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                                                                     EXHIBIT 4.2

SECOND TRANCHE WARRANT NO. 002

            The securities represented by this certificate have been acquired
            directly or indirectly from the Issuer without being registered
            under the Securities Act of 1933, as amended (the "Securities Act"),
            or any other applicable securities laws, and are restricted
            securities as that term is defined under Rule 144 promulgated under
            the Securities Act. These securities may not be sold, pledged,
            transferred, distributed or otherwise disposed of in any manner
            ("Transfer") unless they are registered under the Securities Act and
            any other applicable securities laws, or unless the request for
            Transfer is accompanied by a favorable opinion of counsel,
            reasonably satisfactory to the Issuer, stating that the Transfer
            will not result in a violation of the Securities Act or any other
            applicable securities laws.

                             SECOND TRANCHE WARRANT

                            SUNAIR ELECTRONICS, INC.

      SUNAIR ELECTRONICS, INC. (the "Issuer"), a Florida corporation, with
offices at 3005 SW 3rd Ave., Fort Lauderdale, FL 33315-3312, for value received,
hereby certifies that COCONUT PALM CAPITAL INVESTORS II, LTD., a Florida limited
partnership ("Coconut Palm"), with an address for notice purposes hereunder at
555 South Federal Highway, Second Floor, Boca Raton, Florida 33432, or its
registered assigns, is entitled to purchase from the Issuer up to Five Million
(5,000,000) (as further defined below, the "Issuable Number") duly authorized,
validly issued, fully paid and non-assessable shares (subject to the adjustments
contained in this Warrant) of common stock, par value $0.10 per share (the
"Common Stock"), of the Issuer at the purchase price per share equal to Seven
Dollars ($7.00) (the "Exercise Price") at any time and from time to time on or
after February 8, 2005 (the "Issuance Date") and at or before 5:00 p.m., Fort
Lauderdale, Florida time, on the fifth anniversary of the Issuance Date (the
"Termination Date"), all subject to the terms, conditions and adjustments set
forth below in this Warrant. Capitalized terms used herein are defined in
Section 10 hereof or elsewhere throughout this Warrant, or in that certain
Purchase Agreement, dated November 17, 2004, by and between Issuer and Coconut
Palm (the "Purchase Agreement"). For purposes of this Warrant, the "Issuable
Number" shall equal the aggregate number of shares of Common Stock purchased by
Coconut Palm pursuant to the Purchase Agreement as of the Second Closing Date.
In addition, Coconut Palm shall be entitled to purchase an equal Issuable Number
of First Tranche Warrant Shares, in accordance with that certain First Tranche
Warrant issued to Coconut Palm pursuant to the Purchase Agreement.

1.    Exercise of Warrant.

      1.1   Manner of Exercise. This Warrant may be exercised by the holder of
this Warrant (the "Holder") in whole or in part, at any time and from time to
time on or after the Issuance Date, by facsimile, mail or overnight courier
delivery of a notice in substantially the form attached to this Warrant (or a
reasonable facsimile thereof) duly executed by such Holder (a "Warrant Exercise
Notice"). The closing of each exercise shall take place on (i) the third (3rd)

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Business Day following, and excluding, the date the Warrant Exercise Notice is
delivered (the "Warrant Notice Date"), subject to the provisions of Section
1.4(b) hereof, (ii) at the option of the Holder, such later date as the
conditions set forth in Section 1.2 have been waived or satisfied or (iii) any
other date upon which the exercising Holder and the Issuer mutually agree (each,
a "Warrant Closing Date").

            (a) This Warrant may be exercised by the Holder hereof by paying
      cash to Issuer in the amount equal to the product of (i) the number of
      shares of Common Stock for which the Warrant is being exercised (without
      giving effect to any adjustment thereof) multiplied by (ii) the Exercise
      Price.

            (b) At any time on or after one hundred eighty (180) days following
      the Issuance Date, in lieu of payment of the Exercise Price in cash as set
      forth in Section 1.1(a), the Holder hereof may exercise this Warrant by
      specifying in the Warrant Exercise Notice that such Holder has elected to
      exercise this Warrant pursuant to a "broker-assisted" exercise/sale
      procedure pursuant to which funds to pay for exercise of the Warrant are
      delivered to the Issuer by a broker upon receipt of stock certificates
      from the Issuer through a licensed broker reasonably acceptable to the
      Issuer whereby the stock certificate or certificates for the shares of
      Common Stock for which the Warrant is exercised will be delivered by the
      Issuer to such broker as the agent for the Holder exercising the Warrant
      and the broker will deliver to the Issuer cash (or cash equivalents
      acceptable to the Issuer) equal to the Exercise Price for the shares of
      Common Stock purchased pursuant to the exercise of the Warrant. The Issuer
      shall allow the issuance and delivery to such broker of the shares of
      Common Stock necessary to effect the sale of such shares by such broker
      and apply the sales proceeds to pay the Exercise Price notwithstanding the
      fact that the Issuer will not receive the cash proceeds until after the
      sale of the underlying shares of Common Stock, subject, in the event the
      Holder is an officer or director of the Issuer, to compliance with the
      applicable provisions of the Sarbanes-Oxley Act of 2002 with respect to
      loans to officers and directors. Holder hereby expressly agrees to
      indemnify and to hold the Issuer harmless for the full amount of any loss
      or damage ( including all reasonable trial attorneys' and appellate
      attorneys' fees including those which may be incurred in the enforcement
      of this indemnity) Issuer may sustain as a result of such broker failing
      to remit to Issuer the proceeds from the sale of such shares of Common
      Stock in accordance with this Section 1.1(b).

      1.2   Conditions to Closing. It shall be a condition of the exercising
Holder's obligation to close on each Warrant Closing Date that each of the
following is satisfied, unless waived by such Holder:

            (a) all shares to be issued upon such exercise shall be registered
      under the Securities Act, shall be freely tradable Registered Common Stock
      and shall be duly listed and admitted to trading on Nasdaq, the New York
      Stock Exchange or the American Stock Exchange, depending on where such
      shares are traded at the time the Warrant is exercised (unless the Holder
      expressly consents in writing to the issuance of unregistered Common Stock
      for a portion or all of the shares to be issued upon such exercise in
      which case the Issuer shall issue such unregistered Common Stock upon such
      request).

            (b) As of such Warrant Closing Date, the Issuer shall have notified
      the Holder of all Restatements, and no Restatement shall have occurred on
      or after the date on which

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      the Warrant Exercise Notice is delivered. The Holder and the Issuer
      expressly acknowledge and agree that the issuance of a press release by
      the Issuer disclosing a Restatement shall be deemed sufficient to satisfy
      this notice requirement.

If any such condition is not satisfied or waived prior to the third (3rd)
Business Day following and excluding the date the Warrant Exercise Notice is
delivered, then the Holder may, at its sole option, and at any time, withdraw
the Warrant Exercise Notice by written notice to the Issuer regardless of
whether such condition has been satisfied or waived as of the withdrawal date
and, after such withdrawal, shall have no further obligation with respect to
such Warrant Exercise Notice and may submit a Warrant Exercise Notice on any
future date with respect to the shares referenced in the original Warrant
Exercise Notice.

      1.3   When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to 5:00 p.m. (time in effect in
Fort Lauderdale, Florida on such date) on the Business Day on which the Warrant
Exercise Notice is delivered as provided in Section 1.1, and at such time the
Person or Persons in whose name or names any certificate or certificates for
shares of Common Stock (or Other Securities) shall be issuable upon such
exercise as provided in Section 1.4 shall be deemed to have become the Holder or
Holders of record thereof, provided, however, that such exercise shall not be
deemed effective if at or prior to 5:00 p.m. (time in effect in Fort Lauderdale,
Florida on such date) on the Warrant Closing Date the Holder delivers written
notice of withdrawal to the Issuer as set forth in Section 1.2.

      1.4   Delivery of Warrant and Payment. On each Warrant Closing Date, the
registered Holder shall surrender this Warrant to the Issuer at the address set
forth for the Issuer in the introductory paragraph of this Warrant or such other
address as the Issuer advises the Holder in writing and (a) shall deliver
payment in cash, by wire transfer to the Issuer's account designated by Issuer
of immediately available funds or by certified or official bank check payable to
the order of the Issuer, to the extent that the Warrant is exercised in
accordance with Section 1.1(a), shall have so specified in the Warrant Exercise
Notice delivered by such Holder and such Holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock (or Other Securities) determined as
provided in Sections 2 and 3 hereof, or (b) if exercising this Warrant in
accordance with Section 1.1(b) above, shall have so specified in the Warrant
Exercise Notice delivered by such Holder, and the Issuer shall deliver to the
Holder's broker the number of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock (or Other Securities) determined as
provided in Sections 2 and 3 hereof, following the sale of which in accordance
with Section 1.1(b) above such broker shall, within three (3) Business Days
after the Warrant Closing Date, deliver payment in cash, by wire transfer to the
Issuer's account designated by Issuer of immediately available funds or by
certified or official bank check payable to the order of the Issuer, to the
extent that the Warrant is exercised.

