Exhibit 10.9

 

June 7, 2019

 

MYT Holding Co.

c/o Neiman Marcus Group, Inc.

1618 Main Street

Dallas, TX 75201

Attention: Tracy M. Preston

 

Ladies and Gentlemen:

 

This letter agreement (the “Letter Agreement”) is made and entered into as of
June 7, 2019, by and between MYT Parent Co. (“MYT Parent”) and MYT Holding Co.,
a subsidiary of MYT Parent (“MYT Holdco”), in connection with, and as an
inducement to the parties described in Section 5 (Third Party Beneficiaries)
below to enter into the recapitalization of certain of the Company Parties’ (as
defined below) outstanding indebtedness and equity interests. MYT Parent and MYT
Holdco hereby acknowledge and agree that:

 

1.                                      MYT Waterfall. If MYT Holdco receives
any distributions on account of the equity of the MYT Holdco or proceeds from a
MYT Secondary Sale, MYT Holdco shall promptly pay or distribute such proceeds
(net of any taxes payable by MYT Holdco) in the following order of priority, in
each case, until the redemption in full of the Series A Preferred Stock:

 

(a)         first, until the earliest to occur of (i) a MYT Deposit Event, (ii)
the provision of MYT Alternate Security or (iii) the satisfaction and discharge
in full of the Second Lien Notes Obligations, into a segregated account of MYT
Parent for the benefit of the trustee and the collateral agent on behalf of the
holders of the Second Lien Notes, pledged to secure the Second Lien Notes
Obligations (the “MYT Account”), up to an amount equal to $200.0 million;
provided, that, upon the earlier to occur of (i) the satisfaction and discharge
in full of the Second Lien Notes Obligations and (ii) provision of MYT Alternate
Security, any amounts in the MYT Account shall be released and distributed in
accordance with clause (b) below, and

 

(b)         second, to the holders of Series A Preferred Stock, pro rata based
on the number of shares of Series A Preferred Stock held by each such holder at
a redemption price not to exceed an amount in respect of each share of Series A
Preferred Stock equal to (i) $1.00, adjusted as

 

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appropriate in the event of any stock dividend, stock split, stock distribution,
recapitalization, combination or similar event with respect to shares of Series
A Preferred Stock, plus (ii) all accumulated and unpaid dividends (whether or
not declared, and including all such dividends that have compounded) thereon,
including Default Returns, through but not including, the date of payment (such
amount in respect of each share of Series A Preferred Stock, the “Liquidation
Preference” and such amount in the aggregate, the “Aggregate Liquidation
Preference”); provided, that, if the amount distributable in respect of any
share of Series A Preferred Stock, together with all prior amounts distributed
in respect of such share pursuant to this clause (b), equals the Liquidation
Preference in respect of such share, MYT Holdco shall redeem, and as a condition
to receipt of such amount the holder of such share of Series A Preferred Stock
shall surrender, such share of Series A Preferred Stock to MYT Holdco for
cancellation, in each case in accordance with the procedures set forth in
Article III of the Certificate of Designation of the Series A Preferred Stock.

 

2.                                      MYT Secondary Sales. If MYT Parent,
directly or indirectly, receives any distributions on account of the equity of
the MYT Holdco or proceeds from any MYT Secondary Sale, it shall promptly pay or
contribute such proceeds to MYT Holdco and, thereafter, MYT Holdco shall
distribute such proceeds (net of any taxes payable by MYT Parent) in the
relative amounts and priorities set forth in Section 1 (after taking into
account any proceeds previously distributed pursuant to Section 1) until the
redemption in full of the Series A Preferred Stock. MYT Parent shall not
effectuate a MYT Secondary Sale unless the agreement governing such MYT
Secondary Sale requires the seller(s) to direct the purchaser(s) to fund the
proceeds of such MYT Secondary Sale directly or indirectly (if such proceeds are
thereafter distributed or contributed to MYT Holdco, as applicable) to MYT
Holdco for distribution in the manner set forth in Section 1.

