Exhibit 10.42
EXECUTION VERSION
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
     This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”) is dated as of August 28, 2006, by and among PEROT SYSTEMS
CORPORATION, a Delaware corporation (the "Borrower”), the LENDERS party hereto
(the “Lenders”) and JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such
capacity, the “Administrative Agent”).
RECITALS
     A. The Borrower, the Lenders, the Administrative Agent, KeyBank National
Association, SunTrust Bank and Wells Fargo Bank, National Association, as
Co-Syndication Agents, and Wachovia Bank, N.A., as Documentation Agent, are
parties to an Amended and Restated Credit Agreement dated as of March 3, 2005
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”). Capitalized terms used but not defined herein have the
meanings set forth in the Credit Agreement.
     B. The Borrower has notified the Administrative Agent and the Lenders that
the quarterly financial statements to be delivered by the Borrower pursuant to
Section 5.01(b) of the Credit Agreement for the Borrower’s fiscal quarter ended
June 30, 2006 (the “2Q 2006 Financials”) may indicate that the Borrower did not
comply with clause (i) of the definition of “Minimum Recourse Coverage” for the
period of four consecutive fiscal quarters ended on such date (the “Covenant
Departure”).
     C. The Borrower has requested that the Lenders consent to the Covenant
Departure and waive the requirement under Section 5.11(b) of the Credit
Agreement, resulting from the Covenant Departure, for the Borrower to cause one
or more Domestic Subsidiaries to become Guarantors within 10 days after delivery
of the 2Q 2006 Financials.
     D. The Borrower has further requested that the Lenders agree to amend the
Credit Agreement in certain respects, as more particularly set forth herein.
     E. The Lenders are willing to provide the requested consent and waiver, and
to so amend the Credit Agreement, subject to the terms and conditions and in
reliance upon the representations and warranties of the Borrower set forth
herein.
     NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower and the Lenders agree as follows:
     SECTION 1. Limited Waiver and Limited Consent. Subject to the terms and
conditions set forth in this Amendment, and in reliance upon the representations
and warranties of the Borrower made herein, the Lenders hereby consent to the
Covenant Departure and waive the requirement under Section 5.11(b) of the Credit
Agreement, resulting from the Covenant Departure, for the Borrower to cause one
or more Domestic Subsidiaries to become Guarantors within 10 days after delivery
of the 2Q 2006 Financials; provided that such consent and waiver

 

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shall apply only to the failure to comply with clause (i) of the definition of
“Minimum Recourse Coverage” with respect to the period of four consecutive
fiscal quarters of the Borrower ended June 30, 2006, and the resulting
requirement under Section 5.11(b) for Borrower to cause one or more Domestic
Subsidiaries to become Guarantors within 10 days after delivery of its financial
statements for the period ended June 30, 2006. The foregoing consent and waiver
is limited as described in the immediately preceding sentence, and shall not
apply to any failure to comply with Sections 5.11(a) and 5.11(b) of the Credit
Agreement in respect of any other period or under any other circumstance, nor to
any failure to comply with any other provision of the Credit Agreement or any
other Credit Document under any circumstance.
     SECTION 2. Amendments to Credit Agreement. Subject to the terms and
conditions set forth in this Amendment, and in reliance upon the representations
and warranties of the Borrower made herein, the Lenders and the Borrower hereby
amend the Credit Agreement as follows:
     (a) Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended
by replacing “March 2, 2010” with “August 28, 2011” in the definition of
“Maturity Date” therein.
     (b) Section 1.01 (Defined Terms) of the Credit Agreement is hereby further
amended by adding a new definition of “First Amendment Effective Date” in the
appropriate alphabetical position therein, such new definition to read as
follows:
     ““First Amendment Effective Date” means August 28, 2006.”
     (c) Section 1.01 (Defined Terms) of the Credit Agreement is hereby further
amended by deleting the definitions of “Applicable Rate”, “Consolidated EBIT”
and “Consolidated EBITDA” therein in their entirety and replacing them with the
following:
     ““Applicable Rate” means, for any day, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the facility fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the caption
“ABR Spread”, “Eurodollar Spread” or “Facility Fee Rate”, as the case may be,
based upon the Debt/EBITDA Ratio applicable on such date (calculated in
accordance with Section 6.08(a)), as follows:

                              Level:   Debt/EBITDA Ratio:   ABR Spread  
Eurodollar Spread   Facility Fee Rate
IV
  Greater than or equal to 2.00 to 1.00     0.250 %     1.000 %     0.200 %
III
  Less than 2.00 to 1.00, but greater than or equal to 1.50 to 1.00     0.000 %
    0.750 %     0.150 %
II
  Less than 1.50 to 1.00, but greater than or equal to 1.00 to 1.00     0.000 %
    0.625 %     0.125 %
I
  Less than 1.00 to 1.00     0.000 %     0.500 %     0.100 %

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On the First Amendment Effective Date and continuing through and including the
day immediately preceding the first Adjustment Date occurring after the First
Amendment Effective Date, the ABR Spread shall be 0.000%, the Eurodollar Spread
shall be 0.500%, and the Facility Fee Rate shall be 0.100% per annum, and for
each period thereafter beginning on an Adjustment Date and ending on the day
immediately preceding the next succeeding Adjustment Date, the Applicable Rate
shall be as set forth opposite the applicable Debt/EBITDA Ratio in the table
above, as determined at the end of the most recently ended fiscal quarter prior
to the applicable Adjustment Date in accordance with the definition of
“Adjustment Date”; provided, however, that if the Borrower fails to furnish to
the Administrative Agent the financial statements of the Borrower and related
certificate of a Financial Officer of the Borrower with respect to any fiscal
quarter within the time periods specified in Section 5.01(a) or 5.01(b), as
applicable, then the Applicable Rate prescribed in Level IV above shall apply as
of the date such financial statements were required to be delivered until the
day immediately preceding the date such financial statements and compliance
certificate are so delivered.
Notwithstanding the foregoing, if either S&P or Moody’s have at any time after
the Effective Date established ratings with respect to Index Debt of the
Borrower, the “Applicable Rate” shall instead at all times thereafter be equal
to the applicable percentage rate per annum set forth on the table below, based
upon the ratings by S&P and Moody’s, respectively, applicable at such time to
the Index Debt:

                  Index Debt Rating:   Index Debt Rating:             S&P  
Moody’s   ABR Spread   Eurodollar Spread   Facility Fee Rate Greater than or
equal to A-   Greater than or
equal to A3   0.000%   0.300%   0.070% BBB+   Baa1   0.000%   0.400%   0.080%
BBB   Baa2   0.000%   0.500%   0.100% BBB-   Baa3   0.000%   0.625%   0.125%
less than BBB-   less than Baa3   0.000%   0.875%   0.175%

provided, however, that if at any time the Facility Usage is greater than 50% of
the aggregate amount of the Lender’s Commitments at such time, then the
Applicable Margin with respect to Eurodollar Loans determined with reference to
the table above will be increased 0.125%.

