EXCC Excel Corporation (CE)

Item 1.01. Entry into a Material Definitive Agreement.

On November 2, 2016, Excel Corporation (“Excel” or the “Company”) and certain of the Company’s subsidiaries entered into a Loan and Security Agreement (the “Loan Agreement”) with GACP Finance Co. LLC as administrative agent (“Agent”) and the other lenders as from time to time party thereto. The Loan Agreement has a three-year term and provides for term loan commitments of up to $25,000,000 consisting of an Initial Term Loan in the amount of $13,500,000 and a Delayed Draw Term Loan in the amount of $11,500,000 (each a “Loan” or together “Loans”). The Company used the proceeds from the Initial Term Loan to repay all of its existing secured debt. The Company expects to use the Delayed Draw Term Loan to fund acquisitions of portfolios of recurring residual revenues from credit and debit card transactions or companies that own these portfolios. Funding of Delayed Draw Term Loan is subject to certain conditions including but not limited to borrowing base limitations and further lender due diligence.

The Loans accrue interest of 18% per annum of which 13% is payable in cash monthly and 5% is payable in kind (PIK). Pursuant to the Loan Agreement, the Loans are secured by substantially all of the assets of the Company including but not limited to the Company’s residual portfolios. In addition, certain of Excel’s subsidiaries are guarantors under the Loan Agreement.

The Loan Agreement contains customary events of default, including but not limited to non-payment of principal or other amounts under the Loan Agreement, breach of covenants and certain voluntary and involuntary bankruptcy events. The Loan Agreement also contains certain financial covenants including maintenance of certain EBITDA levels and minimum liquidity. If any event of default occurs and is continuing, the Agent declare all amounts owed to be due (except for a bankruptcy event of default), in which case such amounts will automatically become due and payable.

The foregoing description of the Loan Agreement is not complete and is qualified in its entirety by reference to the full text of the Loan Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein.