Document:

Exhibit 10.4

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT is made as of July 31, 2009 by and among
VIRTUSA CORPORATION, a Delaware corporation, having its chief executive office
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, (“RBS”) and  JPMORGAN CHASE BANK, N. A. (“JPM” and with
RBS and any other lenders who become party hereto pursuant to Section 9 of
this Credit Agreement, each a “Lender” and collectively, the “Lenders”) and RBS
CITIZENS, NATIONAL ASSOCIATION as Administrative Agent (“Agent”).

 

The Borrower has requested that the Lenders extend certain financing
accommodations to the Borrower in the form of loans and letters of credit, and
the Lenders are willing to make such loans to the Borrower and are willing to
issue Letters of Credit for the account of the Borrower, but only on the terms
and subject to the conditions set forth in this Credit Agreement and the
documents, instruments and agreements ancillary hereto.

 

In consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

 

SECTION I

DEFINITIONS

 

1.1.          Definitions

 

All capitalized terms used in this Credit Agreement, in the Notes, in
the other Loan Documents or in any certificate, report or other document made
or delivered pursuant to this Credit Agreement (unless otherwise defined
therein) shall have the meanings assigned to them below:

 

Accounts Receivable and
Accounts. All
rights of the Borrower to payment of a 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 a 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 with
respect thereto, all guarantees and security therefor, and the Borrower’s rights
pertaining to and interests 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.

 

Adjusted EBITDA. For any period means Borrower’s
Consolidated Operating Income plus GAAP depreciation and amortization, non-cash
stock-based compensation and other non-

 

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cash charges for such period.

 

Adjusted LIBOR Rate. 
A rate per annum determined by dividing (x) the LIBOR Rate for such
LIBOR Interest Period by (y) a percentage equal to one hundred percent
(100%) minus the LIBOR Reserve Percentage.

 

Affiliate. With reference to any Person, (i) any
director, officer or employee of that Person, (ii) any other Person
controlling, controlled by or under direct or indirect common control of that
Person, (iii) any other Person directly or indirectly holding 25.0% or
more of any class of the capital stock or other equity interests (including
options, warrants, convertible securities and similar rights) of that Person
and (iv) any other Person 25.0%
more of any class of whose capital stock or other equity interests
(including options, warrants, convertible securities and similar rights) is
held directly or indirectly by that Person.

 

Agent. RBS in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

 

Applicable Percentage. With respect to any Lender, the
percentage of the aggregate Revolving Loan Commitment represented by such
Lender’s several commitment at such time. 
The initial Applicable Percentage of each Lender is set forth opposite
the name of such Lender in Schedule A.

 

Assignee. See Section 9.1.

 

Audited Financial
Statement. See Section 4.6.

 

Borrower. See Preamble.

 

Borrower’s Accountants.  
KPMG LLP, or such other independent certified public accountants as are selected by the Borrower and are
reasonably acceptable to the Agent.

 

Borrower’s Business. The providing of information technology
services, including consulting, technology implementation and application
outsourcing services on a world-wide basis.

 

Borrowing Base. 
At any time means eighty (80.0%) percent of the amount of Eligible
Accounts minus twenty (20.0%) of all open FX Transactions at such time.

 

Borrowing Base
Certificate.  See Section 5.1(f) and Exhibit E
attached.

 

Business Day. Any day, other than a Saturday, Sunday
or legal holiday, on which banks in Boston, Massachusetts are open for the
conduct of a substantial part of their commercial banking business.

 

Capital Expenditures. Without duplication, any expenditure for
fixed or capital assets, leasehold improvements, capital leases, installment
purchases of machinery and equipment, acquisitions of real estate and other
similar expenditures including (i) in the ease of a purchase, 

 

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the entire purchase price, whether or not paid during the fiscal period
in question, (ii) in
the case of a capital lease, the capitalized amount (as determined under GAAP)
of the obligations under such lease to pay rent and other amounts, and (iii) expenditures
respect to any construction in
progress account of the Borrower.

 

Cash Flow. 
For any period means, calculated on a consolidated basis, (a) the
sum of Borrower’s Adjusted EBITDA plus operating lease payments minus (b) unfinanced
Capital Expenditures, cash taxes paid, capital distributions and redemptions
and other distributions with respect to Borrower’s shares and loans and
advances to Subsidiaries and affiliates which are not parties to the Credit
Agreement. The Cash Flow Exclusions shall not be included within clause (b).

 

Cash Flow Exclusions. All of the following (i) short
term intercompany payments in the ordinary course of business from Borrower to
its Subsidiaries and affiliates, (ii) up to $25,000,000 in distributions
to Borrower’s foreign Subsidiaries for acquisitions which conform to Permitted
Acquisition requirements and (iii) up to $10,000,000 representing a
non-cash reclassification of an Account due from Borrower’s UK Subsidiary to
Borrower as an equity investment by borrower in such UK Subsidiary.

 

Closing Date. The first date on which the conditions
set forth in Sections 3.1 and 3.2 have been satisfied and any Loans are to be
made hereunder.

 

Closing Fee. 
See Section 2.5(a).

 

Code. The Internal Revenue Code of 1986 and the rules and
regulations thereunder, collectively, as the same may from time to time be
supplemented or amended and remain in effect.

 

Collateral. All of the property, rights and
interests of the Borrower and its Subsidiaries that are or are intended to be
subject to the security interests and liens created by the Security Documents.

 

Commitment Fee. See Section 2.5(b).

 

Consolidated Current
Liabilities. The
aggregate amount of Indebtedness of the Borrower and its Subsidiaries that may
properly be classified as current liabilities in accordance with GAAP and in
any event including, without limitation, any direct or indirect indebtedness
and other liabilities of the Borrower and its Subsidiaries that are payable on
demand or within one (1) year from the creation thereof:

 

Consolidated Operating
Income. For any
fiscal period, the consolidated operating income of the Borrower and its
Subsidiaries for such period, as determined in accordance with GAAP, except
that in no event shall such consolidated operating income include: (i) any
gain or loss arising from any write-up of assets, except to the extent
inclusion thereof shall be approved in writing by the Lenders; (ii) earnings
of any Subsidiary accrued prior to the date it became a Subsidiary; (iii) any
extraordinary or nonrecurring
gains; (iv) any
deferred or other credit 

 

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representing any excess of the equity of any Subsidiary at the date of
acquisition thereof over the amount invested in such Subsidiary; (v) the
net earnings of any business entity (other than a Subsidiary) in which the
Borrower or any Subsidiary has an ownership interest, except to the extent such
net earnings shall have actually been received by the Borrower or such
Subsidiary in the form of cash distributions; (vi) the proceeds of any
life insurance policy; and (vii) any reversal of any contingency reserve, except to
the extent that provision for such contingency reserve shall be made from
income arising during such period.

 

Consolidated Total
Liabilities. At any date as of which the amount
thereof shall be determined, all
obligations that should, in accordance with GAAP, be classified as liabilities
on the consolidated balance sheet of the Borrower and its Subsidiaries,
including in any event all Indebtedness.

 

Credit Agreement. This Credit Agreement, including the
Exhibits and Schedules hereto, as the same
may be supplemented, amended or restated from time to time.

 

Default. An Event of Default or any event or
condition that, but for the requirement
that time elapse or notice be given, or both, would constitute an Event
of Default.

 

Drawdown Date. The Business Day on which any Loan is
made or is to be made.

 

Eligible Account. An Account Receivable owing to Borrower
which met the following specifications at the time it came into existence and
continues to meet the same until it is collected in full:

 

(i) the Account is not more than ninety (90) days from the date of
the invoice thereof and more than sixty (60) days past due under the original
terms of sale, (ii) the Account arose from the performance of services or
an outright sale of goods by Borrower, such goods have been shipped to the
account debtor, and Borrower has possession of, or has delivered to Lender,
shipping and delivery receipts evidencing such shipment, (iii) the Account
is not subject to any prior assignment, claim, lien, or security interest, and
Borrower will not make any further assignment thereof or create any further
security interest therein, nor permit Borrower’s rights therein to be reached
by attachment, levy, garnishment or other judicial process, (iv) the
Account has not been materially reduced and is not subject to material
reduction, as against the Borrower, its agents or the Lender, by any offset,
counterclaim, adjustment, credit, allowance or other defense and as to which
there is no (and no basis for any) return, rejection, loss or damage of or to
the goods or services giving rise thereto, or any request for credit or
adjustments known to the Borrower; provided, however, that if an Account Receivable,
otherwise meeting the definition of Eligible Account, has been materially
reduced or is subject to material reduction solely because of a failure of the
Borrower to timely meet contract milestones and for no other reason (i.e. “retainage”)
or because of a warranty claim and for no other reason, such Account Receivable
shall be an Eligible Account, to the extent it has not been so materially
reduced or is not subject to material reduction; (v) the Account arose in
the ordinary course of Borrower’s business and did not arise from the
performance of services or a sale of goods to a supplier or employee of
Borrower, (vi) no notice of bankruptcy or insolvency of the account debtor
has been received by or is known to Borrower, (vii) the Account is not
owed by an account debtor whose principal 

 

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place of business is outside the United States of America, (viii) the
Account is not owed by an entity which is a parent, brother/sister, subsidiary
or affiliate of Borrower, (ix) the Account is not evidenced by a
promissory note, (x) the Account did not arise out of any sale made on a
bill and hold, dating or delayed shipment basis, (xii) the Account does not
arise out of a progress billing arrangement other than in conformity with the
terms of the contract with such account debtor, and (xiii) Agent, in accordance
with its customary procedures consistently applied, has not notified the
Borrower that the Account is unacceptable for any reason.

 

PROVIDED THAT if at any time twenty-five (25%) percent or more of the
aggregate amount of the Accounts due from any account debtor are unpaid in
whole or in part more than ninety (90) days from the respective dates of
invoice and more than sixty (60) days past due, from and after such time none
of the Accounts (then existing or hereafter arising) due from such account
debtor shall be deemed to be Eligible Accounts until such time as less than
twenty-five (25%) of the aggregate amount of the Accounts due from such account
debtor are (as a result of actual payments received thereon) more than ninety
(90) days from the respective dates of invoice and more than sixty (60) days
past due; characterization of any Account due from an account debtor as a
Eligible Account shall not be deemed a determination by Lender as to its actual
value nor in any way obligate Lender to accept any Account subsequently arising
from such account debtor to be, or to continue to deem such Account to be, a
Eligible Account; it is Borrower’s responsibility to determine the
creditworthiness of account debtors and all risks concerning the same and
collection of Accounts are with Borrower; and all Accounts whether or not
Eligible Accounts constitute Collateral.

 

Encumbrances. See Section 7.3.

 

Environmental Laws. Any and all applicable federal, state
and local environmental, health or safety statutes, laws, regulations, rules and
ordinances (whether now existing or hereafter enacted or promulgated), and all
applicable judicial, administrative and regulatory decrees, judgments and
orders, including common law rulings and determinations, relating to injury to,
or the protection of real or personal property or human health or the
environment, including, without limitation, all requirements pertaining to
reporting, licensing, permitting, investigation, remediation and removal of
emissions, discharges, releases or threatened releases of Hazardous Materials
into the environment or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of such Hazardous
Materials.

 

ERISA. The Employee Retirement Income Security
Act of 1974 and the rules and regulations thereunder, collectively, as the
same may from time to time be supplemented or amended and remain in effect.

 

ERISA Affiliate. Any trade or business, whether or not
incorporated, that is treated as a single employer with the Borrower under Section 41
4(b) (c), (m) or (o) of the Code and Section 4001(a) (14)
of ERISA.

 

ERISA Event. (a) Any “reportable event,” as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Plan unless
the 30-day notice requirement with respect to such event has been waived by the
PBGC; (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or 

 

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Section 307 of ERISA; (c) the existence with respect to any
Plan of an “accumulated finding deficiency” (as defined in Section 412 of
the Code or Section 302 of ERISA, whether or not waived; (d) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of
ERISA with respect to the termination of any Plan or the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; (f) the receipt by the Borrower of any ERISA Affiliate
from the PBGC or a plan administrator or any notice relating to the intention
to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (g) the
receipt by the Borrower or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability (as defined in Part I of Subtitle E of
Title IV of ERISA) with respect to any Multiemployer Plan or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (ii) the occurrence
of a “prohibited transaction” with respect to which the Borrower or any of the
Subsidiaries is a “disqualified person” (within the meaning of Section 4975
of the Code) or with respect to which the Borrower or any such Subsidiary could
otherwise be liable; and (i) any other event or condition with respect to
a Plan or Multiemployer Plan that could reasonably be expected to result in
liability of the Borrower.

 

Event of Default. Any event described in Section 8.1.

 

Existing L/C. 
As defined in Section 2A.1(b)

 

Fixed Charge Coverage. 
For any period means, on a consolidated basis, the ratio of Borrower’s
Cash Flow to its Fixed Charges for such period.

 

Fixed Charges. The sum of Borrower’s consolidated
interest expense, plus operating lease payments, current maturities of long
term debt and current capital lease maturities.

 

Funded Debt. All Indebtedness on account of borrowed
money including direct borrowings, capital lease obligations, Letter of Credit
obligations, synthetic lease obligations and obligations under asset
securitization programs.

 

FX Documents. Any and all documents entered into by
the Borrower and/or its Subsidiaries in connection with FX Transactions.

 

FX Exposure. 
The amount determined by the Lenders to be the Lenders’ foreign exchange
risk exposure with respect to FX Transactions based upon the Lender’s “value at
risk” model as it may change from time to time. 
Each of the Lenders shall provide the Borrower with a summary of
Borrower’s FX Exposure to such Lender within 30 days of the end of each
calendar quarter.

 

FX Transactions. 
The notional amount (calculated in US Dollars) of any transactions
arranged or facilitated by any Lender and/or any of its Affiliates on behalf of
Borrower and/or its Subsidiaries involving the purchase or sale of foreign
currencies either on a current or deferred basis.

 

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GAAP. Generally accepted accounting
principles, consistently applied.

 

Guaranteed Obligations. See Section 2B.

 

Guarantees. As applied to any Person (a “Guarantor”),
all guarantees, endorsements and other contingent or surety obligations with
respect to Indebtedness or other obligations of any other Person (the “primary
obligor”), whether or not reflected on the consolidated balance sheet of the
guarantor, including any obligation of the guarantor, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment of such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase
or lease property, securities or services for the purpose of assuring the owner
of such Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account
party in respect of any letter of credit or letter of guaranty issued to support
such Indebtedness or other obligation.

 

Hazardous Materials. Any substance (i) the presence of
which requires or may hereafter require notification, investigation, removal or
remediation under any Environmental Law; (ii) which is or becomes defined
as a “hazardous waste”, “hazardous material” or “hazardous substance” or “pollutant”
or “contaminant” under any present or future Environmental Law or amendments
thereto including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.)
and any applicable local statutes and the regulations promulgated thereunder; (iii) which
is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and which is or becomes
regulated pursuant to any Environmental Law by any governmental authority,
agency, department, commission, board, agency or instrumentality of the United
States, any applicable state of the United States, or any political subdivision
thereof, or (iv) without limitation, which contains gasoline, diesel fuel
or other petroleum products, asbestos or polychlorinated biphenyls (“PCB’s”).

 

Hedging Contracts. 
Interest rate swap agreements, interest rate cap agreements and interest
rate collar agreements, or any other agreements or arrangements entered into
between the Borrower and/or its Subsidiaries and the Lenders or Lenders’
Affiliates and designed to protect the Borrower and/or its Subsidiaries against
fluctuations in interest rates or currency exchange rates.

 

Hedging Obligations. With respect to the Borrower, means all
liabilities of the Borrower and its Subsidiaries to the Lenders or the Lenders’
Affiliates under Hedging Contracts.

 

Indebtedness. As applied to the Borrower and its Subsidiaries,
without duplication, (i) all obligations for borrowed money or other
extensions of credit whether secured or unsecured, absolute or contingent,
including, without limitation, unmatured reimbursement obligations with respect
to letters of credit or guarantees issued for the account of or on behalf of
the Borrower and its Subsidiaries and all obligations representing the deferred
purchase price of property, (ii) all obligations evidenced by bonds,
notes, debentures or other similar instruments, (iii) all obligations
secured by any mortgage, pledge, security interest or other lien on property
owned or

 

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acquired by the Borrower or any of its Subsidiaries whether or not the
obligations secured thereby shall have been assumed, (iv) that portion of
all obligations arising under leases that is required to be capitalized on the
consolidated balance sheet of the Borrower and its Subsidiaries, (v) all
Guarantees, (vi) all obligations that are immediately due and payable out
of the proceeds of or production from property now or hereafter owned or
acquired by the Borrower or its Subsidiaries, (vii) all asset
securitization transactions involving Borrower and/or its Subsidiaries, and (viii) all
other obligations which, in accordance with GAAP, would be included as a
liability on the consolidated balance sheet of the Borrower and its
Subsidiaries, but excluding anything in the nature of capital stock, capital
surplus and retained earnings.

 

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.

 

Interest Expense. For any fiscal period, the consolidated
interest expense (including imputed interest and capitalized lease obligations)
and amortized debt discount on indebtedness of the Borrower and its
Subsidiaries for such period.

 

Interest Payment Date. 
Means, (i) relative to any LIBOR Rate Loan having a LIBOR Interest
Period of three months or less, the last Business Day of such LIBOR Interest
Period, (ii) as to any LIBOR Rate Loan having a LIBOR Interest Period
longer than three months, each Business Day which is three months, or a whole
multiple thereof, after the first day of such LIBOR Interest Period and the
last day of such LIBOR Interest Period, and (iii) with respect to any
Prime Rate Loan, the first Business Day of each month.

 

Investment. As applied to the Borrower and its
Subsidiaries, the purchase or acquisition of any share of capital stock,
partnership interest, evidence of indebtedness or other equity security of any
other Person (including any Subsidiary), any loan, advance or extension of
credit (excluding Accounts Receivable arising in the ordinary course of
business) to, or contribution to the capital of, any other Person (including
any Subsidiary), any real estate held for sale or investment, any securities or
commodities futures contracts held, any other investment in any other Person
(including any Subsidiary), and the making of any commitment or acquisition of
any option to make an Investment.

 

Issuing Lender. 
The Lender which issues any Letter of Credit pursuant to Section 2A
of this Credit Agreement. RBS shall be the initial Issuing Lender.

 

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Lease. That certain lease, dated as of June,
2000, between the Borrower and W9/TIB Real Estate Limited Partnership in
respect of the premises occupied by the Borrower in Westborough, Massachusetts,
as amended to date by the First Amendment dated as of November 2000 and
Second Amendment and Extension of Lease dated as of December 30, 2003.

 

Lease Letters of Credit. Any Letters of Credit issued for the
purpose of securing the Borrower’s obligations under the Lease, including,
without limitation, any issued prior to the date of this Credit Agreement.

 

Lenders. Means collectively, RBS and JPM and
each other Lender who becomes a party to this Credit Agreement by executing a
joinder agreement hereto.

 

Letter of Credit
Applications.
Applications for Letters of Credit in such form as may be required by the
Issuing Lender from time to time which
are executed and delivered by the Borrower to the Issuing Lender
pursuant to Section 2A, as the same may be amended or supplemented from
time to time.

 

Letter of Credit Fee. See Section 2.5.

 

Letter of Credit Pledge
Agreement. See Section 2A.1(b).

 

Letter of Credit
Sublimit.  The aggregate sum of $1,500,000, and with
respect to each of RBS and JPM, individually as an Issuing Lender, the sum of
$750,000.

 

Letters of Credit. See Section 2A.1(a).

 

LIBOR Breakage Fee. 
An amount calculated by the Lenders equal to the amount of any losses,
expenses and liabilities (including without limitation any loss of margin) that
Lenders may sustain as a result of Borrower’s termination of a LIBOR Rate Loan
prior to the end of the Interest Period or failure of the Borrower to borrow a
LIBOR Rate Loan for which it has issued a Notice of Borrowing.

 

LIBOR Rate. 
The offered rate for deposits of U.S. Dollars in an amount approximately
equal to the amount of the requested LIBOR Rate Loan for a term coextensive
with the designated LIBOR Interest Period which the British Bankers’
Association fixes as its LIBOR rate as of 11:00 a.m. London time on the
day which is two London Banking Days prior to the beginning of such LIBOR
Interest Period.  If such day is not a
London Banking Day, the LIBOR Rate shall be determined on the next preceding
day which is a London Banking Day.  If for
any reason a Lender cannot determine such offered rate by the British Bankers’
Association, the Lender may, in its discretion, select a replacement index
based on the arithmetic mean of the quotations, if any, of the interbank
offered rate by first class banks in London or New York for deposits in
comparable amounts and maturities.

 

LIBOR Interest Period. 
Relative to any LIBOR Rate Loan: (i)  initially, the period
beginning on (and including) the date on which such LIBOR Rate Loan is made or
continued as, or converted into, a LIBOR Rate Loan and ending on (but
excluding) the day which numerically corresponds to such date one, three or six
months thereafter (or, if such month has no 

 

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numerically corresponding day, on the last Business Day of such month),
in each case as the Borrower may select in its Notice of Borrowing; and (ii) thereafter,
each period commencing on the last day of the next preceding LIBOR Interest
Period applicable to such LIBOR Rate Loan and ending one, three or six months
thereafter, as selected by the Borrower pursuant to its Notice of Borrowing; (iii) provided,
however, that  (a) at no time may
there be more than five (5) LIBOR Interest Periods in effect with respect
to the LIBOR Rate Loans; (b) LIBOR Interest Periods commencing on the same
date for LIBOR Rate Loans comprising part of the same advance under this Credit
Agreement shall be of the same duration; (c) LIBOR Interest Periods for
LIBOR Rate Loans in connection with which the Borrower has or may incur Hedging
Obligations with the Lenders shall be of the same duration as the relevant
periods set under the applicable Hedging Contracts; (d) if such LIBOR
Interest Period would otherwise end on a day which is not a Business Day, such
LIBOR Interest Period shall end on the next following Business Day unless such
day falls in the next calendar month, in which case such LIBOR Interest Period
shall end on the first preceding Business Day; and (e) no LIBOR Interest
Period may end later than the termination of this Credit Agreement.

 

LIBOR Rate Loan.  Any loan or advance the rate of interest
applicable to which is based upon the LIBOR Rate.

 

LIBOR Rate Margin.   2.50% per annum (250 basis points).

 

LIBOR Reserve Percentage.
 The maximum aggregate (without duplication) of
the rates (expressed as a decimal fraction) of reserve requirements (including
all basic, emergency, supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled changes in reserve
requirements) under any regulations of the Board of Governors of the Federal
Reserve System (the “Board”) or other governmental authority having
jurisdiction with respect thereto as issued from time to time and then
applicable to assets or liabilities consisting of “Eurocurrency Liabilities”,
as currently defined in Regulation D of the Board, having a term approximately
equal or comparable to such LIBOR Interest Period.

 

Loan Documents. This Credit Agreement, the Notes, the
Letters of Credit, the Letter of Credit Applications, the Security Documents
and the FX Documents, together with any agreements, instruments or documents
now or hereafter executed and delivered pursuant to or in connection with any
of the foregoing.

 

Loans. The loans made or to be made by the
Lenders to the Borrower pursuant to Section II of this Credit Agreement,
including Revolving Credit Loans and unpaid Reimbursement Obligations.

 

London Banking Day. A day on which dealings in US dollars
deposits are transacted in the London interbank market.

 

Maximum Drawing Amount. The maximum aggregate amount from time
to time which beneficiaries may draw under outstanding Letters of Credit.

 

Modified US Quick Ratio. The ratio, on a consolidated basis for
Borrower and its US Subsidiaries, of (i) cash, cash equivalents,
short-term marketable securities per GAAP 

 

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maintained in the US and trade Accounts Receivable (excluding related
party Accounts Receivable and Accounts Receivable from non-US account debtors)
to (ii) current liabilities per GAAP plus long term deferred revenue.

 

Multiemployer Plan. Any plan which is a Multiemployer Plan
as defined in Section 4001(a) (3) of ERISA.

 

Negative Pledge Agreement. 
The Negative Pledge Agreement from the Borrower to the Lenders of even
date herewith with respect to the Intellectual Property of Borrower.

 

Note Record. Any internal record, including a
computer record, maintained by the Lenders with respect to any Loan.

 

Notes. See Section 2.2(a).

 

Notice of Borrowing. The notice, substantially in the form
of Exhibit B hereto, to be given by the Borrower to the Agent to
request a Revolving Credit Loan.

 

Obligations. 
The aggregate outstanding principal balance of and interest and premium
on the Loans (including, without limitation, interest accruing at the then
applicable rate provided herein after the maturity of the Loans and interest
accruing at the then applicable rate provided herein after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to the Borrower and its Subsidiaries, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) and all other obligations of the Borrower and its Subsidiaries to
the Lenders and the Lenders’ Affiliates of every kind and description pursuant
to or in connection with the Loan Documents, including without limitation, the
Guarantees, the Guaranteed Obligations, Hedging Contracts  and FX Transactions, deposit accounts, cash
management accounts and services, hedging transactions, interest rate caps,
collars and similar interest rate protection products, and all other banking
products and services, direct or indirect, absolute or contingent, primary or
secondary, due or to become due, now existing or hereafter arising, regardless
of how they arise or by what agreement or instrument, if any, in each case
whether on account of principal interest, premium, reimbursement obligations,
fees, indemnities, coats, expenses or otherwise 
and including obligations to perform acts and refrain from taking action
as well as obligations to pay money.

 

Participant. See Section 9.2.

 

PBGC.  The Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under ERISA.

 

Pension Plan. 
Any Plan which is an “employee pension benefit plan” (as defined in
ERISA).

 

Permitted Acquisition. 
An acquisition of the business assets or equity capital of a Person by
the Borrower and/or its Subsidiaries which satisfies all of the following
requirements: (i) the business acquired is engaged in the Borrower’s
Business or in related or similar business, (ii) the

 

11

 

acquisition is not a hostile acquisition (i.e. the board of directors
or governing body of the acquired business has consented to the acquisition by
the Borrower), (iii) the Borrower is in compliance with all of the
provisions of the Credit Agreement including without limitation the financial
covenants contained in Section 6 both before and after giving effect to
the proposed acquisition.  For purposes
of determining Borrower’s compliance with the financial covenants on a pro
forma basis, the Lenders may or may not permit inclusion of the acquired
business’s pre-acquisition Adjusted EBITDA.

 

Permitted Encumbrances.  Any of the following: (i) encumbrances
in favor of the Lenders to secure the Obligations; (ii) encumbrances
existing as of the date of this Credit Agreement and disclosed in Exhibit C
hereto; (iii) encumbrances securing Indebtedness to the extent such
Indebtedness is permitted by Section 7.1
of this Credit Agreement; (iv) liens for taxes, fees, assessments and
other governmental charges to the extent that payment of the same may be
postponed or is not required in accordance with the provisions of Section 5.4; (v) landlords’ and lessors’ liens in respect of rent
not in default or liens in respect of pledges or deposits under workmen’s
compensation, unemployment insurance, social security laws, or similar
legislation (other than ERISA) or in connection with appeal and similar bonds
incidental to litigation; mechanics’, warehouseman’s, laborers’ and materialmen’s
and similar liens, if the obligations secured by such liens are not then
delinquent; liens securing the performance of bids, tenders, contracts (other
than for the payment of money); and liens securing statutory obligations or
surety, indemnity, performance or other similar bonds incidental to the conduct
of the Borrower’s or a Subsidiary’s business in the ordinary course and that do
not in the aggregate materially detract from the value of its property or
materially impair the use thereof in the operation of its business; (vi) judgment
liens securing judgments that (1) are not fully covered by insurance, and (2) shall
not have been in existence for a period longer than 60 days after the creation
thereof or, if a stay of
execution shall have been obtained, for a
period longer than 60 days after the expiration of such stay; (vii) rights
of lessors under capital leases to the extent such capital leases are permitted
hereunder; (viii) easements, rights of way, restrictions and other similar
charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of the Borrower’s Business; and (ix) 
liens constituting a renewal, extension or replacement of any Permitted Encumbrance.

 

Permitted Indebtedness.  Any of the following: (i) the
Obligations; (ii) Indebtedness (other than Obligations) existing as of the
date of this Credit Agreement and disclosed on Exhibit C hereto but
not any increase in the principal amounts thereof nor any renewals or
refinancings thereof; (iii) Indebtedness for taxes, assessments or
governmental charges to the extent that payment therefore shall at the time not
be required to be made in accordance with Section 5.4; (iv) current
trade liabilities on open account for the purchase price of services, materials
and supplies incurred by the Borrower or its Subsidiaries in the ordinary
course of business (not as a result of borrowing), so long as all of such open
account Indebtedness shall be promptly paid and discharged when due or in
conformity with customary trade terms and practices, except for any such open
account Indebtedness which is being contested in good faith by the Borrower or
its Subsidiaries, as to which adequate reserves required by GAAP have been
established and are being maintained and as to which no Encumbrance has been placed
on any property of the Borrower or its Subsidiaries; (v) other
Indebtedness incurred in the ordinary course of business, including asset
securitization facilities and letters of credit not issued under this Credit 

 

12

 

Agreement, and renewals and refinancings thereof, provided that such
Indebtedness under this clause (v) does not exceed $10,000,000 in the
aggregate at any time outstanding; (vi) Guarantees permitted under Section 7.2
hereof; and (vii) Indebtedness existing by and among the Borrower and its
Subsidiaries as set forth in Schedule B annexed.

 

Permitted Restricted Payment.  Any loan, advance, extension of credit or
other payment by and between the Borrower and any Subsidiary at a time when there
is no continuing Default and  the making
of which does not result in a Default under this Credit Agreement.

 

Person. Any individual, corporation, partnership, limited
liability company, trust, unincorporated association, business or other legal
entity, and any government or governmental agency or political subdivision
thereof.

 

Plan.   Any “employee
pension benefit plan” or “employee welfare benefit plan” (each as defined in Section 3
of ERISA) maintained by the Borrower or any Subsidiary.

 

Pledge Agreement.  The
Pledge Agreement dated the date hereof pursuant to which Borrower shall pledge
to Lenders the capital stock of its subsidiary, Virtusa Securities Corporation.

 

Prime Rate. The rate of interest announced from time to time
by the Agent at its head office as its “Prime Rate”. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any customer. Any change in the Prime Rate shall be effective from
and including the effective date of such change.

 

Prime Rate Margin.  2.50% per annum (250 basis points).

 

Prohibited Transaction. Any “prohibited
transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Code.

 

Qualified Investments. As applied to the Borrower
and its Subsidiaries, Investments made in accordance with the requirements of
Borrower’s investment policy as set forth from time to time by the Borrower’s
Board of Directors.

 

Reimbursement Obligation. The Obligation of the
Borrower to reimburse the Lenders on account of any drawing under any Letter of
Credit as provided in Section 2A.2

 

Required Lenders. Lenders holding more than 50.0% of the
Revolving Credit Commitment.

 

Responsible Officer. The chief financial
officer of the Borrower and any other officer of the Borrower designated by the
chief financial officer to sign Notices of Borrowing.

 

Restricted Payment. Other than a Permitted
Restricted Payment, any dividend, distribution, loan, advance, guaranty,
extension of credit or other payment (whether in cash, securities or other
property) to or for the benefit of any Person who holds an equity interest in
the Borrower or any of its Subsidiaries, whether or not such interest is
evidenced by a security, and 

 

13

 

any other payment, whether in cash, securities or other property, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any capital stock of the Borrower or any of its Subsidiaries,
whether now or hereafter outstanding, or of any options, warrants or similar
rights to purchase such capital stock or any security convertible into or
exchangeable for such capital stock.

 

Revolving Credit Commitment. The maximum aggregate
dollar amount of credit which the Lenders have agreed to make available to the
Borrower for Loans and Letters of Credit is $3,000,000, of which RBS has agreed
to provide $1,500,000 on a several basis upon the terms and subject to the
conditions of this Credit Agreement.  JPM
has agreed to provide the other $1,500,000 of the Revolving Credit Commitment
on a several basis upon the terms and subject to the conditions of this Credit
Agreement. The  Revolving Credit
Commitment may be modified from time to time pursuant to the terms of this
Credit Agreement. A portion of the Revolving Credit Commitment up to the Letter
of Credit Sublimit shall be available to Borrower for issuance of Letters of
Credit.

 

Revolving Credit Loans. See Section 2.1(a).

 

Revolving Credit Maturity Date. July  30, 2010.

 

Revolving Credit Outstandings. At any time, the
outstanding principal balance of Revolving Credit Loans.

 

Security Agreement. Collectively, the Security
Agreement from the Borrower and any future security agreements from Borrower’s
US Subsidiaries to the Lenders with respect to all personal property of the
Borrower and such Subsidiaries other than Intellectual Property.

 

Security Documents.  The Security Agreement, the Negative Pledge
Agreement, the Pledge Agreement, and the Letter of Credit Pledge Agreement, and
any subsequent pledge or security agreements granted by Borrower to Lenders,
each in favor of the Lenders to secure Obligations, in each case as amended
and/or restated and in effect from time to time, and any additional documents
evidencing or perfecting the Lenders’ lien on the Collateral.

 

Subsidiary. With respect to any Person, any corporation,
association, joint stock company, business trust, partnership, limited
liability company or other similar organization of which more than 50.0% of the ordinary voting power
for the election of a majority of the members of the board of directors or
other governing body of such entity is held or controlled by such Person or a
Subsidiary of such Person; or any other such organization the management of
which is directly or indirectly controlled by such Person or a Subsidiary of
such Person through the exercise of voting power or otherwise; or any joint
venture, whether incorporated or not, in which such Person has more than a
50.0% ownership interest.

 

Total Revolving Credit Outstandings. At any time, the sum of (i) the aggregate outstanding
principal balance of Revolving Credit Loans and (ii) the Maximum Drawing
Amount of  Letters of Credit at such
time.

 

14

 

UK Subsidiary. Virtusa UK Ltd.

 

US Subsidiaries. Virtusa Securities Corporation and any
future subsidiaries of Borrower or any Subsidiary formed in the United States
of America.

 

1.2. Rules of
Interpretation.

 

(a) All terms of an accounting or financial character used herein
but not defined herein shall have the meanings assigned thereto by GAAP, as in
effect from time to time, and all calculations for the purposes of Section VI
hereof shall be made in accordance with GAAP; provided that if any time after
the date hereof there shall occur any change in respect of GAAP from that used
in the preparation of the audited financial statements referred to in Section 4.6(a) in
a manner that would have a material effect on any matter which is material to Section VI,
the Borrower and Lenders will, within 10 Business Days after notice from
Lenders or the Borrower, as the case may be to that effect, and continue in
good faith negotiations with a view towards making appropriate amendments to
the provisions hereof acceptable to Lenders to reflect as narrowly as possible
the effect on Section VI as in effect on the date hereof; provided,
further, that until such notice shall have been withdrawn or the relevant
provisions amended in accordance herewith, Section VI shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective.

 

(b) Except as otherwise specifically provided herein, reference to
any document or agreement shall include such document or agreement as amended
modified or supplemented and in effect from time to time in accordance with its
terms and the terms of this
Credit Agreement.

 

(c) The singular includes the plural and the plural includes the
singular. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.

 

(d) A reference to any Person includes its permitted successors
and permitted assigns,

 

(e) The words “include”, “includes” and “including” are not
limiting.

 

(f) The words “herein”, “hereof’, “hereunder” and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.

 

(g) All terms not specifically defined herein or by GAAP that are
defined in the Uniform Commercial Code as in effect in The Commonwealth of
Massachusetts, shall have the meanings assigned to them in such Uniform
Commercial Code.

 

SECTION II

DESCRIPTION OF CREDIT

 

Subject to the terms and conditions of this
Credit Agreement, each Lender shall make Loans to the Borrower, and participate
in Letters of Credit at the request of Borrower, in such aggregate 

 

15

 

amount as the Borrower shall request pursuant
to the Revolving Credit Commitment. Each Lender, for itself and not one for any
other, agrees to make Loans and issue or participate in Letters of Credit on
such basis that, immediately after the completion of any borrowing by Borrower
or the issuance of a Letter of Credit: (i) the aggregate outstanding
principal amount of Loans made by such Lender, when combined with such Lender’s
pro rata share of any Letters of Credit issued for the account of the Borrower
shall not be in excess of such Lender’s share of the Revolving Credit
Commitment; and (ii) the aggregate outstanding principal amount of Letters
of Credit made by such Lender shall not be in excess of such Lender’s share of
the Letter of Credit Sublimit.

 

2.1.                              Revolving
Credit Loans.

 

(a) Upon the terms and subject to the conditions of this Credit
Agreement, and in reliance upon the representations, warranties and covenants
of the Borrower herein, each Lender severally agrees to make revolving credit loans (the “Revolving Credit Loans” or
the “Loans”) to the Borrower at
the Borrower’s request from time to time from and after the Closing Date and
prior to the Revolving Credit Maturity Date, provided that (1) Total
Revolving Credit Outstandings (after giving effect to all requested Revolving
Credit Loans and  Letters of Credit)
shall not at any time exceed the lesser of: (i)  the Revolving Credit
Commitment and (ii) the Borrowing Base, and (2) the Revolving Credit
Outstandings to each Lender do not exceed such Lender’s Applicable Percentage
of the Revolving Credit Commitment. Subject to the terms and conditions of this
Credit Agreement, the Borrower may borrow, repay, prepay and re-borrow amounts
up to the limits imposed by this Section 2.1, from time to time between
the Closing Date and the Revolving Credit Maturity Date upon a Notice of
Borrowing given to the Agent pursuant to Section 2.3. Each request for a Revolving Credit Loan hereunder shall
constitute a representation and warranty by the Borrower that the conditions
set forth in Sections 3.1 and 3.2 (as applicable) have been satisfied as of the
date of such request.

 

(b) The Revolving Credit Commitment shall terminate at 5:00 p.m.
Boston time on the Revolving
Credit Maturity Date.

 

2.2. The Notes.

 

(a) The Revolving Credit Loans shall be evidenced by promissory
notes in the form of Exhibit A-1 and Exhibit A-2
hereto, dated as of the Closing
Date (the “Notes”).

 

(b) The Borrower irrevocably authorizes the Lenders to make or
cause to be made, at or about the time of the Drawdown Date of any Loan or at
the time of receipt of any payment of principal on the Note, an appropriate notation on its Note Record reflecting
the making of such Loan or the receipt of such payment. The outstanding amount
of the Loans set forth on the
Note Record shall be prima facie evidence of the principal amount thereof owing
and unpaid to the Lenders, but the failure to record, or any error in so
recording, any such amount on the Lenders’ Note Record shall not limit or otherwise affect the obligations of
the Borrower hereunder or under the Note to make payments of principal of or
interest on the Note when due.

 

16

 

2.3. Notice and Manner of Borrowing.

 

(a) Whenever the Borrower desires to obtain a Revolving Credit
Loan hereunder, the Borrower shall give the Agent a telephonic notice promptly confirmed by a written Notice
of Borrowing, which notices shall be
irrevocable.  With respect to Prime Rate
Loans, such notice must be received no later than 10:00 a.m. Boston time on the date the requested Revolving Credit Loan is to be made. Such
Notice of Borrowing shall specify
the effective date and amount
of the Revolving Credit Loan.
With respect to LIBOR Rate Loans, such notice must be received by 10:00 a.m.
Boston time not less than two (2) nor more than five (5) Business
Days’ notice that a LIBOR Rate Loan be made in a minimum amount of $500,000 and
integral multiples of $100,000, with a LIBOR Interest Period of one, three or
six months.  On the terms and subject to
the conditions of this Credit Agreement, each LIBOR Rate Loan shall be made
available to the Borrower on the first day of the applicable LIBOR Interest
Period by deposit to the account of the Borrower as shall have been specified
in its Notice of Borrowing.

 

(b) By delivering a
Notice of Borrowing to the Agent on or before 10:00 a.m. Boston time, on a
Business Day, the Borrower may from time to time irrevocably elect, on not less
than two (2) nor more than five (5) Business Days’ notice, that all
or any portion of any LIBOR Rate Loan, in an aggregate minimum amount of
$500,000 and integral multiples of $100,000, be converted on the last day of a
LIBOR Interest Period into a LIBOR Rate Loan with a different LIBOR Interest
Period; provided, however, that no portion of the outstanding
principal amount of any LIBOR Rate Loan may be converted to, or continued as a
LIBOR Rate Loan when any Event of Default has occurred and is continuing, and
no portion of the outstanding principal amount of any LIBOR Rate Loan may be
converted to LIBOR Rate Loan of a different duration if such LIBOR Rate Loan
relates to any Hedging Obligation.  In
the absence of delivery of a Notice of Borrowing with respect to any LIBOR Rate
Loan at least two Business Days before the last day of the then current LIBOR
Interest Period with respect thereto, such LIBOR Rate Loan shall, on such last
day, automatically continue as a LIBOR Rate Loan with the same LIBOR Interest
Period.

 

(c)  If the written confirmation of any telephonic notification
differs in any material
respect from the action taken by the
Lenders, the records of the Lenders shall control absent manifest error.
If the Agent receives a Notice of Borrowing
after the time specified above, such Notice shall not be effective.

 

(d)  On each
Business Day (by no later than 2:00 P.M. Boston time), the Agent shall
notify each Lender of the dates, amounts and Interest Periods (if applicable)
and of the amount of its Applicable Percentage of the Loans requested by
Borrower.  Each Lender shall provide to
Agent (not later than 3:00 P.M. Boston time), such amount in US Dollars,
in federal or other immediately available funds, required of it.  Each Lender agrees to
deliver to the Agent such Lender’s pro-rata share of the Loans requested by the
Borrower on the date of such notice. 
Each Lender acknowledges and agrees that such Lender’s obligation to
make such Loans is its several obligation and shall not be affected by the
failure of any other Lender to fund its share of the requested Revolving
Loan.  If the Agent shall elect to
advance the proceeds of any Loan prior to receiving funds from such Lender, the
Agent shall have the right, upon prior notice to the Borrower, to debit any
account of the Borrower or otherwise receive such amount from the Borrower,
promptly on demand in the event that such Lender shall fail to reimburse the
Agent in accordance with this paragraph. 
The Agent shall also have the right to receive interest from such 

 

17

 

Lender at the Federal Funds Effective Rate in
the event that such Lender shall fail to provide its portion of the Loan on the
date requested and to the extent that the Agent provided such funds to the
Borrower.

 

2.4.  Interest Rates and Payment of Interest.

 

(a) Each Revolving
Credit Loan shall bear interest on the outstanding
principal amount thereof at a floating rate per annum equal to, as elected by the Borrower in its Notice
of Borrowing: (i) the sum of the Prime Rate plus the Prime Rate
Margin, or (ii) the sum of the LIBOR Rate plus the LIBOR Rate Margin.  Payments of interest shall be due and payable
on each Interest Payment Date and on the Maturity Date. LIBOR Rate Loans shall
mature and become payable in full on the last day of the LIBOR Interest Period
relating to such LIBOR Rate Loan.  Upon
maturity, a LIBOR Rate Loan may be continued for an additional LIBOR Interest
Period or may be converted to a Prime Rate Loan. With respect to Prime Rate
Loans, the effective rate of interest shall change contemporaneously with any
change in the Prime Rate.

 

(b) If a Default shall occur, then at the option of the Lenders (i) the
unpaid balance of Loans shall bear interest, to the extent permitted by law,
compounded daily at an interest rate equal to 2.0% per annum above the interest
rate applicable to each such Loan in effect on the day such Default occurs,
until such Default is cured or waived, and (ii) the Borrower shall pay to
the Lenders a fee (in addition to the Letter of Credit Fee) equal to 1.0% per
annum of the Maximum Drawing Amount of all Letters of Credit outstanding during
the period from the occurrence of such Default until such Default is cured or
waived.

 

(c) All agreements between the Borrower and the Lenders are hereby
expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of maturity
of the Obligations or otherwise, shall the amount paid or agreed to be paid to
the Lenders for the use or the forbearance of the Obligations exceed the
maximum permissible under applicable law.
As used in this Section 2.4(c), the term “applicable law” shall
mean the law of The Commonwealth
of Massachusetts in effect as of the date hereof provided, however, that in the
event there is a change in the law which results in a higher permissible rate of interest, then the Loan Documents
shall be governed by such new law as of its effective date. In this regard, it is expressly agreed that it is the
intent of Borrower and the Lenders in the execution, delivery and acceptance of
the Loan Documents to contract in strict compliance with the laws of The
Commonwealth of Massachusetts from time to time in effect. If, under or from.
any circumstances whatsoever, fulfillment of any provision of any of the Loan
Documents at the time of performance
of such provision shall be due, shall involve transcending the limit of such
validity prescribed by applicable law, then the obligation, to be fulfilled
shall automatically be reduced to the limits of such validity, and if under or
from any circumstances whatsoever the Lenders should ever receive as interest
an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall
be applied to the reduction of the principal balance of the Obligations and not
to payment of interest. This provision shall control every other provision of
all Loan Documents.

 

(d) LIBOR Rate
Loans may be prepaid upon the terms and conditions set forth herein.  For LIBOR Rate Loans in connection with which
the Borrower has or may incur Hedging 

 

18

 

Obligations, additional
obligations may be associated with prepayment, in accordance with the terms and
conditions of the applicable Hedging Contracts.   The Borrower shall give RBS no later than
10:00 a.m., Boston time, at least four (4) Business Days notice of
any proposed prepayment of any LIBOR Rate Loans, specifying the proposed date
of payment of such LIBOR Rate Loans, and the principal amount to be paid.  Each partial prepayment of the principal
amount of LIBOR Rate Loans shall be in an integral multiple of $100,000 and
accompanied by the payment of all charges outstanding on such LIBOR Rate Loans
(including the LIBOR Breakage Fee) and of all accrued interest on the principal
repaid to the date of payment.

 

(e) Upon: (i) any
default by Borrower in making any borrowing of, conversion into or continuation
of any LIBOR Rate Loan following Borrower’s delivery of a Notice of Borrowing
hereunder or (ii) any prepayment of a LIBOR Rate Loan on any day that is
not the last day of the relevant LIBOR Interest Period (regardless of the
source of such prepayment and whether voluntary, by acceleration or otherwise),
the Borrower shall pay a LIBOR Breakage Fee. The Borrower understands, agrees
and acknowledges that: (i) the Lenders do not have any obligation to
purchase, sell and/or match funds in connection with the use of the LIBOR Rate
as a basis for calculating the rate of interest on a LIBOR Rate Loan, (ii) the
LIBOR Rate may be used merely as a reference in determining such rate, and (iii) the
Borrower has accepted the LIBOR Rate as a reasonable and fair basis for
calculating the LIBOR Breakage Fee and other funding losses incurred by the
Lenders.  Borrower further agrees to pay
the LIBOR Breakage Fee and other funding losses, if any, whether or not the
Lenders elect to purchase, sell and/or match funds.

 

(f) If a Lender shall
determine that the introduction of or any change in or in the interpretation of
any law, rule, regulation or guideline, (whether or not having the force of
law) makes it unlawful, or any central bank or other governmental authority
asserts that it is unlawful, for the Lender to make, continue or maintain any
LIBOR Rate Loan as, or to convert any loan into, a LIBOR Rate Loan of a certain
duration, the obligations of the Lender to make, continue, maintain or convert
into any such LIBOR Rate Loans shall, upon such determination, forthwith be
suspended until the Lender shall notify the Borrower that the circumstances
causing such suspension no longer exist, and all LIBOR Rate Loans of such type
shall automatically convert into Prime Rate Loans at the end of the then current
LIBOR Interest Periods with respect thereto or sooner, if required by such law
or assertion.

 

(g) In the event that
Borrower shall have requested a LIBOR Rate Loan and a Lender, in its reasonable
discretion, shall have determined that U.S. dollar deposits in the relevant
amount and for the relevant LIBOR Interest Period are not available to the
Lender in the London interbank market; or by reason of circumstances affecting
the Lender in the London interbank market, adequate and reasonable means do not
exist for ascertaining the LIBOR Rate applicable to the relevant LIBOR Interest
Period; upon notice from the Lender to the Borrower, the obligations of the
Lender to make or continue any loans as, or to convert any loans into, LIBOR
Rate Loans of such duration shall forthwith be suspended until the Lender shall
notify the Borrower that the circumstances causing such suspension no longer
exist.

 

2.5.                              Fees and
Charges.

 

(a)  The Borrower shall pay to the Agent for the account of the
Lenders in accordance with their Applicable Percentages a closing fee (the “Closing Fee”) in the amount
of 0.40% of 

 

19

 

the Revolving Credit Commitment which is due and payable and deemed to
be fully earned and non-refundable on the Closing Date.

 

(b) The Borrower shall
pay to the Agent for the account of the Lenders in accordance with their
Applicable Percentages an annual commitment fee (the “Commitment Fee”), computed on a daily basis and payable
quarterly in arrears on the first Business Day of each quarter,
equal to (i) the excess of (x) the
Revolving Credit Commitment at the time (without giving effect to any Letters
of Credit or requested Letters of
Credit) over (y) Revolving Credit Outstandings from time to time,
multiplied by (ii) 0.25%.

 

(c) The Borrower shall pay to the Lenders in accordance with their
Applicable Percentages a fee (the “Letter of Credit Fee”) at a rate per annum
equal to the face amount of each outstanding Letter of Credit multiplied by
1.75% with respect to each Letter of Credit. 
The Letter of Credit Fee shall be paid to Lenders in advance as a
condition to issuance of each Letter of Credit. The Borrower shall also pay to
the Issuing Lender on demand standard documentation charges for the issuance of
each Letter of Credit and the amount of any taxes, fees, charges or other costs
and expenses whatsoever incurred by such Issuing Lender in connection with any
Letter of Credit.

 

(d) The Borrower authorizes each Lender to charge to its Note
Record or to any deposit account which the Borrower may maintain with the
Lender the interest, fees, charges, taxes and expenses provided for in this
Credit Agreement, the other Loan Documents or any other document executed or
delivered in connection herewith or therewith.

 

2.6. Payments and Prepayments of the Loans

 

(a) On the Revolving Credit Maturity Date, the Borrower shall pay
to the Lenders the entire unpaid principal balance of all outstanding Revolving
Credit Loans, together with all unpaid interest thereon and all fees and other
amounts due with respect thereto.

 

(b) Revolving Credit Loans may be prepaid at any time, without
premium or penalty, except for any LIBOR Breakage Fee which may be due.  Any such notice of prepayment shall be
irrevocable. Prepayments of Revolving Credit Loans may be re-borrowed to the
extent provided in Section 2.1.

 

(c) If at any time Revolving Credit Outstandings exceed the lesser
of: (i) the Revolving Credit Commitment or (ii) the Borrowing Base,
the Borrower shall immediately pay the amount of any such
excess to the Lenders for application to
the Revolving Credit Loans.  If at any time the Revolving Credit
Outstandings of the Borrower to any Lender exceed such Lender’s Applicable
Percentage of the Revolving Credit Commitment, the Borrower shall immediately
pay the amount of any such excess to such Lender for application to the
Revolving Credit Loans.

 

(d) If the Revolving Credit Outstandings exceed the Borrowing Base
at any time (an “Overadvance”) and there are Revolving Credit Outstandings, the
Borrower shall have five (5) Business Days from written notice by the
Agent (the “Borrowing Base Cure Period”) to (i) fully cash collateralize
the then outstanding Revolving Credit Outstandings, or (ii) to fully cash 

 

20

 

collateralize the amount of the Overadvance. The Borrower’s failure to
fully cash collateralize such Revolving Credit Outstandings within five
Business Days shall constitute an Event of Default hereunder.   During the Borrowing Base Cure Period no
further Revolving Credit Loans or Letters of Credit will be permitted without
the consent of the Lenders.  No Event of
Default shall be deemed to have occurred as a result of the Overadvance during
the Borrowing Base Cure Period.

 

2.7. Method of Payments

 

(a) All payments by the Borrower hereunder and under any of the
other Loan Documents shall be made in lawful money of the United States at the
Agent’s head office or at such
other location that the Agent may from time to time designate, in each case in
immediately available funds, and shall be deemed to have been made only when
made in compliance with this Section. All such payments shall be made without
set-off or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Borrower is compelled by law to
make such deduction or withholding. If any such obligation is imposed upon the
Borrower with respect to any amount payable by it hereunder or under any of the
other Loan Documents, the Borrower will pay to the Agent for the benefit of the
applicable Lender such additional amount in United States Dollars as shall be
necessary to enable the Lender to receive the same net amount which the Lender
would have received on such clue date had no such obligation been imposed upon
the Borrower. The Borrower will deliver promptly to the Agent certificates or
other valid vouchers or other evidence of payment reasonably satisfactory to
the Agent for all taxes or other charges deducted from or paid with respect to
payments made by the Borrower hereunder or under such other Loan Document, the
Agent may, and the Borrower hereby authorizes the Agent to, debit the amount of
any payment not made by such time to the demand deposit accounts of the
Borrower with the Agent or to its Note Record.

