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(Multicurrency--Cross Border)

                                    ISDA(R)

                 International Swap Dealers Association. Inc.
                               MASTER AGREEMENT


                        dated as of      July 19, 2001
                                       ----------------

MORGAN GUARANTY TRUST COMPANY        and        SPIEGEL CREDIT CARD MASTER NOTE
OF NEW YORK                                     TRUST



-----------------------------                   --------------------------------

have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows:--

1.   Interpretation

(a)  Definitions.  The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.

(b)  Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.

(c)  Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.

2.   Obligations

(a)  General Conditions.

     (i)   Each party will make each payment or delivery specified in each
     Confirmation to be made by it, subject to the other provisions of this
     Agreement.

     (ii)  Payments under this Agreement will be made on the due date for value
     on that date in the place of the account specified in the relevant
     Confirmation or otherwise pursuant to this Agreement, in freely
     transferable funds and in the manner customary for payments in the required
     currency. Where settlement is by delivery (that is, other than by payment),
     such delivery will be made for receipt on the due date in the manner
     customary for the relevant obligation unless otherwise specified in the
     relevant Confirmation or elsewhere in this Agreement.

     (iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
     the condition precedent that no Event of Default or Potential Event of
     Default with respect to the other party has occurred and is continuing, (2)
     the condition precedent that no Early Termination Date in respect of the
     relevant Transaction has occurred or been effectively designated and (3)
     each other applicable condition precedent specified in this Agreement.
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(b)  Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.

(c)  Netting.  If on any date amounts would otherwise be payable:--
     (i)  in the same currency; and
     (ii) in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.

(d)  Deduction or Withholding for Tax.

     (i) Gross-Up. All payments under this Agreement will be made without any
     deduction or withholding for or on account of any Tax unless such deduction
     or withholding is required by any applicable law, as modified by the
     practice of any relevant governmental revenue authority, then in effect. If
     a party is so required to deduct or withhold, then that party ("X") will:--

          (1)  promptly notify the other party ("Y") of such requirement;

          (2)  pay to the relevant authorities the full amount required to be
          deducted or withheld (including the full amount required to be
          deducted or withheld from any additional amount paid by X to Y under
          this Section 2(d)) promptly upon the earlier of determining that such
          deduction or withholding is required or receiving notice that such
          amount has been assessed against Y;

          (3)  promptly forward to Y an official receipt (or a certified copy),
          or other documentation reasonably acceptable to Y, evidencing such
          payment to such authorities; and

          (4)  if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
          payment to which Y is otherwise entitled under this Agreement, such
          additional amount as is necessary to ensure that the net amount
          actually received by Y (free and clear of Indemnifiable Taxes, whether
          assessed against X or Y) will equal the full amount Y would have
          received had no such deduction or withholding been required. However,
          X will not be required to pay any additional amount to Y to the extent
          that it would not be required to be paid but for:--

               (A) the failure by Y to comply with or perform any agreement
               contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

               (B) the failure of a representation made by Y pursuant to Section
               3(f) to be accurate and true unless such failure would not have
               occurred but for (I) any action taken by a taxing authority, or
               brought in a court of competent jurisdiction, on or after the
               date on which a Transaction is entered into (regardless of
               whether such action is taken or brought with respect to a party
               to this Agreement) or (II) a Change in Tax Law.

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     (ii) Liability.  If:--

               (1) X is required by any applicable law, as modified by the
               practice of any relevant governmental revenue authority, to make
               any deduction or withholding in respect of which X would not be
               required to pay an additional amount to Y under Section
               2(d)(i)(4);

               (2)  X does not so deduct or withhold; and

               (3)  a liability resulting from such Tax is assessed directly
                    against X,

     then, except to the extent Y has satisfied or then satisfies the liability
     resulting from such Tax, Y will promptly pay to X the amount of such
     liability (including any related liability for interest, but including any
     related liability for penalties only if Y has failed to comply with or
     perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e)  Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.

3.  Representations

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:

(a)  Basic Representations.