      1.5   Delivery of Stock Certificates, etc. On each Warrant Closing Date,
the Issuer at its expense (including the payment by it of any applicable issue
taxes) shall cause to be issued in the name of and delivered to the Holder
hereof or as such Holder may direct,

            (a) via facsimile and at such address specified by the Holder via a
      reputable overnight courier, a delivery notice in the form of Exhibit 2
      hereto and one or more certificates for the number of duly authorized,
      validly issued, fully paid and nonassessable shares of Common Stock (or
      Other Securities) to which such Holder shall

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      be entitled upon such exercise plus, in lieu of any fractional share to
      which such Holder would otherwise be entitled, cash in an amount equal to
      the same fraction of the Closing Sales Price per share on the Business Day
      next preceding the date of such exercise, and

            (b) in case such exercise is in part only, at such address specified
      by the Holder via reputable overnight courier, a new Warrant of like
      tenor, calling in the aggregate on the face or faces thereof for the
      number of shares of Common Stock equal (without giving effect to any
      adjustment thereof) to the number of such shares called for on the face of
      this Warrant minus the number of such shares designated by the Holder in
      the related Warrant Exercise Notice upon such exercise as provided in
      Section 1.1.

2.    Adjustment of Common Stock Issuable Upon Exercise.

      2.1   General; Warrant Price. The number of shares of Common Stock that
the Holder of this Warrant shall be entitled to receive upon each exercise
hereof shall be determined by multiplying the number of shares of Common Stock
that would otherwise (but for the provisions of Sections 2 and 3) be issuable
upon such exercise, as designated by the Holder hereof pursuant to Section 1.1,
by a fraction of which (a) the numerator is the Exercise Price and (b) the
denominator is the Warrant Price in effect on the date of such exercise. The
"Warrant Price" shall initially be the Exercise Price. The Warrant Price shall
be adjusted and readjusted from time to time as provided in Sections 2 and 3
hereof and, as so adjusted or readjusted, shall remain in effect until a further
adjustment or readjustment thereof is required by Sections 2 and 3 hereof.

      2.2   INTENTIONALLY LEFT BLANK.

      2.3   INTENTIONALLY LEFT BLANK.

      2.4   INTENTIONALLY LEFT BLANK.

      2.5   Treatment of Stock Dividends, Stock Splits, etc. In case the Issuer
at any time or from time to time on or after the Issuance Date shall declare or
pay any dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, the Warrant Price in
effect immediately prior to such dividend or subdivision shall, concurrently
with the deemed effectiveness of such dividend or subdivision, be reduced to a
price determined by multiplying the Warrant Price by a fraction, the numerator
of which shall be the number of shares of Common Stock outstanding immediately
prior to giving effect to such dividend or subdivision and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after giving effect to such dividend or subdivision (including, without
limitation, all shares of Common Stock deemed issued or issuable in connection
with or as a result of such dividend or subdivision notwithstanding that any
such shares have not actually been issued as of the deemed effectiveness of such
dividend or subdivision). For purposes hereof, such dividend or subdivision
shall be deemed effective, and additional shares of Common Stock shall be deemed
to have been issued pursuant thereto (a) in the case of any such dividend,
immediately after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such dividend, or (b)
in the case of any such subdivision, at the close of business on the day
immediately prior to the day upon which such corporate action becomes effective.

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      2.6   Adjustments for Combinations, etc. In case the outstanding shares of
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.

      2.7   Dividends and Distributions in Cash, Property or Securities other
than Common Stock. In case the Issuer at any time or from time to time on or
after the Issuance Date shall declare, order, pay or make a dividend or other
distribution on the Common Stock of cash, property or securities (including,
without limitation, a dividend payable in any shares, interests, rights,
options, warrants, evidences of indebtedness or convertible securities of the
Company or any other Person) other than a dividend payable in Common Stock
covered under Section 2.5 hereof or a dividend or other distribution on the
Common Stock of cash, property or securities, issued in connection with any sale
of all or substantially all of the assets or securities of any subsidiary of the
Issuer, then the Warrant Price shall be reduced, effective as of the date of
such distribution record date, (a) in the case of a cash distribution, by the
dollar amount of the cash distribution per share of Common Stock, subject to the
last sentence of this Section 2.7, (b) in the case of a distribution of property
other than cash, by the dollar amount of the fair market value of all the
property being distributed divided by the number of shares of Common Stock
issued and outstanding as of such dividend record date in respect of which such
property distribution is being made and (c) in the case of a distribution of
securities (including, without limitation, a dividend payable in any shares,
interests, rights, options, warrants, evidences of indebtedness or convertible
securities of the Company or any other Person) other than a dividend payable in
Common Stock covered under Section 2.5 hereof, by the dollar amount of the fair
market value of all such securities being distributed divided by the number of
shares of Common Stock issued and outstanding as of such dividend record date in
respect of which such property distribution is being made. The determination of
fair market value of any such property (other than cash) or securities pursuant
to this Section 2.7 shall be made by an independent, nationally recognized
appraisal firm not affiliated with the Issuer that is regularly engaged in the
business of appraising the type of property or securities, as applicable, that
is the subject of such distribution, at the Issuer's expense. If the aggregate
amount of any ordinary cash distributions from retained earnings lawfully made
in accordance with Section 607.06401 of the Florida Business Corporation Act
(expressly excluding, without limitation, extraordinary, liquidating or partial
liquidating cash distributions, by way of return of capital or otherwise)
("Ordinary Cash Distributions") covered by this Section 2.7 shall, during any
quarterly period of any calendar year (i.e. January 1 to March 31, April 1 to
June 30, July 1 to September 30, or October 1 to December 31) (each, a
"Quarterly Period"), total three-quarters of one percent (.75%) of the average
of the Closing Sales Prices for the dividend record dates for such Ordinary Cash
Distributions during such Quarterly Period (the "De Minimis Cash Distribution
Amount") or less, then such cash distributions shall not require an adjustment
to the Warrant Price pursuant to clause (a) of this Section 2.7; provided that,
notwithstanding anything to the contrary set forth herein, the Warrant Price
shall be adjusted as provided in clause (a) of this Section 2.7 by the aggregate
amount of all (i) Ordinary Cash Distributions during any Quarterly Period in
excess of the De Minimis Cash Distribution Amount and (ii) cash distributions
other than Ordinary Cash Distributions.

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3.    Business Combinations.

      3.1   Adjustment upon Business Combination. In case the Issuer on or after
the Issuance Date is a party to (i) any acquisition of the Issuer by means of
merger or other form of corporate reorganization in which outstanding shares of
the Issuer are exchanged for securities or other consideration issued, or caused
to be issued, by the Acquiring Person or its Parent, Subsidiary or affiliate,
(ii) a sale of all or substantially all of the assets of the Issuer (on a
consolidated basis) in a single transaction or series of related transactions,
(iii) any other transaction or series of related transactions by the Issuer or
relating to the Common Stock (including without limitation, any stock purchase
or tender or exchange offer) in which the power to cast the majority of the
eligible votes at a meeting of the Issuer's shareholders at which directors are
elected is transferred to a single entity or group acting in concert, or (iv) a
capital reorganization or reclassification of the Common Stock (other than a
reorganization or reclassification in which the Common Stock are not converted
into or exchanged for cash or other property, and, immediately after
consummation of such transaction, the shareholders of the Issuer immediately
prior to such transaction own the Common Stock or other voting stock of the
Issuer in substantially the same proportions relative to each other as such
shareholders owned immediately prior to such transaction), then, and in the case
of each such transaction (each of which is referred to herein as "Business
Combination"), proper provision shall be made so that, upon the basis and the
terms and in the manner provided herein, the Holder, upon exercise of all or any
part of this Warrant at any time after the consummation of such Business
Combination, shall be entitled to receive upon such exercise, the Common Stock
and Other Securities, cash and property to which the Holder would have been
entitled upon such consummation if the Holder had exercised the Warrant
immediately prior thereto (including, without limitation, any additional shares
of Common Stock, Other Securities, cash and property issuable as a result of an
increase in the Issuable Number occurring after the date of consummation of such
Business Combination); provided, that if the Acquiring Person or its Parent, as
the case may be, shall combine, subdivide or reclassify its common stock, or
shall declare any dividend payable in shares of its common stock, or shall take
any other action of a similar nature affecting such shares, the calculations
above shall be adjusted to the extent appropriate, as provided in Section 2 of
this Warrant, to reflect such event, including appropriate adjustments to
account for any such event that occurs during any of the measurement periods set
forth above.

