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THIRD AMENDMENT TO CREDIT AGREEMENT

Loan Agreement

THIRD AMENDMENT TO CREDIT AGREEMENT | Document Parties: SUNAIR SERVICES CORP | MIDDLETON PEST CONTROL, INC | SUNAIR COMMUNICATIONS, INC | SUNAIR ELECTRONICS, INC | SUNAIR FLORIDA PEST HOLDINGS, INC | SUNAIR HOLDINGS, INC | SUNAIR PEST HOLDINGS, INC | SUNAIR SERVICES CORPORATION | SUNAIR SOUTHEAST PEST HOLDINGS, INC | SUNNAIR ELECTRONICS, INC | WACHOVIA BANK, NATIONAL ASSOCIATION You are currently viewing:
This Loan Agreement involves

SUNAIR SERVICES CORP | MIDDLETON PEST CONTROL, INC | SUNAIR COMMUNICATIONS, INC | SUNAIR ELECTRONICS, INC | SUNAIR FLORIDA PEST HOLDINGS, INC | SUNAIR HOLDINGS, INC | SUNAIR PEST HOLDINGS, INC | SUNAIR SERVICES CORPORATION | SUNAIR SOUTHEAST PEST HOLDINGS, INC | SUNNAIR ELECTRONICS, INC | WACHOVIA BANK, NATIONAL ASSOCIATION

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Title: THIRD AMENDMENT TO CREDIT AGREEMENT
Governing Law: Florida     Date: 2/2/2009
Industry: Communications Equipment     Sector: Technology

THIRD AMENDMENT TO CREDIT AGREEMENT, Parties: sunair services corp , middleton pest control  inc , sunair communications  inc , sunair electronics  inc , sunair florida pest holdings  inc , sunair holdings  inc , sunair pest holdings  inc , sunair services corporation , sunair southeast pest holdings  inc , sunnair electronics  inc , wachovia bank  national association
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Exhibit 10.1

THIRD AMENDMENT TO CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “ Amendment ”), dated as of January 22, 2009, is by and among SUNAIR SERVICES CORPORATION (f/k/a SUNAIR ELECTRONICS, INC.), a Florida corporation (the “ Borrower ”), each of those subsidiaries of the Borrower party hereto (each a “ Guarantor ”, and collectively, the “ Guarantors ”), the several banks and other financial institutions (the “ Lenders ”) from time to time party to the Credit Agreement (defined below) and WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (the “ Agent ”). Capitalized terms used herein without definition have the respective meanings set forth in the Credit Agreement. References herein to “Sections” are to Sections of the Credit Agreement unless otherwise indicated.

RECITALS

     A. The Borrower, the Guarantors, the Lenders and the Agent have entered into that certain Credit Agreement, dated as of June 7, 2005, as amended by that certain First Amendment to Credit Agreement dated May 14, 2007 and Second Amendment to Credit Agreement dated as of February 12, 2008 (as amended, supplemented or otherwise modified, the “ Credit Agreement ”).

     B. The Borrower, the Guarantors, the Lenders and the Agent have agreed to modify the Credit Agreement in the manner hereinafter set forth:

      NOW, THEREFORE , the parties hereto agree as follows:

     1. The Credit Agreement is hereby amended as follows:

     (a) Section 1.1 is hereby amended by amending in its entirety the following definition so that such definition now reads as follows.

     “ Revolving Commitment Termination Date ” shall mean January 2, 2010.

     (b) Section 2.1(a) is amended in its entirety so that such Section now reads as follows.

     (a) Revolving Commitment . During the Commitment Period, subject to the terms and conditions hereof, each Lender severally agrees to make revolving credit loans (“ Revolving Loans ”) to the Borrower from time to time for the purposes hereinafter set forth; provided , however , that (i) with regard to each Lender individually, the sum of such Lender’s share of outstanding Revolving Loans [p] such Lender’s LOC Commitment Percentage of LOC Obligations shall not exceed such Lender’s Revolving Commitment Percentage of the aggregate Revolving Committed Amount, and (ii) with regard to the Lenders collectively, the sum of the aggregate amount of outstanding Revolving Loans plus LOC Obligations shall not exceed the aggregate Revolving Committed Amount then in effect. For

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purposes hereof, the aggregate amount available hereunder shall be SEVEN MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($7,750,000) (as such aggregate maximum amount may be reduced from time to time as provided in Section 2.4 including, without limitation, scheduled mandatory reductions and the maintenance of Reserves, the “ Revolving Committed Amount ”). Revolving Loans shall consist solely of Fixed LIBOR Rate Loans and may be repaid and re- borrowed in accordance with the provisions hereof. Fixed LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office.

     (c) Section 2.1(d) is amended by deleting subsection (1) thereof. Such deletion is intended to remove the Floating LIBOR Rate option from the Credit Agreement in its entirety. Consequently, all references to the Floating LIBOR Rate option and the right to convert from one Type of Loan to another Type of Loan are deleted from the Credit Agreement and each other Loan Document. From and after the date of this Third Amendment, all outstanding Loans and all Loans hereafter advanced under the Credit Agreement shall be Fixed LIBOR Rate Loans, notwithstanding anything to the contrary contained in any of the Loan Documents. There shall not be more than five (5) Tranches of Fixed LIBOR Rate Loans outstanding at any time.

     (d) Section 2.1(d)(ii) is renumbered as Section 2.1(d)(i) .

     (e) Section 2.2(a) is amended to reduce the LOC Committed Amount from THREE MILLION DOLLARS ($3,000,000) to ONE MILLION DOLLARS ($1,000,000) .

     (f) Section 2.3(a) is deleted in its entirety. All unpaid Commitment Fees payable thereunder for periods prior to January 1, 2009 shall be paid upon execution by the Credit Parties of this Third Amendment. No Commitment Fees shall accrue or be payable for any period commencing on or after January 1, 2009.

     (g) Section 2.4(b) is amended in its entirety so that such Section now reads as follows:

     (b) Mandatory Reductions . The Revolving Commitment Amount shall be reduced to $7,500,000 on March 31, 2009, to $6,750,000 on June 30, 2009, and to $5,500,000 on September 30, 2009 and thereafter.

     (h) Section 5.9(a) is amended in its entirety, such amendment to be effective as of September 30, 2008, so that such Section reads as follows:

     (a) Leverage Ratio . The Leverage Ratio shall be less than or equal to the following amounts as of the last day of each fiscal quarter ending during the following periods:

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MAXIMUM

 

 

PERIOD

 

 

RATIO

 

 

Through September 30, 2008

 

 

 

6.00

 

 

 

October 1, 2008 through December 31, 2008

 

 

 

3.90

 

 

 

January 1, 2009 through March 31, 2009

 

 

 

3.25

 

 

 

April 1, 2009 through June 30, 2009

 

 

 

2.65

 

 

 

July 1, 2009 and thereafter

 

 

 

1.90

 

 

 

     (i) Section 5.9(b) is amended in its entirety, such amendment to be effective as of September 30, 2008, so that such Section reads as follows:

     (b) Fixed Charge Coverage Ratio .


 
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