Saks Global Enterprises LLC, et al. - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

ABL DIP Facility

• Saks Global Enterprises LLC and other debtors identified as co-borrowers, as ABL DIP Borrowers
• Other debtors identified as guarantors of the ABL DIP Obligations, as ABL DIP Guarantors

SGUS DIP Facility

• SGUS LLC, as SGUS DIP Borrower
• Other debtors identified as guarantors of the SGUS DIP Obligations, as SGUS DIP Guarantors

OpCo DIP Facility

• Saks Global Enterprises LLC, as OpCo DIP Borrower
• Other debtors identified as guarantors of the OpCo DIP Obligations, as OpCo DIP Guarantors

Agent / Lender(s)

ABL DIP Facility

• Bank of America, N.A., as Administrative and Collateral Agent
• Lenders party thereto, as ABL DIP Lenders

SGUS DIP Facility

• U.S. Bank Trust Company, National Association, as Administrative and Collateral Agent
• Lenders party thereto, as SGUS DIP Lenders

OpCo DIP Facility

• U.S. Bank Trust Company, National Association, as Administrative and Collateral Agent
• Lenders party thereto, as OpCo DIP Lenders

DIP Commitments

ABL DIP Facility

• $1.5 billion senior secured superpriority revolving credit facility

SGUS DIP Facility

• Up to $2,559,128,755.07 senior secured superpriority multi-draw, delayed draw term loan facility comprised of:
  • $1 billion new money first-out term loans
    • Up to $400 million available on an interim basis
    • Up to $600 million available upon entry of the final order
  • Up to $808,128,755.07 second-out term loans to replace and refinance, on a dollar-for-dollar, cashless basis, prepetition SGUS notes held by certain SGUS DIP lenders participating in the SGUS DIP facility
    • Up to $359 million available on an interim basis
    • Up to $449,128,755.07 available upon entry of the final order
  • Up to $751 million third-out term loans used to fund prepetition OpCo second-out notes participations
    • Full amount available on an interim basis
• The second-out term loans are immediately junior in right of payment to the first-out term loans, and the third-out term loans are immediately junior in right of payment to the second-out term loans.

OpCo DIP Facility

• Up to $1,752,465,541 senior secured superpriority multi-draw, delayed draw term loan facility comprised of:
  • Up to $1 billion new money term loans
    • Full amount available on an interim basis
  • $752,465,541 roll-up term loans to replace and refinance, on a dollar-for-dollar, cashless basis, prepetition FILO loans and prepetition NPC loans
    • Full amount available upon entry of the final order

Cash Collateral

• The debtors are authorized to use the prepetition collateral, including all cash collateral of the prepetition secured parties, in accordance with the approved budget.

Interest Rate

• The rates of interest charged for the DIP loans are the rates set forth in the applicable DIP credit agreements and are calculated in the manner and payable at the times set forth therein.

Fees

• The fees charged under the DIP facilities are those set forth in the applicable DIP credit agreements and are unconditionally earned and payable in the amounts and at the times set forth in such DIP credit agreement.
• Fees include the commitment fee, L/C participation fees, issuing bank fees, upfront fee, and administrative agent fees (the ABL DIP premiums), the backstop premium, structuring premium, and commitment premium (the SGUS DIP premiums and the OpCo DIP premiums), and all other commitment fees, closing fees, exit fees, audit fees, appraisal fees, valuation fees, liquidator fees, structuring fees, administrative agent fees, and the reasonable and documented fees and disbursements of the applicable DIP agent and lenders' attorneys, financial advisors, accountants, consultants, and other advisors.

Carve Out

• The carve out consists of:
  • All fees required to be paid to the Clerk of the Court and the Office of the United States Trustee, and all fees and expenses under section 156(c) of title 28
  • All reasonable fees and expenses up to $50,000 incurred by a trustee under section 726(b) of the Bankruptcy Code
  • Allowed professional fees incurred by debtor professionals and committee professionals at any time before or on the first business day following delivery of a carve out trigger notice
  • Post-Trigger Carve Out Trigger Notice Cap: $15 million for allowed professional fees incurred after the first business day following delivery of the carve out trigger notice
• The debtors shall establish and fund a segregated funded reserve account, not subject to the control of the SGUS DIP agent or the ABL DIP agent, for purposes of funding the carve out.
  • The funded reserve account will be funded on an 80%/20% split from proceeds of the SGUS DIP facility (80%) and the ABL DIP facility (20%).
  • The debtors shall fund into the funded reserve account an amount equal to the aggregate amount of allowed professional fees projected to accrue in the approved budget from the petition date through the date the final order is entered, plus the post-trigger carve out trigger notice cap.
  • Commencing on the first business day following entry of the final order, and on the Monday of each week thereafter, the debtors shall fund into the funded reserve account an amount equal to the aggregate amount of allowed professional fees projected to accrue for the following week in the approved budget.

Use of Proceeds

SGUS DIP Facility

• Effect the issuance of the SGUS DIP loans to fund the OpCo DIP facility
• Consummate the replacement and refinancing of the prepetition SGUS notes with SGUS second-out DIP loans
• Consummate prepetition OpCo second-out notes participations

OpCo DIP Facility

• Consummate the replacement and refinancing of prepetition FILO loans and prepetition NPC loans with OpCo roll-up DIP loans

OpCo DIP Facility and ABL DIP Facility

• Working capital and other general corporate needs
• Payment of professional fees, costs, and expenses in connection with the DIP credit agreements and the chapter 11 cases
• Payment of fees, costs, and expenses of the administration of the chapter 11 cases
• Payment of other prepetition obligations approved by the Court
• Payment of adequate protection payments
• Payment of agency fees and fees, costs, and expenses of the DIP agents and lenders, and their attorneys, financial advisors, accountants, consultants, and other advisors
• Facilitate the creeping roll-up
• Payment of obligations arising from or related to the carve out

Credit Bid

• Each of the prepetition agents and each of the DIP agents have the unqualified right to credit bid on a dollar-for-dollar basis up to the full amount of the applicable DIP obligations and prepetition secured obligations in any sale of all or any portion of the applicable DIP collateral or prepetition collateral, including any sales occurring pursuant to section 363 of the Bankruptcy Code or included as part of any chapter 11 plan, including plans subject to confirmation under section 1129(b) of the Bankruptcy Code, and any sale or disposition by a chapter 7 trustee.
• In any transaction involving a credit bid of all or any portion of the SGUS DIP obligations and the OpCo DIP obligations, each of the SGUS DIP agent and the OpCo DIP agent may form one or more acquisition vehicles and cause such entity to jointly credit bid any or all of the SGUS DIP obligations and the OpCo DIP obligations for any or all of the SGUS DIP collateral and the OpCo DIP collateral.

Avoidance Actions

• No proceeds of any DIP facility, the carve out, or any cash collateral may be used to investigate, analyze, commence, prosecute, threaten, litigate, object to, contest, or challenge in any manner the debt or collateral position of any of the DIP agents, lenders, or prepetition secured parties.
• During the challenge period, an aggregate amount of $350,000 may be used by the committee to investigate, prepare, initiate, litigate, or prosecute an objection to, or otherwise challenge, the claims and liens of the prepetition secured parties against the debtors, and potential claims, counterclaims, causes of action, or defenses against the prepetition secured parties.

Challenge Period and Budget

• The challenge period shall mean the earliest to occur of:
  • For any party in interest other than the committee, no later than March 16, 2026
  • For the committee, no later than April 15, 2026
• If, prior to the end of the challenge period, the cases convert to chapter 7 or a chapter 11 trustee is appointed, the challenge period shall be extended for a period ending on the later of March 16, 2026 and 45 days after the date of such conversion or appointment, solely with respect to any such trustee.
• Investigation Budget: $350,000 of the DIP loans and/or the prepetition collateral, including cash collateral, may be used by the committee to investigate, prepare, initiate, litigate, or prosecute an objection to, or otherwise challenge, the claims and liens of the prepetition secured parties.

Securities and Priorities

• The DIP obligations are granted superpriority administrative expense claims against each of the debtors, junior to the carve out, pursuant to section 364(c)(1) of the Bankruptcy Code.
  • Each DIP superpriority claim has priority in right of payment over all other obligations, liabilities, and indebtedness of any of the debtors, including any and all unsecured claims, administrative expenses, adequate protection claims, priority claims, or any other claims.
  • The DIP superpriority claims have the priorities set forth in Annex 3 and in accordance with the DIP intercreditor agreement and the prepetition intercreditor agreements.
• The DIP lenders are granted perfected liens on and security interests in all of the debtors' prepetition and postpetition assets and properties (the DIP collateral), subject to the carve out.
  • The ABL DIP agent is granted valid, binding, enforceable, continuing, non-avoidable, and automatically perfected security interests and liens in and upon the ABL DIP collateral.
  • The SGUS DIP agent is granted valid, binding, enforceable, continuing, non-avoidable, and automatically perfected security interests and liens in and upon the SGUS DIP collateral.
  • The OpCo DIP agent is granted valid, binding, enforceable, continuing, non-avoidable, and automatically perfected security interests and liens in and upon the OpCo DIP collateral.
  • The DIP liens have the priority set forth in Annex 3 and are subject to the carve out.
• The SGUS DIP secured parties shall not have recourse in respect of the DIP superpriority claims or the SGUS DIP liens against any asset of any OpCo DIP loan parties or ABL DIP loan parties.
• The OpCo DIP secured parties and the ABL DIP secured parties shall not have recourse in respect of the DIP superpriority claims or the OpCo DIP liens or the ABL DIP liens against any asset of any SGUS DIP loan party.

