EX-10(J)





Exhibit
10(j)




	 	 	 
	Customer No.

	 	___________________________
	Loan No.

	 	___________________________
	Loan No.

	 	___________________________
	Loan No.

	 	___________________________






RBC BANK (USA)




AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER 




     This Amendment to Loan and Security Agreement and Waiver (this “Amendment”) is made and
entered into as of August 25, 2009 by and between VIDEO DISPLAY CORPORATION, a Georgia corporation
(“Parent”), LEXEL IMAGING SYSTEMS, INC. (“Lexel”), FOX INTERNATIONAL, LTD., INC. (“Fox”), Z-AXIS,
INC. (“Z-Axis”), TELTRON TECHNOLOGIES, INC. (“Teltron”) and AYDIN DISPLAYS, INC. (“Aydin” and
together with Lexel, Fox, Z-Axis and Teltron, collectively, the “Subsidiaries”; and the
Subsidiaries, together with Parent, collectively, the “Borrower”), and RBC BANK (USA) (formerly
known as RBC Centura Bank) (the “Bank”);



WITNESSETH:




     WHEREAS, the Borrower and the Bank have made and entered into that certain Loan and Security
Agreement, dated as of September 26, 2008, as amended (the “Loan Agreement”; capitalized terms used
herein and not otherwise defined shall have the meanings ascribed thereto in the Loan Agreement);



     WHEREAS, pursuant to the Loan Agreement, the Bank has extended to the Borrower (a) a primary
revolving loan facility in the original principal amount of up to $17,000,000, which primary
revolving loan is evidenced by a promissory note, dated as of September 26, 2008, as amended, from
Borrower to the order of the Bank in the principal amount of $17,000,000, (b) a secondary revolving
loan facility in the original principal amount of up to $3,500,000, which secondary revolving loan
is evidenced by a promissory note, dated as of September 26, 2008, as amended, from Borrower to the
order of the Bank in the principal amount of $3,500,000, and (c) a term loan in the original
principal amount of up to $1,700,000, which term loan is evidenced by a promissory note, dated as
of September 26, 2008, as amended, from Borrower to the order of the Bank in the principal amount
of $1,700,000;



     WHEREAS, Defaults and Events of Default have occurred and are continuing under certain
provisions of the Loan Agreement and has asked the Bank to waive the same;



     WHEREAS, the Borrower and Bank desires to amend certain provisions of the Loan Agreement in
connection therewith, and the Bank is willing to agree to the same on the terms and conditions set
forth herein;



     NOW THEREFORE, for and in consideration of the foregoing and for ten dollars ($10.00) and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto agree as follows:



 









 





ARTICLE 1.

Amendments to Loan Agreement




     Section 1.1 Definition Amendments. The following new definitions are hereby added in Section
1.1 of the Loan Agreement to read in their entirety as follows:




“New York Mortgage” means the deed of trust, mortgage or other similar lien
instrument from Z-Axis in favor of Bank with respect to the New York Property, dated
as of August ___, 2009, as amended, modified, supplemented or restated from time to
time.




“New York Property” means Z-Axis’s real property located at 1916 Rt. 96, Phelps, NY
14532.




“Pennsylvania Mortgage” means the deed of trust, mortgage or other similar lien
instrument from Parent in favor of Bank with respect to the Pennsylvania Property,
dated as of August ___, 2009, as amended, modified, supplemented or restated from
time to time.




“Pennsylvania Property” means Parent’s real property located at 8-18 Riverside
Drive, White Mills, PA 18473.



     Section 1.2 Definition Amendments. The following definitions in Section 1.1 of the Loan
Agreement are hereby amended in their entirety to read as follows:




“Adjusted Total Liabilities to Adjusted Tangible Net Worth Ratio” means, as of any
date of calculation, calculated on a consolidated basis for Borrower and all
Subsidiaries, the ratio of Adjusted Total Liabilities as of such date to Adjusted
Tangible Net Worth as of such date




“Adjusted Tangible Net Worth” means, as of any date of calculation, calculated on a
consolidated basis for Borrower and all Subsidiaries and in accordance with GAAP,
Shareholder Equity, less Intangible Assets, less leasehold improvements and loans
receivable from related parties, plus Subordinated Debt.




