**EXHIBIT 2.2**

 

PURCHASE, SALE AND SERVICING TRANSFER AGREEMENT

 

 

PURCHASE, SALE AND SERVICING TRANSFER AGREEMENT

 

AMONG

 

HSBC BANK NEVADA, N.A.,

 

HSBC FINANCE CORPORATION,

 

THE NEIMAN MARCUS GROUP, INC.

 

AND

 

BERGDORF GOODMAN, INC.

 

DATED AS OF JUNE 8, 2005

 

 

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**TABLE OF CONTENTS**

 
| RECITALS                                                               | 1      |
|------------------------------------------------------------------------|--------|
|                                                                   |   |
| ARTICLE I  DEFINITIONS                                            | 1      |
|                                                                   |   |
| SECTION 1.1. Definitions of Certain Terms                         | 1      |
| SECTION 1.2. Interpretation                                       | 11     |
|                                                                   |   |
| ARTICLE II  PURCHASE, SALE AND ASSUMPTION                         | 12     |
|                                                                   |   |
| SECTION 2.1. Purchase and Sale of the  Acquired Assets            | 12     |
| SECTION 2.2. Assumption of Liabilities                            | 12     |
| SECTION 2.3. Excluded Liabilities                                 | 12     |
| SECTION 2.4. Purchase Price; Purchase Price  Adjustment           | 12     |
|                                                                   |   |
| ARTICLE III  CLOSING; ASSIGNMENT                                  | 13     |
|                                                                   |   |
| SECTION 3.1. The Closing                                          | 13     |
|                                                                   |   |
| ARTICLE IV  REPRESENTATIONS OF THE PARTIES                        | 14     |
|                                                                   |   |
| SECTION 4.1. Representations of the Parent                        | 14     |
| SECTION 4.2. Representations of the Purchaser                     | 18     |
| SECTION 4.3. No Other Representations or  Warranties; No Recourse | 21     |
|                                                                   |   |
| ARTICLE V  COVENANTS                                              | 21     |
|                                                                   |   |
| SECTION 5.1. Conduct of Business                                  | 21     |
| SECTION 5.2. Certain Changes                                      | 22     |
| SECTION 5.3. Access and Confidentiality.                          | 23     |
| SECTION 5.4. Reasonable Efforts; Other  Filings                   | 23     |
| SECTION 5.5. Additional Instruments;  Cooperation                 | 25     |
| SECTION 5.6. Non-Solicitation                                     | 25     |
| SECTION 5.7. Credit Card Marks; Branding                          | 25     |
| SECTION 5.8. Communications with Cardholders                      | 25     |
| SECTION 5.9. Post-Closing Access.                                 | 25     |
| SECTION 5.10. Cooperation in Litigation                           | 26     |
| SECTION 5.11. Preservation of and Access to  Books and Records    | 26     |
| SECTION 5.12. Bulk Sales Law.                                     | 26     |
| SECTION 5.13. NFC                                                 | 27     |
| SECTION 5.14. Allocation of the Purchase  Price                   | 27     |
| SECTION 5.15. New Securitization Opinions                         | 27     |
|                                                                   |   |
| ARTICLE VI  TAX MATTERS                                           | 27     |
|                                                                   |   |
| SECTION 6.1. Taxes                                                | 27     |

 

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| ARTICLE VII  CONDITIONS                                                                         | 29     |
|------------------------------------------------------------------------------------------------------|--------|
|                                                                                                 |   |
| SECTION 7.1. Conditions to Each Party’s  Obligations to Effect the Purchase and Assumption | 29     |
| SECTION 7.2. Conditions to Obligations of the  Purchaser                                        | 30     |
| SECTION 7.3. Conditions to Obligations of the  Sellers                                          | 30     |
|                                                                                                 |   |
| ARTICLE VIII  TERMINATION                                                                       | 31     |
|                                                                                                 |   |
| SECTION 8.1. Termination                                                                        | 31     |
| SECTION 8.2. Effect of Termination                                                              | 32     |
|                                                                                                 |   |
| ARTICLE IX  SURVIVAL; INDEMNIFICATION                                                           | 32     |
|                                                                                                 |   |
| SECTION 9.1. Survival                                                                           | 32     |
| SECTION 9.2. Indemnification by the Parent                                                      | 33     |
| SECTION 9.3. Indemnification by the Purchaser                                                   | 34     |
| SECTION 9.4. Notice, Settlements and Other  Matters                                             | 34     |
|                                                                                                 |   |
| ARTICLE X  MISCELLANEOUS                                                                        | 36     |
|                                                                                                 |   |
| SECTION 10.1. Notices                                                                           | 36     |
| SECTION 10.2. Expenses                                                                          | 37     |
| SECTION 10.3. Successors and Assigns                                                            | 37     |
| SECTION 10.4. Entire Agreement; Amendment;  Waiver                                              | 37     |
| SECTION 10.5. Counterparts                                                                      | 37     |
| SECTION 10.6. **Governing Law**                                                                 | 37     |
| SECTION 10.7. Waiver of Jury Trial and Venue                                                    | 38     |
| SECTION 10.8. Severability                                                                      | 38     |
| SECTION 10.9. No Petition                                                                       | 38     |
| SECTION 10.10. Public Announcement                                                              | 38     |
| SECTION 10.11. Third-Party Beneficiaries                                                        | 38     |

 

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**SCHEDULES AND ANNEXES***
|            |   |                                                  |
|-----------------|--------|-------------------------------------------------------|
| Schedule A |   | Form of  Closing Statement                       |
| Schedule B |   | Securitization  Documents                             |
| Schedule C |   | Non-Solicitation  Schedule                            |
| Schedule D |   | Allocation  of Purchase Price                         |
| Schedule E |   | Third  Party Consents Required for Closing            |
| Schedule F |   | Indemnity  Matters                                    |
|            |   |                                                  |
| Annex A    |   | Form of  Program Agreement                       |
| Annex B    |   | Form of  Instrument of Assignment and Assumption |
| Annex C    |   | Form of  Required Amendments                     |
| Annex D    |   | Form of  Securitization Transfer Agreement       |
| Annex E    |   | Form of  Servicing Agreement                     |
| Annex F    |   | Form of  Purchaser Parent Guaranty               |

 

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| * | Neiman Marcus hereby  agrees to furnish supplementally a copy of any omitted schedule or annex to  the Securities and Exchange Commission upon its request. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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**PURCHASE, SALE AND SERVICING TRANSFER AGREEMENT**, dated as of June 8,2005 (this “*Agreement*”), amongThe Neiman Marcus Group, Inc., a Delaware corporation (the “*Parent*”), Bergdorf Goodman, Inc., aNew York corporation (“BG”), HSBC Bank Nevada, N.A., a national credit cardbank (the “*Purchaser*”), and HSBCFinance Corporation, a Delaware corporation (the “*Purchaser Parent*”).

 

**RECITALS**

 

WHEREAS,the Parent and BG are, among other things, (i) engaged in the business ofselling merchandise through retail stores and by other means and (ii) directlyand indirectly through certain of their subsidiaries engaged in the Business(as defined herein);

 

WHEREAS,the Neiman Marcus Group Credit Card Master Trust was formed pursuant to thatcertain Amended and Restated Pooling and Servicing Agreement, dated as of July 2,2000, as amended and/or supplemented through the date of this Agreement and asit may be further amended and/or supplemented through the Closing Date to theextent permitted by this Agreement, (including all series supplements thereto,the “*Pooling and Servicing Agreement*”),by and among Neiman Marcus Funding Corporation, a Delaware corporation (“*NFC*”), as seller, the Parent, as servicer,and The Bank of New York, as trustee;

 

WHEREAS,pursuant to this Agreement, the Parent and BG desire to sell to the Purchaser,and the Purchaser desires to purchase from the Sellers (as defined below), theAcquired Assets pursuant to the terms contained and in the manner describedherein;

 

WHEREAS,on the date hereof, the Parent and the Purchaser are entering into a ProgramAgreement (the “*Program Agreement*”)in the form attached hereto as Annex A, to become effective as of the Closingunder this Agreement, that provides for, among other things, the issuance ofNeiman Marcus proprietary cards, the issuance of existing and new creditrelated products to be developed with the Purchaser, the processing andservicing of the related Accounts, and the conduct of related marketingactivities; and

 

WHEREAS,simultaneously with the Closing under this Agreement, the Parent, the Purchaserand certain of their respective Affiliates desire to enter into otheragreements in connection with the transactions contemplated hereby.

 

**NOW, THEREFORE**, in consideration of thepremises, and of the mutual representations and agreements contained in thisAgreement, the parties agree as follows:

 

**ARTICLE I**

**DEFINITIONS**

 

SECTION 1.1.*Definitions of Certain Terms.* (a) Inthis Agreement, the following terms are used with the meanings assigned below:

 

“*Accounts*”means, as of the Cut-Off Time, any account identified by name and accountnumber under which a purchase, cash advance or credit transaction may be or hasbeen made by a Cardholder by means of (A) a Credit Card or (B) aNon-Card

 

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PaymentPlan, which is recorded as an Account on the computer system of the ServiceProvider or the Sellers’ internal processing system, and for which an AccountAgreement is in effect as of the Closing Date, including any such account thatis a Charged Off Account.

 

“*AccountAgreement*” means an agreement (including related disclosure) betweenthe Parent or BG and a Person or Persons under which Accounts are establishedand Credit Cards or Non-Card Payment Plans are issued to or on behalf of suchPerson or Persons, as such agreement may be amended, modified or otherwise changedfrom time to time (including pursuant to change of terms notices).

 

*“Accrued Interest”* means theaggregate amount of all finance charges that were accrued and earned, but notposted, on the Accounts as of the close of business on the Business Day immediatelypreceding the Cut-Off Time.

 

*“Acquired Assets”* means allright, title and interest of the Sellers in and to the following assets andproperties:

 

(1) the Accounts and the Gross Receivables(other than Securitization Receivables) accrued as of the Cut-Off Time relatedto the Accounts;

 

(2) the applications for Accounts pending andsolicitations for Accounts outstanding;

 

(3) the Account Agreements, the Cardholder Listand the Master File;

 

(4) the Securitization Assets and any NewSecuritization Assets that may exist at Closing;

 

(5) the Books and Records; and

 

(6) rights, claims, credits, causes of actionor rights of set-off against third parties relating principally to the assetsreferred to in (1) through (5) above.

 

*“Affiliate”* means, withrespect to any Person, each Person that controls, is controlled by, or is undercommon control with, such Person. For purposes of this definition, “control” ofa Person means the possession, directly or indirectly, of the power to director cause the direction of its management or policies, whether through theownership of voting securities, by contract or otherwise.

 

*“Ancillary Agreements”* means theProgram Agreement, the Servicing Agreement, the Purchaser Parent Guarantee, theSecuritization Transfer Agreement and the Instrument of Assignment andAssumption.

 

*“Applicable Order”* means, withrespect to any Person, a judgment, injunction, writ, decree or order of anyGovernmental Authority, in each case legally binding on that Person or on anymaterial amount of its property.

 

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*“Assumed Liabilities”* means thefollowing Liabilities of the Sellers:

 

(1) all obligations to Cardholders in theircapacity as such or to perform under Account Agreements, including payment ofcredit balances;

 

(2) all of the obligations of the Sellers, asservicer, originator, transferor, or in any other capacity to the Master Trustand under any Securitization Documents, including all obligations to acceptreassignment of receivables pursuant to the terms of the Pooling and ServicingAgreement; and

 

(3) all Liabilities for Taxes relating to theBusiness, the Acquired Assets, the Assumed Liabilities or the Master Trust tothe extent set forth in Article VI.

 

*“Books and Records”* means books, records,original documents, files and papers maintained by the Sellers, whether in hardcopy or electronic format, including those relating to the Master Trust, ineach case to the extent within the Sellers’ control and possession andexclusively used in the Business, other than the Cardholder List, the MasterFile and any of the foregoing relating principally to the Excluded Assets andother than Tax Returns or Tax work papers. For the avoidance of doubt, the term“Books and Records” does not include any NMG Shopper Data, NMG Systems (asdefined in the Program Agreement) or any of the Sellers’ minute books, stockledgers, internal accounting records or other corporate records and documents.

 

*“Business*” means theproprietary credit business relating to the Credit Cards and Accounts,including the extension of credit to Cardholders, the servicing of the Accounts(including servicing under the Pooling and Servicing Agreement), billings,collections, processing of Account transactions, the administration of the Accountsand Gross Receivables (including the Securitization Receivables), but excluding(i) the operations, systems and facilities of the Parent and allemployees, including those dedicated to the origination, servicing andcollection of Accounts and (ii) the Excluded Assets.

 

*“Business Day”* means any day,other than a Saturday or Sunday, on which each of the Parent, Purchaser andPurchaser Parent are open for business at their respective U.S. headquarters.

 

*“Cardholder”* means a Personor Persons to whom a Credit Card or Non-Card Payment Plan is or has been issuedby the Parent and in whose name(s) an Account, in connection with whichthe Credit Card or Non-Card Payment Plan may be used, has been establishedpursuant to an Account Agreement.

