Neiman Marcus 2008 Annual Report Download - page 376

(iii) the defeasance, redemption, repurchase or other acquisition or retirement of Subordinated Indebtedness of
the Borrower or a Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of,
new Indebtedness of such Person that is incurred in compliance with Section 6.01 so long as (A) the principal amount of such
new Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Subordinated Indebtedness
being so defeased, redeemed, repurchased, acquired or retired for value, plus the amount of any reasonable premium required
to be paid under the terms of the instrument governing the Subordinated Indebtedness being so defeased, redeemed,
repurchased, acquired or retired and any reasonable fees and expenses incurred in connection with the issuance of such new
Indebtedness, (B) such Indebtedness is subordinated to the Obligations at least to the same extent as such Subordinated
Indebtedness so defeased, redeemed, repurchased, acquired or retired, (C) such Indebtedness has a final scheduled maturity
date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness being so defeased, redeemed,
repurchased, acquired or retired and (D) such Indebtedness has a Weighted Average Life to Maturity equal to or greater than
the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so defeased, redeemed,
repurchased, acquired or retired;
(iv) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of
Equity Interests (other than Disqualified Stock) of the Borrower or any of its direct or indirect parent companies held by any
future, present or former employee, director, manager or consultant of the Borrower, any of its subsidiaries or any of its direct
or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or
employee benefit plan or agreement; provided that the aggregate Restricted Payments made under this clause (iv) do not
exceed in any calendar year $10,000,000 (with unused amounts in any calendar year being carried over to succeeding
calendar years subject to a maximum (without giving effect to the following proviso) of $20,000,000 in any calendar year);
provided, further, that such amount in any calendar year may be increased by an amount not to exceed (A) the cash proceeds
from the sale of Equity Interests (other than Disqualified Stock) of the Borrower and, to the extent contributed to the
Borrower, Equity Interests of any of the Borrower's direct or indirect parent companies, in each case to members of
management, directors, managers or consultants of the Borrower, any of its subsidiaries or any of its direct or indirect parent
companies that occurs after the Closing Date, to the extent the cash proceeds from the sale of such Equity Interests have not
otherwise been applied to the payment of Restricted Payments by virtue of clause (iii) of paragraph (a) of this Section 6.04,
plus (B) the cash proceeds of key man life insurance policies received by the Borrower and the Restricted Subsidiaries after
the Closing Date, less (C) the amount of any Restricted Payments previously made pursuant to clauses (A) and (B) of this
clause (iv); and provided, further, that cancellation of Indebtedness owing to the Borrower from members of management,
directors, managers or consultants of the Borrower, any of its direct or indirect parent companies or any Restricted Subsidiary
in connection with a repurchase of Equity Interests of the Borrower or any of its direct or indirect parent companies shall not
be deemed to constitute a Restricted Payment for purposes of this Section 6.04 or any other provision of this Agreement;
(v) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the
Borrower or any Restricted Subsidiary issued in accordance Section 6.01 to the extent such dividends are included in the
definition of "Fixed Charges";
(vi) the declaration and payment of dividends (A) to holders of any class or series of Designated Preferred Stock
(other than Disqualified Stock) issued by the Borrower after the Closing Date, (B) to a direct or indirect parent company of
the Borrower, the proceeds of which
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