Neiman Marcus 2009 Annual Report Download - page 458

(including multiple breaches of the same and individual breaches of different Starred SLAs) (each, a "Significant Failure").
(b) Regulatory Failure. If Servicer fails to meet an SLA designated as a regulatory-based SLA on Schedule
2.04(a) (each, a "Regulatory SLA") and such failure results in a breach by Servicer of Applicable Law (such failure, a "Regulatory
Failure").
Section 5.02. Remedies.
(a) In the event of a Significant Failure, Servicer shall: (A) promptly report to the Management Committee the
reasons for the Starred SLA failure(s); (B) within [***] days of such Significant Failure, propose a remediation plan for taking such
action as Servicer deems necessary to correct and prevent recurrence of such failure(s); and (C) subject to Bank's agreement,
implement the remediation plan as soon as practicable. However, under no circumstances shall the time period between Bank's
agreement to the remediation plan and completion of such plan exceed [***].
(b) If Servicer has an additional failure of any of the same Starred SLA(s) ("Subsequent Failure") during the
[***] Fiscal Months following the occurrence of any Significant Failure, Servicer shall pay Bank the Initial Penalty Amount, within
fifteen (15) 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 [***] Fiscal Months following a Significant Failure or upon the occurrence of a Regulatory Failure, Servicer
shall pay Bank the Subsequent Penalty Amount, 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 [***] Fiscal Months following a Significant Failure or (ii) a second Regulatory Failure of the same Regulatory SLA , Bank 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 Servicer, in which event the parties shall have the rights set forth in Article XVII of the Program Agreement;
provided, however, that prior to either Party electing to transfer the provision of such Services pursuant to Section 5.02(e) below or 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 (except in the case of a Regulatory Failure, in which event no Management
Committee meeting shall be required as a condition to transferring the affected Services pursuant to Section 5.02(e)). If the
Management Committee determines that such SLA shall be modified, then Bank shall not be entitled to terminate the Program
Agreement as a result of the Subsequent Failure discussed at the meeting of the Management Committee unless and until an additional
Subsequent Failure of the same Starred SLA occurs; and provided, further, that for purposes of transferring Services pursuant to this
Section 5.02(d) or Section 5.02(e), an SLA that is both a Starred SLA and a Regulatory SLA shall be deemed to be a Regulatory SLA.
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