Neiman Marcus 2008 Annual Report Download - page 114

Table of Contents
• enter into sale and lease back transactions.
The Senior Indenture also provides for events of default, 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 Notes to be due and payable
immediately.
The fair value of NMG's Senior Notes at August 1, 2009 was approximately $539.9 million.
Senior Subordinated Notes. In October 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.
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, but, under certain circumstances, NMG may be required to offer to purchase Senior Subordinated Notes as described below.
The Company may from time to time acquire Senior Subordinated 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 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 and unpaid interest,
and Additional Interest (as defined in the Senior Subordinated Indenture), if any, thereon to the applicable redemption date.
At any time prior to October 15, 2010, NMG also may redeem all or a part of the Senior Subordinated Notes at a redemption
price equal to 100% of the principal amount of Senior Subordinated Notes redeemed plus an applicable premium, as provided in the
Senior Subordinated 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 Subordinated Indenture), NMG will make an offer to
purchase all of the Senior Subordinated 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 Subordinated Notes contains covenants substantially similar to those applicable to
NMG's Senior Notes described above. The Senior Subordinated Indenture also provides for events of default, 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.
The fair value of NMG's Senior Subordinated Notes at August 1, 2009 was approximately $355.0 million.
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