Document:

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

  	
   

  

 

6Exhibit 10.7

 

SECURITY AGREEMENT

 

This
SECURITY AGREEMENT (this “Agreement”) is made as of July 31, 2009 and is
given by VIRTUSA CORPORATION, a corporation organized under the laws of the
State of Delaware and having its chief executive office at 2000 West Park
Drive, Westborough, Massachusetts 01581 (the “Borrower”) to RBS CITIZENS,
NATIONAL ASSOCIATION, a national bank having a banking office at 28 State
Street, Boston, Massachusetts 02109, as administrative agent for itself and for
the Lenders party to the Credit Agreement, as defined below (the “Agent”).

 

The
Borrower, the Agent and the Lenders have entered into 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 the Lenders have agreed to make loans and other credits to
the Borrower upon the terms and subject to the conditions set forth therein.

 

The
Lenders have required as a condition precedent to entering the Credit Agreement
that the Borrower execute and deliver this Agreement and to grant the security
interests referenced herein.

 

In
order to induce the Agent and the Lenders to enter into the Credit Agreement
and to  make or continue to make
available to the Borrower loans and other extensions of credit upon the terms
and subject to the conditions set forth therein, and in consideration thereof,
and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Borrower agrees as follows:

 

Section 1.
Definitions.  All capitalized
terms used herein or in any certificate, report or other document delivered
pursuant hereto shall have the meanings assigned to them below or in  the Credit Agreement (unless otherwise
defined).  Except as otherwise defined,
terms defined in the Uniform Commercial Code and used herein shall have the
meanings set forth in the Uniform Commercial Code; provided, however,
that the term “instrument” shall be such term as defined in Article 9 of
the Uniform Commercial Code rather than Article 3 of the Uniform
Commercial Code.

 

Accounts.  All  rights
of the Borrower to payment of monetary obligation (i) for property that
has been or is to be sold, leased, licensed, assigned, or otherwise disposed
of, (ii) for services rendered or to be rendered, (iii) for a
secondary obligation incurred or to be incurred, or (iv) arising out of
the use of credit or charge card or information contained on or for use with
the card; and all sums of money and other proceeds due or becoming due thereon,
all notes, bills, drafts, acceptances, instruments, documents and other debts,
obligations and liabilities, in  whatever
form, owing to the Borrower’s rights pertaining to and interest in such
property, including the right of stoppage in transit, replevin or
reclamation; all chattel paper; all insurance proceeds; all other rights and
claims to the payment of money, under contracts or otherwise; and all other
property constituting “accounts” as such term is defined in the Uniform
Commercial Code.

 

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Collateral.  All personal
property and fixtures belonging to the Borrower or in which the Borrower  has any  rights,
of every kind and description, tangible and intangible, whether now owned or
existing or hereafter arising or acquired; including, without limitation, all
Accounts, Equipment, General
Intangibles, Inventory and Investment Property, together with all goods,
instruments, documents of title, policies and certificates of  insurance, commercial tort claims, chattel
paper (whether tangible or electronic), deposit 
accounts, letter of credit rights (whether or not the letter of credit
is evidenced by a writing) and other property owned by the Borrower or in which
the Borrower has an interest and including, without limitation, any cash that
is now or may hereafter be in the possession, custody, or control  of the Lender or its participants or assigns
for any purpose; any and all additions, substitutions, replacements and
accessions to foregoing and all supporting obligations relating to the
forgoing; and all Proceeds and Property and products of any of the foregoing;
but excluding all Intellectual Property.

 

Encumbrance. Any mortgage, pledge, security interest, lien or
other charge or encumbrance of any kind or nature (including, without
limitation, the lien or retained security title of a conditional vendor) upon
or with respect to any property.

 

Equipment. All machinery, equipment, and fixtures, furniture,
furnishings, trade fixtures, specialty tools and parts, motor vehicles and
materials handling equipment of the Borrower, together with the Borrower’s
interest in, and right to, any and all manuals, computer programs, data bases
and other materials relating to the use, operation or structure of any of the
foregoing; and all other property constituting ‘equipment’ as such term is
defined in the Uniform Commercial Code.

 

General Intangibles. Except for the
Intellectual Property, all rights of the Borrower under contracts to enjoy
performance by others or to be entitled to enjoy rights granted by others,
including without limitation any licenses; all payment intangibles; all
obligations and indebtedness of any kind (other than Accounts) owning to the
Borrower from whatever source arising; all contract rights; all rights of the
Borrower as a bailor; all tax refunds; all right, title and interest of the
Borrower in and to all software, documents, books, records, files and other
information (on whatever medium recorded, and including without limitation computer
programs, tapes, discs, punch cards, data processing software and related
property and rights) maintained by the Borrower that reflect the conduct of the
Borrower’s business, such as financial records, marketing and sales records,
research and development records, and design, engineering and manufacturing
records; all rights under service bureau service contracts; all computer data
and the concepts and ideas on which said data is based; all data bases, all
customer lists, and all other property constituting “general tangibles” as such
term is defined in the Uniform Commercial Code.

 

Intellectual Property. All of the following, to
the extent owned by (and not licensed to) 
the Borrower (i) United States and foreign patents, patent
applications and statutory invention registrations, including reissues,
divisions, continuations, substitutions, renewals, continuations in part,
extensions and reexaminations thereof, and all improvements thereto, (ii) software,
databases, copyrightable works, websites, copyrights (registered, renewed or
otherwise) and registrations, renewals and applications for registration or
renewal thereof, (iii) trademarks, 

 

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trademark applications, service marks, service mark
applications, trade dress, logos, slogans, symbols, trade names, internet
domain names, brand names, product names, fictitious names, corporate names,
and other source identifiers and all reissues, extensions and renewals thereof
and the goodwill of the business symbolized thereby and associated therewith, (iv) trade
secrets, know-how, technology, inventions and discoveries and (v) any and
all right, title, and interest in and to the foregoing, including the right to
sue for past, present, and future infringement, in all of such cases (i) through
(v), whether used, held for use, supported, maintained, marketed or otherwise.

 

Inventory. All goods,
merchandise and other personal property (including warehouse receipts and other
negotiable and non-negotiable documents of title covering any such property) of
the Borrower that are held for sale, lease or other disposition or to be
furnished under  contracts of service (or
that are so furnished), or for display or demonstration, or leased or
consigned, or that are raw materials, piece goods, work-in-process, finished
goods or supplies or other materials used or consumed or to be used or consumed
in the Borrower’s business, whether in transit or in the possession of the
Borrower or another, including without limitation all goods covered by purchase
orders and contracts with suppliers and all goods billed and held by suppliers
and goods located on the premises of any carriers, forwarding agents, truckers,
warehousemen, vendors, selling agents or other third parties; all plans, drawings,
diagrams, schematics, assembly and display materials relating to any of the
foregoing; and all other property constituting “inventory” as such term is
defined in the Uniform Commercial Code.

 

Investment Property. All the securities
(whether certificated or uncertificated) of the Borrower, including without
limitation all stocks, bonds Treasury bills, certificates of deposits, mutual
or money market fun shares, security entitlements, securities accounts,
commodity contracts and commodity accounts; and all sums due or to become due
on any of the foregoing, and all securities, instruments or other property
purchased or acquired as a result of the investment and reinvestment thereof as
hereinafter provided, and all other property constituting “investment property”
as such term is defined in the Uniform Commercial Code; excluding any capital
stock, or other equity interests of any Subsidiary of the Borrower.

 

Perfection Certificate. The Perfection Certificate
and Borrower Certification signed by an authorized representative of the
Borrower in the form attached hereto as Exhibit A.

 

Proceeds. All proceeds
received of and all other profits, rentals and receipts, in whatever form, or
arising from any Collateral, including whatever is received or acquired upon
the sale, lease, exchange, assignment, licensing or other disposition of any
Collateral; whatever is  received,
collected on or distributed on account of any Collateral; all rights arising
out of any  Collateral; all claims
arising out of the loss, nonconformity, interference with the use of
defects  or infringement of rights in, or
damage to or destruction of, any Collateral; any insurance payable by reason of
the loss, damage or nonconformity of, defects or infringement of rights in, or
damage to or destruction of, any Collateral; any unearned premiums with respect
to policies of insurance in respect of any Collateral; and condemnation or
requisition payments with respect to any Collateral; and all other property
constituting “proceeds” as such term is defined in the Uniform Commercial Code;
in each chase whether now or existing or hereafter arising.

 

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Secured Obligations. All
Obligations of the Borrower under or in respect of the Loan Documents.

 

Security Interests  The security interests and liens granted
pursuant to Section 2 hereof,  as
well as all other security interests created or assigned as additional security
for the Secured Obligations pursuant to this Agreement.

 

Uniform Commercial Code The Uniform Commercial Code
as in effect in  The Commonwealth of
Massachusetts, provided, that if by reason of mandatory provisions
of  law, perfection, or the effect of
perfection or non-perfection, of the Security Interests of any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than Massachusetts, “Uniform Commercial Code” means the Uniform Commercial Code
as in effect in such other jurisdiction for the purposes of the provisions
hereof relating to such perfection or effect of perfection or non-perfection,
as the case may be.

 

Section 2. Grant.

 

(a)          To secure the full
and punctual payment and performance of the Secured Obligations, the Borrower
hereby assigns and pledges to the Agent, its successors and assigns, for the ratable
benefit of the Lenders, all of its rights, title and interest in, and grants to
the Agent, its successors and assigns, for the ratable benefit of the Lenders,
a continuing security interest in, the Collateral of the Borrower. The Security
Interests are granted as security only and shall not subject the Agent to, or
transfer to the Agent or in any way affect or modify, any obligation or
liability of the Borrower with respect to any of the Collateral, or any
transaction in connection therewith.

 

(b)          Upon the execution of
this Agreement, and from time to time thereafter at the written request of the
Agent, the Borrower shall deliver to the Agent such Uniform Commercial Code
financing statements, assignments, continuation statements, amendments,
instruments and notices and assignments under the Assignment of Claims Act of
1940, as amended (collectively, the “Perfection Documents”), as may be
reasonably required for the Agent to perfect or maintain the perfection of its
Security Interest in all Collateral. Any such financing statements,
continuation statements or amendments may be prepared and filed by the Agent at
any time in any jurisdiction.

 

Section 3. Representations, Warranties, and
Covenants. The Borrower hereby makes the following representations and warranties,
and agrees to the following covenants, each of which representations,
warranties and covenants shall be continuing and in force as long as this
Agreement is in effect:

 

3.1  Name; Location; Changes.

 

(a)         The name of the Borrower set forth in the Perfection
Certificate is the true and correct legal name of the Borrower, and except as
otherwise disclosed to the Agent in the Perfection Certificate, the Borrower
has not done business as or used any other name.

 

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(b)           The state of organization of the Borrower set forth in the
Perfection Certificate is the true and correct state of organization of the
Borrower and the Borrower is duly organized and in good standing in such state
on the date hereof.

 

(c)           The address of the
Borrower set forth in the Perfection Certificate is the Borrower’s chief
executive office and the place where its business records are kept. Except as
disclosed on the Perfection Certificate, all tangible Collateral of the
Borrower other than Investment Property is located at such chief executive
office, and except as disclosed on the Perfection Certificate, such Collateral
has remained located at its current location for the four consecutive months
immediately prior to the date hereof.

 

(d)           The Borrower will
not change its name, identity or organizational structure, nature, or
jurisdiction or organization, or chief executive office or place where its
business records are kept, or move any tangible Collateral (other than
Investment Property) to a location other than those set forth in the Perfection
Certificate, or merge into or consolidate with any other entity, unless
permitted under the Credit Agreement and unless the Borrower shall have given
the Agent at least 30 days’ prior written notice thereof and the Borrower shall
have delivered to the Agent or authorized Agent to file such new Uniform
Commercial Code financing statements or other documentation as may be necessary
or required by the Agent to ensure the continued perfection and priority of the
Security Interests.

 

(e)           The Borrower has
delivered the Perfection Certificate to the Agent with the Credit Agreement.
All information set forth in such Perfection Certificate is true and correct in
all material respects. The Borrower agrees to supplement the Perfection
Certificate promptly after obtaining information which would require a
correction.

 

3.2.   Ownership of Collateral; Absence of Liens
and Restrictions. The Borrower is, and in the case of property acquired
after the date hereof, will be, the sole legal and equitable owner of the
Collateral, holding good and marketable title to the same free and clean of all
Encumbrances except for the Security Interests and Permitted Encumbrances, and
has good right and legal authority to assign, deliver, and create a security
interest in such Collateral in the manner herein contemplated. The Collateral
is genuine and is what it is purported to be. The Collateral is not subject to
any material restriction that would prohibit or restrict the assignment,
delivery or creation of the security interests contemplated hereunder.

 

3.3  First Priority Security Interest. This
Agreement creates a valid and continuing lien on and security interest in the
Collateral, and upon the filing of Uniform Commercial Code financing statements
in the appropriate offices for the locations of Collateral listed in the
Borrower’s Perfection Certificate, the Security Interests will be perfected
(except to the extent a security interest may not be perfected by filing under
the Uniform Commercial Code), prior to all other Encumbrances other than as
disclosed in the Credit Agreement as Permitted Encumbrances, and is enforceable
as such against creditors of the Borrower, any owner of the real property where
any of the Collateral is located, any purchaser of such real property and any
present or future creditor obtaining a lien on such real property.

 

3.4  No Conflicts. Neither the Borrower nor
any of its predecessors has performed any

 

5

 

acts or is bound by any
agreements which might prevent the Agent from enforcing the Security Interest
or any of the terms of this Agreement or which would limit the Agent in any
such enforcement. Except as specifically disclosed in the Perfection Certificate,
no financing statement under the Uniform Commercial Code of any state or other
instrument evidencing a lien that names the Borrower as debtor is on file in
any jurisdiction and the Borrower has not signed any such document or any
agreement authorizing the filing of any such financing statement or instrument.

 

3.5   Sales
and Further Encumbrances. Except for sales in the ordinary course of
business and transactions permitted pursuant to the Credit Agreement, the
Borrower will not sell, grant, assign or transfer any interest in, or permit to
exist any Encumbrances on, any of the Collateral, except the Security Interests
as permitted by the Credit Agreement.

 

3.6   Fixture
Conflicts: Required Waivers. The Borrower intends, to the extent not
inconsistent with applicable law, that the Collateral shall remain personal
property of the Borrower and shall not be deemed to be a fixture irrespective
of the manner and its attachment to any real estate. The Borrower will deliver
to the Agent such disclaimers, waivers or other documents as the Agent may
request to confirm the foregoing, executed by each person having an interest in
such real estate.

 

3.7   Validity of Accounts.
Each Account constituting Collateral is and, to the best of the Borrower’s
knowledge, shall be a valid, legal and binding obligation of the party
purported to be obligated thereon, enforceable in accordance with its terms and
free of material set-offs, defenses or counterclaims. The Borrower has no
knowledge of any fact that would materially impair the validity or
collectibility of any of the Accounts constituting Collateral.