 

(b) If the Revolving
Credit Commitment shall have been terminated or the Obligations shall have been
declared immediately due and payable pursuant to Section 8.2, all funds received from or on behalf of the
Borrower (including as proceeds of Collateral) by the Agent in respect of
Obligations, shall be applied by the Agent in the following manner and order: (i) first,
to reimburse the Lenders for any actual amounts payable pursuant to Sections
11.2 and 11.3 hereof; (ii) second, to the payment of Commitment Fees, Letter
of Credit Fees and any other fees payable hereunder to the applicable Lender; (iii) third,
to the payment of interest due on the Loans and the Reimbursement Obligations
to the Lenders in accordance with the Applicable Percentages; (iv) fourth,
to the payment of the outstanding principal balance of the Loans to the Lenders
in accordance with their Applicable Percentages and to payment of the
Reimbursement Obligations to the Issuing Lenders, and to pay to the applicable
Lenders any breakage costs and fees associated with Hedging Contracts, and to
provide the Issuing Lenders with cash collateral for any issued and outstanding
Letters of Credit, and to provide to the applicable Lenders’ cash collateral
for their exposure on Hedging Contracts and FX Exposure (in an amount
determined by Lenders); (v) fifth, to the payment of any other Obligations
payable to the Lenders by the Borrower, pro rata to the outstanding principal
balance of each Lender; and (vi) any remaining funds shall be paid to whoever shall be entitled thereto
or as a court of competent jurisdiction

 

21

 

shall direct. 
In the event that funds received are not adequate to provide the Lenders
with cash collateral for all issued and outstanding Letters of Credit and
Lenders’ FX Exposure, Borrower and its US Subsidiaries shall immediately
deposit with Lenders cash collateral determined by Lenders to be necessary to
secure such Obligations.

 

(c )  The Agent shall remit to the Lenders such
portion of any payments received from Borrower and other amounts received on
account of the Obligations by not later than 2:00 p. m. on the Business Day
following receipt of such payments by the Agent.  In the event that any payment made by
Borrower to the Agent proves uncollectible or any Borrower payment is required
to be returned or disgorged by the Agent for any reason (each, a “Returned
Payment”), each Lender shall return to the Agent within one Business Day of the
Agent’s demand therefor any payment made to such Lender based upon such
Returned Payment.

 

2.8.                              Computation of
Interest and Fees; Due Date.  Interest and all fees payable hereunder shall
be computed daily on the basis of a year of 360 days and paid for the actual number of days for which due. If the
due date for any payment of principal is extended by operation of law, interest
shall be payable for such extended time. If any payment required by this Credit
Agreement becomes due on a day that is not a Business Day such payment may be
made on the next succeeding Business Day, and such extension shall be included
in computing interest and fees in connection with such payment.

 

2.9. Increased Costs. In case any change made after the Closing
Date in any law, regulation, treaty or official directive or the interpretation
or application thereof by any court or by
any governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having
the force of law): (i) subjects
the Lenders to any tax with respect to payments of principal or interest
or any other amounts payable hereunder by the Borrower or otherwise with respect to the transactions
contemplated hereby (except for taxes on
the overall net income of the Lenders imposed by the United States of
America or any political
subdivision thereof), or (ii) imposes, modifies or deems applicable any
deposit insurance, reserve, special deposit or similar requirement against
assets held by, or deposits in or for the account of, or loans by, the Lenders,
or (iii) imposes upon the Lenders any other condition with respect to its
obligations or performance under this Credit Agreement or in respect of any
Letter of Credit, and the result of any
of the foregoing is to increase the cost to the Lenders, reduce the
income receivable by the Lenders or impose any expense upon the Lenders with
respect to any Loans or its obligations under this Credit Agreement or in
respect of any Letter of Credit, the Lenders shall notify the Borrower thereof. 
The Borrower agrees to pay to the Lenders the amount of such increase in cost, reduction in income or additional
expense as and when such cost, reduction or expense is incurred or determined, upon presentation by
the Lenders of a statement in the amount and setting forth in reasonable detail
the Lenders’ calculation thereof and the assumptions upon which such calculation was based, which statement shall be
deemed true and correct absent manifest error.

 

2.10.                        Capital
Requirements. If after the date hereof any Lender or the Issuing
Lender determines that (i) the adoption of or change in any law, rule,
regulation or guideline regarding capital requirements for banks or bank
holding companies, or any change in the interpretation or 

 

22

 

application thereof (by any governmental authority charged with the
administration thereof or (ii) compliance by the Lender or its parent bank holding company
with any guideline, request or directive of any such entity regarding capital
adequacy (whether or not having the force of law), has the effect of reducing
the return on the Lender’s or
such holding company’s capital as a consequence of the Lender’s Revolving Credit Commitment to make Loans
hereunder or its obligations in respect of any Letter of Credit to a level
below that which the Lender or such holding company could have achieved but for
such adoption, change or compliance (taking into consideration the Lender’s or
such holding company’s then existing policies with respect to capital adequacy
and assuming the full utilization of such entity’s capital) by any amount
deemed by the Lender to be material, then the Lender shall notify the Borrower thereof. The Borrower agrees to pay
to the Lender the amount of such reduction of return on capital as and when
such reduction is determined, payable within
90 days after presentation by the Lender of a statement in the amount and
setting forth in reasonable detail the Lender’s calculation thereof and the
assumptions upon which such calculation
was based (which statement shall be deemed true and correct absent manifest error) unless within such 90 day
period the Borrower shall have prepaid in full all Obligations to the Lender,
in which event no amount shall be payable to the Lender under this Section. In
determining such amount, the Lender may use any reasonable averaging and
attribution methods.

 

2.12. Taxes.

 

(a) All payments by the
Borrower of principal of, and interest on, LIBOR Rate Loans and all other
amounts payable hereunder shall be made free and clear of and without deduction
for any present or future income, excise, stamp or franchise taxes and other
taxes, fees, duties, withholdings or other charges of any nature whatsoever
imposed by any taxing authority, but excluding franchise taxes and taxes
imposed on or measured by a Lender’s net income or receipts (such non-excluded
items being called “Taxes”).  In the
event that any withholding or deduction from any payment to be made by the
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrower will (i) pay
directly to the relevant authority the full amount required to be so withheld
or deducted; (ii) promptly forward to the Lender an official receipt or
other documentation satisfactory to the Lender evidencing such payment to such
authority; and (iii)  pay to the Lender such additional amount or amounts
as is necessary to ensure that the net amount actually received by the Lender
will equal the full amount the Lender would have received had no such
withholding or deduction been required. Moreover, if any Taxes are directly
asserted against the Lender with respect to any payment received by the Lender
hereunder, the Lender may pay such Taxes and the Borrower will promptly pay
such additional amount (including any penalties, interest or expenses) as is necessary
in order that the net amount received by the Lender after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
the Lender would have received had not such Taxes been asserted.

 

(b) If the Borrower fails to pay any Taxes when
due to the appropriate taxing authority or fails to remit to the Lenders the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Lenders for any incremental Taxes, interest or penalties that may
become payable by the Lenders as a result of any such failure.

 

23

 

SECTION 2A

LETTERS OF CREDIT

 

Subject
to the terms and conditions of this Credit Agreement, the Issuing Lender shall,
in its own name, on behalf of the Lenders, issue such Letters of Credit for the
account of Borrower, as the Borrower may from time to time request.  The Borrower shall not request any Letter of
Credit (and the Issuing Lender shall not be obligated to issue any Letter of
Credit) if, after giving effect thereto, (i) the issued and outstanding
Letters of Credit would exceed the Letter of Credit Sublimit or the applicable
Lender’s Letter of Credit Sublimit, or (B) the sum of the issued and
outstanding Revolving Credit Loans and Letters of Credit would exceed the
Revolving Credit Commitment or the applicable Lender’s Applicable Percentage of
the Revolving Credit Commitment.  The
issuance of each Letter of Credit shall confer upon each Lender the benefits
and liabilities of a participation consisting of an undivided pro rata interest
in the Letter of Credit to the extent of such Lender’s share of the Revolving
Credit Commitment.  Issuance fees shall
be shared among the Lenders.  Customary
administrative costs and fees shall be for the account of the Issuing Lender as
Letter of Credit issuer.

 

2A.1 Issuance.

 

(a) Upon the terms and subject to the conditions hereof, the
Issuing Lender, in reliance upon the representations and warranties of the
Borrower contained herein, agrees to issue
letters of credit (the “Letters of Credit”) prior to the Revolving Credit
Maturity Date for the account of the Borrower in such form as may be requested
from time to time by the
Borrower and agreed to by the Lenders, provided that (i) the Maximum
Drawing Amount of all  Letters of Credit
shall not at any time exceed the Letter of Credit Sublimit or the applicable
Issuing Lender’s Letter of Credit Sublimit (after giving effect to all
requested  Letters of Credit), (ii) and the sum of
the outstanding amount of  Revolving
Credit Loans and the Maximum Drawing Amount of all Letters of Credit shall not at any time exceed the lesser of: (1) the
Revolving Credit Commitment and (2) the Borrowing Base, and (iii) that
any Lender’s Applicable Percentage of Revolving Credit Outstandings does not
exceed such Lender’s Applicable Percentage of the Revolving Credit Commitment;
provided, further that no Letter of Credit shall have an expiration date later than the Revolving Credit Maturity
Date.

 

(b)   Prior to the date of this Credit
Agreement,  RBS has issued for the account of the
Borrower  a standby Letter of Credit to
2000 Westborough Office Park LLC in the amount of $346,036.27 (the “Existing
L/C”), which shall be deemed to have been advanced under the Revolving Credit
Commitment established by this Credit Agreement and which shall be deemed to
have been advanced against RBS’s Letter of Credit Sublimit.  With respect to additional Letters of Credit
issued under this Credit Agreement, at least three (3) Business Days prior
to the proposed issuance date of any Letter of Credit, the Borrower shall
deliver to the Issuing Lender (i) a Letter of Credit Application setting
forth the Maximum Drawing Amount of all Letters of Credit (including the
requested Letter of Credit, but excluding the Lease Letter of Credit), the
requested language of the requested Letter of Credit (which shall be reasonably
acceptable to the Issuing Lender) and such other information as the Issuing
Lender shall require, and (ii) if the Letter of Credit is to be secured by
cash collateral, a designation of cash collateral under the Letter of Credit
Pledge Agreement equal to 100.0% of the Maximum Drawing Amount of the 

 

24

 

requested Letter of Credit. Each request for the issuance of a Letter
of Credit hereunder shall constitute a representation and warranty by the
Borrower that the conditions set forth in Sections 3.1 and 3.2, as applicable,
have been satisfied as of the date of such request.

 

2A.2  Reimbursement Obligation
of the Borrower. In order to induce the Lenders to issue, extend and renew
each Letter of Credit, the Borrower hereby agrees to reimburse or pay to the
Lenders, with respect to each Letter of Credit issued, extended or renewed by
the Lenders hereunder on each date that any draft presented under any Letter of
Credit is honored by the Lenders or the Lenders otherwise makes payment with
respect thereto, the Borrower shall pay (i) the amount paid by the Lenders
under or with respect to such Letter of Credit, and (ii) the amount of any
taxes, fees, charges or other costs and expenses whatsoever (including standard
documentation charges for the issuance of each Letter of Credit) incurred by
the Lenders in connection with any payment made by the Lenders under, or with
respect to, such Letter of Credit. Interest on any and all amounts remaining
unpaid by the Borrower under this Section 2A.2 at any time from the date
such amounts become due and payable (whether as stated in this Section 2A.2,
by acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Lenders on demand at a rate per annum equal
to 2.0% above the interest rate applicable to Revolving Credit Loans at the
time in the absence of an Event of Default.

 

2A.3 Letter of Credit Payments. 
If any draft shall be presented or other demand for payment shall be
made under any Letter of Credit, the Lenders shall notify the Borrower of the
date and amount of the draft presented or demand for payment and of the date and
time when it expects to pay such draft or honor such demand for payment. The
responsibility of the Lenders to the Borrower shall be only to determine that
the documents and drafts delivered under each Letter of Credit in connection
with such presentment shall be in conformity in all material respects with such
Letter of Credit. Any unpaid Reimbursement Obligations with respect to Letters
of Credit shall be deemed to be Revolving Credit Loans and shall be charged to
Borrower’s Loan account.

 

2A.4 Obligations Absolute.

 

(a) The Borrower’s Reimbursement Obligations shall be absolute and
unconditional under any and all circumstances and irrespective of the
occurrence of any Default or Event of Default or any condition precedent
whatsoever or any set-off; counterclaim or defense to payment which the
Borrower may have or have had against the Lenders or any beneficiary of a
Letter of Credit. The Borrower further agrees that the Lenders shall not be
responsible for, and the Borrower’s Reimbursement Obligations shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even if such documents should in fact prove to be in
any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower, against the beneficiary of
any Letter of Credit or any such transferee.

 

(b) The Lenders shall not be liable for any error, omission,
interruption or delay in 

 

25

 

transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees that
any action taken or omitted by the
Lenders under or in connection with each Letter of Credit and the related
drafts and documents, if done in good faith, shall be binding upon the Borrower
and shall not result in any liability on the part of the Lenders to the
Borrower.

 

2A.5 Reliance by the Lenders. To the extent
not inconsistent with Section 2A.4, the Lenders shall be entitled to rely
on and shall be fully protected in relying upon, any Letter of Credit, draft,
writing, resolution, notice, consent, certificate, affidavit, letter,
electronic facsimile transmission, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Lenders.

 

SECTION 2B

GUARANTY
OF FX TRANSACTIONS OF SUBSIDIARIES

 

2B.1  Guaranty of FX Transactions. Borrower
hereby absolutely and unconditionally guarantees, as a guaranty of payment and
performance and not merely as a guaranty of collection, prompt payment when
due, whether at stated maturity, by required prepayment, upon acceleration,
demand or otherwise, and at all times thereafter, of any and all obligations
and liabilities of any nature whatsoever arising in connection with the FX
Transactions payable by each Subsidiary of Borrower, it successors and assigns,
to the Lenders and/or their respective Affiliates (the “Guaranteed Obligations”),
regardless of how evidenced or documented, whether now existing or hereafter
created, originally contracted with a Lender and/or one of its respective
Affiliates or with any other Person, secured or unsecured, direct or indirect,
absolute or contingent, matured or unmatured.

 

2B.2  Waivers.  With respect to the Guaranteed Obligations,
Borrower waives (a) acceptance of the guaranty of the Guaranteed
Obligations created hereby and proof of reliance by the Agent and the Lenders
hereon in creating the Guaranteed Obligations; (b) presentment, protest,
demand for payment and notice of dishonor; (c) notice of any other nature
whatsoever; (d) any requirement that Agent or any Lender take any action
whatsoever (including demand for payment and legal action) with respect to any
other Person or any other guarantor; and (e) all legal and equitable
defenses which may be available to a guarantor or surety.

 

SECTION III

CONDITIONS OF LOANS AND LETTERS OF CREDIT

 

3.1.                              Conditions
Precedent to Initial Loans. The obligations of each
Lender to make the initial Loans and of the Issuing Lender to issue the initial
Letter of Credit is subject to the satisfaction of the following conditions
precedent on or prior to the Closing Date:

 

(a) The Lenders shall have received the following agreements,
documents, certificates and opinions in form and substance satisfactory to the
Lenders and duly executed and delivered by the parties thereto:

 

26

 

(i) This Credit Agreement;

 

(ii) The Notes, substantially in the form of Exhibit A-1
and Exhibit A-2 hereto;

 

(iii) The Security Documents;

 

(iv) A UCC-l Financing
Statement naming the Agent as agent for the Lenders covering the Collateral;

 

(v) UCC-3 Termination Statements to terminate Encumbrances (other
than Permitted Encumbrances) of Persons other than the Lenders of record
against the Collateral;

 

(vi)  Certificates of insurance or insurance binders evidencing
compliance with Section 5.3 hereof and the applicable provisions of the
Security Documents;

 

(vii) A certificate of the
Secretary or an Assistant Secretary of the Borrower with respect to resolutions
of its Board of Directors or other authorized Committee thereof, authorizing
the execution and delivery of the Loan Documents and identifying the officer(s) authorized
to execute, deliver and take all other actions required under this Credit
Agreement, and providing specimen signatures of such officer(s);

 

(viii) The Certificate
of Incorporation of the Borrower and all amendments and supplements thereto, as
flied in the office of the Secretary of State of its jurisdiction of formation,
certified by said Secretary of State as being a true and correct copy thereof;

 

(ix) The By-laws of the Borrower
and all amendments and supplements thereto, certified by the Secretary or an
Assistant Secretary of the Borrower as being a true and correct copy thereof;

 

(x) A certificate of the
Secretary of State of the Borrower’s jurisdiction of incorporation as to legal
existence and good standing of the Borrower in such state;

 

(xi) A certificate of the Secretaries of State of each state in which
the Borrower is doing business as to the due qualification and good standing of
the Borrower as a foreign, corporation in such states;

 

(xii) An opinion addressed to the Lenders from Goodwin, Procter, LLP,
counsel to the Borrower;

 

(xiii) A certificate of the chief financial officer of the Borrower as
to the solvency of the Borrower, the accuracy of the Borrower’s representations
and warranties and such other matters as the Lenders may request;

 

(xiv) A report in substantially the form of Exhibit D
hereto signed on behalf of the Borrower by its chief financial officer with
respect to the financial statements required to be 

 

27

 

delivered pursuant to Section 4.6; and

 

(xv) Such other documents, instruments, opinions and certificates, and
completion of such other matters, as the Lenders may reasonably deem necessary or appropriate.

