**Exhibit10.52**

 

ConfidentialTreatment Requested.

 

Certain material (indicated by asterisks) hasbeen omitted from this document and filed separately with the Securities andExchange Commission pursuant to a request for confidential treatment.

 

**SEVENTH AMENDMENT TO CREDIT CARD PROGRAM AGREEMENT**

 

This Seventh Amendment toCredit Card Program Agreement (the “Seventh Amendment”) is entered into this 21st day of April 2008by and among The Neiman Marcus Group, Inc. and Bergdorf Goodman, Inc.on the one hand, and HSBC Private Label Corporation (formerly, HouseholdCorporation) and HSBC Bank Nevada, N.A. on the other hand, to that certainCredit Card Program Agreement, dated June 8, 2005 (as amended, the “Agreement”),among the foregoing parties. All capitalized terms used herein and nototherwise defined shall have the meanings given to them in the Agreement.

 

1.                                       The following new defined terms shall beadded in Section 1.1 of theAgreement in the appropriate alphabetical order:

 

“Active Account” means anAccount with debit or credit activity within the last [***] days.

 

“AverageNumber of Active Accounts” means, with respect to any period, the sum of thenumber of Active Accounts on the last day of each calendar month during suchperiod divided by the number of calendar months in such period.

 

“AverageGross Receivables” means, (i) withrespect to the RAM Measurement Period, the average of the Gross Receivables onthe last day of each calendar month during the period from [***]and (ii) with respect to any Reference Period, the average of the GrossReceivables on the last day of each calendar month during the period from [***]through the end of such Reference Period.

 

“High/LowCollar Review Period” means the period of 120days following the effective date of the February 2008 Change ofTerms (as that term is defined in the Letter Agreement between the partiesexecuted on February 22, 2008), and an additional [***]days in which the Parties shall attempt to mutually agree upon a new HighCollar and Low Collar.

 

“InactiveAccount” means any Account that is not an Active Account.

 

“NetCredit Sales”, for purposes of this Seventh Amendment, means, for any period,an amount equal to (A) gross credit sales on Accounts (including gift cardsales, sales tax, delivery charges, Licensee sales and any other amountincluded in the full amount charged by Cardholders) reflected in the NMG ChargeTransaction Data during such period, minus (B) the sum of credits forreturned goods and cancelled services and other credits (such as concessions,discounts and adjustments) on Accounts reflected in the NMG Charge TransactionData during such period.

 

1

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“NetWrite-Off Ratio” means, with respect to any period, (i) Net Write-Offs (as defined below) during such perioddivided by (ii) Net Credit Salesduring such period.

 

“NextGen” means an individual consumer’s (including Cardholders) credit score basedupon that consumer’s overall credit performance and history as provided by thethree major credit bureaus (Equifax-Pinnacle, Experian-Experian/Fair IsaacAdvanced Risk Score and TransUnion-Precision).

 

“RAMMeasurement Period” means the period from (and including) [***]through [***].

 

“ReferencePeriod” means with respect to any interim annual payment required pursuant to Section 9.1(a)(vii) or (viiI), the period from (and including) [***]preceding the due date for the Year-End Settlement Sheet on which such paymentwill be reflected.

 

“RiskAdjusted Margin” means, with respect to the RAM Measurement Period (or in thecase of any interim payment pursuant to Section 9.1 (a) (vii), therelevant Reference Period), the percentage equivalent of a fraction equal to (A) (i) GrossFinancing Income for such period, minus (ii) Net Write-Offs forsuch period, minus(iii) Funding Costs for such period, plus (iv) thetotal of all amounts paid by NMG pursuantto Section 9.1(a)(viii) at any time during such period dividedby (B) the Average Gross Receivables for such period.”

 

“Rolling12 Net Write-Off Ratio” means, with respect to any calendar month, the NetWrite-Off Ratio for the period of 12 consecutive calendar months ending on andincluding the month immediately preceding such calendar month.

 

“SharedWrite-Off Amount” means, with respect to the RAM Measurement Period (or in thecase of any interim payment pursuant to Section 9.1 (a)(viii), therelevant Reference Period), the amount by which Net Write-Offs for such periodexceed [***]of Net Credit Sales up to and including [***]of Net Credit Sales for such period (it being understood for the avoidance ofdoubt that if the Net Write-Off Ratio for such period is less than or equal to [***],then the Shared Write-Off Amount shall be zero, and that the Shared Write-OffAmount cannot exceed an amount equal to [***]of Net Credit Sales).

