Document:

exv10w60

EXHIBIT 10.60

FIRST LOAN MODIFICATION AGREEMENT

     This First Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as
of October 30, 2008, by and between SILICON VALLEY BANK, a California chartered bank, with its
principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 (“Bank”) and
FINISAR CORPORATION, a Delaware corporation with its chief executive office located at 1399 Moffett
Park Drive, Sunnyvale, California 94089 (“Borrower”).

1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and
obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan
arrangement dated as of March 14, 2008, evidenced by, among other documents, a certain Loan and
Security Agreement dated as of March 14, 2008, between Borrower and Bank (as amended, the “Loan
Agreement”). Capitalized terms used but not otherwise defined herein shall have the same meaning
as in the Loan Agreement.

2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as
described in the Loan Agreement (together with any other collateral security granted to Bank, the
“Security Documents”). Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”.

3. DESCRIPTION OF CHANGE IN TERMS.

A. Modifications to Loan Agreement.

	 	1	 	Borrower hereby agrees to deliver to Bank, on or prior to
November 27, 2008, a joinder agreement and all other documentation requested by
Bank in order to make Optium Corporation, a Delaware corporation that is a
wholly-owned subsidiary of Borrower, a “Borrower” under the Loan Agreement.
The failure of Borrower to comply with this provision shall result in an
immediate Event of Default under the Loan Agreement, for which there shall be
no grace or cure period.
	 
	 	2	 	The Loan Agreement shall be amended by inserting the following
text, appearing at the end of Section 2.5 thereof:

“ (d) Unused Revolving Line Facility Fee. A fee (the “Unused
Revolving Line Facility Fee”), payable quarterly, in arrears, on a
calendar year basis, in an amount equal to 0.35% per annum of the
average unused portion of the Revolving Line, as determined by Bank.
The unused portion of the Revolving Line, for the purposes of this
calculation, shall include amounts reserved under Section 2.1.4 for
products provided and under Section 2.1.3 for FX Forward Contracts.
Borrower shall not be entitled to any credit, rebate or repayment of
any Unused Revolving Line Facility Fee previously earned by Bank
pursuant to this Section 2.5(d) notwithstanding any termination of
this Agreement or the suspension or termination of Bank’s obligation
to make loans and advances hereunder.”

	 	3	 	The Loan Agreement shall be amended by deleting the following
text appearing in Section 6.6 thereof:

“ (b) In the event that the aggregate amount of Borrower’s
unrestricted cash and Cash Equivalents maintained with Bank and
Bank’s affiliates is less than Fifty Million Dollars ($50,000,000.00)
at any time, Borrower

 

 

shall immediately pay to Bank a one-time fee equal to Fifty Thousand
Dollars ($50,000.00), which fee shall be deemed to be earned as of
the Effective Date.”

	 	 	 	and inserting in lieu thereof the following:

“ (b) In the event that the aggregate amount of Borrower’s
unrestricted cash maintained in a deposit account with Bank is less
than Five Million Dollars ($5,000,000.00) at any time, Borrower shall
immediately pay to Bank a one-time fee equal to Fifty Thousand
Dollars ($50,000.00), which fee shall be deemed to be earned as of
the Effective Date.”

	 	4	 	The Loan Agreement shall be amended by deleting the following
appearing as Section 6.7 thereof:

“ 6.7 Financial Covenants

     Borrower shall maintain at all times, to be tested as of the
last day of each month, unless otherwise noted:

     (a) Adjusted Quick Ratio. An Adjusted Quick
Ratio of at least (i) 0.90 to 1.0 through and including the
month ending June 30, 2008, (ii) 1.0 to 1.0 as of the month
ending July 31, 2008 through and including the month ending
September 30, 2008, and (iii) 1.25 to 1.0 as of the month
ending October 31, 2008 and thereafter.

     (b) EBITDA. As of the last day of each of
Borrower’s fiscal quarters, commencing with the fiscal quarter
ended October 31, 2007, Borrower shall have EBITDA of at least
Five Million Dollars ($5,000,000.00) for the six-month period
ending on such date.”

	 	 	 	and inserting in lieu thereof the following:

“ 6.7 Financial Covenants

     Borrower shall maintain at all times, to be tested as of the
last day of each month, unless otherwise noted:

     (a) Adjusted Quick Ratio. An Adjusted Quick
Ratio of at least (i) 0.90 to 1.0 through and including the
month ending June 30, 2008, (ii) 1.0 to 1.0 as of the month
ending July 31, 2008 through and including the month ending
September 30, 2008, (iii) 1.10 to 1.00 as of October 31, 2008
through and including the month ending June 30, 2009, and (iv)
1.25 to 1.00 as of the month ending July 31, 2009 and
thereafter.