 

*“Cardholder List*” means a listof the names, addresses, telephone numbers and taxpayer identification numbersand social security numbers of all Cardholders as of the Cut-Off Time if and tothe extent maintained by Parent.

 

*“Charged Off Accounts”* means allAccounts that, as of the Cut-Off Time, have been charged off in accordance withthe Sellers’ standard policies and procedures as in effect on January 1,2005.

 

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“*Class”*hasthe meaning set forth in the Pooling and Servicing Agreement.

 

*“Code”* means theInternal Revenue Code of 1986, as amended.

 

*“Constituent Documents”* means thearticles of association, articles of incorporation, certificate ofincorporation, by-laws and/or other organizational documents, as appropriate,of any Person.

 

*“Contract”* means, withrespect to any Person, any agreement, undertaking, contract, indenture, deed oftrust or other instrument, document or agreement by which that Person, or anyamount of its properties, is bound and/or subject.

 

*“Credit Card”* means aproprietary card that may be used by the holder to purchase goods and servicesof Parent or its Subsidiaries or their respective licensees through open-endrevolving credit, commonly known as a credit or charge card; provided that theterm does not include: (i) any gift card; (ii) any debit card, storedvalue card, electronic or digital cash card or any other card that does notprovide the holder thereof with the ability to obtain credit other than throughan overdraft line or similar feature; or (iii) any card issued to theholder of a securities brokerage account that allows the holder to obtaincredit through a margin account.

 

*“Cut-Off Time”* means 11:59 PMPacific time on the date immediately preceding the Closing Date.

 

*“Deductible Amount”*has the meaningset forth on Schedule F.

 

“*De Minimis ClaimAmount*” has the meaning set forth on Schedule F.

 

*“Disclosure Schedule”* means, withrespect to the Sellers or the Purchaser, a schedule delivered to the otherparty on or before the date of this Agreement setting forth, among otherthings, items the disclosure of which is required under this Agreement eitherin response to an express disclosure requirement contained in a provision ofthis Agreement or as an exception to one or more of the representations orcovenants contained in this Agreement; *provided*that the mere inclusion of an item in a Disclosure Schedule as an exception toa representation shall not be considered an admission by the disclosing partythat such item (or any non-disclosed item or information of comparable orgreater significance) represents a material exception or fact, event orcircumstance or that such item has had or is reasonably expected to result in aMaterial Adverse Effect with respect to the disclosing party or the Business.

 

“*Escrow Agent*”means an escrow agent to be selected by the Parties, who shall act as theescrow agent in connection with the transactions contemplated by this Agreementpursuant to an escrow agent agreement to be entered into among such escrow agentand the Parties.

 

“*EstimatedClosing Statement*” means a statement prepared by the Sellers,substantially in the form of Schedule A, showing in reasonable detail thecalculation of the Estimated Purchase Price, based on data available as of thefifth Business Day preceding the Cut-Off Time.

 

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*“Estimated Purchase Price”* means theamount payable by the Purchaser on the Closing Date in accordance with theEstimated Closing Statement.

 

*“Excluded Assets”*means theassets of the Sellers and their Affiliates not being acquired by the Purchaserhereunder, including the following:

 

(1) all rights under any Contracts other thanthe Securitization Documents and the Account Agreements;

 

(2) all cash and cash equivalents on hand andcash and cash equivalents in bank accounts maintained by the Sellers or any oftheir Affiliates, other than in the Securitization Bank Accounts;

 

(3) all insurance policies maintained by or forthe benefit of the Sellers or any of their Affiliates and all claims accruedthereunder;

 

(4) all Intellectual Property Rights, otherthan rights to the Cardholder List and the Master File (in each case, subjectto the restrictions set forth in the Program Agreement);

 

(5) all rights, claims, credits or other rightsto payment, causes of action, or rights of set-off against third parties, otherthan those set forth in clause (6) of “Acquired Assets”;

 

(6) all licenses, permits or otherauthorizations of any Governmental Authorities held or used by the Sellers;

 

(7) all interests in real property of theSellers and their Affiliates, whether or not related to or used in theBusiness;

 

(8) all tangible personal property of theSellers and their Affiliates, whether or not related to or used in theBusiness;

 

(9) all right, title and interest of theSellers and their Affiliates in and to any and all other assets and properties,of any kind whatsoever, that are not principally used in the conduct of theBusiness;

 

(10) all customer data relating to customers ofthe Sellers and their Affiliates (whether or not any portion thereof isduplicated in the Cardholder List and the Master File); and

 

(11) all current Taxes receivable, deferred Taxassets and prepaid Taxes, Tax payments due from Affiliates, and entitlements torefunds or credits for overpayment of Taxes, all to the extent set forth in Article VI.

 

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*“Excluded Liabilities”* meansLiabilities of the Sellers, their Subsidiaries and Affiliates (or any of theirrespective predecessors), other than the Assumed Liabilities, of any kindwhatsoever, whether presently in existence or arising hereafter, including:

 

(1) Liabilities for Taxes relating to theBusiness, the Acquired Assets, the Assumed Liabilities or the Master Trust tothe extent set forth in Article VI;

 

(2) the portion of any Liability principallyrelated to an Excluded Asset;

 

(3) Liabilities related to, associated with orarising out of any action, claim, suit or proceeding arising out of or relatingto the operation of the Business, the Acquired Assets or the Master Trust,including any breach of the Securitization Documents, prior to the Closing,whether such action, claim, suit or proceeding is brought prior to, on or afterthe Closing;

 

(4) all loan loss reserves maintained by theSellers in respect of (i) the Accounts and (ii) the amounts owing inrespect thereof from Cardholders; and

 

(5) all Liabilities constituting, arising outof or incurred in connection with any Merger Financing Arrangement or NewSecuritization Assets.

 

*“Federal Funds Rate”* means theoffered rate as reported in The Wall Street Journal in the “Money Rates”section for reserves traded among commercial banks for overnight use in amountsof one million dollars or more or, if no such rate is published for a day, therate published for the preceding Business Day, calculated on a daily basisbased on a 365-day year.

 

*“Final Closing Statement”* means astatement prepared by the Parent, substantially in the form of Schedule A,showing in reasonable detail the Parent’s calculation of the Purchase Price,based on the data with respect to the Accounts and the Acquired Assets as ofthe Cut-Off Time.

 

*“GAAP”* meansgenerally accepted accounting principles in the United States.

 

*“Governmental Authority”* means anydomestic or foreign governmental, regulatory or self-regulatory authority,agency, court, tribunal, commission or other governmental, regulatory orself-regulatory entity exercising legislative, judicial, regulatory oradministrative functions.

 

*“Gross Receivables”* means amountsowing (net of credit balances) to the Sellers from Cardholders with respect toAccounts (including outstanding loans, cash advances and other extensions ofcredit; billed or posted but unbilled finance charges and late charges; AccruedInterest; and any other fees, charges and interest assessed on the Accounts).

 

“*HSR Act*”means the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended.

 

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“*Indemnity ClaimAmount”* has the meaning set forth on Schedule F.

 

*“Intellectual Property Right”* means anyintellectual property right, including any trademark, service mark or othersource indicator and all goodwill associated therewith, invention, patent,copyright, trade secret, know-how, and any registration or application forregistration of any of the foregoing.

 

“*Instrument ofAssignment and Assumption*” means the Instrument of Assignment andAssumption in the form attached as Annex B, to be entered into at Closing.

 

“*InvestorCertificateholder”*has the meaning set forth in the Pooling andServicing Agreement.

 

*“Knowledge”* means, withrespect to the Sellers, the actual knowledge of the persons named in Section 1.1(a) ofthe Seller Disclosure Schedules, after reasonable inquiry, with respect toSellers and, with respect to the Purchaser, the actual knowledge of the personsnamed in Section 1.1 of the Disclosure Schedules, after reasonableinquiry, with respect to Purchaser.

 

*“Liability”* means anydebt, liability, commitment or obligation, of any kind whatsoever, whether dueor to become due, known or unknown, accrued or fixed, absolute or contingent,or otherwise.

 

*“Lien”* means, withrespect to any property, any lien, security interest, mortgage, pledge, chargeor encumbrance relating to that property, including the interest of a vendor orlessor under any conditional sale agreement, capital lease or other title retentionagreement relating to such property.

 

*“Master File”*means themaster file maintained by the Sellers and the Service Provider with respect tothe Accounts, including identification and other customer data and Accountinformation, the names and addresses of Cardholders with respect to theAccounts and any and all adjustments made with respect to the Accounts.

 

*“Master Trust”* means theNeiman Marcus Group Credit Card Master Trust.

 

“Material Adverse Effect” means:

 

(a) With respect to the Business, a materialadverse change in, or a material adverse effect upon, the results of operationsor financial condition of the Business, taken as a whole, excluding any effector change attributable to or resulting from (1) events, conditions ortrends in economic, business or financial conditions generally or affecting thecredit card services or consumer credit business, the banking or financialservices industry or the retail department store industry, (2) financialmarket conditions, including interest rates or changes therein, (3) changesin laws, GAAP or regulatory accounting principles, (4) any action,omission, change, effect, circumstance or condition contemplated by thisAgreement, or attributable to the signing and announcement of this Agreement orthe transactions contemplated by this Agreement and the Ancillary Agreements or(5) any actions or omissions required by the terms of this Agreement orthe Ancillary Agreements or any action taken or not taken at the request ordirection of the other party or parties hereto; and

 

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(b) With respect to the Sellers or thePurchaser, a material impairment of the ability of the relevant Person orPersons to perform its or their material obligations under this Agreement orthe Ancillary Agreements.

 

*“Merger Agreement”*the Agreementand Plan of Merger, dated as of May 1, 2005, as the same may be amended,supplemented or modified from time to time, among Newton Acquisition Inc.,Newton Acquisition Merger Sub, Inc. and the Parent.

 

*“Merger Closing”*means theclosing of the Merger contemplated by the Merger Agreement.

 

*“Merger Financing Arrangement”* the incurrenceof indebtedness secured by any or all of the Acquired Assets, the issuance ofNew Securitization Assets, the transfer of Securitization Assets or NewSecuritization Assets and/or the payment of dividends in connection with theforegoing, in each case in order to finance all or any portion of the mergerconsideration and other amounts payable in connection with the Merger Closing.

 

*“New Securitization Assets”* means any newcertificates or interests issued to any Person pursuant to the SecuritizationDocuments in connection with, or securing, any Merger Financing Arrangement.

 

*“New Seller”* means anydirect or indirect wholly-owned Subsidiary of Parent established in connectionwith any Merger Financing Arrangement that holds some or all of theSecuritization Assets or New Securitization Assets.

 

“*NMG Shopper Data*”has the meaning set forth in the Program Agreement.

 

*“Non-Card Payment Plan”* means thepayment plans referred to in Section 1.1(b) of the Seller DisclosureSchedules and such other payment plans not associated with a Credit Card as maybe offered by Sellers following the date hereof and prior to the Closing Datepursuant to which the obligor thereunder may purchase goods and services of theParent and its Subsidiaries and their respective licensees through revolvingcredit or pursuant to a retail installment sale arrangement.

 

*“Permissible Liens”* means (a) restrictionsor imperfections of title that do not materially detract from the value orimpair the use of the Acquired Asset, and (b) Liens (i) for taxes,assessments and other governmental charges or levies (1) not yet due or (2) whichare being contested in good faith by appropriate action and as to whichadequate reserves for contested amounts have been set aside in accordance withGAAP, (ii) created under the Securitization Documents or (iii) createdto secure the obligations arising upon or after the Merger Closing under anyMerger Financing Arrangement, *provided*that such Liens shall be released at or prior to the Closing.

 

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*“Person”* means anyindividual, corporation, business trust, partnership, association, limitedliability company or similar organization, or any Governmental Authority.

 

*“Previously Disclosed”* means, withrespect to the Sellers or the Purchaser and the Purchaser Parent, informationset forth in the Disclosure Schedule with respect to the Sellers or thePurchaser and the Purchaser Parent, respectively, whether in response to anexpress informational requirement or as an exception to one or morerepresentations or covenants.

 

*“Purchase Price”* means thepurchase price payable in accordance with the Final Closing Statement, asfinally determined in accordance with Section 2.4.

 

*“Purchaser Parent Guaranty”* means theguaranty of the Purchaser Parent in favor of the Sellers, in the form set forthas Annex F.

 

*“Purchaser’s Designee”* means HSBCFunding (USA) Inc. VIII.

 

*“Rating Agency Condition”*has the meaningspecified in the Pooling and Servicing Agreement.

 

*“Requirement of Law”* means, withrespect to any Person, any law, ordinance, statute, treaty, rule orregulation or determination of an arbitrator or of a Governmental Authority, ineach case binding on that Person or any material amount of its property.

 

*“Required Amendments andConfirmations”* means all amendments to the SecuritizationDocuments (substantially in the form set forth on Annex C, subject to (i) changesrequired by any rating agency in connection with the transactions contemplatedby this Agreement, (ii) changes required to provide for the origination,ownership and contribution to the Master Trust of Non-Card Payment Planreceivables by an Affiliate of Purchaser) and the satisfaction of anyapplicable Rating Agency Conditions in order to consummate the transactionscontemplated hereby and by the Securitization Transfer Agreement withoutviolation of the terms of any Securitization Document and (iii) such otherchanges as are approved and agreed to by the Sellers and Purchaser toeffectuate the consummation of the transactions contemplated by this Agreement.

