Exhibit 10.6


 


PLEDGE AGREEMENT


 


This Pledge Agreement (this “Agreement”) is made July 31, 2009 by
and between VIRTUSA CORPORATION, a Delaware corporation having its principal
offices at 2000 West Park Drive, Westborough, Massachusetts 01581 (the “Borrower”),
and RBS CITIZENS, NATIONAL ASSOCIATION, a national bank with a banking office
at 28 State Street, Boston, Massachusetts 02109, as administrative agent for
itself and for the Lenders which are parties to the Credit Agreement as defined
below (the “Agent”).


 


The Borrower, the Agent the Lenders are parties to a certain Credit
Agreement of even date herewith, (as the same may be amended, modified,
supplemented, extended or restated from time to time, the “Credit Agreement”)
pursuant to which Lenders have agreed to make certain loans and other credits
available to Borrower on the terms and conditions set forth in the Credit
Agreement.  Pursuant to the provisions of
Section 3.1 of the Credit Agreement, the Borrower was required to pledge
to the Agent for the ratable benefit of the Lenders, all of its right, title
and interest in and to the shares of Virtusa Securities Corporation owned by it.  Capitalized terms used and not defined herein
shall have the meanings ascribed to them in the Credit Agreement.


 


1)             Pledge of
Stock.  The Borrower hereby represents
and warrants that the Borrower owns on the date hereof, free and clear of any
and all claims, liens or encumbrances, all 
of the issued and outstanding shares of the capital stock of VIRTUSA
SECURITIES CORPORATION (the “Subsidiary”), and hereby agrees to pledge, assign,
and deliver the same on the date hereof to the Agent, for benefit of the Lenders,
to be held by the Agent subject to the terms and conditions hereinafter set
forth, together with stock powers appropriately executed in blank.  The term “Stock”, as used herein includes the shares
of stock described above and any additional shares of stock which may from time
to time be pledged to the Agent hereunder.


 


Any sums or property paid upon or with respect to any of the Stock upon
the liquidation or dissolution of any issuer thereof shall be paid over to the Agent
to be held by it as security for the Obligations. In case any distribution of
capital shall be made on or in respect of any of the Stock or any property
shall be distributed upon or with respect to any of the Stock pursuant to the
recapitalization or reclassification of the capital of the issuer thereof or
pursuant to the reorganization thereof, the property so distributed shall be
delivered to the Agent to be held by it as security for the Obligations.  All sums of money and property paid or
distributed in respect of the Stock which are received by the Borrower shall,
until paid or delivered to the Agent, be held by the Borrower in trust for the Lenders
as security for the Obligations.


 


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2)             Warranty of Title.  The Borrower warrants that it has good and
marketable title to the Stock described in Section l hereof, subject to no
pledges, liens, security interests, charges, options, restrictions or other
encumbrances except the security interest created by this Agreement, and that
such Borrower has power, authority and legal right to pledge the Stock pursuant
to this Agreement.  The Borrower
represents and warrants that the Stock represents 100.0% of the issued and
outstanding capital stock of the Subsidiary, and that it will not permit any
further shares or instruments convertible into or exchangeable for shares of
stock in the Subsidiary to issue while this Agreement remains in effect. The
Borrower covenants to defend the Lenders’ rights and security interest in the
Stock against the claims and demands of all Persons whomsoever; and the
Borrower covenants to have the like title to and right to pledge any other
property at any time hereafter pledged to the Agent hereunder and to likewise
defend the Lenders’ rights and security interest therein.


 


The property at any time pledged with the Agent hereunder and all
income therefrom and proceeds thereof, are collectively referred to herein as
the “Collateral”.


 


3)           Security for Obligations.  This Agreement and the pledge of the
Collateral is made with the Agent to secure the payment in full and performance
of any and all obligations, indebtedness and liabilities of the Borrower, now
existing or hereafter arising, direct or indirect, absolute or contingent, due
or to become due, matured or unmatured, liquidated or unliquidated, arising
by  contract, operation of law or
otherwise including, but not limited to, those arising under or in connection
with the Credit Agreement (the “Obligations”).


 


4)             Dividends, Voting, etc., While No Event of
Default.  So long as no default by the
Borrower in the full and punctual payment and performance of the Obligations is
continuing, the Borrower, as to the Stock, shall be entitled to receive all
cash dividends paid in respect of the Stock, to vote the Stock (to the extent
otherwise entitled thereto) and to give consents, waivers and ratifications in
respect of the Stock, provided, however, that no vote shall be cast or
consent, waiver or ratification given or action taken which would be
inconsistent with or violate any provision of the Credit Agreement.  All such rights of the Borrower to vote and
give consents, waivers and ratifications with respect to the Stock shall, at Agent’
option, as evidenced by Agent’ notifying Borrower of such election, cease in
case an Event of Default shall have occurred and be continuing.


