Excel Corporation (OTCMKTS:EXCC) Files An 8-K Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet ArrangementItem 2.04.
As previously disclosed, on May 5, 2017, Excel Corporation (the “Company”) received a written notice (the “Notice”) from GACP Finance Co, LLC (“GACP”) that the Company was in default under the terms of that certain Loan and Security Agreement dated November 2, 2016, among GACP, as agent, the lenders party thereto, the Company, as borrower, and certain subsidiaries of the Company as guarantors (the “Original Loan Agreement”) and the First Amendment and Waiver to Loan and Security Agreement, entered into as of January 26, 2017 (the “Amendment” and, together with the Original Loan Agreement, the “Loan Agreement”). GACP stated in the Notice that the Company was in default under the Loan Agreement for failure to perform certain covenants and conditions under the Loan Agreement, including, without limitation, (i) the Company’s obligations to file a proxy statement providing for the appointment of an independent member to the Company’s Board of Directors (the “Board”), (ii) the Company’s failure to meet the minimum liquidity requirements set forth in the Loan Agreement as of March 31, 2017 and (iii) the Company’s failure to maintain certain EBITDA levels required under the Loan Agreement. to the Notice, GACP terminated its commitment to lend or extend credit under the Loan Agreement and, as a result of the default, GACP may declare all amounts under the Loan Agreement due and payable.
On September 27, 2017, the Company received a supplemental notice from GACP, to which GACP demanded immediate payment from the Company of all obligations owing to the lenders under the Loan Agreement and served notification on the Company of GACP’s intended disposition of collateral to the terms of the Loan Agreement, such collateral consisting of equity interests in each of the Company’s wholly-owned subsidiaries.
As of the date of this Current Report on Form 8-K, the principal due under the Loan Agreement is $13,534,713.51.
The foregoing description of the Original Loan Agreement is not complete and is qualified in its entirety by reference to the full text of the Original Loan Agreement, a copy of which is filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 2, 2016 and incorporated by reference herein. The foregoing description of the Amendment is not complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed as Exhibit 10.2 hereto and incorporated by reference herein.
The Company is currently in discussions with GACP regarding a forbearance agreement. There can be no assurances that the Company will be able to enter into a forbearance agreement with GACP.
On September 27, 2017, the Board approved the formation of a Governance Committee of the Board, consisting initially of Ruben Azrak and David Shweky (the “Governance Committee”).
As previously disclosed, on August 10, 2017, the Board set September 28, 2017 as the date of the Company’s 2017 Annual Meeting of Stockholders (the “Annual Meeting”). On September 27, 2017, the Board acted to postpone the Annual Meeting until the date and time to be determined by the Governance Committee.
| Item 9.01. | Financial Statements and Exhibits. |
(d)Exhibits.
| Exhibit Number | Description |
| 10.1 | Loan and Security Agreement dated November 2, 2016 among GACP Finance Co., LLC, as Agent, the Lenders as time to time party thereto, as lenders, Excel Corporation, as Borrower, and certain subsidiaries of Borrower, as Guarantors (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 2, 2016 and incorporated by reference herein). |
| 10.2 | First Amendment and Waiver to Loan and Security Agreement, dated as of January 26, 2017, among GACP Finance Co., LLC, as Agent, the lender signatories thereto, as lenders, Excel Corporation, as Borrower, and certain other persons party thereto. |
Excel Corp ExhibitEX-10.2 2 f8k092717ex10-2_excelcorp.htm FIRST AMENDMENT AND WAIVER TO LOAN AND SECURITY AGREEMENT,…To view the full exhibit click here
About Excel Corporation (OTCMKTS:EXCC)
Excel Corporation sells integrated financial and transaction processing services to small and medium sized businesses throughout the United States. The Company provides these services through its subsidiary, eVance Processing Inc. (eVance). Through its eVance subsidiary, the Company provides an integrated suite of third-party merchant payment processing services and related proprietary software enabling products that deliver credit and debit card-based Internet payments processing solutions to small and mid-sized merchants operating in physical brick and mortar business environments, on the Internet and in retail settings requiring both wired and wireless mobile payment solutions. It also operates as a wholesale Independent Sales Organization (ISO), generating individual merchant processing contracts in exchange for future residual payments.
