Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant On August 26, 2009, we entered into an amendment to the promissory note dated June 15, 2009 in favor of Sonabank, referred to as the lender (the "Amendment") the agreement is effective beginning September 1, 2009. The promissory note was entered into in connection with the Business Loan Agreement and the Commercial Security Agreement that we entered into with the lender on June 15, 2009 and described on a Form 8-K filed on June 17, 2009.
Under the Amendment, the amount that we may borrow has been increased from $1,500,000 to $3,000,000. Additionally, as long as we maintain a debt service coverage ratio of 1.25, we may make quarterly interest payments on the 8% promissory notes issued to Nancy Scurlock and the Arch C. Scurlock Children's Trust. The Amendment provides that we may also lease or finance equipment up to $250,000 without lender consent. The lockbox fee has been increased to $625 per month. All other terms remain unchanged. See the Form 8-K referenced above for a description of the other terms.
In connection with the Amendment, the lender has released the personal guarantees of Charles L. McNew, our Chief Executive Officer, and Joseph Sciacca, our Chief Financial Officer.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
10.1. Security and Compliance Agreement dated August 26, 2009 between Halifax Corporation of Virginia and Sonabank

10.2. Amendment to Promissory Note dated August 26, 2009 issued by Halifax Corporation of Virginia in favor of Sonabank

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