content: 109813.00100/11802266v.1
                               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): July 7, 2008
  
                      HALIFAX CORPORATION OF VIRGINIA
          (Exact name of registrant as specified in its charter)
  
  
  
       Virginia             1-08964                54-0829246
    (State or other      (Commission File       (I.R.S. Employer
    jurisdiction of           Number)         Identification No.)
    incorporation)
  
          5250 Cherokee Avenue, Alexandria, Virginia        22312
         (Address of principal executive offices)       (Zip Code)
  
  
  
  Registrant's telephone number, including area code:(703)658-2400
  
                                    N/A
   Former name, former address, and former fiscal year, if changed since
                                last report
  
  Check the appropriate box below if the Form 8-K filing is intended to
  satisfy the filing obligation of the registrant under any of the
  following provisions:
  
  [ ]  Written communications pursuant to Rule 425 under the Securities
       Act (17 CFR 230.425)
  
  [ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
       (17 CFR 240.14a-12)
  
  [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under
       the Exchange Act (17 CFR 240.14d-2(b))
  
  [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under
       the Exchange Act (17 CFR 240.13e-4(c))
  
  <PAGE>
  
  Item 1.01  Entry Into a Material Definitive Agreement.
  
       On  July  7,  2008,  we entered into Loan and Security  Agreement,
  referred  to as the Loan Agreement, with Textron Financial Corporation,
  referred  to  as  the lender.  The Loan Agreement replaced  our  Fourth
  Amended  and Restated Loan and Security Agreement dated as of June  29,
  2007  with Provident Bank, which terminated on June 30, 2008,  referred
  to as the Old Credit Facility.
  
       The Loan Agreement has a term of three years (this three year term
  is  referred to as the initial term) and will automatically renew after
  the completion of the initial term for additional one year terms unless
  terminated by the lender or us.  We may terminate the Loan Agreement by
  giving  written notice of termination to the Lender at  least  90  days
  prior  to  the end of the relevant term.  The Lender may terminate  the
  Loan  Agreement  at the expiration of the initial term or  any  renewal
  term by giving written notice of termination at least 60 days prior  to
  the  effective  date  of the termination and at  any  time  during  the
  existence  of an event of default.  We may terminate the Loan Agreement
  early upon payment in full of the  principal amount outstanding and any
  other  obligations we owe to the Lender provided that we pay  an  early
  termination  fee  of  2% of the credit limit if we terminate  the  Loan
  Agreement  within the first year of the Loan Agreement (if  termination
  is caused by a change in control, the percentage will be reduced to 1%)
  and  such  termination fee is reduced to  1% of  the  credit  limit  if
  terminated after the first year of the Loan Agreement.  The  lender  is
  also  entitled  to the early termination fee upon an occurrence  of  an
  event  of default relating to our becoming insolvent or bankrupt,  even
  if the lender does not exercise its right of termination.
  
       Under the revolving credit facility of the Loan Agreement, we  may
  borrow  an amount equal to the lesser of (a) $4,000,000 or (b) the  sum
  of (i) up to the eligible accounts advance rate of the aggregate amount
  of  eligible  accounts and (ii) up to the eligible pre-billed  accounts
  rate  of  the  aggregate amount of eligible pre-billed accounts  in  an
  amount  not  to exceed the eligible pre-billed accounts sublimit.   The
  Lender  may establish reserves against the amount we may borrow  as  it
  determines  in  its  sole discretion are necessary to  reflect  events,
  conditions,  contingencies  or risks which may  affect  the  collateral
  securing the revolving credit facility or our financial condition.  The
  lender  may also reduce the eligible accounts advance rate to a  lesser
  amount  the  lender  determine in its sole  credit  discretion  if  our
  borrower's   dilution  at  any  time  exceeds  the   maximum   dilution
  percentage.   The  eligible accounts advance rate, eligible  pre-billed
  accounts,  eligible  pre-billed accounts sublimit,  eligible  accounts,
  collateral,  dilution  and maximum dilution are  defined  in  the  Loan
  Agreement.  Advances under the Loan Agreement are collateralized  by  a
  first priority security interest on all of our personal property as set
  forth  in  the  Loan  Agreement.  Each of  Halifax  Engineering,  Inc.,
  Halifax  Realty, Inc. and Halifax Alphanational Acquisition,  Inc.  are
  guarantors under the Loan Agreement.  Additionally, Charles  McNew  and
  Joseph  Sciacca  have  limited  personal  guarantees  under  the   Loan
  Agreement.   As  of  July 1, 2008, we were eligible  to  borrow  up  to
  $4,000,000.  We used approximately $2.5 million to pay off  the  amount
  outstanding under the Old Credit Facility.
  