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For purposes of the foregoing, (a) if either Moody’s or S&P shall not have in
effect a rating for the Index Debt (other than by reason of the circumstances
referred to in the last sentence of this definition), then such rating agency
shall be deemed to have established a rating as set forth in the bottom row of
the table above; (b) if the ratings established or deemed to have been
established by Moody’s and S&P for the Index Debt shall fall within different
categories, the Applicable Margin shall be based on the higher of the two
ratings unless one of the two ratings is two or more categories lower than the
other, in which case the Applicable Rate shall be determined by reference to the
category next above that of the lower of the two ratings; and (c) if the ratings
established or deemed to have been established by Moody’s and S&P for the Index
Debt shall be changed (other than as a result of a change in the rating system
of Moody’s or S&P), such change shall be effective as of the date on which it is
first announced by the applicable rating agency, irrespective of when notice of
such change shall have been furnished by the Borrower to the Administrative
Agent and the Lenders. Each change in the Applicable Rate shall apply during the
period commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of Moody’s or S&P shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt obligations, the Borrower
and the Lenders shall negotiate in good faith to amend the definition of
“Applicable Rate” to reflect such changed rating system or the unavailability of
ratings from such rating agency and, pending the effectiveness of any such
amendment, the Applicable Rate shall be determined by reference to the rating
most recently in effect prior to such change or cessation.”
““Consolidated EBIT” means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of the amounts for such period, without
duplication, of: (a) Consolidated Net Income, plus (b) charges against income
for foreign, federal, state, and local taxes, to the extent deducted in
computing Consolidated Net Income, plus (c) Consolidated Interest Expense, plus
(d) extraordinary or non-recurring non-cash losses to the extent deducted in
computing Consolidated Net Income, plus (e) non-cash stock compensation expense
recorded in accordance with FASB Statement 123R, which the Borrower adopted as
of January 1, 2006, to the extent deducted in computing Consolidated Net Income,
minus (f) extraordinary or non-recurring non-cash gains to the extent included
in computing Consolidated Net Income, calculated on a rolling four-quarter basis
for covenant compliance purposes.”
““Consolidated EBITDA” means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of the amounts for such period, without
duplication, of: (a) Consolidated Net Income, plus (b) charges against income
for foreign, federal, state, and local taxes, to the extent deducted in
computing Consolidated Net Income, plus (c) Consolidated Interest Expense, plus
(d) depreciation expense, to the extent deducted in computing Consolidated Net
Income, plus (e) amortization expense, including, without limitation,
amortization of goodwill, other intangible assets and Transaction Expenses, to
the extent deducted in computing Consolidated Net Income, plus (f) extraordinary
or non-recurring non-cash losses to the extent deducted in computing
Consolidated Net Income, plus (g) non-cash stock compensation expense recorded
in accordance with FASB Statement 123R, which the Borrower adopted as of

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January 1, 2006, to the extent deducted in computing Consolidated Net Income,
minus (h) extraordinary or non-recurring non-cash gains to the extent included
in computing Consolidated Net Income, calculated on a rolling four-quarter basis
for covenant compliance purposes.”
No term, covenant or provision of the Credit Agreement or any other Credit
Document is intended to be amended hereby except to the extent specifically set
forth above in this Section 1.
     SECTION 3. Conditions to Effectiveness. This Amendment shall become
effective as of the date first set forth above when and if each of the
conditions set forth in this Section 3 shall have been satisfied:
     (a) Amendment. This Amendment shall have been duly executed and delivered
by the Borrower, each Guarantor, the Administrative Agent and each Lender.
     (b) Board Resolutions. The Administrative Agent shall have received a copy
of the resolutions of the Board of Directors of the Borrower authorizing the
execution, delivery and performance of (i) this Amendment and the Credit
Agreement as amended hereby and (ii) any related agreements, in each case
certified by the Secretary or Assistant Secretary of the Borrower as of the date
hereof, together with a certificate of the Secretary or Assistant Secretary of
the Borrower as to the incumbency and signature of the officers of the Borrower
executing such Credit Documents and any certificate or other documents to be
delivered by them pursuant hereto, together with evidence of the incumbency of
such Secretary or Assistant Secretary.
     (c) Organization. The Administrative Agent shall have received (i) a copy
of the Certificate of Incorporation of the Borrower certified as of a recent
date by the Secretary of State of the State of Delaware and (ii) a copy of the
bylaws of the Borrower certified by the Secretary or Assistant Secretary
thereof; provided that in lieu of providing such Certificate of Incorporation
and bylaws, such Secretary or Assistant Secretary may certify that there have
been no amendments or other modifications thereto on or after the Effective
Date.
     (d) Officer’s Certificate. The Administrative Agent shall have received an
executed certificate of an officer of the Borrower, satisfactory in form and
substance to the Administrative Agent, certifying that (i) the representations
and warranties contained herein, in the Credit Agreement and in the other Credit
Documents to which the Borrower is a party are true and correct in all respects
on and as of the date hereof, except to the extent that any such representation
or warranty relates to a specific earlier date (in which case such
representation or warranty was true and correct in all respects on and as of
such earlier date); (ii) the Borrower is in compliance with all of the terms and
provisions set forth herein, in the Credit Agreement and in the other Credit
Documents to which it is a party; (iii) no Default or Event of Default has
occurred and is continuing, and no material adverse change has occurred since
the Effective Date in the business, assets, liabilities, operations or
condition, financial or otherwise, of the Borrower or the Borrower’s
subsidiaries; and (iv) the Borrower is, both before and after giving effect to
the transactions contemplated by this Amendment, Solvent.
     (e) Absence of Default. No Default or Event of Default shall have occurred
and be continuing, and no material adverse change shall have occurred since the
Effective Date in the

