Neiman Marcus 2008 Annual Report Download - page 363

SECTION 5.08. Compliance with Laws. Each Loan Party will, and will cause each Subsidiary to, comply in all
material respects with all Requirements of Law applicable to it or its property, except where the failure to do so, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.09. Use of Proceeds. The proceeds of the Loans will be used only for the purposes specified in the
introductory statement to this Agreement. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that would entail a violation of Regulations T, U or X.
SECTION 5.10. Insurance. Each Loan Party will, and will cause each Subsidiary to, maintain, with financially
sound and reputable insurance companies (a) insurance in such amounts and against such risks, as are customarily maintained by
similarly situated companies engaged in the same or similar businesses operating in the same or similar locations (after giving effect to
any self-insurance reasonable and customary for similarly situated companies) and (b) all insurance required pursuant to the Collateral
Documents (and shall cause the Agent to be listed as a loss payee (together with any other loss payee in accordance with the
Intercreditor Agreement) on property and casualty policies covering loss or damage to Collateral and as an additional insured on
liability policies). The Borrower will furnish to the Agent, upon request, information in reasonable detail as to the insurance so
maintained.
SECTION 5.11. Additional Collateral; Further Assurances. (a) Subject to applicable law, the Borrower and each
Subsidiary that is a Loan Party shall cause (i) each of its Domestic Subsidiaries (other than any Immaterial Subsidiary (except as
otherwise provided in paragraph (e) of this Section 5.11) or Unrestricted Subsidiary) formed or acquired after the date of this
Agreement in accordance with the terms of this Agreement that is required to become a Subsidiary Guarantor pursuant to Section 6.08
and (ii) any such Domestic Subsidiary that was an Immaterial Subsidiary but, as of the end of the most recently ended fiscal quarter of
the Borrower has ceased to qualify as an Immaterial Subsidiary, to become a Loan Party as promptly thereafter as reasonably
practicable by executing a Joinder Agreement in substantially the form set forth as Exhibit D hereto (the "Joinder Agreement"). Upon
execution and delivery thereof, each such Person (i) shall automatically become a Loan Guarantor hereunder and thereupon shall have
all of the rights, benefits, duties, and obligations in such capacity under the Loan Documents and (ii) will simultaneously therewith or
as soon as practicable thereafter grant Liens to the Agent, for the benefit of the Agent and the Lenders and each other Secured Party at
such time party to or benefiting from the Intercreditor Agreement or the Security Agreement (including, if applicable, the holders of
the 2028 Debentures or the 2008 Notes), in each case to the extent required by the terms thereof, in any property (subject to the
limitations with respect to Equity Interests set forth in paragraph (b) of this Section 5.11, the limitations with respect to real property
set forth in paragraph (f) of this Section 5.11 and any other limitations set forth in the Security Agreement) of such Loan Party which
constitutes Collateral, on such terms as may be required pursuant to the terms of the Collateral Documents and in such priority as may
be required pursuant to the terms of the Intercreditor Agreement.
(b) The Borrower and each Subsidiary that is a Loan Party will cause (i) 100% of the issued and outstanding Equity
Interests of each of its Domestic Subsidiaries, other than any Domestic Subsidiary taxed as a partnership for federal income tax
purposes that holds Capital Stock of a Foreign Subsidiary whose Equity Interests are pledged pursuant to clause (ii) below, and
(ii) 65% of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and
100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in
each Foreign Subsidiary directly owned by the Borrower or any Subsidiary that is a Loan Party to be subject at all times to a first
priority perfected Lien in favor of the Agent pursuant to the terms and conditions of the Loan Documents or other security documents
as the Agent shall reasonably request; provided, however this paragraph (b) shall not require the Borrower or
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