8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 17, 2007

RURAL/METRO CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE	0-22056	86-0746929
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

9221 East Via de Ventura Scottsdale, Arizona	85258
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (480) 994-3886

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

A subsidiary of Rural/Metro Corporation (the “Company”), Rural/Metro Operating Company LLC (“Rural/Metro LLC”), entered into an amendment and waiver (the “Amendment No. 6 and Waiver”), dated as of October 11, 2007, to the Credit Agreement, dated as of March 4, 2005 (as amended, the “Credit Agreement”), with the Lenders thereunder; Citibank, N.A., as LC facility issuing bank; Citicorp North America, Inc., as administrative agent for the lenders; JPMorgan Chase Bank, N.A., as syndication agent; and Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and joint lead bookrunners. The Amendment and Waiver is effective as of September 1, 2007.

The Amendment No. 6 and Waiver provides for an increase in the applicable margins under the Credit Agreement. The margins increased to 350 basis points in the case of letter of credit deposits and Eurodollar loans and 250 basis points in the case of ABR loans. The Amendment No. 6 and Waiver also modifies certain financial covenants contained in the Credit Agreement, including the total leverage ratio, interest expense coverage ratio and fixed charge ratio (all as further set out in the Amendment No. 6 and Waiver filed as Exhibit 99.1 hereto).

Under the Amendment No. 6 and Waiver, the Lenders waive all defaults arising out of, or relating to, the Company’s failure to timely file its Form 10-K and the financial statements as required by the Credit Agreement for the fiscal year ended June 30, 2007. It also waives all defaults arising from defaults under material indebtedness (such as the indenture governing Rural/Metro LLC’s notes) arising solely out of the failure to file the Company’s annual report or otherwise provide financial information. The Company has been delayed in filing its 2007 Form 10-K due to a restatement relating to financial reporting for several items including income taxes, a retirement plan, deferred rent and deferred subscription revenue as disclosed in Item 2.02 below. However, if this default continues to occur under the Credit Agreement on November 23, 2007, such default shall constitute an “Event of Default” on November 23, 2007.

The waiver is specific to the Credit Agreement and does not waive any default that may arise as a result of the existing notice of default under the notes, as disclosed in the Form 8-K filed on September 14, 2007. The foregoing description of the Amendment No. 6 and Waiver is qualified in its entirety by reference to the Amendment No. 6 and Waiver, a copy of which is attached hereto as Exhibit 99.1 and incorporated in this Item 1.01 by reference.

Item 2.02 Results of Operations and Financial Condition.

The Company issued a press release, dated October 17, 2007, announcing that during its 2007 fiscal year-end review, it identified accounting misstatements related to financial reporting for several items including income taxes, a retirement plan match, deferred rent and deferred subscription revenue. The full text of the Company’s press release is attached hereto as Exhibit 99.2 and is incorporated in this Item 2.02 by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Amendment No. 6 and Waiver, dated as of October 11, 2007 to the Credit Agreement, dated as of March 4, 2005, among Rural/Metro Operating Company LLC, as borrower; the lenders party thereto; Citibank, N.A., as LC facility issuing bank; Citicorp North America, Inc., as administrative agent for the lenders; JPMorgan Chase Bank, N.A., as syndication agent; and Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and joint lead bookrunners.
99.2	Press release, dated October 17, 2007, regarding restatement adjustments.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RURAL/METRO CORPORATION
Dated: October 17, 2007	By:	/s/ Kristine A. Beian-Ponczak
		Kristine A. Beian-Ponczak
		Senior Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Amendment No. 6 and Waiver, dated as of October 11, 2007 to the Credit Agreement, dated as of March 4, 2005, among Rural/Metro Operating Company LLC, as borrower; the lenders party thereto; Citibank, N.A., as LC facility issuing bank; Citicorp North America, Inc., as administrative agent for the lenders; JPMorgan Chase Bank, N.A., as syndication agent; and Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and joint lead bookrunners.
99.2	Press release, dated October 17, 2007, regarding restatement adjustments.