Adjusted Total Liabilities” means, as of any date of calculation, calculated on a
consolidated basis for Borrower and all Subsidiaries and (except with respect to
Contingent Liabilities) in accordance with GAAP, Total Liabilities, including
Contingent Liabilities, less Subordinated Debt.




“Asset Coverage Ratio” means, as of any date of calculation, calculated on a
consolidated basis for Borrower and all Subsidiaries, the ratio of (a) the total
amount of Funded Debt outstanding consisting of revolving debt, including, but not
limited to, the Primary Revolving Loan and the Secondary Revolving Loan, divided by
(b) the sum of (i) Accounts, net of allowance for doubtful Accounts,



2









 







plus (ii) Inventory, net of reserves (such net Inventory capped at (x) $20,000,000
through and including August 31, 2009 and (y) $17,500,000 on and after September 1,
2009), less (iii) its accounts payable.




“EBITDA” shall mean, as of any date of calculation, calculated on a consolidated
basis for Borrower and all Subsidiaries and in accordance with GAAP, net income,
plus Interest Expense, plus income tax expense, plus depreciation and amortization.




“Fixed Charge Coverage Ratio” means, as of any date of calculation, calculated on a
consolidated basis for Borrower and all Subsidiaries and in accordance with GAAP:
(a) the sum of EBITDA, plus rent and lease expense, less Unfunded Capital
Expenditures, less cash taxes, divided by (b) the sum of rent and lease expense,
plus current maturities of long term Funded Debt (“CMLTD”), plus Interest Expense,
plus Corporate Distributions.




“Revolving Loan Termination Date” or “Termination Date” means (i) with respect to
the Primary Revolving Loan only, June 30, 2010 and (ii) with respect to the
Secondary Revolving Loan only, September 30, 2009, in each case as such date may be
renewed from time to time as provided herein.




“Term Loan Amount” means $1,403,170.42.



     Section 1.3 Covenant Amendment. Section 2.2 of the Loan Agreement is hereby amended in its
entirety to read as follows:




2.2. Promissory Notes.




(a) The Primary Revolving Loan shall be evidenced by a renewal promissory note in
the face amount of the Maximum Primary Revolving Loan Amount, dated as of August ___,
2009, from Borrower to the order of Bank (as amended, modified, supplemented,
restated or renewed from time to time, the “Primary Revolving Note”).




(b) The Secondary Revolving Loan shall be evidenced by a renewal promissory note in
the face amount of the Maximum Secondary Revolving Loan Amount, dated as of August
___, 2009, from Borrower to the order of Bank (as amended, modified, supplemented,
restated or renewed from time to time, the “Secondary Revolving Note”).




(c) The Term Loan shall be evidenced by a renewal promissory note in the face amount
of the Term Loan Amount, dated as of August ___, 2009, from Borrower to the order of
Bank (as amended, modified, supplemented, restated or renewed from time to time, the
“Term Note” and together with the Revolving Note and the Revolving Note, the
“Notes”).



3









 





     Section 1.4 Covenant Amendment. Section 2.3 of the Loan Agreement is hereby amended to add a
new subsection (e) to read in its entirety as follows:




(e) Upon the sale of the New York Property and the Pennsylvania Property from time
to time, Bank shall release the applicable New York Mortgage or Pennsylvania
Mortgage upon Borrower’s payment to Bank of the net proceeds of the sale of such New
York Property and the Pennsylvania Property (with costs of such sale not to exceed
10% of the gross sales price thereof), with such payments to be applied first to the
principal of the Primary Revolving Loan until paid in full, next to the principal of
the Term Loan until paid in full, and next to the principal of the Secondary
Revolving Loan until paid in full. For any such payment applied to the Primary
Revolving Loan or the Secondary Revolving Loan, the Maximum Primary Revolving Loan
Amount and the Maximum Secondary Revolving Loan Amount, as applicable, and the
Bank’s lending commitment thereunder, shall be reduced on a dollar-for-dollar basis.



     Section 1.5 Covenant Amendment. Section 5.6 of the Loan Agreement is hereby amended to add a
new subsection (f) to read in its entirety as follows:




Guarantor Financial Statements. As soon as available, but in any event
within 150 days after each fiscal year end of Borrower, Guarantor’s personal
financial statements, on the form provided by Bank (or otherwise in a form
reasonably satisfactory to Bank and certified to Bank as true and correct in all
material respects.



     Section 1.6 Covenant Amendment. Section 6.3 of the Loan Agreement is hereby amended in its
entirety to read as follows:




6.3. Corporate Distributions; Subordinated Debt; Stock Repurchases. Shall
pay or declare any dividends (other than stock dividends) or other Corporate
Distribution or make any payment on or otherwise acquire any Subordinated Debt if
any Default or Event of Default has occurred and is continuing or would be caused
thereby; provided, notwithstanding anything to the contrary herein or in any other
Loan Document, Borrower shall not effect the purchase, directly or indirectly of any
of its stock, whether held in treasury or otherwise, without the written consent of
the Bank.



     Section 1.7 Covenant Amendment. Article 7 of the Loan Agreement is hereby amended in its
entirety to read as follows:




7.1. Fixed Charge Coverage Ratio. Borrower shall have a Fixed Charge
Coverage Ratio of at least 1.35 to 1.00, calculated on a consolidated basis for
Borrower and all Subsidiaries (i) at each fiscal quarter end from May 31, 2009
through November 30, 2009, on a year to date basis for the period (including the
proration of CMLTD) and (ii) at each
fiscal quarter end after December 1, 2009,



4









 







on a rolling 4 quarters basis for the
fiscal quarter then ended and the immediately preceding 3 fiscal quarters.




7.2. Adjusted Total Liabilities to Adjusted Tangible Net Worth Ratio.
Borrower shall have an Adjusted Total Liabilities to Adjusted Tangible Net Worth
Ratio of not greater than 2.00 to 1.0 at each fiscal quarter end, calculated on a
consolidated basis for Borrower and all Subsidiaries.




7.3. Asset Coverage Ratio. Borrower shall have an Asset Coverage Ratio of
not greater than 1.0 to 1.0 at each fiscal quarter end, calculated on a consolidated
basis for Borrower and all Subsidiaries.



     Section 1.8 Attachments. Exhibit 5.6 to the Loan Agreement is hereby amended in its entirety
to read in the form attached hereto as Exhibit 5.6.



ARTICLE 2.

Acknowledgment of Defaults




     Section 2.1 Acknowledgment of Default. Events of Default (the “Existing Defaults”) have
occurred under Section 8.1(b) of the Loan Agreement as a result of the (i) Borrower’s failure to
comply with Section 7.1 of the Loan Agreement (Fixed Charge Coverage Ratio) for the fiscal
quarter ending May 31, 2009, and (ii) Borrower’s failure to comply with Section 6.3 of the Loan
Agreement (Corporate Distributions; Subordinated Debt) as a result of Borrower’s making
Corporate Distributions of up to $343,889 to repurchase its treasury shares during the fiscal
quarter ending May 31, 2009 during the occurrence of an Event of Default.



     Section 2.2 Acknowledgment of the Borrower. The execution, delivery and performance of this
Amendment by the Bank and the acceptance by the Bank of performance of the Borrower hereunder (a)
shall not constitute a waiver or release by the Bank of any Default or Event of Default that may
now or hereafter exist under the Loan Documents, except the Existing Defaults to the extent
provided herein, (b) shall not constitute a novation of the Loan Documents as it is the intent of
the parties to modify the Loan Documents as expressly set out herein and (c) except as expressly
provided in this Amendment, shall be without prejudice to, and is not a waiver or release of, the
Bank’s rights at any time in the future to exercise any and all rights conferred upon the Bank by
the Loan Documents or otherwise at law or in equity, including but not limited to the right to
institute foreclosure proceedings against the Collateral and/or institute collection or arbitration
proceedings against the Borrower and/or to exercise any right against any other Person not a party
to this Amendment



ARTICLE 3.

Waivers




     Section 3.1 Waiver Covenant. Upon strict satisfaction of the conditions specified hereinafter
in Article 5, Bank shall waive the Existing Defaults and shall not because of the Existing
Defaults,



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     3.1.1 accelerate any of the Loans or demand accelerated payment of the same;




     3.1.2 require the payment of interest at the Default Rate set forth in the Loan
Documents; or




     3.1.3 exercise any other remedies under the Loan Agreement or under the other Loan
Documents.



     Bank’s waiver of the Existing Defaults from such actions, subject to the terms and conditions
of this Waiver, is herein referred to as the “Waiver Covenant”. The effectiveness of each term of
the Waiver Covenant is expressly conditioned on the strict satisfaction of each and every condition
set forth in Article 5 of this Waiver. The Waiver Covenant applies solely to the Existing Defaults
and to no other Defaults or Events of Default, whether now existing or hereinafter arising and
whether now known to the Bank or the Borrower and/or its Subsidiaries and/or any Guarantors.



     Section 3.2 Continued Compliance With the Loan Documents. Notwithstanding this Amendment,
Borrower will continue to perform and comply strictly with each and every provision of the Loan
Documents, except for the Existing Defaults, which have been waived by the Bank pursuant to this
Amendment (upon satisfaction of the conditions set forth in Article 5 hereof).



ARTICLE 4.

Release; Waivers by Borrower




     Section 4.1 Release. In consideration of the accommodations and concessions made by the Bank
pursuant to this Amendment, the Borrower does hereby irrevocably remise, release, acquit, satisfy
and forever discharge the Bank, its successors and assigns, all of its affiliates and subsidiaries,
past, present and future, and all of its shareholders, officers, directors, employees, agents,
attorneys, representatives and participants, from any and all manner of debts, accountings, bonds,
warranties, representations, covenants, promises, contracts, controversies, agreements, claims,
executions, counterclaims, demands and causes of action of any nature or type whatsoever, whether
at law or in equity, whether known or unknown, either now accrued or hereafter maturing, which it
now has or hereafter can, shall or may have by reason of any matter, claim or action arising
through the date hereof out of or relating to the administration, funding or existence of the Loan
from the Bank to the Borrower, or the Loan Documents, or any other agreement or transaction between
or among the Borrower, the Guarantors and Bank.



     Section 4.2 Waivers. The Borrower acknowledges and agrees that the Bank has all rights and
remedies of a “secured party” under the Code and all rights and remedies provided by applicable
law. Borrower waives any additional right to notice of any Default or Event of Default or
opportunity to cure any Default or Event of Default. Notwithstanding anything to the contrary in
Loan Agreement, any Security Agreement, any Guaranty Agreement or any other Loan Document to which
it is a party, the Borrower hereby irrevocably waives (i) any right to notification required under
Code Section 11-9-611 of the disposition of any “Collateral” (as



6









 







defined in the Loan Agreement and as defined in any Security Agreement) or any other
collateral in which the Borrower or any Guarantor has granted (or may hereafter grant) the Bank a
Lien, (ii) any right to redeem, under Code Section 11-9-623, any “Collateral” (as defined in the
Loan Agreement and as defined in any Security Agreement) or any other collateral in which the
Borrower or any Guarantor has granted (or may hereafter grant) Bank a Lien, and (iii) any other
right which the Borrower or any such Guarantor may waive under the Code (whether before or after
default). Any notice required to be given by Bank to the Borrower or any Guarantor (which is not
otherwise waivable under the Code), may be given by the Bank in the shortest time period permitted
by the Code, notwithstanding any provision of the Loan Documents requiring a longer notice period;
where “reasonable” notice is required under the Code and cannot be waived, 10 days’ notice shall be
deemed “reasonable” notice for purposes of the Loan Agreement and each Security Agreement (except
for circumstances described in Code Section 11-9-611(d)).



     Section 4.3 Waiver of Trial by Jury. IN RECOGNITION OF THE HIGHER COSTS AND DELAY WHICH MAY
RESULT FROM A JURY TRIAL, THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING
IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.



     Section 4.4 Relief From Stay. (a) In entering into this Amendment, the Borrower and the Bank
hereby stipulate, acknowledge and agree that the Bank gave up valuable rights and agreed to forbear
from exercising legal remedies available to it in exchange for the promises, representations,
acknowledgments and warranties of Borrower as contained herein and that the Bank would not have
entered into this Amendment but for such promises, representations, acknowledgments, agreements,
and warranties, all of which have been accepted by the Bank in good faith, the breach of which by
the Borrower in any way, at any time, now or in the future, would admittedly and confessedly
constitute cause for dismissal of any such bankruptcy petition pursuant to 11 U.S.C. § 1112(b).


