Neiman Marcus 2008 Annual Report Download - page 316

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers,
consolidations and disposed operations (as determined in accordance with GAAP) that have been made by the Borrower or any
Restricted Subsidiary during the four-quarter reference period or subsequent to such reference period and on or prior to or
simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions,
dispositions, mergers, consolidations and disposed operations (and the change in any associated fixed charges and the change in
EBITDA resulting therefrom) had occurred on the first day of the reference period. If since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any Restricted Subsidiary since the
beginning of such period) shall have made any Investment, acquisition, disposition, merger, consolidation or disposed operation that
would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma
effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or disposed operation had occurred
at the beginning of the reference period.
For purposes of this definition, whenever pro forma effect is to be given to a transaction, the pro forma calculations
shall be made in good faith by a responsible financial or accounting officer of the Borrower. If any Indebtedness bears a floating rate
of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the
Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such
Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a
responsible financial or accounting officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in
accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving
credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the
applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or,
if none, then based upon such optional rate chosen as the Borrower may designate.
"Fixed Charges" means, with respect to any Person for any period, the sum of (a) Consolidated Interest Expense of
such Person for such period, (b) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred
Stock during such period, and (c) all cash dividend payments (excluding items eliminated in consolidation) on any series of
Disqualified Stock made during such period.
"Foreign Lender" means a person that is not a "United States person" within the meaning of Section 7701(a)(30) of
the Code.
"Foreign Subsidiary" means, with respect to any Person, any Restricted Subsidiary of such Person that is not
organized or existing under the laws of the United States of America, any state thereof, the District of Columbia, or any territory
thereof.
"Foreign Subsidiary Total Assets" means the total amount of all assets of Foreign Subsidiaries of the Borrower and
the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP as shown on the most recent balance sheet
of the Borrower.
"Funded Debt" means all Indebtedness of the Borrower and its Restricted Subsidiaries for borrowed money that
matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at
the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that
obligates the lender or lenders
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