Neiman Marcus 2008 Annual Report Download - page 777

(C) will not be made to any Account segment without NMG's prior approval if Bank has previously implemented a change in
any Risk Management Policy in respect of such Account segment within the prior 3 months."
3. Section 3.2(g) of the Agreement is amended by adding the following clause (vi) as an additional "Bank Matter" at the end
thereof:
"(vi) if at 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 Ratio remains greater than [***], changes to Risk Management Policies
that are designed to reduce the Net Write-Off Ratio, provided that such changes will not affect a group of Accounts for which
the historic ratio of (1). Net Credit Sales lost to (2) Net Write-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 to NMG). Such report shall be
provided to NMG at least 30 days in advance of making any such changes and shall demonstrate the most recent rolling 3
month authorization after 12 months on book (Example attached as Exhibit 8) for each such group of Accounts. Bank may
blend groups of Accounts in adjacent ten (10) point Next Gen score bands together (e,g, 600-609 and 590-599) so long as
(x) the ratio of Net Credit Sales lost to Net Write-Offs reduced for the group of Accounts in the highest ten (10) point Next
Gen score band (e,g., 600-609 would 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 Offs reduced does not exceed [***] for the combined groups.
Notwithstanding the foregoing, Bank may implement changes to Risk Management Policies in respect of a subgroup of
Accounts within an individual ten (10) point Next Gen score band whose Net Write Off ratio is greater than [***], if, by
utilizing other risk attributes that historically correlate (consistent with Bank's past practice) to the likelihood of Net Write
Offs, such subgroup of Accounts within such ten (10) point Next 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. The following shall be added as a new Section 3.4 of the Agreement:
"Section 3.4. Consideration of Change of Terms. The Management Committee will consider implementing an additional
change of terms during calendar year 2008, with the goal of creating an additional [***]in annual pre-tax profit improvement
for the Program, net of all associated expenses. Notwithstanding anything to the contrary in this Article Ill, and excluding any
change in terms that may be necessary pursuant to Applicable Law (which shall continue to be governed by Section 3.2(g)
(ii) of this Agreement), unless all members of the Management Committee approve such additional calendar year 2008
change of terms, including the terms of implementation thereof, such change of terms shall be deemed rejected. For the
avoidance of doubt, and subject to the immediately preceding sentence (i) no change of terms proposed during calendar year
2008 shall constitute an Unapproved Matter or a Bank Matter, (ii) no such change of terms proposal shall be subject to the
dispute resolution procedures of Section 3.2(e)(ii)(B) and, if rejected by any NMG Designee, each such change of terms
proposal shall be deemed rejected by the Management Committee."
5. The following shall be added as a new Section 4.6(e) of the Agreement:
"Effective March 2008, the Risk Management Policies are amended as set forth in Schedule 4.6(e), attached hereto. NMG is
allowed to accept the credit risk for any Account affected by the actions taken pursuant to these as well as any other future
Risk Management Policy changes pursuant to the existing recourse programs between the parties, as set forth in Article XX
of this Agreement, and via the process outlined in the attached Exhibit A to Schedule 4.6(e)."
6. Schedule 1.1 (f) shall be amended to reflect a mutually agreed upon new High Collar and Low Collar upon the expiration of
the High/Low Collar Review Period. If the Parties are unable to reach a mutual agreement at the expiration of the High/Low
Collar Review Period, the existing High Collar and Low Collar meanings