 

“VariableBreak-Even Margin” means (i) GrossFinancing Income (defined below) plus (ii) the amounts paid by NMGpursuant to Section 9.1 (a) (viii) minus (iii) FundingCosts (defined below) minus (iv) Net Write-Offs (defined below) minus (v) theTotal of All Amounts Bank Paid to NMG (defined below) minus (vi) MarketingExpenses (defined below) minus (vii) Fraud Loss (defined below) minus (viii) StandardVariable Operating Expenses (defined below). As used to determine Variable Break-Even Margin, the following termsshall have the following meanings:

 

(1) “GrossFinancing Income” means, with respect to any period, an amount equal to the sumof assessed or accrued finance charges, late fees, NSF fees and any otherinterest or fees payable under the Program and any amounts paid by NMG to Bankpursuant to Section 4.10 or 4.11 during such period less the sum offinance charge waivers, fee waivers, the amount required under GAAP to beamortized by Bank as deferral amortization pursuant to Financial AccountingStandard No. 91 during such period and any amounts paid by Bank to NMGpursuant to Section 4.10 or 4,11 during such period. Fees from ApprovedAncillary Products are not included as part of Gross Financing Income.

 

(ii) “FundingCosts” means for each calendar month during any period, the product of (A) businessdaily average of one month LIBOR as published by Bloomberg Financial Marketsplus [***],times (B) the average of [***]of the Gross Receivables for each day during such calendar month.

 

(iii) “NetWrite-Offs” means, with respect to Accounts that have been written off in aparticular period in accordance with the credit and collection policiescontained in. the’ Risk Management Policies, (a) the portion of the totalGross Receivables charged-off as uncollectible to the written-off Accounts inaccordance with such credit and collection policies (and not as a result offraud losses) during such period minus (b) any recoveries,including sales tax recoveries, received during such period on previouslywritten-

 

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offAccounts.

 

(iv) “Totalof All Amounts Bank Paid to NMG” means the amounts paid by Bank pursuant to Section .9.1(a)(i) and Section  and Section 9.1(a)(vii) (A).

 

(v) “Fraud Loss”means, during any period, actual fraud loss incurred by Bank during such periodnet of chargebacks to NMG during such period.

 

(vi) “MarketingExpense” means, during any period, actual marketing expenses incurred by Bankor reimbursements made by Bank to NMG of marketing expenses incurred by NMG duringsuch period, in each case that satisfy the marketing commitments set forth inSchedule 5.2 of the Program Agreement.

 

(vii) “StandardVariable Operating Expenses” means (A) for the period of [***],[***]multiplied by the Average Number of Active Accounts during such period, (B) forthe period of [***],[***]multiplied by the Average Number of Active Accounts during such period, (C) forthe period of [***],[***]multiplied by the Average Number of Active Accounts during such period, and (D) forthe RAM Measurement Period, the sum of the amounts calculated in accordancewith the foregoing clauses (A) - (C). In the event that any additional Services are assumed by the Bank underSchedule 9.1(a)(i), the parties shall negotiate in good faith to determine anappropriate amendment to the foregoing amounts to appropriately take suchadditional Services into account.

 

2.                                       Section 3.2(g) ofthe Agreement is amended by adding the following clause (v) as anadditional “Bank Matter” at the end thereof:

 

“(v) ifat any time during the Term, the Rolling 12 Net Write-Off Ratio is greater than[***]but equal to or less than [***]for [***]consecutive calendar months, for so long as the Rolling 12 Net Write-Off Ratioremains greater than [***]but equal to or less than [***],changes to Risk Management Policies that are designed to reduce the Net Write-Off Ratio, provided that such changes:

 

(A) willnot affect a group of Accounts for which the historic ratio of (1) NetCredit Sales lost to (2) Net Write-Offs reduced in respect of each ten (10) pointNext Gen score band (e.g. 600-609) is greater than [***](as set forth in the report provided by HSBC to NMG).  Such report shall be provided to NMG at least30 days in advance of making any such changes and shall demonstrate the mostrecent rolling 3 month authorization after 12 months on book (Example attachedas Exhibit B) for each such group of Accounts.  Bank may blend groups of Accounts in adjacentten (10) point Next Genscore bands together (e.g. 600-609**and 590-599) so long as (x) theratio of Net Credit Sales lost to Net Write-Offs reduced for the group atAccounts in the highest ten (10) point Next Gen score band (e.g., 600-609would be higher than 590-599) of the groups to be blended does not exceed [***]and (y) the total blended rate of Net Credit Sales lost to Net Write Offsreduced does not exceed [***]for the combined groups.  Notwithstandingthe foregoing, Bank may implement changes to Risk Management Policies inrespect of a subgroup of Accounts within an individual ten (10) point NextGen score band whose Net Write Off ratio is greater than [***],if, by utilizing other risk attributes that historically correlate (consistentwith Bank’s past practice) to the likelihood of Net Write Offs, such subgroupof Accounts within such ten (10) point Next Gen score band has a Net WriteOff ratio of less than [***],as set forth in the report provided by HSBC to NMG (Example attached as Exhibit C).

