TERM SHEET(1)
March 25, 2019
THIS RECAPITALIZATION TERM SHEET AND THE DOCUMENTS ATTACHED HERETO COLLECTIVELY
DESCRIBE A PROPOSED RECAPITALIZATION OF NEIMAN MARCUS GROUP, INC., A DELAWARE
CORPORATION, AND CERTAIN OF ITS SUBSIDIARIES AS DEFINED IN THIS RECAPITALIZATION
TERM SHEET.
THIS RECAPITALIZATION TERM SHEET IS NOT AN OFFER OR A SOLICITATION WITH RESPECT
TO ANY SECURITIES OF THE COMPANY PARTIES.
ANY SUCH OFFER OR SOLICITATION SHALL
COMPLY WITH ALL APPLICABLE SECURITIES LAWS.
THIS RECAPITALIZATION TERM SHEET IS A SETTLEMENT PROPOSAL TO CERTAIN
UNAFFILIATED LENDERS UNDER THE COMPANY PARTIES' TERM LOAN CREDIT AGREEMENT,
CERTAIN UNAFFILIATED HOLDERS OF THE COMPANY PARTIES' UNSECURED NOTES, AND
CERTAIN HOLDERS OF THE COMPANY PARTIES' EXISTING COMMON STOCK IN FURTHERANCE OF
SETTLEMENT DISCUSSIONS.
ACCORDINGLY, THIS RECAPITALIZATION TERM SHEET IS
PROTECTED BY RULE 408 OF THE FEDERAL RULES OF EVIDENCE AND ANY OTHER APPLICABLE
STATUTES OR DOCTRINES PROTECTING THE USE OR DISCLOSURE OF CONFIDENTIAL
SETTLEMENT DISCUSSIONS.
REFERENCE IN THIS RECAPITALIZATION TERM SHEET IS MADE TO THAT CERTAIN
TRANSACTION SUPPORT AGREEMENT (THE "TRANSACTION SUPPORT AGREEMENT") BY AND AMONG
THE COMPANY PARTIES AND THE OTHER PARTIES THERETO, DATED AS OF THE DATE OF THIS
RECAPITALIZATION TERM SHEET.
THIS RECAPITALIZATION TERM SHEET IS FOR DISCUSSION PURPOSES ONLY AND DOES NOT
PURPORT TO SUMMARIZE ALL OF THE TERMS, CONDITIONS, REPRESENTATIONS, WARRANTIES,
AND OTHER PROVISIONS WITH RESPECT TO THE TRANSACTIONS DESCRIBED IN THIS
RECAPITALIZATION TERM SHEET, WHICH TRANSACTIONS WILL BE SUBJECT TO THE
COMPLETION OF DEFINITIVE DOCUMENTS INCORPORATING THE TERMS AND CONDITIONS SET
FORTH IN THIS RECAPITALIZATION TERM SHEET AND THE CLOSING OF ANY TRANSACTION
SHALL BE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN SUCH DEFINITIVE
DOCUMENTS.
(1)
Capitalized terms used but not otherwise defined in this
Recapitalization Term Sheet shall have the meaning ascribed to them in the
Transaction Support Agreement or the other term sheets annexed hereto, as
applicable.
Overview
Recapitalization Transaction Overview
This term sheet (including all exhibits, annexes, appendices, and/or schedules
hereto, the "Recapitalization Term Sheet") contemplates a consensual
recapitalization of certain of the Company Parties' outstanding indebtedness and
equity interests (the "Recapitalization Transactions") consisting of the
transactions described in this Recapitalization Term Sheet on terms and
conditions consistent with this Recapitalization Term Sheet and the Transaction
Support Agreement.
This Recapitalization Term Sheet does not include a description of all of the
terms, conditions, and other provisions that are to be contained in the
definitive documentation governing the Recapitalization Transactions. The
Recapitalization Transactions will not contain any material terms or conditions
that are inconsistent in any material respect with this Recapitalization Term
Sheet and the exhibits attached hereto.
Debt to Be Restructured
Outstanding indebtedness of the Company Parties that will be restructured or
satisfied pursuant to the Recapitalization Transactions includes:
Term Loan Credit Facility
Approximately $2.8 billion in principal amount outstanding (the "Term Loan
Credit Facility") under that certain term loan credit agreement (as amended from
time to time, the "Term Loan Credit Agreement"), dated as of October 25, 2013,
by and among Neiman Marcus Group LTD LLC, as borrower, certain of the Company
Parties, as