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.
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
1
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:
2
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MAXIMUM
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PERIOD
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RATIO
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Through September 30, 2008
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6.00
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October 1, 2008 through December 31,
2008
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3.90
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January 1, 2009 through March 31,
2009
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3.25
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April 1, 2009 through June 30,
2009
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2.65
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July 1, 2009 and thereafter
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1.90
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(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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