 


5)             Remedies Following
Event of Default.  If an Event of Default
shall have occurred and be continuing, the Agent shall thereafter have the
following rights and remedies in addition to the rights and remedies of a
secured party under the Uniform Commercial Code, all such rights and remedies
being cumulative, not exclusive, and enforceable alternatively successively or
concurrently, at such time or times as the Agent think expedient:


 


a)           if the Agent so elects
and gives notice of such election to the Borrower, the Agent may vote any or
all shares of the Stock (whether or not the same shall have been transferred
into its name or the name of its nominee or nominees) and give all consents, 


 


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waivers and ratifications in respect of the stock and otherwise act
with respect thereto as though it was the outright owner thereof (the Borrower
hereby irrevocably constituting and appointing the Agent the proxy and
attorney-in-fact of the Borrower with full power of
substitution, to do so);


 


b)           the Agent may demand,
sue for, collect or make any compromise or settlement the Agent deem suitable
in respect of any Collateral held by it hereunder;


 


c)           the Agent may sell,
resell, assign and deliver, or otherwise dispose of any or all of the
Collateral, for cash and/or credit and upon such terms, at such place or places
and at such time or times and to such Persons as the Agent think expedient, all
without demand for performance by the Borrower or any notice or advertisement
whatsoever except such as may be required by law; and


 


d)            the Agent may cause
all or any part of the Stock held by it to be transferred into its name or the name
of its nominee or nominees.


 


The Agent may enforce its rights hereunder without any other notice and
without compliance with any other condition precedent now or hereafter imposed
by statute, rule or law or otherwise (all of which are hereby expressly
waived by the Borrower).  If any of the
Collateral is sold by the Agent upon credit or for future delivery, the Agent
shall not be liable for the failure of the purchaser to pay for the same and in
such event the Agent may resell such Collateral.  The Agent may buy any part or all of the
Collateral at any public sale and if any part or all of the Collateral is of a
type customarily sold in a recognized market or is of the
type which is the subject of widely-distributed standard price quotations, the Agent
may buy at private sale and may make payments thereof by any means.  The Agent may apply the cash proceeds
actually received from any sale or other disposition to the reasonable expenses
of retaking, holding, preparing for sale, selling and the like, or reasonable
attorneys’ fees, and all legal expenses, travel and other expenses which may be
incurred by the Agent in attempting to collect the Obligations or any of them,
or to enforce this Agreement or in the prosecution or defense of any action or
proceeding related to the subject matter of this Agreement; and then  to the Obligations in such order as to
principal or interest remaining unpaid, including interest thereon, and the
balance of any expenses unpaid, as the Agent in their discretion may reasonably
determine, and any surplus shall be paid to the Borrower.


 


The Borrower recognizes that the Agent may be unable to effect a public
sale of the Stock by reason of certain prohibitions contained in the Securities
Act of 1933, as amended, but may be compelled to resort to one or more private
sales thereof to a restricted group of purchasers who will be obliged to agree,
among other things, to acquire such securities for their own account, for
investment and not with a view to the distribution or resale thereof.  The Borrower agrees that any such private
sales may be at prices and on other reasonable terms less favorable to the
seller than if sold at public sales and that such private sales shall be deemed
to have been made in a commercially reasonable manner.  The Agent shall be under no obligation to
delay a sale of any of the Stock for the period of time necessary to permit the
issuer of such securities to register 


 


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such securities for public sale under the Securities Act of 1933, as
amended, even if the issuer would agree to do so.


 


6)           Marshalling.  The Agent shall not be required to marshal
any present or future security for (including but not limited to this Agreement
and the Collateral pledged hereunder), or guaranties of, the Obligations or any
part of them, or to resort to such security 
or guaranties in any particular order; and all of its rights hereunder
and in respect of such securities and guaranties shall be cumulative and in
addition to all other rights, however existing or arising.  To the extent that the Borrower lawfully may,
the Borrower hereby agrees that it will not invoke any law which might cause
delay in or impede the enforcement of the Lenders’ rights under this Agreement
or under any other instrument evidencing any of the Obligations or under which
any of the Obligations is outstanding or by which any of the Obligations is
secured and guaranteed, and the Borrower hereby irrevocably waives the benefits
of all such laws.


 


7)           Borrower’s Obligations Not Affected.  The obligations of the Borrower hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by (a) any insolvency, bankruptcy, arrangement of or involving
the Borrower; (b) any exercise or non-exercise, or any waiver, by the Agent
of any right, remedy, power or privilege under or in respect of any of the
Obligations or any security therefor (including this Agreement); (c) any
amendment or waiver of any of the terms of the Credit Agreement or any of the
Obligations; (d) any amendment or waiver of any of the terms of any
instrument (other than this Agreement) securing any of the Obligations or (e) the
taking of additional security for or any guaranty of any of the Obligations or
the release or discharge or termination of any security or guaranty for any of
the Obligations; whether or not the Borrower shall have notice or knowledge of
any of the foregoing.