      3.2   Assumption of Obligations. Notwithstanding anything contained herein
to the contrary, the Issuer will not effect any Business Combination unless,
prior to the consummation thereof, each Person (other than the Issuer) that may
be required to deliver any stock, securities, cash or property upon exercise of
this Warrant as provided herein shall assume (A) the obligations of the Issuer
under this Warrant (and if the Issuer shall survive the consummation of such
transaction, such assumption shall be in addition to, and shall not release the
Issuer from, any continuing obligations of the Issuer under this Warrant) and
(B) the obligation to deliver to the Holder such shares of stock, securities,
cash or property as, in accordance with the foregoing provisions of this Section
3 and the other provisions of this Warrant, the Holder may be entitled to
receive.

4.    No Impairment. The Issuer will not, by amendment of its articles of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to

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protect the rights of the Holder of this Warrant against impairment. Without
limiting the generality of the foregoing, the Issuer (a) will not permit the par
value of any shares of stock receivable upon the exercise of this Warrant to
exceed the amount payable therefor upon such exercise, and (b) will take all
such action as may be necessary or appropriate in order that the Issuer may
validly and legally issue fully paid and nonassessable shares of stock on the
exercise of the Warrants from time to time outstanding.

5.    Accountants' Report as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable upon
the exercise of this Warrant, the Issuer at its expense will promptly compute
such adjustment or readjustment in accordance with the terms of this Warrant
and, to the extent Holder disputes in writing such computations, cause
independent certified public accountants of recognized national standing (which
may be the regular auditors of the Issuer) selected by the Issuer to verify such
computation and prepare a report setting forth such adjustment or readjustment
and showing in reasonable detail the method of calculation thereof and the facts
upon which such adjustment or readjustment is based, including but not limited
to a statement of (a) the number of shares of Common Stock outstanding or deemed
to be outstanding and (b) the Warrant Price in effect immediately prior to such
issue or sale and as adjusted and readjusted (if required by Section 2 or 3) on
account thereof. The Issuer will forthwith mail a copy of each such report to
each Holder of a Warrant and will, upon the written request at any time of any
Holder of a Warrant, furnish to such Holder a copy of the most recent report
setting forth the Warrant Price in effect as of the date such report is
delivered and showing in reasonable detail how it was calculated. The Issuer
will also keep copies of all such reports at its principal office and will cause
the same to be available for inspection at such office during normal business
hours by any Holder of a Warrant or any prospective purchaser of a Warrant
designated by the Holder thereof.

6.    Notices of Corporate Action. In the event of :

            (a) any taking by the Issuer of a record of the holders of any class
      of securities for the purpose of determining the holders thereof who are
      entitled to receive any dividend or other distribution, or any right to
      subscribe for, purchase or otherwise acquire any shares of stock of any
      class or any other securities or property, or to receive any other right,
      or

            (b) any capital reorganization of the Issuer, any reclassification
      or recapitalization of the capital stock of the Issuer or any
      consolidation or merger involving the Issuer and any other Person or any
      transfer of all or substantially all the assets of the Issuer to any other
      Person, or

            (c) any voluntary or involuntary dissolution, liquidation or
      winding-up of the Issuer,

the Issuer will mail to the Holder a notice specifying (i) the date or expected
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right, and (ii) the date or expected date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place and the time,
if any such time is to be fixed, as of which the holders of record of Common
Stock (or Other Securities) shall be entitled to exchange their shares of Common
Stock (or Other Securities) for the securities or other

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property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be delivered to Holder at least twenty (20)
Business Days prior to the date therein specified, but in no event later than
the date notice is delivered to any holder of Common Stock.

7.    Reservation of Shares. For so long as the Warrant represented hereby has
not been exercised in full, the Issuer shall at all times prior to the
Termination Date reserve and keep available, free from pre-emptive rights, out
of its authorized but unissued capital stock, the number of shares required to
permit the full exercise of this Warrant (assuming it were exercised in the
manner provided for in Section 1.1(a) hereof).

8.    Lost or Stolen Warrant. In case this Warrant shall be mutilated, lost,
stolen or destroyed, the Issuer shall issue in exchange and substitution for and
upon cancellation of the mutilated warrant certificate, or in lieu of and
substitution for the warrant certificate lost, stolen or destroyed, a new
warrant certificate of like tenor, but only upon receipt of evidence reasonably
satisfactory, and (in the case of loss, theft or destruction) of an undertaking
to provide reasonably satisfactory indemnification, to the Issuer of or in
respect of such loss, theft or destruction of such warrant certificate.

9.    Warrant Agent. The Issuer (and any corporation into which the Issuer is
merged or any corporation resulting from any consolidation to which the Issuer
is a party) shall serve as warrant agent (the "Warrant Agent") under this
Warrant. The Warrant Agent hereunder shall at all times maintain a register (the
"Warrant Register") of the Holders of this Warrant. Upon 30 days' notice to the
registered Holder hereof, the Issuer may appoint a new Warrant Agent. Such new
Warrant Agent shall be a corporation doing business and in good standing under
the laws of the United States or any state thereof, and having a combined
capital and surplus of not less than $50,000,000. The combined capital and
surplus of any such new Warrant Agent shall be deemed to be the combined capital
and surplus as set forth in the most recent report of its condition published by
such Warrant Agent prior to its appointment; provided that such reports are
published at least annually pursuant to law or to the requirements of a federal
or state supervising or examining authority. After acceptance in writing of such
appointment by the new Warrant Agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named herein as
the Warrant Agent, without any further assurance, conveyance, act or deed; but
if for any reason it shall be reasonably necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done
at the expense of the Issuer and shall be legally and validly executed and
delivered by the Issuer. Any corporation into which any new Warrant Agent may be
merged or any corporation resulting from any consolidation to which any new
Warrant Agent shall be a party or any corporation to which any new Warrant Agent
transfers substantially all of its corporate trust or shareholders services
business shall be a successor Warrant Agent under this Warrant without any
further act; provided that such corporation (i) would be eligible for
appointment as successor to the Warrant Agent under the provisions of this
Section 9 or (ii) is a wholly owned Subsidiary of the Warrant Agent. Any such
successor Warrant Agent shall promptly cause notice of its succession as Warrant
Agent to be delivered via reputable overnight courier to the registered Holder
hereof at such Holder's last address as shown on the Warrant Register.

10.   Definitions. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:

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      10.1  "Acquiring Person" means, in connection with any Business
Combination: (i) the continuing or surviving corporation or other entity of a
consolidation or merger with the Issuer (if other than the Issuer), (ii) the
transferee of all or substantially all of the properties or assets of the
Issuer, (iii) the corporation or other entity consolidating with or merging into
the Issuer in a consolidation or merger in connection with which the Common
Stock is changed into or exchanged for stock or other securities of any other
Person or cash or any other property, (iv) the entity or group acting in concert
acquiring or possessing the power to cast the majority of the eligible votes at
a meeting of the Issuer's shareholders at which directors are elected or, (v) in
the case of a capital reorganization or reclassification described in clause
(iv) of the definition of Business Combination, the Issuer.

      10.2  "Business Combination" shall have the meaning attributed to it in
Section 3.1 hereof.

      10.3  "Business Day" means any day on which the Common Stock may be traded
on the American Stock Exchange or, if not admitted for trading on the American
Stock Exchange, on any day other than a Saturday, Sunday or holiday on which
banks in Fort Lauderdale, Florida are required or permitted to be closed.

      10.4  "Closing Sales Price" means, on any date, the amount per share of
the Common Stock (or, for purposes of determining the Closing Sales Price of the
common stock of an Acquiring Person or its Parent under Section 3, the common
stock of such Acquiring Person or such Parent), equal to (i) the closing sales
price, or if no sale takes place on such date, the closing bid price of the
Common Stock (or, in the case of an Acquiring Person or its Parent, it common
stock) on the American Stock Exchange, or if not then listed or admitted for
trading on the American Stock Exchange then on the national securities exchange
on which the Common Stock (or, in the case of an Acquiring Person or its Parent,
it common stock) is then listed or admitted for trading, or if not then listed
or admitted for trading on a national securities exchange then on any securities
exchange, quotation system or the OTC Bulletin Board on which the Common Stock
(or, in the case of an Acquiring Person or its Parent, it common stock) is then
listed or admitted for trading on such date, in each case as reported by
Bloomberg, L.P. (or by such other Person as the Holder and the Issuer may
agree), or (ii) if such Common Stock or common stock of an Acquiring Person or
its Parent is not then listed or admitted for trading on any securities
exchange, quotation system or the OTC Bulletin Board, the higher of (x) the book
value per share thereof as determined (at Issuer's cost) by any firm of
independent public accountants of recognized standing selected by the Board of
Directors of the Issuer as of the last calendar day of any month ending within
sixty (60) calendar days preceding the date as of which the determination is to
be made or (y) the fair value per share thereof determined in good faith by an
independent, nationally recognized appraisal firm selected by the Issuer and
reasonably acceptable to the Holder (whose fees and expenses shall be borne by
Issuer), subject to adjustment for stock splits, recombinations, stock dividends
and the like.

