Exhibit 10.1
THIRD AMENDMENT TO CREDIT AGREEMENT
     THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of
January 22, 2009, is by and among SUNAIR SERVICES CORPORATION (f/k/a SUNAIR
ELECTRONICS, INC.), a Florida corporation (the “Borrower”), each of those
subsidiaries of the Borrower party hereto (each a “Guarantor”, and collectively,
the “Guarantors”), the several banks and other financial institutions (the
“Lenders”) from time to time party to the Credit Agreement (defined below) and
WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders
(the “Agent”). Capitalized terms used herein without definition have the
respective meanings set forth in the Credit Agreement. References herein to
“Sections” are to Sections of the Credit Agreement unless otherwise indicated.
RECITALS
     A. The Borrower, the Guarantors, the Lenders and the Agent have entered
into that certain Credit Agreement, dated as of June 7, 2005, as amended by that
certain First Amendment to Credit Agreement dated May 14, 2007 and Second
Amendment to Credit Agreement dated as of February 12, 2008 (as amended,
supplemented or otherwise modified, the “Credit Agreement”).
     B. The Borrower, the Guarantors, the Lenders and the Agent have agreed to
modify the Credit Agreement in the manner hereinafter set forth:
     NOW, THEREFORE, the parties hereto agree as follows:
     1. The Credit Agreement is hereby amended as follows:
     (a) Section 1.1 is hereby amended by amending in its entirety the following
definition so that such definition now reads as follows.
     “Revolving Commitment Termination Date” shall mean January 2, 2010.
     (b) Section 2.1(a) is amended in its entirety so that such Section now
reads as follows.
     (a) Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans (“Revolving Loans”) to the Borrower from time to time for the
purposes hereinafter set forth; provided, however, that (i) with regard to each
Lender individually, the sum of such Lender’s share of outstanding Revolving
Loans [p] such Lender’s LOC Commitment Percentage of LOC Obligations shall not
exceed such Lender’s Revolving Commitment Percentage of the aggregate Revolving
Committed Amount, and (ii) with regard to the Lenders collectively, the sum of
the aggregate amount of outstanding Revolving Loans plus LOC Obligations shall
not exceed the aggregate Revolving Committed Amount then in effect. For

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purposes hereof, the aggregate amount available hereunder shall be SEVEN MILLION
SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($7,750,000) (as such aggregate maximum
amount may be reduced from time to time as provided in Section 2.4 including,
without limitation, scheduled mandatory reductions and the maintenance of
Reserves, the “Revolving Committed Amount”). Revolving Loans shall consist
solely of Fixed LIBOR Rate Loans and may be repaid and re- borrowed in
accordance with the provisions hereof. Fixed LIBOR Rate Loans shall be made by
each Lender at its LIBOR Lending Office.
     (c) Section 2.1(d) is amended by deleting subsection (1) thereof. Such
deletion is intended to remove the Floating LIBOR Rate option from the Credit
Agreement in its entirety. Consequently, all references to the Floating LIBOR
Rate option and the right to convert from one Type of Loan to another Type of
Loan are deleted from the Credit Agreement and each other Loan Document. From
and after the date of this Third Amendment, all outstanding Loans and all Loans
hereafter advanced under the Credit Agreement shall be Fixed LIBOR Rate Loans,
notwithstanding anything to the contrary contained in any of the Loan Documents.
There shall not be more than five (5) Tranches of Fixed LIBOR Rate Loans
outstanding at any time.
     (d) Section 2.1(d)(ii) is renumbered as Section 2.1(d)(i).
     (e) Section 2.2(a) is amended to reduce the LOC Committed Amount from THREE
MILLION DOLLARS ($3,000,000) to ONE MILLION DOLLARS ($1,000,000).
     (f) Section 2.3(a) is deleted in its entirety. All unpaid Commitment Fees
payable thereunder for periods prior to January 1, 2009 shall be paid upon
execution by the Credit Parties of this Third Amendment. No Commitment Fees
shall accrue or be payable for any period commencing on or after January 1,
2009.
     (g) Section 2.4(b) is amended in its entirety so that such Section now
reads as follows:
     (b) Mandatory Reductions. The Revolving Commitment Amount shall be reduced
to $7,500,000 on March 31, 2009, to $6,750,000 on June 30, 2009, and to
$5,500,000 on September 30, 2009 and thereafter.
     (h) Section 5.9(a) is amended in its entirety, such amendment to be
effective as of September 30, 2008, so that such Section reads as follows:
     (a) Leverage Ratio. The Leverage Ratio shall be less than or equal to the
following amounts as of the last day of each fiscal quarter ending during the
following periods:

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                          MAXIMUM     PERIOD     RATIO    
Through September 30, 2008
      6.00      
October 1, 2008 through December 31, 2008
      3.90      
January 1, 2009 through March 31, 2009
      3.25      
April 1, 2009 through June 30, 2009
      2.65      
July 1, 2009 and thereafter
      1.90      

     (i) Section 5.9(b) is amended in its entirety, such amendment to be
effective as of September 30, 2008, so that such Section reads as follows:
     (b) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio shall be
at least the following amounts as of the last day of each fiscal quarter ending
during the following periods:

                          MAXIMUM     PERIOD     RATIO    
Through September 30, 2008
      1.00      
October 1, 2008 through December 31, 2008
      1.00      
January 1, 2009 through March 31, 2009
      1.05      
April 1, 2009 through June 30, 2009
      1.10      
July 1, 2009 and thereafter
      1.20      

     (j) Section 5.9(c) is amended in its entirety, such amendment to be
effective as of September 30, 2008, so that such Section reads as follows:
     (c) Consolidated EBITDA. Consolidated EBITDA shall not be less than each of
the following amounts for each of the rolling four fiscal quarterly periods
ending as of the last day of each fiscal quarter ending during the following
periods:

                          MAXIMUM     PERIOD     RATIO    
Through September 30, 2008
    $ 1,700,000.00      
October 1, 2008 through December 31, 2008
    $ 1,800,000.00      
January 1, 2009 through March 31, 2009
    $ 2,050,000.00      
April 1, 2009 through June 30, 2009
    $ 2,300,000.00      
July 1, 2009 and thereafter
    $ 2,800,000.00      

     (k) Section 9.13 is amended in its entirety so that such Section now reads
as follows:
     Section 9.13 Governing Law.
     This Credit Agreement, the Notes and each of the other Credit Documents,
and the rights and obligations of the parties under the Credit Agreement, the
Notes and each of the other Credit Documents, shall be governed by, and
construed and interpreted in accordance with, the laws of the State of Florida.

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     The foregoing amendment is intended to change the governing law provisions
of all Credit Documents and, as such, shall be deemed an amendment to each
Credit Document.
     The first sentence of Section 9.14 (Consent to Jurisdiction and Service of
Process) is amended in its entirety so that such sentence now reads as follows:
     Any legal action or proceeding with respect to this Credit Agreement or any
other Credit Document shall be brought in the courts of the State of Florida in
Broward County or of the United States for the Southern District of Florida,
and, by execution of this Credit Agreement, each of the Borrower and the other
Credit Parties accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts and irrevocably agrees to be bound by any final judgment rendered thereby
in connection with this Credit Agreement or any other Credit Document from which
no appeal has been take or is available.
     2. In connection with the execution of this Third Amendment, Borrower
agrees to pay the Agent a loan modification fee in the amount of $40,000 on the
date hereof, and this Third Amendment shall not be effective until the receipt
in full of such amount.
     3. To induce the Agent and the Lenders to enter into this Third Amendment,
Borrower represents and warrants to the Agent and the Lenders that (i) except
for Middleton Pest Control, Inc., Sunair Florida Pest Holdings, Inc., Sunair
Pest Holdings, Inc., Sunair Communications, Inc., Sunair Southeast Pest
Holdings, Inc. and Sunair Holdings Inc., there are no other Domestic
Subsidiaries which, pursuant to Section 5.10, are required to be Guarantors,
(ii) after giving effect to this Third Amendment, no Default or Event of Default
exists, and (iii) all corporate and other action necessary to authorize the
Credit Parties to enter into and execute this Third Amendment, and to perform
their respective obligations hereunder, have been taken.
     4. Borrower agrees to execute such additional documents as are reasonably
requested by the Agent to reflect the terms and conditions of this Third
Amendment and will cause to be delivered such certificates, legal opinions and
other documents as are reasonably required by the Agent. In addition, the
Borrower will pay all costs and expenses in connection with the preparation,
execution and delivery of the documents executed in connection with this
transaction, including, without limitation, the reasonable fees and
out-of-pocket expenses of special counsel to the Agent as well as any and all
filing and recording fees and stamp and other taxes with respect thereto and to
save the Agent harmless from any and all such costs, expenses and liabilities.