 


8)             Transfer, etc. by the
Borrower.  Without the prior written
consent of the Agent, the Borrower will not sell, assign, transfer or otherwise
dispose of, grant any option with respect to, or pledge or grant any security
interest in or otherwise encumber any of the Collateral or any interest
therein, except for the pledge thereof provided for in this Agreement.


 


9)           Further
Assurances.  The Borrower will do all
such acts, and will furnish to the Agent all such financing statements,
certificates, opinions and other documents and will do or cause to be done all
such other things as the Agent may reasonably request from time to time in
order to give full effect to this Agreement and to secure the rights of the Lenders
hereunder.


 


10)         Agent and Lenders’
Exoneration.  Under no circumstances
shall the Agent or the Lenders be deemed to assume any responsibility for or
obligation or duty (except for safe custody) with respect to any part or all of
the Collateral, of any nature or kind or any matter or proceedings arising
out of or relating thereto, but the same shall be at the Borrower’s
sole risk at all times.  Neither the
Agent nor the Lenders shall be required to take any action of any kind to
collect, preserve or protect its or the Borrower’s rights in the Collateral or
against any parties thereto.  The
Borrower hereby releases the Agent and 


 


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the Lenders from any claims, causes of action and demands at any time
arising out of or with respect to this Agreement, the Obligations, the use of
the Collateral and/or any actions reasonably taken or omitted to be taken by
the Agent or the Lenders with respect thereto, and the Borrower hereby agrees
to hold the Agent and the Lenders harmless from and with respect to any and all
such claims, causes of action and demands. 
The Agent’s and Lenders’ prior recourse to any part or all of the
Collateral shall not constitute a condition of any demand, suit or proceeding
for payment or collection of the Obligations.


 


11)           No Waiver, Etc.  No act, failure or delay by Agent shall
constitute a waiver of its rights and remedies hereunder or otherwise.  No single or partial waiver by the Agent of
any default or right or remedy which it may have shall operate as a waiver of
any other default, right or remedy or of the same default, right or remedy on a
future occasion.  The Borrower hereby
waives presentment, notice of dishonor and protest of all instruments included
in or evidencing any of the Obligations or the Collateral, and any and all
other notices and demands whatsoever (except as expressly provided herein).


 


12)         Notices, Etc.  All notices, requests and other
communications hereunder shall be in writing and shall be given as set forth in
the Credit Agreement.


 


13)           Termination.  Upon payment in full of all the Obligations
in accordance with their terms and the performance by the Borrower of all of
the Borrower’s agreements under the Credit Agreement and this Agreement, this
Agreement shall terminate, the security interest created hereby shall be
terminated and the Borrower shall be entitled to the return, at the Borrower’s
expense, of such of the Collateral in the possession or control of the Agent as
has not theretofore been disposed of pursuant to the provisions hereof,
together with any moneys and other property at the time held by the Agent
hereunder.  On termination of this
Agreement, the Agent shall promptly provide such UCC releases or other evidence
of termination of the security interest created hereby to Borrower.


 


14)           Miscellaneous
Provisions.  Neither this Agreement nor
any term hereof may be changed, waived, discharged or terminated except by a
written instrument expressly referring to this Agreement and to the
provisions so modified or limited, and executed by the party to be
charged.  This Agreement and all
obligations of the Borrower hereunder shall be binding upon the successors in
title and assigns of the Borrower, and shall, together with the rights and
remedies of the Agent hereunder, inure to the benefit of the Agent, its
successors in title and assigns.  This
Agreement and obligations of the Borrower hereunder shall be governed by and
construed in accordance with the laws of the Commonwealth of
Massachusetts.  The descriptive section
headings have been inserted for convenience of reference only and do not define
or limit the provisions hereof.  If any
term of this Agreement shall be held to be invalid, illegal or unenforceable,
the validity of all other terms hereof shall be in no way affected thereby, and
this Agreement shall be construed and be enforceable as if such invalid,
illegal or unenforceable terms had not been included
herein.  The Borrower acknowledges receipt of a copy
of this Agreement.  Words and expressions
used herein without definition which are defined in the Uniform Commercial Code
have such defined meanings herein, unless the context otherwise indicates or
requires.  This Agreement may be executed
in 


 


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several counterparts, each of which when executed and delivered shall
be original, but all of which together shall constitute one instrument.  In making proof of this Agreement, it shall
not be necessary to produce or account for more than one such counterpart.


 


IN WITNESS WHEREOF, the
Borrower has executed this Agreement as an instrument under seal on the date
first above written.


 


 


	
  WITNESS

  	
   

  	
  BORROWER

  
	
   

  	
   

  	
  VIRTUSA CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Paul D. Tutun

  	
   

  	
  By:

  	
  /s/ Ranjan Kalia

  
	
   

  	
   

  	
   

  



 


ACKNOWLEDGED AND AGREED


 


AGENT


RBS CITIZENS, NATIONAL ASSOCIATION


In its capacity as Agent for the Lenders


 


	
  By:

  	
  /s/ Jennifer Perry

  	
   

  



 


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