      10.5  "Common Stock" as defined in the introduction to this Warrant, such
term to include any stock into which such Common Stock shall have been changed
or any stock resulting from any reclassification of such Common Stock, and all
other stock of any class or classes (however designated) of the Issuer the
holders of which have the right, without limitation as to amount, either to all
or to a share of the balance of current dividends and liquidating dividends
after the payment of dividends and distributions on any shares entitled to
preference to Common Stock shares.

                                       9

<PAGE>

      10.6  "Issuer" as defined in the introduction to this Warrant, means
Sunair Electronics, Inc. and any corporation or entity which shall succeed to or
assume the obligations of Sunair Electronics, Inc.

      10.7  "Other Securities" means any stock (other than Common Stock) and
other securities of the Issuer or any other Person (corporate or otherwise)
which the Holder of the Warrant at any time shall be entitled to receive, or
shall have received, upon the exercise of the Warrant, in lieu of or in addition
to Common Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities.

      10.8  "Parent" as to any Acquiring Person, means any corporation which (a)
controls the Acquiring Person directly or indirectly through one or more
intermediaries, (b) is required to include the Acquiring Person in the
consolidated financial statements contained in such Parent's Annual Report on
Form 10-K (if Parent is required to file such a report) or would be required to
so include the Acquiring Person in such Parent's consolidated financial
statements if they were prepared in accordance with U.S. GAAP and (c) is not
itself included in the consolidated financial statements of any other Person
(other than its consolidated Subsidiaries).

      10.9  "Person" means a corporation, an association, a partnership, a
limited liability company, an organization, a business, an individual, a
government or political subdivision thereof or a governmental agency.

      10.10 "Registered Common Stock" means Common Stock that has been
registered under the Securities Act and is freely tradable.

      10.11 "Restatement" means that Issuer restates or announces its intention
to restate, in any material way, any portion of its financial statements as
included (i) in a Form 10-KSB or Form 10-QSB filed with the SEC in the form of
an amendment thereto, (ii) in a Form 8-K or in any other filing made with the
SEC, or (iii) in a press release or other form of media, except as is required
as a result of a change occurring after the date of this Warrant in (1)
applicable law or (2) generally accepted accounting principles promulgated by
the Financial Accounting Standards Board or the SEC, which change is implemented
by Issuer in the manner and at the time prescribed by such law or such generally
accepted accounting principle.

      10.12 "SEC" means the Securities and Exchange Commission.

      10.13 "Subsidiary" of a Person means (i) a corporation, a majority of
whose stock with voting power, under ordinary circumstances, to elect directors
is at the time of determination, directly or indirectly, owned by such Person or
by one or more Subsidiaries of such Person, or (ii) any other entity (other than
a corporation) in which such Person or one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has at least a
majority ownership interest.

      10.14 "Termination Date" has the meaning set forth in the introductory
paragraph of this Warrant.

11.   Remedies. The Issuer stipulates that the remedies at law of the Holder of
this Warrant in the event of any default or threatened default by the Issuer in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific

                                       10

<PAGE>

performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.

12.   No Rights or Liabilities as Shareholder. Nothing contained in this Warrant
shall be construed as conferring upon the Holder hereof any rights as a
shareholder of the Issuer or as imposing any obligation on such Holder to
purchase any securities or as imposing any liabilities on such Holder as a
shareholder of the Issuer, whether such obligation or liabilities are asserted
by the Issuer or by creditors of the Issuer.

13.   Notices. All notices and other communications under this Warrant shall be
in writing and shall be delivered by facsimile or by a nationally recognized
overnight courier, postage prepaid, addressed (a) if to Holder, to the address
set forth for the Holder in the introductory paragraph of this Warrant, and if
to the Issuer, to the address set forth for the Issuer in the introductory
paragraph of this Warrant, or (b) if to any other Holder of any Warrant, at the
registered address of such Holder as set forth in the register kept at the
principal office of the Issuer, provided that the exercise of any Warrant shall
be effective in the manner provided in Section 1.

14.   Amendments. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.

15.   Descriptive Headings. The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

16.   GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE
OF FLORIDA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

17.   Judicial Proceedings; Waiver of Jury. Any judicial proceeding brought
against the Issuer with respect to this Warrant may be brought in any court of
competent jurisdiction in the State of Florida or of the United States of
America for the Southern District of Florida and, by Issuer's execution and
delivery and Holder's acceptance of this Warrant, each of the Issuer and Holder
(a) accepts, generally and unconditionally, the nonexclusive jurisdiction of
such courts and any related appellate court, and irrevocably agrees to be bound
by any judgment rendered thereby in connection with this Warrant, subject to any
rights of appeal, and (b) irrevocably waives any objection the Issuer or Holder
may now or hereafter have as to the venue of any such suit, action or proceeding
brought in such a court or that such court is an inconvenient forum. Each of the
Issuer and Holder hereby waives personal service of process and consents, that
service of process upon it may be made by certified or registered mail, return
receipt requested, at its address specified or determined in accordance with the
provisions of Section 13, and service so made shall be deemed completed on the
first Business Day after such service is deposited with a reputable overnight
courier or, if earlier, when delivered. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any party to bring proceedings against the other party in the courts of any
other jurisdiction. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY, OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR

                                       11

<PAGE>

CONNECTED WITH THIS WARRANT OR THE RELATIONSHIP ESTABLISHED HEREUNDER.

18.   Legend. Unless the shares of Common Stock or Other Securities issuable
upon exercise of this Warrant have been registered under the Securities Act,
upon exercise of all or any part of the Warrant and the issuance of any of the
shares of Common Stock or Other Securities, all certificates representing such
securities shall bear on the face thereof substantially the following legend:

            "The securities represented by this certificate have been acquired
            directly or indirectly from the Issuer without being registered
            under the Securities Act of 1933, as amended (the "Securities Act"),
            or any other applicable securities laws, and are restricted
            securities as that term is defined under Rule 144 promulgated under
            the Securities Act. These securities may not be sold, pledged,
            transferred, distributed or otherwise disposed of in any manner
            ("Transfer") unless they are registered under the Securities Act and
            any other applicable securities laws, or unless the request for
            Transfer is accompanied by a favorable opinion of counsel,
            reasonably satisfactory to the Issuer, stating that the Transfer
            will not result in a violation of the Securities Act or any other
            applicable securities laws."

19.   Assignment. Notwithstanding anything to the contrary set forth herein,
this Warrant and all rights hereunder may be assigned by the Holder to any
person or entity; and upon the Holder's providing written notice of such
assignment to the Issuer, the Holder's assignee shall become the registered
assignee and the registered Holder of this Warrant, and the Issuer shall
recognize such assignment and cause such assignment to be reflected in its books
and records.

      This Warrant shall not be valid unless signed by the Issuer.

                  [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

                                       12

<PAGE>

      IN WITNESS WHEREOF, Sunair Electronics, Inc. has caused this Second
Tranche Warrant to be signed by its duly authorized officer.

Dated: February 8, 2005                    SUNAIR ELECTRONICS, INC.

                                           By: /s/ James E. Laurent
                                               ---------------------------------
                                           Name: James E. Laurent
                                           Title: President

                                       13

<PAGE>

                                                                       EXHIBIT 1

                        [FORM OF WARRANT EXERCISE NOTICE]

                  (To Be Executed Upon Exercise Of the Warrant)

                                     [DATE]

Sunair Electronics, Inc.
3005 SW 3rd Ave.
Fort Lauderdale, FL 33315-3312
Attention: [_____________]

                  Re:   Second Tranche Warrant No. ____

Ladies and Gentlemen:

      The undersigned is the registered Holder of the above-referenced warrant
(the "Warrant") issued by SUNAIR ELECTRONICS, INC. (the "Issuer"), evidenced by
copy of the Second Tranche Warrant attached hereto, and hereby elects to
exercise the Warrant to purchase [___________]1 shares of Common Stock (or Other
Securities, as applicable) (as such capitalized terms are defined in such Second
Tranche Warrant) and (check the appropriate box):

      [___] cash exercise: shall deliver on the Warrant Closing Date via wire
transfer of immediately available funds or by certified or official bank check
$__________ to the order of Sunair Electronics, Inc. as payment for such Common
Stock in accordance with the terms of such Second Tranche Warrant; or

      [___] broker-assisted exercise: following the Issuer's issuance and
delivery to the broker identified below of certificates for the shares of Common
Stock (or Other Securities, as applicable) with respect to which this Warrant is
being exercised and the sale of such shares of Common Stock (or Other
Securities, as applicable), such broker shall deliver within three (3) Business
Days after the Warrant Closing Date via wire transfer of immediately available
funds or by certified or official bank check $__________ to the order of Sunair
Electronics, Inc. as payment for such Common Stock in accordance with the terms
of such Second Tranche Warrant.

-----------------------------
1     Insert here the Issuable Number called for on the face of this Warrant
(or, in the case of a partial exercise, the portion thereof as to which this
Warrant is being exercised), in either case without making any adjustment for
additional shares of Common Stock or any other stock or other securities or
property or cash which, pursuant to the adjustment provisions of this Warrant,
may be delivered upon exercise. In the case of partial exercise, a new Warrant
or Warrants will be issued and delivered, representing the unexercised portion
of the Warrant, to the Holder surrendering the Warrant.

<PAGE>

      In accordance with the terms of the attached Second Tranche Warrant, the
undersigned requests that certificates for such shares be registered in the name
of and delivered to the undersigned at the following address (or in the case of
a broker-assisted exercise, delivered to the following broker at the following
address):

                     ______________________________________
                     ______________________________________
                     ______________________________________

      The undersigned will deliver the original of the Second Tranche Warrant no
later than the third Business Day after and excluding the date of this notice.

      [If the number of shares of Common Stock to be delivered is less than the
total number of shares of Common Stock deliverable under the Warrant, insert the
following -- The undersigned requests that a new warrant certificate
substantially identical to the attached Second Tranche Warrant be issued to the
undersigned evidencing the right to purchase the number of shares of Common
Stock equal to (x) the total number of shares of Common Stock deliverable under
the Warrant less (y) [_____________]2.]

                                           [HOLDER]

                                           By:__________________________________
                                           Name:________________________________
                                           Title:_______________________________

ACKNOWLEDGED:

SUNAIR ELECTRONICS, INC.

By:__________________________________
Name:________________________________
Title:_______________________________

--------------------
2     Insert here the number of shares identified in the footnote immediately
preceding this one.

                                       2

<PAGE>

                                                                       EXHIBIT 2

                   [FORM OF WARRANT EXERCISE DELIVERY NOTICE]

                                     [Date]

[HOLDER]
__________________________________
__________________________________
__________________________________
Attention: _______________________
Telephone: _______________________
Facsimile: _______________________

Ladies and Gentlemen:

      Reference is made to Second Tranche Warrant No. ______ issued by SUNAIR
ELECTRONICS, INC. (the "Warrant") dated as of [________________], 2004.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Warrant.

      This notice confirms that the Warrant has been exercised by the Holder
with respect to ______________ shares of Common Stock at a Warrant Price (as
defined in the Second Tranche Warrant) of $_____________. Attached are copies of
the front and back of the _________ original stock certificates, each
representing ___________ shares of Common Stock, together with a copy of the
overnight courier air bill which will be used to ship such stock certificates.
Also attached is a reissued warrant certificate, as provided in Section 1.5 of
the Second Tranche Warrant. We will send the original stock certificates by
overnight courier to the following address:

                      [__________________________________]
                      [__________________________________]
                      [__________________________________]

                                           SUNAIR ELECTRONICS, INC.

                                           By:__________________________________
                                           Name:________________________________
                                           Title:_______________________________<PAGE>

                                                                    EXHIBIT 10.7

                              EMPLOYMENT AGREEMENT

      This Employment Agreement (the "Agreement"), is entered into as of
February 8, 2005, (the "Effective Date") by and between JOHN HAYES, residing at
8417 Countrywood Way, Memphis, Tennessee ("Employee"), and SUNAIR ELECTRONICS,
INC., a Florida corporation, with offices at 3005 S.W. Third Ave., Ft.
Lauderdale, FL 33315 (the "Company"). This Agreement replaces and supercedes
that certain Employment Agreement between Employee and the Company dated as of
November 16, 2004.

                                   WITNESSETH:

      WHEREAS, the Company is engaged in several lines of business, including
supplying radio communications systems for defense applications and global
telecommunications hardware and software, and the Company desires to enter into
the pest control services industry;

      WHEREAS, the Employee has a great deal of knowledge, experience and
expertise in the pest control services industry; and

      WHEREAS, the Company and Employee are willing to commence an employment
relationship, on the terms, conditions and covenants set forth in this
Agreement.

      NOW, THEREFORE, in consideration of Employee's commencement of employment
with the Company, the mutual covenants contained herein and other good and
valuable consideration, the receipt of which the Company and Employee hereby
acknowledge, Employee and the Company agree, as follows:

      1.    Position. Employee agrees to employment with the Company, and the
Company hereby employs Employee, in the position of Vice President of Corporate
Development from the Effective Date until February 14, 2005, and as of February
15, 2005, Employee shall be employed in the position of President and Chief
Executive Officer of the Company. Employee further agrees to faithfully and
diligently perform the job duties and to carry out the responsibilities of that
position and such other duties and responsibilities traditionally associated
with such position as determined by the Board of Directors of the Company from
time to time.

      2.    Employee's Effort. Employee shall faithfully and diligently perform
his duties in the capacity as an employee and in such capacity shall spend his
full working time and best efforts, skill and attention to his position and to
the business and interests of the Company, and Employee shall be prohibited from
causing any private investments in businesses that are unrelated to the business
of the Company to interfere with his duties to the Company pursuant to this
Agreement.

      3.    Salary.

            (a) The Company shall pay Employee (i) base compensation (the
"Salary") for services rendered in the amount of Three Hundred Twenty Five
Thousand Dollars

                                       1

<PAGE>

($325,000.00) per annum, payable in installments consistent with the Company's
normal payroll schedule, subject to applicable withholding and other taxes
(which base compensation may be increased by the Board of Directors of the
Company, in its sole discretion), and (ii) annual bonus, if any, as may be
determined by the Board of Directors of the Company, in its sole discretion. The
Board of Directors shall annually review Employee's Salary for adjustment when
appropriate.

            (b) The Employee will be entitled to participate in any bonus plan,
incentive compensation program or incentive stock option plan or other employee
benefits of the Company and which are available to the other similarly situated
executives of the Company, on the terms and at the level of participation
determined by the Board of Directors. Options granted pursuant to such plans
shall vest in accordance with the applicable plan from the time of grant until
the Expiration Date (as defined herein).

      4.    Benefits.

            (a)   The Company will notify Employee on or about the beginning of
each calendar year with respect to the holiday schedule (including the Company's
policy for allowing personal holidays) for the coming year and the Employee
shall be entitled to nine (9) paid holidays per year, in accordance with the
Company's policies.

            (b)   Employee shall be entitled to twenty (20) paid vacation days
each calendar year, to be taken at such times as the Employee and the Company
shall mutually determine and provided that no vacation time shall significantly
interfere with the duties required to be rendered by the Employee hereunder. Any
vacation time not taken by the Employee during any calendar year may not be
carried forward into any succeeding calendar year.

            (c)   Employee shall be entitled to sick leave and emergency leave
according to the regular policies and procedures of the Company. Additional sick
leave or emergency leave over and above paid leave provided by the Company, if
any, shall be unpaid and shall be granted at the discretion of the Board of
Directors of the Company.

            (d)   During the term of employment hereunder, the Employee shall be
entitled to participate in all medical, dental, hospitalization, accidental
death and dismemberment, disability, travel and life insurance plans, and any
and all other plans as are presently and hereinafter offered by the Company to
its executive personnel, including savings, pension, profit-sharing and deferred
compensation plans, subject to the general eligibility and participation
provisions set forth in such plans. Employee shall be responsible for payment of
any federal or state income tax imposed upon these benefits.

            (e)   Employee shall be entitled to participate in any pension or
profit sharing plan, incentive stock option plan or any other type of plan
adopted by Company for the benefit of its officers and/or regular employees
pursuant to the terms of such plans.

                                       2

<PAGE>

            (f)   During the term of this Agreement, the Company shall provide
the Employee with a non-accountable automobile allowance of Seven Hundred
Dollars ($700.00) per month. The Employee shall be responsible for all
insurance, lease and other similar expenses incurred by the Employee by reason
of the use of such automobile. The Company shall be responsible for all costs of
gasoline, oil, repairs, maintenance, and other similar expenses incurred by the
Employee by reason of the use of such automobile for Company business from time
to time. Employee shall be responsible for payment of any federal or state
income tax imposed upon these benefits.

            (g)   Employee shall be entitled to reimbursement for all reasonable
expenses, including travel and entertainment, incurred by Employee in the
performance of Employee's duties. Employee will maintain records and written
receipt as required by the Company policy and reasonably requested by the Board
of Directors of the Company to substantiate such expenses.