 

(8) (i) willnot result in the closure of Accounts that are current or one paymentdelinquent (currently known as “X days”), unless NMG otherwise agrees;

 

(ii) willnot decrease credit lines on Active Accounts below the current balance or [***], whichever is higher; and

 

(iii) willnot decrease credit lines on Inactive Accounts below [***];and

 

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(C) willnot be made to any Account segment without NMG’s prior approval if Bank haspreviously implemented a change in any Risk Management Policy in respect ofsuch Account segment within the prior 3 months.”

 

3.                                       Section 3.2(g) ofthe Agreement is amended by adding the following clause (vi) as anadditional “Bank Matter” at the end thereof:

 

“(vi) ifat any time during the Term, the Rolling 12 Net Write-Off Ratio is greater than[***]for [***]consecutive calendar months, for so long as the Rolling 12 Net Write-Off Ratioremains greater than [***],changes to Risk Management Policies that are designed to reduce the NetWrite-Off Ratio, provided that such changes will not affect a group of Accountsfor which the historic ratio of (1). Net Credit Sales lost to (2) NetWrite-Offs reduced in respect of each ten (10) point Next Gen score band(e.g. 600-609)is greater than [***] (as set forth in the report provided by HSBC toNMG).  Such report shall be provided toNMG at least 30 days in advance of making any such changes and shalldemonstrate the most recent rolling 3 month authorization after 12 months onbook (Example attached as Exhibit 8) for each such group of Accounts.  Bank may blend groups of Accounts in adjacentten (10) point Next Gen score bands together (e,g, 600-609 and 590-599) solong as (x) the ratio of Net Credit Sales lost to Net Write-Offs reducedfor the group of Accounts in the highest ten (10) point Next Gen scoreband (e,g., 600-609 would be higher than 590-599) of the groups to be blendeddoes not exceed [***] and (y) the total blended rate of Net Credit Saleslost to Net Write Offs reduced does not exceed [***] for the combined groups. Notwithstanding theforegoing,  Bank may implement changes toRisk Management Policies in respect of a subgroup of Accounts within anindividual ten (10) point Next Gen score band whose Net Write Off ratio isgreater than [***], if, by utilizing other risk attributes thathistorically correlate (consistent with Bank’s past practice) to the likelihoodof Net Write Offs, such subgroup of Accounts within such ten (10) pointNext Gen score band has a Net Write Off ratio of less than [***], as set forth in the report provided by HSBC to NMG(Example attached as Exhibit C).”

 

4.                                       Thefollowing shall be added as a new Section 3.4 of the Agreement:

 

“Section 3.4.  Consideration of Change of Terms.  The Management Committee will considerimplementing an additional change of terms during calendar year 2008, with thegoal of creating an additional [***]in annual pre-tax profit improvement for the Program, net of all associatedexpenses. Notwithstanding anything to the contrary in this Article Ill,and excluding any change in terms that may be necessary pursuant to ApplicableLaw (which shall continue to be governed by Section 3.2(g)(ii) ofthis Agreement), unless all members of the Management Committee approve suchadditional calendar year 2008 change of terms, including the terms ofimplementation thereof, such change of terms shall be deemed rejected.  For the avoidance of doubt, and subject tothe immediately preceding sentence (i) no change of terms proposed duringcalendar year 2008 shall constitute an Unapproved Matter or a Bank Matter, (ii) nosuch change of terms proposal shall be subject to the dispute resolutionprocedures of Section 3.2(e)(ii)(B) and, if rejected by any NMGDesignee, each such change of terms proposal shall be deemed rejected by theManagement Committee.”

 

5.                                       Thefollowing shall be added as a new Section 4.6(e) of the Agreement:

 

“EffectiveMarch 2008, the Risk Management Policies are amended as set forth inSchedule 4.6(e), attached hereto.  NMG isallowed to accept the credit risk for any Account affected by the actions takenpursuant to these as well as any other future Risk Management Policy changespursuant to the existing recourse programs between the parties, as set forth inArticle XX of this Agreement, and via the process outlined in the attachedExhibit A to Schedule 4.6(e).”

