Interest. The Superpriority Term Loans will bear interest at the Adjusted Term SOFR Rate (as defined in the Superpriority Credit Agreement) (subject to a 2.00% per annum floor) or Base Rate (as defined in the Superpriority Credit Agreement), as applicable, plus (x) in the case of SOFR Rate Loans (as defined in the Superpriority Credit Agreement), 6.50% per annum or (y) in the case of Base Rate Loans (as defined in the Superpriority Credit Agreement), 5.50% per annum, provided that, the foregoing interest rate margin in respect of both SOFR Rate Loans and Base Rate Loans shall be increased (i) by 0.50% per annum on July 1, 2024 and (ii) by 1.00% per annum on and after January 1, 2025 (for a total increase of 1.50% per annum), if, in each case, the outstanding amount of Superpriority Term Loans on such date is in excess of $125,000,000 (with continuing effect from such date regardless of the outstanding amount of Superpriority Term Loans at any time after such date of determination); and any time after June 30, 2025, with respect to Superpriority Term Loans (x) in the case of SOFR Rate Loans, 13.00% per annum or (y) in the case of Base Rate Loans, 12.00% per annum.
Closing Fees. The Superpriority Term Loans were issued with OID (which was paid in kind rather than in cash) and certain Participating Lenders received consent fees (which were paid in kind rather than in cash) upon the closing of the Superpriority Credit Agreement.
Exit Fees. The Superpriority Term Loans are prepayable at par between the closing of the Superpriority Credit Agreement through December 31, 2023; thereafter, the Superpriority Term Loans are prepayable at any time and from time to time, subject to an exit fee increasing over time ranging from 3.0% to 20.0% through maturity. In the event the Superpriority Term Loans are accelerated prior to their maturity following any event of default, the maximum exit fee will be payable in connection therewith.
Maturity. The Superpriority Term Loans are expected to mature on December 20, 2027 (subject to a springing maturity of December 20, 2025 if, unless otherwise waived by holders collectively owning or controlling at least 75% of the Superpriority Term Loans on the date of determination, (x)(1) the Total Net First Lien Leverage Ratio (as defined in the Superpriority Credit Agreement) is greater than 1.00:1.00, or (2) the Total Net Leverage Ratio (as defined in the Superpriority Credit Agreement) is greater than 1.50:1.00, in each case, as of September 30, 2025 or (y) a Default (as defined in the Superpriority Credit Agreement) or Event of Default (as defined in the Superpriority Credit Agreement) has occurred and is continuing under the Superpriority Credit Agreement as of December 20, 2025), unless earlier repaid or accelerated. The Superpriority Term Loans will amortize in equal quarterly installments in the aggregate annual amount equal to 1.0% of the principal amount of the Superpriority Term Loans outstanding on the date of the Term Loan Exchange (after giving effect to the Closing Date Prepayment).
Mandatory Prepayments. The Superpriority Term Loans are subject to mandatory prepayments customary for transactions of this type, including 75% of excess cash flow, certain non-ordinary course asset dispositions, the issuance of certain equity interests by Casa and the incurrence of certain indebtedness by Casa and its subsidiaries. Such prepayments shall be subject to the exit fee described above (to the extent otherwise then applicable).
Guarantees; Collateral; Ranking.
The Superpriority Term Loans are guaranteed by certain subsidiaries of Casa. The Superpriority Term Loans are secured by substantially all of the assets of Casa and the guarantors.
Pursuant to the terms of an intercreditor agreement entered into in connection with the closing of the Superpriority Credit Agreement, the liens securing the remaining loans (and related obligations) under the Existing Credit Agreement will rank junior as to lien priority to the liens securing the Superpriority Term Loans (and related obligations).
Financial Covenant. The Superpriority Credit Agreement includes a minimum liquidity covenant to be tested monthly and on November 15, 2023 and December 10, 2023.
Board Observer. The Participating Lenders shall have the right to appoint an independent board observer and such board observer shall have the right to, among others thing, attend meetings of the Board of Directors (and committees thereof) of Casa in a non-voting capacity, subject to certain customary exceptions.
The foregoing description of the Superpriority Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Superpriority Credit Agreement, a copy of which will be filed by amendment on Form 8-K/A to this Current Report as Exhibit 10.3 within four business days of the date hereof and will be incorporated by reference herein.
Warrant Agreement
On June 15, 2023, Casa entered into a Warrant Agreement (the “Warrant Agreement”) with the Warrant Agent. The Warrant Agreement contemplates that the Warrants issued to Participating Lenders (or their respective affiliates or designees) will be subject to terms and conditions stated therein.
Subject to the terms and conditions set forth therein, the Warrant Agreement contemplates, among other things, that each Participating Lender (or its affiliates or designees) shall receive on a pro rata basis in accordance with the amount of the Superpriority Term Loans held by such Participating Lender, penny warrants immediately exercisable for an aggregate number of shares of Common Stock equal to 10% of the shares of Common Stock issued and outstanding as of the closing of the Superpriority Credit Agreement, which exercise percentage increases to 15.0% (in the aggregate) on January 1, 2024 in the event the Superpriority Term Loans remain outstanding as of such date, and which exercise percentage further increases to 19.99% (in the aggregate) on January 1, 2025 in the event the Superpriority Term Loans remain outstanding as of such date (such shares of Common Stock, collectively, the “Warrant Shares”).