Neiman Marcus 2007 Annual Report Download - page 111

Table of Contents
NMG is not required to make any mandatory redemption or sinking fund payments with respect to the Senior Notes, but
under certain circumstances, NMG may be required to offer to purchase Senior Notes as described below. NMG may from time to
time acquire Senior Notes by means other than a redemption, whether by tender offer, in open market purchases, through negotiated
transactions or otherwise, in accordance with applicable securities laws.
Except as described below, the Senior Notes are not redeemable at NMG's option prior to October 15, 2010. From and after
October 15, 2010, NMG may redeem the Senior Notes, in whole or in part, at a redemption price equal to 104.5% of principal amount,
declining annually to 100% of the principal amount on October 15, 2013, plus accrued and unpaid interest, and Additional Interest (as
defined in the Senior Indenture), if any, thereon to the applicable redemption date.
Prior to October 15, 2008, NMG may, at its option, subject to certain conditions, redeem up to 35% of the original aggregate
principal amount of Senior Notes at a redemption price equal to 109% of the aggregate principal amount thereof, plus accrued and
unpaid interest, and Additional Interest, if any, thereon to the redemption date, with the net cash proceeds of one or more equity
offerings of NMG or any direct or indirect parent of NMG to the extent such net proceeds are contributed to NMG. At any time prior
to October 15, 2010, NMG also may redeem all or a part of the Senior Notes at a redemption price equal to 100% of the principal
amount of Senior Notes redeemed plus an applicable premium, as provided in the Senior Indenture, and accrued and unpaid interest
and Additional Interest, if any, to the redemption date.
Upon the occurrence of a change of control (as defined in the Senior Indenture), each holder of the Senior Notes has the right
to require NMG to repurchase some or all of such holder's Senior Notes at a price in cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest, and Additional Interest, if any, to the date of purchase.
The indenture governing the Senior Notes contains covenants that limit NMG's ability and certain of its subsidiaries' ability
to:
• incur additional indebtedness;
• pay dividends on NMG's capital stock or redeem, repurchase or retire NMG's capital stock or subordinated
indebtedness;
• make investments;
• create restrictions on the payment of dividends or other amounts to NMG from its restricted subsidiaries that are not
guarantors of the notes;
• engage in transactions with NMG's affiliates;
• sell assets, including capital stock of NMG's subsidiaries;
• consolidate or merge;
• create liens; and
• enter into sale and lease back transactions.
The Senior Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal,
premium, if any, interest and any other monetary obligations on all outstanding Senior Notes to be due and payable immediately.
The fair value of NMG's Senior Notes at August 2, 2008 was approximately $686.0 million.
Senior Subordinated Notes. On October 6, 2005, Newton Acquisition Merger Sub, Inc. issued $500.0 million aggregate
principal amount of 10.375% Senior Subordinated Notes under a senior subordinated indenture (Senior Subordinated Indenture) with
Wells Fargo Bank, National Association, as trustee. At the closing of the Acquisition, as the surviving corporation in the Acquisition,
NMG assumed all the obligations of Newton Acquisition Merger Sub, Inc. under the Senior Subordinated Indenture. The Senior
Subordinated Notes mature on October 15, 2015. Interest on the Senior Subordinated Notes is payable in cash semi-annually in arrears
on each April 15 and October 15, commencing April 15, 2006.
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