 

6.                                       Schedule1.1 (f) shall be amended to reflect a mutually agreed upon new High Collarand Low Collar upon the expiration of the High/Low Collar Review Period. If theParties are unable to reach a mutual agreement at the expiration of theHigh/Low Collar Review Period, the existing High Collar and Low Collar meanings

 

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setforth in Schedule 1.1 (f) of the Program Agreement, as amended via theSixth Amendment to the Program Agreement, dated as of July 17, 2007 (“SixthAmendment”), shall continue to apply. For the avoidance of doubt, the High Collarand Low Collar meanings from the Sixth Amendment shall apply during theHigh/Low Collar Review Period.

 

7.                                       Schedule 4.6(c) of the Agreement isamended as follows:

 

(a) bydeleting the “Collections” (Net Write-Off Percentages to Credit Sales) target fromsuch Schedule; and

 

(b) byadding the following paragraph at the end of paragraph (A) thereof:

 

“Notwithstandingthe foregoing provisions of this Schedule, in the event that the Rolling 12 NetWrite-Off Ratio for any two consecutive calendar months is greater than [***],then the Risk Management Targets set forth in this Schedule 4.6(c) shallbe suspended.  Once the Rolling 12 NetWrite-Off Ratio for a calendar month is below [***],the Risk Management Targets set forth in this Schedule 4.6(c) shall beautomatically reinstated (however, if the Roiling 12 Net Write-Off Ratio rangeis between [***]to [***]for [***]consecutive calendar months, the Parties shall meet to discuss reinstatement ofthe Risk Management Targets, timing of such and whether to readjust such RiskManagement Targets further), and HSBC shall have [***] daysto achieve such Risk Management Targets, as they may be adjusted, after suchreinstatement.  If the Risk ManagementTargets have not been met by the end of such [***]-day period, the NMG Companies shall have the right toterminate the Agreement pursuant to Section 15.2(h) thereof.”

 

8.                                       Theattached Schedule 7.1 (e) replaces in its entirety Schedule 7.1 (c) tothe Agreement.

 

9.                                       Thefollowing new Section 7.1 (d) shall be added at the end of Section 7.1:

 

“(d) On each “Report Date” reflected on Schedule 7.1 (d), Bank will deliver to NMG acalculation of (i) the Risk Adjusted Margin, the Net Write-Off Ratio, Variable Break-Even Margin and each componentof each of the foregoing (including, in the case of Gross Financing Income,separately reported amounts in respect of finance charges, late fees and feewaivers), in each case calculated as if the Reference Period were the periodindicated as such in such Schedule and (ii) the dollar amount that wouldbe payable by Bank to NMG (or by NMG to Bank) pursuant to each of Section 9.1(a)(vii) (A) and(B) and 9.1(a)(viii) if such payment were due in respect of thereported period.  Such calculations shallbe in such form and shall reflect such detail with respect to each of theforegoing items, and each component thereof) as shall be mutually agreed uponby the Parties.  The financialinformation set .forth in such reports from HSBC is derived from its GeneralLedger (GL) and/or its supporting financial accounting subsystems.

 

10.                                 Thefollowing shall be added as new Sections 9,1 (a) (vii), (viii) and (ix) ofthe Agreement:

 

“(vii)  Bankwill pay to NMG the following amounts in respect of the RAM Measurement Period,with interim annual payments in respect of the total amount payable (calculatedon an estimated basis based on the relevant Reference Period) being reflectedon and paid pursuant to each Year-End Settlement Sheet, and with the finalpayment in respect of the full RAM Measurement Period being due and payable on [***]:

 

(A)  [***] of the product of (1) the amount, if any, by whichthe Risk Adjusted Margin exceeds [***] times (2) theAverage Gross receivables Amount; provided, however, that, incalculating any payment in respect of the total amount owing by Bank pursuantto this clause (A), there shall be deducted from such payment the net amountpreviously paid by Bank pursuant to this clause (A) (after adding allprevious interim payments and deducting all previous interim refunds paid by NMGto Bank pursuant to the following sentence of this clause (A)).  In the event that the amount owing by Bank toNMG pursuant to this clause (A) is less than the net amount already paidby Bank to NMG pursuant to this clause (A) (after applying this sentence),NMG shall refund to Bank the excess of the net amount previously paid by Bankover the total amount payable by Bank in respect of the RAM Measurement Period(or the relevant Reference Period, as applicable).  For the avoidance of doubt, in no event shallthe total payments by NMG pursuant to this clause (A) exceed the totalamounts received by it from Bank pursuant to this clause (A); and

 

