Neiman Marcus 2008 Annual Report Download - page 354

businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted following the Closing
Date.
(b) The Loan Parties do not intend to incur debts beyond their ability to pay such debts as they mature, taking into
account the timing and amounts of cash to be received by the Loan Parties and the timing and amounts of cash to be payable by the
Loan Parties on or in respect of their Indebtedness.
SECTION 3.14. Insurance. Schedule 3.14 sets forth a true, complete and correct description of all insurance
maintained by or on behalf of the Loan Parties and the Subsidiaries as of the Closing Date. As of the Closing Date, all such insurance
is in full force and effect and all premiums in respect of such insurance have been duly paid. The Borrower believes that the insurance
maintained by or on behalf of the Borrower and the Subsidiaries is adequate and is in accordance with normal industry practice.
SECTION 3.15. Capitalization and Subsidiaries. Schedule 3.15 sets forth (a) a correct and complete list of the
name and relationship to the Borrower of each and all of the Borrower's Subsidiaries, (b) a true and complete listing of each class of
each of the Borrower's authorized Equity Interests, of which all of such issued shares are validly issued, outstanding, fully paid and
non-assessable, and owned beneficially and of record by the Persons identified on Schedule 3.15, and (c) the type of entity of the
Borrower and each of its Subsidiaries. All of the issued and outstanding Equity Interests of the Subsidiaries owned by any Loan Party
have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully
paid and non-assessable free and clear of all Liens (other than Liens created under the Loan Documents and the ABL Security
Documents).
SECTION 3.16. Security Interest in Collateral. The provisions of this Agreement and the other Loan Documents
create legal and valid Liens on all the Collateral in favor of the Agent, for the benefit of the Agent and the Lenders; and upon the
proper filing of UCC financing statements required pursuant to paragraph (l) of Article IV and any Mortgages with respect to
Mortgaged Properties, such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations,
enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in
the case of (a) Permitted Liens, to the extent any such Permitted Liens would have priority over the Liens in favor of the Agent
pursuant to any applicable law, (b) Liens perfected only by possession (including possession of any certificate of title) to the extent the
Agent has not obtained or does not maintain possession of such Collateral and (c) subject to and as provided for under the terms of the
Intercreditor Agreement, the Liens granted under the ABL Security Documents.
SECTION 3.17. Labor Disputes. As of the Closing Date, except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect: (a) there are no strikes, lockouts or slowdowns against any Loan Party
pending or, to the knowledge of the Borrower, threatened, (b) the hours worked by and payments made to employees of the Loan
Parties and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or
foreign law dealing with such matters and (c) all payments due from any Loan Party or any Subsidiary, on account of wages and
employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Loan Party or
such Subsidiary to the extent required by GAAP. Except (i) as, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect or (ii) as set forth on Schedule 3.17, the consummation of the Transactions will not give rise to a right
of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which Holdings, the
Borrower or any of the Subsidiaries (or any predecessor) is a party or by which Holdings, the Borrower or any of the Subsidiaries (or
any predecessor) is bound.
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