 

*“Requisite Regulatory Approvals”* means theconsents, registrations, approvals, permits or authorizations designated assuch in the Disclosure Schedule of the Sellers with respect to Section 4.1(c) andof the Purchaser with respect to Section 4.2(c) of this Agreement.

 

*“Securitization Assets”* means thecollective reference to (i) the Seller Certificate, as defined in theSecuritization Documents, and any other certificate or interest retained by NFCor any other Affiliate of Parent in the Master Trust; (ii) all interestsof the Sellers and NFC in the Securitization Bank Accounts; (iii) allinterests of the Sellers in and to the Securitization Receivables; and (iv) allother rights and interests of Sellers under each of the SecuritizationDocuments.

 

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“*SecuritizationAssignment and Assumption*” means the assignment by the Sellers tothe Purchaser (or, in the case of the Sellers’ Interest and the Seller RetainedCertificates (as defined in the Pooling and Servicing Agreement), the Purchaser’sDesignee) of the Sellers’ rights and interests in or relating to, and theassumption by the Purchaser or its designee of the Sellers’ obligations underor relating to, the Master Trust pursuant to the Securitization TransferAgreement.

 

*“Securitization Bank Accounts”*means anyspread account, reserve account, collection account, principal funding accountor other similar accounts created pursuant to the Securitization Documents.

 

*“Securitization Documents”*means thePooling and Servicing Agreement and the other documents designated as such onSchedule B.

 

*“Securitization Receivables”* means, as ofany date, the Gross Receivables that have been transferred to the Trust andthat have not been reassigned to the relevant seller under the Pooling andServicing Agreement.

 

*“Securitization TransferAgreements”* means the Assignment and Assumption Agreementsdated as of the Closing Date among the Sellers, the Purchaser Parent, thePurchaser Designee and the trustee of the Master Trust, substantially in theform attached hereto as Annex D, subject to (i) changes required toprovide for the origination, ownership and contribution to the Master Trust ofNon-Card Payment Plan receivables by an Affiliate of Purchaser and (ii) suchother changes as are approved and agreed to by the Sellers and Purchaser toeffectuate the consummation of the transactions contemplated by this Agreement.

 

*“Seller Interest”*has the meaningassigned to such term in the Pooling and Servicing Agreement.

 

*“Sellers”*means theParent, BG and NFC and, if the Closing occurs after the Merger Closing, any NewSeller established at the time of the Merger Closing.

 

*“Sellers’ Securitization Counsel”* means Mayer,Brown, Rowe & Maw LLP.

 

*“Service Provider”* means PaySysand any other data processing service provider used by the Sellers inconnection with the Accounts.

 

*“Servicing Agreement”* means theServicing Agreement between NMG and Household Corporation, in the form attachedhereto as Annex E.

 

*“Subsidiary”* when used withrespect to any Person, means another Person, an amount of the votingsecurities, other voting ownership or voting partnership interests of which issufficient to elect at least a majority of its board of directors or similargoverning body (or if there are not such voting interests, more than fiftypercent (50%) of the equity interest of which) is owned directly or indirectlyby such first Person or by another Subsidiary of such Person.

 

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*“Tax Opinion”*has the meaningassigned to such term in the Pooling and Servicing Agreement.

 

*“Tax Return”* means anyreturn, declaration, report or similar statement required to be filed withrespect to any Taxes (including any attached schedules) including anyinformation return, claim for refund, amended return and declaration ofestimated Tax.

 

*“Taxes”* means anyincome, corporate franchise, alternative or add-on minimum tax, gross receipts,sales, use, transfer, gains, ad valorem, franchise, profits, license,withholding, payroll, employment, excise, severance, stamp, occupation,premium, property, environmental or windfall profit tax, custom, duty or othertax, governmental fee or other like assessment or charge, together with anyinterest or any penalty, addition to tax or additional amount imposed by anyGovernmental Authority responsible for the imposition of any such tax (domesticor foreign).

 

(b) Each of the following terms is defined inthe section of this Agreement set forth opposite such term:

 
| **Term**                          | ** ** | **Section** |
|-----------------------------------|------------|-------------|
| * *                          |       |        |
| *Accountant*                      |       | 2.4(c)      |
| *Actions*                         |       | 5.10(a)     |
| *Agreement*                       |       | Preamble    |
| *BG*                              |       | Preamble    |
| *Buyer Tax Act*                   |       | 6.1(a)      |
| *Closing*                         |       | 3.1(a)      |
| *Closing Date*                    |       | 3.1(a)      |
| *Confidentiality Agreement*       |       | 5.3(c)      |
| *Credit Card Marks*               |       | 5.7         |
| *De Minimis Claim*                |       | 9.2         |
| *Indemnified Party*               |       | 9.4(a)      |
| *Indemnifying Party*              |       | 9.4(a)      |
| *Losses*                          |       | 9.2         |
| *NFC*                             |       | Recitals    |
| *Parent*                          |       | Preamble    |
| *Pooling and Servicing Agreement* |       | Recitals    |
| *Program Agreement*               |       | Recitals    |
| *Purchase and Assumption*         |       | 3.1(a)      |
| *Purchaser*                       |       | Preamble    |
| *Purchaser Parent*                |       | Preamble    |

 

SECTION 1.2.*Interpretation.* (a) In thisAgreement, unless the context otherwise requires, references to:

 

(1) the *Preamble*or the *Recitals, Sections,Annexes* or *Schedules*refer to the Preamble or a Recital or Section of, or Annex or Schedule to,this Agreement;

 

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(2) any *Contract*(including this *Agreement*) referto the Contract as amended, modified, supplemented or replaced from time totime;

 

(3) any *statute*or *regulation* refer to thestatute or regulation as amended, modified, supplemented or replaced from timeto time (and, in the case of statutes, include any rules and regulationspromulgated under the statute) and to any *sectionof any statute or regulation* include any successor to the section;

 

(4) any *GovernmentalAuthority* include any successor to the Governmental Authority; and

 

(5) this *Agreement*are to this Agreement and the Schedules to it.

 

(b) The *tableof contents* and *headings*contained in this Agreement are for reference purposes only and do not limit orotherwise affect any of the provisions of this Agreement.

 

(c) Whenever the word *“include,” “includes”* or *“including”* is used in this Agreement, itwill be deemed to be followed by the words *“withoutlimitation.”*

 

(d) This Agreement is the product ofnegotiation by the parties having the assistance of counsel and other advisers.It is the intention of the parties that this Agreement not be construed morestrictly with regard to one party than with regard to the other.

 

**ARTICLE II**

**PURCHASE, SALE AND ASSUMPTION**

 

SECTION 2.1.*Purchase and Sale of the Acquired Assets*.On the terms and subject to the conditions of this Agreement at the time of theClosing and effective from and after the Closing Date, Parent and BG shall, andshall cause NFC to, sell, convey and assign (or cause their Subsidiaries tosell, convey and assign) to the Purchaser or its designee, free and clear ofall Liens, except Permissible Liens, the Acquired Assets, and the Purchaser orits designee shall purchase the Acquired Assets.

 

SECTION 2.2.*Assumption of Liabilities.* On theterms and subject to the conditions of this Agreement, at the Closing and effectivefrom and after the Closing Date the Purchaser or (without limiting thePurchaser’s and Purchaser Parent’s obligations under Article IX) thePurchaser’s designee shall assume, pay, defend, discharge and perform as andwhen due the Assumed Liabilities.

 

SECTION 2.3.*Excluded Liabilities*.Notwithstanding any provision in this Agreement or any other writing to thecontrary, the Purchaser is assuming only the Assumed Liabilities and not anyExcluded Liabilities. The Excluded Liabilities shall be retained by theSellers.

 

SECTION 2.4.*Purchase Price; Purchase Price Adjustment*.(a) On the second Business Day before the Closing, the Parent, on behalfof the Sellers, shall deliver to the Purchaser the Estimated Closing Statementreflecting the Sellers’ calculation of the Estimated Purchase Price to be paidby the Purchaser at the Closing.

 

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(b) Within sixty (60) Business Days after theClosing, the Parent, on behalf of the Sellers, shall deliver to the Purchaserthe Final Closing Statement prepared based on the information in the MasterFile as of the Cut-Off Time and copies of the Master File as of the Cut-OffTime.

 

(c) The Purchaser shall, within thirty (30)days after receipt of the Final Closing Statement, advise the Sellers inwriting and in reasonable detail if it believes that the Final ClosingStatement did not accurately reflect the items required to be included thereinin accordance with the provisions of this Agreement and Schedule B hereto, ineach case stating in reasonable detail the basis of its belief. In the eventthe Purchaser delivers such an objection, the Sellers and the Purchaser shallattempt in good faith to resolve their differences. In the event alldifferences are not resolved within forty-five (45) days following receipt ofthe Final Closing Statement by the Purchaser, then the issues remainingunresolved shall be determined by PricewaterhouseCoopers LLP (the “*Accountant*”). The Accountant shall resolveall disputed items in accordance with the provisions of this Agreement. Inmaking its determination, the Accountant may only consider those items andamounts as to which the Purchaser and the Sellers have disagreed within thetime periods and on the grounds specified. The Accountant’s determination shallbe conclusive and binding on the Purchaser and the Sellers absent manifesterror. The fees of the Accountant shall be shared by the Purchaser and theSellers in proportion to the relative differences between their respectivecalculations of the Purchase Price and the amount determined by the Accountant.

 

(d) If the Estimated Purchase Price exceeds thePurchase Price, then the Parent, on behalf of the Sellers, shall, within five (5) BusinessDays after the Purchase Price has been finally determined pursuant to Section 2.4(c),pay such excess to the Purchaser, together with interest on such excess for theperiod from and including the Closing Date to but excluding the date of suchpayment at a rate per annum equal to the Federal Funds Rate. If the EstimatedPurchase Price is less than the Purchase Price, then the Purchaser shall,within five (5) Business Days after the Purchase Price has been finallydetermined pursuant to Section 2.4(c), pay such deficiency to the Parent,on behalf of the Sellers, together with interest on such deficiency for theperiod from and including the Closing Date to but excluding the date of suchpayment at a rate per annum equal to the Federal Funds Rate.

 

(e) Each party to this Agreement shall makeavailable to the other parties, and to the Accountant, its and its accountant’swork papers, schedules and other supporting data as may be reasonably requestedby such other parties to enable them to verify the amounts set forth in theFinal Closing Statement.

 

**ARTICLE III**

**CLOSING; ASSIGNMENT**

 

SECTION 3.1.*The Closing*. (a) The closing(the *“Closing”*) of the purchaseand sale of the Acquired Assets and assumption of the Assumed Liabilitieshereunder

 

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(collectively,the *“Purchase and Assumption”*)shall, subject to Section 10.5, take place at the offices of SimpsonThacher & Bartlett LLP, 425 Lexington Avenue, New York, New York, onthe second Business Day after the last of the conditions set forth in Sections7.1, 7.2 and 7.3 (other than conditions relating solely to the delivery ofdocuments to be dated the Closing Date) has been satisfied or waived inaccordance with the terms of this Agreement or at such other date or locationas the parties hereto jointly designate in writing (the *“Closing Date”*).

 

(b) At the Closing, the Purchaser and PurchaserParent shall, and the Parent shall and shall cause the Sellers and the Trusteeto, deliver or cause to be delivered to each other instruments of sale,assignment, transfer, amendment and conveyance of the Acquired Assets and theAssumed Liabilities, respectively, in substantially the forms set forth inAnnexes C and D, as appropriate, appropriately executed by the Sellers, theTrustee, the Purchaser and the Purchaser Parent.

 

(c) At the Closing, the Purchaser shall pay theEstimated Purchase Price by wire transfer of immediately available funds (inU.S. dollars) prior to 11:00 a.m. Eastern time on the Closing Date to anaccount or accounts specified by the Parent at least one Business Day prior tothe Closing Date.

 

(d) In the event that the Closing occurs afterthe Merger Closing, the Purchaser shall pay the Estimated Purchase Price bywire transfer of immediately available funds (in U.S. dollars) prior to 11:00am Eastern time on the Closing Date to the Escrow Agent. Upon receipt by theEscrow Agent of a certificate from the Parent to the effect that the EstimatedPurchase Price, together with any additional funds made available by the Parentor its Affiliates at Closing, is sufficient to cause Sections 7.2(f) and (g) tobe satisfied upon release of all or a portion of the Estimated Purchase Priceto the Parent or a third party designated by the Parent, including to anylender or agent acting on behalf of the lenders under the terms of any MergerFinancing Arrangement, the Escrow Agent shall release the Estimated PurchasePrice to the Parent and/or such third party designated by the Parent.

 

**ARTICLE IV**

**REPRESENTATIONS OF THE PARTIES**

 

SECTION 4.1.*Representations of the Parent*.Except as Previously Disclosed, the Parent represents to the Purchaser asfollows:

 

(a) Existence and Authority. Each Selleris duly organized and validly existing under its jurisdiction of organization.Each Seller has the requisite power and authority to own the Acquired Assetsand to carry on the Business as currently conducted, and is duly qualified todo business in each jurisdiction where the ownership or operation of theAcquired Assets or the conduct of the Business requires such qualification,except for any failure to have such authority or be so qualified that would notreasonably be expected to have a Material Adverse Effect on the Business or theSellers.