(B)  [***] of the amount, if any, by which the Variable Break-EvenMargin exceeds zero; provided, however, that, in calculating anypayment in respect of the total amount owing by Bank

 

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pursuant to this clause (B), there shall be deducted fromsuch payment the net amount previously paid by Bank pursuant to this clause (B) (afteradding all previous interim payments and deducting all previous interim refundspaid by NMG to Bank pursuant to the following sentence of this clause(B)).  In the event that the amount owingby Bank to NMG pursuant to this clause (B) is less than the net amountalready paid by Bank to NMG pursuant to this clause (B) (after applyingthis sentence), NMG shall refund to Bank the excess of the net amountpreviously paid by Bank over the total amount payable by Bank in respect of theRAM Measurement Period (or the relevant Reference Period, as applicable).  For the avoidance of doubt, in no event shallthe total payments by NMG pursuant to this clause (B) exceed the totalamounts received by it from Bank pursuant to this clause (B).

 

(viii)  NMG will pay to Bank [***] of the Shared Write Off Amount, if any, with respect tothe RAM Measurement Period, with interim annual payments in respect of thetotal amount payable (calculated on an estimated basis based on the relevantReference Period) being reflected on and paid pursuant to each Year-End SettlementSheet, and with the final payment in respect of the full RAM Measurement Periodbeing due and payable on [***], provided, however, that, in calculatingany payment in respect to the total amount owing by NMG pursuant to this clause(viii), there shall be deducted from such payment the net amount previouslypaid by NMG pursuant to this clause (viii) (after adding all previousinterim payments and deducting all previous interim refunds paid by Bank to NMGpursuant to the following sentence of this clause (viii)) in the event that theamount owing by NMG to Bank pursuant to this clause (viii) is less thanthe net amount already paid by NMG to Bank pursuant to this clause (viii) (afterapplying this sentence).  Bank shallrefund to NMG the excess of the net amount previously paid by Bank over thetotal amount payable by Bank in respect of the RAM Measurement Period (or therelevant Reference Period, as applicable). For the avoidance of doubt, in no event shall the total payments by Bankpursuant to this clause (viii) exceed the total amounts received by itfrom NMG pursuant to this clause (viii).

 

(ix)  Setforth on Schedule 9.1(a0(ix), are illustrative calculations of the paymentsdescribed in clauses (vii) and (viii) above.

 

11.                                 Theattached Schedule 9.1(a)(i) shall replace in its entirety Schedule 9.1(a)(i) ofthe Agreement.

 

12.                                 Withinfive (5) business days of the execution of this Seventh Amendment by NMGand Bank, NMG shall dismiss, without prejudice, the proceedings before theDistrict Court in Dallas County, Texas as well as its accompanying temporaryrestraining order (“Lawsuit”).

 

13.                                 Theparties agree that, if either is contacted by the media and/or customersregarding the Lawsuit, that each may state only that the matter has beensatisfactorily resolved.  The partieswill mutually agree upon scripting to address any inquiries by the media and/orcustomers with respect to the February 2008 Change of Terms and anyadditional change in terms.

 

14.                                 Exceptas otherwise modified herein, the terms and conditions of the Agreement remainin full force and effect.

 

AGREED TO AND EXECUTEDon this the 21st day of April, 2008.

 
| **HSBC BANK NEVADA, N.A.** | ** **              | **HSBC PRIVATE LABEL CORPORATION** |
|----------------------------|-------------------------|------------------------------------|
|                       |                    |                               |   |   |
| By:                        | /s/ Eliabeth F. McCombe |                               | By: | /s/ Elizabeth F.  McCombe |
| Its:                       | EVP                     |                               | Its: | VP |

 

 
| **THE NEIMAN MARCUS GROUP, INC.** | ** **                 | **BERGDORF GOODMAN, INC.** |
|-----------------------------------|----------------------------|----------------------------|
|                              |                       |                       |   |   |
| By:                               | /s/  James E. Skinner |                       | By: | /s/  James E.  Skinner |
| Its:                              | EVP & CFO         |                       | Its: | VP |

 

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**Schedule4.6 (e)**

 

