Neiman Marcus 2008 Annual Report Download - page 732

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 thirty (30) 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 two (2) months.
(b) If Servicer has an additional failure of any of the same Starred SLA(s) ("Subsequent Failure") during the twelve (12)
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 twenty four (24) Fiscal Months following a Significant Failure or upon the occurrence of a Regulatory Failure,
Servicer shall pay Bank the Subsequent Penalty Amount, within fifteen (15) 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 twenty
four (24) 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 thirty (30)
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.
(e) Notwithstanding the foregoing, in the case of any Servicer Default with respect to any type of Service, after the
Management Committee meeting referred to above (except in the case of a Regulatory Failure) and assuming that no SLA is modified,
in lieu of terminating the Program Agreement, either Party may elect to cause the Services subject to such Servicer Default to be
transferred to Primary Servicer pursuant to the Program Agreement.
(f) No servicing transfer or termination of this Agreement pursuant to Section 5.02(d) or Section 5.02(e) above shall be
effective until either assumption by the Bank or its
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