(b) As additional consideration for the Bank agreeing to forbear from immediately enforcing its
rights and remedies under this Amendment and in the Loan Documents, including but not limited to
the institution of foreclosure proceedings, the Borrower agrees that in the event a bankruptcy
petition under any Chapter of the Bankruptcy Code (11 U.S.C. §101, et seq.) is filed by or against
the Borrower at any time after the execution of this Amendment, the Bank shall be entitled to the
immediate entry of an order from the appropriate bankruptcy court granting Bank complete relief
from the automatic stay imposed by §362 of the Bankruptcy Code (11 U.S.C. §362) to exercise its
foreclosure and other rights, including but not limited to obtaining a foreclosure judgment and
foreclosure sale, upon the filing with the appropriate court of a motion for relief from the
automatic stay with a copy of this Amendment attached thereto. The Borrower


7









 






specifically agrees (i) that upon filing a motion for relief from the automatic stay, the Bank
shall be entitled to relief from the stay without the necessity of an evidentiary hearing and
without the necessity or requirement of the Bank to establish or prove the value of the Collateral,
the lack of adequate protection of its interest in the Collateral, or the lack of equity in the
Collateral; (ii) that the lifting of the automatic stay hereunder by the appropriate bankruptcy
court shall be deemed to be “for cause” pursuant to §362(d)(1) of the Bankruptcy Code (11 U.S.C.
§362(d)(1)); and (iii) that the Borrower will not directly or indirectly oppose or otherwise defend
against the Bank’s efforts to gain relief from the automatic stay, and (iv) the Bank shall be
entitled to recover from Borrower all of Bank’s costs and expenses (including the Bank’s attorneys
fees) incurred in connection with any bankruptcy or insolvency proceeding of any of them. This
provision is not intended to preclude Borrower from filing for protection under any Chapter of the
Bankruptcy Code. The remedies prescribed in this paragraph are not exclusive and shall not limit
Bank’s rights under the Loan Agreement, any Guaranty, any other Loan Document or under any law.



(c) All of the above terms and conditions have been freely bargained for and are all supported by
reasonable and adequate consideration and the provisions herein are material inducements for Bank
entering into this Amendment.




ARTICLE 5.

Conditions to Effectiveness 




     Section 5.1 Conditions. The amendments to the Loan Agreement set forth in this Amendment,
and the Waiver Covenant, shall become effective as of the date first above written (the “Effective
Date”) after all of the conditions set forth in Sections 5.2 through 5.6 hereof shall have been
satisfied.



     Section 5.2 Execution of Amendment. This Amendment shall have been executed and delivered by
the Borrower.



     Section 5.3 Execution of Notes. The renewal Notes shall have been executed and delivered by
the Borrower.



     Section 5.4 Confirmations of Guaranties. Ronald D. Ordway shall have executed and delivered
his Unconditional Limited Guaranty Agreement, in form and substance satisfactory to Bank.



     Section 5.5 Mortgages. Bank shall have received first priority mortgages (and related UCC
financing statements) on Borrower’s real property in 8-18 Riverside Drive, White Mills, PA 18473
and 1916 Rt. 96, Phelps, NY 14532, and such other documents in connection therewith as Bank may
require, including, without limitation, (i) and environmental indemnity agreement, (ii) title
searches for each such property and (iii) title affidavits for each such property, each in form and
substance satisfactory to Bank.



     Section 5.6 Representations and Warranties. As of the Effective Date, the representations and
warranties set forth in the Loan Agreement, and the representations and warranties set forth in
each of the Loan Documents, shall be true and correct in all material



8









 







respects; (b) as of the Effective Date, no Defaults or Events of Default shall have occurred
and be continuing, other than the Existing Defaults that are the subject of the Waiver Covenant;
(c) the Bank shall have received from the Borrower a certificate dated the Effective Date,
certifying the matters set forth in subsections (a) and (b) of this Section 5.6.



     Section 5.7 Loan Fee. Borrower shall have paid a waiver fee of $5,000, which fee has been
fully earned by the Bank and is non-refundable in its entirety.



ARTICLE 6.

Miscellaneous




     Section 6.1 Entire Agreement; No Novation or Release. This Amendment, together with the Loan
Documents, as in effect on the Effective Date, reflects the entire understanding with respect to
the subject matter contained herein, and supersedes any prior agreements, whether written or oral.
This Amendment is not intended to be, and shall not be deemed or construed to be, a satisfaction,
novation or release of the Loan Agreement or any other Loan Document. Except as expressly amended
hereby, all representations, warranties, terms, covenants and conditions of the Loan Agreement and
the other Loan Documents shall remain unamended and unwaived and shall continue in full force and
effect.