**Changesto Risk Management Policies to be Implemented by the end of March 2008**

 
| — | Reduce the credit line  to the balance on accounts with a Next Gen score less than [***] ([***] implementation)                                                                               |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                          |
| — | Reduce the credit line  to the balance on “X day” (i.e., [***] days delinquent) accounts with balances  less than [***] and Next Gen scores less than [***] ([***] implementation). |
|   |                                                                                                                                                                                          |
| — | Reduce the credit line  to the balance on [***] day accounts with balances less than [***] and a Next Gen scores less than [***] ([***] implementation).                                      |
|   |                                                                                                                                                                                          |
| — | Reduce the credit line  to the balance .on all accounts that are [***] &[***] authorizations ([***] implementation).                                                                 |
|   |                                                                                                                                                                                          |
| — | Close all accounts that  are [***] ([***] implementation)                                                                                                                                     |
|   |                                                                                                                                                                                          |
| — | Increase POS cut .off  to [***] In  Store, and [***] Neiman Marcus Direct and Neiman Marcus/Bergdorf  Goodman Online ([***] implementation).                                                  |
|   |                                                                                                                                                                                          |
| — | All accounts that are  noted as [***] and/or  [***] will  be exempted from the foregoing actions (currently known as [***]).                                                                  |

 

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**Exhibit Ato Schedule 4.6(e)**

**RecourseReview Process**

 

Beginning as of theEffective Date, Bank and NMG shall comply with the following Recourse Reviewprocess prior to any Risk Management Policy changes.

 
| **Process  Owner** | ** ** | **Description**                                                                                                                                                                                                                                                                                                                       | ** ** | **Timing**                                                          |
|--------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------|
| Bank               |       | Will provide a report  of Accounts (inactive and active) that would be affected by impending Risk  Management Policy changes. The report will include Account number, block  code(s), Account open date, LTD purchases, YTD purchases, current balance,  credit line, cycle due, and will be sorted from High Balance to Low Balance. |       | 30 days before  implementation of Risk Management Policy changes.   |
|               |       |                                                                                                                                                                                                                                                                                                                                  |       |                                                                |
| NMG                |       | Will review the  Accounts and provide Bank with a list of Accounts that they would like to  take on full recourse, per the Fourth Amendment to the Agreement executed  April 3, 2007.                                                                                                                                            |       | 15 days before  implementation of Risk Management Policy changes.   |
|               |       |                                                                                                                                                                                                                                                                                                                                  |       |                                                                |
| Bank               |       | Bank will flag the  identified Accounts as full recourse using the then current recourse  management procedures. These Accounts will be included in the monthly  recourse portfolio reporting.                                                                                                                                        |       | Within 5 days of  implementation of Risk Management Policy changes. |
|               |       |                                                                                                                                                                                                                                                                                                                                  |       |                                                                |
| Bank               |       | After the initial  implementation, Bank will provide reporting, (not less than quarterly) on any  new Accounts, not previously identified, that will be impacted by previous  changes to Risk Management Policies.                                                                                                                    |       | On Going                                                            |

 

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**SCHEDULE7.1(e)**

**YearlySettlement Sheet**

 

The Yearly SettlementSheet shall set forth:

 

(a)                                  the aggregate of all Joint MarketingCommitment Amounts spent by the NMG Companies in the last Fiscal Month of suchFiscal Year; and

 

(b)                                 the number of In-Store Payments receivedby any of the NMG Companies in the last Fiscal Month of such Fiscal Year;

 

(c)                                  the Finance Charge Reversal Percentagefor such Fiscal Year and the calculation of any amounts due pursuant to Section 4.10(b);

 

(d)                                 the Late Fee Reversal Percentage for suchFiscal Year and the calculation of any amounts due pursuant to Section 4.10(c);

 

(e)                                  Average Private Label Receivables, (ii) AverageInterest Free Receivables and (iii) the Net Yield for such Fiscal Yearcalculated on all Billed Cardholder Debt and the calculation of any amounts duepursuant to Section 4.11; and

 

(f)                                    any other amounts owed to the NMGCompanies as explicitly provided herein or as otherwise agreed by the partiesin writing with line item specificity, which amounts may be netted.

 

(g)                                 The net amount payable by one party tothe other after giving effect to payments owing pursuant to Sections 9.1(a)(vii) and(viii).

 

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**Schedule7.1(d)**

**Reporting**

 

The calculation of RiskAdjusted Margin, the Net-Write-Off Ratio, Variable Break-Even Margin and eachcomponent of the foregoing will begin on [***] and will be measured quarterly(through the end of the RAM Measurement Period) and the payments contemplatedby Sections 9.1(a)(vii) and (viii) shall be settled annually based onthe below:

 
| **Measurement  Period** | ** ** | **Report Date** | ** ** | **Payment Date** |
|-------------------------|------------|-----------------|------------|------------------|
| [***]                   |       | [***]           |       |             |
| [***]                   |       | [***]           |       |             |
| [***]                   |       | [***]           |       |             |
| [***]                   |       | [***]           |       | [***]            |
| [***]                   |       | [***]           |       |             |
| [***]                   |       | [***]           |       |             |
| [***]                   |       | [***]           |       |             |
| [***]                   |       | [***]           |       | [***]            |
| [***]                   |       | [***]           |       | [***]            |