 

(b) Authorization and Validity. EachSeller has the requisite corporate power and authority to execute, deliver andperform its obligations under this Agreement (if applicable) and each of theAncillary Agreements to which it is a party. Each of this

 

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Agreementand each Ancillary Agreement has been duly authorized by each Seller partythereto by all necessary corporate action. This Agreement has been dulyexecuted and delivered by each Seller party hereto and each Ancillary Agreementhas been, or shall have been at the Closing Date, duly executed and deliveredby each Seller party thereto. Assuming that this Agreement has been, and thatthe Ancillary Agreements have been or shall be on or prior to the Closing Dateduly authorized, executed and delivered by the Purchaser, this Agreement is,and the Ancillary Agreements are or shall be at the Closing Date, the legal,valid and binding obligations of the Sellers party hereto and thereto,enforceable against such Sellers in accordance with their respective terms,subject to applicable bankruptcy, insolvency, moratorium, reorganization,fraudulent transfer and other laws affecting creditors’ rights generally and togeneral equitable principles.

 

(c) Governmental and Third-Party Consents.No notices, reports or other filings are required to be made by the Sellers with,nor are any consents, registrations, approvals, permits or authorizationsrequired to be obtained by the Sellers from, any Governmental Authority or anyother third party in connection with the execution, delivery or performance ofthis Agreement and the Ancillary Agreements by the Sellers or the consummationby them of the transactions contemplated by this Agreement or the AncillaryAgreements, except for the Requisite Regulatory Approvals and the otherPreviously Disclosed regulatory and third party approvals and for such othernotices, reports, filings, consents, registrations, approvals, permits orauthorizations the failure to obtain which would not reasonably be expected tohave a Material Adverse Effect on the Business or the Sellers.

 

(d) No Conflicts. The execution,delivery and performance by the applicable Sellers of this Agreement and theAncillary Agreements do not, and (subject to obtaining the Requisite RegulatoryApprovals and other Previously Disclosed governmental and third-party consents,registrations, approvals, permits and authorizations referred to in Section 4.1(c))the consummation of the transactions contemplated by this Agreement and theAncillary Agreements will not:

 

(1) breach or violate the Constituent Documentsof the Sellers;

 

(2) breach or violate any Requirement of Law orApplicable Order applicable to the Sellers;

 

(3) breach, violate or result in a defaultunder the terms, conditions or provisions of any Contract of any of theSellers, or give any third party the right to terminate or cancel any right ofany of the Sellers under any Contract of such Seller, or accelerate theperformance of its obligations thereunder, in each case where such Contractrelates to the Business or is binding upon the Acquired Assets; or

 

(4) result in the creation of any Lien on anyAcquired Asset other than a Permissible Lien (with or without the giving ofnotice or the lapse of time, or both);

 

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*except* in each case described inclause (2), (3) or (4), for any breach, violation, default, termination,cancellation, acceleration or Lien that would not reasonably be expected tohave a Material Adverse Effect on the Business or the Sellers.

 

(e) Absence of Certain Changes. Since January 29,2005, the Business has been conducted in the ordinary course and there has notbeen any change in the financial condition or results of operations of theBusiness that has had or would reasonably be expected to have a MaterialAdverse Effect on the Business or the Sellers.

 

(f) Title to Properties; Encumbrances. ASeller has good title to or a valid leasehold interest in, or is licensed orotherwise entitled to use, all of the Acquired Assets (other than the Accounts,to which Section 4.1(j) is applicable), free and clear of all Liensother than Permissible Liens.

 

(g) Litigation. There are no actions,suits, proceedings or claims pending in arbitration or before any GovernmentalAuthority, against the Sellers in connection with the Business or any AcquiredAsset, or to the Sellers’ Knowledge, threatened against any of the Sellers withrespect to the Business or Acquired Assets, in each case that would reasonablybe expected to have a Material Adverse Effect on the Business or the Sellers.

 

(h) Books and Records. All Books andRecords of the Sellers have been maintained accurately and in accordance withall Requirements of Law applicable to the Sellers and the Business, except forany instances of inaccuracy or noncompliance that would not reasonably beexpected to have a Material Adverse Effect on the Business or the Sellers.

 

(i) Compliance with Laws. Except to theextent that any of the following would not reasonably be expected to have aMaterial Adverse Effect on the Business or the Sellers, the Sellers are in compliancewith all Requirements of Law relating to the Business and the Acquired Assets.

 

(j) Accounts. Except to the extent thatany of the following would not reasonably be expected to have a MaterialAdverse Effect on the Business or the Sellers:

 

(1) A Seller is the sole owner of and has goodtitle to the Accounts, the Gross Receivables and the Securitization Assets(subject in each case to Permissible Liens). This Agreement shall, followingthe Closing Date, and subject to the filing of appropriate financing statementsand all required continuations, amendments and replacements thereof, vest inthe Purchaser all right, title and interest of the Sellers in and to theAccounts, the Gross Receivables and the Securitization Assets, free and clearof all Liens, other than Permissible Liens.

 

(2) Each Account Agreement (other than anyAccount Agreement with respect to any Charged Off Account) is a valid andlegally binding obligation of each obligor thereunder, including any cosigner,guarantor or surety, and is enforceable against such obligors in accordancewith its terms, subject to (i) possible claims and defenses on disputedcard transactions asserted by a

 

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Cardholder,(ii) applicable bankruptcy, insolvency, reorganization, moratorium,fraudulent transfer and other laws relating to or affecting creditors’ rightsgenerally and the effect of general equitable principles, and (iii) theServicemembers Relief Act.

 

(3) From July 31, 2004 through the date ofthis Agreement, the Sellers have not effected any change in operating policiesand procedures of the Business relating to the origination or maintenance of,and collection policies with respect to, the Accounts.

 

(4) the Sellers are in compliance with theapplicable Account Agreements.

 

(5) All Account applications have been takenand evaluated and applicants notified in a manner that complied in all materialrespects with all applicable Requirements of Law.

 

(6) All Accounts have been originated,maintained and serviced in all material respects in compliance with allapplicable Requirements of Law.

 

(7) All disclosures that were required underapplicable Requirements of Law to be made in connection with the Accounts havebeen made in compliance in all material respects with all such applicableRequirements of Law.

 

(k) Securitization. Except to the extentthat any of the following would not reasonably be expected to have a MaterialAdverse Effect on the Business or the Sellers:

 

(1) the Pooling and Servicing Agreement is notrequired to be qualified under the Trust Indenture Act of 1939, as amended;

 

(2) the Master Trust is not required to beregistered as an investment company under the Investment Company Act of 1940,as amended;

 

(3) NFC is the sole owner of the SellerInterest under the Securitization Documents and the other certificates issuedpursuant thereto set forth in Schedule B;

 

(4) as of the date hereof, the listing of theSecuritization Documents set forth in Schedule B is a true, accurate andcomplete list of the Contracts to which any of the Sellers is a party relatingto the Master Trusts and all such Contracts have been made available toPurchaser;

 

(5) (A) from July 21, 2000 to thedate hereof, no interests in the Master Trust have been issued, and as of thedate hereof the only outstanding series of investor certificates is the Series 2000-1and (B) except for the Series 2000-1 and any New SecuritizationAssets issued after the date hereof, no interests in the Master Trust will beoutstanding at the time of Closing; and

 

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(6) each Securitization Document is a valid,legally binding agreement of the Seller or Subsidiary thereof that is partythereto and each such Seller and Subsidiary and, to the Sellers’ Knowledge,each other party thereto, is in compliance in all material respects with itsobligations thereunder.

 

(l) Investor Certificates. All of theoutstanding investor certificates issued to any Person other than Sellers orany of their Affiliates are properly characterized as indebtedness for federalincome tax purposes.

 

(m) Required Amendments and Confirmations.The Required Amendments and Confirmations, insofar as they relate to the Poolingand Servicing Agreement, do not adversely affect in any material respect theinterests of any Class of Investor Certificateholder of the Series 2000-1certificates that has not consented thereto in accordance with the provisionsof Section 13.01(b) thereof.

 

(n) Merger Financing. Any MergerFinancing Arrangement related to the Acquired Assets will not result in adefault in any material respect under the Securitization Documents.

 

(o) Servicing Qualifications. The Parentis or will be at the Closing Date licensed and qualified in all jurisdictionsnecessary to conduct the servicing activities with respect to the Accounts inwhich it is engaged in accordance with all applicable Requirements of Law,except where the failure to be so qualified would not reasonably be expected tohave a Material Adverse Effect on the Business or the Sellers.

 

(p) Taxes. The Sellers have filed allmaterial Tax Returns that they were required to file on or before the date ofthis Agreement (taking into account all applicable extensions) with respect tothe Business, the Acquired Assets, the Assumed Liabilities and the Master Trustand have paid all Taxes shown thereon as due and owing, the non-payment ofwhich would result in a Lien on any of the Acquired Assets.

 

(q) No Brokers or Finders. The AssumedLiabilities do not include any liability incurred by the Sellers or any oftheir Affiliates for any financial advisory fees, brokerage fees, commissionsor finder’s fees directly or indirectly in connection with this Agreement orthe transactions contemplated hereby or by the Ancillary Agreements.

 

(r) Accuracy of Information. The MasterFile information previously delivered to the Purchaser prior to the date hereofwas accurate in all material respects as of the date thereof, and theinformation contained in the Master File to be conveyed as part of the AcquiredAssets will be complete and accurate in all material respects as of the Cut-OffTime.

 

SECTION 4.2.*Representations of the Purchaser*.Except as Previously Disclosed, the Purchaser represents to the Sellers asfollows:

 

(a) Existence and Authority. ThePurchaser is a validly existing national credit card bank, duly organized andin good standing under the laws of the United States, and has the corporatepower and authority to carry on its business as now conducted and to

 

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acquireand operate the Business as currently conducted or as proposed to be conducted.The Purchaser Parent is a corporation, duly organized and validly existingunder the laws of Delaware.

 

(b) Authorization and Validity. ThePurchaser and the Purchaser Parent each has the requisite corporate power andauthority to execute, deliver and perform its obligations under this Agreementand each of the Ancillary Agreements to which it is a party. This Agreement andeach Ancillary Agreement have been duly authorized by the Purchaser by allnecessary corporate action. This Agreement has been duly authorized byPurchaser Parent by all necessary corporate action. This Agreement has beenduly executed and delivered by the Purchaser and the Purchaser Parent and eachAncillary Agreement has been or shall have been, at the Closing Date, dulyexecuted and delivered by the Purchaser. Assuming that this Agreement has been,and the Ancillary Agreements have been or will be on or prior to the ClosingDate, duly authorized, executed and delivered by the Sellers party thereto,this Agreement is, and the Ancillary Agreements shall be at the Closing Date,the legal, valid and binding obligations of the Purchaser and, to the extent itis a party thereto, the Purchaser Parent, enforceable against the Purchaserand, to the extent it is a party thereto, the Purchaser Parent, in accordancewith their respective terms, subject to applicable bankruptcy, insolvency,moratorium, reorganization, fraudulent transfer and other laws affectingcreditors’ rights generally and to general equitable principles.

 

(c) Governmental and Third-Party Consents.No notices, reports or other filings are required to be made by the Purchaseror the Purchaser Parent with, nor are any consents, registrations, approvals,permits or authorizations required to be obtained by either of them from, anyGovernmental Authority or any other third party in connection with the execution,delivery and performance of this Agreement and the Ancillary Agreements by thePurchaser and the Purchaser Parent, as applicable or the consummation by thePurchaser and the Purchaser Parent, as applicable of the transactionscontemplated by this Agreement or the Ancillary Agreements, except for theRequisite Regulatory Approvals and for such other notices, reports, filings,consents, registrations, approvals, permits or authorizations the failure toobtain which would not reasonably be expected to have a Material Adverse Effecton the Purchaser or on the Business following the Closing Date. The Purchaserand the Purchaser Parent have no reason to believe that they will not be ableto obtain the Requisite Regulatory Approvals on a timely basis.

 

(d) No Conflicts. The execution,delivery and performance by the Purchaser and the Purchaser Parent of thisAgreement and the Ancillary Agreements do not, and (subject to obtaining thePreviously Disclosed governmental and third-party consents, registrations, approvals,permits and authorizations referred to in Section 4.2(c)) the consummationof the transactions contemplated by this Agreement and the Ancillary Agreementswill not:

 

(1) breach or violate the Purchaser’s or thePurchaser Parent’s Constituent Documents;

 

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(2) breach or violate any Requirement of Law orApplicable Order applicable to the Purchaser or the Purchaser Parent;

 

(3) breach, violate or result in a defaultunder the terms, conditions or provisions of any Contract of the Purchaser orthe Purchaser Parent, or give any third party the right to terminate or cancelany right of the Purchaser or the Purchaser Parent under any such Contract, oraccelerate the performance of its obligation thereunder; or

 

(4) result in the creation of any Lien on theproperties or assets of the Purchaser or the Purchaser Parent, other thanPermissible Liens;

 

*except* in each case described inclause (2), (3) or (4), for any breach, violation, default, termination,cancellation, acceleration or Lien that would not reasonably be expected tohave a Material Adverse Effect on the Purchaser or on the Business followingthe Closing Date.