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EX-99.1

Exhibit 99.1

AMENDMENT NO. 6 AND WAIVER

AMENDMENT NO. 6 AND WAIVER (this “Amendment”), dated as of October 11, 2007, to that certain Credit Agreement, dated as of March 4, 2005, (the “Credit Agreement”; capitalized terms used herein and not defined herein shall have the meaning set forth in the Credit Agreement), among RURAL/METRO OPERATING COMPANY, LLC, a Delaware limited liability company (“Borrower”); the Lenders; CITIBANK, N.A., as LC Facility issuing bank (in such capacity, the “LC Facility Issuing Bank”); CITICORP NORTH AMERICA, INC., as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders; JPMORGAN CHASE BANK, N.A. (“JPMCB”), as syndication agent (in such capacity, the “Syndication Agent”); and CITIGROUP GLOBAL MARKETS INC. (“CGMI”) and J.P. MORGAN SECURITIES INC. (“JPMSI”), as joint lead arrangers and joint lead bookrunners (in such capacities, the “Joint Lead Arrangers”).

W I T N E S S E T H:

WHEREAS, Section 9.08 of the Credit Agreement permits the Credit Agreement to be amended and waived from time to time;

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION ONE. Amendments.

(a) The following definitions shall be added in Section 1.01:

“Amendment No. 6 Effective Date” means the date upon which Amendment No. 6 and Waiver to the Credit Agreement becomes effective pursuant to the terms thereof.

“Repricing Transaction” means the refinancing or repricing by Borrower of the Loans and/or LC Facility Deposits under this Agreement (x) with any debt or “synthetic” letter of credit arrangements (including, without limitation, any new or additional term loans under this Agreement) or (y) in connection with any amendment to this Agreement, in either case, (i) having or resulting in an effective interest rate or weighted average yield (to be determined by the Administrative Agent, in consultation with Borrower, consistent with generally accepted financial practice, after giving effect to margins, upfront or similar fees or original issue discount shared with all lenders or holders thereof, but excluding the effect of any arrangement, structuring, syndication or other fees payable in connection therewith that are not shared with all lenders or holders thereof) as of the date of such refinancing that is, or could be by the express terms of such Indebtedness (and not by virtue of any fluctuation in any “base” rate), less than the Applicable Margin for, or weighted average yield (to be determined by the Administrative Agent, in consultation with Borrower, on the same basis) of the Loans and/or LC Facility Deposits, as applicable, as of the date of such repricing and (ii) in the

case of a refinancing of the Loans and/or LC Facility Deposits, the proceeds of which are used to repay, in whole or in part, principal of outstanding Loans and/or reduce the LC Facility Deposits; provided that “Repricing Transaction” shall not include the refinancing of all (and not less than all) of the Loans, Commitments and LC Facility Deposits in connection with a transaction in which the Equity Interests of Parent are converted into, or converted into the right to receive, or exchanged for, cash and/or Equity Interests of another Person.

(b) The definition of “Applicable Margin” in Section 1.01 shall be replaced in its entirety with the following:

“Applicable Margin” means (i) with respect to Revolving Loans (x) that are Eurodollar Loans, 350 basis points and (y) that are ABR Loans, 250 basis points, (ii) with respect to Term Loans (x) that are Eurodollar Loans, 350 basis points and (y) that are ABR Loans, 250 basis points, and (iii) with respect to LC Facility Deposits, 350 basis points.

(c) The definition of Obligations shall be amended by adding the words “and premium, if any,” after the words “unpaid principal of”.

(d) Section 2.05(c)(ii) of the Credit Agreement shall be amended by adding at the end of such clause the following sentence:

“Notwithstanding the foregoing, all of the Net Proceeds of any Asset Sale permitted by Section 6.05(x) shall applied in accordance with Section 2.05(e) within five (5) Business Days of receipt thereof and shall not be permitted to be reinvested.”

(e) A new Section 2.05(c)(vi) shall be added as follows:

“If, prior to the first anniversary of the Amendment No. 6 Effective Date, (x) Borrower effects any prepayment of Loans or reduction of LC Facility Deposits in connection with any Repricing Transaction, or (y) effects any amendment of this Agreement resulting in a Repricing Transaction, Borrower shall pay to the Administrative Agent, for the ratable account of each Lender, (I) in the case of clause (x), a prepayment premium of 1% of the amount of Loans and/or LC Facility Deposits being prepaid or returned, as applicable, and (II) in the case of clause (y), a payment equal to 1% of the aggregate amount of Loans and/or LC Facility Deposits outstanding immediately prior to such amendment. In addition, if Borrower exercises its right under Section 9.08(e) prior to the first anniversary of the Amendment No. 6 Effective Date, it shall pay to the Non-Consenting Lender a payment equal to 1% of the aggregate amount of Loans and LC Facility Deposits assigned by the Non-Consenting Lender pursuant to Section 9.08(e).”

