Spanish Broadcasting System Inc - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Spanish Broadcasting System, Inc. ("SBS"), as Borrower
• The DIP Guarantor Subsidiaries (each of the Debtors other than the Borrower), as Guarantors, jointly and severally guaranteeing the DIP Loans and all other DIP Obligations (together with the Borrower, the "DIP Loan Parties")

Agent / Lender(s)

• Brigade Agency Services LLC, as Administrative Agent and Collateral Agent (the "DIP Agent")
• The financial institutions or other entities from time to time party thereto as Lenders (the "DIP Lenders")

DIP Commitments

• Senior secured, superpriority, priming debtor-in-possession multi-draw term loan facility in an aggregate principal amount of up to $30 million, comprised of:
  • Base DIP Loans:
    • $7 million made available upon entry of the Interim Order (the "Interim Draw")
    • Up to an aggregate of $13 million available following entry of the Final Order, subject to certain conditions set forth in the DIP Credit Agreement
  • A final $10 million available to be drawn following entry of the Final Order either (x) with the written consent of the Backstop Parties or (y) upon the occurrence of the Sale Pivot Date (each as defined in the Restructuring Support Agreement, dated as of April 3, 2026)
• Upon entry of the Interim Order, the Borrower was authorized to borrow up to $7 million; upon entry of the Final Order, the Borrower is authorized to borrow up to an additional $23 million, for a total of up to $30 million including the Interim Draw

Cash Collateral

• "Cash Collateral" means all of the Debtors' cash, wherever located and held, including cash in deposit accounts, that constitutes or will constitute "cash collateral" of any of the Prepetition Secured Parties or DIP Secured Parties within the meaning of section 363(a) of the Bankruptcy Code, but excluding cash on deposit in Excluded Accounts
• The Debtors are authorized to use all Cash Collateral in accordance with the DIP Documents and the Approved Budget, subject to Permitted Variances

Interest Rate

• Interest, including, where applicable, default interest, shall accrue and be payable as set forth in the DIP Credit Agreement

Fees

• The DIP Fees and Expenses include any fees in connection with the DIP Facility, including amendment fees, premiums, servicing fees, audit fees, liquidator fees, structuring fees, arrangement fees, trustee's, administrative agent's, collateral agent's, or security trustee's fees, upfront fees, closing fees, commitment premiums, exit fees, closing date fees, prepayment fees, and agency fees, together with indemnification and expense reimbursement obligations, including:
  • The Backstop Premium and the Commitment Premium, each of which was fully earned, due, and payable in the form of Interim DIP Loans on the Closing Date
  • The Exit Premium
  • The reasonable and documented fees and expenses of professionals retained by or on behalf of the DIP Secured Parties, including those of Milbank LLP, M3 Advisory Partners, LP, and Richards, Layton & Finger, P.A.
• The DIP Loan Parties are authorized and directed to pay the DIP Fees and Expenses, without the need to file retention or fee applications, and, subject to the review procedures of the Final Order, such payments are not subject to allowance or review by the Court