 

3.8   Inspection; Verification of Accounts.
The Borrower shall keep complete and accurate books and records relating to the
Collateral, and upon request of the Agent shall    stamp or otherwise mark such books and
records in such manner as the Agent may reasonably request in order to reflect
the Security Interest. The Borrower will allow the Agent and its designees to
examine, inspect and make extracts from or copies of the Borrower’s books and
records, inspect the Collateral and arrange for verification of Accounts
constituting Collateral directly with any account debtors or by other methods,
upon reasonable notice and under reasonable procedures established by the Agent
after consultation with the Borrower.

 

3.9    Collection
and Delivery of Proceeds; Lockboxes.

 

(a)             The
Borrowers will diligently collect all of its Accounts constituting Collateral
until the Agent exercises its rights to collecting the Accounts pursuant to this
Agreement. After the occurrence and during the continuance of an Event of
Default, all Proceeds of Accounts, Inventory and other Collateral received by
the Borrower, whether in the form of wire or ACH transfers, cash, checks,
notes, or other instruments, shall be held in trust for the Agent and, upon
request of the Agent, shall be delivered daily to the Agent, without
commingling, in the identical form received (properly endorsed or assigned
where required to enable the Agent to collect the same), for application to the
Secured Obligations. If any Accounts are at any time evidenced by tangible
chattel paper, promissory notes, trade acceptances or other

 

6

 

instruments, the Borrower will promptly deliver the same to the Agent
appropriately endorsed to the Agent’s order and, regardless of the form of such
endorsement, the Borrower hereby waives presentment, demand, notice of
dishonor, protest, notice of protest, and all other notices with respect
thereto.

 

(b)         The Borrower shall, at the request of
the Agent at any time, notify account debtors, and the Agent may itself, after
the occurrence and during the continuance of an Event of Default notify account
debtors directly, of the Security Interest of the Agent in any Account and that
payment thereof is to be made directly to the Agent for application to the
Secured Obligations.

 

3.10  Insurance. The
Borrower shall at all times maintain liability and casualty insurance on the
Collateral with  financially sound
and reputable insurers in such amounts and with such coverages, endorsements,
deductibles and expiration dates as the officers of the Borrower in the
exercise of their reasonable judgment deem to be adequate, as are customary in
the industry for companies of established reputation engaged in the same or
similar business and owning or operating similar properties and as shall be
reasonably satisfactory to the Agent. The Agent shall be named as loss payee,
additional insured and/or mortgagee under such insurance as the Agent shall
require from time to time, and the Borrower shall provide to the Agent lender’s
loss payable endorsements in form and substance reasonably satisfactory to the
Agent. In addition, the Agent shall be given thirty (30) days advance notice of
any cancellation of insurance. In the event of failure to provide and maintain
insurance as herein provided, the Agent may, at its option, provide such
insurance and charge the amount thereof to the Borrower as a Revolving Credit
Loan. The Borrower shall furnish to the Agent certificates or other evidence
satisfactory to the Agent of compliance with the foregoing insurance
provisions. The Agent shall not, by the fact of approving,  disapproving or accepting any such
insurance, incur any liability for the form or legal sufficiency of insurance
contracts, solvency of insurance companies or payment of lawsuits, and the
Borrower hereby expressly assumes full responsibility therefor and liability,
if any, thereunder.

 

3.11  Maintenance and Use
Payment of  Taxes. The Borrower will preserve, protect  and keep the Collateral in good order and
repair, ordinary wear and tear and damage by  fire
or other casualty excepted, will not use the same in violation of law or any
policy of  insurance thereon, and
will pay promptly when due all taxes and assessments on such Collateral or on
its use or operation, except as otherwise permitted by the Credit Agreement.

 

3.12  General Intangibles.
The Borrower will use such measures as are appropriate to preserve its rights  in its General Intangibles constituting
Collateral.

 

3.13  Investment Property.
Until the occurrence and continuance of an Event of Default hereunder, the
Borrower shall retain the right to vote any of the Investment Property
constituting Collateral in a manner not inconsistent with the terms of  this Agreement and the Credit Agreement.
If the Borrower, as registered holder of such Investment Property, receives (i) any
dividend, or other distribution in cash or other property in connection with
the liquidation or dissolution of the  issuer
of such Investment Property, or in connection with the redemption or payment of
such Investment Property, or (ii) any stock certificate, option or  right, or other 

 

7

 

distribution, whether as an addition to, in substitution of, or in
exchange for, such Investment Property, or otherwise, other than as permitted
pursuant to the Credit Agreement, the Borrower agrees to accept the same in
trust for the Agent and to  deliver
the same forthwith to the  Agent or
its designee, in the exact form received, with the  Borrower’s endorsement or reassignment when necessary, to be
held by the Agent as Collateral. After the occurrence and during the
continuance of an Event of Default, upon request of the Agent, the Borrower
will (i) deliver all of its Investment Property constituting Collateral
and represented by certificates, including without limitation all stock of its
Subsidiaries, to the Agent to hold pursuant to the terms of this Agreement (ii) register
in the name of the Agent or its designee any uncertificated Investment Property
constituting Collateral or the Lenders’ security interest therein on the books
maintained by or on behalf of the issuer thereof or the depository therefore
and (iii) do all things necessary or desirable, as determined by the
Agent, to transfer control over any Investment Property to the Agent including,
but not limited to, registering the Agent as the holder of the securities
entitlement or commodities contract as appropriate, and entering into any
control agreement, in form designated by the Agent, pursuant to which the
securities intermediary shall agree that it will comply with the entitlement
orders originated by the Agent without further consent of the Borrower, and
entering into any control agreement, in form designated by the Agent, pursuant
to which the commodity intermediary shall agree that it will apply any value
distributed on account of any commodity contract as direct by the Agent without
further consent by the Borrower.

