Document:

Exhibit 10.2

 

NEGATIVE PLEDGE AGREEMENT

 

THIS NEGATIVE PLEDGE
AGREEMENT (this “Agreement”) is made this 30th day of July,
2010 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”), in favor of JPMORGAN
CHASE BANK, N.A., with an office at 12 Corporate Woods Blvd., Albany, NY 12211
as administrative agent for itself and for the Lenders party to the Credit
Agreement as such term is defined below (the “Agent”).

 

The Borrower has entered
into a certain Credit Agreement with the Agent and the Lenders 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.

 

Lenders have required that
Borrower enter into this Agreement as a condition precedent to Lenders’
entering into the Credit Agreement.

 

In order to induce the Agent
and the Lenders to enter into the Credit Agreement and to make or continue to
make loans and other credits available to the Borrower upon the terms and
subject to the conditions set forth in the Credit Agreement, 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.

 

The term “Intellectual
Property” shall have the following meaning:

 

Intellectual Property.  All of the Borrower’s: (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, database, copyrightable works,
websites, copyrights (registered, renewed or otherwise) and registrations,
renewals and applications for registration or renewal thereof, (iii) trademarks,
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 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.

 

All other capitalized terms
used herein or in any certificate, report or other document delivered pursuant
hereto shall have the meanings assigned to them in the Credit Agreement.

 

Section 2.  Negative Pledge.  The Borrower hereby covenants that it shall
not create, incur, 

 

1

 

assume or suffer to exist
any encumbrance, other than Permitted Encumbrances on or with respect to the
Intellectual Property.  The Borrower
further covenants and agrees that it shall not sell, transfer, assign or otherwise
alienate or dispose of the Intellectual Property, other than for fair
consideration in the ordinary course of Borrower’s Business, without the prior
written consent of the Required Lenders. The Borrower further covenants and
agrees that it shall not enter into any other negative pledge or agreement not
to encumber or dispose of the Intellectual Property in favor of any Person
other than the Agent for the ratable benefit of the Lenders.

 

Section 3. Notices.  All notices, approvals, requests, demands and
other communications hereunder shall be given in accordance with the provisions
of the Credit Agreement.

 

Section 4.  Governing Law; Jurisdiction; Venue.  THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS ARE
CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SAID STATE (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 NEW YORK, NEW
YORK IN THE STATE OF NEW YORK IN CONNECTION WITH ANY SUIT TO ENFORCE THE RIGHTS OF THE AGENT 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 5.
Waiver of Jury Trial. EACH OF THE BORROWER AND THE AGENT 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 BORROWER AND THE AGENT 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 

 

2

 

THE
LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS AND (b) ACKNOWLEDGES THAT THE AGENT AND THE LENDERS
HAVE 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 6. General.  This Agreement may not be amended or modified
expect by a writing  signed by
each of the Borrower and Agent, on behalf of the Lenders (subject to approval
of the Required Lenders).  This Agreement
shall be binding upon and inure to the benefit of the Borrower and its
successors and assigns, and shall be shall be binding upon and inure to the
benefit of and be enforceable by the Agent and its successors and assigns for
the ratable benefit of the Lenders; provided that the Borrower may not
assign or transfer its rights or obligations hereunder.  This Agreement and any amendment hereof may
be executed in several counterparts and by each party on a separate
counterpart, each of which when executed and delivered shall be an original,
but all of which together shall constitute one agreement.  Section headings are for convenience of
reference only and are not a part of this Agreement.  In the event that any deposit or 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.

 

3

 

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

 

 

	
  WITNESS

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
  VIRTUSA CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Paul D. Tutun

  	
   

  	
  By:

  	
  /s/ Ranjan Kalia

  
	
   

  	
   

  	
  SVP and CFO

  

 

4Exhibit 10.3

 

PLEDGE
AGREEMENT

 

This Pledge Agreement (this “Agreement”)
is made July 30, 2010 by and between VIRTUSA CORPORATION, a Delaware
corporation having its principal offices at 2000 West Park Drive, Westborough,
Massachusetts 01581 (the “Borrower”), and JPMORGAN CHASE BANK, N.A. with an
address of  12 Corporate Woods Blvd.,
Albany, NY 12211, 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 and
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 4.1
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.

 

 

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’s 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 thinks 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,

 

2

 

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 deems 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 thinks 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 its 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

 

3

 

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

 

4

 

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 State of New York.  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 several counterparts, each of

 

5

 

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.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

6

 

IN WITNESS WHEREOF, the
Borrower has executed this Agreement on the date first above written.

 

 

	
  WITNESS

  	
   

  	
  BORROWER

  
	
   

  	
   

  	
  VIRTUSA CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Paul D. Tutun

  	
   

  	
  By:

  	
  /s/ Ranjan Kalia

  
	
   

  	
   

  	
  Name:

  	
  Ranjan Kalia

  
	
   

  	
   

  	
  Title:

  	
  SVP and CFO

  
	
   

  	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED AND AGREED

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  AGENT

  	
   

  	
   

  	
   

  
	
  JPMORGAN CHASE BANK, N.A.

  	
   

  	
   

  	
   

  
	
  In its capacity as Agent
  for the Lenders

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Scott A. McNamara

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Scott A. McNamara

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  

 

7

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