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business, assets, liabilities, operations or condition, financial or otherwise,
of the Borrower or the Borrower’s subsidiaries.
     (f) Legal Restraints/Litigation. As of the date hereof, there shall be no:
(i) litigation, investigation or proceeding (judicial or administrative) pending
or threatened against the Borrower or its assets, by any agency, division or
department of any county, city, state or federal government arising out of this
Amendment, the Credit Agreement as amended hereby or the other Credit Documents;
(ii) injunction, writ or restraining order restraining or prohibiting the
financing arrangements contemplated under this Amendment, the Credit Agreement
as amended hereby or the other Credit Documents; or (iii) suit, action,
investigation or proceeding (judicial or administrative) pending against the
Borrower or its assets, which, if adversely determined, could have a material
adverse effect on the business, assets, liabilities, operations or condition,
financial or otherwise, of the Borrower or the Borrower’s subsidiaries.
     (g) Fees. The Borrower shall have paid (i) to the Administrative Agent, for
its own account or for that of the Lenders, as applicable, fees payable in the
amounts and at the times separately agreed upon in writing between the Borrower
and the Administrative Agent and (ii) to counsel to the Administrative Agent,
its fees, charges, and expenses to the extent reflected in a statement of such
counsel rendered to the Borrower on or prior to the date hereof.
     SECTION 4. Representations and Warranties. As a material inducement to the
Lenders to enter into this Amendment, the Borrower hereby represents and
warrants to the Lenders as follows (in each case after giving effect to this
Amendment):
     (a) Authorization; Enforceability. Execution, delivery and performance by
the Borrower of this Amendment and the Credit Agreement as amended hereby have
been duly authorized by all necessary corporate action. This Amendment has been
duly executed and delivered by the Borrower. This Amendment and the Credit
Agreement as amended hereby constitute the legal, valid and binding obligations
of the Borrower, enforceable in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
     (b) Representations and Warranties The representations and warranties of
the Borrower and its Subsidiaries set forth in the Credit Agreement and the
other Credit Documents are true and correct in all material respects on and as
of the date of execution and delivery of this Amendment (other than
representations and warranties that by the specific terms thereof apply only as
of an earlier date, which representations and warranties shall be true and
correct on and as of such earlier date).
     (c) No Default or Event of Default. On and as of the date of execution and
delivery of this Amendment by the parties hereto, and immediately after giving
effect thereto, no Default or Event of Default has occurred or is continuing.
     SECTION 5. Miscellaneous.
     (a) Ratification and Confirmation. The terms, provisions, conditions and
covenants of the Credit Agreement, as amended by the amendments expressly set
forth above, and the other

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Credit Documents remain in full force and effect and are hereby ratified and
confirmed, and the execution, delivery and performance of this Amendment shall
not in any manner operate as a waiver of, consent to or, except as expressly set
forth herein, amendment of any term, provision, condition or covenant thereof.
     (b) Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
     (c) APPLICABLE LAW. THE LAWS OF THE STATE OF TEXAS (OTHER THAN
CONFLICT-OF-LAW PROVISIONS THEREOF) SHALL GOVERN THE RIGHTS AND DUTIES OF THE
PARTIES TO THIS AMENDMENT AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND
INTERPRETATION THEREOF.
     (d) Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. Delivery of this Amendment may be made by facsimile or
electronic transmission of a duly executed counterpart copy hereof.
     (e) Affirmation of Obligations. Notwithstanding that such consent is not
required under the Guaranty Agreement, each of the Guarantors consents to the
execution, delivery and performance of this Amendment and the Credit Agreement
as amended hereby. As a material inducement to the undersigned Lenders to enter
into this Amendment, each of the Guarantors (i) acknowledges and confirms the
continuing existence, validity and effectiveness of the Guaranty Agreement and
(ii) agrees that the execution, delivery and performance of this Amendment and
the Credit Agreement as amended hereby shall not in any way release, diminish,
impair, reduce or otherwise affect its obligations thereunder.
     (f) FINAL AGREEMENT. THIS AMENDMENT, THE CREDIT AGREEMENT AS AMENDED HEREBY
AND THE OTHER CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
[Remainder of this page blank; signature pages follow]

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
first above written.