     (i)   Status.  It is duly organised and validly existing under the laws of
     the jurisdiction of its organisation or incorporation and, if relevant
     under such laws, in good standing;

     (ii)  Powers.  It has the power to execute this Agreement and any other
     documentation relating to this Agreement to which it is a party, to deliver
     this Agreement and any other documentation relating to this Agreement that
     it is required by this Agreement to deliver and to perform its obligations
     under this Agreement and any obligations it has under any Credit Support
     Document to which it is a party and has taken all necessary action to
     authorise such execution, delivery and performance;

     (iii) No Violation or Conflict.  Such execution, delivery and performance
     do not violate or conflict with any law applicable to it, any provision of
     its constitutional documents, any order or judgment of any court or other
     agency of government applicable to it or any of its assets or any
     contractual restriction binding on or affecting it or any of its assets;

     (iv)  Consents.  All governmental and other consents that are required to
     have been obtained by it with respect to this Agreement or any Credit
     Support Document to which it is a party have been obtained and are in full
     force and effect and all conditions of any such consents have been complied
     with; and

     (v)   Obligations Binding.  Its obligations under this Agreement and any
     Credit Support Document to which it is a party constitute its legal, valid
     and binding obligations, enforceable in accordance with their respective
     terms (subject to applicable bankruptcy, reorganisation, insolvency,
     moratorium or similar laws affecting creditors' rights generally and
     subject, as to enforceability, to equitable principles of general
     application (regardless of whether enforcement is sought in a proceeding in
     equity or at law)).

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(b)  Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.

(c)  Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.

(d)  Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

(e)  Payer Tax Representation.  Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.

(f)  Payee Tax Representations.  Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and
true.

4.   Agreements

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--

(a)  Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--

     (i)   any forms, documents or certificates relating to taxation specified
     in the Schedule or any Confirmation;

     (ii)  any other documents specified in the Schedule or any Confirmation;
     and

     (iii) upon reasonable demand by such other party, any form or document that
     may be required or reasonably requested in writing in order to allow such
     other party or its Credit Support Provider to make a payment under this
     Agreement or any applicable Credit Support Document without any deduction
     or withholding for or on account of any Tax or with such deduction or
     withholding at a reduced rate (so long as the completion, execution or
     submission of such form or document would not materially prejudice the
     legal or commercial position of the party in receipt of such demand), with
     any such form or document to be accurate and completed in a manner
     reasonably satisfactory to such other party and to be executed and to be
     delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b)  Maintain Authorisations.  It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.

(c)  Comply with Laws.  It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d)  Tax Agreement.  It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.

(e)  Payment of Stamp Tax.  Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,

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organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.


5.   Events of Default and Termination Events

(a)  Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--

     (i)   Failure to Pay or Deliver. Failure by the party to make, when due,
     any payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
     required to be made by it if such failure is not remedied on or before the
     third Local Business Day after notice of such failure is given to the
     party;

     (ii)  Breach of Agreement.  Failure by the party to comply with or perform
     any agreement or obligation (other than an obligation to make any payment
     under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
     notice of a Termination Event or any agreement or obligation under Section
     4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
     in accordance with this Agreement if such failure is not remedied on or
     before the thirtieth day after notice of such failure is given to the
     party;

     (iii) Credit Support Default.

           (1)  Failure by the party or any Credit Support Provider of such
           party to comply with or perform any agreement or obligation to be
           complied with or performed by it in accordance with any Credit
           Support Document if such failure is continuing after any applicable
           grace period has elapsed;

           (2)  the expiration or termination of such Credit Support Document or
           the failing or ceasing of such Credit Support Document to be in full
           force and effect for the purpose of this Agreement (in either case
           other than in accordance with its terms) prior to the satisfaction of
           all obligations of such party under each Transaction to which such
           Credit Support Document relates without the written consent of the
           other party; or

           (3)  the party or such Credit Support Provider disaffirms, disclaims,
           repudiates or rejects, in whole or in part, or challenges the
           validity of, such Credit Support Document;

     (iv)  Misrepresentation. A representation (other than a representation
     under Section 3(e) or (f)) made or repeated or deemed to have been made or
     repeated by the party or any Credit Support Provider of such party in this
     Agreement or any Credit Support Document proves to have been incorrect or
     misleading in any material respect when made or repeated or deemed to have
     been made or repeated;