Events of Default and Remedies

• Upon the occurrence and continuation of an Event of Default not waived by the Required Lenders, and following delivery of a Termination Notice on not less than three business days' notice (the "DIP Agent Remedies Notice Period") to the Remedies Notice Parties (lead restructuring counsel to the Debtors, lead restructuring counsel to the Prepetition Notes Trustee, lead counsel to the Creditors' Committee (if appointed), and the U.S. Trustee), the DIP Agent may, upon expiration of the notice period:
  • Terminate and/or revoke the Debtors' right to use Cash Collateral, subject to the Carve-Out
  • Terminate the DIP Facility and any DIP Document as to any future liability or obligation of the DIP Secured Parties, without affecting the DIP Obligations or the DIP Liens
  • Declare all DIP Obligations immediately due and payable
  • Invoke the right to charge interest at the default rate under the DIP Documents
• Following an Event of Default and delivery of the Termination Notice, on three business days' notice (which may run concurrently with the DIP Agent Remedies Notice Period), the DIP Secured Parties may, among other things, freeze monies or balances in the Debtors' accounts, set off amounts against the DIP Obligations, and enforce rights against the DIP Collateral, including foreclosure, occupying the Debtors' premises, or sale or disposition of the DIP Collateral
• Upon the occurrence of any Cash Collateral Termination Event (each deemed an Event of Default), the Prepetition Notes Trustee, on not less than three business days' notice, may terminate the Prepetition Noteholders' consent to the use of Cash Collateral. Such events include:
  • Acceleration of the DIP Obligations
  • The filing of any motion or pleading by the Debtors, or the entry of an order on account of a motion filed by any other party, to stay, vacate, reverse, amend, or modify the DIP Orders in a manner materially adverse to the Prepetition Secured Parties without the consent of the Prepetition Secured Parties
  • The appointment of a trustee, receiver, or examiner with expanded powers
  • An attempt by the Debtors to invalidate, reduce, or otherwise impair the Prepetition Secured Obligations
  • The dismissal of any of the chapter 11 cases
  • The effective date of any plan of reorganization
  • The conversion of any of the chapter 11 cases to chapter 7
  • The delivery of a Carve-Out Trigger Notice

Carve-Out

• The Carve-Out is the sum of:
  • All statutory fees payable to the Clerk of the Court and the U.S. Trustee under 28 U.S.C. § 1930(a), plus interest at the statutory rate
  • Up to $50,000 in reasonable fees and expenses incurred by a trustee under section 726(b) of the Bankruptcy Code
  • Allowed Professional Fees of the Debtor Professionals and Committee Professionals incurred at any time before or on the first business day following delivery of a Carve-Out Trigger Notice
  • Post-Carve-Out Trigger Notice Cap: Allowed Professional Fees in an aggregate amount not to exceed $750,000 incurred after the first business day following delivery of a Carve-Out Trigger Notice, excluding any transaction or success fees
• A Carve-Out Trigger Notice may be delivered by the DIP Agent following acceleration of the DIP Obligations as a result of an Event of Default
• Contemporaneously with the funding of the Interim Draw, and monthly thereafter, the Debtors shall fund a Pre-Carve-Out Trigger Notice Reserve equal to the budgeted fees and expenses of the Professional Persons, held in a segregated account in trust
• The Carve-Out is senior to all liens and claims securing the DIP Facility and any other forms of adequate protection, liens, or claims securing the DIP Obligations or the Prepetition Secured Obligations
• Any payment of Allowed Professional Fees made prior to the Termination Declaration Date shall not reduce the Carve-Out, while any such payment made on or after that date shall permanently reduce the Carve-Out on a dollar-for-dollar basis

Use of Proceeds

• The proceeds of the DIP Loans shall be used for all purposes permitted under the DIP Documents and the Final Order, subject to and in accordance with the Approved Budget (subject to Permitted Variances)
• No DIP Loans, DIP Collateral, Prepetition Collateral (including Cash Collateral), or any portion of the Carve-Out may be used, among other things, to investigate or prosecute claims or causes of action against the DIP Secured Parties or Prepetition Secured Parties (subject to the Creditors' Committee's right to investigate, but not prosecute, such claims up to the $50,000 Investigation Cap), to challenge the DIP Obligations or the Prepetition Secured Obligations, to interfere with the secured parties' enforcement or realization on their collateral, or to pay prepetition claims except as authorized

Credit Bid

• The DIP Agent (or any assignee or designee), acting at the direction of the Required Lenders, shall have the unqualified and unconditional right to credit bid up to the full amount of the obligations arising in connection with the DIP Loans in any sale of the Debtors' assets, including under section 363, a plan under section 1129, or a chapter 7 sale under section 725 of the Bankruptcy Code
• The Prepetition Notes Trustee, on behalf of and at the direction of the requisite Prepetition Noteholders, shall have the unqualified and unconditional right to credit bid, subject to section 363(k), up to the full amount of the Prepetition Secured Obligations and the Adequate Protection Obligations in any sale or other disposition of the Debtors' assets
• Each DIP Secured Party shall automatically be deemed a "qualified bidder"
• The DIP Agent and the Prepetition Notes Trustee shall have the absolute right to assign, sell, or otherwise dispose of their respective credit bid rights to any acquisition entity or joint venture formed in connection with such bid