     (b) EBITDA. As of the last day of each of
Borrower’s fiscal quarters, commencing with the fiscal quarter
ended October 31, 2007, Borrower shall have EBITDA for the
six-month period ending on the last day of such quarter of at
least (i) Five Million Dollars ($5,000,000.00) for the
quarters ended October 31, 2007, January 31, 2008, April 30,
2008 and July 31, 2008, (ii) Twenty Million Dollars
($20,000,000.00) for the quarters ending October 31, 2008,
January 31, 2009 and April 30, 2009, and (iii) Twenty-Five
Million Dollars ($25,000,000.00) for the quarter ending on
July 31, 2009 and as of the last day of each quarter
thereafter.”

 

 

	 	5	 	The Loan Agreement shall be amended by inserting the following
new definition appearing alphabetically in Section 13.1 thereof:

“ “Unused Revolving Line Facility Fee” is defined in Section 2.5(d).”

	 	6	 	The Loan Agreement shall be amended by deleting the following
definitions appearing in Section 13.1 thereof:

“ “Adjusted Quick Ratio” is the ratio of Quick Assets to Current
Liabilities minus Deferred Revenue.”

“ “LIBOR Rate Margin” is two and one-half of one percent (2.50%).”

“ “Prime Rate Margin” is zero percent (0.00%).”

“ “Revolving Line” is an Advance or Advances in an aggregate
amount of up to Fifty Million Dollars ($50,000,000.00) outstanding at
any time.”

“ “Revolving Line Maturity Date” is March 13, 2009.”

	 	 	 	and inserting in lieu thereof the following:

“ “Adjusted Quick Ratio” is the ratio of (a) Quick Assets to (b)
Current Liabilities minus Deferred Revenue and the current portion of
convertible subordinated notes to be paid by Borrower.”

“ “LIBOR Rate Margin” is three percent (3.0%).”

“ “Prime Rate Margin” is one-half of one percent (0.50%).”

“ “Revolving Line” is an Advance or Advances in an aggregate amount
of up to Forty-Five Million Dollars ($45,000,000.00) outstanding at
any time”

“ “Revolving Line Maturity Date” is July 15, 2010.”

	 	7	 	The Compliance Certificate appearing as Exhibit B to
the Loan Agreement is hereby replaced with the Compliance Certificate attached
hereto as Schedule 1.

4. FEES. In connection with the Loan Agreement and this Loan Modification Agreement,
Borrower shall pay to Bank the following additional fees:

     (a) Borrower shall pay to Bank a modification fee equal to Two Hundred Twenty-Five
Thousand Dollars ($225,000.00), which fee shall be deemed fully earned and shall be due and
payable as of the date hereof; provided, however, such fee shall be reduced by an amount
equal to (i) Two Hundred Thousand Dollars ($200,000.00), multiplied by (ii) the quotient of
(A) the number of days between the date following the date of this Loan Modification
Agreement and March 13, 2009 (inclusive of each such date), divided by (B) 364.

     (b) Borrower shall pay to Bank the Anniversary Fee, which Anniversary Fee shall be
deemed fully earned on the date hereof and shall be due and payable on the earlier to occur
of (i) the date that is one (1) year from the date of this Loan Modification Agreement (the
“Anniversary Date”), and (ii) the early termination of the Loan Agreement. As used herein,
“Anniversary Fee” shall be an amount equal to (A) Two Hundred Twenty-Five Thousand Dollars
($225,000.00), multiplied by (B) the quotient of (1) the number of days between the date
following the Anniversary Date and July 15, 2010 (inclusive of each such date), divided by
(2) 365.

 

 

     (c) Borrower shall reimburse Bank for all legal fees and expenses incurred in
connection with this Loan Modification Agreement.

5. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms and
reaffirms, all and singular, the terms and disclosures contained in a certain Perfection
Certificate dated as of March 14, 2008 between Borrower and Bank, and acknowledges, confirms and
agrees the disclosures and information Borrower provided to Bank in the Perfection Certificate have
not changed, as of the date hereof.

6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary
to reflect the changes described above.

7. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all
terms and conditions of all security or other collateral granted to the Bank, and confirms that the
indebtedness secured thereby includes, without limitation, the Obligations.

8. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no
offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or
otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or
counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby
expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

9. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing
Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set
forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan
Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force
and effect. Bank’ s agreement to modifications to the existing Obligations pursuant to this Loan
Modification Agreement in no way shall obligate Bank to make any future modifications to the
Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the
Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of
Existing Loan Documents, unless the party is expressly released by Bank in writing. No maker will
be released by virtue of this Loan Modification Agreement.

10. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective only when it
shall have been executed by Borrower and Bank.

[The remainder of this page is intentionally left blank]

 

 

     This Loan Modification Agreement is executed as a sealed instrument under the laws of the
State of California as of the date first written above.

	 	 	 	 	 	 	 	 	 	 	 
	BORROWER:	 	 	 	 	 	BANK:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	FINISAR CORPORATION	 	 	 	 	 	SILICON VALLEY BANK	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ STEPHEN K. WORKMAN
	 	 	 	By:	 	/s/ TOM SMITH	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Name:

	 	Stephen K. Workman
	 	 	 	Name:	 	Tom Smith	 	 
	 

	 	 	 	 	 	 	 	 	 
	Title:

	 	Senior Vice President, Finance and CFO
	 	 	 	Title:	 	Managing Director	 	 
	 

	 	 	 	 	 	 	 	 	 

 

 

SCHEDULE 1

EXHIBIT B

COMPLIANCE CERTIFICATE

	 	 	 	 	 
	TO:

	 	SILICON VALLEY BANK
	 	Date:                                                             
	FROM:

	 	FINISAR CORPORATION	 	 

          The undersigned authorized officer of FINISAR CORPORATION (“Borrower”) certifies that under
the terms and conditions of the Loan and Security Agreement between Borrower and Bank (as amended,
the “Agreement”), (1) Borrower is in complete compliance for the period ending                                          with
all required covenants except as noted below, (2) there are no Events of Default, (3) all
representations and warranties in the Agreement are true and correct in all material respects on
this date except as noted below; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in all material
respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required
tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to
the terms of Section 5.8 of the Agreement, and (5) no Liens have been levied or claims made against
Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which
Borrower has not previously provided written notification to Bank. Attached are the required
documents supporting the certification. The undersigned certifies that these are prepared in
accordance with GAAP consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested
at any time or date of determination that Borrower is not in compliance with any of the terms of
the Agreement, and that compliance is determined not just at the date this certificate is
delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given
them in the Agreement.

Please indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	Monthly Financial Statements and Compliance
Certificate

	 	Monthly within 30 days
	 	Yes     No
	 
	 	 	 	 
	Annual financial statements (CPA Audited) on 10-K

	 	FYE within 90 days
	 	Yes     No
	 
	 	 	 	 
	10-Q

	 	Quarterly, within 5 days after filing with
SEC or 45 days after quarter
	 	Yes     No
	 
	 	 	 	 
	8-K

	 	Within 5 days after SEC filing
	 	Yes     No
	 
	 	 	 	 
	Board approved projections

	 	As requested by Bank
	 	Yes     No

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Financial Covenant	 	Required	 	Actual	 	Complies
	Adjusted Quick Ratio (tested monthly)
	 	 	 	 	 	 	 	 	 	 	 	 
	As of October 31, 2008
	 	 	1.10:1.00	 	 	 	___:1.00	 	 	Yes     No
	As of July 31, 2009
	 	 	1.25:1.00	 	 	 	___:1.00	 	 	Yes     No
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Rolling Two-Quarter EBITDA (tested quarterly)
	 	 	 	 	 	 	 	 	 	 	 	 
	As of October 31, 2008
	 	$	20,000,000	 	 	$	     	 	 	Yes     No
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	As of July 31, 2009
	 	$	25,000,000	 	 	$	     	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

 

 

     The following financial covenant analyses and information set forth in Schedule 1 attached
hereto are true and accurate as of the date of this Certificate.

     The following are the exceptions with respect to the certification above: (If no exceptions
exist, state “No exceptions to note.”)

 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	FINISAR CORPORATION	 	 	 	BANK USE ONLY	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	Received by:	 	 	 	 
	Name:

	 	 

	 	 	 	 	 	 

authorized signer
	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	Verified:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 

authorized signer
	 	 
	 

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 	 	 	 	 	 	Compliance Status:
                            
          Yes     No	 	 

 

 

Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

Dated:                                                             

In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan
Agreement shall control.