(f) Section 2.08(c)(i) shall be amended by adding the words “and premium, if any” after the words “in the case of principal of”.

(g) Section 2.13(c) shall be amended by adding the words “, premium, if any, “ in each case after the word “principal”.

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(h) Section 2.13(d) shall be amended by adding the words “, premium, if any,” after the word “principal” in paragraph Fourth and adding the words “and premium, if any,” after the words “principal amount” in the paragraph Fifth thereof.

(i) Section 6.05 of the Credit Agreement shall be amended by deleting “and” immediately preceding clause (ix) and adding immediately following the end of clause (ix) the following:

“; and

(x) the sale of the real property located at 4141 N. Granite Reef, Scottsdale, Arizona; provided that (A) at the time of any such Asset Sale, no Default shall exist or would result from such Asset Sale, (B) 100% of the consideration for such Asset Sale shall be received in the form of cash, (C) the fair market value of such Property shall not exceed $20,000,000 and (D) all of the Net Proceeds thereof are used to repay the Loans in accordance with the last sentence of Section 2.05(c)(ii)”.

(j) The table in Section 6.14 of the Credit Agreement (Interest Expense Coverage Ratio) shall be amended by replacing the ratios set forth therein with respect to the periods set forth below with the following:

July 1, 2007 - December 31, 2007	1.50 to 1.0
January 1, 2008 - March 31, 2008	1.75 to 1.0
April 1, 2008 - June 30, 2008	1.90 to 1.0

(k) The table in Section 6.15 of the Credit Agreement (Total Leverage Ratio) shall be amended by replacing the ratios set forth therein with respect to the periods set forth below with the following the following:

July 1, 2007 - September 30, 2007	6.00 to 1.0
October 1, 2007 - December 31, 2007	6.00 to 1.0
January 1, 2008 - March 31, 2008	5.50 to 1.0
April 1, 2008 - June 30, 2008	5.00 to 1.0

(l) The table in Section 6.16 of the Credit Agreement (Fixed Charge Coverage Ratio) shall be amended by replacing the ratios set forth therein with respect to the periods set forth below with the following the following:

July 1, 2007 - June 30, 2008 1.00 to 1.0

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(k) Section 7.01(a)(i) shall be amended by adding “or premium” after the word “principal”.

SECTION TWO. Waiver and Acknowledgment.

(a) The Lenders hereby waive the Default arising out of (i) the Borrower’s failure to comply with Section 5.01(a) and (c) of the Credit Agreement with respect to the fiscal year ended June 30, 2007 and any failure of Borrower to provide the related notification required by 5.01(g) with respect thereto and (ii) any Default under Section 7.01(e) due to a default under any Material Indebtedness arising solely out of the failure to timely file an annual report on Form 10-K, or otherwise provide financial information or certification, for the fiscal year ended June 30, 2007; provided that this clause (ii) shall not apply if the maturity of any Material Indebtedness is accelerated or the prepayment, repurchase, redemption or defeasance thereof is required prior to its scheduled maturity. However, if any Default described in clause (i) or (ii) exists on November 23, 2007, such Default shall constitute an Event of Default on November 23, 2007.

(b) The Lenders hereby acknowledge and agree that the adjustments to the financial statements of the Borrower described in Parent’s Form 12b-25 dated September 14, 2007, which adjustments have the impacts described to the Lenders who have agreed to receive material non-public information with respect to the Borrower, do not result in a breach of Section 3.06 or 3.16 of the Credit Agreement or any Default under Section 7.01(b) of the Credit Agreement.