Avoidance Actions

• The DIP Collateral, the DIP Superpriority Claims, and the first-priority liens on Unencumbered Property exclude the Avoidance Actions themselves but include the Avoidance Proceeds — any proceeds or property recovered as a result of any Avoidance Actions, whether by judgment, settlement, or otherwise

Challenge Period and Investigations Cap

• The deadline to bring a Challenge is the earlier of:
  • The commencement of a hearing on confirmation of the Debtors' chapter 11 plan
  • 75 calendar days after entry of the Interim Order
• If a chapter 7 or chapter 11 trustee is appointed or elected prior to the end of the Challenge Period, the Challenge Period for any such trustee is extended to the later of (i) 75 calendar days after entry of the Interim Order or (ii) 21 calendar days after such appointment
• A later date may apply if agreed to in writing by the Prepetition Notes Trustee or ordered by the Court for cause
• Investigation Cap: The Creditors' Committee may use the proceeds of the DIP Loans and DIP Collateral (including Cash Collateral) to investigate, but not to prosecute, the claims and liens of, and potential claims against, the Prepetition Secured Parties, up to an aggregate cap of no more than $50,000

Security and Priorities

• Pursuant to section 364(c)(1) of the Bankruptcy Code, the DIP Obligations constitute allowed superpriority administrative expense claims (the "DIP Superpriority Claims") against the DIP Loan Parties on a joint and several basis, with priority over any and all claims, junior only to the Carve-Out
• As security for the DIP Obligations, the DIP Agent is granted valid, enforceable, non-avoidable, and automatically perfected liens (the "DIP Liens") on the DIP Collateral, subject to the Carve-Out, with the following priorities:
  • Pursuant to section 364(c)(2), first-priority liens on all unencumbered prepetition and postpetition property of the DIP Loan Parties, other than the Avoidance Actions and the Carve-Out Reserves, but including all other proceeds of any unencumbered asset and the Avoidance Proceeds (the "Unencumbered Property")
  • Pursuant to section 364(d)(1), first-priority senior priming liens (subject and subordinate only to the Carve-Out and the Permitted Prior Liens) on all property of the same nature, scope, and type as the Prepetition Collateral, senior to the other Prepetition Liens and any Adequate Protection Liens on the Prepetition Collateral; the Prepetition Liens are primed by and made subject and subordinate to the DIP Priming Liens
  • Pursuant to section 364(c)(3), liens (subject and subordinate to the Carve-Out) on all property of the DIP Loan Parties that is subject to the Permitted Prior Liens
• No claim or lien having a priority superior to or pari passu with the DIP Liens and Adequate Protection Liens shall be permitted while the DIP Obligations or Adequate Protection Obligations remain outstanding, except as expressly provided in the Final Order, including the Carve-Out

Adequate Protection

Prepetition Secured Parties

• Adequate Protection Liens: valid, perfected replacement security interests in and liens upon all of the DIP Collateral on account of the Prepetition Secured Parties' diminution in value, subject and subordinate, in order, to (i) the Carve-Out and (ii) the DIP Liens, and extending to the Avoidance Proceeds
• 507(b) Claims: allowed superpriority administrative expense claims under section 507(b) on account of the diminution in value, payable from and with recourse to all DIP Collateral and proceeds (excluding Avoidance Actions but including Avoidance Proceeds), junior to (i) the Carve-Out and (ii) the DIP Superpriority Claims
• Adequate Protection Fees and Expenses: current cash payment of all reasonable and documented prepetition and postpetition fees and out-of-pocket expenses of the Prepetition Notes Trustee and the Prepetition Secured Parties' legal and financial advisors, including those of Milbank LLP, M3 Advisory Partners, LP, Richards, Layton & Finger, P.A., and Seward & Kissel LLP, as counsel to the Prepetition Notes Trustee
• Maintenance and insurance of the Prepetition Collateral and DIP Collateral as required under the Prepetition Notes Documents and the DIP Documents

