Item 1.01 Entry into a Material Definitive Agreement.
Amendment and Restatement of Credit Agreement
On November 3, 2021, AFC Gamma, Inc. (the "Company") entered into the Second
Amendment to the Revolving Credit Agreement (the "Second Amendment"), by and
between the Company, as borrower, and AFC Finance, LLC, as agent and lender, to
amend its revolving credit agreement with AFC Finance, LLC (as amended,
restated, supplemented or otherwise modified from time to time, the "Revolving
Credit Agreement") to, among other things: (i) decrease the interest rate to
4.75% per annum; (ii) extend the maturity date to the earlier of September 30,
2022 and the closing date of any credit facility where the proceeds are incurred
to refund, refinance or replace such revolving credit agreement; (iii) add an
unused fee of 0.25% per annum on the undrawn amount of the revolving loan
commitments; (iv) add a one-time commitment fee of 0.25% of the total revolving
loan commitments, payable in three quarterly installments, beginning in the
first quarter of 2022; (v) increase the aggregate revolving credit commitments
to $75.0 million; (vi) provide holders of Notes (as defined below), on the
occurrence of certain events of default and subject to certain terms and
conditions, the option to purchase all outstanding obligations under the
Revolving Credit Agreement; and (vii) require all payments of interest, the
commitment fee and unused fee (in each case, net of taxes) to be paid, directly
or indirectly, to a charitable organization to be designated by AFC Finance, LLC
in its sole discretion. AFC Finance, LLC is an affiliated entity wholly-owned by
Leonard M. Tannenbaum, the Company's Chief Executive Officer and one of the
Company's directors, and Jonathan Kalikow, the Company's Head of Real Estate and
one of the Company's directors.
The foregoing description of the Second Amendment is qualified in its entirety
by reference to the terms of the Second Amendment, the form of which is attached
hereto as Exhibit 10.1 and incorporated herein by reference.
Indenture relating to the Issuance of 5.750% Senior Notes due 2027
On November 3, 2021, the Company completed its previously announced offering of
$100.0 million aggregate principal amount of its 5.750% Senior Notes due 2027
(the "Notes") in a private offering (the "Notes Offering") to qualified
institutional buyers pursuant to Rule 144A and non-U.S. persons pursuant to
Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"). The Notes were issued pursuant to an Indenture, dated as of November 3,
2021 (the "Indenture"), between the Company and TMI Trust Company, as trustee.
Seaport Global Securities LLC acted as sole book-running manager and Lake Street
Capital Markets, LLC acted as co-manager for the Notes Offering.
The Indenture provides that the Notes will bear interest at a rate of 5.750% per
annum, payable in cash semi-annually on May 1 and November 1 of each year,
beginning May 1, 2022. The Notes will mature on May 1, 2027. Under the
Indenture, the Company is required to cause all of its existing and future
subsidiaries to fully and unconditionally guarantee the Notes on a senior
unsecured basis, other than certain immaterial subsidiaries as set forth in the
Indenture. As of the issue date of the Notes, the Company's only subsidiary,
AFCG TRS1, LLC, constitutes an immaterial subsidiary under the Indenture and,
consequently, the Notes are not currently guaranteed by any of the Company's
subsidiaries.
Prior to February 1, 2027, the Company may redeem the Notes at any time, in
whole or from time to time in part, at a redemption price equal to the greater
of 100% of the principal amount thereof or a make-whole premium set forth in the
Indenture, plus accrued and unpaid interest, if any, to, but excluding, the
redemption date.
The Company may redeem some or all of the Notes on or after February 1, 2027 at
a redemption price equal to 100% of the principal amount of such Notes being
redeemed, plus accrued and unpaid interest thereon, if any, to, but excluding,
the applicable redemption date. The Notes are the general unsecured and
unsubordinated obligations of the Company. Any Note guarantees will be the
unsecured and unsubordinated obligations of the guarantors. Under certain
circumstances, the guarantors may be released and discharged from their Note
guarantees without consent of the holders of Notes. The Notes rank (i) equally
in right of payment with all of Company's and the subsidiary guarantors'
existing and future senior unsecured indebtedness; (ii) senior in right of
payment to any of the Company's and the subsidiary guarantors' future
indebtedness that is expressly subordinated in right of payment to the Notes;
and (iii) are effectively subordinated to the Company's and the subsidiary
guarantors' existing and future secured indebtedness, including secured
indebtedness under the Revolving Credit Agreement, to the extent of the value of
the assets securing such indebtedness. The Notes are structurally subordinated
to all existing and future indebtedness and liabilities (including trade
payables) of the Company's subsidiaries that do not guarantee the Notes.
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Upon the occurrence of a Change of Control Triggering Event (as defined in the
Indenture), unless the Company or a third party has previously or concurrently
delivered a redemption notice with respect to all of the outstanding Notes, the
Company will be required to offer to repurchase the Notes at a price equal to
101% of the principal amount of the Notes, plus accrued and unpaid interest, if
any, to, but excluding, the date of repurchase.
The Indenture contains covenants that, subject to exceptions and qualifications,
among other things, limit the ability of the Company and the Company's
subsidiaries to (i) incur additional indebtedness; and (ii) consummate a merger,
consolidation or sale of all or substantially all of the assets of the Company
and its subsidiaries taken as a whole.
The Indenture contains customary events of default including, without
limitation, failure to make required payments, failure to comply with certain
agreements or covenants, cross-default and cross-acceleration to certain other
indebtedness in excess of specified amounts and certain events of bankruptcy and
insolvency. An event of default under the Indenture will allow either the
trustee or the holders of at least 25% in aggregate principal amount of the then
outstanding Notes to accelerate, or in certain cases, will automatically cause
the acceleration of, the maturity of the principal, and accrued and unpaid
interest, if any, on all outstanding Notes.
The foregoing description of the Indenture is qualified in its entirety by
reference to the terms of the Indenture, which is attached hereto as Exhibit 4.1
and incorporated herein by reference. The foregoing description of the Notes is
qualified in its entirety by reference to the terms of the Notes, the form of
which is attached hereto as Exhibit 4.2 and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 hereto is incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
4.1 Indenture, dated as of November 3, 2021, between the Company and TMI
Trust Company, as trustee.
4.2 Form of 5.750% Senior Notes due 2027 (included in Exhibit 4.1).
10.1 Second Amendment to Revolving Credit Agreement, dated as of November 3,
2021, by and among AFC Gamma, Inc., as borrower, AFC Finance, LLC, as
agent, and AFC Finance, LLC, as lender.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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AFC GAMMA, INC. 