SECTION THREE. Conditions to Effectiveness. This Amendment shall become effective as of September 1, 2007 (the “Effective Date”) when (w) the Administrative Agent shall have received counterparts of this Amendment executed by the Borrower and the Administrative Agent, (x) the Administrative Agent shall have received executed consents to this Amendment from the Requisite Lenders, (y) the Borrower shall have paid a consent fee to the Administrative Agent, for the ratable account of the applicable Lenders, equal to 0.50% of the aggregate principal amount of Term Loans plus 0.50% of the aggregate amount of Revolving Credit Commitments of the Lenders plus 0.50% of the aggregate amount of the LC Facility Participations, who have delivered executed consents to this Amendment not later than the later of (i) 5:00 pm (New York City time) on October 11, 2007 and (ii) when the Administrative Agent has received executed consents to this Amendment from the Requisite Lenders and (z) all fees payable by the Borrower to the Administrative Agent shall have been paid.

SECTION FOUR. Representations and Warranties. The Loan Parties hereby represent and warrant that, as of the date hereof and as of the Effective Date, the conditions set forth in Section 4.02(b) and 4.02(c) of the Credit Agreement are satisfied, in each case after giving effect to this Amendment.

SECTION FIVE. Reference to and Effect on the Credit Agreement. On and after the Effective Date, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring the Credit Agreement, and each reference in each of the Loan Documents to “the Credit Agreement,” “thereunder,” “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as

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amended by this Amendment. The Credit Agreement and each of the other Loan Documents, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or any Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

SECTION SIX. Amendment of Section 2.05(c)(vi). Borrower hereby agrees, without the consent of each Lender, that it will not seek to change or waive, or effect any change or waiver of, the provisions of Section 2.05(c)(vi) or the definitions of terms used therein.

SECTION SEVEN. Costs and Expenses. Borrower agrees to pay all reasonable costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, if any.

SECTION EIGHT. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION NINE. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

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RURAL/METRO OPERATING COMPANY, LLC, as Borrower
By:	/s/ Kristine Ponczak
	Name:	Kristine Ponczak
	Title:	Senior Vice President and Chief Financial Officer

CITICORP NORTH AMERICA, INC., as Administrative Agent
By:	/s/ Stuart G. Dickson
	Name:	Stuart G. Dickson
	Title:	Vice President

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EX-99.2

Exhibit 99.2

CONTACT:       Liz Merritt, Rural/Metro Corporation (investors)
(480) 606-3337
Jeff Stanlis, Hayden Communications (media)
(602) 476-1821

RURAL/METRO ENTERS INTO AMENDMENT AND WAIVER TO ITS SENIOR CREDIT FACILITY;
PROVIDES RESTATEMENT DETAILS

For immediate release

SCOTTSDALE, Ariz. (Oct. 17, 2007) — Rural/Metro Corporation (Nasdaq: RURL) announced today that it has entered into an amendment and waiver to its senior secured credit facility effective September 1, 2007.

The amendment and waiver were required as a result of the Company’s delay in filing its 2007 Annual Report on Form 10-K due to a restatement relating to financial reporting for several items, including income taxes, a retirement plan match, operating leases and subscription revenue. The agreement waives any defaults that existed under the credit agreement. The Company has paid an amendment and waiver fee of $733,000 to its lenders.

The Company’s senior secured credit facility includes the $83.0 million Term Loan B, the undrawn $20 million revolving credit and the $45.0 million letter of credit facility, all due in 2011.

Additionally, the Company sought from its lenders certain financial covenant relief contained in the credit agreement, including total leverage ratio, interest expense coverage ratio and fixed charge ratio in order to provide additional operational flexibility.

The Company also obtained consent to the sale of real property due to favorable market conditions for commercial properties, on the basis that 100.0% of net proceeds will be used to repay the Term Loan B.

As a result of these provisions, the Company agreed to an increase in the applicable margin over LIBOR to 350 basis points, from 225 basis points on the Term Loan B, as well as an increase in the applicable margin to 350 basis points, from 225 basis points on the letter of credit facility. The Company anticipates related annual interest expense will increase approximately $1.6 million as a result. Approximately $1.0 million of additional interest expense is attributable to Term Loan B debt based on the current amount outstanding, and approximately $600,000 is attributable to the $45.0 million letter of credit facility.

The Company also agreed that in the event it enters into a repricing transaction under the credit facilities within 12 months of the date of the amendment and waiver, it will pay lenders a prepayment premium of 1.0% on the amount of the then-outstanding loans and/or letters of credit deposits.

