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Video Display Corp Signs New Credit Agreement

ATLANTA, Dec. 29, 2010 (GLOBE NEWSWIRE) -- Video Display Corporation (Nasdaq:VIDE), a leader in innovative display technology, today announced that the Company had entered into a new senior secured three-year credit agreement among the Company, RBC Bank and Georgia's Community & Southern Bank with RBC bank acting as the Administrative Agent. The new facility provides a $24.0 million package of debt instruments including a revolving credit facility with a $17.5 million cap based upon inventory and receivable advance levels, and two term loans totaling $6.5 million. The lenders under the facility and their affiliates have various other relationships with the Company and its subsidiaries involving the provision of financial services, including cash management, loans, letter of credit and bank guarantee facilities as well as other banking services. Additionally RBC Bank acted as sole lender under the Company's previous Credit Agreement, as defined below. The revolving credit portion of the facility terminates on November 23, 2013. The maturity dates of the two amortizing term loans are December 2015 and December 2025. Interest on facility advances are based on a matrix of debt coverage ratios. Interest is charged at a rate equal to 2.75% to 3.25% above one-month LIBOR for the applicable interest period or a minimum floor rate of 4.00%, each as more fully described in the Agreement. Based on the Company's current debt coverage ratios, the initial rate of interest will be charged at the minimum base rate of 4.00%. The facility includes various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers. As of the date of filing the current report on Form 8-K, draws in the approximate amount of $13 million in revolving credit advances have been made and are outstanding under the facility.    

The Agreement replaces the Company's previous credit agreement dated September 26, 2008 as amended (the "Previous Credit Agreement"), which established two revolving credit facilities in the amount of $17.0 million to the parent Company and $3.5 million to the Company's subsidiary Fox International Ltd., Inc., and a term loan with a remaining balance of $678,000, all of which were terminated by payment from the proceeds of the new Credit Facility on December 23, 2010.  For a complete description of the terms and conditions of these agreements, please refer to the Loan and Security Agreement and related documents, which is incorporated herein by reference and attached to this Current Report on Form 8-K as Exhibit 10(h).

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