       Interest  accrues on the outstanding balance at a  variable  rate,
  adjusted  daily, equal to prime plus 2.75%.  Prime generally means  the
  greater  of  (a)  5% or (b) the prime commercial rate of  interest  per
  annum  as  announced  from  time to time on-line  by  the  Wall  Street
  Journal.  All
  
  <PAGE>
  
       interest  accrued  on the outstanding principal  balance  will  be
  calculated on the basis of a year of 360 days and the actual number  of
  days  elapsed  in each month.  Upon an event of default,  the  interest
  rate  on  the unpaid balance will immediately be increased by  3%.   We
  must  pay  accrued interest monthly, in arrears.  Accrued interest  and
  fees  will  be  added to the unpaid principal amount on  the  day  such
  amounts  are  due,  unless the lender elects to  invoice  us  for  such
  amounts.  At June 30, 2008, the interest rate was 7.75%.
  
       We  are  required to pay to the lender a monthly servicing fee  of
  $2,500.   We  are  also required to pay a credit facility  fee  in  the
  amount of 1.0% of the credit limit, which was due on the effective date
  of  the  Loan  Agreement and 0.5% on each anniversary of the  effective
  date  of  the Loan Agreement.  We will also be required to pay a  field
  examination fee for each fee examination performed by the lender.
  
       We  must pay to the lender all revenues received by us.  Following
  credit  for  collected funds, the lender has 3 business days  as  float
  days  for  which  it  may  not apply such funds against  the  principal
  outstanding.  Lender is entitled to charge us for the float days at the
  interest rate on all collections received.  We must maintain a lock-box
  for  collection of accounts at a bank designated by the lender.  Lender
  may  charge  our  accounts or advance funds under the revolving  credit
  facility  to make any payments of principal, interest, fees,  costs  or
  expenses required to be made by us under the Loan Agreement.
  
       Events  of  default,  include, but are not  limited  to:  (i)  our
  failure to make a payment on any obligation of borrowed money or  other
  indebtedness or observe a convent which results in the payment of  such
  obligation  to  be  due  before its stated maturity,  (ii)  the  lender
  determining  that  an  adverse change has  occurred  in  our  financial
  condition  or  business  prospects or  the  prospect  for  payment   or
  performance  of  any covenant, agreement or obligation under  the  Loan
  Agreement  is impaired, (iii) bankruptcy, reorganization or  insolvency
  proceedings  are  instituted  by  or against  us,  (iv)  a  settlement,
  judgment or order for the payment of money by us in excess of $100,000,
  (v)  any  loss, theft, damage or destruction of any item  or  items  of
  collateral or our other property which materially and adversely affects
  the property, business, operations, prospects, or condition of us, (vi)
  an  overadvance arises which was not approved by lender, and  (vii)  we
  move  any collateral to, or stores or maintains any collateral at,  any
  location other than as stated in the Loan Agreement.
  