 

(b) No litigation, arbitration, proceeding or investigation shall
be pending or threatened in writing which questions the validity or legality of
the transactions contemplated by any Loan Document or seeks a restraining
order, injunction or damages in connection therewith, or which, in the judgment
of the Lenders, might adversely affect the transactions contemplated hereby.

 

(c) All necessary filings and recordings against the Collateral
shall have been completed and the Lenders’ liens on the Collateral shall have
been perfected, as contemplated by the Security Documents.

 

(d) The Borrower shall have paid to the Lenders all fees to be
paid hereunder on or prior to
the Closing Date.

 

3.2.                              Conditions
Precedent to all Loans and Letters of Credit. The obligation of the
Lenders to make any Loan or to issue any Letter of Credit is further subject to
the following conditions:

 

(a) Receipt by the Agent of a Notice of Borrowing with respect to any
Revolving Credit Loan or the Letter of Credit Application and Agreement with
respect to any Letter of Credit;

 

(b) The Borrower shall have satisfied the conditions set forth in
Sections 2.1 and 2A.l hereof;

 

(c) The outstanding Loans and Letters of Credit do not and, after giving effect to any requested Loan or
Letter of Credit, will not exceed the limitations set forth in Sections 2.1 and
2A.1(a) hereof;

 

(d) The representations and
warranties contained in Section IV shall be true and accurate in all material
respects on and as of the date of such
Notice of Borrowing or Letter of Credit Application and on the effective date of the making of
each Loan or issuance of each Letter
of Credit as though made at and as of each such date (except to the extent that
such representations and warranties expressly relate to an earlier date);

 

(e) No Default or Event of Default shall
have occurred and be continuing at the
time of and immediately after
the making of such requested Loan or the issuance of such requested Letter of
Credit;

 

(f) The resolutions referred to in Section 3.1 shall remain in
full force and effect; and

 

(g) No change shall have occurred in any law or regulation or
interpretation thereof that, in the reasonable opinion of counsel for
the Lenders, would make it illegal or
against the policy of any governmental agency or authority for the
Lenders to make Revolving Credit Loans 

 

28

 

hereunder or to issue Letters of Credit hereunder (as the case may be).

 

The making of each Loan and the issuance of each Letter of Credit shall
be deemed to be a representation and warranty by the Borrower on the date of
the making of such Loan or the issuance of such Letter of Credit as to the
accuracy of the facts referred to in subsections (c), (d) and (e) of
this Section 3.2 and of the satisfaction of all of the conditions set
forth in this Section 3.2.

 

SECTION IV

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Lenders to enter into this Credit Agreement and
to make Loans and the Issuing Lender to issue Letters of Credit hereunder, the
Borrower represents and warrants to the Lenders that except as otherwise
disclosed in Borrower’s audited financial statements and/ or in Borrower’s 10-K
reporting for the fiscal year ended March 31, 2009, or as set forth on Exhibit C
attached hereto:

 

4.1.                              Organization;
Qualification; Business.

 

(a) Each of the Borrower and its US Subsidiaries (i) is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of formation, (ii) has
all requisite power to own its property and conduct its business as now
conducted and as presently contemplated and (iii) is duly qualified and in
good standing as a foreign corporation and is duly authorized to do business
in  each jurisdiction (all of which are
listed on Exhibit C attached hereto) where the nature of its
properties or business requires such qualification, except where the failure to
be so qualified would not have a material adverse effect on the business,
financial condition, assets or properties of the Borrower or of the Borrower
and its Subsidiaries taken as a whole.

 

(b) Since the date of the Audited Financial Statement, the
Borrower has continued to engage in substantially the same business as that in
which it was then engaged and is engaged in no unrelated business.

 

4.2.                              Corporate
Authority; No Conflicts. The execution, delivery and performance of
the Loan Documents and the transactions contemplated thereby are within the
power and authority of the Borrower and have been authorized by all necessary
corporate proceedings, and do not and will not (a) contravene any
provision of the Certificate of Incorporation or By-Laws of the Borrower or any
law, rule or regulation applicable to the Borrower, (b) contravene
any provision of, or constitute an event of default or event that, but for the
requirement that time elapse or notice be given, or both, would constitute an
event of default under, any other agreement, instrument, order or undertaking
binding on the Borrower, or (c) result in or require the imposition of any
Encumbrance on any of the properties, assets or rights of the Borrower, except
in favor of the Lenders.

 

4.3.                              Valid
Obligations. The Loan Documents and all of their respective
terms and provisions are the legal, valid and binding obligations of the
Borrower, enforceable in 

 

29

 

accordance with their respective terms except as limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors’ rights generally, and except as the remedy of specific
performance or of injunctive relief is subject to the discretion of the court
before which any proceeding therefore may be brought. The Security Documents
have effectively created in favor of the Lenders legal, valid and enforceable security
interests in the Collateral and such security interests are fully perfected
first priority security interests.

 

4.4.                              Consents or
Approvals. The execution, delivery and performance of the Loan Documents and the transactions contemplated herein do not
require any approval or consent
of, or filing or registration
with, any governmental or other agency or authority, or any other Person (including without limitation
any lessor or lessee of Borrower’s properties), except under or as contemplated
by the Security Documents.

 

4.5.                              Title to
Properties; Absence of Encumbrances. Each of the Borrower and
its Subsidiaries has good and marketable title to all of the properties, assets
and rights of every name and
nature now purported to be owned by it, and good and valid leasehold title to
all of the properties, assets
and rights of every name and nature now purported to be leased by it,
including, without limitation, such properties, assets and rights as are
reflected in the Audited Financial Statements (except such properties, assets or rights as have been disposed of in the ordinary course of business
since the date thereof), free from all Encumbrances except Permitted
Encumbrances, and free from all
defects of title that might materially adversely affect such properties, assets
or rights, or Borrower’s or its Subsidiaries’ operations conducted with respect
thereto, taken as a whole. All material leases under which Borrower or its Subsidiaries is the lessor or
lessee are in full force and
effect and there are no existing defaults or events that with the giving of notice or passage of time or both
could ripen into defaults, by the Borrower or, to the Borrower’s knowledge, the lessor thereunder. No third parties possess any rights with
respect to any of Borrower’s or its Subsidiaries owned or, to the Borrower’s knowledge, leased properties, the exercise
of which would have a material adverse effect on the Borrower or its
Subsidiaries or their respective operations, taken as a whole. All real
property owned or leased by the
Borrower (other than short-term residential rentals) is described in Exhibit C
hereto.

 

4.6.                              Financial
Statements; Indebtedness,

 

(a) The Borrower has
furnished to the Lenders its audited consolidated financial statements for the
years ended March 31, 2009 (the “Audited 
Financial Statement”), March 31, 2008 and March 31, 2007.  
All such financial statements are prepared in accordance with GAAP
applied on a consistent basis throughout the periods specified and present fairly the financial position of the
Borrower and its Subsidiaries as of such dates and the results of the
operations of the Borrower and its Subsidiaries for such periods in all
material respects.

 

(b) At the date hereof, the Borrower and its Subsidiaries have no
Indebtedness or other material
liabilities, debts or obligations,
whether accrued, absolute, contingent or otherwise, and whether due or to
become due, including, but not limited to, liabilities or obligations on
account of taxes or other governmental
charges, that are not set forth on the Audited 
Financial Statement, on Exhibit C
hereto or accrued in the ordinary course of business consistent with past 

 

30

 

practices since the date of the Audited Financial Statement.

 

4.7.                              Changes. Since the date
of the Audited Financial Statement, there have been no material changes in the
assets, liabilities, financial, condition, business or prospects of the
Borrower or any of its Subsidiaries (including as a result of any applicable
law or governmental regulation, ruling or policy).

 

4.8.                              Solvency. The Borrower
has and, after giving effect to the Loans, will have, assets (both tangible and
intangible) having a fair saleable value in excess of the amount required to
pay the probable liability on its then-existing debts (whether matured or
unmatured, liquidated or unliquidated, fixed or contingent); the Borrower has
and will have access to adequate capital for the conduct of its business and
the discharge of its debts incurred in connection therewith as such debts
mature; the Borrower was not insolvent immediately prior to the making of the
Loans and immediately after giving effect thereto, the Borrower will not be
insolvent.

 

4.9.                              Defaults. As of the date
of this Credit Agreement, no Default exists.

 

4.10.                        Taxes.  The Borrower and its Subsidiaries have filed
all federal, state and other tax returns required to be filed, and all taxes,
assessments and other governmental charges due from any of them have been fully
paid, except for such taxes, assessments or charges that are being contested in
good faith by appropriate proceedings and with respect to which (a) adequate
reserves have been established and are being maintained in accordance with GAAP
and (b) no lien has been filed to secure such taxes, assessments or
charges. All such contests at the date hereof are described on Exhibit C
hereto. The Borrower and its Subsidiaries have not executed any waiver that
would have the effect of extending the applicable statute of limitations in
respect of tax liabilities. The federal and state income tax returns of the
Borrower and its Subsidiaries have not been audited or, to the best of the
Borrower’s knowledge, otherwise examined by any federal or state taxing
authority. The Borrower and its Subsidiaries have established on their books
reserves adequate for the payment of all federal, state and other tax
liabilities.

 

4.11.                        Litigation. To the
Borrower’s knowledge, there is no litigation, arbitration, proceeding or
investigation pending, or, to the knowledge of the Borrower’s or any Subsidiary’s
officers, threatened, against the Borrower or any Subsidiary that, if adversely
determined, may reasonably be expected to result in a material judgment not
fully covered by insurance, may reasonably be expected to result in a
forfeiture of all or any substantial part of the property of the Borrower or
its Subsidiaries, or may reasonably be expected to have a material adverse
effect on the assets, business or prospects of the Borrower and its
Subsidiaries taken as a whole.

 

4.12.                        Subsidiaries. All the
Subsidiaries of the Borrower are listed on Exhibit C hereto. The
Borrower is the owner, free and clear of all Encumbrances, of all of the issued
and outstanding stock or other equity interest of each Subsidiary, except as
disclosed in Exhibit C. All shares of such stock or other equity
interest held by the Borrower have been validly issued and are fully paid and
non-assessable, and no rights to subscribe to any additional shares have been
granted, and no options,
warrants or similar rights are outstanding

 

4.13. Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is 

 

31

 

subject to regulation under the Investment Company Act of 1940, as
amended.

 

4.14.  Compliance. The Borrower
has all necessary permits, approvals, authorizations, consents, variances,
licenses, franchises, registrations and other rights and privileges (including
patents, trademarks, trade names and copyrights) to allow it to own and operate
its business and properties without any violation of laws, regulations,
authorizations and orders of public authorities (including without limitation
Environmental Laws) or the rights of others, except to the extent that any such
violation would not have a material adverse effect on the business, financial
condition or operation of the Borrower and its Subsidiaries taken as a whole.
The Borrower and each Subsidiary are duly authorized, qualified and licensed
under, and the Borrower, its Subsidiaries and all real properties owned or
leased by them are in compliance with, all applicable laws, regulations,
authorizations and orders of public authorities, including, without limitation,
Environmental Laws, except to the extent that any such failure to be so
authorized, qualified, licensed or in compliance would not have a material
adverse effect on the business, financial condition or operation of the
Borrower and its Subsidiaries taken as a whole. The Borrower and each
Subsidiary have performed all obligations required to be performed by it under, and is not in default
under or in violation of its Certificate of Incorporation or By-laws or any
other agreement, lease, mortgage, note, bond, indenture license or other
instrument or undertaking to which it is a party or by which any of it or any
of its properties are bound, except for violations none of which, either
individually or in the aggregate, would have any material adverse effect on the
business, condition (financial or otherwise) or assets of the Borrower and its Subsidiaries
taken as a whole.

 

4.15. ERISA. The Borrower and its ERISA Affiliates are in
compliance in all material respects with ERISA and the provisions of the Code
and the regulations and published interpretations thereunder applicable to the
Plans. No ERISA Event has
occurred or is reasonably expected to occur, including by reason of the
consummation of the transactions contemplated by this Credit Agreement that
when taken together with all other such ERISA Events, could reasonably be
expected to result in material liability to the Borrower or any of its ERISA Affiliates. None of the Plans
had any “unfunded benefit liabilities” (within the meaning of Section 4001(a)(18)
of ERISA) as of the last annual valuation dates applicable thereto.

 

4.16. Environmental Matters.

 

(a) The Borrower and each of its Subsidiaries are in compliance
with the terms and conditions of all permits, licenses and authorizations
required under any Environmental Law, and are also in compliance with all
applicable orders, decrees, judgments and injunctions, issued, entered,
promulgated or approved under any Environmental Law, except to the extent
failure to comply would not have a material adverse effect on the business,
financial condition or operations of the Borrower and it Subsidiaries.

 

(b) No written notice, notification, demand, request for
information, citation, summons or order has been issued and is outstanding, no
complaint has been filed, no penalty has been assessed and no investigation or
review is pending or, to the best of the Borrower’s knowledge, threatened by
any governmental or other entity (i) with respect to any alleged failure
by the Borrower or any of its Subsidiaries to have any permit, license or
authorization required in 

 

32

 

connection with the conduct of its business or to comply with any
Environmental Laws, except to the extent such failure would not have a material
adverse effect on the business, financial condition or operations of the
Borrower and its Subsidiaries or (ii) regarding the presence of any
Hazardous Material at, on or under any property now or previously owned, or, to the Borrower’s knowledge,
leased or used, by the Borrower or any
of its Subsidiaries or any other location
to which Hazardous Materials generated or used by the Borrower or any of its Subsidiaries from such
property had been transported or
which they have been disposed of.

 

(c) No material oral or written
notification of a release of a
Hazardous Material has been filed by or
on behalf of the Borrower
or any of its Subsidiaries and no property now or previously owned, or, to the Borrower’s knowledge,
leased or used, by the Borrower or any of
its Subsidiaries is listed or, to the best of the Borrower’s knowledge,
proposed for listing on the National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, or on any similar state list of sites
requiring investigation or clean-up.

 

(d) There are no Encumbrances arising under
or pursuant to any Environmental
Law on any of the real property or properties
owned, or, to the Borrower’s knowledge, leased or used, by the Borrower or
any of its Subsidiaries
and no governmental actions have been taken or, to the best of the
Borrower’s knowledge, are in process
which could subject any of such properties to such liens or Encumbrances
or, as a result of which the Borrower or any of its Subsidiaries would be
required to place any notice or restriction relating to the presence of Hazardous
Materials at any property owned
by it in any deed to such
property.

 

(e) Neither the Borrower nor any of its Subsidiaries nor, to the best
knowledge of the Borrower, any previous
owner, tenant, occupant or user
of any property owned by the
Borrower or any of its Subsidiaries has (i) engaged in or permitted any operations or activities upon or any use or occupancy of any owned, leased or used property, or any portion thereof, for the handling, manufacture, treatment,
storage, use, generation, release, discharge, refining, dumping or disposal of any
Hazardous Materials on, under, in or
about such property, except to the extent commonly used in day-to-day operations of such property and in such case only in compliance in all material respects with all Environmental Laws, or (ii) transported any Hazardous
Materials to, from or across such property except to the extent commonly
used in day-to-day operations of such property and, in such case, in compliance in all material respects with, all Environmental Laws;
nor to the best knowledge of the
Borrower have any Hazardous Materials migrated from other properties upon, about or beneath such property, nor, to the
best knowledge of the Borrower, are any Hazardous Materials presently constructed, deposited,
stored or otherwise located on, under,
in or about such property except to the extent commonly used in day-to-day operations of such property and, in such case, in compliance in all material respects with all Environmental Laws.

 

4.17. Restrictions on the Borrower.
The Borrower is not party to or
bound by any contract, agreement
or instrument, nor subject to any charter
or other corporate restriction which
will, under current or
foreseeable conditions, materially and adversely affect the
business, property, assets,
operations or conditions, financial or otherwise of the Borrower or any
of its Subsidiaries.

 

33

 

4.18. Labor Relations. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower, threatened, before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Borrower or
any of its Subsidiaries or, to the best knowledge of the Borrower, threatened,
except for such complaints, grievances and arbitration proceedings which, if
adversely decided, would not have a material and adverse effect on the
condition (financial or otherwise), properties, business or results of
operations of the Borrower or any of its Subsidiaries, (ii) no strike,
labor dispute, slowdown or stoppage pending against the Borrower or any of
its Subsidiaries or, to the best knowledge of the Borrower, threatened against
the Borrower or any of its Subsidiaries, except for any such labor action as
would not have a material and adverse effect on the condition (financial or
otherwise) properties, business or results of operations of the Borrower or any
of its Subsidiaries and (iii) to the best knowledge of the Borrower, no
union representation question exists with respect to the employees of the
Borrower or any of its Subsidiaries and, to the best knowledge of the Borrower,
no union organizing activities are taking place, except for any such question
or activities as would not have a material and adverse effect on the condition
(financial or otherwise), properties, business or results of operations of the
Borrower or any of its Subsidiaries.

 

4.19. Trade Relations. There exists
no actual or, to the best knowledge of the Borrower, termination, cancellation
or limitation of, or any material modification or change in, the business
relationship between the Borrower or any of its Subsidiaries and any customer
or any group of customers whose purchases, individually or in the aggregate;
are material to the business of the Borrower and its Subsidiaries, taken as a whole,
or with any material vendor, except in each case, where the same could not
reasonably be expected to have a material adverse effect on the business,
financial condition, assets or properties of the Borrower and its Subsidiaries,
taken as a whole.

 

4.20. Margin Rules. The Borrower does not own or have any
present intention of purchasing or carrying, and no portion of any Loan shall
be used for purchasing or carrying, any “margin security” or “margin stock” as
such terms are used in Regulations T, U or X of the Board of Governors of the
Federal Reserve System.