I. Adjusted Quick Ratio (Section 6.7(a))

	 	 	 
	Required:

	 	___: 1.00*
	 
	 	 
	Actual:

	 	___: 1.00

	 	 	 	 	 	 	 	 	 
	 	A.	 	 	Aggregate value of the unrestricted cash and Cash Equivalents of Borrower
	 	$	                  	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	B.	 	 	Aggregate value of the net billed trade accounts receivable of Borrower
	 	$	                  	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	C.	 	 	Investments of Borrower
	 	$	                  	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	D.	 	 	Quick Assets (the sum of lines A through C)
	 	$	                  	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	E.	 	 	Aggregate value of liabilities of Borrower (including all Indebtedness
to Bank) that mature within one (1) year and current portion of
Subordinated Debt permitted by Bank to be paid by Borrower
	 	$	                  	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	F.	 	 	Current Liabilities (line E))
	 	$	                  	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	G.	 	 	Deferred Revenue
	 	$	                  	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	H.	 	 	Current portion of convertible subordinated notes to be paid by Borrower
	 	$	                  	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	I.	 	 	Line F minus line G and minus line H
	 	$	                  	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	J.	 	 	Adjusted Quick Ratio (line D divided by line I)
	 	 	                  	 

Is line J equal to or greater than ____ : 1.00*?

See Section 6.7(a)

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	  No, not in compliance
	 	 	 	 	 	  Yes, in compliance	 	 
	 

	 	 	 	 	 	 

	 	 	 	 

II. EBITDA (Section 6.7(b))

	 	 	 	 	 	 	 	 	 
	Required:
	 	$	                  	* (for prior two quarters) 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Actual:
	 	$	                  	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

Is EBITDA for prior two quarters at least $                                        *?

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	  No, not in compliance
	 	 	 	 	 	  Yes, in compliance	 	 
	 

	 	 	 	 	 	 

	 	 	 	 

 

			
	*	 	See Section 6.7(b)exv10w27

Exhibit 10.27

INDEMNIFICATION AGREEMENT

          This Indemnification Agreement (this “Agreement”) is made and entered into as of                      ___,
2008, by and between Perot Systems Corporation, a Delaware corporation (the “Company”), and
                     (the “Indemnitee”).

          WHEREAS, qualified persons are reluctant to serve organizations as directors or officers or in
other capacities unless they are provided with adequate protection against risks of claims and
actions against them arising out of their service to and activities on behalf of such
organizations;

          WHEREAS, the parties hereto recognize that the legal risks and potential liabilities, and the
threat thereof, associated with lawsuits filed against persons serving the Company and/or its
subsidiaries, and the resultant substantial time, expense and anxiety spent and endured in
defending lawsuits bears no reasonable relationship to the compensation received by such persons,
and thus poses a significant deterrent and increased reluctance on the part of experienced and
capable individuals to serve the Company and/or its subsidiaries;

          WHEREAS, the uncertainties related to obtaining adequate insurance and indemnification have
increased the difficulty of attracting and retaining such persons;

          WHEREAS, it is reasonable, prudent and necessary for the Company to contractually agree to
indemnify such persons to the fullest extent permitted by law, so that such persons will serve or
continue to serve the Company and/or its subsidiaries free from undue concern that they will not be
adequately indemnified; and

          WHEREAS, the Indemnitee is willing to serve, continue to serve and to take on additional
service for an on behalf of the Company on the condition that the Indemnitee is indemnified
according to the terms of this Agreement;

          NOW, THEREFORE, in consideration of the premises and of Indemnitee’s agreement to provide
services to the Company and/or its subsidiaries and intending to be legally bound hereby, the
parties hereto agree as follows:

          1. Certain Definitions:

     (a) Change in Control: shall be deemed to have occurred if (i) any “person”
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended), other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the
Company representing 30% or more of the total voting power represented by the
Company’s then outstanding Voting Securities (other than a Perot Stockholder (as defined below) or any such person or
any affiliate thereof that is such a 30%

 

beneficial owner as of the date hereof), or
(ii) during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Company and any new director
whose election by the Board of Directors or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (iii) the stockholders of the Company
approve a merger or consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the surviving
entity) at least 60% of the total voting power represented by the Voting Securities
of the Company or such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of (in one transaction or a series of transactions) all or substantially all
the Company’s assets.

     (b) Claim: any threatened, pending or completed action, suit or proceeding
(including any mediation, arbitration or other alternative dispute resolution
proceeding), whether instituted by or in the right of the Company or by any other
party, or any inquiry or investigation that Indemnitee in good faith believes might
lead to the institution of any such action, suit or proceeding, whether civil
(including intentional and unintentional tort claims), criminal, administrative,
investigative or other.