       The  Loan Agreement provides that upon the occurrence of an  event
  of  default, the lender may, without notice, (i) discontinue making any
  further  advances under the revolving credit facility,  (ii)  terminate
  the  Loan  Agreement, (iii)declare all our obligations under  the  Loan
  Agreement, including principal amount outstanding and accrued interest,
  to  be immediately due and payable, (iv) take possession of all or  any
  portion of the collateral, (v) use, without charge, any of our patents,
  copyrights,   trade  names,  trade  secrets,  trademarks,   advertising
  materials or any license therefore or any property of a similar nature,
  in  advertising for sale and selling any of the collateral, (vi) renew,
  modify or extend any account, grant waivers or indulgences with respect
  to  any  account,  accept  partial payments on  any  account,  release,
  surrender  or  substitute any security for payment of  any  account  or
  compromise with, or release, any person liable on any account in such a
  manner  as  lender  may,  in its sole discretion  deem  advisable,  all
  without affecting or diminishing our obligations; and (vii) obtain  the
  appointment of a receiver, trustee,
  
  <PAGE>
  
       or  similar  official  over us to effect all of  the  transactions
  contemplated  by  the  Loan Agreement or as is otherwise  necessary  to
  perform  the Loan Agreement.  Additionally, the Loan Agreement provides
  that  upon the occurrence of an event of default, the lender may,  with
  notice,  sell  or  otherwise  dispose of all  or  any  portion  of  the
  collateral at public or private sale for cash or credit.
  
       The   Loan  Agreement  contains  representations,  warranties  and
  covenants that are customary in connection with a transaction  of  this
  type. The Loan Agreement contains certain covenants including, but  not
  limited  to: (i) notifying the lender of any amounts due and  owing  in
  excess  of  $50,000  that are in dispute by any account  debtor  on  an
  eligible  account  or eligible pre-billed account, (ii)  the  immediate
  payment  of  any  excess  amount above the credit  limit  plus  accrued
  interest  and  other charges owed with respect to such  excess  amount,
  (iii) in the event accounts arise out of government contracts, we  will
  assign  to the lender all amounts due under government contracts,  (iv)
  we  may  not  make  a change in management, enter into  any  merger  or
  consolidation,  or  liquidate, wind up or dissolve, or  convey,  lease,
  sell,  transfer or otherwise dispose of any substantial portion of  our
  business or property or acquire all or substantially all of the  assets
  or  business  of  any  other company, person  or  entity,  (v)  without
  lender's  prior written consent, we may not encumber the collateral  in
  favor  of  any  person other than lender, other than (a) the  permitted
  prior encumbrances on equipment; or (b) liens permitted under the terms
  of  any  intercreditor agreements, (vi) without lender's prior  written
  consent,  we may not sell, consign, lease, license or remove  from  our
  business  locations any of our assets except that, so long as no  event
  of  default has occurred, we may sell inventory in the ordinary  course
  of  our business (any sale or exchange of inventory in satisfaction  of
  our indebtedness will not be a sale of inventory in the ordinary course
  of  business) and may sell or dispose of obsolete assets which we  have
  determined,  in  good faith, not to be useful in  the  conduct  of  our
  business  and which, in any fiscal year, do not have an aggregate  fair
  market value in excess of the $100,000, (vii) we may not make any  loan
  or  contribute money, goods or services to any person, or borrow  money
  or  incur  any indebtedness from any person, or guaranty  or  agree  to
  become liable for any obligation of, any person, other than: (a)  loans
  to  our  employees for reimbursable expenses incurred by such employees
  in  the normal course of our business; (b) extensions of credit in  the
  ordinary  course  of  business  to our customers;  (c)  purchase  money
  indebtedness  incurred solely for the purchase of  equipment;  and  (d)
  indebtedness identified in the Loan Agreement, (viii) we may  not  make
  capital  expenditures  of  any  kind or  nature,  including  leases  of
  property which are required to be capitalized on our balance sheet,  in
  an  aggregate amount in excess of the $250,000 in any fiscal year, (ix)
  we may not declare or pay any dividend upon, make any distribution with
  respect  to,  or  purchase, redeem or otherwise  acquire  any  of   our
  capital stock or increase, whether by election, promotion or otherwise,
  the  aggregate salaries and other compensation paid to our officers  by
  more  than  10%  in any fiscal year, (x) we may not cause,  permit,  or
  suffer, directly or indirectly a change in control (as defined  in  the
  Loan  Agreement), (xi) we may not enter into or be a party  to  certain
  agreements and transactions with an interested party (as defined in the
  Loan   Agreement)  or  borrower  affiliate  (as  defined  in  the  Loan
  Agreement),  and  (xii)  we may not make any payment  with  respect  to
  indebtedness  that  is subordinate to our obligations  under  the  Loan
  Agreement  except  as  specifically provided for  in  an  intercreditor
  agreement.    The  Loan  Agreement  also  contains  certain   financial
  covenants which we are required to maintain including, but not  limited
  to, maintaining an adjusted tangible net worth that is not less than $0
  and not permit our accounts receivable turnover days to exceed 75 days.
  
       There  can  be  no assurances we will be able to comply  with  the
  covenants or other terms   contained in the Loan Agreement.  We may not
  be  successful  in  obtaining  a waiver of  non-compliance  with  these
  financial covenants.  If we are unable to comply with the covenants  or
  other  terms  of the Loan Agreement, absent a waiver,  we  will  be  in
  default  of  the  Loan Agreement and the lender can  take  any  of  the
  actions discussed above.
  
  Item 9.01 Financial Statements and Exhibits
  
  (d) Exhibits
  
  10.1.  Loan and Security Agreement with Textron Financial Corporation
  
  <PAGE>
  
                                 SIGNATURE
  
  
  
  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.
  
  
  
                                HALIFAX CORPORATION OF VIRGINIA
  
  
  
  Date:  July 9, 2008           By:  /s/Joseph Sciacca
                                     Joseph Sciacca
                                     Vice President, Finance & CFO
  
  <PAGE>
  
                               EXHIBIT INDEX
  
  10.1.  Loan and Security Agreement with Textron Financial Corporation
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text: 109813.00100/11802266v.1
                               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): July 7, 2008
  
                      HALIFAX CORPORATION OF VIRGINIA
          (Exact name of registrant as specified in its charter)
  
       Virginia             1-08964                54-0829246
    (State or other      (Commission File       (I.R.S. Employer
    jurisdiction of           Number)         Identification No.)
    incorporation)
  
          5250 Cherokee Avenue, Alexandria, Virginia        22312
         (Address of principal executive offices)       (Zip Code)
  
  Registrant's telephone number, including area code:(703)658-2400
  
                                    N/A
   Former name, former address, and former fiscal year, if changed since
                                last report
  
  Check the appropriate box below if the Form 8-K filing is intended to
  satisfy the filing obligation of the registrant under any of the
  following provisions:
  
  [ ]  Written communications pursuant to Rule 425 under the Securities
       Act (17 CFR 230.425)
  
  [ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
       (17 CFR 240.14a-12)
  
  [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under
       the Exchange Act (17 CFR 240.14d-2(b))
  
  [ ]  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.
  
       On  July  7,  2008,  we entered into Loan and Security  Agreement,
  referred  to as the Loan Agreement, with Textron Financial Corporation,
  referred  to  as  the lender.  The Loan Agreement replaced  our  Fourth
  Amended  and Restated Loan and Security Agreement dated as of June  29,
  2007  with Provident Bank, which terminated on June 30, 2008,  referred
  to as the Old Credit Facility.
  