              PEROT SYSTEMS CORPORATION
 
       
 
  By:   /s/ Russell Freeman
 
       
 
      Name: Russell Freeman
 
      Title:   Vice President & CFO
 
       
 
  By:   /s/ Elizabeth Whitmer
 
       
 
      Name: Elizabeth Whitmer
 
      Title:   Treasurer
 
            JPMORGAN CHASE BANK, as Administrative
Agent and as a Lender
 
       
 
  By:   /s/ Mae Reeves
 
       
 
      Name: Mae Reeves
 
      Title:   Vice President
 
            KEYBANK NATIONAL ASSOCIATION, as a Lender
 
       
 
  By:  
 
       
 
      Name:
 
      Title:
 
            SUNTRUST BANK, as a Lender
 
       
 
  By:   /s/ Daniel S. Komitor
 
       
 
      Name: Daniel S. Komitor
 
      Title:   Director

Signature Page to First Amendment to Amended and Restated Credit Agreement

 

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              WELLS FARGO BANK, N.A., as a Lender
 
       
 
  By:   /s/ Zach Johnson
 
       
 
      Name: Zach Johnson
 
      Title: Senior Vice President
 
            WACHOVIA BANK, N.A.,
as a Lender
 
       
 
  By:   /s/ Julia Harman
 
       
 
      Name: Julia Harman
 
      Title: Vice President
 
            COMERICA BANK,
as a Lender
 
       
 
  By:   /s/ Mark B. Grover
 
       
 
      Name: Mark B. Grover
 
      Title: First Vice President
 
            AMEGY BANK NATIONAL ASSOCIATION,
as a Lender
 
       
 
  By:   /s/ Melinda N. Jackson
 
       
 
      Name: Melinda N. Jackson
 
      Title: Senior Vice President
 
            BANK OF TEXAS, N.A.,
as a Lender
 
       
 
  By:   /s/ Ryan Suchala
 
       
 
      Name: Ryan Suchala
 
      Title: Vice President

Signature Page to First Amendment to Amended and Restated Credit Agreement

 

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              THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
as a Lender
 
       
 
  By:   /s/ D. Barnell
 
       
 
      Name: D. Barnell
 
      Title: VP & Manager
 
            BANK HAPOALIM B.M.,
as a Lender
 
       
 
  By:   /s/ Helen H. Gateson
 
       
 
      Name: Helen H. Gateson
 
      Title: Vice President
 
       
 
       
 
  By:   /s/ Charles McLaughlin
 
       
 
      Name: Charles McLaughlin
 
      Title: Senior Vice President
 
            MIZUHO CORPORATE BANK, LTD.,
as a Lender
 
       
 
  By:   /s/ Bertram H. Tang
 
       
 
      Name: Bertram H. Tang
 
      Title: Senior Vice President & Team Leader

Signature Page to First Amendment to Amended and Restated Credit Agreement

 

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SUBSIDIARY GUARANTORS (for purposes of Section 5(e) hereof):

          PEROT SYSTEMS HEALTHCARE SERVICES, LLC    
 
       
By:
  /s/ Rex C. Mills    
 
 
 
Name: Rex C. Mills    
 
  Title: Assistant Secretary    
 
        PS CONNECTICUT, LLC    
 
       
By:
  /s/ Thomas D. Williams    
 
 
 
Name: Thomas D. Williams    
 
  Title: Vice President    
 
        ADVANCED RECEIVABLES STRATEGY, INC.    
 
       
By:
  /s/ Thomas D. Williams    
 
 
 
Name: Thomas D. Williams    
 
  Title: Vice President    
 
        PEROT SYSTEMS GOVERNMENT SERVICES, INC.    
 
       
By:
  Charles N. Bell    
 
 
 
Name: Charles N. Bell    
 
  Title: Assistant Secretary    

Signature Page to First Amendment to Amended and Restated Credit Agreement