 

(e) Absence of Certain Changes. Since December 31,2004, there has not been any change in the financial condition or results ofoperations of the Purchaser or the Purchaser Parent that has had or wouldreasonably be expected to have a Material Adverse Effect on the Purchaser or onthe Business following the Closing Date.

 

(f) Compliance with Laws.

 

(1) Except to the extent that any of thefollowing would not reasonably be expected to have a Material Adverse Effect onthe Purchaser or the Business after the Closing Date,

 

(A)      the Purchaser is in compliance with all Requirementsof Law relating to its credit card business; and

 

(B)        neither the Purchaser nor any of its Affiliates issubject to any capital plan or supervisory agreement, cease-and-desist orsimilar order or directive or memorandum of understanding between it and anyGovernmental Authority or issued by any Governmental Authority, nor has any ofthem adopted any board resolutions at the request of any GovernmentalAuthority.

 

(2) Neither the Purchaser nor any of itsAffiliates is subject to any order, directive or restriction of any kind issuedby any Governmental Authority that restricts in any respect its operation ofits credit card business; and Purchaser is not aware of any fact orcircumstance that would in any way delay or impede its ability to (A) consummatethe transactions contemplated hereby and by the Program Agreement or (B) timelyperform all of its obligations hereunder and thereunder.

 

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(g) Servicing Qualifications. ThePurchaser is, and as of the Closing Date shall be, licensed and qualified inall jurisdictions necessary to service the Accounts in accordance with allapplicable Requirements of Law, except where the failure to be so qualifiedwould not reasonably be expected to have a Material Adverse Effect on the Purchaseror the Business or on the ability of the Purchaser to perform its duties asservicer under the Pooling and Servicing Agreement following the Closing Date.

 

(h) Financing. The Purchaser hassufficient cash, available lines of credit or other sources of immediatelyavailable funds to enable it to pay the Estimated Purchase Price as required bySection 3.1(c) and to timely pay any other amounts to be paid by itunder this Agreement.

 

(i) Litigation. There are no actions,suits, proceedings or claims pending, in arbitration or before any GovernmentalAuthority, against the Purchaser Parent or Purchaser or any of their assetsthat would be reasonably expected to have a Material Adverse Effect withrespect to the Purchaser or on the Business following the Closing Date.

 

(j) No Brokers or Finders. Any liabilityincurred by the Purchaser or its Affiliates for any financial advisory fees,brokerage fees, commissions or finder’s fees directly or indirectly inconnection with this Agreement or the transactions contemplated hereby or bythe Ancillary Agreements shall be borne by the Purchaser.

 

(k) Restricted Securities. The Purchaserunderstands that certain of the Certificates (as defined in the Pooling andServicing Agreement) are “restricted securities” under applicable U.S. federaland state securities laws and that, pursuant to such laws, the Purchaser or thePurchaser’s Designee must hold those securities indefinitely unless they areregistered with the SEC and qualified by applicable state Governmental Authoritiesor an exemption from such registration and qualification is available.

 

SECTION 4.3.*No Other Representations or Warranties; NoRecourse*. Except as expressly set forth in this Article IV,neither the Sellers nor the Purchaser have made or make any other express orimplied representations, or any express or implied warranty, either written ororal, with respect to the Acquired Assets, the Assumed Liabilities, theSellers, the Business or the Purchaser, respectively, or as to any other matterwhatsoever. Except as otherwise expressly provided herein or in any AncillaryAgreement, the sale of the Acquired Assets is without recourse of any kind tothe Parent or its Affiliates.

 

**ARTICLE V**

**COVENANTS**

 

SECTION 5.1.*Conduct of Business*. (a) Exceptas otherwise contemplated hereby or by the Ancillary Agreements, and except fortransactions in the ordinary course of business, until the Closing Date, theParent and BG shall use their respective commercially

 

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reasonableefforts to (and to cause NFC to) preserve intact the business organizations andrelationships with third parties relating to the Business, to keep availablethe services of required employees of the Business and to preserve beneficialrelationships with customers in connection with the Business, followingsubstantially the same material practices and standards, including collectionpractices and accounting practices for charge-offs and reserves, as in effecton the date of this Agreement.

 

(b) Exceptas otherwise contemplated hereby or by the Ancillary Agreements, and except fortransactions in the ordinary course of business, until the Closing Date, thePurchaser shall use its commercially reasonable efforts to preserve intact thebusiness organizations and relationships with third parties relating to itscredit card business, to keep available the services of required employees ofits credit card business and to preserve beneficial relationships withcustomers in connection with its credit card business, following substantiallythe same material practices and standards, as in effect on the date of thisAgreement.

 

SECTION 5.2.*Certain Changes*. (a) (a) Withoutlimiting Section 5.1, and except as otherwise contemplated hereby or bythe Ancillary Agreements or as required by applicable Requirements of Law, fromthe date of this Agreement until the Closing Date, without the prior writtenconsent of the Purchaser (which consent shall not be unreasonably withheld ordelayed), the Parent and BG shall not (and shall cause NFC not to):

 

(1) amend any of the Securitization Documents,except any amendments in connection with any Merger Financing Arrangement thatwould not impair Sellers’ ability to satisfy the closing condition set forth inSection 7.2(f) or 7.2(g);

 

(2) change in any material respect its creditand underwriting, risk management, posting, collection or operating policiesand procedures with respect to the Business;

 

(3) sell, lease, dispose of or otherwise incurany Lien on any of the Acquired Assets, except (1) in the ordinary courseof business and in transactions that individually or in the aggregate with allsuch other dispositions would not have a Material Adverse Effect on the Sellersor the Business, (2) in connection with securitizations of receivablesarising under the Accounts (provided that the benefits thereof are transferableto the Purchaser at the Closing), (3) pursuant to the terms of Contractsor commitments existing as of the date of this Agreement and PreviouslyDisclosed, (4) as otherwise Previously Disclosed, (5) PermissibleLiens or (6) dispositions to a New Seller (which New Seller shall becomeobligated to sell such assets to the Purchaser in accordance with the termshereof) in connection with any Merger Financing Arrangement; or

 

(4) agree with any Person or otherwise committhemselves to do any of the foregoing.

 

(b) The Purchaser acknowledges that the Parentis party to the Merger Agreement and that pursuant thereto the Parent isobligated to use its reasonable best efforts to facilitate the Merger FinancingArrangement and the Merger Closing.

 

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SECTION 5.3.*Access and Confidentiality.*

 

(a) Until the Closing Date, upon reasonableprior notice and subject to applicable laws relating to the exchange ofinformation, the Parent and BG shall permit (and shall cause NFC to permit) thePurchaser and its authorized representatives to have reasonable access, duringregular business hours for purposes consistent with this Agreement, to theproperties and financial Books and Records relating to the Business, to theextent that such access does not unduly interfere with the business of theSellers; *provided*, that thePurchaser and such representatives comply with the confidentiality obligationscontained herein and in the Confidentiality Agreement; and *provided, further* that the foregoing shallnot (1) require the Sellers to permit any inspection, or to disclose anyinformation, that in their reasonable judgment would result in the disclosureof any trade secrets of third parties or trade secrets of the Sellers or theirAffiliates unrelated to the Business or violate any obligations of the Sellersto any third party with respect to confidentiality if the Sellers shall haveused commercially reasonable efforts to obtain the consent of such third partyto such inspection or disclosure or (2) require any disclosure by theSellers that could, as a result of such disclosure, have the effect of causingthe waiver of any attorney-client or other legal privilege.

 

(b) If this Agreement is terminated, thePurchaser, at its own expense, shall promptly deliver (without retaining anycopies) to the applicable Seller or (at the Parent’s option) confirm in writingto the Sellers that it has completely destroyed, all information furnished tothe Purchaser or its representatives by the Sellers or any of their agents,employees or representatives in connection with this Agreement, whether soobtained before or after the execution hereof, and all analyses, compilations,forecasts, studies or other documents prepared by the Purchaser or itsrepresentatives that contain or reflect any such information.

 

(c) In addition to the confidentialityarrangements contained herein, all information provided or obtained in connectionwith the transactions contemplated by this Agreement and by the AncillaryAgreements (including pursuant to clause (a) above) shall be held by thePurchaser in accordance with the Confidentiality Agreement, dated March 9,2005, between the Purchaser and the Parent (the *“Confidentiality Agreement”*). In the event of a conflict orinconsistency between the terms of this Agreement and the ConfidentialityAgreement, the terms of this Agreement shall govern.

 

(d) The Sellers shall be entitled to specific performanceof the foregoing provisions of this Section 5.3 and the provisions of theConfidentiality Agreement, in addition to any other remedies that they may haveat law or in equity.

 

SECTION 5.4.*Reasonable Efforts; Other Filings.*(a) Subject to the terms and conditions of this Agreement, the Purchasershall, and shall cause its Subsidiaries to, and the Parent shall, and shallcause its Subsidiaries to, use commercially reasonable efforts to take, orcause to be taken, all actions and to do, or cause to be done, all thingsnecessary, proper or advisable under applicable Requirements of Law, so as topermit consummation of the transactions contemplated by this Agreement and theAncillary Agreements as promptly as reasonably practicable and shall cooperatefully with each other to that end.

 

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(b) Without limiting Section 5.4(a), theParent shall, and shall cause its Subsidiaries to, and the Purchaser Parent andthe Purchaser shall, and shall cause their Subsidiaries to, use reasonable bestefforts to prepare all documentation, to effect all filings and to obtain allpermits, consents, approvals and authorizations of all Governmental Authoritiesnecessary to consummate the transactions contemplated by this Agreement and theAncillary Agreements, including taking any action necessary to defendvigorously, lift, mitigate or rescind the effect of any litigation oradministrative proceeding involving any Governmental Authority adverselyaffecting the transactions contemplated by this Agreement or the validity orenforceability of this Agreement, including promptly appealing any adversecourt or administrative decision. The Parent and BG, on the one hand, and thePurchaser Parent and the Purchaser, on the other hand, shall consult with theother with respect to the obtaining of such permits, consents, approvals andauthorizations and to keep the other apprised of the status thereof. Subject toappropriate confidentiality protections, the parties to this Agreement shalleach furnish to the others such necessary information and reasonable assistanceas any of the parties may request in connection with the foregoing and shalleach provide counsel for the other parties with copies of all filings made bysuch party, and all correspondence between such party (and its advisors) andany Governmental Authority and any other information supplied by such party andsuch party’s Affiliates to a Governmental Authority in connection with thisAgreement and the transactions contemplated hereby. Each party shall, subjectto applicable law, permit counsel for the other party to review in advance anyproposed written communication to any Governmental Authority.

 

(c) Without limiting the foregoing, thePurchaser shall use its reasonable best efforts to obtain the RequisiteRegulatory Approvals in time to permit the Closing Date to occur on or before July 1,2005 or, if the Closing Date has not then occurred, as promptly thereafter asreasonably practicable. The Purchaser further agrees, without any request ordemand by the Sellers, to make all necessary filings related to the RequisiteRegulatory Approvals no later than ten (10) Business Days from theexecution and delivery of this Agreement and to pursue actively all suchfilings and pursue the receipt of each Requisite Regulatory Approval.

 

(d) The Purchaser agrees to take such actionswith respect to the Securitization Assets and Securitization Documents prior tothe Closing Date as the Parent, on behalf of the Sellers, may reasonably request,including those actions that are incident to the satisfaction of any applicableRating Agency Condition in connection with the assumption by the Purchaser andthe Purchaser’s designee of the roles of servicer and seller, respectively,thereunder.

 

(e) The Purchaser Parent and the Purchasershall promptly notify the Sellers in writing, and the Parent, on behalf of theSellers, shall promptly notify the Purchaser Parent and the Purchaser inwriting, upon (i) becoming aware of any order or decree or any complaintseeking an order or decree restraining or enjoining the execution of thisAgreement or the Ancillary Agreement or the consummation of the transactionscontemplated hereunder and thereunder, or (ii) receiving any notice fromany Governmental Authority of its intention to (A) institute a suit orproceeding to restrain or enjoin the execution of this Agreement or theAncillary Agreements or the consummation of the transactions contemplatedhereunder and thereunder, (B) nullify or render ineffective this Agreementor the Ancillary Agreements if such transactions are consummated, (C) failto issue or give any of the Requisite Regulatory

 

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Approvalsor (D) otherwise materially restrict or impair such party’s ability toconsummate the transactions contemplated by, and perform its obligations under,this Agreement and the Ancillary Agreements.

 

(f) The filing fees under the HSR Act or anyother domestic or foreign antitrust merger control laws shall be borne byPurchaser.