       The Loan Agreement has a term of three years (this three year term
  is  referred to as the initial term) and will automatically renew after
  the completion of the initial term for additional one year terms unless
  terminated by the lender or us.  We may terminate the Loan Agreement by
  giving  written notice of termination to the Lender at  least  90  days
  prior  to  the end of the relevant term.  The Lender may terminate  the
  Loan  Agreement  at the expiration of the initial term or  any  renewal
  term by giving written notice of termination at least 60 days prior  to
  the  effective  date  of the termination and at  any  time  during  the
  existence  of an event of default.  We may terminate the Loan Agreement
  early upon payment in full of the  principal amount outstanding and any
  other  obligations we owe to the Lender provided that we pay  an  early
  termination  fee  of  2% of the credit limit if we terminate  the  Loan
  Agreement  within the first year of the Loan Agreement (if  termination
  is caused by a change in control, the percentage will be reduced to 1%)
  and  such  termination fee is reduced to  1% of  the  credit  limit  if
  terminated after the first year of the Loan Agreement.  The  lender  is
  also  entitled  to the early termination fee upon an occurrence  of  an
  event  of default relating to our becoming insolvent or bankrupt,  even
  if the lender does not exercise its right of termination.
  
       Under the revolving credit facility of the Loan Agreement, we  may
  borrow  an amount equal to the lesser of (a) $4,000,000 or (b) the  sum
  of (i) up to the eligible accounts advance rate of the aggregate amount
  of  eligible  accounts and (ii) up to the eligible pre-billed  accounts
  rate  of  the  aggregate amount of eligible pre-billed accounts  in  an
  amount  not  to exceed the eligible pre-billed accounts sublimit.   The
  Lender  may establish reserves against the amount we may borrow  as  it
  determines  in  its  sole discretion are necessary to  reflect  events,
  conditions,  contingencies  or risks which may  affect  the  collateral
  securing the revolving credit facility or our financial condition.  The
  lender  may also reduce the eligible accounts advance rate to a  lesser
  amount  the  lender  determine in its sole  credit  discretion  if  our
  borrower's   dilution  at  any  time  exceeds  the   maximum   dilution
  percentage.   The  eligible accounts advance rate, eligible  pre-billed
  accounts,  eligible  pre-billed accounts sublimit,  eligible  accounts,
  collateral,  dilution  and maximum dilution are  defined  in  the  Loan
  Agreement.  Advances under the Loan Agreement are collateralized  by  a
  first priority security interest on all of our personal property as set
  forth  in  the  Loan  Agreement.  Each of  Halifax  Engineering,  Inc.,
  Halifax  Realty, Inc. and Halifax Alphanational Acquisition,  Inc.  are
  guarantors under the Loan Agreement.  Additionally, Charles  McNew  and
  Joseph  Sciacca  have  limited  personal  guarantees  under  the   Loan
  Agreement.   As  of  July 1, 2008, we were eligible  to  borrow  up  to
  $4,000,000.  We used approximately $2.5 million to pay off  the  amount
  outstanding under the Old Credit Facility.
  
       Interest  accrues on the outstanding balance at a  variable  rate,
  adjusted  daily, equal to prime plus 2.75%.  Prime generally means  the
  greater  of  (a)  5% or (b) the prime commercial rate of  interest  per
  annum  as  announced  from  time to time on-line  by  the  Wall  Street
  Journal.  All
  interest  accrued  on the outstanding principal  balance  will  be
  calculated on the basis of a year of 360 days and the actual number  of
  days  elapsed  in each month.  Upon an event of default,  the  interest
  rate  on  the unpaid balance will immediately be increased by  3%.   We
  must  pay  accrued interest monthly, in arrears.  Accrued interest  and
  fees  will  be  added to the unpaid principal amount on  the  day  such
  amounts  are  due,  unless the lender elects to  invoice  us  for  such
  amounts.  At June 30, 2008, the interest rate was 7.75%.
  
       We  are  required to pay to the lender a monthly servicing fee  of
  $2,500.   We  are  also required to pay a credit facility  fee  in  the
  amount of 1.0% of the credit limit, which was due on the effective date
  of  the  Loan  Agreement and 0.5% on each anniversary of the  effective
  date  of  the Loan Agreement.  We will also be required to pay a  field
  examination fee for each fee examination performed by the lender.
  