     (v)   Default under Specified Transaction.  The party, any Credit Support
     Provider of such party or any applicable Specified Entity of such party (1)
     defaults under a Specified Transaction and, after giving effect to any
     applicable notice requirement or grace period, there occurs a liquidation
     of, an acceleration of obligations under, or an early termination of, that
     Specified Transaction, (2) defaults, after giving effect to any applicable
     notice requirement or grace period, in making any payment or delivery due
     on the last payment, delivery or exchange date of, or any payment on early
     termination of, a Specified Transaction (or such default continues for at
     least three Local Business Days if there is no applicable notice
     requirement or grace period) or (3) disaffirms, disclaims, repudiates or
     rejects, in whole or in part, a Specified Transaction (or such action is
     taken by any person or entity appointed or empowered to operate it or act
     on its behalf);

     (vi)  Cross Default.  If "Cross Default" is specified in the Schedule as
     applying to the party, the occurrence or existence of (1) a default, event
     of default or other similar condition or event (however

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     described) in respect of such party, any Credit Support Provider of such
     party or any applicable Specified Entity of such party under one or more
     agreements or instruments relating to Specified Indebtedness of any of them
     (individually or collectively) in an aggregate amount of not less than the
     applicable Threshold Amount (as specified in the Schedule) which has
     resulted in such Specified Indebtedness becoming, or becoming capable at
     such time of being declared, due and payable under such agreements or
     instruments, before it would otherwise have been due and payable or (2) a
     default by such party, such Credit Support Provider or such Specified
     Entity (individually or collectively) in making one or more payments on the
     due date thereof in an aggregate amount of not less than the applicable
     Threshold Amount under such agreements or instruments (after giving effect
     to any applicable notice requirement or grace period);

     (vii)  Bankruptcy. The party, any Credit Support Provider of such party or
     any applicable Specified Entity of such party:--

            (1) is dissolved (other than pursuant to a consolidation,
            amalgamation or merger); (2) becomes insolvent or is unable to pay
            its debts or fails or admits in writing its inability generally to
            pay its debts as they become due; (3) makes a general assignment,
            arrangement or composition with or for the benefit of its creditors;
            (4) institutes or has instituted against it a proceeding seeking a
            judgment of insolvency or bankruptcy or any other relief under any
            bankruptcy or insolvency law or other similar law affecting
            creditors' rights, or a petition is presented for its winding-up or
            liquidation, and, in the case of any such proceeding or petition
            instituted or presented against it, such proceeding or petition (A)
            results in a judgment of insolvency or bankruptcy or the entry of an
            order for relief or the making of an order for its winding-up or
            liquidation or (B) is not dismissed, discharged, stayed or
            restrained in each case within 30 days of the institution or
            presentation thereof; (5) has a resolution passed for its winding-
            up, official management or liquidation (other than pursuant to a
            consolidation, amalgamation or merger); (6) seeks or becomes subject
            to the appointment of an administrator, provisional liquidator,
            conservator, receiver, trustee, custodian or other similar official
            for it or for all or substantially all its assets; (7) has a secured
            party take possession of all or substantially all its assets or has
            a distress, execution, attachment, sequestration or other legal
            process levied, enforced or sued on or against all or substantially
            all its assets and such secured party maintains possession, or any
            such process is not dismissed, discharged, stayed or restrained, in
            each case within 30 days thereafter; (8) causes or is subject to any
            event with respect to it which, under the applicable laws of any
            jurisdiction, has an analogous effect to any of the events specified
            in clauses (1) to (7) (inclusive); or (9) takes any action in
            furtherance of, or indicating its consent to, approval of, or
            acquiescence in, any of the foregoing acts; or

     (viii) Merger Without Assumption. The party or any Credit Support Provider
     of such party consolidates or amalgamates with, or merges with or into, or
     transfers all or substantially all its assets to, another entity and, at
     the time of such consolidation, amalgamation, merger or transfer:--

            (1)  the resulting, surviving or transferee entity fails to assume
            all the obligations of such party or such Credit Support Provider
            under this Agreement or any Credit Support Document to which it or
            its predecessor was a party by operation of law or pursuant to an
            agreement reasonably satisfactory to the other party to this
            Agreement; or

            (2)  the benefits of any Credit Support Document fail to extend
            (without the consent of the other party) to the performance by such
            resulting, surviving or transferee entity of its obligations under
            this Agreement.

