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Exhibit 10.7
INDEMNIFICATION AGREEMENT
This
Agreement made and entered into this ____ day of _______ 2007,
(the
"Agreement"), by and between Virtusa Corporation, a Delaware
corporation (the
"Company," which term shall include, where appropriate, any Entity
(as
hereinafter defined) controlled directly or indirectly by the
Company) and
____________ (the "Indemnitee"):
WHEREAS,
it is essential to the Company that it be able to retain and
attract as directors the most capable persons available;
WHEREAS,
increased corporate litigation has subjected directors to
litigation risks and expenses, and the limitations on the
availability of
directors and officers liability insurance have made it
increasingly difficult
for the Company to attract and retain such persons;
WHEREAS,
the Company's By-laws (the "By-laws") require it to indemnify
its
directors to the fullest extent permitted by law and permit it to
make other
indemnification arrangements and agreements;
WHEREAS,
the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full
indemnification against
litigation risks and expenses (regardless, among other things, of
any amendment
to or revocation of the By-laws or any change in the ownership of
the Company or
the composition of its Board of Directors);
WHEREAS,
the Company intends that this Agreement provide Indemnitee with
greater protection than that which is provided by the Company's
By-laws; and
WHEREAS,
Indemnitee is relying upon the rights afforded under this
Agreement in becoming or continuing as a director of the
Company.
NOW,
THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and
agree as
follows:
1.
Definitions.
(a) "Corporate Status" describes the status of a person who is
serving or has served (i) as a director of the Company, (ii) in
any
capacity with respect to any employee benefit plan of the
Company,
or (iii) as a director, partner, trustee, officer, employee, or
agent of any other Entity at the request of the Company. For
purposes of subsection (iii) of this Section 1(a), if Indemnitee
is
serving or has served as a director, partner, trustee, officer,
employee or agent of a Subsidiary, Indemnitee shall be deemed to
be
serving at the request of the Company.
(b) "Entity" shall mean any corporation, partnership, limited
liability company, joint venture, trust, foundation,
association,
organization or other legal entity.
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(c) "Expenses" shall mean all fees, costs and expenses incurred
by
Indemnitee in connection with any Proceeding (as defined
below),
including, without limitation, attorneys' fees, disbursements
and
retainers (including, without limitation, any such fees,
disbursements and retainers incurred by Indemnitee pursuant to
Sections 11 and 12(c) of this Agreement), fees and disbursements
of
expert witnesses,
private investigators and professional advisors
(including, without limitation, accountants and investment
bankers),
court costs, transcript costs, fees of experts, travel
expenses,
duplicating, printing and binding costs, telephone and fax
transmission charges, postage, delivery services, secretarial
services, and other disbursements and expenses.
(d) "Indemnifiable Expenses," "Indemnifiable Liabilities" and
"Indemnifiable Amounts" shall have the meanings ascribed to
those
terms in Section 3(a) below.
(e) "Liabilities" shall mean judgments, damages, liabilities,
losses, penalties, excise taxes, fines and amounts paid in
settlement.
(f) "Proceeding" shall mean any threatened, pending or
completed
claim, action, suit, arbitration, alternate dispute resolution
process, investigation, administrative hearing, appeal, or any
other
proceeding, whether civil, criminal, administrative, arbitrative
or
investigative, whether formal or informal, including a
proceeding
initiated by Indemnitee pursuant to Section 11 of this Agreement
to
enforce Indemnitee's rights hereunder.
(g) "Subsidiary" shall mean any corporation, partnership,
limited
liability company, joint venture, trust or other Entity of which
the
Company owns (either directly or through or together with
another
Subsidiary of the Company) either (i) a general partner,
managing
member or other similar interest or (ii) (A) 50% or more of the
voting power of the voting capital equity interests of such
corporation,
partnership, limited liability company, joint venture
or other Entity, or (B) 50% or more of the outstanding voting
capital stock or other voting equity interests of such
corporation,
partnership, limited liability company, joint venture or other
Entity.
2.
Services of Indemnitee. In consideration of the Company's covenants
and
commitments hereunder, Indemnitee agrees to serve or continue to
serve as a
director of the Company. However, this Agreement shall not impose
any obligation
on Indemnitee or the Company to continue Indemnitee's service to
the Company
beyond any period otherwise required by law or by other agreements
or
commitments of the parties, if any.
3.
Agreement to Indemnify. The Company agrees to indemnify Indemnitee
as
follows:
(a) Proceedings Other Than By or In the Right of the Company.