Waivers

• Section 506(c): The Debtors waive their right to surcharge the DIP Collateral or the Prepetition Collateral; no costs or expenses of administration shall be charged against or recovered from the DIP Collateral or Prepetition Collateral (in each case including Cash Collateral) without the prior written consent of the DIP Agent or the Prepetition Notes Trustee, as applicable
• Section 552(b): The "equities of the case" exception shall not apply to the DIP Secured Parties or the Prepetition Secured Parties
• Marshaling: The equitable doctrine of "marshaling," and other similar doctrines, shall not apply to the DIP Secured Parties or the Prepetition Secured Parties with respect to the DIP Collateral, the DIP Obligations, the Prepetition Collateral, or the Prepetition Secured Obligations

Permitted Variance

• The Debtors delivered an Initial DIP Budget attached to the Interim Order. A Subsequent DIP Budget was received by the advisors to the DIP Secured Parties on May 27, 2026 and approved by the Required Lenders, and is attached to the Final Order; it may be modified, amended, extended, and updated from time to time with the prior written consent of the Required Lenders in their sole discretion
• Commencing June 10, 2026 and continuing on the Wednesday of every second full calendar week thereafter, the Debtors shall deliver a Variance Report covering the four-week period ending on the fourth full calendar week of the Subsequent DIP Budget and each subsequent rolling two-week period thereafter (the "Variance Period")
• For each Variance Period, tested on a cumulative basis, the Permitted Variances are:
  • The unfavorable variance of actual aggregate receipts shall not exceed 20% of estimated receipts in the Approved Budget
  • The unfavorable variance of actual aggregate disbursements shall not exceed 10% of estimated disbursements in the Approved Budget

Prepetition Debt / Debtors' Stipulations

• Pursuant to the Senior Secured Notes Indenture, dated as of February 17, 2021 (the "Prepetition Notes Indenture"), among SBS, as issuer, the guarantors party thereto, and Wilmington Trust, National Association, as trustee and collateral agent (the "Prepetition Notes Trustee"), the Prepetition Notes Parties issued $310,000,000 in face amount of Notes to the Prepetition Noteholders and incurred the Prepetition Secured Obligations (the Prepetition Noteholders together with the Prepetition Notes Trustee, the "Prepetition Secured Parties")
• As of the Petition Date (May 11, 2026), the Debtors stipulate they were jointly and severally indebted in an aggregate principal amount of no less than $310,000,000, plus accrued and unpaid interest, fees, costs, and other Prepetition Secured Obligations, constituting legal, valid, binding, and non-avoidable obligations
• The Prepetition Notes Parties granted the Prepetition Notes Trustee, for the benefit of the Prepetition Secured Parties, a first-priority security interest in and continuing lien (the "Prepetition Liens") on substantially all of their assets (the "Prepetition Collateral," which includes Cash Collateral), other than the Excluded Assets, subject only to any Permitted Prior Liens
• The Debtors' stipulations, admissions, agreements, and releases are binding on all parties in interest, subject to the Challenge Period

Releases

• Debtors' Release: Effective as of entry of the Interim Order, the Debtors and their estates absolutely, unconditionally, and irrevocably released and discharged the Prepetition Secured Parties and their Representatives (the "Released Parties") from all claims and causes of action arising out of or related to the Prepetition Notes Documents, the DIP Facility, the DIP Documents, and the DIP Loans, for any act or omission on or prior to the date of the Final Order; provided that the release does not relieve any DIP Lender of its obligation to fund under the DIP Documents, and remains subject to the challenge rights preserved during the Challenge Period
• DIP Secured Parties Release: The DIP Secured Parties and their Representatives (the "DIP Released Parties") are released and discharged from all claims and causes of action arising out of or related to the DIP Facility, the DIP Documents, and the DIP Loans, for any act or omission on or prior to the date of the Final Order; provided that the release does not relieve any DIP Lender of its funding obligations and does not release claims arising primarily out of a DIP Secured Party's gross negligence or willful misconduct, as determined by a final, non-appealable order of a court of competent jurisdiction