 

3.14  Electronic
Chattel Paper and Transferable Records: 
For any interest in an electronic chattel paper or any “transferable
record,” as that term is defined in Section 201 of the federal electronic
Signatures in Global and National Commerce Act, or in Section 16 of the
Uniform Electronic Transactions Act as in effect in any jurisdiction applicable
to the Borrower, any Collateral or any transaction contemplated hereby, the
Borrower shall take such action as the Agent may reasonably request to vest in the
Agent control under Section 9-105 of the Uniform Commercial Code of such
electronic chattel paper or control under Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or, as the case may
be, Section 16 of the Uniform Electronic Transactions Act of such
transferable record. The Agent agrees that it will arrange, pursuant to
procedures satisfactory to the Agent, so long as such procedures will not
result in the Agent’s loss of control, for the Borrower to make alterations to
the electronic chattel paper or transferable record permitted under Section 9-105
of the Uniform Commercial Code or, as the case may be, Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to make
without loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by the Borrower
with respect to such electronic chattel paper or transferable record.

 

3.15  Bailments,
Etc.  If any Collateral is at any
time in the possession or control of any warehouseman, bailee or any of the
Borrower’s agents or processors, the Borrower shall, upon request of the Agent,
(i) notify such warehouseman, bailee, agent or processor of the Security
Interest and instruct such warehouseman, bailee, agent or processor to hold all
such Collateral for the Agent’s account subject to the Agent’s instructions, (ii) arrange
for such warehouseman, bailee, agent or processor to authenticate a record
acknowledging that it holds possession of the Collateral for the Agent’s
benefit, (iii)  deliver any negotiable warehouse receipt, bill of lading
or other document of title issued with regard to the Collateral to the Agent
appropriately endorsed

 

8

 

to the Agent’s order, and (iv) arrange for the issuance in the
name of the Agent, in form reasonably satisfactory to the Agent, any
nonnegotiable document of title covering such Collateral.

 

3.16  Assignment
of Claims Act.  If at any time any
Accounts of the Borrower arise from contracts with the United States of America
or any department, agency or instrumentality thereof, the Borrower shall
execute all assignments and take all steps reasonably requested by the Agent in
order that all monies due to become due thereunder will be assigned and paid to
the Agent under the Assignment of Claims Act of 1940.

 

3.17  Notes and Instruments.  If at any time any amount payable under or in
connection with any of the Collateral is evidenced by any promissory note or
other instrument, such note or instrument shall be promptly delivered to the
Agent, duly endorsed in a manner satisfactory to the Agent.

 

3.18  Further
Assurances.  Upon the reasonable
request of the Agent, and the sole expense of the Borrower, the Borrower will
promptly execute and deliver such further instruments and documents and take
such further actions as the Agent may deem desirable to obtain the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, filing of any financing statement, continuation
statement, amendment or notice under the Uniform Commercial Code or other
applicable law. The Borrower authorizes the Agent to file such financing
statements without the signature of the Borrower to the extent permitted by
applicable law, and to file a copy this Agreement in lieu of a financing
statement, and to take any and all actions required by any earlier versions of
the Uniform Commercial Code or by other law, as applicable  in any relevant Uniform Commercial Code
jurisdiction, or by other laws applicable in any foreign jurisdiction. The
Borrower shall provide the Agent with any information the Agent shall
reasonably request in connection with the foregoing, including, without
limitation, the type and jurisdiction of organization of the Borrower, and any
organizational identification number issued to the Borrower. The Borrower shall
also take all actions requested by the Agent in order to insure the continued
perfection and priority of the Agent’s security interest in any of the
Collateral and of the preservation of its rights therein.

