SelectCore Ltd.
TSX VENTURE : SCG

SelectCore Ltd.

October 18, 2010 17:42 ET

SelectCore Amends Loan Agreement with ComVest Capital

TORONTO, ONTARIO--(Marketwire - Oct. 18, 2010) - SelectCore Ltd. (TSX VENTURE:SCG) (the "Company") announced today that it has entered into an agreement (the "Amendment") amending its revolving credit and term loan agreement (the" Existing Agreement") with ComVest Capital II, L.P. ("ComVest") which provided for a US$2,500,000 revolving line of credit (the "Revolving Loan") and a US$2,500,000 term loan (the "Term Loan"), all as described in more detail in the Company's March 30, 2010 press release.

Pursuant to the Amendment, the Company will benefit from the elimination of the 2% premium for prepayment of the Term Loan, and, if ComVest is paid out by November 30, 2010, ComVest will surrender at no cost to the Company the 9,809,523 Common Shares that it received in connection with the Original Facility (the "ComVest Shares"). The Company is also released from the obligation to repurchase any or all of the ComVest Shares at a price of CDN$0.14 per share at ComVest's option upon the repayment of the Revolving Loan (the "Repurchase Obligation"). After deduction of specified fees and costs incurred in respect of the amendment, elimination of the Repurchase Obligation is expected to result in the Company being able to avoid a payment obligation of over CDN$1.2 million in respect of the ComVest Shares.

The Amendment provides for the right for the Company to refinance in order to pay down the Term Loan and the Revolving Loan. Additionally, the Amendment includes certain other amendments to the loan facility, including, among other things, the requirement to eliminate certain costs associated with the Company's stored-value card business, amendments to the monitoring fees and certain loan covenants.

In consideration of the foregoing, the Company has agreed to repay the Term Loan by March 31, 2011 (in three installments of $500,000 due November 8, 2010, $750,000 due December 31, 2010 and $1,250,000 due March 31, 2011) and the Revolving Loan by December 31, 2011 and to amend of the interest rate applicable to the Revolving Loan after April 1, 2011 by 0.5% per month to up to a maximum interest rate of 13.5% and of the interest rate applicable to the Term Loan after January 1, 2011 up to a maximum interest rate of 15%.

The Amendment was entered into in order to enable the Company to pursue other strategic partnerships and financing options in the near to medium term.

The Amendment is conditional upon the approval of the TSX Venture Exchange.

Keith McKenzie, CEO of SelectCore, commented, "We are very pleased to have achieved some future flexibility with respect to refinancing the company and improving our balance sheet."

About SelectCore:

SelectCore is a leading provider of point-of-sale transaction processing and electronic distribution solutions for the prepaid telecom and financial services market. Our proprietary PrepaidONE technology platform and extensive retail network delivers a full suite of prepaid products and services to millions of credit-challenged and unbanked consumers nation-wide. We also provide wholesale solutions to some of the industry's largest distributors, retailers and telecom providers. SelectCore is a public company on the TSX Venture Exchange trading under the symbol "SCG". We were ranked one of the nation's fastest- growing companies in 2006, 2007 and 2009 by Profit100.

About ComVest:

The ComVest Group is a leading private investment firm focused on providing debt and equity solutions to lower middle-market companies with enterprise values of less than US$350 million. Since 1988, The ComVest Group has invested more than US$2 billion of capital in over 200 public and private companies worldwide.

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the Company's debt financing arrangement with ComVest and the Company's future plans. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including risks related to market and financing conditions as well as risks associated with the prepaid telecom, prepaid financial and transaction-based point of sale activation industries, changes in project parameters as plans continue to be refined as well as those risk factors discussed in the Company's management's discussion and analysis for the period ended June 30, 2010, available on www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information contained herein, except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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