      5.    Term; Termination. This Agreement and the status and obligations of
Employee hereunder as an employee of the Company (except as provided for below)
shall cease and terminate effective upon the close of business on the fourth
anniversary of the Effective Date (the "Expiration Date") unless earlier
terminated pursuant to this Section 5 or further extended by the parties hereto
in writing in a separate instrument provided to the other party no later than
sixty (60) days prior to the applicable Expiration Date; provided, however, that
upon such date said termination shall not affect any rights that may have been
specifically granted to Employee by the Board of Directors of the Company or a
designated committee thereof pursuant to any of the Company's retirement plans,
supplementary retirement plans, profit sharing and savings plans, healthcare,
401(k) or any other employee benefit plans sponsored by the Company, it being
understood that no such rights are granted hereunder and that the Employee's
participation in such plans shall cease as of the date of said termination. In
addition, notwithstanding the expiry or termination of this Agreement pursuant
to this Section 5 or otherwise, The Company's and the Employee's rights and
obligations under Sections 7 through 12 inclusive of this Agreement shall
survive such termination or expiration of this Agreement in accordance with the
terms of such Sections.

            (a)   Termination with Notice by Either Party. The Company or
Employee may terminate this Agreement for any reason or no reason upon sixty
(60) days prior written notice to the other. If the Company terminates the
employment of Employee without Good Cause (as herein defined), the Company fails
to renew this Agreement as provided in Section 5 without Good Cause, the
Employee terminates his employment with Good Cause (as herein defined) or the
Employee fails to renew this Agreement as provided in Section 5, the Company
shall pay Employee severance compensation calculated at the rate of Salary in
effect as of the date immediately preceding the date of termination and the cost
of premiums for any Company sponsored insurance policy (or the cash equivalent)
for twenty-four (24) months, payable in the manner and at such times as the
Salary otherwise would have been payable to the Employee hereunder were Employee
to continue to be employed by the Company. If the Company terminates the
employment of Employee with Good Cause, the Company fails to renew this
Agreement as provided in Section 5 with Good Cause, or Employee terminates his
employment

                                       3

<PAGE>

with the Company hereunder as provided in this Section 5(a), the Company shall
not be under any obligation to pay Employee, and Employee shall not be entitled
to, any such severance compensation.

            (b)   Termination for Good Cause by Company. In the case of the
Company terminating this Agreement, "Good Cause" means any one or more of the
following:

                  (1) a material breach or material default by Employee of the
material terms of this Agreement (except any such breach or default which is
caused by the physical disability or death of Employee) which remains uncured
after twenty (20) days following Employee's receipt from the Company of written
notice specifying such breach or default, if subject to cure;

                  (2) gross negligence or willful misfeasance by Employee or the
breach of fiduciary duty by Employee (if affirmatively determined by the Board
of Directors of the Company) in the performance of his duties as an employee
hereunder;

                  (3) the commission by Employee of an act of fraud,
misappropriation of funds, breach of trust, embezzlement or any other crime in
connection with Employee's duties;

                  (4) conviction of Employee of a felony or any crime which
involves dishonesty or a breach of trust;

                  (5) the Employee shall be unable, or fail, to perform the
essential functions of his/her position for which he was hired, with or without
reasonable accommodation, for any period of six months or more to the extent
termination for such disability is in accordance with applicable law;

                  (6) the death of the Employee; or

                  (7) the Employee is unable to perform any of the functions of
his position for which he was hired, because such performance is prohibited or
enjoined by a judicial or administrative order or other agreement enforcing any
non-competition, non-solicitation or other restrictive covenant or agreement to
which the Employee is a party.

      In the event of a termination for Good Cause, the Company will pay
Employee the Salary earned and reasonable expenses reimbursable under this
Agreement incurred through the date of Employee's termination. Any good faith
determination by the Board of Directors of the Company of Good Cause shall be
binding and conclusive on all interested parties. Upon the termination of
Employee's employment with the Company due to death or disability as set forth
in Sections 5(b)(5) and 5(b)(6) above, the Employee shall be entitled to retain
all options that have been granted to Employee and have vested as of the date of
such termination for the duration allowed under applicable law and the Company's
stock option plan.

                                       4

<PAGE>

            (c)   Termination for Good Cause by Employee. In the case of the
Employee terminating this Agreement, "Good Cause" means any one or more of the
following:

                  (1) there shall be a continuing material breach or continuing
material default by the Company of the material terms of this Agreement which
remains uncured after twenty (20) days following the Company's receipt from the
Employee of written notice specifying such breach or default;

                  (2) if Employee shall no longer hold the position of Chief
Executive Officer of the Company with duties and responsibilities consistent
with such positions unless there is Good Cause for the removal of Employee from
such position; or

                  (3) a reduction in Employee's Salary.

      6.    Change in Control and Other Grounds Entitling Employee to Terminate.
"Change in Control" shall mean (a) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions) of all or substantially all of
the assets of the Company; (b) any consolidation or merger or other business
combination of the Company with any other entity where the shareholders of the
Company, immediately prior to the consolidation or merger or other business
combination would not, immediately after the consolidation or merger or other
business combination, beneficially own, directly or indirectly, shares
representing fifty percent (50%) of the combined voting power of all of the
outstanding securities of the entity issuing cash or securities in the
consolidation or merger or other business combination (or its ultimate parent
corporation, if any); or (c) the Board of Directors of the Company adopts a
resolution to the effect that a "Change In Control" has occurred for purposes of
this Agreement. Notwithstanding the foregoing, no transaction shall be deemed to
constitute a "Change in Control" for purposes of this Agreement if such
transaction involves a pest control services company or relates to any existing
or former business segment or division in which the Company operates, or if the
Change of Control is procured, directly or indirectly, by the Employee, Richard
C. Rochon, Mario B. Ferrari, Coconut Palm Capital Investors II, Ltd., any then
existing executive officer or director of the Company or any former executive
officer or director previously affiliated with the Company at any time during
the six month period prior to the Change of Control event and/or or any
affiliates of each of the foregoing.

      Upon a Change in Control, 100% of all unvested stock options and/or
restricted shares held by Employee shall immediately vest.

      Further, if Employee elects to terminate his employment hereunder with
Good Cause (as defined in Section 5(c)) because any of the scenarios
constituting such Good Cause occurs within one (1) year of a Change in Control
then Employee shall be entitled to the severance payments provided for in
Section 5(a).

      Nothing stated in this Section 6 shall operate to reduce or eliminate the
severance obligations of the Company to the Employee pursuant to Section 5(a) to
the extent the Company terminates the employment of Employee without Good Cause
whether in connection with a Change in Control or otherwise.

                                       5

<PAGE>

      7.    Confidentiality. Employee shall keep confidential, except as the
Company may otherwise consent in writing, and not divulge, communicate, disclose
use to the detriment of the Company or for the benefit of any other person or
persons, misuse in any way, or make any use of except for the benefit of the
Company, at any time either during the term of this Agreement or at any time
thereafter, any Confidential Information (as defined herein). For purposes of
this Agreement, "Confidential Information" means information disclosed to the
Employee or known by the Employee as a consequence of or through the unique
position of his employment with the Company (including information conceived,
originated, discovered or developed by the Employee) prior to or after the date
hereof, and not generally or publicly known, about the Company or its business,
including, without limitation, trade secrets, knowledge, data or other
information of the Company relating to the products, processes, know how,
technical data, designs, formulas, test data, customer lists, business plans,
marketing plans and strategies, and product pricing strategies or other subject
matter pertaining to any business of the Company or any of its clients,
customers, consultants, licensees or affiliates which Employee may produce,
obtain or otherwise learn of during the course of Employee's performance of
services, including information expressly deemed to be confidential by the
Company . Employee shall not deliver, reproduce, or in any way allow any such
Confidential Information to be delivered to or used by any third parties without
the specific direction or consent of a duly authorized representative of the
Company, except in connection with the discharge of his duties hereunder. The
terms of this paragraph shall survive termination of this Agreement. Any
Confidential Information or data now or hereafter acquired by the Employee with
respect to the business of the Company (which shall include, but not be limited
to, information concerning the Company's financial condition, prospects,
technology, customers, suppliers, sources of leads and methods of doing
business) shall be deemed a valuable, special and unique asset of the Company
that is received by the Employee in confidence and as a fiduciary, and Employee
shall remain a fiduciary to the Company with respect to all of such information.
Notwithstanding anything to the contrary herein, Employee shall not have any
obligation to keep confidential any information (and the term Confidential
Information shall not be deemed to include any information) that (a) is
generally available to the public through no fault or wrongful act of Employee
in breach of the terms hereof, (b) is disseminated by the Company or any of its
affiliates publicly without requiring confidentiality, (c) is required by law or
regulation to be disclosed by Employee, (d) is required to be disclosed by
Employee to any government agency or person to whom disclosure is required by
judicial or administrative process, or (e) is within Employee's knowledge,
experience and expertise in the pest control services industry that he possessed
at the time of this Agreement; provided that such knowledge, experience and
expertise shall not be used in violation of the restrictive covenants set forth
in Sections 9 through 12 hereof.