 

3.                                      Additional Restriction. MYT Holdco and
MYT Parent shall not (and shall not permit their subsidiaries to) take any
action that causes, directly or indirectly (including by amendment,
modification, recapitalization, reclassification, reincorporation, redomiciling,
share exchange, merger, consolidation, liquidation, dissolution or otherwise)
the amount that is required to be paid or distributed by MYT Holdco in the
manner described in Section 1(a) to exceed $200.0 million.

 

4.                                      Non-Circumvention. MYT Parent shall have
no operations or business other than holding the equity interests of MYT Holdco
(including, that MYT Parent shall not incur any indebtedness, liens, or other
liabilities, other than liabilities resulting from its ownership of the equity
interests of MYT Holdco). Each of MYT Parent shall not, and shall cause MYT
Holdco not to, by any voluntary action directly or indirectly through any
subsidiary, including amending its governing documents or through any
reorganization, reclassification, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other similar voluntary action,
avoid the

 

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observance or performance of any of the terms set forth in this Letter
Agreement.  Without limiting the generality of the foregoing, the business of
the MYT Group (as defined in the Certificate of Designation of the Series A
Preferred Stock) will be conducted, directly or indirectly, through MYT Holdco.

 

5.                                      Third Party Beneficiaries.  The parties
to this Letter Agreement agree that each of the holders of Series A Preferred
Stock, for so long as any such holder holds a share of Series A Preferred Stock,
is an intended third-party beneficiary of this Letter Agreement.

 

6.                                      Certain Definitions. As used herein, the
following terms shall have the following meanings:

 

“Common Stock” means any shares of common stock of MYT Holdco, par value $0.001
per share.

 

“Company Party” mean Neiman Marcus Group, Inc., a Delaware corporation, and each
of its subsidiaries that has executed and delivered, or in the future, executes
and delivers, counterpart signature pages to the Second Lien Notes Indenture.

 

“Default Return” means additional dividends of 2% per annum payable in
accordance with the Certificate of Designation governing the Series A Preferred
Stock upon the occurrence and continuance of a Triggering Event (as defined
therein).

 

“Guarantee and Collateral Agreement” means that certain Guarantee and Collateral
Agreement, dated as of the date hereof, by and between MYT Parent and Ankura
Trust Company.

 

“Independent Third Party” means a person or entity other than (i) any member of
the Company Parties, (ii) any of the Sponsors, (iii) an affiliate of any member
of the Company Parties or any of the Sponsors or (iv) another person or entity
in which the Company Parties and/or any of the Sponsors and/or their respective
affiliates own at least 10% of the outstanding equity interests of such person
or entity (measured by voting power, economic value or number).

 

“Issue Date” means the date the shares of the Series A Preferred Stock are first
issued to the holders thereof.

 

“Issuers” means Neiman Marcus Group LTD LLC, The Neiman Marcus Group LLC,
Mariposa Borrower, Inc. and The NMG Subsidiary LLC.

 

“MYT Alternate Security” shall have the meaning set forth in the Guarantee and
Collateral Agreement as amended in accordance with Section 9.

 

“MYT Deposit Event” shall have the meaning set forth in the Guarantee and
Collateral Agreement as amended in accordance with Section 9.

 

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“MYT Entities” means, collectively, (i) Mariposa Luxembourg I S.à r.l.
(Luxembourg), (ii) Mariposa Luxembourg II S.à r.l. (Luxembourg), (iii) NMG
Germany GmbH, (iv) mytheresa.com GmbH (Germany), (v) mytheresa.com Service GmbH
(Germany), (vi) Theresa Warenvertrieb GmbH (Germany), (vii) once formed, MYT
Netherlands Parent B.V. (Netherlands) and (viii) the subsidiaries of any of the
foregoing described in clauses (i) through (vii).

 

“MYT Parent” means MYT Parent Co., the direct parent of MYT Holdco.

 

“MYT Secondary Sale” shall have the meaning set forth in the Second Lien Notes
Indenture as amended in accordance with Section 9.

