized below in this section; (2) the
Debtor will furnish the Bank, immediately upon the execution of this agreement,
immediately upon request made by the Bank hereafter, and at least fourteen
(14) days prior to any anticipated sale of Farm Products, in writing signed by
the Debtor, a list of potential buyers, commission merchants and selling agents
of the Debtor’s Farm Products, in form and substance satisfactory to the Bank;
(3) the Debtor will, whether or not requested by the Bank, immediately notify
the Bank, in writing signed by the Debtor, of any changes which would render the
list described in subsection (2) of this section incorrect, incomplete or
inaccurate, and shall supply the Bank with such information as may be necessary
to correct, complete or clarify such list and any information provided in
connection therewith; (4) the Debtor will promptly furnish the Bank such
information and such completed and executed forms and/or documents (including,
but not limited to, effective financing statements or notices of lien under 7
U.S.C. §1631) as may be requested by the Bank and as the Bank may deem
appropriate to protect the Bank’s security interest and to provide notice of
such interest to potential buyers, commission merchants and selling agents of
the Debtor’s Farm Products in accordance with 7 U.S.C. §1631, including any
revision or replacement of such statute hereafter enacted; (5) the Bank is
hereby authorized at any time and from time to time to (a) provide a notice of
lien under 7 U.S.C. §1631, in form and substance satisfactory to the Bank, and
to provide a copy of this agreement, to any buyer, potential buyer, commission
merchant or selling agent of any of the Debtor’s Farm Products, whether or not
they are on the above-described list, and (b) to file any effective financing
statements or notices of lien under 7 U.S.C. §1631 against the Debtor, as
debtor, and in favor of the Bank, as secured party, and describing the
Collateral or any part thereof, in any public filing offices as the Bank may
desire; (6) the Debtor will not sell or otherwise dispose of, or enter into any
agreement concerning the sale or other disposition of, any Farm Products to any
person or entity which is not on the above-described list of potential buyers,
commission merchants and selling agents furnished by the Debtor to the Bank;
(7) in addition to the penalties imposed by federal law, it shall be a default
under this agreement and under the terms of all other agreements related to any
of the Liabilities for the Debtor to sell or otherwise dispose of, or enter into
any agreement concerning the sale or other disposition of, any Farm Products
which are subject to this agreement with any buyer, commission merchant or
selling agent not on the list furnished by the Debtor to the Bank pursuant to
the terms of this section and who has not received notice of the Bank’s security
interest in those Farm Products as provided in 7 U.S.C. §1631; (8) the Bank may,
at any time and from time to time, require any check, draft or other remittance
issued as full or partial payment for the sale of Farm Products to be made
payable to the Bank, or to both the Debtor and the Bank, at the option of the
Bank; and (9) the Bank may, at any time and

 

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from time to time, require the Debtor to apply the proceeds of sale or other
disposition of any Farm Products to the payment of all or part of the
Liabilities as the Bank may require, provided that the foregoing shall not be
construed as authorization to sell or otherwise dispose of Farm Products except
as specifically authorized in this section. THE DEBTOR UNDERSTANDS THAT 7 U.S.C.
§1631 IMPOSES ON THE DEBTOR A PENALTY OF THE GREATER OF $5,000.00 OR 15% OF THE
VALUE OR BENEFIT RECEIVED BY THE DEBTOR FOR EACH FARM PRODUCT THAT IS SUBJECT TO
THE SECURITY AGREEMENT BETWEEN THE DEBTOR AND THE BANK AND IS SOLD TO OR DEALT
WITH BY A BUYER, COMMISSION MERCHANT OR SELLING AGENT NOT ON THE LIST OF SUCH
PERSONS FURNISHED BY THE DEBTOR TO THE BANK, UNLESS THE DEBTOR (i) NOTIFIES THE
BANK IN WRITING OF THE IDENTITY OF THE BUYER, COMMISSION MERCHANT OR SELLING
AGENT AT LEAST SEVEN (7) DAYS PRIOR TO THE SALE OF THE FARM PRODUCTS, OR
(ii) ACCOUNTS TO THE BANK FOR THE PROCEEDS OF SALE OF THE FARM PRODUCTS NOT
LATER THAN TEN (10) DAYS AFTER THE SALE.