 

4.21. Disclosure. No representation or warranty made by the
Borrower in any Loan Document and no document or information furnished to the
Lenders by or on behalf of or at the request of the Borrower in connection with
any of the transactions contemplated by the Loan Documents contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements contained therein not misleading in light of the circumstances
in which they are made.

 

4.22  Anti-Terrorism Laws. Neither Borrower
nor, to the knowledge of the Borrower, any owner of Borrower is in violation of
any laws relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, Public Law 107-56.

 

34

 

4.23 OFAC.   Neither Borrower nor, to the knowledge of
Borrower, any subsidiary or affiliate or other agent of Borrower acting or
benefiting in any capacity in connection with the transactions contemplated hereunder,
is any of the following: (i) a person that is listed in the annex to, or
is otherwise subject to the provisions of, the Executive Order; (ii) a
person owned or controlled by, or acting for or on behalf of, any person that
is listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order; (iii) a person with which any Lender is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) a
person that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order; or (v) a person that is named as a “specially
designated national and blocked person” on the most current list published by
the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”) at its official website or any
replacement website or other replacement official publication of such list.

 

4.24 Money Laundering.  Neither Borrower nor, to the knowledge of the
Borrower, any owner of Borrower, or agent of any of its owners, subsidiaries or
affiliates acting in any capacity in connection with the transactions
contemplated hereunder (i) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of
any person described in Section 4.23 above, (ii) deals in, or
otherwise engages in any transaction relating to, any property or interest in
property blocked pursuant to the Executive Order, or (iii) engages in or
conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.

 

4.25. Material Agreements.  Except as disclosed on Schedule 4.25
hereto, the Borrower and its Subsidiaries are not parties to any material
agreements not disclosed in its SEC filings.

 

SECTION V

AFFIRMATIVE COVENANTS

 

The Borrower covenants that so long as any Loan, Letter of Credit or
other Obligation remains outstanding or the Lenders have any obligation to lend
or to issue any Letter of Credit hereunder:

 

5.1. Financial Statements. The Borrower
shall furnish to the Lenders:

 

(a) As soon as available to the Borrower, but in any event within
90 days after the end of each fiscal year, (i) the Borrower’s consolidated
balance sheets as of the end of  such
fiscal year and related
consolidated and consolidating statements of income, retained earnings and cash
flow for such year, prepared in accordance with GAAP and audited and certified
without qualification by the Borrower’s Accountants in the case of such
consolidated statements, (ii) consolidating balance sheets as of the end
of such fiscal year and related
consolidating statements of income, retained earnings and cash flow for such
year, prepared by Borrower and certified by the chief financial officer of the
Borrower; (iii) a copy of the Borrower’s Accountant’s management report,
and (iv) a certification by the chief financial officer of the Borrower
that no Distributions have been made by the Borrower to any of its Subsidiaries
other than Cash Flow Exclusions;

 

(b) As soon as available to the Borrower, but in any event within
45 days after the end of each fiscal quarter, (i) the Borrower’s
consolidated and consolidating balance sheets as of the 

 

35

 

end of and related consolidated and consolidating statements of income,
retained earnings and cash flow for, the fiscal quarter then ended and the
portion of the year then ended prepared in accordance with GAAP and certified
by the chief financial officer of the Borrower, except for lack of footnotes
and subject to normal, recurring year-end adjustments that shall not in the
aggregate be material in amount, and (ii) a certification by the chief
financial officer of the Borrower that no Distributions have been made by the
Borrower to any of its Subsidiaries other than Cash Flow Exclusions;

 

(c) Concurrently with the delivery of each financial statement
pursuant to subsections (a) and (b) of this Section 5.1, a
covenant compliance certificate in substantially the form of Exhibit D
hereto signed on behalf of the Borrower by its chief financial officer;

 

(d) As soon as available to the Borrower, but in any event not
later than 30 days before the beginning of each fiscal year, the Borrower’s
projections for such fiscal year, prepared on a quarterly  basis and including consolidated balance
sheets and statements of income, retained earnings and cash flows;

 

(e) As soon as available to the Borrower, but in any event within
45 days after the end of each fiscal quarter, a schedule of all outstanding FX
Transactions of the Borrower and its Subsidiaries including the applicable
currency, tenor and notional amount of each FX Transaction and such other
information with respect thereto as the Lenders may reasonably request;

 

(f) With each Notice of Borrowing, within twenty (20) days of the
end of each month that there are Revolving Credit Outstandings (other than the
Existing L/C) and within thirty (30) days of each quarter end when there are no
Revolving Credit Outstandings, a Borrowing Base Certificate in the form of Exhibit E
hereto and an accounts receivable aging in form acceptable to the Lenders; and

 

(g) From time to time, such other financial data and information
about the Borrower or its Subsidiaries as the Lenders may reasonably request.

 

5.2. Conduct of Business.  The Borrower and each of its Subsidiaries
shall:

 

(a) Duly observe and comply in all material respects with all
laws, regulations, decrees, orders, judgments and valid requirements of any
governmental authorities applicable to its corporate existence, rights and
franchises, to the conduct of its business and to its property and assets
(including without limitation all Environmental Laws and ERISA), and shall
maintain and keep in full force and effect and comply in all material respects
with all licenses and permits necessary to the proper conduct of its business,
except where the failure to comply in any instance would not have a material
adverse effect on the business, financial condition or operations of the
Borrower and its Subsidiaries taken as a whole; and

 

(b) Maintain their existence (except to the extent permitted
pursuant to Section 7.4) and remain or engage substantially in the
Borrower’s Business and in no unrelated business.

 

36

 

5.3                                 Maintenance and
Insurance.

 

(a) The Borrower and each of its Subsidiaries shall maintain their
properties in good repair, working order and condition, ordinary wear and tear
and damage by fire or other casualty excepted, as required for the normal
conduct of their business.

 

(b) The Borrower and each of its Subsidiaries shall at all times
maintain liability and casualty insurance on its properties 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 Lenders.  RBS, as agent for the Lenders shall be named
as loss payee only with respect to any insurance policy in Borrower’s name,
additional insured and/or mortgagee under such insurance as the Lenders shall
require from time to time, and the Borrower shall provide to the Lenders loss
payable endorsements in form and substance reasonably satisfactory to the
Lenders. In addition, the Lenders 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 Lenders may, at their option,
provide such insurance and charge the amount thereof to the Borrower as a
Revolving Credit Loan. The Borrower
shall furnish to the Lenders certificates or other evidence satisfactory to the
Lenders of compliance with the foregoing insurance provisions. The Lenders
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 law suits, and the
Borrower hereby expressly assumes full responsibility therefore and liability,
if any, thereunder.

 

5.4    Taxes. The Borrower shall pay or cause to
be paid all taxes, assessments or governmental charges on or against it or any
of its Subsidiaries or its or their properties on or prior to the time when
they become due; except for any tax, assessment or charge that is being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been established and are being maintained in accordance
with GAAP if no Encumbrance shall have been flied to secure such tax, assessment
or charge.

 

5.5. Inspection. On the request
of RBS from time to time, the Borrower shall permit the Lenders and their
designees, at reasonable times and intervals
of time, and upon reasonable written notice,
to (i) visit and inspect the United States properties of the Borrower and
its Subsidiaries, (ii) examine and make copies of and take abstracts from
the United States books and records of
the Borrower and its Subsidiaries, (iii) verify Accounts
Receivables using its customary practices and procedures, and (iv) discuss the affairs,
finances, and accounts of the Borrower and
its Subsidiaries with their appropriate officers, employees and
independent accountants, all at the expense of the Borrower.  In the absence of a continuing Event of
Default, any such examination shall be at the Lender’s expense, and during the
continuance of an Event of Default such examination shall be at the Borrower’s
expense.

 

5.6. Maintenance of Books and Records.
The Borrower shall keep adequate books and records of account, in which true
and complete entries will be made reflecting all of its and its 

 

37

 

Subsidiaries’ business and financial
transactions in accordance with
GAAP and applicable law.

 

5.7. Further Assurances.  At any
time and from time to time the Borrower shall execute and deliver such further
documents and take such further action
as may reasonably be requested by the Lenders to effect the purposes of
the Loan Documents.

 

5.8. Notification Requirements. The Borrower shall furnish to the Lenders:

 

(a) Promptly upon becoming aware of the existence of any condition
or event that constitutes a Default, written notice thereof specifying the
nature and duration, thereof and the action being or proposed to be taken with
respect thereto;

 

(b) Promptly upon becoming aware of any litigation or of any
investigative proceedings by a governmental agency or authority commenced or
threatened against the Borrower or any of its Subsidiaries of which they have
notice, the outcome of which would or might have a materially adverse effect on
the assets, business or prospects of the Borrower alone or the Borrower and its
Subsidiaries on a consolidated basis, written notice thereof and the action
being or proposed to be taken with respect thereto; and

 

(c) Promptly after any occurrence or after becoming aware of any
condition affecting the Borrower or any Subsidiary which might constitute a
material adverse change in or which might have a material adverse effect on the
business, properties or condition (financial or otherwise) of the Borrower
alone or the Borrower and its Subsidiaries, taken as a whole, written notice
thereof.

 

5.9. ERISA Compliance and Reports.

 

(a) Each Plan shall comply in all material respects with ERISA and
the Code, except to the extent failure to comply in any instance would not have
a material adverse effect on the business, financial condition or operations of
the Borrower and its Subsidiaries taken as a whole.

 

(b) With respect to any Plan, the Borrower shall, or shall cause
its ERISA Affiliates to furnish to the Lenders promptly as soon as possible and
in any event within 10 days after the Borrower or any of its ERISA Affiliates
knows that any ERISA Event has occurred or expected to occur, a statement of
the chief financial officer of the Borrower describing such ERISA Event,
including copies of any notice concerning such ERISA Event received from the
PBGC, a plan administrator, or from a Multiemployer Plan sponsor, and the
action, if any, the Borrower or such ERISA Affiliate proposes to take with
respect thereto promptly after the adoption of any Pension Plan, the Borrower
shall notify the Lenders of such adoption.

 

5.10. Environmental Compliance.

 

(a) The Borrower and its Subsidiaries will comply in all material
respects with all applicable Environmental Laws in all jurisdictions in which
any of them operates now or in the future, and the Borrower and its
Subsidiaries will comply in all material respects with all such Environmental
Laws that may in the future be applicable to the Borrower’s or any Subsidiary’s
business, properties and assets.

 

38

 

(b) If the Borrower or any Subsidiary shall (i) receive
notice that any material violation of any Environmental Law may have been
committed or is about to be committed by the Borrower or any Subsidiary, (ii) receive
notice that any administrative or judicial complaint or order has been filed or
is about to be filed against the Borrower or any Subsidiary alleging a material
violation of any Environmental Law requiring the Borrower or any Subsidiary to
take any action in connection with the release of Hazardous Materials into the
environment, (iii) receive any notice from a federal, state or local
government agency or private party alleging that the Borrower or any Subsidiary
may be liable or responsible for any material amount of costs associated with a
response to or cleanup of a release of Hazardous Materials into the environment
or any damages caused thereby, (iv) become aware of any investigative
action or proceedings by a governmental agency or authority commenced or
threatened against the Borrower or any of its Subsidiaries regarding any
potential violation of Environmental Laws or any spill, release, discharge or
disposal of any Hazardous Material or (v) notify any governmental agency
or authority regarding any potential violation of Environmental Laws or any
spill, release, discharge or disposal of any Hazardous Material by the Borrower
or any Subsidiary, the Borrower shall promptly notify the Lenders thereof
(together with a copy of any such notice) and of any action being or proposed
to be taken with respect thereto and thereafter shall continue to furnish to
the Lenders all further notices, demands, reports and other information
regarding the foregoing.

 

5.11. Operating
Accounts. The Borrower shall continue to use the Lenders as
its primary depository banks for the Borrower’s United States-based operating
accounts.

 

5.12 US Subsidiaries. 
Each US Subsidiary hereafter established by Borrower shall become a
party to this Credit Agreement by executing a joinder agreement and shall also
execute and deliver a security agreement in the same form as that executed by
the Borrower.

 

5.13 Cash Collateral.  In
the event that the Credit Agreement is terminated for any reason and there are
issued and outstanding Letters of Credit and/or open FX Transactions, the
Borrower shall pledge cash collateral to the Lenders in the amount of at least
100% of the face amount of such Letters of Credit to the Issuing Lenders and
100% of the FX Exposure to the applicable Lenders as a condition to the Lenders’
agreement to release any of the Security Documents.

 

SECTION VI

FINANCIAL COVENANTS

 

The Borrower covenants that so long as any Loan, Letter of Credit or
other Obligation remains outstanding, or the Lenders have any obligation to
make any Loan or issue any Letter of Credit hereunder:

 

6.1. Fixed Charge Coverage. For the trailing twelve month period
ending on each fiscal quarter end, the Borrower shall maintain, on a
consolidated basis, a ratio of its Cash Flow to its Fixed Charges of greater
than 1.25 to 1.0.

 

39

 

6.2. Funded Debt to EBITDA. At each fiscal quarter end the ratio
of the Borrower’s Funded Debt to its Adjusted EBITDA, on a consolidated basis,
shall be less than 1.0 to 1.0.

 

6.3. Modified US Quick Ratio. At each fiscal quarter end the
Borrower and its US Subsidiaries shall maintain a minimum Modified US Quick
Ratio of greater than 2.0 to 1.0.

 

SECTION VII

NEGATIVE COVENANTS

 

The Borrower covenants that so long as any Loan, Letter of Credit or
other Obligation remains outstanding or the Lenders have any obligation to make
any Loan or to issue any Letter of Credit hereunder, without the prior written
consent of the Lenders:

 

7.1. Indebtedness. Neither 
Borrower nor its Subsidiaries shall create, incur, assume, guarantee or
be or remain liable with respect to any Indebtedness other than Permitted
Indebtedness.

 

7.2. Intentionally Deleted.

 

7.3. Encumbrances. Neither the Borrower nor any US Subsidiary
shall create, incur, assume or suffer to exist any mortgage, pledge, security
interest, lien or other charge or encumbrance of any kind, including the lien
or retained security title of a conditional vendor, upon or with respect to any
of its property or assets, or assign or otherwise convey any right to receive
income, including the sale or discount of Accounts Receivable with or without
recourse, except for Permitted Encumbrances.

 

7.4. Merger: Purchase. Sale or Lease of Assets; Reorganization;
Liquidation.

 

(a) The Borrower and its Subsidiaries shall not: (i) acquire
the capital stock or other equity interests or all or substantially all of the assets of another Person,
whether or not involving a merger or consolidation with such other Person,
other than pursuant to a Permitted Acquisition, and providing that both
immediately before and after giving effect to such acquisition, no Default shall exist; (ii) merge or
consolidate into or with any other Person,
or commence a reorganization,
other than a merger of any
Subsidiary with and into the
Borrower, with the Borrower as the survivor
of such merger, or a merger or consolidation into or with another Person, or a reorganization, in each case, where
the holders of more than 50.0% of the ordinary
voting power for the election of a majority of the members of the board of directors of the Borrower
prior to such transaction retain such power after the transaction; or (iii) liquidate
or dissolve, except that any wholly-owned Subsidiary may liquidate or dissolve.

 

(b) Neither the Borrower nor its Subsidiaries shall sell, lease (as lessor) or otherwise dispose of any assets or properties in
excess of $10,000,000 in the aggregate, other
than sales of Qualified Investments
and inventory and obsolete or worn out equipment, in each case in the ordinary course of business and
consistent with past practices.

 

40

 

7.5. Subsidiaries. The Borrower shall not issue and shall not permit
any of its Subsidiaries to issue
any additional shares of its capital stock or other equity securities, any
options therefore or any securities convertible thereto, other than to the Borrower. Neither the Borrower nor any of its Subsidiaries shall
sell, transfer or otherwise dispose of any of the capital stock or other equity securities of a Subsidiary,
except to the Borrower or any of its wholly-owned subsidiaries. The Borrower
shall not permit any US Subsidiary to encumber any of its assets other than by
Permitted Encumbrances.

 

7.6.                              Restricted
Payments. The Borrower shall not pay, make, declare or
authorize any Restricted Payment other than: (i) compensation paid to
employees, officers and directors in the
ordinary course of business and
consistent with prudent business practices; (ii) dividends payable solely in common stock; (iii) dividends paid
by any Subsidiary to the Borrower;
(iv) redemptions of shares of
capital stock of the Borrower which are “restricted securities” (as
defined in Rule 144 promulgated under the Securities Act of 1933) in an amount not to
exceed 5.0% of the aggregate
total voting stock of the Borrower issued and outstanding on a fully diluted basis, and (v) shares
of capital stock of the Borrower withheld or redeemed by Borrower to settle any
applicable tax obligations of a grantee of shares of any equity award
(including without limitation thereof, any shares of restricted stock and any
stock appreciation rights) which arise in connection with the vesting, exercise
or other taxable event with respect to such awards.

 

7.7.                              Investments;
Purchases of Assets. Neither the Borrower nor its Subsidiaries shall  make
or maintain any Investments or
purchase or otherwise acquire any material
amount of assets other than: (i) Investments existing on the date hereof in Subsidiaries; (ii) Qualified
Investments; (iii) Capital Expenditures; (iv) normal trade credit extended in the ordinary course
of business and consistent with prudent business
practice; (v) advances to employees for business related expenses
to be incurred in the ordinary course of business and consistent with past
practices in an amount not to exceed
$500,000 in the aggregate outstanding at any one time, provided that advances to any single employee shall not exceed $50,000 in the aggregate; (vi) Investments
in any Subsidiary of the Borrower which is a Cash Flow Exclusion; and (vii) Loans to any Person
(including employees) not in the ordinary course of business not to exceed
$300,000 in the aggregate outstanding at any one time.