       We  must pay to the lender all revenues received by us.  Following
  credit  for  collected funds, the lender has 3 business days  as  float
  days  for  which  it  may  not apply such funds against  the  principal
  outstanding.  Lender is entitled to charge us for the float days at the
  interest rate on all collections received.  We must maintain a lock-box
  for  collection of accounts at a bank designated by the lender.  Lender
  may  charge  our  accounts or advance funds under the revolving  credit
  facility  to make any payments of principal, interest, fees,  costs  or
  expenses required to be made by us under the Loan Agreement.
  
       Events  of  default,  include, but are not  limited  to:  (i)  our
  failure to make a payment on any obligation of borrowed money or  other
  indebtedness or observe a convent which results in the payment of  such
  obligation  to  be  due  before its stated maturity,  (ii)  the  lender
  determining  that  an  adverse change has  occurred  in  our  financial
  condition  or  business  prospects or  the  prospect  for  payment   or
  performance  of  any covenant, agreement or obligation under  the  Loan
  Agreement  is impaired, (iii) bankruptcy, reorganization or  insolvency
  proceedings  are  instituted  by  or against  us,  (iv)  a  settlement,
  judgment or order for the payment of money by us in excess of $100,000,
  (v)  any  loss, theft, damage or destruction of any item  or  items  of
  collateral or our other property which materially and adversely affects
  the property, business, operations, prospects, or condition of us, (vi)
  an  overadvance arises which was not approved by lender, and  (vii)  we
  move  any collateral to, or stores or maintains any collateral at,  any
  location other than as stated in the Loan Agreement.
  
       The  Loan Agreement provides that upon the occurrence of an  event
  of  default, the lender may, without notice, (i) discontinue making any
  further  advances under the revolving credit facility,  (ii)  terminate
  the  Loan  Agreement, (iii)declare all our obligations under  the  Loan
  Agreement, including principal amount outstanding and accrued interest,
  to  be immediately due and payable, (iv) take possession of all or  any
  portion of the collateral, (v) use, without charge, any of our patents,
  copyrights,   trade  names,  trade  secrets,  trademarks,   advertising
  materials or any license therefore or any property of a similar nature,
  in  advertising for sale and selling any of the collateral, (vi) renew,
  modify or extend any account, grant waivers or indulgences with respect
  to  any  account,  accept  partial payments on  any  account,  release,
  surrender  or  substitute any security for payment of  any  account  or
  compromise with, or release, any person liable on any account in such a
  manner  as  lender  may,  in its sole discretion  deem  advisable,  all
  without affecting or diminishing our obligations; and (vii) obtain  the
  appointment of a receiver, trustee,
  or  similar  official  over us to effect all of  the  transactions
  contemplated  by  the  Loan Agreement or as is otherwise  necessary  to
  perform  the Loan Agreement.  Additionally, the Loan Agreement provides
  that  upon the occurrence of an event of default, the lender may,  with
  notice,  sell  or  otherwise  dispose of all  or  any  portion  of  the
  collateral at public or private sale for cash or credit.
  