Pledge. If the Debtor is not liable for all or any part of the Liabilities, then
the Debtor agrees that:

 

1. If any moneys become available from any source other than the Collateral that
the Bank can apply to the Liabilities, the Bank may apply them in any manner it
chooses, including but not limited to applying them against obligations,
indebtedness or liabilities which are not secured by this agreement.

 

2. The Bank may take any action against the Borrower, the Collateral or any
other collateral for the Liabilities, or any other person or entity liable for
any of the Liabilities.

 

3. The Bank may release the Borrower or anyone else from the Liabilities, either
in whole or in part, or release the Collateral in whole or in part or any other
collateral for the Liabilities, and need not perfect a security interest in the
Collateral or any other collateral for the Liabilities.

 

4. The Bank does not have to exercise any rights that it has against the
Borrower or anyone else, or make any effort to realize on the Collateral or any
other collateral for the Liabilities, or exercise any right of setoff.

 

5. Without notice or demand and without affecting the Debtor’s obligations
hereunder, from time to time, the Bank is authorized to: (a) renew, modify,
compromise, rearrange, restate, consolidate, extend, accelerate or otherwise
change the time for payment of, or otherwise change the terms of the Liabilities
or any part thereof, including increasing or decreasing the rate of interest
thereon; (b) release, substitute or add any one or more sureties, endorsers, or
guarantors; (c) take and hold other collateral for the payment of the
Liabilities, and enforce, exchange, substitute, subordinate, impair, waive or
release any such collateral; (d) proceed against the Collateral or any other
collateral for the Liabilities and direct the order or manner of sale as the
Bank in its discretion may determine; and (e) apply any and all payments
received by the Bank in connection with the Liabilities, or recoveries from the
Collateral or any other collateral for the Liabilities, in such order or manner
as the Bank in its discretion may determine.

 

6. The Debtor’s obligations hereunder shall not be released, diminished or
affected by (a) any act or omission of the Bank, (b) the voluntary or
involuntary liquidation, sale or other disposition of all or substantially all
of the assets of the Borrower, or any receivership, insolvency, bankruptcy,
reorganization, or other similar proceedings affecting the Borrower or any of
its assets or any other obligor on the Liabilities or that obligor’s assets,
(c) any change in the composition or structure of the Borrower or any other
obligor on the Liabilities, including a merger or consolidation with any other
person or entity, or (d) any payments made upon the Liabilities.

 

7. The Debtor expressly consents to any impairment of any other collateral for
the Liabilities, including, but not limited to, failure to perfect a security
interest and release of any other collateral for the Liabilities and any such
impairment or release shall not affect the Debtor’s obligations hereunder.

 

8. The Debtor waives and agrees not to enforce any rights of subrogation,
contribution or indemnification that it may have against the Borrower, any
person or entity liable on the Liabilities, or the Collateral, until the
Borrower and the Debtor have fully performed all their obligations to the Bank,
even if those obligations are not covered by this agreement.

 

9. The Debtor waives (a) to the extent not prohibited by applicable law, all
rights and benefits under any laws or statutes regarding sureties, as may be
amended, (b) any right the Debtor may have to receive notice of the following
matters before the Bank enforces any of its rights: (i) the Bank’s acceptance of
this agreement, (ii) incurrence or acquisition of any Liabilities, any credit
that the Bank extends to the Borrower, (iii) the Borrower’s default, (iv) any
demand, diligence, presentment, dishonor and protest, or (v) any action that the
Bank takes regarding the Borrower, anyone else, any other collateral for the
Liabilities, or any of the Liabilities, which it might be entitled to by law or
under any other agreement, (c) any right it may have to require the Bank to
proceed against the Borrower, any guarantor or other obligor on the Liabilities,
the Collateral or any other collateral for the Liabilities, or pursue any remedy
in the Bank’s power to pursue, (d) any defense based on any claim that the
Debtor’s obligations exceed or are more burdensome than those of the Borrower,
(e) the benefit of any statute of limitations affecting the Debtor’s obligations
hereunder or the enforcement hereof, (f) any defense arising by reason of any
disability or other defense of the Borrower or by reason of the cessation from
any cause whatsoever (other than payment in full) of the obligation of the
Borrower for the Liabilities, and (g) any defense based on or arising out of any
defense that the Borrower may have to the payment or performance of the
Liabilities or any portion thereof. The Bank may waive or delay enforcing any of
its rights without losing them. Any waiver affects only the specific terms and
time period stated in the waiver.