      8.    Return of Confidential Material. Upon the completion or other
termination of Employee's services for the Company, Employee shall promptly
surrender and deliver to the Company all records, materials, equipment,
drawings, documents, notes and books and data of any nature pertaining to any
invention, trade secret or Confidential Information of the Company or to
Employee's services, and Employee will not take with him any description
containing or pertaining to any Confidential Information, knowledge or data of
the Company which Employee may produce or obtain during the course of his
services. The terms of this paragraph shall survive termination of this
Agreement.

                                       6

<PAGE>

      9.    Competition. Employee will not do any of the following, either
directly or indirectly, during Employee's employment with the Company and,
during the Applicable Non-Competition Period (as herein defined), anywhere in
the United States. In the event that Employee improperly competes with the
Company in violation of this Section, the period during which he engages in such
competition shall not be counted in determining the Applicable Non-Competition
Period:

            (a)   For purposes of this Agreement, "Competitive Activity" shall
                  mean any activity relating to, in respect of or in connection
                  with, directly or indirectly, the pest control services
                  industry or any existing or former business segment or
                  division in which the Company operates.

            (b)   For purposes of this Agreement, "Applicable Non-Competition
                  Period" shall equal (i) two (2) years after Employee's
                  cessation of employment with the Company in the event the
                  Company terminates the employment of Employee without Good
                  Cause, the Company fails to renew this Agreement as provided
                  in Section 5 without Good Cause, the Employee terminates his
                  employment with the Company with Good Cause or Employee fails
                  to renew this Agreement as provided in Section 5, but only to
                  the extent the Company complies with its obligation to pay the
                  severance payments required by Section 5(a) hereunder to
                  Employee and (ii) two (2) years after Employee's cessation of
                  employment with the Company in the event the Company
                  terminates the employment of Employee with Good Cause, the
                  Company fails to renew this Agreement as provided in Section 5
                  with Good Cause, or Employee terminates his employment with
                  the Company hereunder without Good Cause as provided in this
                  Section 5(a).

            (c)   Employee shall not, directly or indirectly, own any interest
                  in, manage, operate, control, consult for, be an officer or
                  director of, work for, or be employed in any capacity by, any
                  sole proprietorship, corporation, company, partnership,
                  association, venture or business any company or any other
                  business, entity, agency or organization (whether as an
                  employee, officer, director, partner, agent, security holder,
                  creditor, consultant or otherwise) that directly or indirectly
                  (or through any affiliated entity) engages in Competitive
                  Activity; provided that such provision shall not apply to the
                  Employee's ownership of securities of the Company or the
                  acquisition by the Employee, solely as an investment, of
                  securities of any issuer that is registered under Section
                  12(b) or 12(g) of the Securities Exchange Act of 1934, as
                  amended, and that are listed or admitted for trading on any
                  United States national securities exchange or that are quoted
                  on the National Association of Securities Dealers Automated
                  Quotations System, or any similar system or automated
                  dissemination of quotations of securities prices in common
                  use, so long as the Employee does not control, acquire a
                  controlling interest in or become

                                       7

<PAGE>

                  a member of a group which exercises direct or indirect control
                  of, more than five percent of any class of capital stock of
                  such corporation.

            (d)   Employee shall not, directly or indirectly, for himself or for
                  any other person, firm, corporation, partnership, association
                  or other entity, solicit or perform services in connection
                  with any Competitive Activity for any prior or current
                  customers of the Company;

            (e)   Employee shall not, directly or indirectly, for himself or for
                  any other person, firm, corporation, partnership, association
                  or other entity, solicit or attempt to solicit for employment
                  or employ or attempt to employ any then current employees or
                  former employees employed by the Company without the Company's
                  consent, as applicable, unless such employee or former
                  employee has not been employed by the Company for a period in
                  excess of six months; or

            (f)   Employee shall not make known the names and addresses of such
                  clients or any information relating in any manner to the
                  Company's trade or business relationships with such customers,
                  other than in connection with the performance of the
                  Employee's duties under this Agreement.

            Employee and the Company agree that the phrase "Employee's cessation
of employment with the Company" as used in this Agreement, refers to any
separation from his employment at the Company either voluntarily by Employee
pursuant to Sections 5(a) and 5(c) or involuntarily by the Company pursuant to
Sections 5(a) and 5(b).

      10.   Other Obligations.

            (a)   Employee acknowledges that the Company from time to time may
have agreements with other persons, which impose obligations or restrictions on
the Company made during the course of work thereunder or regarding the
confidential nature of such work. Employee will be bound by all such obligations
and restrictions and will take all action necessary to discharge the obligations
of the Company thereunder.

            (b)   All of Employee's obligations under this Agreement shall be
subject to any applicable agreements with, and policies issued by the Company to
which Employee is subject that are generally applicable to the similarly
situated executives of the Company.

      11.   Trade Secrets of Others. Employee represents that his performance of
all the terms of this Agreement as employee to the Company does not and will not
breach any agreement to keep in confidence proprietary information, knowledge or
data acquired by Employee in confidence or in trust. Employee will not enter
into any agreement, either written or oral, which is in conflict with this
Agreement.

                                       8

<PAGE>

      12.   Other Provisions Relating to Restrictive Covenants.

            (a)   Ownership of Developments. All copyrights, patents, trade
secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed or
created by the Employee during the course of performing work for the Company or
its clients (collectively, the "Work Product") shall belong exclusively to the
Company and shall, to the extent possible, be considered a work made by the
Employee for hire for the Company within the meaning of Title 17 of the United
States Code. To the extent the Work Product may not be considered work made by
the Employee for hire for the Company, the Employee agrees to assign, and
automatically assign at the time of creation of the Work Product, without any
requirement of further consideration, any right, title, or interest the Employee
may have in such Work Product. Upon the request of the Company, the Employee
shall take such further actions, including execution and delivery of instruments
of conveyance, as may be appropriate to give full and proper effect to such
assignment.

            (b)   Books and Records. All books, records, and accounts relating
in any manner to the customers or clients of the Company, whether prepared by
the Employee or otherwise coming into the Employee's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company on termination of the Employee's employment hereunder or on the
Company's request at any time.

            (c)   Definition of Company. Solely for purposes of these Sections 7
through 12, the term "Company" also shall include any existing or future
subsidiaries of the Company that are operating during the time periods described
herein and any other entities that directly or indirectly, through one or more
intermediaries, control, are controlled by or are under common control with the
Company during the periods described herein.

            (d)   Acknowledgment by the Employee. The Employee acknowledges and
confirms that (a) the restrictive covenants contained in these Sections 7
through 12 are reasonably necessary to protect the legitimate business interests
of the Company, and (b) the restrictions contained in these Sections 7 through
12 (including without limitation the length of the term of such provisions) are
not overbroad, overlong, or unfair and are not the result of overreaching,
duress or coercion of any kind. The Employee further acknowledges and confirms
that his full, uninhibited and faithful observance of each of the covenants
contained in these Sections 7 through 12 will not cause him any undue hardship,
financial or otherwise, and that enforcement of each of the covenants contained
herein will not impair his ability to obtain employment commensurate with his
abilities and on terms fully acceptable to him or otherwise to obtain income
required for the comfortable support of him and his family and the satisfaction
of the needs of his creditors. The Employee acknowledges and confirms that his
special knowledge of the business of the Company is such as would cause the
Company serious injury or loss if he were to use such ability and knowledge to
the benefit of a competitor or were to compete with the Company in violation of
the terms of these Sections 7 through 12. The Employee further acknowledges that
the restrictions contained in these Sections 7 through 12 are intended to be,
and shall be, for the benefit of and shall be enforceable by, the Company's
successors and assigns.

                                       9

<PAGE>

            (e)   Reformation by Court. In the event that a court of competent
jurisdiction shall determine that any provision of these Sections 7 through 12
is invalid or more restrictive than permitted under the governing law of such
jurisdiction, then only as to enforcement of these Sections 7 through 12 within
the jurisdiction of such court, such provision shall be interpreted and enforced
as if it provided for the maximum restriction permitted under such governing
law.

            (f)   Extension of Time. If the Employee shall be in violation of
any provision of these Sections 7 through 12, then each time limitation set
forth in these Sections 7 through 12 shall be extended for a period of time
equal to the period of time during which such violation or violations occur. If
the Company seeks injunctive relief from such violation in any court, then the
covenants set forth in these Sections 7 through 12 shall be extended for a
period of time equal to the pendency of such proceeding including all appeals by
the Employee.