 

SECTION 5.5.*Additional Instruments; Cooperation.*At the reasonable request of the Parent, on the one hand, or the Purchaser, onthe other hand, at or after the Closing, the other parties shall promptlyexecute and deliver, or cause to be executed and delivered, to the requestingparty such assignments, bills of sale, assumption agreements, consents andother similar instruments in addition to those required by this Agreement, inform and substance reasonably satisfactory to the requesting party, as may bereasonably necessary to carry out or implement any provision of this Agreementor any Ancillary Agreement or to make effective the Purchase and Assumption.The Parent agrees to cause any New Seller to comply with all obligations of theSellers hereunder applicable to such New Seller and the Acquired Assets ownedby such New Seller, as if such New Seller were a signatory to this Agreement.

 

SECTION 5.6.*Non-Solicitation.* The Purchasershall continue to comply with the provisions of paragraph 7 of theConfidentiality Agreement during the two-year period following the Closing Datewith respect to the Persons listed in Schedule C. The Sellers and theirAffiliates shall be entitled to specific performance of such provisions inaddition to any other remedies that they may have at law or in equity.

 

SECTION 5.7.*Credit Card Marks; Branding.* Itis expressly agreed that, except for the limited license granted in the ProgramAgreement, the Purchaser Parent and the Purchaser are not purchasing or acquiringany right, title or interest in the name “Neiman Marcus”, “Bergdorf Goodman” orany variation thereof or any trademarks or service marks of the Sellers ortheir Affiliates that the Sellers have used prior to the date of this Agreement(or shall use or own thereafter) in connection with the Accounts or theBusiness (collectively, the *“Credit CardMarks”*). The Purchaser Parent and the Purchaser acknowledge that theSellers or their Affiliates own the Credit Card Marks and goodwill relatedthereto and symbolized thereby.

 

SECTION 5.8.*Communications with Cardholders.*From and after the date of this Agreement and until the Closing, except asotherwise expressly contemplated by the Program Agreement, the Purchaser andits Affiliates shall not communicate with the Cardholders (whether by mail, bytelephone or otherwise) other than Cardholders who are customers of Purchaseror its Affiliates prior to the Closing without the prior written consent of theSellers.

 

SECTION 5.9.*Post-Closing Access*. ThePurchaser shall upon reasonable notice afford to the Sellers, their Affiliatesand their representatives reasonable access (including the right to copy),without charge, during normal business hours, to the Acquired Assets, the Booksand Records relating thereto, any employee and any third party who maintains orcontrols any of the foregoing for the Purchaser or its Subsidiaries, all as maybe reasonably requested by the Parent or any of its Affiliates in order toenable the Sellers to (i) prepare the Final Closing Statement andparticipate in the resolution of any disputes relating thereto; (ii) permitthe performance of any covenants required to be performed under this Agreementand the Ancillary

 

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Agreementsafter the Closing Date by the Sellers; (iii) permit the preparation of anyTax Return or other document required to be filed with any GovernmentalAuthority; (iv) respond to any proceeding or to any claim made, or to anyrequest for information, by any Governmental Authority or any other Person,including any Cardholder with respect to matters that may constitute ExcludedLiabilities; and (v) permit the processing of or response to any claimmade under this Agreement or the Ancillary Agreements, and the Purchaser shallreasonably cooperate with the Sellers, if requested, in connection with theforegoing. Without limiting the foregoing, it is acknowledged and agreed that,in connection with the performance by the Parent of its servicing obligationswith respect to the Accounts following the Closing Date pursuant to theServicing Agreement, the Books and Records shall be maintained and utilized bythe Parent and its Affiliates in such capacity and shall not be physicallydelivered to a new location at the Closing.

 

SECTION 5.10.*Cooperation in Litigation.* (a) Theparties hereto shall cooperate, to the extent reasonably requested by any otherparty, in the handling and disposition of any claim, action, suit, arbitration,proceeding, investigation or regulatory inquiry (“*Actions*”), whether or not listed on the Disclosure Schedulesand whether or not pending or threatened prior to the Closing, that arise outof or are related to any event or occurrence with respect to the Business priorto the Closing; *provided, however,*that the party ultimately responsible for discharging such Action shall havethe authority to take such actions as it deems necessary or advisable, in itssole discretion, to discharge such Action, subject, however, to the provisionsof this Agreement.

 

(b) The Sellers shall be entitled to keepcopies of all litigation filings, correspondence, Books and Records and otherdocumentation of any kind that the Sellers reasonably determine are necessaryor desirable in connection with the handling and disposition of the Actions bythe Sellers and their Affiliates.

 

SECTION 5.11.*Preservation of and Access to Books andRecords.* The Purchaser shall preserve and keep all Books and Recordsof the Business and all information relating to the accounting, business,financial and Tax affairs of the Business that are in existence on the ClosingDate or that come into existence after the Closing Date but relate to theBusiness prior to the Closing Date for a period of seven (7) yearsthereafter, or for any longer period (i) as may be required by anyfederal, state, local or foreign governmental body or agency, (ii) as maybe reasonably necessary with respect to the prosecution or defense of any auditor other Action that is then pending or threatened, or (iii) that isequivalent to the period established by any applicable statute of limitations(or any extension or waiver thereof) with respect to matters pertaining toTaxes. For a period of four (4) years following the seven (7) yearperiod specified above, if the Purchaser wishes to destroy such records, thePurchaser shall first provide the Sellers the opportunity to take possession ofthe same (at the Sellers’ cost and expense).

 

SECTION 5.12.*Bulk Sales Law*. The PurchaserParent and the Purchaser hereby acknowledge that the Sellers do not intend tocomply with the provisions of any applicable bulk sales law (including theUniform Commercial Code Bulk Transfer provisions)in connection with thetransactions contemplated hereby.

 

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SECTION 5.13.*NFC.* The Parent shall take alllawful actions to cause NFC to comply with all agreements and covenantsapplicable to it under this Agreement.

 

SECTION 5.14.*Allocation of the Purchase Price.*(a) The Purchase Price (including the Assumed Liabilities) shall beallocated among the Acquired Assets as set forth on Schedule D (the “*Allocation Statement*”) and which shall bemodified appropriately to take into account subsequent adjustments oradditional payments which are properly treated as purchase price for U.S.federal income Tax purposes.

 

(b) The Purchaser Parent, the Purchaser and theParent shall (and in the case of the Parent, shall cause the Sellers to) reportthe allocation of the total consideration among the Acquired Assets in a mannerconsistent with the Allocation Statement and shall act in accordance with theAllocation Statement in the preparation and filing of all Tax Returns(including filing Form 8594 with their respective Federal income taxreturns for the taxable year that includes the Closing Date and any other formsor statements required by the Code, Treasury regulations, the Internal RevenueService or any applicable state or local taxing authority) and in the course ofany Tax audit, Tax review or Tax litigation relating thereto; *provided, however*, that in the event thatany Governmental Authority challenges any position taken by the PurchaserParent, the Purchaser or the Sellers, such party may settle or litigate suchchallenge without the consent of, or liability to, the other parties. In theevent that any party takes a position inconsistent with the AllocationStatement, such party shall notify the other parties of such position.

 

(c) The parties to this Agreement shallpromptly inform the other parties of any challenge by any GovernmentalAuthority to any allocation made pursuant to this Section 5.14 and shallconsult with and keep each other informed with respect to the status of, andany discussion, proposal or submission with respect to, such challenge.

 

SECTION 5.15.*New Securitization Opinions.* Anyopinions of Sellers’ counsel issued in connection with the issuance of NewSecuritization Assets shall be addressed to the Purchaser.

 

**ARTICLE VI**

**TAX MATTERS**

 

SECTION 6.1.*Taxes*. (a) Sellers shall beliable for and pay (i) any Taxes related to the Business, the AcquiredAssets, the Assumed Liabilities or the Master Trust that accrue or otherwiserelate to any taxable year or period (or portion thereof) ending or deemed toend on or prior to the Closing Date and (ii) any Taxes imposed upon theSellers or their Subsidiaries and Affiliates as a result of the sale of theAcquired Assets to the Purchaser; *provided,however,* that the Sellers shall not be liable for any Taxes (I) imposeddirectly or indirectly upon the Sellers resulting from any action taken afterthe Closing by the Purchaser or the Purchaser Parent (other than thetransactions contemplated hereunder), any of their Affiliates, or anytransferee of the Purchaser, the Purchaser Parent or their Affiliates (a “BuyerTax Act”) or (II) legal fees or expenses incurred in connection withsuch Buyer Tax Act.

 

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(b) The Purchaser shall be liable for and payany Taxes related to (i) the Business, the Acquired Assets, the AssumedLiabilities or the Master Trust that accrue or otherwise relate to any taxableyear or period (or portion thereof) ending or deemed to end after the ClosingDate, except for Taxes imposed upon the Sellers or their Subsidiaries andAffiliates as a result of the sale of the Acquired Asset to the Purchaser and (ii) aBuyer Tax Act.

 

(c) For purposes of this Section 6.1,Taxes attributable to a portion of a taxable year or period shall be determinedon a “closing of the books” basis as of the Closing Date, except that Taxes, ifany, imposed on a periodic basis (such as property Taxes) shall be allocated ona daily basis.

 

(d) The parties hereto shall furnish or causeto be furnished to each other, promptly upon reasonable request, anyinformation and reasonable assistance relating to the Acquired Assets and theBusiness as the requesting party deems reasonably necessary in connection withthe filing of any Tax Returns, the preparation for any audit by any Taxingauthority, the response to any inquiry by a Tax authority, the mailing orfiling of any notice and the prosecution or defense of any claim, suit orproceeding relating to any Tax Returns or any other filing required to be madewith any Tax authority or any other matter related to Taxes.

 

(e) Notwithstanding anything in this Agreementto the contrary, all Tax Returns filed by the Sellers for periods ending on orbefore the Closing Date shall remain the property of the Sellers. The Purchasershall be given access to Tax Returns as deemed reasonably necessary.

 

(f) Notwithstanding the provisions of Section 6.1(a),all excise, sales, use, transfer, documentary, stamp or similar Taxes that arepayable or that arise as a result of the consummation of the transactionscontemplated by this Agreement and the Ancillary Agreements and any recordingor filing fees with respect thereto shall be borne by the Purchaser. Such Taxesshall not be considered Excluded Liabilities.

 

(g) The Purchaser and the Purchaser Parentshall, if the Parent, on behalf of the Sellers, so requests and at the Sellers’expense (for reasonable out-of-pocket costs and expenses), cooperate with theSellers to file for and obtain any Tax refund or credit related to the Businessor the Acquired Assets that relates to any period prior to the Closing Date. Ifthe Purchaser or the Purchaser Parent at any time receives a Tax refund orcredit related to the Business or the Acquired Assets that relates to anyperiod prior to the Closing Date, it shall promptly pay over such refund or theamount of such credit to the Sellers.

 

(h) The Sellers shall be responsible for anyapplicable 2005 federal or state information reporting for events or paymentsoccurring with respect to the Acquired Assets for the period beginning on January 1,2005 and ending on the Closing Date. The Purchaser shall be responsible for anyapplicable 2005 federal or state information reporting for events or paymentsoccurring with respect to the Acquired Assets occurring subsequent to theClosing Date.

 

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**ARTICLE VII**

**CONDITIONS**

 

SECTION 7.1.*Conditions to Each Party’s Obligations toEffect the Purchase and Assumption*. The respective obligations ofthe Sellers and the Purchaser to effect the Purchase and Assumption are subjectto the fulfillment or written waiver, at or prior to the Closing Date, of thefollowing conditions:

 

(a) Governmental and Regulatory Approvals.All of the Requisite Regulatory Approvals shall have been obtained or made andshall be in full force and effect and all waiting periods required by law(including under the HSR Act) shall have expired or been terminated, and allother approvals or authorizations of, filings and registrations with, andnotifications to, all Governmental Authorities required to effect the Purchase andAssumption shall have been obtained or made and shall be in full force andeffect, *except* to the extent thatthe failure to obtain such an approval or authorization (other than a RequisiteRegulatory Approval) would not reasonably be expected to have a MaterialAdverse Effect on the Business or on the Sellers or the Purchaser.

 

(b) Third Party Consents. The consentsand approvals of the Persons set forth in Schedule E shall have been obtainedand shall be in full force and effect, *except*to the extent that the failure to obtain such a consent or approval would notreasonably be expected to have a Material Adverse Effect on the Business or theSecuritization Assets.

 

(c) No Injunction or Prohibition. NoGovernmental Authority of competent jurisdiction shall have enacted, issued,promulgated, enforced or entered any statute, rule, regulation, by-law,judgment, decree, injunction or other order (whether temporary, preliminary orpermanent) that is in effect and prohibits or makes illegal consummation of thetransactions contemplated by this Agreement or the Ancillary Agreements.

 

(d) Program Agreement. The ProgramAgreement shall have been duly executed and delivered by the other partythereto and shall not have been terminated and shall be in full force and effect.

 

(e) Instrument of Assignment and Assumption.The Instrument of Assignment and Assumption shall have been duly executed anddelivered by the parties thereto.

 

(f) Financing Statements. Sellers shallhave executed and delivered UCC-1 financing statements to be filed in theOffices of the Secretaries of State of the states of Delaware and New York andany other state necessary to perfect the sale of the Gross Receivablespurchased pursuant to the Purchase and Assumption.

 

(g) Securitization Transfer Agreement.The Securitization Transfer Agreement shall have been duly executed anddelivered by the parties thereto and all of the conditions to the effectivenessof the assignment and assumption shall have been satisfied or, wherepermissible, waived prior to or concurrently with the Closing Date.