 

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** **

**Schedule 9.1 (a)(i)**

 

**Daily NMGCompensation**

 

Bank shall pay to NMG anamount equal to the aggregate for all Private Label Accounts and Non-CardPayment Plans of the following:

 

For each such PrivateLabel Account or Non-Card Payment Plan, the product of (A) the sum of (x) theProgram Fee Percentage applicable to such Account and (y) the ServicingFee Percentage and (B) Net Credit Sales under such Account reflected inall NMG Charge Transaction Data required to be paid for by Bank on suchBusiness Day pursuant to Section 8.4.

 

Determination of ProgramFee Percentage

 

The “Program FeePercentage” with respect to each Account means [***].

 

Determination ofServicing Fee Percentage

 

The “Servicing FeePercentage” means [***].  The ServicingFee Percentage applicable to all Accounts shall be decreased on the date thatBank begins providing the following Services to the Program:

 
| **Service**                           | ** ** | **Amount** | ** ** | **Definition**                                                                         |
|---------------------------------------|------------|------------|------------|----------------------------------------------------------------------------------------|
| **General Late Stage Collections**    |       | [***]      |       | Bank is collecting  balances which are at least [***] days past their due date         |
| **Universal Agents to Bank  Payroll** |       |       |       | Bank is employing the  Persons responsible for customer service and related activities |
| Early  Stage Collections              |       | [***]      |       | Bank is collecting  balances which are less than [***] days past their due date        |
| Customer  Service Services            |       | [***]      |       | Bank is staffing the  call center and resolving customer and store inquiries           |
| Credit  Processing Services           |       | [***]      |       | Bank is processing and  decisioning new applications and pending sale transaction      |

 

During the Term, whileNMG is providing the Services set forth above, a portion of some of theServices may be subject to sales and use tax in Texas.  Refer to Section 19.6 for treatment ofsales and use tax on these Services.

 

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**Schedule9.1(a)(ix****)**

**IllustrativeCalculations**

 

**[***]**

 
| Average  Gross Receivables                    |   | [***]  |   |
|-----------------------------------------------|--------|--------|--------|
|                                          |   |   |   |
| Net  Credit Sales                             |   | [***]  |   |
| Number  of Average Active Accounts            |   | [***]  |   |
|                                          |   |   |   |
| Gross  Finance Income                         |   | [***]  |   |
|                                          |   |   |   |
| Less  Cost of Funds (actual internal charge)  |   | [***]  |   |
| Less  Net Write-Offs                          |   | [***]  |   |
|                                          |   | [***]  |   |
|                                          |   | [***]  |   |
|                                          |   |   |   |
| Increased  late fee due to 6th amendment |   |   |   |
| Adjust                                        |   | [***]  |   |
|                                          |   | [***]  |   |
|                                          |   |   |   |
| Risk  Adjusted Margin                         |   | [***]  |   |

 

**VariableMargin**

 
| Gross  Finance Income**             |   | [***] |   |
|-------------------------------------|--------|-------|--------|
| Less  Cost of Funds*                |   | [***] |   |
| Less  Net Write-Offs                |   | [***] |   |
| Less  All Payments Bank paid to NMG |   | [***] |   |
| Less  Fraud Loss                    |   | [***] |   |
| Less  marketing Expense             |   | [***] |   |
| Less  Standard Variable Expenses    |   | [***] |   |
| Variable  Margin                    |   | [***] |   |

 

----

*  Avg1 month Libor for 2007 + [***] = [***] times [***] of Gross receivables([***]).

**  Includesincome from the Late Fee Change 6th amendment for Nov & Dec.

 

----

 

**Exampleof 2009 Year End Settlement**

 
| Assumptions  for Calculations                    |   |   |   |
|--------------------------------------------------|--------|--------|--------|
| Average  Gross Receivables                       |   | [***]  |   |
| Net  Credit Sales                                |   | [***]  |   |
| Number  of Average Active Accounts               |   | [***]  |   |
|                                             |   |   |   |
| Gross  Finance Income                            |   | [***]  |   |
| 1-Month-LIBOR                                    |   | [***]  |   |
| Net  Write-Offs at [***] of Net Credit Sales     |   | [***]  |   |
| Recoveries                                       |   | [***]  |   |
| Fraud  Loss                                      |   | [***]  |   |
| Marketing  Expense                               |   | [***]  |   |
| Payment  to NMG for Processing In-Store Payments |   | [***]  |   |