     (c) Expenses: include attorneys’ fees and all other costs, expenses and
obligations paid or incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing to defend, be a
witness in or participate in any Claim relating to any Indemnifiable Event.

     (d) Indemnifiable Event: any event or occurrence related to the fact that
Indemnitee is or was serving as [a member of the Board of Directors] [an officer] of
the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust
or other enterprise.

     (e) Independent Legal Counsel: a law firm, or a member of a law firm, that
is experienced in matters of corporation law and neither presently is, nor in the
five years previous to the selection or appointment has been, retained to represent:
(i) the Company or Indemnitee in any matter material to either such party or (ii)
any other party to the Claim for which
Indemnitee is seeking indemnification hereunder (other than with respect to matters
concerning the rights of Indemnitee under this Agreement, or of other indemnitees
under similar indemnity agreements). Notwithstanding the foregoing, the term
“Independent Legal Counsel” shall not include any person who, under applicable
standards of professional conduct then prevailing, would have a conflict of interest
in representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.

 - 2 - 

 

     (f) Perot Stockholder: includes Ross Perot, Ross Perot, Jr., HWGA,
Ltd. or any of their respective Affiliates and Associates (as such terms are defined
in Rule 12b-2 of the Securities Exchange Act of 1934, as amended).

     (g) Reviewing Party: (i) member or members of the Company’s Board of
Directors who is not a party to the particular Claim, issue or matter for which
Indemnitee is seeking indemnification, or (ii) Independent Legal Counsel.

     (h) Voting Securities: any securities of the Company which vote generally
in the election of directors.

          2. Basic Indemnification Arrangement.

     (a) In the event Indemnitee was, is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other
participant in, a Claim by reason of (or arising in part out of) an Indemnifiable
Event, the Company shall indemnify Indemnitee to the fullest extent permitted by law
as soon as practicable but in any event no later than thirty days after written
demand is presented to the Company, against any and all Expenses, liabilities,
losses, judgments, fines, excise taxes, penalties and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses, liabilities, losses, judgments, fines, excise
taxes, penalties or amounts paid in settlement) of such Claim. If so requested by
Indemnitee, the Company shall advance (within ten business days of such request) any
and all Expenses to Indemnitee (an “Expense Advance”). Expense Advances shall be
made without regard to the ability of Indemnitee to repay such amounts. Any such
Expense Advances shall be made on an unsecured basis and be interest-free.

     (b) Notwithstanding the foregoing, (i) the obligations of the Company under
Section 2(a) shall be subject to the condition that the Reviewing Party shall not
have determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 3 hereof is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, and (ii) the obligation of the
Company to make an Expense Advance pursuant to Section 2(a) shall be subject to the
condition that, if, when and to the extent that the Reviewing Party ultimately
determines that Indemnitee would not be permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by Indemnitee
(who hereby agrees and undertakes to reimburse the Company) for all such amounts
theretofore paid; provided, however, that if Indemnitee has commenced or thereafter
commences legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, any
determination made by the Reviewing Party that Indemnitee would not be permitted to
be indemnified under applicable law shall not be binding and Indemnitee shall not be
required to reimburse the Company for any Expense Advance until a final judicial
determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). If there has not been a Change in
Control, the Reviewing Party shall be members of the Company’s Board of Directors
who are not a party to the particular Claim, issue or matter for which Indemnitee is
seeking indemnification, and if there has been such a Change in Control (other than
a Change

 - 3 - 

 

in Control which has been approved by a majority of the Company’s Board of
Directors who were directors immediately prior to such Change in Control) or if no
such disinterested directors are available, the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 3 hereof. If there has been no
determination by the Reviewing Party or if the Reviewing Party determines that
Indemnitee substantively would not be permitted to be indemnified in whole or in
part under applicable law, Indemnitee shall have the right to commence litigation in
any court in the State of Texas or Delaware having subject matter jurisdiction
thereof and in which venue is proper seeking an initial determination by the court
or challenging any such determination by the Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and the Company hereby consents to
service of process and to appear in any such proceeding. In the event that the
Indemnitee does not commence such litigation following a determination by the
Reviewing Party, such determination by the Reviewing Party shall be conclusive and
binding on the Company and Indemnitee.

     (c) The Company shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any action or Claim effected without
its written consent. The Company shall not settle any action or claim in any manner
which would impose any penalty or limitation on Indemnitee without Indemnitee’s
written consent. Neither the Company nor Indemnitee will unreasonably withhold their
consent to any proposed settlement.