 

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10. The Debtor agrees that to the extent any payment or transfer is received by
the Bank in connection with the Liabilities, and all or any part of such payment
or transfer is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be transferred or repaid by the Bank or
paid over to a trustee, receiver or any other person or entity, whether under
any bankruptcy act or otherwise (any of those payments or transfers is
hereinafter referred to as a “Preferential Payment”), then this agreement shall
continue to be effective or shall be reinstated, as the case may be, even if all
Liabilities have been paid in full, and whether or not the Bank is in possession
of this agreement or whether agreement has been marked paid, cancelled, released
or returned to the Debtor, and, to the extent of the payment or repayment or
other transfer by the Bank, the Liabilities or part intended to be satisfied by
the Preferential Payment shall be revived and continued in full force and effect
as if the Preferential Payment had not been made. If this agreement must be
reinstated, the Debtor agrees to execute and deliver to the Bank any new
security agreements and financing statements, if necessary or if requested by
the Bank, in form and substance acceptable to the Bank, covering the Collateral.

 

11. The Debtor agrees to fully cooperate with the Bank and not to delay, impede
or otherwise interfere with the efforts of the Bank to secure payment from the
assets which secure the Liabilities including actions, proceedings, motions,
orders, agreements or other matters relating to relief from automatic stay,
abandonment of property, use of cash collateral and sale of the Bank’s
collateral free and clear of all liens.

 

12. The Debtor has (a) without reliance on the Bank or any information received
from the Debtor and based upon the records and information the Debtor deems
appropriate, made an independent investigation of the Borrower, the Borrower’s
business, assets, operations, prospects and condition, financial or otherwise,
and any circumstances that may bear upon those transactions, the Borrower or the
obligations, liabilities and risks undertaken pursuant to this agreement;
(b) adequate means to obtain from the Borrower on a continuing basis information
concerning the Borrower and the Bank has no duty to provide any information
concerning the Borrower or other obligor on the Liabilities to the Debtor;
(c) full and complete access to the Borrower and any and all records relating to
any Liabilities now or in the future owing by the Borrower; (d) not relied and
will not rely upon any representations or warranties of the Debtor not embodied
in this agreement or any acts taken by the Debtor prior to or after the
execution or other authentication and delivery of this agreement (including but
not limited to any review by the Debtor of the business, assets, operations,
prospects and condition, financial or otherwise, of the Borrower); and
(e) determined that the Debtor will receive benefit, directly or indirectly, and
has or will receive fair and reasonably equivalent value, for the execution and
delivery of this agreement and the rights provided to Bank. By entering into
this agreement, the Debtor does not intend: (i) to incur or believe that the
Debtor will incur debts that would be beyond the Debtor’s ability to pay as
those debts mature; or (ii) to hinder, delay or defraud any creditor of the
Debtor. The Debtor is neither engaged in nor about to engage in any business or
transaction for which the remaining assets of the Debtor are unreasonably small
in relation to the business or transaction, and any property remaining with the
Debtor after the execution or other authentication of this agreement is not
unreasonably small capital.

