Item 1.01 Entry into a Material Definitive Agreement.
Corporate Facility Consent
Effective as of August 14, 2020, we obtained a limited consent ("August
Consent") for our corporate debt facility ("Corporate Facility") as we continue
to work towards entering into a broader amendment to the Corporate Facility to
address impacts stemming from the COVID-19 pandemic. Under the August Consent,
the lenders consented to extend the Extended Date from August 14, 2020 to August
21, 2020, which further delays the effectiveness of the increased monthly
principal repayments triggered by an Asset Performance Payout Event ("APPE")
(Level 2). In consideration for the August Consent, the Company agreed to make
a principal repayment of $13.125 million (which is the amount that would be
payable on August 17, 2020 as a result of the APPE (Level 1)). If an amendment
is not entered into or the August Consent is not otherwise extended, the Company
will be required to make an additional $15.75 million principal repayment by
August 21, 2020, which represents the incremental principal amount that would
have otherwise been payable on July 17, 2020 and August 17, 2020 as a result of
the APPE (Level 2). In addition, the monthly principal repayments of $21 million
triggered by the APPE (Level 2) would commence on September 17, 2020 and
continue until the Corporate Facility is repaid in full. Certain capitalized
terms not defined in this section of the report are used with the meanings
ascribed to them in the Corporate Facility as amended by prior amendments
thereto and the August Consent.
The foregoing description of the August Consent does not purport to be complete
and is qualified in its entirety by reference to (i) the full text of the August
Consent, which will be filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ending September 30, 2020 and (ii) the definitive
Corporate Facility agreement, which was filed as Exhibit 10.31 to Company's
Annual Report on Form 10-K for the year ended December 31, 2019, as modified by
the Lender Joinder Agreement, which was filed as Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.
LAOD Facility Amendment
On August 14, 2020, Loan Assets of OnDeck, LLC ( "LAOD"), a wholly-owned
subsidiary of On Deck Capital, Inc. (the "Company") amended (the "LAOD
Amendment") its asset-backed revolving debt facility to further modify the
Credit Agreement, dated as of April 13, 2018 (the "LAOD Agreement"), by and
among LAOD, as Borrower, the Lenders party thereto from time to time, 20 Gates
Management LLC, as Administrative Agent for the Class A Lenders, and Deutsche
Bank Trust Company Americas, as Paying Agent and as Collateral Agent.
Pursuant to the LAOD Amendment, the end of the Amendment Period (as such term is
defined in the LAOD Amendment) was extended from August 18, 2020 to September 3,
2020. As previously disclosed in connection with the amendment entered into on
April 27, 2020, no Borrowing Base Deficiency shall be deemed to occur under the
LAOD Facility during the Amendment Period. In addition, no portfolio performance
tests in the LAOD Facility shall be tested until the first Interest Payment Date
occurring following the Amendment Period. During the Amendment Period, the
Lenders are not obligated to make any loans to LAOD, LAOD is restricted from
purchasing receivables from the Company (other than certain subsequent line of
credit advances) and any cash remaining in the LAOD Facility is not permitted to
be distributed to the Company.
The foregoing description of the LAOD Amendment does not purport to be complete
and is qualified in its entirety by reference to (i) the LAOD Amendment, which
will be filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the quarter ending September 30, 2020 and (ii) the LAOD Agreement, and prior
amendments thereto, which were filed as Exhibits 10.27, 10.28 and 10.29 to
Company's Annual Report on Form 10-K for the year ended December 31, 2019.
Safe Harbor Statement.
This Current Report on Form 8-K contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and other legal
authority. Forward-looking statements can be identified by words such as "will,"
"enables," "targets," "expects," "intends," "may," "allows," "plans,"
"continues," "believes," "anticipates," "estimates" or similar expressions.
Forward-looking statements are neither historical facts nor assurances of future
performance. They are based only on our current beliefs, expectations and
assumptions regarding the future of our business, anticipated events and trends,
the economy, the COVID-19 pandemic and other future conditions. As such, they
are subject to inherent uncertainties, risks and changes in circumstances that
are difficult to predict and in many cases outside our control. Therefore, you
should not rely on any of these forward-looking statements.
Our expected results may not be achieved, and actual results may differ
materially from our expectations. Important factors that could cause or
contribute to such differences include risks relating to: our ability to meet
the conditions of, and remain in compliance with, the terms of the August
Consent; our ability to cure or amend our Corporate Facility, cure deficiencies
under our other debt facilities or obtain additional waivers or amendments to
avoid the risk of default; and other risks, including those described in Part II
- Item 1A. Risk Factors in our Form 10-Q for the quarters ended March 31, 2020
and June 30, 2020, Part I - Item 1A. Risk Factors in our Annual Report on Form
10-K for the year ended
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December 31, 2019 and other documents that we file with the Securities and
Exchange Commission, or SEC, from time to time which are or will be available on
the SEC website at www.sec.gov.
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