Restatement Adjustments

The Company today also reported detailed amounts and periods representing a cumulative, aggregate reduction of $4.5 million to prior years’ net income for the restatement adjustments previously reported on September 14, 2007 related to income taxes, operating leases, a retirement plan match and other items. The Company also finalized its review of subscription revenue and determined there were inconsistencies in recognizing revenue with contract renewal cycles.

The following adjustment amounts are presented on an unaudited basis as the Company continues to work to file its Annual Report on Form 10-K for the fiscal year ended June 30, 2007, and restated quarterly reports on Form 10-Q/A for the quarters ended March 31, 2007, December 31, 2006 and September 30, 2006. The reports will include restated consolidated financial information for the interim periods and fiscal year ended June 30, 2006.

The adjustments are detailed below:

Increase (Decrease) to Net Income
Adjustments - After Tax	2007			2006			2005			2004			2003			2002 - Prior			Total
Subscription Revenue	$	(175,637	)	$	(229,078	)	$	698,299		$	(223,984	)	$	(191,489	)	$	(1,962,927	)	$	(2,084,816	)
Operating Leases		77,867			(42,389	)		128,198			(251,617	)		(109,902	)		(363,145	)		(560,988	)
Retirement Plan		(113,029	)		(218,616	)		(83,435	)		—			—			—			(415,080	)
Other Items		256,392			25,231			195,887			47,735			78,498			(980,946	)		(377,203	)
		45,593			(464,852	)		938,949			(427,866	)		(222,893	)		(3,307,018	)		(3,438,087	)
Income Taxes		(165,265	)		(145,289	)		480,664			(242,746	)		(236,076	)		(758,383	)		(1,067,095	)
Total Adjustments to Net Income	$	(119,672	)	$	(610,141	)	$	1,419,613		$	(670,612	)	$	(458,969	)	$	(4,065,401	)	$	(4,505,182	)
Total Adjustments After-Tax per Fully Diluted Share	$	0.00		$	(0.02	)	$	0.06		$	(0.03	)	$	(0.03	)

Other Updates

Due to the ongoing nature of the restatement process, the Company is not providing interim updates on uncompensated care or other financial metrics for the three months ended September 30, 2007 until such time that all outstanding reports described above have been filed. The Company remains confident that previously outlined initiatives to reduce uncompensated care are progressing as expected.

About Rural/Metro

Rural/Metro Corporation provides emergency and non-emergency medical transportation, private fire protection, and other safety services in 23 states and approximately 400 communities throughout the United States. For more information, visit the Company’s web site at www.ruralmetro.com.

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Safe Harbor Provisions for Forward-Looking Statements

The foregoing reflects the Company’s views about the accounting adjustments, its financial condition, performance, uncompensated care and other matters that constitute “forward-looking” statements; as such term is defined by the federal securities laws. You can find many of these statements by looking for words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate,” “should,” “continue,” “predict,” “preliminary” and similar words used herein. These forward-looking statements are subject to the safe harbor protection provided by federal securities laws. These forward-looking statements are subject to numerous risks, uncertainties and assumptions. These risks and uncertainties include, but are not limited to: (1) the results and effect of the Company’s review of its accounting practices; (2) the effects of any potential SEC or NASDAQ inquiry with respect to the potential adjustments or the Company’s accounting practices; (3) expectations as to the timing of the Company’s review, restatement and filing of its previously issued financial statements and its assessment of the effectiveness of disclosure controls and procedures and internal control over financial reporting, the review and filing of the Company’s Form 10-K for the fiscal year ended June 30, 2007, and the issuance of interim financial results for the Company; (4) the Company’s failure to regain compliance within any extension period that the NASDAQ Listing Qualifications Panel, in which case the Company’s common stock would be delisted from the Nasdaq Capital Market; (5) the effects of any required restatement adjustments to previously issued financial statements and possible material weaknesses in internal control over financial reporting; (6) the possibility that any default under the Company’s financing arrangements could cause acceleration of repayment of the entire principal amounts and accrued interest on such arrangements; and (7) the additional risks and uncertainties and important factors detailed from time to time in the Company’s press releases and in the Company’s periodic filings under the Securities Exchange Act of 1934. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, because the statements are subject to risks and uncertainties, the Company can give no assurance that its expectations will be attained or that actual developments and results will not materially differ from those express or implied by the forward-looking statements. Readers are cautioned not to place undue reliance on the statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law.

(RURL/F)

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