Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT
AGREEMENT (this “ Amendment ”), dated as of
Februar 12, 2008, is by and among SUNAIR SERVICES CORPORATION
(f/k/a SUNAIR ELECTRONICS, INC., a Florida corporation (the “
Borrower ”), each of those subsidiaries of the
Borrower party hereto (each a “ Guarantor ”, and
collectively, the “ Guarantors ”), the several
banks and other financial institutions (the “ Lenders
”) from time to time party to the Credit Agreement (defined
below) and WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative
agent for the Lenders (the “ Agent ”).
RECITALS
A. The Borrower, the Guarantors,
the Lenders and the Agent have entered into that certain Credit
Agreement, dated as of June 7, 2005, as amended by that
certain First Amendment to Credit Agreement dated May 14, 2007
(as amended, supplemented or otherwise modified, the “
Credit Agreement ”).
B. The Borrower, the Guarantors,
the Lenders and the Agent have agreed to modify the Credit
Agreement as follows:
NOW, THEREFORE, the parties hereto
agree as follows:
1. The Credit Agreement is
hereby amended as follows:
(a) Section 1.1 is hereby
amended by amending in their entirety the following definitions so
that such definitions now read as follows:
“ Applicable Percentage
” shall mean, for any day, five percent (5%).
“ Consolidated EBITDA
” shall mean, for any applicable period of computation,
(a) Consolidated Net Income for such period plus (b) the
sum of the following to the extent deducted in calculating
Consolidated Net Income: (i) Consolidated Interest Expense for such
period, (ii) the provision for Federal, state, local and
foreign income taxes payable by the Borrower and its Subsidiaries
for such period, (iii) depreciation and amortization expense
for such period, (iv) other non-cash expenses of the Borrower and
its Subsidiaries, including, but not limited to, stock based
compensation, equity based compensation, bad debt reserves,
goodwill impairment and any other non-cash expenses reflected on
the Borrower’s financial statements, and (v) after
October 1, 2007, any accrued but unpaid management fees due to
RPC Financial Advisors, LLC; provided , however , any
such management fees that are actually paid shall be deducted from
the Consolidated EBITDA during the period paid.
“ Funded Debt ”
shall mean, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money,
(b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest
payments are customarily made, including, without limitation, all
Indebtedness of Borrower to any Seller that is not
Subordinated
Debt, (c) all obligations of such Person under conditional
sale or other title retention agreements relating to property
purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in
the ordinary course of business), (d) all obligations of such
Person issued or assumed as the deferred purchase price of property
or services purchased by such Person (other than trade debt
incurred in the ordinary course of business and due within six
months of the incurrence thereof) which would appear as liabilities
on a balance sheet of such Person, (e) the principal portion
of obligations of such Person under Capital Leases, (f) the
maximum amount of all letters of credit issued or bankers’
acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent
reimbursed), including, without limitation, all LOC Obligations,
(g) all preferred Capital Stock issued by such Person and
which by the terms thereof could be (at the request of the holders
thereof or otherwise) subject to mandatory sinking (fund payments,
redemption or other acceleration, (h) the principal balance
outstanding under any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet
financing product, (i) obligations of such Person under
non-compete agreements to the extent such obligations have been
determined, (j) all obligations of such Person under Hedging
Agreements, excluding any portion thereof which would be accounted
for as interest expense under GAAP, (k) all Indebtedness of
others of the type described in clauses (a) through
(j) hereof secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed,
(l) all Guaranty Obligations of such Person with respect to
Indebtedness of another Person of the type described in clauses
(a) through (j) hereof, and (m) all Indebtedness of
the type described in clauses (a) through (j) hereof of
any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer; provided ,
however , that Funded Debt shall not include Indebtedness
among the Credit Parties.
“ Revolving Commitment
Termination Date ” shall mean January 7, 2009.
(b) Section