          3. Change in Control. The Company agrees that if there is a Change in Control of the
Company (other than a Change in Control which has been approved by a majority of the Company’s
Board of Directors who were directors immediately prior to such Change in Control), then with
respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity payments
and Expense Advances under this Agreement or any other agreement or Company charter or by-law
provision now or hereafter in effect relating to Claims for Indemnifiable Events, the Company shall
seek legal advice only from Independent Legal Counsel selected by Indemnitee and approved by the
Company (which approval shall not be unreasonably withheld). Such counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to whether and to what extent the
Indemnitee would be permitted to be indemnified under applicable law. The Company agrees to pay
the reasonable fees and expenses of the Independent Legal Counsel referred to above and to fully
indemnify such counsel against any and all expenses (including attorneys’ fees), claims,
liabilities and damages arising out of or relating to this Agreement or its engagement pursuant
hereto.

          4. Indemnification for Additional Expenses. The Company shall, to the maximum extent
permitted by law, indemnify Indemnitee against any and all expenses (including attorneys’ fees)
and, if requested by Indemnitee, shall (within ten business days of such request) advance such
expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by
Indemnitee for (i) indemnification or Expense Advances under this Agreement or any other agreement
or Company charter or by-law provision now or hereafter in effect relating to Claims for
Indemnifiable Events, or (ii) recovering under any directors’ and officers’ liability insurance
policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance expense payment or insurance recovery, as the case may
be.

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          5. Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement
to indemnification by the Company for some or a portion of the Expenses, judgments, fines,
penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or otherwise in defense of any or all
Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter
therein, including dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.

          6. Burden of Proof. In connection with any determination by the Reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proof
shall be on the Company to establish that Indemnitee is not so entitled.

          7. No Presumptions. For purposes of this Agreement, the termination of any claim,
action, suit or proceeding by judgment, order, settlement (whether with or without court approval)
or conviction, or upon a plea of nolo contendere or its equivalent shall not create a presumption
that Indemnitee did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable law. In addition,
neither the failure of the Reviewing Party to have made a determination as to whether Indemnitee
has met any particular standard of conduct or had any particular belief, nor an actual
determination by the Reviewing Party that Indemnitee has not met such standard of conduct or did
not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a
judicial determination that Indemnitee should be indemnified under applicable law, shall be a
defense to Indemnitee’s claim or create a presumption that Indemnitee has not met any particular
standard of conduct or did not have any particular belief.

          8. Nonexclusivity; Subsequent Change in Law. The rights of the Indemnitee hereunder
shall be in addition to any other rights Indemnitee may have under the Company’s charter or by-laws
or Delaware law, or otherwise. To the extent that a change in Delaware law (whether by statute or
judicial decision) permits greater indemnification by agreement than would be afforded currently
under the Company’s charter or by-laws and this Agreement, it is the intent of the parties hereto
that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.

          9. D&O Liability Insurance. The Company currently maintains a directors’ and officers’
liability insurance policy and intends to continue to maintain such policies or replacements
thereof as long as, in its sole discretion, such coverages are economically feasible. To the extent
the Company maintains a directors’ and officers’ liability insurance policy or policies, and as
long as Indemnitee remains an officer or director of the Company, Indemnitee shall be covered by
such policy or policies in accordance with its or their terms, to the maximum extent of the
coverage available for any director or officer of the Company. Further, after Indemnitee no longer
serves as an officer or director of the Company for any reason, the Company will use its
commercially reasonable efforts to continue to cover Indemnitee as a named insured under the
Company’s insurance policy or policies providing directors’ and officers’ liability insurance for a
period of time that shall commence on the date of termination and end on the date that is the
sooner of (i) six years after the date of termination, or (ii) the date on which the Company ceases
to maintain an insurance policy providing directors’ and officers’ liability insurance.

 - 5 - 

 

          10. Amendments; Waiver. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

          11. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company effectively to bring suit
to enforce such rights.

          12. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors or assigns (including any
direct or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company), spouses, heirs, executors and
personal or legal representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as a director of the Company.

          13. Severability. The provisions of this Agreement shall be severable in the event
that any of the provisions hereof (including any provision within a single section, paragraph or
sentence) is held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable in any respect, and the validity and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way impaired and shall
remain enforceable to the fullest extent permitted by law.

          14. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made and to be performed
in such state without giving effect to the principles of conflicts of laws.

[Signature page follows]

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          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth
above.

	 	 	 	 	 	 	 
	 	 	PEROT SYSTEMS CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 - 7 -

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