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     5. Except as expressly amended hereby, all of the provisions of the Credit
Agreement and the Credit Documents shall remain unchanged and shall continue to
be, and shall remain, in full force and effect in accordance with their
respective terms. The amendments set forth herein are the only amendments being
made by this Third Amendment, any waivers of any provisions of the Credit
Agreement or other Credit Documents granted prior to the date hereof shall be
limited to such waiver on the date waived, and, in each case, the amendments and
the waivers shall not be deemed to be a waiver of, an amendment to, consent to
or modification of any other term or provision of the Credit Agreement or any
other Credit Document or any transaction or further or future action on the part
of the Borrower which would require the consent of the Lenders under the Credit
Agreement or any of the Credit Documents.
     6. This Third Amendment is a Credit Document executed pursuant to the
Credit Agreement and shall (unless otherwise expressly indicated herein or
therein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.
     7. At such time as this Third Amendment shall become effective, all
references in the Credit Documents to the “Credit Agreement” shall be deemed to
refer to the Credit Agreement as amended by this Third Amendment.
     8. This Third Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
     9. This Third Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original, and it
shall not be necessary in making proof of this Third Amendment to produce or
account for more than one counterpart.
     10. THIS THIRD AMENDMENT AND THE OTHER DOCUMENTS AND AGREEMENTS EXECUTED IN
CONNECTION HEREWITH (UNLESS SPECIFICALLY STIPULATED TO THE CONTRARY IN SUCH
DOCUMENT OR AGREEMENT), AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
AND THEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES.
[Three execution pages follow]

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

          BORROWER:   SUNAIR SERVICES CORPORATION (Vida
SUNNAIR ELECTRONICS, INC.)
      By:   /s/ Jack I. Ruff         Name:   Jack I. Ruff        Title:  
President and Chief Executive Officer     

          MIDDLETON PEST CONTROL, INC.

GUARANTORS:
    By:   /s/ Jack I. Ruff       Name:   Jack I. Ruff      Title:   President   
 

          SUNAIR SOUTHEAST PEST HOLDINGS, INC.
    By:   /s/ Jack I. Ruff       Name:   Jack I. Ruff      Title:   President   
 

            SUNAIR PEST HOLDINGS, INC.
      By:   /s/ Jack I. Ruff         Name:   Jack I. Ruff        Title:  
President     

[Two execution pages follow]

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SUNAIR HOLDINGS, INC. (f/k/a Sunair Services Corporation
SUNAIR FLORIDA PEST HOLDINGS, INC.
[One execution page follows]

                  By:   /s/ Jack I. Ruff         Name:   Jack I. Ruff       
Title:   President        SUNAIR COMMUNICATIONS, INC.
      By:   /s/ Jack I. Ruff         Name:   Jack I. Ruff        Title:  
President              By:   /s/ Jack I. Ruff         Name:   Jack I. Ruff     
  Title:   President   

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          ADMINISTRATIVE AGENT AND SOLE LENDER:
WACHOVIA BANK, NATIONAL ASSOCIATION
    By:   /s/ Pat Schnitzer       Name:   Pat Schnitzer, Senior Vice President 
         

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