Neiman Marcus 2008 Annual Report Download - page 334

unripened or contingent obligations related to indemnification under Section 9.03 for which no written demand has been made.
"Unrestricted Subsidiary" means (a) any subsidiary of the Borrower that at the time of determination is an
Unrestricted Subsidiary (as designated by the Borrower, as provided below) and (b) any subsidiary of an Unrestricted Subsidiary.
The Borrower may designate any subsidiary of the Borrower (including any existing subsidiary and any newly
acquired or newly formed subsidiary) to be an Unrestricted Subsidiary unless such subsidiary or any of its subsidiaries owns any
Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, the Borrower or any subsidiary of the Borrower
(other than any subsidiary of the subsidiary to be so designated); provided that (i) any Unrestricted Subsidiary must be an entity of
which shares of the capital stock or other equity interests (including partnership interests) entitled to cast at least a majority of the
votes that may be cast by all shares or equity interests having ordinary voting power for the election of directors or other governing
body are owned, directly or indirectly, by the Borrower, (ii) such designation complies with Section 6.04 and (iii) each of (A) the
subsidiary to be so designated and (B) its subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has
recourse to any of the assets of the Borrower or any Restricted Subsidiary.
The Borrower may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately
after giving effect to such designation no Default shall have occurred and be continuing and either (x) the Borrower could incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described in the first paragraph of
Section 6.01 or (y) the Fixed Charge Coverage Ratio for the Borrower and its Restricted Subsidiaries would be greater than such ratio
for the Borrower and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into
account such designation.
Any such designation by the Borrower shall be notified by the Borrower to the Agent by promptly delivering to the
Agent a copy of any applicable Board Resolution giving effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions. Notwithstanding the foregoing, as of the Closing Date, all of the subsidiaries of
the Borrower will be Restricted Subsidiaries, other than Neiman Marcus Funding Corporation, Kate Spade, Gurwitch Products LLC
and their respective subsidiaries, which shall be Unrestricted Subsidiaries.
"USA PATRIOT Act" means The Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)), as amended from
time to time.
"Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to
vote in the election of the Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness, Disqualified Stock or Preferred
Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the
date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar
payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all
such payments.
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