A group G is locally graded if every finitely generated nontrivial subgroup of G has a nontrivial finite image. Let N (2, k)* denote the class of groups in which every infinite subset contains a pair of elements that generate a nilpotent subgroup of class at most k. We show that if G is a finitely generated locally graded N (2, k)*-group, then there is a positive integer c depending only on k such that G/Zc (G) is finite.