(b)  Termination Events.  The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event

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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--

     (i)   Illegality.  Due to the adoption of, or any change in, any applicable
     law after the date on which a Transaction is entered into, or due to the
     promulgation of, or any change in, the interpretation by any court,
     tribunal or regulatory authority with competent jurisdiction of any
     applicable law after such date, it becomes unlawful (other than as a result
     of a breach by the party of Section 4(b)) for such party (which will be the
     Affected Party):--

           (1) to perform any absolute or contingent obligation to make a
           payment or delivery or to receive a payment or delivery in respect of
           such Transaction or to comply with any other material provision of
           this Agreement relating to such Transaction; or

           (2) to perform, or for any Credit Support Provider of such party to
           perform, any contingent or other obligation which the party (or such
           Credit Support Provider) has under any Credit Support Document
           relating to such Transaction;

     (ii)  Tax Event. Due to (x) any action taken by a taxing authority, or
     brought in a court of competent jurisdiction, on or after the date on which
     a Transaction is entered into (regardless of whether such action is taken
     or brought with respect to a party to this Agreement) or (y) a Change in
     Tax Law, the party (which will be the Affected Party) will, or there is a
     substantial likelihood that it will, on the next succeeding Scheduled
     Payment Date (1) be required to pay to the other party an additional amount
     in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
     respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
     payment from which an amount is required to be deducted or withheld for or
     on account of a Tax (except in respect of interest under Section 2(e),
     6(d)(ii) or 6(e)) and no additional amount is required to be paid in
     respect of such Tax under Section 2(d)(i)(4) (other than by reason of
     Section 2(d)(i)(4)(A) or (B));

     (iii) Tax Event Upon Merger.  The party (the "Burdened Party") on the next
     succeeding Scheduled Payment Date will either (1) be required to pay an
     additional amount in respect of an Indemnifiable Tax under Section
     2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
     6(e)) or (2) receive a payment from which an amount has been deducted or
     withheld for or on account of any Indemnifiable Tax in respect of which the
     other party is not required to pay an additional amount (other than by
     reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
     party consolidating or amalgamating with, or merging with or into, or
     transferring all or substantially all its assets to, another entity (which
     will be the Affected Party) where such action does not constitute an event
     described in Section 5(a)(viii);

     (iv)  Credit Event Upon Merger.  If "Credit Event Upon Merger" is specified
     in the Schedule as applying to the party, such party ("X"), any Credit
     Support Provider of X or any applicable Specified Entity of X consolidates
     or amalgamates with, or merges with or into, or transfers all or
     substantially all its assets to, another entity and such action does not
     constitute an event described in Section 5(a)(viii) but the
     creditworthiness of the resulting, surviving or transferee entity is
     materially weaker than that of X, such Credit Support Provider or such
     Specified Entity, as the case may be, immediately prior to such action
     (and, in such event, X or its successor or transferee, as appropriate, will
     be the Affected Party); or

     (v)   Additional Termination Event.  If any "Additional Termination Event"
     is specified in the Schedule or any Confirmation as applying, the
     occurrence of such event (and, in such event, the Affected Party or
     Affected Parties shall be as specified for such Additional Termination
     Event in the Schedule or such Confirmation).

(c)  Event of Default and Illegality.  If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.

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6.   Early Termination

(a)  Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b)  Right to Terminate Following Termination Event.

     (i)   Notice.  If a Termination Event occurs, an Affected Party will,
     promptly upon becoming aware of it, notify the other party, specifying the
     nature of that Termination Event and each Affected Transaction and will
     also give such other information about that Termination Event as the other
     party may reasonably require.

     (ii)  Transfer to Avoid Termination Event.  If either an Illegality under
     Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
     Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
     Affected Party, the Affected Party will, as a condition to its right to
     designate an Early Termination Date under Section 6(b)(iv), use all
     reasonable efforts (which will not require such party to incur a loss,
     excluding immaterial, incidental expenses) to transfer within 20 days after
     it gives notice under Section 6(b)(i) all its rights and obligations under
     this Agreement in respect of the Affected Transactions to another of its
     Offices or Affiliates so that such Termination Event ceases to exist.

     If the Affected Party is not able to make such a transfer it will give
     notice to the other party to that effect within such 20 day period,
     whereupon the other party may effect such a transfer within 30 days after
     notice is given under Section 6(b)(i).

