Neiman Marcus 2008 Annual Report Download - page 307

(d) any net after-tax gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions or
the sale or other disposition of any Capital Stock of any Person other than in the ordinary course of business, as determined in
good faith by the Borrower, shall be excluded,
(e) the Net Income for such period of any Person that is not a subsidiary, or is an Unrestricted Subsidiary, or that is
accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of the Borrower
shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent
converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period (subject in the case of
dividends, distributions or other payments made to a Restricted Subsidiary to the limitations contained in clause (f) below),
(f) solely for the purpose of determining the amount available for Restricted Payments under Section 6.04(a)(iii)(A),
the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded if the
declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date
of determination wholly permitted without any prior governmental approval (which has not been obtained) or, directly or
indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or
governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the
payment of dividends or similar distributions has been legally waived; provided that Consolidated Net Income of the
Borrower will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to
the extent converted into cash) to the Borrower or a Restricted Subsidiary thereof in respect of such period, to the extent not
already included therein,
(g) any increase in amortization or depreciation or other noncash charges resulting from the application of purchase
accounting in relation to the Transactions or any acquisition that is consummated after the Closing Date, net of taxes, shall be
excluded,
(h) any net after-tax income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other
derivative instruments shall be excluded,
(i) any impairment charge or asset write-off, in each case pursuant to GAAP, and the amortization of intangibles
arising pursuant to GAAP shall be excluded, and
(j) any noncash compensation expense recorded from grants of stock appreciation or similar rights, stock options,
restricted stock or other rights to officers, directors or employees shall be excluded.
Notwithstanding the foregoing, for the purpose of Section 6.04 only (other than clause (a)(iii)(D) thereof), there shall be excluded
from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Borrower
and the Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Borrower and the Restricted
Subsidiaries, any repayments of loans and advances that constitute Restricted Investments by the Borrower or any Restricted
Subsidiary, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each
case only to the extent such amounts increase the amount of Restricted Payments permitted under Section 6.04(a)(iii)(D); provided,
however, that any income arising from any sale or other disposition of the Equity Interests in Kate Spade or any Extraordinary
Distribution shall be excluded from Consolidated Net Income for the purpose of Section 6.04 only.
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