     Section 6.2 Fees and Expenses. All fees and expenses of the Bank incurred in connection with
the issuance, preparation and closing of the transactions contemplated hereby shall be payable by
the Borrower promptly upon the submission of the bill therefor. If the Borrower shall fail to
promptly pay such bill, the Bank is authorized to pay such bill through an advance of funds under
the Revolver Facility or by debiting its accounts with the Bank.



     Section 6.3 Choice of Law; Successors and Assigns. This Amendment shall be construed and
enforced in accordance with and governed by the internal laws (as opposed to the conflicts of laws
provisions) of the State of Georgia. This Amendment shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.



9









 





     WITNESS the hand and seal of each of the undersigned as of the date first written above.



	 	 	 	 	 
	 	BANK:



RBC BANK (USA)

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 
	 	BORROWER:




VIDEO DISPLAY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]
	 
	 	LEXEL IMAGING SYSTEMS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]
	 
	 	FOX INTERNATIONAL, LTD., INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]
	 
	 	Z-AXIS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]



10









 






	 	 	 	 	 



	 	 	 	 	 
	 	TELTRON TECHNOLOGIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]
	 
	 	AYDIN DISPLAYS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]



11









 






	 	 	 	 	 



Exhibit 5.6

COMPLIANCE CERTIFICATE





	TO: 	 	RBC BANK (USA)

(the “Bank”)





FROM:     VIDEO DISPLAY CORPORATION



The undersigned authorized officer of VIDEO DISPLAY CORPORATION (“Parent”) hereby certifies that in
accordance with the terms and conditions of the Loan and Security Agreement between Parent, certain
of its Subsidiaries and Bank, dated September 26, 2008, as amended (the “Agreement”), (i) Borrowers
are in complete compliance for the period ending _________ with all covenants set forth in
the Agreement, except as noted below and (ii) all representations and warranties of Borrowers
stated in the Agreement are true, correct and accurate as of the date hereof. Attached herewith
are the required documents supporting the above certification. The undersigned authorized officer
further certifies that this Compliance Certificate and any supporting financial documents have been
prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently
applied from one period to the next except as explained in an accompanying letter or footnotes —
or unless otherwise permitted in the Agreement. Reference is made to the Agreement for the
relevant meanings of the reporting requirements and covenants which are stated below in a
“short-hand” manner.



Please indicate compliance status by circling Yes/No under “Complies” column.




	 	 	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	 
	 	 	 	 	 	 
	Quarterly financial statements

	 	Quarterly within 45 days
	 	Yes
	 	No
	Annual financial statements (Audited)

	 	FYE within 150 days
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	 

	 	 	 	Yes
	 	No
	Budget/Forecast

	 	30 days after FYE
	 	Yes
	 	No
	Guarantor personal financial statements

	 	FYE within 150 days
	 	Yes
	 	No






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Financial Covenant	 	Required	 	 	Actual	 	 	Complies	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted
Total Liabilities to Adjusted Tangible Net
Worth
	 	 	2.00	 	 	 	1.00	 	 	 	 	 	 	 	1.00	 	 	Yes	 	No
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fixed Charge Coverage Ratio
	 	 	1.35	 	 	 	1.00	 	 	 	 	 	 	 	1.00	 	 	Yes	 	No
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Asset Coverage Ratio
	 	 	1.00	 	 	 	1.00	 	 	 	 	 	 	 	1.00	 	 	Yes	 	No
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





(Continued on Next Page)




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Compliance Certificate




(Continued from Previous Page)




	 	 	 	 	 
	 
	 	 	 	 
	Comments Regarding Exceptions: See Attached.

	 	  BANK USE ONLY	 	 
	 
	 	 	 	 
	 

	 	  Received by:
                                                                                    	 	 
	 

	 	                         Authorized Signer	 	 
	 
	 	 	 	 
	 

	 	  Date:
                                                                                                 	 	 
	Authorized Signatory of Borrower
	 	 	 	 
	 

	 	  Verified:
                                                                                               	 	 
	 

	 	                 Authorized Signer	 	 
	Title
	 	 	 	 
	 
	 	 	 	 
	 

	 	  Date:
                                                                                                      	 	 
	Date
	 	 	 	 
	 

	 	  Compliance Status                                                                Yes
	 	No
	 
	 	 	 	 





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