     Any such transfer by a party under this Section 6(b)(ii) will be subject to
     and conditional upon the prior written consent of the other party, which
     consent will not be withheld if such other party's policies in effect at
     such time would permit it to enter into transactions with the transferee on
     the terms proposed.

     (iii) Two Affected Parties.  If an Illegality under Section 5(b)(i)(1) or
     a Tax Event occurs and there are two Affected Parties, each party will use
     all reasonable efforts to reach agreement within 30 days after notice
     thereof is given under Section 6(b)(i) on action to avoid that Termination
     Event.

     (iv)   Right to Terminate. If:--

            (1)  a transfer under Section 6(b)(ii) or an agreement under Section
            6(b)(iii), as the case may be, has not been effected with respect to
            all Affected Transactions within 30 days after an Affected Party
            gives notice under Section 6(b)(i); or

            (2)  an Illegality under Section 5(b)(i)(2), a Credit Event Upon
            Merger or an Additional Termination Event occurs, or a Tax Event
            Upon Merger occurs and the Burdened Party is not the Affected Party,

     either party in the case of an Illegality, the Burdened Party in the case
     of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
     or an Additional Termination Event if there is more than one Affected
     Party, or the party which is not the Affected Party in the case of a Credit
     Event Upon Merger or an Additional Termination Event if there is only one
     Affected Party may, by not more than 20 days notice to the other party and
     provided that the relevant Termination Event is then

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     continuing, designate a day not earlier than the day such notice is
     effective as an Early Termination Date in respect of all Affected
     Transactions.

(c)  Effect of Designation.

     (i)  If notice designating an Early Termination Date is given under Section
     6(a) or (b), the Early Termination Date will occur on the date so
     designated, whether or not the relevant Event of Default or Termination
     Event is then continuing.

     (ii) Upon the occurrence or effective designation of an Early Termination
     Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
     respect of the Terminated Transactions will be required to be made, but
     without prejudice to the other provisions of this Agreement. The amount if
     any, payable in respect of an Early Termination Date shall be determined
     pursuant to Section 6(e).

(d)  Calculations.

     (i)  Statement.  On or as soon as reasonably practicable following the
     occurrence of an Early Termination Date, each party will make the
     calculations on its part, if any, contemplated by Section 6(e) and will
     provide to the other party a statement (1) showing, in reasonable detail,
     such calculations (including all relevant quotations and specifying any
     amount payable under Section 6(e)) and (2) giving details of the relevant
     account to which any amount payable to it is to be paid.  In the absence of
     written confirmation from the source of a quotation obtained in determining
     a Market Quotation, the records of the party obtaining such quotation will
     be conclusive evidence of the existence and accuracy of such quotation.

     (ii)  Payment Date.  An amount calculated as being due in respect of any
     Early Termination Date under Section 6(e) will be payable on the day that
     notice of the amount payable is effective (in the case of an Early
     Termination Date which is designated or occurs as a result of an Event of
     Default) and on the day which is two Local Business Days after the day on
     which notice of the amount payable is effective (in the case of an Early
     Termination Date which is designated as a result of a Termination Event).
     Such amount will be paid together with (to the extent permitted under
     applicable law) interest thereon (before as well as after judgment) in the
     Termination Currency, from (and including) the relevant Early Termination
     Date to (but excluding) the date such amount is paid, at the Applicable
     Rate. Such interest will be calculated on the basis of daily compounding
     and the actual number of days elapsed.

(e)  Payments on Early Termination. If an Early Termination Date occurs. the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.

     (i)  Events of Default.  If the Early Termination Date results from an
     Event of Default:--

        (1)  First Method and Market Quotation.  If the First Method and Market
        Quotation apply, the Defaulting Party will pay to the Non-defaulting
        Party the excess, if a positive number, of (A) the sum of the Settlement
        Amount (determined by the Non-defaulting Party) in respect of the
        Terminated Transactions and the Termination Currency Equivalent of the
        Unpaid Amounts  owing to the Non-defaulting Party over (B) the
        Termination Currency Equivalent of the Unpaid Amounts owing to the
        Defaulting Party.

        (2)  First Method and Loss.  If the First Method and Loss apply, the
        Defaulting Party will pay to the Non-defaulting Party, if a positive
        number, the Non-defaulting Party's Loss in respect of this Agreement.

