Neiman Marcus 2008 Annual Report Download - page 735

(b) the failure by Servicer to perform any of its covenants or agreements contained in this Agreement, except to the extent
such failure to perform is caused by (i) the failure of any of the Household Companies to perform its obligations under any
Transaction Document or (ii) any actions or omission by Servicer taken or not taken at any Household Companies' written request or
direction pursuant to any Transaction Document;
(c) any fines or penalties imposed by a Governmental Authority on the basis of a Regulatory Failure;
(d) any lawsuit, legal proceeding, arbitration proceeding, claim, dispute, complaint or setoff by a Cardholder with respect
to anything actually or allegedly done or not done by Servicer in connection with the Services, excluding anything actually or
allegedly done or not done by Servicer that (A) is required or expressly permitted under the Risk Management Policies, the Operating
Procedures or any Transaction Document or (B) is done at the express direction of Bank.
(e) any lawsuit, legal proceeding, arbitration proceeding or claim by a third party alleging any material inaccuracy in the
information provided pursuant to Section 2.08.
Section 7.02. Procedure for Indemnification.
(a) In case any claim is made, or any suit or action is commenced against Bank in respect of which indemnification may
be sought by it under this Section 7.02, Bank shall promptly give Servicer notice thereof and Servicer shall be entitled to participate in
the defense thereof and, with prior written notice to Bank given not later than twenty (20) days after the delivery of the applicable
notice from Bank, to assume, at Servicer's expense, the defense thereof, with counsel reasonably satisfactory to Bank. After notice
from Servicer to Bank of its election so to assume the defense thereof, Servicer shall not be liable to Bank under this Section for any
attorneys' fees or other expenses subsequently incurred by Bank in connection with the defense thereof, except as set forth in
Section 7.02(b), other than reasonable costs of investigation.
(b) Bank shall have the right to employ its own counsel if Servicer elects to assume such defense, but the fees and
expenses of such counsel shall be at Bank's expense, unless (i) the employment of such counsel has been authorized in writing by
Servicer, (ii) Servicer has not employed counsel to take charge of the defense within twenty (20) days after delivery of the applicable
notice or, having elected to assume such defense, thereafter ceases its defense of such action, or (iii) Bank has reasonably concluded
that the interests of the Parties are conflicting such that it would be inappropriate for the same counsel to represent both parties (in
which case Servicer shall not have the right to direct the defense of such action on behalf of Bank), in any of which events the
attorneys' fees and expenses of counsel to Bank shall be borne by Servicer.
(c) Bank or Servicer may at any time notify the other of its intention to settle or compromise any claim, suit or action
against Bank in respect of which payments may be sought by Bank hereunder, and (i) Servicer may settle or compromise any such
claim, suit or action solely for the payment of money damages for which Bank will be fully indemnified
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