            (g)   Injunction. It is recognized and hereby acknowledged by the
parties hereto that a breach by the Employee of any of the covenants contained
in these Sections 7 through 12 of this Agreement will cause irreparable harm and
damage to the Company, the monetary amount of which may be virtually impossible
to ascertain. As a result, the Employee recognizes and hereby acknowledges that
the Company shall be entitled to an injunction from any court of competent
jurisdiction enjoining and restraining any violation of any or all of the
covenants contained in these Sections 7 through 12 of this Agreement by the
Employee or any of his affiliates, associates, partners or agents, either
directly or indirectly, and that such right to injunction shall be cumulative
and in addition to whatever other remedies the Company may possess.

            (h)   Survival. The provisions of these Sections 7 through 12 shall
survive the termination of the term of employment hereunder or expiration of the
term of this Agreement.

      13.   Modification. This Agreement may not be changed, modified, released,
discharged, abandoned, or otherwise amended, in whole or in part, except by an
instrument in writing, signed by Employee and by the Company. Any subsequent
change or changes in Employee's relationship with the Company or Employee's
compensation shall not affect the validity or scope of this Agreement.

      14.   Entire Agreement. Employee acknowledges receipt of this Agreement,
and agrees that with respect to the subject matter thereof, it is Employee's
entire agreement with the Company, superseding any previous oral or written
communications, representations, understandings with the Company or any office
or representative thereof. Each party to the Agreement acknowledges that, in
executing this Agreement, such party has had the opportunity to seek the advice
of independent legal counsel, and has read and understood all of the terms and
provisions of the Agreement.

      15.   Severability. In the event that any paragraph or provision of this
Agreement shall be held to be illegal or unenforceable, the entire Agreement
shall not fall on account thereof, but shall otherwise remain in full force and
effect, and such paragraph or provision shall be enforced to the maximum extent
permissible.

                                       10

<PAGE>

      16.   Successors and Assigns. This Agreement shall be binding upon
Employee's heirs, executors, administrators or other legal representatives and
is for the benefit of and shall be enforceable by the Company, its successors
and assigns.

      17.   Governing Law. This Agreement shall be governed by the laws of the
State of Florida except for any conflicts of law rules thereof that might direct
the application of the substantive law of another state.

      18.   Counterparts. This Agreement may be signed in counterparts and by
facsimile transmission, each of which shall be deemed an original and both of
which shall together constitute one agreement.

      19.   No Waiver. No waiver by either party hereto of any breach of this
Agreement by the other party hereto shall constitute a waiver of any subsequent
breach.

      20.   Notice. Any notice hereby required or permitted to be given shall be
sufficiently given if in writing and upon mailing by registered or certified
mail, postage prepaid, to either party at the address of such party or such
other address as shall have been designated by written notice by such party to
the other party.

      21    Arbitration.

            (a)   Exclusive Remedy. The parties recognize that litigation in
federal or state courts or before federal or state administrative agencies of
disputes arising out of the Employee's employment with the Company or out of
this Agreement, or the Employee's termination of employment or termination of
this Agreement, may not be in the best interests of either the Employee or the
Company, and may result in unnecessary costs, delays, complexities, and
uncertainty. The parties agree that any dispute between the parties arising out
of or relating to the Employee's employment, or to the negotiation, execution,
performance or termination of this Agreement or the Employee's employment,
including, but not limited to, any claim arising out of this Agreement, claims
under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights
Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans
with Disabilities Act of 1990, Section 1981 of the Civil Rights Act of 1966, as
amended, the Family Medical Leave Act, the Employee Retirement Income Security
Act, and any similar federal, state or local law, statute, regulation, or any
common law doctrine, whether that dispute arises during or after employment
shall be resolved by arbitration in the Broward County, Florida area, in
accordance with the National Employment Arbitration Rules of the American
Arbitration Association, as modified by the provisions of this Section 21.
Except as set forth below with respect to Section 12 of this Agreement, the
parties each further agree that the arbitration provisions of this Agreement
shall provide each party with its exclusive remedy, and each party expressly
waives any right it might have to seek redress in any other forum, except as
otherwise expressly provided in this Agreement. Notwithstanding anything in this
Agreement to the contrary, the provisions of this Section 21 shall not apply to
any injunctions that may be sought with respect to disputes arising out of or
relating to Sections 7 through 12 of this Agreement. The parties acknowledge and
agree that their obligations under this arbitration agreement survive the
expiration or termination of this Agreement and continue after the termination
of the employment relationship between the Employee and the Company. BY ELECTION
OF ARBITRATION

                                       11

<PAGE>

AS THE MEANS FOR FINAL SETTLEMENT OF ALL CLAIMS, THE PARTIES HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO, AND AGREE NOT TO, SUE EACH OTHER IN ANY ACTION IN A
FEDERAL, STATE OR LOCAL COURT WITH RESPECT TO SUCH CLAIMS, BUT MAY SEEK TO
ENFORCE IN COURT AN ARBITRATION AWARD RENDERED PURSUANT TO THIS AGREEMENT. THE
PARTIES SPECIFICALLY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY,
AND FURTHER AGREE THAT NO DEMAND, REQUEST OR MOTION WILL BE MADE FOR TRIAL BY
JURY.

            (b)   Arbitration Procedure and Arbitrator's Authority. In any
arbitration proceeding, each party shall be entitled to engage in any type of
discovery permitted by the Federal Rules of Civil Procedure, to retain its own
counsel, to present evidence and cross-examine witnesses, to purchase a
stenographic record of the proceedings, and to submit post-hearing briefs. In
reaching his/her decision, the arbitrator shall have no authority to add to,
detract from, or otherwise modify any provision of this Agreement. The
arbitrator shall submit with the award a written opinion which shall include
findings of fact and conclusions of law. Judgment upon the award rendered by the
arbitrator may be entered in any court having competent jurisdiction.

            (c)   Effect of Arbitrator's Decision: Arbitrator's Fees. The
decision of the arbitrator shall be final and binding between the parties as to
all claims which were or could have been raised in connection with the dispute,
to the full extent permitted by law. In all cases in which applicable federal
law precludes a waiver of judicial remedies, the parties agree that the decision
of the arbitrator shall be a condition precedent to the institution or
maintenance of any legal, equitable, administrative, or other formal proceeding
by the Employee in connection with the dispute, and that the decision and
opinion of the arbitrator may be presented in any other forum on the merits of
the dispute. If the arbitrator finds that the Employee was terminated in
violation of law or this Agreement, the parties agree that the arbitrator acting
hereunder shall be empowered to provide the Employee with any remedy available
should the matter have been tried in a court, including equitable and/or legal
remedies, compensatory damages and back pay. The arbitrator's fees and expenses
and all administrative fees and expenses associated with the filing of the
arbitration shall be borne by the non-prevailing party.

      22.   Section 162(m) Limits. Notwithstanding any other provision of this
Agreement to the contrary, if and to the extent that any remuneration payable by
the Company to the Employee for any year would exceed the maximum amount of
remuneration that the Company may deduct for that year under Section 162(m)
("Section 162(m)") of the Internal Revenue Code of 1986, as amended (the
"Code"), payment of the portion of the remuneration for that year that would not
be so deductible under Section 162(m) shall, in the sole discretion of the Board
of Directors, be deferred and become payable at such time or times as the Board
of Directors determines that it first would be deductible by the Company under
Section 162(m), with interest at the "short-term applicable rate" as such term
is defined in Section 1274(d) of the Code.

      23.   Assignment. The Company shall have the right to assign this
Agreement and its rights and obligations hereunder in whole, but not in part, to
any corporation or other entity which is a wholly-owned subsidiary of the
Company or with or into which the Company may hereafter merge or consolidate or
to which the Company may transfer all or substantially all of its assets, if in
any such case said corporation or other entity shall by operation of law or
expressly in writing assume all obligations of the Company hereunder as fully as
if it had been

                                       12

<PAGE>

originally made a party hereto. The Employee may not assign or transfer this
Agreement or any rights or obligations hereunder.

      24.   Waiver of Jury Trial. The Employee hereby knowingly, voluntarily and
intentionally waives any right that the Employee may have to a trial by jury in
respect of any litigation based hereon, or arising out of, under or in
connection with this Agreement and any agreement, document or instrument
contemplated to be executed in connection herewith, or any course of conduct,
course of dealing statements (whether verbal or written) or actions of any party
hereto.

                         [Signatures on following page]

                                       13

<PAGE>

      The undersigned have executed this Employment Agreement as of the date
first set forth above.

                                           SUNAIR ELECTRONICS, INC.

                                           By: /s/ James E. Laurent
                                               ---------------------------------

                                                Name: James E. Laurent

                                                Title: President

                                           /s/ John Hayes
                                           -------------------------------------
                                           John Hayes

                                       14

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