Neiman Marcus 2009 Annual Report Download - page 371

ARTICLE XX
RECOURSE CREDIT PROGRAM
20.1 Recourse Credit Program.
(a) Overview. From time to time, NMG may request that the Bank approve an Application or Account as a Full
Recourse Account or an Account as a Partial Recourse Account. If such requests are within a range of acceptable creditworthiness, as
solely determined by NMG's Vice President of Credit Risk or NMG's Director of Credit Operations, then NMG shall advise Bank's
account executive via email, and Bank will approve the requests to designate such Accounts as Full Recourse Accounts or Partial
Recourse Accounts subject to the terms and conditions set forth in this Article XX (Full Recourse Accounts and Partial Recourse
Accounts being herein referred to as "Recourse Accounts"). Notwithstanding the foregoing: (i) an Account shall not be accepted as a
Full Recourse Account if the applicant is not eighteen (18) years or older at the time the Application is submitted for approval and
(ii) an Account shall not be accepted as a Recourse Account if doing so would violate Applicable Law.
(b) Recourse Accounts shall be subject to the same Cardholder terms as the remainder of the Accounts under the
Program. Recourse Accounts shall be considered Accounts for all purposes of this Agreement, including Sections 4.10 and 4.11.
20.2 NMG Obligations.
(a) Obligation to Purchase or Reimburse. NMG understands and acknowledges that Bank would not approve any
Recourse Accounts if NMG had not promised to comply with all of the terms and conditions set forth in this Article XX. In exchange
for Bank's approval of such Recourse Accounts, NMG agrees (i) to purchase any Full Recourse Account from Bank that: (A) becomes
[***] past due; (B) is held by a Cardholder who is deceased; (C) is included in any bankruptcy proceeding; or (D) is included in any
probate proceeding; and (ii) to reimburse Bank for the portion of any Account balance of any Partial Recourse Account that exceeds
the credit line that would have been in effect in absence of such designation as a Partial Recourse Account in the event such Partial
Recourse Account is charged off in accordance with the Risk Management Policies. NMG agrees to purchase each such Recourse
Account (or reimburse such balance referred to above in the case of a Partial Recourse Account) from Bank for the full balance (or
portion thereof referred to above in the case of a Partial Recourse Account) due at the time of the purchase, including earned interest
and fees. NMG agrees to pay the Bank the relevant amount referred to above within [***] after receiving written notice or an email
from Bank of the occurrence of an event referred to in clause (A), (B), (C) or (D).
20.3 Collection of Charged-Off Partial Recourse Accounts and Purchased Full Recourse Accounts.
(a) Following the time that Partial Recourse Accounts have been charged off, any recoveries will be split
proportionately based on the proportion of the amount remaining unpaid to Bank (other than the portion of such amount for which
NMG made payment pursuant to Section 20.2(a)(ii)) and the amount remaining unpaid to NMG from its payment pursuant to
Section 20.2(a)(ii) above. Bank will assume all costs of collecting charged-off Partial Recourse Accounts.
(b) Upon payment to Bank of the purchase price for any Full Recourse Account, Bank shall assign all rights, title and
interest in such Recourse Account(s) to NMG. Thereafter, NMG will bear all liability and risk of loss associated with such Recourse
Account, without
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