 

7.8.                              ERISA
Compliance. Neither the Borrower nor any of its ERISA Affiliates nor any Plan
shall (i) engage in any Prohibited Transaction which would have a material adverse effect
on the business, financial condition or operations of the Borrower and its
Subsidiaries taken as a whole, (ii) incur any “accumulated funding
deficiency” (within the meaning of Section 412(a) of
the Code and Section 302 of ERISA), whether or not waived, (iii) permit
to exist any material amount of “unfunded
benefit liabilities” (within the meaning of Section 4001.(a)(1 8) of
ERISA), (iv) terminate any Pension Plan in a manner which could result in
the imposition of a lien on any
property of the Borrower or any of its Subsidiaries, (v) fail to make any required contribution to any
Multiemployer Plan or (vi) completely
or partially withdraw from a Multiemployer Plan if such complete or partial
withdrawal will result in any material withdrawal liability under Title IV of
ERISA.

 

7.9.                              Transactions
with Affiliates. Except as otherwise provided herein, neither the
Borrower nor any of its Subsidiaries will directly or indirectly, enter into
any purchase, sale, 

 

41

 

lease or other transaction with any Subsidiary or Affiliate except (i) transactions
in the ordinary course of business on terms that are no less favorable to the
Borrower than those which might be obtained at the time in a comparable arm’s
length transaction with any Person who is
not an Affiliate or Subsidiary, including without limitation, any transfer
pricing, service fee or similar agreements between or among Borrower and its
Affiliates or Subsidiaries, (ii) employment contracts with senior
management of the Borrower entered into in the ordinary course of business and
consistent with prudent business practices and (iii) for the avoidance of doubt,
transactions relating to Restricted Payments permitted under Section 7.6.

 

7.10.                        Fiscal Year. The Borrower
and its Subsidiaries shall not change their March 31 fiscal year end without the prior written consent of the
Lenders.

 

SECTION VIII

DEFAULTS

 

8.1.                              Events of
Default. There shall be an Event of Default
hereunder if any of the
following events occurs:

 

(a) The Borrower or any Subsidiary shall fail to pay any interest,
principal or other amount due with respect to any Loan, any Reimbursement
Obligation or any amount owing by it with
respect to any Obligation when the same shall become due and payable, whether
at maturity or at any accelerated date of maturity or at any other date fixed for payment; or

 

(b) The Borrower or any Subsidiary shall fail to perform or comply with any term., covenant or agreement applicable to it
contained in Sections 5.1,5.2(b),
5.5, 5.6,
5.9, 5.11, 6 and 7 of this Credit Agreement; or

 

(c) The Borrower or any Subsidiary shall fail to perform or comply
with any term, covenant or agreement
applicable to it (other than as specified in subsections 8.1(a), (b) or (d) through
(k) hereof) contained in this Credit Agreement or any other Loan Document and such default shall continue for
ten (10) Business Days; or

 

(d) Any representation or warranty of the Borrower made in this
Credit Agreement or any other Loan Document or in any certificate, notice or
other writing delivered hereunder or thereunder shall prove to have been false
in any material respect upon the date when made or deemed to have been made; or

 

(e) The Borrower or any of its Subsidiaries shall fail to pay when
due any amount payable (i) under any Indebtedness exceeding $1,000,000 in
principal amount or (ii) under any agreement for the use a real or personal property requiring aggregate
payments in excess of $1,000,000 in any twelve month period, or fail to observe
or perform any term, covenant or agreement evidencing or securing such
Indebtedness or relating to such agreement
for the use of real or personal property; or

 

(f) The Borrower or any of its Subsidiaries shall (i) apply
for or consent to the appointment of or
the taking of possession by, a receiver, custodian, trustee, liquidator or similar 

 

42

 

official of itself or of all or a substantial part of its property, (ii) be
generally not paying its debts as such debts
become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a
voluntary case under the United States Bankruptcy Code (as now or hereafter in effect), (v) take any action or
commence any case or proceeding under any law relating to bankruptcy, insolvency, reorganization, winding-up
or composition or adjustment of debts,
or any other law providing for
the relief of debtors, (vi) fail to contest in a timely or appropriate
manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the United States Bankruptcy Code or other law, or (vii) take
any corporate action for the purpose of
effecting any of the foregoing; or

 

(g) A proceeding or case shall be commenced against the Borrower
or any of its Subsidiaries,
without the application or consent of such Borrower or such Subsidiary in any
court of competent jurisdiction, seeking
(i) the liquidation, reorganization, dissolution, winding up, or
composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of it or of all or any substantial
part of its assets, or (iii) similar
relief in respect of it, under any
law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts or
any other law providing for the relief
of debtors, and such proceeding or case shall continue undismissed, or unstayed and in effect, for a period of 30 days;
or an order for relief shall be entered
in an involuntary case under the
Federal Bankruptcy Code, against
the Borrower or such Subsidiary; or action under the laws of the jurisdiction of incorporation or organization of the Borrower
or any of its Subsidiaries similar
to any of the foregoing shall be
taken with respect to the Borrower or such
Subsidiary and shall continue
unstayed and in effect for a period of 45 days; or

 

(h) A judgment or order for the payment of money shall be entered against the Borrower or any
of its Subsidiaries by any
court, or a warrant of attachment or execution or similar process shall be issued or levied against property of the Borrower or such
Subsidiary, that in the aggregate exceeds $1,000,000 in value, the payment of which is not fully covered by insurance in excess of any
deductibles not exceeding $200,000 in the aggregate, and such judgment, order, warrant or
process shall continue undischarged or unstayed for 30 days; or

 

(i) There shall occur a cessation of a substantial part of the Borrower’s Business for a
period which materially adversely affects Borrower’s capacity to continue
Borrower’s Business in accordance with its historical practices; or the Borrower shall suffer the loss or
revocation of any material license or permit
now held or hereafter acquired which is
necessary to the
continued or lawful operation of the
Borrower’s Business; or the Borrower shall
be enjoined, restrained or in any
other way prevented by a court,
governmental or administrative order
from conducting all or any material part of the Borrower’s Business; or

 

(j) The Borrower or any ERISA
Affiliate shall fail to pay when
due any material amount that they shall have become liable to pay to the
PBGC or to a Plan under Title IV
of ERISA, unless such liability is being
contested in good faith by
appropriate proceedings, the Borrower or the ERISA Affiliate, as the case may be, has established and is maintaining adequate reserves in accordance with GAAP and no lien shall have been filed to
secure such liability; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate or to cause
a trustee to be appointed to administer any such Plan or Plans; or a condition shall exist by
reason of which the 

 

43

 

PBGC would be entitled to obtain a
decree adjudicating that any such Plan
or Plans must be terminated;
or

 

(k) Any of the Loan Documents shall
be canceled, terminated, revoked or rescinded
otherwise than in accordance with the express terms thereof or with the express
prior written agreement, consent or approval of the Lenders, or any
action at law or in equity or other
legal proceeding to cancel, revoke or rescind any Loan Document shall be
commenced by or on behalf of the
Borrower, or any court or other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or shall issue a judgment, order,
decree or ruling to the effect
that, any one or mare of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms
thereof, or any Encumbrance in favor of
the Lenders created under any of
the Loan Documents shall at any time (other than by reason of the
Lenders relinquishing such Encumbrance) cease in any material respect to
constitute a valid and, to the extent applicable, perfected Encumbrance on any
material portion of the Collateral.

 

8.2                                 Remedies. Upon the
occurrence of an Event of Default described
in subsections 8.1(f) and
(g), immediately and automatically, and
upon the occurrence of any other Event of Default, at any time thereafter
while such Event of Default is continuing, at the option of the Lenders and upon the Lenders’ declaration:

 

(a) The agreement of the Lenders to make
any further Loans and to issue any Letters of Credit hereunder shall terminate;

 

(b) The unpaid principal amount of the Loans together with accrued
interest, all Reimbursement Obligations
and all other Obligations shall
become immediately due and payable
without presentment, demand,
protest or further notice of any kind,
all of which are hereby expressly waived;

 

(c) The Borrower shall
immediately pledge to Lenders cash collateral in an amount determined by
Lenders to be sufficient to fully secure any Obligations of Borrower to Lenders
with respect to (1) any issued Letters of Credit and (2) each Lenders’
FX Exposure; and

 

(d) The Lenders may exercise any and all rights it has under this Credit Agreement, the other Loan Documents or at law or
in equity, and proceed to protect and enforce its rights by any action at law or in equity or by any other appropriate
proceeding.

 

No
remedy conferred upon the
Lenders in the Loan Documents is intended to be exclusive of any other remedy, and each and every remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or by any other provision of law. Without
limiting the generality of the foregoing or of any of the terms and provisions
of any of the Security Documents, if and when the Lenders exercise remedies
under the Security Documents with respect to Collateral, the Lenders may, in
their discretion, determine which items and types of Collateral to dispose of
and in what order and may dispose of Collateral in any order the Lenders shall
select in its sole discretion, and the Borrower consents to the foregoing and
waives all rights of marshalling with respect to all Collateral.

 

44

 

SECTION IX

ASSIGNMENT AND PARTICIPATION

 

9.1.                              Right to Assign.

 

(a) Each of the Lenders shall have the right to assign at any time
any portion of its Commitment hereunder and its interests in the risk relating
to any Loans to other federally regulated banks which routinely engage in
secured lending in the ordinary course of their business (each an “Assignee”)
and to furnish from time to time to prospective Assignees copies of the Loan
Documents and any information concerning the Borrower in its possession,
provided that if no Event of Default shall have occurred and be continuing,
each Assignee which is not an Affiliate of such Lender or a Federal Reserve
Bank shall be subject to prior approval by the Borrower (such approval not to
be unreasonably withheld). Each Assignee shall execute and deliver to RBS and
the Borrower a joinder agreement. Upon the execution and delivery of such
joinder agreement, (a) such Assignee shall, on the date and to the extent
provided in such joinder agreement, become a “Lender” party to this Credit
Agreement and the other Loan Documents for all purposes of this Credit
Agreement and the other Loan Documents and shall have all rights and
obligations of a “Lender” with a Commitment as set forth in such joinder agreement, and such
Lender shall, on the date and to the
extent provided in such joinder
agreement, be released prospectively from its obligations hereunder and under
the other Loan Documents to a corresponding extent (and, in the case of an
assignment covering all of the remaining portion of a Lender’s rights and
obligations under this Credit Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Section 11.3
and to any fees accrued for its
account hereunder and not yet paid); (b) the assigning Lender, if it holds
the Note, shall promptly surrender the Note to the Borrower for cancellation,
provided that if RBS has retained any Commitment, the Borrower shall execute
and deliver to RBS a new Note in the
amount of its retained Commitment; (c) the Borrower shall issue to such
Assignee a Note in the amount of such Assignee’s Commitment, dated the Closing Date or such other date as may
be specified by such Assignee and otherwise completed in substantially the form of Exhibit A (d) this
Credit Agreement shall be deemed appropriately amended to reflect (i) the
status of such Assignee as a
party hereto and (ii) the status and rights of the Lender hereunder; and (e) the Borrower shall take such
action as RBS may reasonably request to perfect any security interests
or mortgages in favor of the Lenders, including any Assignee which becomes a
party to this Credit Agreement.

 

(b) A Lender may at any time pledge all or any portion of its
rights under the Loan Documents, including any portion of the Note, to any of
the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. Section 341.
No such pledge or any enforcement thereof shall release the Lender from its
obligations under any of the Loan Documents.

 

9.2.                              Participations. A Lender shall
have the right at any time and from time to time, without the consent of or
notice to the Borrower, to grant participations to one or more federally
regulated banks which routinely engage in secured lending in the ordinary
course of their business (each a “Participant”) in all or any part of any Loans
and Letter of Credit Participations 

 

45

 

owing to the Lender and the Note held by the Lender, and shall have the
right to furnish from time to time to prospective Participants copies of the
Loan Documents and any information concerning the Borrower in its possession.
Notwithstanding the foregoing, under no circumstances may a (i) competitor
of the Borrower or any of its Subsidiaries or (ii) an entity engaged in a
line of business similar to that of the Borrower or any of its Subsidiaries,
become a Participant. The Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver
of any provision of the Loan Documents, provided that the documents evidencing
any such participation may provide that, except with the consent of such
Participant, the Lender will not consent to (a) the reduction in or
forgiveness of the stated principal of or rate of interest on or commitment fee
with respect to the portion of any Loan subject to such participation, (b) the
extension or postponement of any stated date fixed for payment of principal or
interest or commitment fee with respect to the portion of any Loan subject to
such participation, (a) the waiver or reduction of any right to
indemnification of the Lender hereunder, or (d) except as otherwise
permitted hereunder, the release of any Collateral. Notwithstanding the
foregoing, no participation shall operate to increase the total Commitments
hereunder or otherwise alter the substantive terms of this Credit Agreement. In
the event of any such sale by the Lender of participating interests to a
Participant, the Lender’s obligations under this Credit Agreement shall remain
unchanged, the Lender shall remain solely responsible for the performance
thereof; the Lender shall remain the holder of such Note for all purposes under
this Credit Agreement and the Borrower shall continue to deal solely and
directly with the Lender in connection with the Lender’s rights and obligations
under this Credit Agreement.

 

SECTION X

AGREEMENTS AMONG LENDERS

 

Each Lender authorizes RBS to act as agent
for the Lender and RBS hereby agrees to act as agent for the Lender in respect
of this Credit Agreement upon the terms and conditions set forth in this Credit
Agreement, and upon the following additional terms and conditions:

 

10.1.  Appointment and Authorization.  Each Lender hereby irrevocably appoints and
authorizes RBS to take such action as agent on its behalf and to exercise such
powers hereunder as are delegated to RBS by the terms hereof, together with
such powers as are reasonably incidental thereto.  Neither RBS nor any of its affiliates,
directors, officers, attorneys or employees shall (a) be liable for any
action taken or omitted to be taken by it or them hereunder or in connection
herewith, except for its or their own gross negligence or willful misconduct
(as determined by a court of competent jurisdiction), or be responsible in any
manner to any of the Lenders for the effectiveness, enforceability,
genuineness, validity or due execution of this Credit Agreement or any other
Loan Documents, (b) be under any obligation to any Lender to ascertain or
to inquire as to the performance or observance of any of the terms, covenants
or conditions hereof or thereof on the part of Borrower, or the financial
condition of Borrower, or (c) be liable to any of the Borrower for
consequential damages resulting from any breach of contract, tort or other
wrong in connection with the negotiation, documentation, administration or
collection of the Loans or Letters of Credit or any of the Loan Documents.  Notwithstanding any
provision to the contrary contained in this Credit Agreement or in any other
Loan Document, RBS shall not have any duty or responsibility except those
expressly set forth herein, nor shall RBS have or be deemed to have any
fiduciary relationship with any Lender or participant, and no 

 

46

 

implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any other Loan Document or otherwise exist against
RBS.  Without limiting the generality of
the foregoing sentence, the use of the term “agent” herein and in other Loan
Documents with reference to RBS is not intended to connote any fiduciary or
other implied (or express) obligations arising under agency doctrine of any
applicable law.  Instead, such term is
used merely as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting parties.

 

10.2.
Investment Purpose.  Each Lender
represents and warrants to Borrower and to RBS that it is entering into this
Credit Agreement with the present intention of acquiring any Note issued
pursuant hereto for investment purposes only and not for the purpose of
distribution or resale, it being understood, however, that each Lender shall at
all times retain full control over the disposition of its assets.

 

10.3.  Documents.  RBS shall not be under any duty to examine
into or pass upon the validity, effectiveness, genuineness or value of any Loan
Document or other document, instrument or agreement furnished pursuant to this
Credit Agreement or in connection herewith or the value of any collateral
obtained hereunder, and RBS shall be entitled to assume that the same are
valid, effective and genuine and what they purport to be.

 

10.4. Lenders’ Independent
Investigation.  Each Lender, by its
signature to this Credit  Agreement or
joinder agreement, acknowledges and agrees that RBS has made no representation
or warranty, express or implied, with respect to the creditworthiness,
financial condition, or any other condition of the Borrower or with respect to
the statements contained in any information memorandum furnished in connection
herewith or in any other oral or written communication between RBS and such
Lender.  Each Lender represents that it
has made and shall continue to make its own independent investigation of the
creditworthiness, financial condition and affairs of the Borrower in connection
with the extension of credit hereunder, and agrees that RBS has no duty or
responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto (other than
such notices as may be expressly required to be given by Agent to the Lenders
hereunder), whether coming into its possession before the date of this Credit
Agreement or at any time or times thereafter. 
Each Lender further represents that it has reviewed the Credit Agreement
and each of the other Loan Documents.

 

10.5.  Lenders and Affiliates.  Each Lender and its affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower, its
Subsidiaries and Affiliates as though such Lender were not a lender hereunder
and without notice to or consent of any Lender. 
Each Lender acknowledges that, pursuant to such activities, each Lender
or its affiliates may receive information regarding the Borrower, any
Subsidiary or any Affiliate and acknowledges that such Lender shall be under no
obligation to provide such information to other Lenders.  With respect to Loans and Letters of Credit,
RBS and its affiliates shall have the same rights and powers under this Credit
Agreement as any other Lender and may exercise the same as though RBS were not
agent, and the terms “Lender” and “Lenders” include RBS and its affiliates, to
the extent applicable, in their individual capacities.

 

47

 

10.6.  Knowledge of Default.  RBS shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless RBS has received notice from a Lender or a Borrower referring to this
Credit Agreement describing such Default or Event of Default and stating that
such notice is a “notice of default”. In the event that RBS receives such a
notice, RBS shall give notice thereof to the Lenders. RBS shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided that, unless and until RBS shall
have received such directions, RBS may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable, in its discretion, for the
protection of the interests of the Lenders.

