Neiman Marcus 2004 Annual Report Download - page 138

ARTICLE III.
INDEMNIFICATION
SECTION 3.1 Indemnification by Neiman Marcus. Except as otherwise specifically set forth in any provision of this Agreement, Neiman Marcus shall
indemnify, defend and hold harmless the Harcourt General Indemnitees from and against any and all Indemnifiable Losses of the Harcourt General
Indemnitees arising out of, by reason of or otherwise in connection with the Neiman Marcus Liabilities or alleged Neiman Marcus Liabilities, including any
breach by Neiman Marcus of any representation, warranty, covenant or other provision of this Agreement or the Recapitalization Agreement.
SECTION 3.2 Indemnification by Harcourt General. Except as otherwise specifically set forth in any provision of this Agreement, Harcourt General
shall indemnify, defend and hold harmless the Neiman Marcus Indemnitees from and against any and all Indemnifiable Losses of the Neiman Marcus
Indemnitees arising out of, by reason of or otherwise in connection with the Harcourt General Liabilities or alleged Harcourt General Liabilities, including
any breach by Harcourt General of any representation, warranty, covenant or other provision of this Agreement or the Recapitalization Agreement.
SECTION 3.3 Procedures for Indemnification.
(a) Third Party Claims. If a claim or demand is made against a Neiman Marcus Indemnitee or a Harcourt General Indemnitee (each, an
"Indemnitee") by any person who is not a party to this Agreement (a "Third Party Claim") as to which such Indemnitee is entitled to indemnification
pursuant to this Agreement, such Indemnitee shall notify the party which is or may be required pursuant to the terms hereof to make such
indemnification (the "Indemnifying Party") in writing, and in reasonable detail, of the Third Party Claim promptly (and in any event within 15 business
days) after receipt by such Indemnitee of written notice of the Third Party Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been actually prejudiced as a result of such failure
(except that the Indemnifying Party shall not be liable for any expenses incurred during the period in which the Indemnitee failed to give such notice).
Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within five business days) after the Indemnitee's receipt
thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third Party Claim. Any Indemnitee shall
cooperate with the Indemnifying Party in the defense or prosecution of any Third Party Claim, including by providing or causing to be provided records
and witnesses as soon as reasonably practicable after receiving any request therefor from or on behalf of the Indemnifying Party.
If a Third Party Claim is made against an Indemnitee with respect to which a claim for indemnification is made pursuant to Section 3.1 or Section 3.2
hereof, the Indemnifying Party shall be entitled to participate in the defense thereof and, if it so chooses and acknowledges in writing its obligation to
indemnify the Indemnitee therefor, to assume the defense thereof with counsel selected by the Indemnifying Party; provided that such counsel is not
reasonably objected to by the Indemnitee. Should the Indemnifying Party so elect to assume the defense of a Third Party Claim, the Indemnifying Party shall,
within 30 days (or sooner if the nature of the Third Party Claim so requires), notify the Indemnitee of its intent to do so, and the Indemnifying Party shall
thereafter not be liable to the Indemnitee for legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof;
provided, that such Indemnitee shall have the right to employ counsel to represent such Indemnitee if, in such Indemnitee's reasonable judgment, a conflict of
interest between such Indemnitee and such Indemnifying Party exists in respect of such claim which would make representation of both such parties by one
counsel inappropriate, and in such event the fees and expenses of such separate counsel shall be paid by such Indemnifying Party. If the Indemnifying Party
assumes such defense, the Indemnitee shall have the right to participate in the defense thereof and to
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