 

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(h) Required Amendments and Confirmations.The Required Amendments and Confirmations shall have been obtained and shallhave become effective in accordance with their terms.

 

(i) Servicing Agreement. The ServicingAgreement shall have been duly executed and delivered by the other partythereto.

 

SECTION 7.2.*Conditions to Obligations of the Purchaser.*The obligations of the Purchaser to effect the Purchase and Assumption aresubject to the fulfillment or waiver by it in writing, at or prior to theClosing Date, of the following additional conditions:

 

(a) Performance of Obligations. TheSellers shall have performed in all material respects all their covenants and agreementsset forth in this Agreement to the extent required to be performed at or priorto the Closing Date.

 

(b) Representations. The representationsof the Parent set forth in this Agreement shall be true and correct as of (1) thedate of this Agreement and (2) the Closing Date (except thatrepresentations that by their terms speak as of the date of this Agreement orsome other date shall be true and correct only as of such date), except to theextent that any failure to be so true and correct would not reasonably beexpected to have a Material Adverse Effect on the Business or on the Sellers.

 

(c) Certificate. The Purchaser shallhave received a certificate signed on the Sellers’ behalf by an executiveofficer of the Parent, dated the Closing Date, to the effect that theconditions set forth in Sections 7.2(a), 7.2(b) and 7.2(f) have beensatisfied.

 

(d) Tax Opinion. The Purchaser shallhave received copies of any Tax Opinions of Sellers’ Securitization Counselrequired by the Securitization Documents in order to consummate thetransactions contemplated hereby.

 

(e) Securitization Opinion. Any opinionsof Sellers’ counsel required in connection with the assumption of the roles ofseller and servicer under the Master Trust in order to consummate the transactionscontemplated hereby shall be addressed to the Purchaser and the PurchaserParent.

 

(f) Release of Merger Financing Liens.Any Liens on the Acquired Assets incurred pursuant to any Merger FinancingArrangement shall have been released at or prior to the Closing.

 

(g) Termination of New Securitization Assets.All indebtedness secured by series of certificates constituting NewSecuritization Assets shall have been repaid concurrently with the Closing and,upon the request of Purchaser, all such series of certificates constituting NewSecuritization Assets shall have been terminated and cancelled concurrentlywith the Closing.

 

SECTION 7.3.*Conditions to Obligations of the Sellers.*The obligations of the Sellers to effect the Purchase and Assumption are subjectto the fulfillment or waiver by them in writing, at or prior to the ClosingDate, of the following additional conditions:

 

(a) Performance. The Purchaser shallhave performed in all material respects all its covenants and agreements setforth in this Agreement to the extent required at or prior to the Closing Date.

 

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(b) Representations. The representationsof the Purchaser set forth in this Agreement shall be true and correct as of (1) thedate of this Agreement and (2) the Closing Date (except that anyrepresentations that by their terms speak as of the date of this Agreement orsome other date shall be true and correct only as of such date), except to theextent that any failure to be so true and correct would not reasonably beexpected to have a Material Adverse Effect on the Business following theClosing Date or on the Purchaser.

 

(c) Certificate. The Sellers shall havereceived a certificate signed on the Purchaser’s behalf by an executive officerof the Purchaser, dated the Closing Date, to the effect that the conditions setforth in Sections 7.3(a) and 7.3(b) have been satisfied.

 

(d) Securitization Opinion. The Sellersshall have received copies of any opinions of Purchaser’s counsel required bythe Securitization Documents, rating agencies or trustee in connection with theassumption of the roles of seller and servicer under the Master Trust in orderto consummate the transactions contemplated hereby.

 

(e) Purchaser Parent Guarantee. ThePurchaser Parent Guarantee shall have been duly executed and delivered by thePurchaser Parent.

 

SECTION 7.4.*Opinion*. For the avoidance ofdoubt, the opinions required by the Securitization Documents, rating agenciesor trustee in connection with the assumption of the roles of transferor andservicer under the Master Trust in order to consummate the SecuritizationAssignment and Assumption and satisfy the conditions set forth in Sections 7.2and 7.3 shall be allocated between the Sellers and Purchaser as provided inthis Section 7.4. Sellers shall, or shall cause their counsel to, provide (i) theno material adverse affect opinion under Section 13.01(b) of thePooling and Servicing Agreement in relation to the Required Amendments andConfirmations insofar as such amendments relate to the Pooling and ServicingAgreement and (ii) the condition precedent opinion required by Section 9.5(b) ofeach of the Receivables Purchase Agreements, dated as of March 1, 1995, asamended and restated as of July 2, 2000, by and between the Parent and NFCand BG and NFC, respectively. The Purchaser shall, or shall cause its counselto, provide (i) opinions covering enforceability of any SecuritizationDocuments assumed by the Purchaser or its Affiliates, (ii) opinionsrelating to true sale and non-consolidation related to the transactions underthe Securitization Documents following the Securitization Assignment andAssumption and (iii) any other opinions that are customarily given by thePurchaser or its Affiliates in connection with their respectivesecuritizations.

 

**ARTICLE VIII**

**TERMINATION**

 

SECTION 8.1.*Termination*. This Agreement maybe terminated at any time before the Closing Date only:

 

(a) by the written consent of the partieshereto;

 

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(b) by either the Purchaser or the Parent, ifany Requisite Regulatory Approval or any other approval of a GovernmentalAuthority, the lack of which would result in the failure to satisfy thecondition set forth in Section 7.1(a) has been denied by theapplicable Governmental Authority and such denial has become final andnonappealable;

 

(c) by either the Purchaser or the Parent, if (i) anypermanent injunction or action by any Governmental Authority of competentjurisdiction prohibiting consummation of the transactions contemplated by thisAgreement or the Ancillary Agreements becomes final and nonappealable; (ii) anylaw or regulation makes consummation of the transactions contemplated by thisAgreement or the Ancillary Agreements illegal or otherwise prohibited; or (iii) consummationof the transactions contemplated by this Agreement or the Ancillary Agreementswould violate any nonappealable final order, decree or judgment of anyGovernmental Authority having competent jurisdiction;

 

(d) by either the Purchaser or the Parent ifthe Purchase and Assumption is not consummated by August 31, 2005; *provided, however*, that neither thePurchaser nor the Parent may terminate this Agreement pursuant to this Section 8.1(d) ifsuch party’s breach of any representation, warranty or covenant containedherein has been the cause of or resulted in the failure to consummate suchtransactions by such date; or

 

(e) by either the Purchaser or the Parent, inthe event of a breach or default in the performance by the other party of anyrepresentation, warranty, covenant or agreement of such other party, whichbreach or default (i) would, individually or in the aggregate with allother uncured breaches and defaults of such other party, constitute grounds forthe conditions set forth in Section 7.2(a) or (b) or Section 7.3(a) or(b), as the case may be, not to be satisfied at the Closing Date and (ii) hasnot been, or cannot be, cured within thirty (30) days after written notice,describing such breach or default in reasonable detail, is given by theterminating party to the breaching or defaulting party.

 

SECTION 8.2.*Effect of Termination*. If thisAgreement is terminated, it shall become void and of no further effect and noparty hereto shall have any liability or further obligation to any other partyto this Agreement, except that (a) the representations set forth inSections 4.1(q) and 4.2(j) and the obligations set forth in Sections5.3(b)-(d), this Section 8.2 and Article X (other than Section 10.9thereof) shall continue to apply following any such termination and (b) terminationof this Agreement shall not relieve any party of any liability arising out ofor resulting from any knowing or willful breach of any covenant under, or forany fraudulent misrepresentation under, this Agreement by such party prior tosuch termination.

 

**ARTICLE IX**

**SURVIVAL; INDEMNIFICATION**

 

SECTION 9.1.*Survival.* (a) Therepresentations or warranties of the parties in this Agreement shall survivethe Closing until the first anniversary of the Closing Date. Notwithstandingthe foregoing, the representation and warranty in Section 4.1(l) shallsurvive the Closing and remain in effect until the expiration of the applicablestatute of limitations.

 

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(b) No agreement or covenant in this Agreementshall survive the Closing Date, *other*than the agreements and covenants set forth in Sections 2.4, 5.3, 5.5, 5.6,5.7, 5.8, 5.9, 5.10, 5.11, 5.12 and 5.14, Article VI, this Article IXand Article X.

 

(c) No claim for indemnification pursuant tothis Article IX for breach of any representation, warranty or covenant maybe brought after the date on which such representation, warranty or covenant nolonger survives; *provided*, thatif a written notice of a claim for indemnification is given to the indemnifyingparty in accordance with Section 9.4(a) prior to the termination ofthe applicable survival period, the indemnifying party’s obligation hereunderwith respect to such indemnification claim shall survive until such claim hasbeen finally resolved.

 

SECTION 9.2.*Indemnification by the Parent*.The Parent shall indemnify the Purchaser and its Affiliates against, and agreeto hold each of them harmless from, any and all damage, loss, Liability orexpense (including reasonable expenses of investigation and reasonableattorneys’ fees and expenses in connection with any action, suit or proceeding)(*“Losses”*) incurred or sufferedby the Purchaser or any of its Affiliates because of (1) any breach of arepresentation or warranty of the Parent contained in Section 4.1 (*provided, however,* that for the purpose ofthis provision, with respect to any such representation or warranty (other thanthe representation and warranty contained in Section 4.1(e)) that containsa qualification or limitation by reference to a “Material Adverse Effect”, abreach of such representation or warranty shall be deemed to have occurred ifthere would have been a breach of such representation or warranty absent suchqualification or limitation), (2) any material breach of an agreement orcovenant made by the Parent in this Agreement, (3) any Excluded Liability,(4) any failure of the Parent, the Purchaser or any of their Affiliates tocomply with any applicable “bulk sales” or similar Requirement of Law inconnection with the consummation of the transactions contemplated hereby, (5) anyfailure by the Parent or any of its Affiliates or any of their respectiveagents, directors, officers or employees to comply with any federal, state orlocal law or regulation with respect to the Business at any time prior to theClosing, (6) any action, suit, proceeding or claim or other litigation, orany investigation by a Governmental Authority with respect to the Businessinvolving the Parent or any of its Affiliates or any of their respectiveagents, directors, officers or employees arising out of any action or inactionwith respect to the Business prior to the Closing, (7) the failure by theParent or any of its Affiliates or any of their respective agents, directors,officers or employees to disclose Account Agreement terms to Cardholders at anytime prior to the Closing, or (8) any false or misleading advertising orother misrepresentation by the Parent or any of its Affiliates or any of theirrespective agents, directors, officers or employees to Cardholders prior to theClosing. Notwithstanding the foregoing, the Purchaser and its Affiliates shallnot be entitled to indemnity pursuant to clause (1) of this Section 9.2:(a) in respect of any individual set of claims, facts or occurrences orany series of related claims, facts or occurrences (each such individual set ofclaims, facts or occurrences, a “*De MinimisClaim*”) if the aggregate Losses in respect of such De Minimis Claimare less than the De Minimis Claim Amount; (b) for any Losses until theaggregate amount of all Losses incurred or suffered by the Purchaser or any ofits Affiliates (excluding Losses related to all De Minimis Claims) exceeds theDeductible Amount, in which case the

 

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Purchaserand its Affiliates shall be entitled to indemnification for the full amount ofLosses in excess of the Deductible Amount; and (c) for Losses, in theaggregate, incurred or suffered by the Purchaser or any of its Affiliates inexcess of the Indemnity Cap.

 

SECTION 9.3.*Indemnification by the Purchaser*. ThePurchaser and the Purchaser Parent jointly and severally agree to indemnifyeach Seller and each of their respective Affiliates against, and agree to holdeach of them harmless from, any and all Losses incurred or suffered by a Selleror any such Affiliate because of (1) any material breach of arepresentation or warranty of the Purchaser contained in Section 4.2 (*provided, however,* that for the purpose ofthis provision, with respect to any such representation or warranty (other thanthe representation and warranty contained in Section 4.2(e)) that containsa qualification or limitation by reference to a “Material Adverse Effect”, abreach of such representation or warranty shall be deemed to have occurred ifthere would have been a breach of such representation or warranty absent suchqualification or limitation), (2) any material breach of an agreement orcovenant made by the Purchaser in this Agreement, (3) any AssumedLiability, (4) the operation of the Business from and after the Closing, (5) thefailure by the Purchaser or any of its Affiliates or any of their respectiveagents, directors, officers or employees to comply with any federal, state orlocal law or regulation with respect to the Business at any time from and afterthe Closing, (6) any action, suit, proceeding or claim or otherlitigation, or any investigation by a Governmental Authority with respect tothe Business involving the Purchaser or any of its Affiliates or any of theirrespective agents, directors, officers or employees arising out of any actionor inaction with respect to the Business from and after the Closing, (7) thefailure by the Purchaser or any of its Affiliates or any of their respectiveagents, directors, officers or employees to disclose Account Agreement terms toCardholders at any time from and after the Closing, or (8) any false ormisleading advertising or other misrepresentation by the Purchaser or any ofits Affiliates or any of their respective agents, directors, officers oremployees to Cardholders from and after the Closing. Notwithstanding theforegoing, the Sellers and their Affiliates shall not be entitled to indemnitypursuant to clause (1) of this Section 9.3: (a) in respect ofany De Minimis Claim; (b) for any Losses until the aggregate amount of allLosses incurred or suffered by the Sellers or any of their Affiliates(excluding Losses related to all De Minimis Claims) exceeds the DeductibleAmount, in which case the Sellers and their Affiliates shall be entitled toindemnification for the full amount of Losses in excess of the DeductibleAmount; and (c) for Losses, in the aggregate, incurred or suffered by theSellers or their Affiliates in excess of the Indemnity Cap.