 

10.7.  Action by RBS.  Subject to the other terms and conditions
hereof, so long as RBS shall be entitled to assume that no Default or Event of
Default shall have occurred and be continuing, RBS shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
that may be vested in it by, or with respect to taking or refraining from
taking any action or actions that it may be able to take under or in respect
of, this Credit Agreement. RBS shall incur no liability under or in respect of
this Credit Agreement by acting upon any notice, certificate, warranty or other
paper or instrument believed by it to be genuine or authentic or to be signed
by the proper party or parties, or with respect to anything that it may do or
refrain from doing in the reasonable exercise of its judgment, or that may seem
to it to be necessary or desirable in the premises.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against RBS as a result of RBS’s
acting or refraining from acting hereunder in accordance with the instructions
of the Required Lenders.

 

10.8.  Delegation of Duties.  RBS may execute any of its duties under this
Credit Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties.  RBS shall not be responsible to the Lenders
for the negligence or misconduct of any agent or attorney-in-fact that it
selects in the absence of gross negligence or willful misconduct, as determined
by a court of competent jurisdiction.

 

10.9.  Indemnification of Agent.  The Lenders agree to indemnify RBS (to the
extent not reimbursed by Borrower) ratably from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including attorneys’ fees and expenses) or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by or asserted against RBS in its capacity as agent in any way relating to or
arising out of this Credit Agreement or any Loan Document or any action taken
or omitted by RBS with respect to this Credit Agreement or any Loan Document,
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys’ fees and expenses) or disbursements resulting
from RBS’s gross negligence or willful misconduct as determined by a court of
competent jurisdiction, or from any action taken or omitted by RBS in any
capacity other than as agent under this Credit Agreement or any other Loan
Document.  No action taken in accordance
with the directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 10.9.  The undertaking in this Section 10.9
shall survive repayment of the Loans, cancellation of the Notes, if any,
expiration or termination of the Letters of Credit, termination of 

 

48

 

the Commitment, any foreclosure under, or
modification, release or discharge of, any or all of the Loan Documents,
termination of this Credit Agreement and the resignation or replacement of the
agent.

 

10.10.  Successor Agent.  RBS may resign as agent hereunder by giving
not fewer than thirty (30) days prior written notice to the Borrower and the
Lenders.  If RBS shall resign under this
Credit Agreement, then either (a) the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders, or (b) if a successor
agent shall not be so appointed and approved within the thirty (30) day period
following RBS’s notice to the Lenders of its resignation, then RBS shall
appoint a successor agent that shall serve as agent until such time as the
Required Lenders appoint a successor agent. 
If no successor agent has accepted appointment as Agent by the date
that is thirty (30) days following a retiring Agent’s notice of resignation,
the retiring Agent’s resignation shall nevertheless thereupon become effective,
and the Lenders shall assume and perform all of the duties of Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.  Upon its
appointment, such successor agent shall succeed to the rights, powers and
duties as agent, and the former agent’s rights, powers and duties as agent
shall be terminated without any other or further act or deed on the part of
such former agent or any of the parties to this Agreement.

 

10.11.  No Reliance on RBS’s Customer
Identification Program. Each Lender acknowledges and agrees that neither
such Lender, nor any of its affiliates, participants or assignees, may rely on
RBS to carry out such Lender’s or its affiliate’s, participant’s or assignee’s
customer identification program, or other obligations required or imposed under
or pursuant to the Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP
Regulations”), or any other anti-terrorism law, including any programs
involving any of the following items relating to or in connection with
Borrower, its Subsidiaries, Affiliates or agents, the Loan Documents or the
transactions hereunder: (a) any identity verification procedures, (b) any
record keeping, (c) any comparisons with government lists, (d) any
customer notices or (e) any other procedures required under the CIP
Regulations or such other laws.

 

10.12.  Amendments.  No amendment, modification, termination, or
waiver of any provision of this Credit Agreement or any of the other Loan
Documents nor consent to any variance therefrom, shall be effective unless the
same shall be in writing and signed by the Required Lenders and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. Notwithstanding the previous sentence,
unanimous consent of the Lenders shall be required with respect to (i) any
increase in the Revolving Loan Commitment hereunder, (ii) the extension or
postponement of maturity of the Loans, the payment date of interest or
scheduled principal thereunder, or the payment date of commitment or other fees
payable hereunder, (iii) any reduction in the stated rate of interest on
the Loans (provided that the institution of the Default Rate and a subsequent
removal of the Default Rate shall not constitute a decrease in interest rate
pursuant to this Section 10.12), or in any amount of
interest or scheduled principal due on any Loan, or the payment of commitment
or other fees hereunder or any change in the manner of pro rata application of
any payments made by Borrower to the Lenders hereunder, (iv) any change in
any percentage voting requirement, voting rights, or the Required Lenders
definition in this Agreement, (v) the release of the 

 

49

 

Borrower or of substantially all of the
Collateral, or (vi) any amendment to this Section 10.12.

 

10.13.  Obligations Several; No Fiduciary
Obligations.  The obligations of the
Lenders hereunder are several and not joint. 
Nothing contained in this Credit Agreement and no action taken by Agent
or the Lenders pursuant hereto shall be deemed to constitute Agent or the
Lenders a partnership, association, joint venture or other entity. No default
by any Lender hereunder shall excuse the other Lenders from any obligation under
this Agreement; but no Lender shall have or acquire any additional obligation
of any kind by reason of such default. 
The relationship between Borrower and the Lenders with respect to the
Loan Documents and any ancillary documents and agreements is and shall be
solely that of debtors and creditors, respectively, and neither Agent nor any
Lender shall have any fiduciary obligation toward the Borrower with respect to
any such documents or the transactions contemplated thereby.

 

10.14. Costs, Expenses
and Taxes.  The Borrower agrees to
pay on demand all costs and expenses of RBS in connection with the Credit
Agreement and Loans, including but not limited to (a) syndication,
administration, travel and out-of-pocket expenses, including but not limited to
attorneys’ fees and expenses, of RBS in connection with the preparation,
negotiation and closing of the Loan Documents and the administration of the
Loan Documents, the collection and disbursement of all funds hereunder and the
other instruments and documents to be delivered hereunder, (b) extraordinary
expenses of RBS in connection with the administration of the Loan Documents and
the other instruments and documents to be delivered hereunder, and (c) the
reasonable fees and out-of-pocket expenses of special counsel for RBS, with
respect to the foregoing, and of local counsel, if any, who may be retained by
said special counsel with respect thereto. 
Borrower also agrees to pay on demand all costs and expenses of RBS and
the Lenders, including reasonable attorneys’ fees and expenses, in connection
with the restructuring or enforcement of the Obligations, this Credit Agreement
or any of the Loan Documents.  In
addition, Borrower shall pay any and all stamp, transfer, documentary and other
taxes, assessments, charges and fees payable or determined to be payable in
connection with the execution and delivery of the Loan Documents, and the other
instruments and documents to be delivered hereunder, and agree to hold Agent
and each Lender harmless from and against any and all liabilities with respect
to or resulting from any delay in paying or failure to pay such taxes or
fees.  All obligations provided for
in this Section shall survive any termination of this Credit Agreement.

 

SECTION XI

GENERAL

 

11.1.                        Notices. Unless otherwise
specified herein, all notices hereunder to any party hereto shall be in writing
and shall be deemed to have been given when delivered by hand, or when sent by
electronic facsimile transmission, or on the first Business Day after delivery
to any overnight delivery service, freight pre-paid, or five (5) days
after being sent by certified or registered mail, return receipt requested,
postage pre-paid, and addressed to such party at its address indicated below:

 

If to the Borrower:

 

50

 

Virtusa Corporation

2000 West Park Drive

Westborough, Massachusetts 01581

Attention:        Chief Financial
Officer

 

with a copy (which shall not constitute notice) to:

 

Goodwin Procter LLP

Exchange Place

Boston, Massachusetts 02109

Attention: Gina Lynn Martin, Esq.

 

 

If to RBS, at

 

RBS Citizens,National
Association

28 State Street

Boston, Massachusetts 02109

Attention: Victoria P. Lazzell

 

 

with a copy (which shall not constitute notice) to:

 

Bartlett Hackett Feinberg, P.C.

155 Federal Street

Boston, Massachusetts 02110

Attention: John L. Hackett, Esq.

 

or at any other address specified by such parry in writing.

 

11.2.                        Expenses. Whether or
not the transactions contemplated herein shall be consummated, the Borrower
promises to reimburse the Lender for all reasonable out-of-pocket fees and
disbursements (including all reasonable and documented attorneys’ fees and
collateral evaluation costs) incurred or expended in connection with the
preparation, filing or recording, interpretation or administration of this
Credit Agreement and the other Loan Documents, or any amendment, modification,
approval, consent or waiver hereof or thereof, or in connection with the
enforcement of any Obligations, the exercise, preservation or enforcement of
any rights, remedies or options of the Lender or the satisfaction of any
Obligations, or in connection with any litigation, proceeding or dispute in any
way related to the credit hereunder, including, without limitation, documented fees and disbursements of outside
legal counsel, accounting, consulting, brokerage or other similar third
party  professional fees or expenses; all
fees, charges (including the Lender’s per diem charges) and expenses relating
to any inspections, appraisals or examinations conducted in connection with the
Loans or any Collateral; and all
costs and expenses relating to any attempt to inspect, verify, protect,
preserve, restore, collect, sell, liquidate or otherwise dispose of or realize
upon the Collateral. The amount of all such costs and expenses shall, until
paid, bear interest at the rate applicable to Revolving Credit Loans and shall 

 

51

 

be an Obligation secured by the Collateral. The Borrower will pay any taxes (including any interest and penalties in respect thereof), other than the Lender’s federal and state income
taxes, payable on or with
respect to the transactions contemplated by the Loan Documents (the Borrower hereby agreeing to indemnify
the Lender with respect thereto).

 

11.3.                        Indemnification. The
Borrower agrees to indemnify and
hold harmless the Lender, as well as its respective shareholders, directors,
officers, agents, subsidiaries and affiliates, from and against all damages,
losses, settlement payments, obligations, liabilities, claims, suits,
penalties, assessments, citations, directives, demands, judgments, actions or causes of action, whether
statutorily created or under the common law, all reasonable and documented
costs and expenses (including, without limitation, reasonable fees and
disbursements of outside attorneys, experts and consultants) and all other
liabilities whatsoever (including, without limitation, liabilities under
Environmental Laws) which shall at any time or times be incurred, suffered, sustained
or required to be paid by any
such indemnified Person (except any of the foregoing which result from the gross negligence or willful
misconduct of the indemnified Person) on account of or in relation to or any
way in connection with any of the
arrangements or transactions
contemplated by, associated with or ancillary to this Credit Agreement, the other Loan Documents or any other
documents executed or delivered in connection herewith or therewith, all as the
same may be amended from time to
time, or with respect to any Letters of Credit, whether or not all or part of the transactions contemplated by, associated with or ancillary to this Credit Agreement,
any of the other Loan Documents or any such other documents are ultimately consummated. In any investigation, proceeding or litigation, or the preparation therefore, the Lender shall
select its own counsel and, in addition to the foregoing indemnity, the
Borrower agrees to pay promptly the reasonable fees and expenses of such
counsel. In the event of the commencement of any such proceeding or litigation,
the Borrower shall be entitled to participate in such proceeding or litigation
with counsel of its choice at its own expense,
provided that such counsel shall be reasonably
satisfactory to the Lender. The Borrower authorizes the Lender to charge any deposit account or Note
Record which it may maintain with
any of them for any of the foregoing. The covenants of
this Section 11.3 shall
survive payment or satisfaction of payment
of all amounts owing with respect to the Note, any other Loan
Document or any other Obligation.

 

11.4.                        Survival of Covenants. Etc.  All covenants, agreements, representations and warranties made
herein, in the other Loan Documents or in any documents or other papers
delivered by or on behalf of the Borrower pursuant hereto or thereto shall be deemed to have been
relied upon by the Lenders, notwithstanding any investigation heretofore or
hereafter made by it, and shall survive
the making by the Lender of the Loans
as herein contemplated and the
termination of the Commitment, and shall continue in full force and effect so
long as any Obligation remains outstanding and unpaid or the Lender has any
obligation to make any Loans hereunder or has any obligation to issue any Letter
of Credit. Notwithstanding the foregoing, the provisions of Sections
11.2 and 11.3 shall continue in full force and effect after the payment in full
of all Obligations. All statements contained in any certificate or other writing delivered by or on behalf of the Borrower
pursuant hereto or the other Loan Documents or in connection with the
transactions contemplated hereby shall constitute representations and
warranties by the Borrower hereunder.

 

52

 

11.5.                        Set-Off.
Regardless of the adequacy of any Collateral or other means of
obtaining repayment of the Obligations, any deposits, balances or other
sums credited by or due from the head office of the Lender or any of its branch offices to the
Borrower may, at any time and from time to time without prior notice
to the Borrower, be set off,
appropriated, and applied by the
Lender against any and all Obligations
of the Borrower in such manner as the head office of the Lender or
any of its branch offices in its
sole reasonable discretion may determine, and the Borrower hereby grants the Lender a continuing security interest in such deposits, balances
or other sums for the payment and
performance of all such Obligations.

 

ANY AND ALL RIGHTS TO REQUIRE
THE LENDER TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY
OTHER COLLATERAL, WHICH SECURES THE 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.

 

11.6.                        No Waivers. No failure or delay by the Lender in
exercising any right, power or privilege
hereunder, under the Note or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise
of any other right, power or privilege.
No waiver shall extend to or
affect any Obligation not expressly waived or impair any right consequent thereon. No course of dealing or omission on the part of the Lender
in exercising any right shall operate
as a waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon the Borrower shall
entitle the Borrower to other or further notice or demand in similar or other circumstances. The rights and remedies herein and in
the Note and the other Loan Documents are cumulative and not exclusive of any rights or
remedies otherwise provided by agreement
or law.

 

11.7. Binding Effect of
Agreement. This Credit Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender and their
respective successors and assignees provided
that the Borrower may not assign or
transfer its rights or obligations hereunder.

 

11.8.                        Lost Note, Etc. Upon
receipt of an affidavit of an officer
of the Lender as to the loss, theft, destruction or mutilation of the Note or
any Security Document which is not a public
record and, in the case of any such loss, theft, destruction or mutilation, upon cancellation of such Note or Security Deposit, if
available, the Borrower will issue, in lieu thereof, a replacement Note or other Security Document in the same
principal amount thereof and
otherwise of like tenor.

 

11.9.                        Captions; Counterparts.
The captions in this Credit Agreement are for convenience of reference only and shall not define or limit
the provisions hereof.  This Credit
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. In proving this Credit
Agreement it shall not be necessary to produce
or account for mare than one such counterpart signed by the party against whom enforcement is
sought.

 

53

 

11.10.                  Entire Agreement. Etc. The Loan Documents and any other
documents executed in connection
herewith or therewith express the entire understanding of the parties with respect to the transactions contemplated hereby and supersede all prior agreements with respect to the subject matter
hereof.

 

11.11.                  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 CREDIT 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 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 CREDIT 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.

 

11.12.                  Governing
Law; Jurisdiction; Venue.  THIS
CREDIT 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 CREDIT 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 

 

54

 

OR CLAIM IN ANY
SUCH ACTION THAT SUCH ACTION HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.

 

11.13 Severability. The provisions of this Credit Agreement are
severable and if any one clause
or provision hereof shall be
held invalid or unenforceable in whole or in part in any jurisdiction, then
such invalidity or unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction, and shall not in any manner affect such clause or
provision in any other jurisdiction,
or any other clause or provision of this Credit Agreement in any jurisdiction.

 

55

 

IN WITNESS WHEREOF, the undersigned have duly executed this Credit Agreement under seal as of the date
first above written.

 

	
  WITNESS

  	
   

  	
  VIRTUSA CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Paul D. Tutun

  	
   

  	
  By:

  	
  /s/ Ranjan Kalia

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RBS CITIZENS, NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
  As Agent and Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Illegible

  	
   

  	
  By:

  	
  /s/ Jennifer Perry

  
	
   

  	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
   

  	
  As Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Karen Mercer

  	
   

  	
  By:

  	
  /s/ James P. Murphy

  

 

56

 

LISTING
OF SCHEDULES

 

Schedule A- 
Applicable Percentages of Lenders

 

Schedule B- Outstanding Indebtedness among
Borrower and its Subsidiaries

 

Schedule 4.25- Material Contracts of Borrower
and Subsidiaries

 

 

57

 

LISTING
OF EXHIBITS

 

	
  Exhibit A-1 and A-2

  	
  Form of Revolving
  Promissory Note

  
	
   

  	
   

  
	
  Exhibit B

  	
  Notice of Borrowing

  
	
   

  	
   

  
	
  Exhibit C

  	
  Additional Disclosures of
  Borrower

  
	
   

  	
   

  
	
  Exhibit D

  	
  Covenant Compliance
  Certificate

  
	
   

  	
   

  
	
  Exhibit E

  	
  Borrowing Base Certificate

  

 

58Exhibit 10.5

 

NEGATIVE PLEDGE AGREEMENT

 

THIS NEGATIVE PLEDGE AGREEMENT (this
“Agreement”) is made this 31st day of July, 2009 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 RBS CITIZENS, NATIONAL ASSOCIATION, a national banking
corporation with an office at 28 State Street, Boston, Massachusetts 02109 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.

 

1

 

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

 

2

 

OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWER (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF 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 under
seal as of the date first written above.

 

 

	
  WITNESS

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
  VIRTUSA CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Paul D. Tutun

  	
   

  	
  By:

  	
  /s/ Ranjan Kalia

  
	
   

  	
   

  	
   

  

4

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