Excel Corporation (EXCC)

[Stanson]

This is not correct. Covenant breaches do occur all the time, yes. However, it is a default of the loan agreement and the bank can call the loan. It has the same ramifications as if they missed a payment. Typically a bank will not call the loan if the covenant breach is simple, however, if they are worried that the cash flow of the business cannot support the debt going forward, they may exercise their rights and seize the assets of the business.