Adequate Protection

Prepetition OpCo Secured Parties

• Allowed superpriority administrative expense claims against each OpCo DIP loan party on a joint and several basis, solely to the extent of any diminution in value, subject to the carve out, the DIP superpriority claims, and the DIP intercreditor agreement
• Valid, perfected replacement security interests and liens on the OpCo DIP collateral, subject and subordinate to the carve out and the OpCo DIP liens
• Payment of reasonable and documented prepetition and postpetition accrued and unpaid fees and expenses for the DIP lender advisors and the prepetition ABL secured party advisors
• All reporting required to be provided to the DIP secured parties under the DIP documents

Prepetition SGUS Secured Parties

• Allowed superpriority administrative expense claims against each SGUS DIP loan party on a joint and several basis, solely to the extent of any diminution in value, subject to the carve out and the DIP superpriority claims
• Valid, perfected replacement security interests and liens on the SGUS DIP collateral, subject and subordinate to the carve out and the SGUS DIP liens
• Payment of reasonable and documented prepetition and postpetition accrued and unpaid fees and expenses of the prepetition SGUS notes agent and its counsel

Waivers

• Section 506(c): The debtors waive their right to surcharge the DIP or prepetition collateral, except with respect to:
  • Unpaid stub rent claims for nonresidential real property accrued from the petition date through January 31, 2026, to the extent such claims remain unpaid, the holders of such claims and the committee may seek standing to assert a surcharge against any DIP collateral or prepetition collateral (excluding collateral securing the ABL DIP obligations and prepetition ABL secured obligations).
  • Unpaid postpetition vendor claims for merchandise delivered on or after the petition date, to the extent such claims remain unpaid, the holders of such claims and the committee may seek standing to assert a surcharge against any DIP collateral or prepetition collateral (excluding collateral securing the ABL DIP obligations and prepetition ABL secured obligations).
• Section 552(b): The "equities of the case" exception shall not apply to any of the DIP secured parties or the prepetition secured parties.
• The equitable doctrine of "marshaling" and other similar doctrines shall not apply with respect to any of the DIP collateral, the DIP obligations, the prepetition collateral, or the prepetition secured obligations.
• The DIP secured parties shall first obtain recoveries from DIP collateral other than the specified assets before obtaining recoveries from the specified assets.
  • The specified assets include the assets of Saks Fifth Avenue Holdco II LLC and its subsidiaries, and any property or assets of the DIP loan parties as of the commencement of the chapter 11 cases that did not constitute valid, duly perfected prepetition collateral at such time.
  • From and after the date that is 150 days after the DIP termination date, the DIP secured parties shall be permitted to recover from the specified assets subject to the use of commercially reasonable efforts to first recover from DIP collateral other than specified assets.

Permitted Variance

• For each budget variance test period, the debtors shall not permit:
  • Actual aggregate cash receipts to be less than forecasted cash receipts minus the product of the applicable percentage (20% for the initial period, 17.5% for the second period, and 15% thereafter) and forecasted cash receipts
  • Actual aggregate cash disbursements (including vendor payments, but excluding professional fees for advisors in connection with the chapter 11 cases) to exceed forecasted aggregate cash disbursements plus the product of the applicable percentage (15% for the initial period, 12.5% for the second period, and 10% thereafter) and forecasted aggregate cash disbursements
  • Actual net cash flow (aggregate cash receipts minus aggregate cash disbursements, excluding professional fees for advisors) to be less than the absolute value of forecasted aggregate cash receipts minus the absolute value of aggregate cash disbursements minus the product of the applicable percentage (15% for the initial period, 12.5% for the second period, and 10% thereafter) and the absolute value of forecasted aggregate cash receipts plus the absolute value of aggregate cash disbursements