 

SECTION 9.4.*Notice, Settlements and Other Matters.*(a) A party seeking indemnification pursuant to Section 9.2 or 9.3(an *“Indemnified Party”*) mustgive prompt written notice to the party from whom such indemnification issought (the *“Indemnifying Party”*)of the assertion of any claim, or the commencement of any action or proceeding,in respect of which indemnity may be sought hereunder specifying in reasonabledetail the individual items of the Losses in respect of which indemnificationis sought including the amount, the date each such item was paid, incurred orproperly accrued, and the specific details of the breach of representation,warranty or covenant or other claim or matter to which such item is related. Inthe event that any third party claim is made against the Indemnified Party andthe Indemnified Party notifies the Indemnifying Party of the commencementthereof, the Indemnifying Party may elect at any time to negotiate a settlementor a compromise of such action or claim or to defend such action or claim, ineach case at its sole cost and expense (subject to the limitations set forth inSection 9.2, if the Parent is the Indemnifying Party, or

 

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Section 9.3,if the Purchaser is the Indemnifying Party) and with its own counsel. If,within thirty (30) days of receipt from an Indemnified Party of the noticereferred to above the Indemnifying Party (i) advises the Indemnified Partyin writing that it shall not elect to defend, settle or otherwise compromise orpay such action or claim or (ii) fails to make such an election inwriting, the Indemnified Party may (subject to the Indemnifying Party’scontinuing right of election in the preceding sentence), at its option, defend,settle, compromise or pay such action or claim; *provided* that any such settlement or compromise shall bepermitted hereunder only with the written consent of the Indemnifying Party,which consent shall not be unreasonably withheld. Unless and until theIndemnifying Party makes an election in accordance with this Section todefend, settle, compromise or pay such action or claim, all of the IndemnifiedParty’s reasonable costs arising out of the defense, settlement, compromise orpayment thereof shall be Losses subject to indemnification by the IndemnifyingParty (subject to the provisions and limitations of Sections 9.2 and 9.3, asapplicable). Each Indemnified Party shall make available to the IndemnifyingParty all information reasonably available to such Indemnified Party relating tosuch action or claim. If the Indemnifying Party elects to defend any suchaction or claim, the Indemnified Party may participate in such defense withcounsel of its choice at the Indemnified Party’s sole cost and expense. If theIndemnifying Party elects to assume the defense of (or otherwise elects tonegotiate, settle or compromise) any action or claim as described above, theIndemnified Party shall reimburse the Indemnifying Party for all costs andexpenses incurred by the Indemnifying Party in connection with such defense tothe extent such costs and expenses do not total an amount indemnifiablepursuant to Section 9.2 or Section 9.3, as applicable.

 

(b) The Indemnified Party shall have the rightto reject any settlement approved by the Indemnifying Party if the IndemnifiedParty is not fully and unconditionally released from any liability resultingfrom that claim or is required to pay any costs, expenses or damages to anyperson as a result of the claim that are not covered by the indemnity providedherein. The Indemnified Party shall not have the right to settle any thirdparty claim without the written consent of the Indemnifying Party if theIndemnifying Party is contesting such claim in good faith and has assumed thedefense of such claim from the Indemnified Party or if the period fordetermining whether or not to assume the defense of such claim from theIndemnified Party has not expired.

 

(c) Without limitation of their respectiverights and obligations as set forth elsewhere in this Article IX, andsubject to the procedures for indemnification claims set forth in this Article IX,the Indemnified Party shall act in good faith, shall use commerciallyreasonable efforts to mitigate any Losses, shall use similar discretion in theuse of personnel and the incurring of expenses as the Indemnified Party woulduse if it were engaged and acting entirely at its own cost and for its ownaccount, and shall consult regularly with the Indemnifying Party with respectto all its matters of interest to the Indemnifying Party under this Article IX.

 

(d) All indemnity payments shall be treated asadditional adjustments to the amount of the total consideration paid for theAcquired Assets for all Tax purposes.

 

(e) Notwithstanding anything to the contrarycontained herein, the indemnification provided for herein shall not cover, andin no event shall any party hereto be liable for, any indirect damages,including consequential, incidental, exemplary or special damages, or punitivedamages (except to the extent necessary to reimburse an Indemnified Party forjudgments actually awarded to third parties in respect of such types ofdamages).

 

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(f) After the Closing Date, other than asprovided in Section 2.4, this Article IX shall constitute the Sellers’,the Purchaser’s and the Purchaser Parent’s exclusive remedy for any of thematters addressed herein or other claim arising out of or relating to thisAgreement.

 

**ARTICLE X**

**MISCELLANEOUS**

 

SECTION 10.1.*Notices*. All notices and othercommunications by any party to this Agreement shall be in writing to the otherparty and shall be deemed to have been duly given when delivered in person,when received via facsimile or overnight courier, or when posted by UnitedStates registered or certified mail, with postage prepaid, addressed asfollows:

 

if to the Purchaser to:

 

c/o HSBC Bank Nevada, N.A.

2700 Sanders Road

Prospect Heights, Illinois 60070

Attention: Chief Financial Officer, HSBC RetailServices

Facsimile: (847) 205-7444

 

with a copy to:

 

HSBC Retail Services

2700 Sanders Road

Prospect Heights, Illinois 60070

Attention: General Counsel, Retail Services Division

Facsimile: (847) 205-7417

 

if to the Sellers to:

 

c/o The Neiman Marcus Group, Inc.

One Marcus Square

1618 Main Street

Dallas, Texas 75201

Attention: General Counsel

Facsimile: (214) 573-5354

 

with a copy to:

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Maripat Alpuche, Esq.

Facsimile: (212) 455-2502

 

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Noticesand other communications may also be sent to such other address or addresses asthe Purchaser or the Sellers may from time to time designate by notice asprovided herein, except that notices of change of address shall be effectiveonly upon receipt.

 

SECTION 10.2.*Expenses*. (a) Except asotherwise provided herein, all legal and any other third-party costs andexpenses incurred in connection herewith and the transactions contemplated bythis Agreement and the Ancillary Agreements shall be paid by the partyincurring such expenses, *except*thatall fees or other amounts payable to any Governmental Authority in connectionwith any Requisite Regulatory Approval and any other consent required to beobtained hereunder shall be paid by the Purchaser.

 

(b) Collection efforts and related expenses onall Accounts made or incurred by the Sellers prior to the Closing Date shall bethe responsibility of the Sellers, and all monies paid or otherwise collectedthereon prior to the Closing Date (and all monies paid or otherwise collectedon charged-off accounts prior to the Closing Date) shall be retained by theSellers subject to their contractual obligations under the SecuritizationDocuments.

 

(c) The Purchaser shall be responsible for allfees of the rating agencies in connection with confirming ratings and providingapprovals for the contemplated assumptions and any proposed amendments of theSecuritization Documents by the Purchaser.

 

SECTION 10.3.*Successors and Assigns*. ThisAgreement shall be binding upon and shall inure to the benefit of the partiesand their respective successors and permitted assigns. This Agreement and therights and obligations hereunder may not be assigned by any party to any personwithout the prior written consent of the other party hereto, and any purportedassignment without such consent shall be void.

 

SECTION 10.4.*Entire Agreement; Amendment*;Waiver. This Agreement and the Ancillary Agreements, including the annexesschedules hereto and thereto, embody the entire agreement of the parties heretowith respect to the subject matter hereof and supersede all prior agreementswith respect thereto, other than the Confidentiality Agreement. Norepresentation, warranty, inducement, promise, understanding or condition notset forth in this Agreement (or the other documents referred to in thepreceding sentence) has been made or relied on by any party in entering intothis Agreement. This Agreement may be amended, and any provision hereof waived,but only in writing signed by the party against whom such amendment or waiveris sought to be enforced.

 

SECTION 10.5.*Counterparts*. This Agreement maybe executed in two or more counterparts any of which may be delivered byfacsimile transmission and all of which shall together constitute one and thesame instrument. Any facsimile of (a) an executed counterpart to thisAgreement or (b) any document delivered pursuant hereto, including anydocuments required to be delivered pursuant to Sections 7.1, 7.2 or 7.3, shallbe deemed an original.

 

SECTION 10.6.***Governing Law*.This Agreement shall be governed by and construed in accordance with the lawsof the State of New York applicable to contracts made and to be performedwithin such State, and the obligations, rights and remedies of the partieshereunder shall be determined in accordance with such laws.**

 

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SECTION 10.7.*Waiver of Jury Trial and Venue*.

 

(a) Eachparty hereto hereby waives all right to trial by jury in any action orproceeding to enforce or defend any rights under this Agreement.

 

(b) Eachparty hereto hereby irrevocably submits to the jurisdiction of the UnitedStates District Court for the State of Delaware or, if such federaljurisdiction is unavailable, in the state courts of the State of Delaware overany action arising out of this Agreement, and each party hereto herebyirrevocably waives any objection which such party may now or hereafter have tothe laying of improper venue or *forum nonconveniens*. Each party hereto agrees that a judgment in any suchaction or proceeding may be enforced in other jurisdictions by suit on thejudgment or in any manner provided by law. Any and all service of process andany other notice in any such suit, action or proceeding with respect to thisAgreement shall be effective against any party hereto if given as providedherein.

 

SECTION 10.8.*Severability*. In case any one ormore of the provisions contained herein shall be invalid, illegal orunenforceable in any respect under any law, the validity, legality andenforceability of the remaining provisions contained herein shall not in anyway be affected or impaired thereby, and this Agreement shall be reformed,construed and enforced as if such invalid, illegal or unenforceable provisionor portion of any provision had never been contained herein and there had beencontained herein instead such valid, legal and enforceable provisions as wouldmost nearly accomplish the intent and purpose of such invalid, illegal orunenforceable provision.

 

SECTION 10.9.*No Petition*. The Purchasercovenants and agrees that it shall not, prior to the date that is one year andone day after the final payment of any series of investor certificates or anyother series issued by the Master Trust, acquiesce, petition or otherwise invokethe process of any Governmental Authority for the purpose of commencing orsustaining a case against NFC or the Master Trust under any federal or statebankruptcy, insolvency or similar law or appointing a receiver, liquidator,assignee, trustee, custodian, sequestrator or other similar official of NFC orthe Master Trust or any substantial part of its property or ordering thewinding up or liquidation of the affairs of NFC or the Master Trust.

 

SECTION 10.10.*Public Announcement*. Except forany notice which is required by law or regulation, each of the Purchaser andthe Purchaser Parent, on the one hand, and the Parent and BG, on the otherhand, agrees that it shall not (and, in the case of the Parent, shall cause NFCnot to) issue a press release, make any other public statement or make anystatement to employees with respect to the transactions contemplated by thisAgreement or the Ancillary Agreements without the prior written consent of theother, which consent shall not be unreasonably withheld or delayed. Each of thePurchaser and the Purchaser Parent, on the one hand, and the Parent and BG, onthe other hand, agrees, if possible, to notify and consult (and in the case ofthe Parent, to cause NFC to notify and consult) with the others at least 24 hoursin advance of filing any notice required by law or regulation.

 

SECTION 10.11.*Third-Party Beneficiaries*.Nothing in this Agreement, expressed or implied, shall confer on any person,other than the parties hereto and NFC or their respective successors, anyrights, remedies, obligations or liabilities; *provided*that the provisions of Article IX shall inure to the benefit of theIndemnified Parties.

 

[Remainder of Page Intentionally Left Blank]

 

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INWITNESS WHEREOF, this Agreement has been executed on behalf of each of theparties hereto as of the day and year first above written.

 

 
|   | HSBC  BANK NEVADA, N.A.             |
|--------|-------------------------------------|
|   |                                |
|   | By                                  | /s/  Joseph W. Hoff |
|   | Name:                               | Joseph  W. Hoff |
|   | Title:                              | Executive  Vice President |
|   |                                |
|   | HSBC  FINANCE CORPORATION           |
|   |                                |
|   | By                                  | /s/  Sandra L. Derickson |
|   | Name:                               | Sandra  L. Derickson |
|   | Title:                              | Vice  Chairman |
|   |                                |
|   | THE  NEIMAN MARCUS GROUP, INC. |
|   |                                |
|   | By                                  | /s/  Steven P. Dennis |
|   | Name:                               | Steven  P. Dennis |
|   | Title:                              | Senior  Vice President, Strategy, Business Development and Multichannel Marketing |
|   |                                |
|   | BERGDORF  GOODMAN, INC.        |
|   |                                |
|   | By                                  | /s/  Nelson A. Bangs |
|   | Name:                               | Nelson  A. Bangs |
|   | Title:                              | Senior  Vice President |

 

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