       The   Loan  Agreement  contains  representations,  warranties  and
  covenants that are customary in connection with a transaction  of  this
  type. The Loan Agreement contains certain covenants including, but  not
  limited  to: (i) notifying the lender of any amounts due and  owing  in
  excess  of  $50,000  that are in dispute by any account  debtor  on  an
  eligible  account  or eligible pre-billed account, (ii)  the  immediate
  payment  of  any  excess  amount above the credit  limit  plus  accrued
  interest  and  other charges owed with respect to such  excess  amount,
  (iii) in the event accounts arise out of government contracts, we  will
  assign  to the lender all amounts due under government contracts,  (iv)
  we  may  not  make  a change in management, enter into  any  merger  or
  consolidation,  or  liquidate, wind up or dissolve, or  convey,  lease,
  sell,  transfer or otherwise dispose of any substantial portion of  our
  business or property or acquire all or substantially all of the  assets
  or  business  of  any  other company, person  or  entity,  (v)  without
  lender's  prior written consent, we may not encumber the collateral  in
  favor  of  any  person other than lender, other than (a) the  permitted
  prior encumbrances on equipment; or (b) liens permitted under the terms
  of  any  intercreditor agreements, (vi) without lender's prior  written
  consent,  we may not sell, consign, lease, license or remove  from  our
  business  locations any of our assets except that, so long as no  event
  of  default has occurred, we may sell inventory in the ordinary  course
  of  our business (any sale or exchange of inventory in satisfaction  of
  our indebtedness will not be a sale of inventory in the ordinary course
  of  business) and may sell or dispose of obsolete assets which we  have
  determined,  in  good faith, not to be useful in  the  conduct  of  our
  business  and which, in any fiscal year, do not have an aggregate  fair
  market value in excess of the $100,000, (vii) we may not make any  loan
  or  contribute money, goods or services to any person, or borrow  money
  or  incur  any indebtedness from any person, or guaranty  or  agree  to
  become liable for any obligation of, any person, other than: (a)  loans
  to  our  employees for reimbursable expenses incurred by such employees
  in  the normal course of our business; (b) extensions of credit in  the
  ordinary  course  of  business  to our customers;  (c)  purchase  money
  indebtedness  incurred solely for the purchase of  equipment;  and  (d)
  indebtedness identified in the Loan Agreement, (viii) we may  not  make
  capital  expenditures  of  any  kind or  nature,  including  leases  of
  property which are required to be capitalized on our balance sheet,  in
  an  aggregate amount in excess of the $250,000 in any fiscal year, (ix)
  we may not declare or pay any dividend upon, make any distribution with
  respect  to,  or  purchase, redeem or otherwise  acquire  any  of   our
  capital stock or increase, whether by election, promotion or otherwise,
  the  aggregate salaries and other compensation paid to our officers  by
  more  than  10%  in any fiscal year, (x) we may not cause,  permit,  or
  suffer, directly or indirectly a change in control (as defined  in  the
  Loan  Agreement), (xi) we may not enter into or be a party  to  certain
  agreements and transactions with an interested party (as defined in the
  Loan   Agreement)  or  borrower  affiliate  (as  defined  in  the  Loan
  Agreement),  and  (xii)  we may not make any payment  with  respect  to
  indebtedness  that  is subordinate to our obligations  under  the  Loan
  Agreement  except  as  specifically provided for  in  an  intercreditor
  agreement.    The  Loan  Agreement  also  contains  certain   financial
  covenants which we are required to maintain including, but not  limited
  to, maintaining an adjusted tangible net worth that is not less than $0
  and not permit our accounts receivable turnover days to exceed 75 days.
  
       There  can  be  no assurances we will be able to comply  with  the
  covenants or other terms   contained in the Loan Agreement.  We may not
  be  successful  in  obtaining  a waiver of  non-compliance  with  these
  financial covenants.  If we are unable to comply with the covenants  or
  other  terms  of the Loan Agreement, absent a waiver,  we  will  be  in
  default  of  the  Loan Agreement and the lender can  take  any  of  the
  actions discussed above.
  
  Item 9.01 Financial Statements and Exhibits
  
  (d) Exhibits
  
  10.1.  Loan and Security Agreement with Textron Financial Corporation
  SIGNATURE
  
  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.
  
                                HALIFAX CORPORATION OF VIRGINIA
  
  Date:  July 9, 2008           By:  /s/Joseph Sciacca
                                     Joseph Sciacca
                                     Vice President, Finance & CFO
  EXHIBIT INDEX
  
  10.1.  Loan and Security Agreement with Textron Financial Corporation