Neiman Marcus 2004 Annual Report Download - page 39

EBITDAR (Parent has the right to reallocate amounts between the facilities in order to achieve compliance with these leverage ratio conditions)
and, if the ratio of adjusted total debt to pro forma EBITDAR on the closing date would exceed a specified ratio, borrowings under the facilities
and in respect of the notes will be available so long as maximum adjusted total debt shall not exceed $3.752 billion (or $3.768 billion in certain
circumstances); and
Parent having available to it under the Asset-Based Revolving Facility at least $300 million (less amounts drawn to fund the working capital
needs at the closing of the merger) of unused borrowing capacity at closing, which requires a borrowing base at closing of at least that amount,
determined based on specified percentages of the value of eligible inventory.
Parent has agreed to use its reasonable best efforts to arrange the debt financing on the terms and conditions described in the commitments and the
merger agreement. In the event that any portion of the debt financing becomes unavailable on the terms and conditions contemplated in the commitment
papers, Parent must use its reasonable best efforts to arrange to obtain alternative financing from alternative sources in an amount sufficient to consummate
the merger and other transactions contemplated by the merger agreement on terms not materially less beneficial to Merger Sub (as determined in the
reasonable judgment of Parent) as promptly as practicable following the occurrence of such event but no later than the last day of the marketing period.
Although the debt financing described in this annual report is not subject to due diligence or "market out," such financing may not be considered assured.
As of the date of this annual report, no alternative financing arrangements or alternative financing plans have been made in the event the debt financing
described herein is not available as anticipated.
Asset-Based Revolving Facility. The commitment to provide the Asset-Based Revolving Facility was issued by a group of banks of which Credit
Suisse and Deutsche Bank Securities, Inc. will act as joint lead arrangers. Borrowings under the Asset-Based Revolving Facility are limited by a borrowing
base, which is calculated periodically based on specified percentages of the value of eligible inventory, subject to adjustments for reserves and other matters.
The Asset-Based Revolving Facility will be guaranteed by Parent and our U.S. subsidiaries (subject to certain exceptions) and will be secured by a perfected
first priority lien on substantially all personal property of Parent, the Company and the U.S. subsidiaries consisting of inventory, cash, deposit accounts and
proceeds of the foregoing and a second priority lien on capital stock, real estate, accounts receivable (other than credit cards receivables) and other assets. The
borrower may borrow under the Asset-Based Revolving Facility on the closing date (i) up to $150.0 million for purposes of financing the merger and related
transactions (including payment of the aggregate merger consideration, the repayment or refinancing of some of our currently outstanding debt and all related
fees and expenses), but only to the extent that the aggregate principal amount of the term loan facilities and senior secured notes shall have been reduced on a
dollar-for-dollar basis by the amount of such borrowing, (ii) to fund certain upfront fees and/or original issue discount in respect of the debt financing, (iii) to
fund an amount equal to the excess, if any, of the working capital of the borrower as of the closing date over the working capital of the borrower as of July 30,
2005 (in each case, with working capital to exclude current assets and current liabilities relating to any credit card receivables) and (iv) in respect of certain
letters of credit.
Term Loan Facility and the Senior Secured Notes. The commitment to provide the term loan facility was issued by a group of banks of which Credit
Suisse and Deutsche Bank Securities, Inc. will act as joint lead arrangers. The commitment to purchase the senior secured notes was issued by Credit Suisse,
Deutsche Bank Securities, Inc. Banc of America Securities LLC and Goldman, Sachs & Co. Borrowings under the term loan facility will be made on the
closing date, and the senior secured notes will be issued on the closing date. The term loan facility and the senior secured notes will be guaranteed by Parent
and our U.S. subsidiaries (subject to certain exceptions) and will be secured by a second priority lien on substantially all personal property of Parent, the
Company and our U.S. subsidiaries consisting
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