Default; Remedies. If any of the Liabilities are not paid at maturity, whether
by acceleration or otherwise, or if a default by anyone occurs under the terms
of any agreement related to any of the Liabilities, then the Bank shall have the
rights and remedies provided by law or this agreement, including but not limited
to the right to require the Debtor to assemble the Collateral and make it
available to the Bank at a place to be designated by the Bank which is
reasonably convenient to both parties, the right to take possession of the
Collateral with or without demand and with or without process of law, and the
right to sell and dispose of it and distribute the proceeds according to law.
Should a default occur, the Debtor will pay to the Bank all costs reasonably
incurred by the Bank for the purpose of enforcing its rights hereunder, to the
extent not prohibited by law, including, without limitation: costs of
foreclosure; costs of obtaining money damages; and a reasonable fee for the
services of internal and outside attorneys employed or engaged by the Bank or
its affiliates for any purpose related to this agreement, including, without
limitation, consultation, drafting documents, sending notices or instituting,
prosecuting or defending litigation or any proceeding. The Debtor agrees that
upon default the Bank may dispose of any of the Collateral in its then present
condition, that the Bank has no duty to repair or clean the Collateral prior to
sale, and that the disposal of the Collateral in its present condition or
without repair or clean-up shall not affect the commercial reasonableness of
such sale or disposition. The Bank’s compliance with any applicable state or
federal law requirements in connection with the disposition of the Collateral
will not adversely affect the commercial reasonableness of any sale of the
Collateral. The Bank may disclaim warranties of title, possession, quiet
enjoyment, and the like, and the Debtor agrees that any such action shall not
affect the commercial reasonableness of the sale. In connection with the right
of the Bank to take possession of the Collateral, the Bank may take possession
of any other items of property in or on the Collateral at the time of taking
possession, and hold them for the Debtor without liability on the part of the
Bank. The Debtor expressly agrees that the Bank may enter upon the premises
where the Collateral is believed to be located without any obligation of payment
to the Debtor, and that the Bank may, without cost, use any and all of the
Debtor’s “equipment” (as defined in the UCC) in the manufacturing or processing
of any “inventory” (as defined in the UCC) or in growing, raising, cultivating,
caring for, harvesting, loading and transporting of any of the Collateral that
constitutes “farm products” (as defined in the UCC). If there is any statutory
requirement for notice, that requirement shall be met if the Bank sends notice
to the Debtor at least ten (10) days prior to the date of sale, disposition or
other event giving rise to the required notice, and such notice shall be deemed
commercially reasonable. The Debtor is liable for any deficiency remaining after
disposition of the Collateral.

 

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Miscellaneous.

 

1. Where the Collateral is located at, used in or attached to a facility leased
by the Debtor, the Debtor will obtain from the lessor a consent to the granting
of this security interest and a release or subordination of the lessor’s
interest in any of the Collateral, in form and substance satisfactory to the
Bank.

 

2. At its option the Bank may, but shall be under no duty or obligation to,
discharge taxes, liens, security interests or other encumbrances at any time
levied or placed on the Collateral, pay for insurance on the Collateral, and pay
for the maintenance and preservation of the Collateral, and the Debtor agrees to
reimburse the Bank on demand for any payment made or expense incurred by the
Bank, with interest at the highest rate at which interest may accrue under any
of the instruments or documents evidencing the Liabilities.

 

3. No delay on the part of the Bank in the exercise of any right or remedy
waives that right or remedy, no single or partial exercise by the Bank of any
right or remedy precludes any other exercise of it or the exercise of any other
right or remedy, and no waiver or indulgence by the Bank of any default is
effective unless it is in writing and signed by the Bank, nor does a waiver on
one occasion waive that right on any future occasion.

 

4. If any provision of this agreement is invalid, it shall be ineffective only
to the extent of its invalidity, and the remaining provisions shall be valid and
effective.

 

5. Except as provided in the Accounts; Chattel Paper; General Intangibles; and
Instruments paragraph above, any notices and demands under or related to this
document shall be in writing and delivered to the intended party at its address
stated herein, and if to the Bank, at its main office if no other address of the
Bank is specified herein, by one of the following means: (a) by hand, (b) by a
nationally recognized overnight courier service, or (c) by certified mail,
postage prepaid, with return receipt requested. Notice shall be deemed given:
(a) upon receipt if delivered by hand, (b) on the Delivery Day after the day of
deposit with a nationally recognized courier service, or (c) on the third
Delivery Day after the notice is deposited in the mail. “Delivery Day” means a
day other than a Saturday, a Sunday, or any other day on which national banking
associations are authorized to be closed. Any party may change its address for
purposes of the receipt of notices and demands by giving notice of such change
in the manner provided in this provision.

 

6. All rights of the Bank benefit the Bank’s successors and assigns; and all
obligations of the Debtor bind the Debtor’s heirs, executors, administrators,
successors and assigns. If more than one person or entity signs as the Debtor,
their obligations are joint and several and each agreement, representation,
warranty and covenant shall be individual, joint and several and the
“Collateral” includes any property that is owned by any Debtor individually or
jointly with any other.

 

7. A carbon, photographic or other reproduction of this agreement is sufficient
as, and can be filed as, a financing statement. The Bank is irrevocably
appointed the Debtor’s attorney-in-fact to execute any financing statement on
the Debtor’s behalf covering the Collateral. The Debtor authorizes the Bank to
file one or more financing statements or similar records related to the security
interests created by this agreement, and further authorizes the Bank, as secured
party herein, instead of the Debtor, to sign such financing statements and other
similar records.

Security Agreement in Addition to Other Security Agreements. This Agreement is
in addition to and not in substitution or replacement of any other security
agreement executed by the Debtor in favor of the Bank, and the Bank’s rights
under this Agreement and any such other security agreement are cumulative.

Indemnification. The Debtor agrees to indemnify, defend and hold the Bank, its
parent companies, subsidiaries, affiliates, their respective successors and
assigns and each of their respective shareholders, directors, officers,
employees and agents (collectively the “Indemnified Persons”) harmless from and
against any and all loss, liability, obligation, damage, penalty, judgment,
claim, deficiency, expense, interest, penalties, attorneys’ fees (including the
fees and expenses of attorneys engaged by the Indemnified Person at the
Indemnified Person’s reasonable discretion) and amounts paid in settlement
(“Claims”) to which any Indemnified Person may become subject arising out of or
relating to this agreement or the Collateral, except to the limited extent that
the Claims are proximately caused by the Indemnified Person’s gross negligence
or willful misconduct. The indemnification provided for in this paragraph shall
survive the termination of this agreement and shall not be affected by the
presence, absence or amount of or the payment or nonpayment of any claim under,
any insurance.

Governing Law and Venue. This agreement shall be governed by and construed in
accordance with the laws of the State of Michigan (without giving effect to its
laws of conflicts), and to the extent applicable, federal law, except to the
extent that the laws regarding the perfection and priority of security interests
of the state(s) in which either the Debtor or any property securing the
Liabilities is located are applicable. The Debtor agrees that any legal action
or proceeding with respect to any of its obligations under this agreement may be
brought by the Bank in any state or federal court located in the State of
Michigan, as the Bank in its sole discretion may elect. By the execution and
delivery of this agreement, the Debtor submits to and accepts, for itself and in
respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of those courts. The Debtor waives any claim that the State of
Michigan is not a convenient forum or the proper venue for any such suit, action
or proceeding.

Additional Representations, Warranties and Covenants. The Debtor represents,
warrants and covenants to the Bank that each of the following is true and will
remain true until termination of this agreement and payment in full of all
Liabilities: (a) the execution and delivery of this agreement and the
performance of the obligations it imposes do not violate any law, do not

 

7

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conflict with any agreement by which it is bound, and do not require the consent
or approval of any governmental authority or any third party; (b) this agreement
is a valid and binding agreement, enforceable according to its terms; and
(c) all balance sheets, profit and loss statements, and other financial
statements furnished to the Bank in connection with the Liabilities are accurate
and fairly reflect the financial condition of the organizations and persons to
which they apply on their effective dates, including contingent liabilities of
every type, which financial condition has not changed materially and adversely
since those dates. The Debtor, other than a natural person, further represents
that: (a) it is duly organized, validly existing and in good standing under the
laws of the state where it is organized and in good standing in each state where
it is doing business; and (b) the execution and delivery of this agreement and
the performance of the obligations it imposes (i) are within its powers and have
been duly authorized by all necessary action of its governing body; and (ii) do
not contravene the terms of its articles of incorporation or organization, its
by-laws, or any agreement or document governing its affairs.

WAIVER OF SPECIAL DAMAGES. THE DEBTOR WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR RECOVER FROM
THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES.

JURY WAIVER. THE DEBTOR AND THE BANK HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY
AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) BETWEEN OR AMONG THE
DEBTOR AND THE BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT. THIS
PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING
DESCRIBED HEREIN.

 

Debtor:  

Syntel, Inc.

 

By:

 

/s/ Daniel M. Moore

  Daniel M. Moore   Chief Administrative Officer   Printed Name   Title

Date Signed:

 

12/7/12

Debtor:    

Syntel Consulting Inc.

By:

 

Daniel M. Moore

 

Daniel M. Moore

  Printed Name   Title

Date Signed:

 

12/7/12

Debtor:  

SkillBay LLC

By:

 

Daniel M. Moore

  Daniel M. Moore   Manager   Printed Name   Title

Date Signed:

 

12/7/12

 

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