 

Section 4.  Notices and Reports Pertaining to
Collateral.  The Borrower will, with
respect to the Collateral:

 

(a)           promptly furnish to the Agent, from time to time upon
request, reports in form and detail reasonably satisfactory to the Agent;

 

(b)           promptly notify the Agent of any Encumbrance (except
Permitted Encumbrances) asserted against the Collateral, including any
attachment, levy, execution or other legal process levied against any of the
Collateral, and of any information received by the Borrower relating to the
Collateral, including the Accounts, the account debtors, or other persons
obligated in connection therewith, that may in any way adversely affect the
value of the Collateral as a whole or the rights and remedies of the Agent with
respect thereto;

 

(c)           promptly notify the Agent when it obtains knowledge of
actual or

 

9

 

imminent
bankruptcy or other insolvency proceeding of any material account debtor or
issuer of Investment property;

 

(d)           concurrently with the reports
required to be furnished under subsection (a), and immediately if material in
amount, notify the Agent of any return or adjustment, rejection, repossession,
or loss or damage of or to merchandise represented by Accounts and of any
credit, adjustment, or dispute arising in connection with the goods or services
represented by Accounts or constituting Inventory;

 

(e)           promptly after the Borrower
establishes any Account with the United States of America or any department,
agency or instrumentality thereof, notify the Agent thereof;

 

(f)            promptly upon acquiring any
commercial tort claim, notify the Agent in a writing signed by the Borrower, of
the details thereof and grant to the Agent in such writing a security interest
therein and in all the Proceeds thereof, such writing to be in form and
substance satisfactory to the Agent; and

 

(g)           promptly upon receipt of any letter
of credit issued to the Borrower as beneficiary thereunder or upon acquiring an
interest in any electronic chattel paper or any “transferable record,” as that
term is defined in section 201 of the Federal Electronic Signatures in Global
and National Commerce Act, or in Section 16 of the Uniform Electronic
Transactions Act, notify the Agent thereof.

 

Section 5.
Agent’s Rights and Remedies in General.

 

(a)           So long as any Event of Default shall
have occurred and is continuing: (i) the Agent may, at its option, without
notice or demand, cause all of the Secured Obligations to become immediately
due and payable and take immediate possession of the Collateral, and for that
purpose the Agent may, so far as the Borrower can  give authority therefore, enter upon any
premises on which any of the Collateral is situated and remove the same
therefrom or remain on such premises and in possession of such Collateral for
purposes of conducting a sale or enforcing the rights of the Agent; (ii) the
Borrower will, upon demand, assemble the Collateral, and make it available to
the Agent at a place and time designated by the Agent that is reasonably
convenient to both parties; (iii) the Agent may collect and receive all
income and Proceeds in respect to any Collateral and exercise all rights of the
Borrower with respect thereto; (iv) the Agent may sell, lease or otherwise
dispose of any Collateral at a public or private sale, with or without having
such Collateral at the place of sale, and upon such terms and in such manner as
the Agent may determine, and the Lenders or any of them may purchase any
Collateral at any such sale. Unless such Collateral threatens to decline
rapidly in value or is of the type customarily sold on a recognized market, the
Agent shall send to the Borrower prior written notice (which, if given with in
ten (10) days of any sale, shall be deemed to be reasonable) of the time
and place of any public sale of such Collateral or of the time after which any
private sale or other disposition thereof is to be made. The Borrower agrees
that upon any such sale such Collateral shall be held by the purchaser free
from all claims or rights of every kind and nature, including any equity of
redemption or similar rights, and all such equity of redemption and similar rights
are hereby expressly waived and released by the Borrower. In the event any 

 

10

 

consent,
approval or authorization of any governmental agency is necessary to effectuate
any such sale, the Borrower shall execute all applications or other instruments
as may be required; and (v) in any jurisdiction where the enforcement of
its rights hereunder is sought, the Agent shall have, in addition to all other
rights and remedies, the rights and remedies of a secured party under the
Uniform Commercial Code and other applicable law.

 

(b)           The Agent may perform any covenant or
agreement of the Borrower contained herein that the Borrower has failed to
perform and in so doing the Agent may expend such sums as it may reasonably
deem advisable in the performance thereof, including, without limitation, the
payment of any taxes or insurance premiums, payment to obtain a release of
Encumbrance or potential Encumbrance, expenditures made in defending against
any adverse claim and all other expenditures which the Agent may make for the
protection of Collateral or which it may be compelled to make by operation of
law. All such sums and amounts so expended shall be repaid by the Borrower upon
demand, shall constitute additional Secured Obligations and shall bear interest
from the date said amounts are expended at the rate per annum provided in the
Credit Agreement to be paid on Revolving Credit Loans after the occurrence of
an Event of Default. No such performance of any covenant or agreement by the
Agent on behalf of the Borrower, and no such advance or expenditure therefore,
shall relieve the Borrower of any Event of Default under the terms of this
Agreement or the other Loan Documents

 

(c)           Prior to any disposition of
Collateral pursuant to this Agreement the Agent may, at its option, cause any
of the Collateral to be repaired or reconditioned (but not upgraded unless
mutually agreed) in such manner and to the extent as to make it saleable.

 

(d)           The Agent is hereby granted a license
or other right to use, without charge, in the course of exercise of the Agent’s
Rights and Remedies, the Borrower’s labels, patents, copyrights, right of use
of any name, trade secrets, trade names, trademarks, and advertising matter, or
any property of a similar nature, relating to the Collateral, in completing
production of, advertising for sale and selling any Collateral; and the
Borrower’s rights under all licenses and all franchise agreements shall inure
to the Agent’s benefit.