 

**Schedule 1**

 
| Gross  Receivables to Write-Off      |   | [***]  |   |
|--------------------------------------|--------|--------|--------|
| Less  Recoveries                     |   | [***]  |   |
| Net  Write-Offs                      |   | [***]  |   |
|                                 |   |   |   |
| [***]  of Credit Sales               |   | [***]  |   |
|                                 |   |   |   |
| Shared  Net Write-Offs               |   | [***]  |   |
|                                 |   |   |   |
| NMG  Payable to Bank [***] of Shared |   | [***]  |   |

 

**Schedule 2**[***]**RAM Sharing**

 
| Gross  Finance Income                     |   | [***]  |   |
|-------------------------------------------|--------|--------|--------|
| Plus  NMG Paid to Bank Shared W/O Amount  |   | [***]  |   |
| Less  Cost of Funds (1)                   |   | [***]  |   |
| Less  Net Write-Offs                      |   | [***]  |   |
| Risk-Adjusted  Revenue                    |   | [***]  |   |
|                                      |   |   |   |
| Risk-Adjusted  Margin                     |   | [***]  |   |
|                                      |   | [***]  |   |
|                                      |   | [***]  |   |
| Excess  Available for RAM Sharing         |   | [***]  |   |
|                                      |   |   |   |
| Bank  Payable to NMG of [***] RAM Sharing |   | [***]  |   |

 

**Schedule 3 Variable Break-Even**

 
| Gross  Finance Income                                   |   | [***]  |   |
|---------------------------------------------------------|--------|--------|--------|
| NMG  Payable to Bank [***] of Shared                    |   | [***]  |   |
| Less  Cost of Funds(1)                                  |   | [***]  |   |
| Less  Net Write-Offs                                    |   | [***]  |   |
| Less  All Payments Bank Paid to NMG (2)                 |   | [***]  |   |
| Less  Fraud Loss                                        |   | [***]  |   |
| Less  Marketing Expense                                 |   | [***]  |   |
| Less  Standard Variable Expenses (3)                    |   | [***]  |   |
| Variable  Margin                                        |   | [***]  |   |
|                                                    |   |   |   |
| Bank  Payable to NMG of [***] Variable Break Even       |   | [***]  |   |
| (1)                                                     |   |   |   |
| 1  Month LIBOR times [***] of Average Gross Receivables |   | [***]  |   |
| [***]  times [***] of Average Gross Receivables         |   | [***]  |   |
| Cost  of Funds                                          |   | [***]  |   |

 

----

 
| (2)                                              |   |   |   |
|--------------------------------------------------|--------|--------|--------|
| [***]  NMG Program Fee                           |   | [***]  |   |
| [***]  Servicing Fee                             |   | [***]  |   |
| Payment  to NMG for Processing In-Store Payments |   | [***]  |   |
| Bank  Payable to NMG of [***] RAM Sharing        |   | [***]  |   |
|                                             |   | [***]  |   |
| (3)                                              |   |   |   |
| Number  of Average Active Accounts               |   | [***]  |   |
| [***]  cost per average account                  |   | [***]  |   |

 

----

 

**EXHIBIT B**

 

Authorization 12Month On Book (MOB) Report — Next Gen Score

 
| **[***]** | ** ** |
|-----------|------------|
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   |

 
| **[***]** | ** ** | **[***]** | ** ** |
|-----------|------------|-----------|------------|
| **[***]** | ** ** | **[***]** | ** ** | **[***]** | ** ** | **[***]** | ** ** | ** ** | ** ** |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   | [***] |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | $         | [***]      |   | $ | [***] |   | [***] |   |   |   |

 

----

** **

**EXHIBIT C**

 

Authorizations 12 Months OnBook (MOB) Report-Next Gen Score 600-609 (EXAMPLE ONLY)

 
| **[***]** | ** ** |
|-----------|------------|
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |
|      |       | [***] |   |   |   |   |   |   |   |

 
| **[***]** | ** ** |
|-----------|------------|
| **[***]** | ** ** | **[***]** | ** ** | **[***]** | ** ** | **[***]** | ** ** | **[***]** | ** ** | ** ** | ** ** |
| [***]     |       | $ | [***] |   | [***] |   | $ | [***] |   | [***] |   |   |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |   |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |   |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |   |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |   |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |   |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   | [***] |   |
| [***]     |       | [***] |   | [***] |   | [***] |   | [***] |   |   |   |
| [***]     |       |   |   |   |   |   |   |   |   |   |   |
|           |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

----

*Sample Attribute

**Sample Band

 

----