PLEDGE AGREEMENT
Exhibit 10.3
This Pledge Agreement (this “Agreement”) is made July 30, 2010 by and between VIRTUSA CORPORATION, a Delaware corporation having its principal offices at 0000 Xxxx Xxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000 (the “Borrower”), and JPMORGAN CHASE BANK, N.A. with an address of 00 Xxxxxxxxx Xxxxx Xxxx., Xxxxxx, XX 00000, as administrative agent for itself and for the Lenders which are parties to the Credit Agreement as defined below (the “Agent”).
The Borrower, the Agent and the Lenders are parties to a certain Credit Agreement of even date herewith, (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Credit Agreement”) pursuant to which Lenders have agreed to make certain loans and other credits available to Borrower on the terms and conditions set forth in the Credit Agreement. Pursuant to the provisions of Section 4.1 of the Credit Agreement, the Borrower was required to pledge to the Agent for the ratable benefit of the Lenders, all of its right, title and interest in and to the shares of Virtusa Securities Corporation owned by it. Capitalized terms used and not defined herein shall have the meanings ascribed to them in the Credit Agreement.
Any sums or property paid upon or with respect to any of the Stock upon the liquidation or dissolution of any issuer thereof shall be paid over to the Agent to be held by it as security for the Obligations. In case any distribution of capital shall be made on or in respect of any of the Stock or any property shall be distributed upon or with respect to any of the Stock pursuant to the recapitalization or reclassification of the capital of the issuer thereof or pursuant to the reorganization thereof, the property so distributed shall be delivered to the Agent to be held by it as security for the Obligations. All sums of money and property paid or distributed in respect of the Stock which are received by the Borrower shall, until paid or delivered to the Agent, be held by the Borrower in trust for the Lenders as security for the Obligations.
The property at any time pledged with the Agent hereunder and all income therefrom and proceeds thereof, are collectively referred to herein as the “Collateral”.
a) if the Agent so elects and gives notice of such election to the Borrower, the Agent may vote any or all shares of the Stock (whether or not the same shall have been transferred into its name or the name of its nominee or nominees) and give all consents,
waivers and ratifications in respect of the stock and otherwise act with respect thereto as though it was the outright owner thereof (the Borrower hereby irrevocably constituting and appointing the Agent the proxy and attorney-in-fact of the Borrower with full power of substitution, to do so);
b) the Agent may demand, xxx for, collect or make any compromise or settlement the Agent deems suitable in respect of any Collateral held by it hereunder;
c) the Agent may sell, resell, assign and deliver, or otherwise dispose of any or all of the Collateral, for cash and/or credit and upon such terms, at such place or places and at such time or times and to such Persons as the Agent thinks expedient, all without demand for performance by the Borrower or any notice or advertisement whatsoever except such as may be required by law; and
d) the Agent may cause all or any part of the Stock held by it to be transferred into its name or the name of its nominee or nominees.
The Agent may enforce its rights hereunder without any other notice and without compliance with any other condition precedent now or hereafter imposed by statute, rule or law or otherwise (all of which are hereby expressly waived by the Borrower). If any of the Collateral is sold by the Agent upon credit or for future delivery, the Agent shall not be liable for the failure of the purchaser to pay for the same and in such event the Agent may resell such Collateral. The Agent may buy any part or all of the Collateral at any public sale and if any part or all of the Collateral is of a type customarily sold in a recognized market or is of the type which is the subject of widely-distributed standard price quotations, the Agent may buy at private sale and may make payments thereof by any means. The Agent may apply the cash proceeds actually received from any sale or other disposition to the reasonable expenses of retaking, holding, preparing for sale, selling and the like, or reasonable attorneys’ fees, and all legal expenses, travel and other expenses which may be incurred by the Agent in attempting to collect the Obligations or any of them, or to enforce this Agreement or in the prosecution or defense of any action or proceeding related to the subject matter of this Agreement; and then to the Obligations in such order as to principal or interest remaining unpaid, including interest thereon, and the balance of any expenses unpaid, as the Agent in its discretion may reasonably determine, and any surplus shall be paid to the Borrower.
The Borrower recognizes that the Agent may be unable to effect a public sale of the Stock by reason of certain prohibitions contained in the Securities Act of 1933, as amended, but may be compelled to resort to one or more private sales thereof to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such securities for their own account, for investment and not with a view to the distribution or resale thereof. The Borrower agrees that any such private sales may be at prices and on other reasonable terms less favorable to the seller than if sold at public sales and that such private sales shall be deemed to have been made in a commercially reasonable manner. The Agent shall be under no obligation to delay a sale of any of the Stock for the period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act of 1933, as amended, even if the issuer would agree to do so.
the Lenders from any claims, causes of action and demands at any time arising out of or with respect to this Agreement, the Obligations, the use of the Collateral and/or any actions reasonably taken or omitted to be taken by the Agent or the Lenders with respect thereto, and the Borrower hereby agrees to hold the Agent and the Lenders harmless from and with respect to any and all such claims, causes of action and demands. The Agent’s and Lenders’ prior recourse to any part or all of the Collateral shall not constitute a condition of any demand, suit or proceeding for payment or collection of the Obligations.
14) Miscellaneous Provisions. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated except by a written instrument expressly referring to this Agreement and to the provisions so modified or limited, and executed by the party to be charged. This Agreement and all obligations of the Borrower hereunder shall be binding upon the successors in title and assigns of the Borrower, and shall, together with the rights and remedies of the Agent hereunder, inure to the benefit of the Agent, its successors in title and assigns. This Agreement and obligations of the Borrower hereunder shall be governed by and construed in accordance with the laws of the State of New York. The descriptive section headings have been inserted for convenience of reference only and do not define or limit the provisions hereof. If any term of this Agreement shall be held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall be in no way affected thereby, and this Agreement shall be construed and be enforceable as if such invalid, illegal or unenforceable terms had not been included herein. The Borrower acknowledges receipt of a copy of this Agreement. Words and expressions used herein without definition which are defined in the Uniform Commercial Code have such defined meanings herein, unless the context otherwise indicates or requires. This Agreement may be executed in several counterparts, each of
which when executed and delivered shall be original, but all of which together shall constitute one instrument. In making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart.
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IN WITNESS WHEREOF, the Borrower has executed this Agreement on the date first above written.
WITNESS |
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BORROWER |
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VIRTUSA CORPORATION |
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/s/ Xxxx X. Xxxxx |
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By: |
/s/ Xxxxxx Xxxxx |
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Name: |
Xxxxxx Xxxxx |
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Title: |
SVP and CFO |
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ACKNOWLEDGED AND AGREED |
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AGENT |
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JPMORGAN CHASE BANK, N.A. |
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In its capacity as Agent for the Lenders |
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By: |
/s/ Xxxxx X. XxXxxxxx |
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Name: |
Xxxxx X. XxXxxxxx |
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Title: |
Vice President |
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