Neiman Marcus 2009 Annual Report Download - page 430

SCHEDULE 7.3(c)
Primary Servicer Defaults
I. Primary Servicer Default. It shall be a "Primary Servicer Default" if either of the events set forth below shall occur and be
continuing and remain unremedied prior to the expiration of the specified period:
(a) Significant Failure. If Primary Servicer (i) is more than [***] below the target for any Starred SLA in any Fiscal
Month, (ii) fails to meet any individual Starred SLA in [***] or (iii) fails to meet any Starred SLA [***] in any [***] (including
multiple breaches of the same and individual breaches of different Starred SLAs) (each, a "Significant Failure").
(b) Regulatory Failure. If Primary Servicer fails to meet an SLA designated as a regulatory-based SLA on Schedule
7.3(a) (a "Regulatory SLA") and such failure results in a breach by Primary Servicer of Applicable Law (such failure, a
"Regulatory Failure").
II. Remedies.
(a) In the event of a Significant Failure, Primary Servicer shall: (A) promptly report to NMG the reasons for the Starred
SLA failure(s); (B) within [***] days of such Significant Failure, propose a remediation plan for taking such action as
Primary Servicer deems necessary to correct and prevent recurrence of such failure(s); and (C) subject to NMG's agreement,
implement the remediation plan as soon as practicable. However, under no circumstances shall the time period between
NMG's agreement to the remediation plan and completion of such plan exceed [***].
(b) If Primary Servicer has an additional failure of any of the same Starred SLA(s) ("Subsequent Failure") during the
[***] following the occurrence of any Significant Failure, Primary Servicer shall pay NMG [***], within [***] days of the
end of such Fiscal Month, for each such Subsequent Failure.
(c) Upon the occurrence of the second Subsequent Failure and each additional Subsequent Failure of the same Starred
SLA during the [***] following a Significant Failure or upon the occurrence of a Regulatory Failure, Primary Servicer shall
pay NMG [***], within [***] days of the end of such Fiscal Month, per each additional Subsequent Failure.
(d) Upon the occurrence of (i) the third and each additional Subsequent Failure of the same Starred SLA during the
[***] following a Significant Failure or (ii) a second Regulatory Failure of the same Regulatory SLA, NMG shall, in addition
to payment as provided in paragraph (c) above, have the right to terminate the Program Agreement by providing [***] days
prior written notice to Bank, in which event the parties shall have the rights set forth in Article XVII; provided, however, that
prior to NMG electing to terminate the Program Agreement, the Management Committee shall meet to discuss the occurrence
of the Subsequent Failure and shall determine whether such SLA should be modified. If the