Neiman Marcus 2009 Annual Report Download - page 115

Table of Contents
At any time prior to October 15, 2010, NMG 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 fair value of NMG's Senior Notes was approximately $767.5 million at July 31, 2010 and $539.9 million at August 1,
2009 based on quoted market prices.
Senior Subordinated Notes. NMG has $500.0 million aggregate principal amount of 10.375% Senior Subordinated Notes
under a senior subordinated indenture (Senior Subordinated Indenture). NMG's Senior Subordinated Notes mature on October 15,
2015.
The Senior Subordinated Notes are fully and unconditionally guaranteed, on a joint and several unsecured, senior
subordinated basis, by each of NMG's wholly-owned domestic subsidiaries that guarantee NMG's obligations under its Senior Secured
Credit Facilities and by the Company. The Senior Subordinated Notes and the guarantees thereof are NMG's and the guarantors'
unsecured, senior subordinated obligations and rank (i) junior to all of NMG's and the guarantors' existing and future senior
indebtedness, including the Senior Notes and any borrowings under NMG's Senior Secured Credit Facilities, and the guarantees
thereof and NMG's 2028 Debentures; (ii) equally with any of NMG's and the guarantors' future senior subordinated indebtedness; and
(iii) senior to any of NMG's and the guarantors' future subordinated indebtedness. In addition, the Senior Subordinated Notes are
structurally subordinated to all existing and future liabilities, including trade payables, of NMG's subsidiaries that are not providing
guarantees.
NMG is not required to make any mandatory redemption or sinking fund payments with respect to the Senior Subordinated
Notes. The indenture governing the Senior Subordinated Notes contains a number of customary negative covenants and events of
defaults, including a cross-default provision in respect of any other indebtedness that has an aggregate principal amount exceeding $50
million, 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 Subordinated Notes to be due and payable immediately, subject to certain exceptions.
Except as described below, the Senior Subordinated Notes are not redeemable at NMG's option prior to October 15, 2010.
From and after October 15, 2010, NMG may redeem the Senior Subordinated Notes, in whole or in part, at a redemption price equal to
105.188% of principal amount, declining annually to 100% of principal amount on October 15, 2013, plus accrued
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