 

(e)           The Borrower recognizes that the
Agent may be unable to effect a public sale of all or a part of the Investment
Property by reason of certain prohibitions contained  in the Securities Act of 1933 (as amended
from time to time, the “Securities Act”) or the securities laws of
various states (the “Blue Sky Laws”), but may be compelled to resort to
one or more private sales to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire the Investment Property for
their own account, for investment and not with a view to the distribution or
resale thereof. The Borrower acknowledges that private sales so made may be at
prices and upon other terms less favorable to the seller than if the Investment
Property were sold at public sales. The Borrower agrees that the Agent has no
obligation to delay sale of any of the Investment Property for the period of
time necessary to permit the Investment Property to be registered for public
sale under the Securities Act or the Blue Sky Laws, and that private sales made
under the foregoing circumstances shall be deemed to have been made in a
commercially reasonable manner.

 

(f)            The Agent shall be entitled to
retain and to apply the Proceeds of any

 

11

 

disposition of
the Collateral, first, to its reasonable expenses provided for herein,
including attorneys’ fees and other documented legal expenses incurred by it in
connection therewith; and second, to the payment of the Secured Obligations in
such order of priority as the Agent shall determine. Any surplus remaining
after such application shall be paid to the Borrower or to whomever may be
legally entitled thereto, provided that in no event shall the Borrower be
credited with any part of the Proceeds of the disposition of the Collateral
until such Proceeds shall have been received in cash from the Agent. The
Borrower shall remain liable for any deficiency.

 

(g)           The Borrower hereby appoints the
Agent and each of the Agent’s designees or agents as attorney-in-fact of the Borrower,
irrevocably and with power of substitution, with full authority in the name of
the Borrower, the Agent or otherwise, for sole use and benefit of the Lenders,
but at the Borrower’s expense, so long as an Event of Default is continuing, to
take any and all of the actions specified above in this Section and
elsewhere in this Agreement. This power of attorney is a power coupled with an
interest and shall be irrevocable for so long as any of the Secured Obligations
remain outstanding.

 

Section 6. Agent’s
Rights and Remedies with Respect to Collateral. The Agent may, at its
option, at any time and from time to time after the occurrence and during the
continuance of an Event of Default, without notice to or demand on the
Borrower, take the following actions with respect to the Collateral:

 

(a)              with respect to
any Accounts (i) demand, collect, and receipt of any amounts relating
thereto, as the Agent may determine; (ii) commence and prosecute any
actions in any court for the purposes of collection any such Accounts and
enforcing any other rights in respect thereof, (iii) defend, settle, or
compromise any action brought and, in connection therewith, give such
discharges or releases as the Agent may deem appropriate; (iv) receive,
open and dispose of mail addressed to the Borrower and endorse checks, notes,
drafts, acceptances, money orders, bills of lading, warehouse receipts or other
instruments or documents evidencing payment, shipment or storage of the goods
giving rise to such Accounts or securing or relating to such Accounts, on
behalf of and in the name of the Borrower; and (v) sell, assign, transfer,
make any agreement in respect of, or otherwise deal with or exercise rights in
respect of, any such Accounts or the goods or services which have given rise thereto,
as fully and completely as though the Agent were the absolute owner there of
for all purposes;

 

(b)          with respect to any Equipment and
Inventory (i) make, adjust and settle claims under any insurance policy
related thereto and place and pay for appropriate insurance thereon; (iii) make
repairs or provide maintenance with respect thereto; and (iv) pay any
necessary filing fees and any taxes arising as a consequence of any such
filing. The Agent shall not thereby relieve the Borrower of its obligation to
make such expenditures; and

 

(c)           with respect to any Investment
Property (i) transfer it at any time to Agent, or to its nominee, and
receive the income thereon and hold the same as Collateral hereunder or apply
it to any matured Secured Obligations; and (ii) demand, sue for, collect
or make any compromise or settlement it deems desirable.

 

12

 

Except as otherwise provided
herein, the Agent shall have no duty as to the collection or protection of any
Collateral nor as to the preservation of any rights pertaining thereto, beyond
the safe custody of any Collateral in its possession.

 

Section 7. Set-Off. Regardless of
the adequacy of any Collateral or other means of obtaining repayment of the
Secured Obligations, any deposits, balances or other sums credited by or due
from the head office of the Agent or any of its branch offices to the Borrower
and any property of the Borrower now or hereafter in the possession, custody,
safekeeping or control of the Agent or in transit to the Agent may, at any time
and from time to time after the occurrence and during the continuance of an
Event of Default, without prior notice to the Borrower or compliance with any
other condition precedent now or hereafter imposed by statute, rule of
law, or otherwise (all of which are hereby expressly waived) be set -off,
appropriated and applied by the Agent against any and all Secured Obligations
of the Borrower in such manner as the head office of the Agent or any of its
branch offices in its sole discretion may determine, and the Borrower hereby
grants the Agent a continuing security interest in such deposits, balances,
other sums and property for the payment and performance of all such Secured
Obligations. ANY AND ALL RIGHTS TO REQUIRE THE AGENT TO EXERCIS ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE SECURED
OBLIGATIONS PRIOR TO EXERCISING ITS RIGHTS OF SETOFF WITH RESPECT TO SUCH
DEPOSITS, BALANCES, OTHER SUMS AND PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.

