Document:

Exhibit 10.4

 

SECURITY
AGREEMENT

 

This SECURITY AGREEMENT
(this “Agreement”) is made as of July 30, 2010 and is given by VIRTUSA
CORPORATION, a corporation organized under the laws of the State of Delaware
and having its chief executive office at 2000 West Park Drive, Westborough,
Massachusetts 01581 (the “Borrower”) to JPMORGAN CHASE BANK, N.A., having an
address of 12 Corporate Woods Blvd., Albany, NY 12211, as administrative agent
for itself and for the Lenders party to the Credit Agreement, as defined below
(the “Agent”).

 

The Borrower, the Agent and
the Lenders have entered into a certain Credit Agreement of even date herewith
(as the same may be amended, modified, supplemented, extended or restated from
time to time, the “Credit Agreement”) pursuant to which the Lenders have
agreed to make loans and other credits to the Borrower upon the terms and
subject to the conditions set forth therein.

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 2. Grant.

 

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

 

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

 

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

 

3.1  Name; Location; Changes.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3.9    Collection and Delivery of Proceeds;
Lockboxes.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

(d)           The Agent is hereby granted a license
or other right to use, without charge, in the course of the exercise of the
Agent’s Rights and Remedies pursuant to Section 6 of this Agreement, the
Borrower’s labels, patents, copyrights, right of use of any name, trade
secrets, trade names, trademarks, and advertising matter, or any property of a
similar nature, relating to the Collateral, in completing production of,
advertising for sale and selling any Collateral; and the Borrower’s rights
under all licenses and all franchise agreements shall inure to the Agent’s
benefit.

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

Section
12. Waiver of Jury Trial. EACH OF THE BORROWER AND THE LENDERS HEREBY WAIVES
ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER
LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER
OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
OR ACTIONS OF THE LENDER RELATING
TO THE ADMINISTRATION 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 LENDERS EACH HEREBY WAIVE ANY RIGHT THEY MAY 

 

14

 

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 ANY LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (b) ACKNOWLEDGES
THAT THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THE LOAN DOCUMENTS TO WHICH
EACH IS A PARTY BECAUSE OF, AMONG OTHER
THINGS, THE BORROWER’S WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

 

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

 

THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

 

15

 

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

 

 

	
  WITNESS

  	
   

  	
  BORROWER

  
	
   

  	
   

  	
  VIRTUSA CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Paul D. Tutun

  	
   

  	
  By:

  	
  /s/ Ranjan Kalia

  
	
   

  	
   

  	
  Name:

  	
  Ranjan Kalia

  
	
   

  	
   

  	
  Title:

  	
  SVP and CFO

  

 

16

 

EXHIBIT A

PERFECTION CERTIFICATE

 

Attach Perfection Certificate and Borrower Certification

 

17Exhibit
10.1

 

Amendment

 

20070105.006.S.007.A.003

 

EMBR Program

 

Between

 

StarTek, Inc.

 

And

 

AT&T Services, Inc.

 

 

AMENDMENT NO. 3

 

ORDER NO. 20070105.006.S.007

 

This
Amendment, effective on the date when signed by the last Party (“Effective Date”),
and amending Order No. 20070105.006.S.007, is by and between StarTek, Inc.,
a Delaware corporation (“Supplier”), and AT&T Services, Inc., a
Delaware corporation (“AT&T”), each of which may be referred to in the
singular as a “Party” or in the plural as the “Parties.”

 

WITNESSETH

 

WHEREAS, Supplier and AT&T entered into Order No. 20070105.006.S.007
on July 1, 2007 (the “Order”); and

 

WHEREAS, Supplier and AT&T desire to amend the
Order as hereinafter set forth.

 

NOW, THEREFORE, in consideration of the
premises and the covenants hereinafter contained, the Parties hereto agree as
follows:

 

1.)  Section 2
Duration of Order is hereby deleted and replaced with the following:

 

“This
Order shall be effective from July 1, 2007 through December 31, 2010.

 

The
terms and conditions of Order No. 20070105.006.S.007 in all other respects
remain unmodified and in full force and effect.

 

Original signature
transmitted and received via facsimile or other electronic transmission of a
scanned document, (e.g., .pdf or similar format) are true and valid signatures
for all purposes hereunder and shall bind the Parties to the same extent as
that of an original signature.  This
Amendment may be executed in multiple counterparts, each of which shall be
deemed to constitute an original but all of which together shall constitute
only one document.

 

IN WITNESS WHEREOF, the Parties have caused
this Amendment to Order No. 20070105.006.S.007 to be executed, as of the
date the last Party signs.

 

	
  StarTek, Inc.

  	
   

  	
   

  	
  AT&T
  Services, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  A. Laurence Jones

  	
   

  	
  By:

  	
  /s/
  Kathy Holzer-Muniz

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed
  Name:

  	
  A.
  Laurence Jones

  	
   

  	
  Printed
  Name: Kathy Holzer-Muniz

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President
  and CEO

  	
   

  	
  Title:
  Sr. Contract Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  6/17/2010

  	
   

  	
  Date:

  	
  6/14/2010

  

 

Proprietary
and Confidential

This Amendment and
information contained therein is not for use or disclosure outside of AT&T,
its Affiliates, and third party representatives, and Supplier except under
written agreement by the contracting parties.

 

2

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