 

“Second Lien Notes” means the 14.00% Senior Cash Pay/PIK Second Lien Notes due
2024 of the Issuers.

 

“Second Lien Notes Indenture” means the indenture governing the Second Lien
Notes, as the same may be amended, modified or supplemented from time to time.

 

“Second Lien Notes Obligations” means the indebtedness and related obligations
under the Second Lien Notes and the other indebtedness documents related to the
Second Lien Notes.

 

“Series A Preferred Stock” means the 250,000,000 shares of Cumulative Series A
Preferred Stock of MYT Holdco, $0.001 par value per share.

 

“Sponsors” means any of Ares Corporate Opportunities Fund III, L.P., Ares
Corporate Opportunities Fund IV, L.P., the Canada Pension Plan Investment Board
and any of their respective affiliates and funds or partnerships managed or
advised by any of them or any of their respective affiliates, but not including
any operating portfolio company of any of the foregoing.

 

“Third Lien Notes” means, collectively, (x) the 8.75% Third Lien Senior Secured
Notes due 2024 of the Issuer and (y) the 8.00% Third Lien Senior Secured Notes
due 2024 of the Issuers.

 

“Third Lien Notes Indenture” means the indentures governing the Third Lien
Notes.

 

7.                                      Entire Agreement.  This Letter Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof or thereof.

 

8.                                      Severability.  In case any provision in
this Letter Agreement shall be deemed to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired hereby.

 

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9.                                      Modifications.  No provision contained
in this Letter Agreement shall be amended, modified, supplemented or waived
without the written consent of each of the parties hereto; provided that so long
as any Series A Preferred Stock is outstanding, any amendments, modifications,
supplements or waivers that adversely affects the holders of Series A Preferred
Stock shall require the consent of the holders that hold a majority of the
outstanding shares of Series A Preferred Stock and any amendments,
modifications, supplements or waivers that reduce the amounts available for
distribution to the holders of Series A Preferred Stock shall require the prior
written consent of all holders of Series A Preferred Stock. Notwithstanding the
foregoing, (a) any amendment, modification, supplement or waiver of the
provisions of the Guarantee and Collateral Agreement (in accordance with the
terms thereof) that corresponds to Section 1(a) and the related definitions
thereto and (b) any amendment, modification, supplement or waiver of the
definitions set forth in the Second Lien Notes Indenture that are used in
Sections 1 and 2 of this Letter Agreement shall be automatically deemed
effective as to such section or definition herein without additional action by
the parties hereto; provided that in each case of the foregoing clauses (a) and
(b), (i) in no event shall Section 1(a) or such definitions be amended,
modified, supplemented or waived to require the amount to be paid or distributed
by MYT Holdco thereunder to exceed $200.0 million or otherwise in a manner
materially adverse to the holders of the Series A Preferred Stock and (ii) the
holders of Series A Preferred Stock shall be given prompt (and in any event
within four business days) notice and copies of any such amendment,
modification, supplement or waiver.

 

10.                               Binding Effect. The rights and obligations of
this Letter Agreement shall bind and inure to the benefit of the parties and
their respective successors.

 

11.                               Governing Law.  This Letter Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
applicable to contracts made and performed in such state without giving effect
to the choice of law principles of such state that would require or permit the
application of laws of another jurisdiction.

 

12.                               Counterparts.  This Letter Agreement may be
executed in multiple counterparts, each one of which shall be deemed an original
and which, taken together, shall constitute one and the same agreement.  Any
such counterpart, to the extent delivered by means of a facsimile machine or by
.pdf, .tif, .gif, .jpg or similar attachment to electronic mail, shall be
treated in all manner and respects as an original executed counterpart.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the parties have caused this Letter Agreement to be executed
on the date first written above.

 

 

MYT PARENT CO.

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name: Tracy M. Preston

 

Title: Vice President and Secretary

 

 

 

 

 

MYT HOLDING CO.

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name: Tracy M. Preston

 

Title: Vice President and Secretary

 

[Signature Page to MYT Parent Letter Agreement]

 

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