 

Section 8. Waivers. The Borrower
waives presentment, demand, notice, protest, notice of acceptance of this
Agreement, notice of any loans made, credit or other extensions granted,
Collateral received or delivered and any other action taken in reliance hereon
and all other demands and notices of any description, except for such demands
and notices as are expressly required to be provided to the Borrower under this
Agreement or any other Loan Document. 
The Borrower waives, to the fullest extent permitted by law, the benefit
of all appraisement, valuation, stay, extension and redemption laws now or
hereafter in force and all rights of marshaling in the event of any sale or
disposition of any of the Collateral with respect to both the Secured
Obligations and any Collateral.  The
Borrower assents to any extension or postponement of the time of payment or any
other forgiveness or indulgence, to any substitution, exchange or release of
Collateral, to the addition or release of any party or person primarily or
secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromise or adjustment of any thereof, all in such manner and at
such time or times as the Agent may deem advisable.  The Agent may exercise its rights with
respect to the Collateral without resorting, or regard, to other collateral or
sources of reimbursement for Secured Obligations.  The Agent shall not be deemed to have waived
any of its rights with respect to the Secured Obligations or the Collateral
unless such waiver is in writing and signed by Agent.  No delay or omission on part of the Agent in
exercising any right and no course of dealing shall operate as a waiver of such
right or any other right.  A waiver on
any one occasion shall not bar or waive the exercise of any right on any future
occasion.  All rights and remedies of the
Agent in the Secured Obligations or the Collateral, whether evidenced hereby or
by any other instrument or papers, are cumulative and not exclusive of any
remedies provided by law or any other agreement, and may be exercised
separately or concurrently.

 

13

 

Section 9. Notices. All notices,
approvals, request, demands and other communications  hereunder shall be given in accordance with
the provisions of the Credit Agreement.

 

Section 10. Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the Borrower and its successors and
assigns, and shall be binding upon and inure to the benefit of and be
enforceable by the Agent and its successors and assigns; provided that
the Borrower may not assign or transfer its rights or obligations
hereunder.  Without limiting the
generality of the foregoing sentence, a Lender may, in the manner and to the
extent set forth in the Credit Agreement, assign or otherwise transfer any
agreement or any note held by it evidencing, securing or otherwise executed in
connection with the Secured Obligations, or sell participations in any interest
therein, to any other person or entity, and such other person or entity shall
thereupon become vested, to the extent set forth in agreement evidencing such
assignment, transfer or participation, with all the rights in respect thereof
granted to the Lender herein.  The Lender
shall provide notice of any such assignment to the Borrower.

 

Section 11. Governing Law; Jurisdiction; Venue.  THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS ARE
CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SAID COMMONWEALTH
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
CONSENTS TO THE JURISDICTION OF ANY OF THE FEDERAL OR STATE COURTS LOCATED IN
SUFFOLK COUNTY IN THE COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY SUIT
TO ENFORCE THE RIGHTS OF THE LENDER UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS AND CONSENTS TO SERVICE OP PROCESS IN
ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE BORROWER’S ADDRESS
SET FORTH HEREIN. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION IN WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH ACTION BROUGHT IN THE
COURTS REFERRED TO IN THIS SECTION AND
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH ACTION THAT
SUCH ACTION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.

 

Section 12. Waiver of Jury Trial. EACH OF THE BORROWER AND THE
LENDERS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT,
THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS OR ANY COURSE
OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE LENDER RELATING TO THE ADMIMSTRATION OR ENFORCEMENT OF THE
LOANS AND THE LOAN DOCUMENTS, AND AGREES
THAT IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH
ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. EXCEPT AS PROHIBITED BY LAW, EACH OF THE 

 

14

 

BORROWER AND THE LENDER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION
REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION
TO, ACTUAL DAMAGES. THE BORROWER
(a) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF THE LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (b) ACKNOWLEDGES
THAT THE LENDER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS TO WHICH EACH IS A PARTY
BECAUSE OF, AMONG OTHER THINGS, THE BORROWER’S WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

 

Section 13. General. This
Agreement may not be amended or modified except by a writing signed by each of
the Borrower and the Agent.  This
Agreement and any amendment hereof may be executed in several counterparts and
by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, but all of which together shall constitute one
instrument.  Section headings are
for convenience of reference only and are not a part of this Agreement.  In the event that any Collateral or any
deposit or other sum due from or credited by the Agent is held or stands in the
name of the Borrower and another or others jointly, the Agent may deal with the
same for all purposes as if it belonged to or stood in the name of the Borrower
alone.

 

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK.

 

15

 

IN WITNESS WHEREOF, the Borrower has caused
this Agreement to be duly executed as an instrument under seal as of the date
first written above.

 

 

	
  WITNESS

  	
   

  	
  BORROWER

  
	
   

  	
   

  	
  VIRTUSA
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Paul D. Tutun

  	
   

  	
  By:

  	
  /s/
  Ranjan Kalia

  
	
   

  	
   

  	
   

  

 

16

 

EXHIBIT A

PERFECTION CERTIFICATE

 

Attach Perfection
Certificate and Borrower Certification

 

17

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