Subject to the exceptions contained in Section 4(a) and 4(c)
below,
if Indemnitee was or is a party or is threatened to be made a
party
to any Proceeding (other than an action by or in the right of
the
Company) by reason of Indemnitee's Corporate Status,
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Indemnitee shall be indemnified by the Company against all
Expenses
and Liabilities incurred or paid by Indemnitee in connection
with
such Proceeding (referred to herein as "Indemnifiable Expenses"
and
"Indemnifiable Liabilities," respectively, and collectively as
"Indemnifiable Amounts").
(b) Proceedings By or In the Right of the Company. Subject to
the
exceptions contained in Section 4(b) and 4(c) below, if
Indemnitee
was or is a party or is threatened to be made a party to any
Proceeding by or in the right of the Company by reason of
Indemnitee's Corporate Status, Indemnitee shall be indemnified
by
the Company against all Indemnifiable Expenses.
(c) Conclusive Presumption Regarding Standard of Care. In making
any
determination required to be made under Delaware law with respect
to
entitlement to indemnification hereunder, the person, persons
or
entity making such determination shall presume that Indemnitee
is
entitled to indemnification under this Agreement if Indemnitee
submitted a request therefor in accordance with Section 5 of
this
Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by any
person, persons or entity of any determination contrary to that
presumption.
4.
Exceptions to Indemnification. Indemnitee shall be entitled to
indemnification under Section 3 above in all circumstances other
than with
respect to any specific claim, issue or matter involved in the
Proceeding out of
which Indemnitee's claim for indemnification has arisen, as
follows:
(a) Proceedings Other Than By or In the Right of the Company.
If
indemnification is requested under Section 3(a) and it has been
finally adjudicated by a court of competent jurisdiction that,
in
connection with such specific claim, issue or matter,
Indemnitee
failed to act (i) in good faith and (ii) in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests
of
the Company, or, with respect to any criminal Proceeding,
Indemnitee
had reasonable cause to believe that Indemnitee's conduct was
unlawful, Indemnitee shall not be entitled to payment of
Indemnifiable Amounts hereunder.
(b) Proceedings
By or In the Right of the Company. If
indemnification is requested under Section 3(b) and
(i) it has been finally adjudicated by a court of
competent jurisdiction that, in connection with such
specific claim, issue or matter, Indemnitee failed to
act (A) in good faith and (B) in a manner Indemnitee
reasonably believed to be in or not opposed to the best
interests of the Company, Indemnitee shall not be
entitled to payment of Indemnifiable Expenses hereunder;
or
(ii) it has been finally adjudicated by a court of
competent jurisdiction that Indemnitee is liable to the
Company with respect to such specific claim, Indemnitee
shall not be entitled to payment
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of Indemnifiable Expenses hereunder with respect to such
claim, issue or matter unless the Court of Chancery or
another court in which such Proceeding was brought shall
determine upon application that, despite the
adjudication of liability, but in view of all the
circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnification for such
Indemnifiable Expenses which such court shall deem
proper; or
(iii) it has been finally adjudicated by a court of
competent jurisdiction that Indemnitee is liable to the
Company for an accounting of profits made from the
purchase or sale by the Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of
the Securities Exchange Act of 1934, the rules and
regulations promulgated thereunder and amendments
thereto or similar provisions of any federal, state or
local statutory law, Indemnitee shall not be entitled to
payment of Indemnifiable Expenses hereunder.
(c) Insurance Proceeds. To the extent payment is actually made
to
the Indemnitee under a valid and collectible insurance policy
in
respect of Indemnifiable Amounts in connection with such
specific
claim, issue or matter, Indemnitee shall not be entitled to
payment
of Indemnifiable Amounts hereunder except in respect of any
excess
beyond the amount of payment under such insurance.
5.
Procedure for Payment of Indemnifiable Amounts. Indemnitee shall
submit
to the Company a written request specifying the Indemnifiable
Amounts for which
Indemnitee seeks payment under Section 3 of this Agreement and the
basis for the
claim. The Company shall pay such Indemnifiable Amounts to
Indemnitee promptly
upon receipt of its request. At the request of the Company,
Indemnitee shall
furnish such documentation and information as are reasonably
available to
Indemnitee and necessary to establish that Indemnitee is entitled
to
indemnification hereunder.
6.
Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement,
and without
limiting any such provision, to the extent that Indemnitee is, by
reason of
Indemnitee's Corporate Status, a party to and is successful, on the
merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified
against all
Expenses reasonably incurred by Indemnitee or on Indemnitee's
behalf in
connection therewith. If Indemnitee is not wholly successful in
such Proceeding
but is successful, on the merits or otherwise, as to one or more
but less than
all claims, issues or mat