        (3)  Second Method and Market Quotation.  If the Second Method and
        Market Quotation apply, an amount will be payable equal to (A) the sum
        of the Settlement Amount (determined by the

                                       9
<PAGE>

        Non-defaulting Party) in respect of the Terminated Transactions and the
        Termination Currency Equivalent of the Unpaid Amounts owing to the Non-
        defaulting Party less (B) the Termination Currency Equivalent of the
        Unpaid Amounts owing to the Defaulting Party. If that amount is a
        positive number, the Defaulting Party will pay it to the Non-defaulting
        Party; if it is a negative number, the Non-defaulting Party will pay the
        absolute value of that amount to the Defaulting Party.

        (4) Second Method and Loss. If the Second Method and Loss apply, an
        amount will be payable equal to the Non-defaulting Party's Loss in
        respect of this Agreement. If that amount is a positive number, the
        Defaulting Party will pay it to the Non-defaulting Party; if it is a
        negative number, the Non-defaulting Party will pay the absolute value of
        that amount to the Defaulting Party.

     (ii)   Termination Events.  If the Early Termination Date results from a
            Termination Event:--

            (1)  One Affected Party.  If there is one Affected Party, the amount
            payable will be determined in accordance with Section 6(e)(i)(3), if
            Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
            except that, in either case, references to the Defaulting Party and
            to the Non-defaulting Party will be deemed to be references to the
            Affected Party and the party which is not the Affected Party,
            respectively, and, if Loss applies and fewer than all the
            Transactions are being terminated, Loss shall be calculated in
            respect of all Terminated Transactions.

            (2)  Two Affected Parties. If there are two Affected Parties:--

                 (A)  if Market Quotation applies, each party will determine a
                 Settlement Amount in respect of the Terminated Transactions,
                 and an amount will be payable equal to (I) the sum of (a) one-
                 half of the difference between the Settlement Amount of the
                 party with the higher Settlement Amount ("X") and the
                 Settlement Amount of the party with the lower Settlement Amount
                 ("Y") and (b) the Termination Currency Equivalent of the Unpaid
                 Amounts owing to X less (II) the Termination Currency
                 Equivalent of the Unpaid Amounts owing to Y; and

                 (B)  if Loss applies, each party will determine its Loss in
                 respect of this Agreement (or, if fewer than all the
                 Transactions are being terminated, in respect of all Terminated
                 Transactions) and an amount will be payable equal to one-half
                 of the difference between the Loss of the party with the higher
                 Loss ("X") and the Loss of the party with the lower Loss ("Y").

            If the amount payable is a positive number, Y will pay it to X; if
            it is a negative number, X will pay the absolute value of that
            amount to Y.

     (iii) Adjustment for Bankruptcy.  In circumstances where an Early
     Termination Date occurs because "Automatic Early Termination" applies in
     respect of a party, the amount determined under this Section 6(e) will be
     subject to such adjustments as are appropriate and permitted by law to
     reflect any payments or deliveries made by one party to the other under
     this Agreement (and retained by such other party) during the period from
     the relevant Early Termination Date to the date for payment determined
     under Section 6(d)(ii).

     (iv)  Pre-estimate.  The parties agree that if Market Quotation applies an
     amount recoverable under this Section 6(e) is a reasonable pre-estimate of
     loss and not a penalty. Such amount is payable for the loss of bargain and
     the loss of protection against future risks and except as otherwise
     provided in this Agreement neither party will be entitled to recover any
     additional damages as a consequence of such losses.

                                       10
<PAGE>

7.   Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--

(a)  a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

(b)  a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8.   Contractual Currency

(a)  Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into this Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.

(b)  Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.

(c ) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.

(d)  Evidence of loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.

                                       11
<PAGE>

9.   Miscellaneous

(a)  Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.

(b)  Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.

(c)  Survival of Obligations.  Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive
the termination of any Transaction.

(d)  Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e)  Counterparts and Confirmations.

     (i)  This Agreement (and each amendment, modification and waiver in respect
     of it) may be executed and delivered in counterparts (including by
     facsimile transmission), each of which will be deemed an original.

     (ii) The parties intend that they are legally bound by the terms of each
     Transaction from the moment they agree to those terms (whether orally or
     otherwise). A Confirmation shall be entered into as soon as practicable and
     may be executed and delivered in counterparts (including by facsimile
     transmission) or be created by an exchange of telexes or by an exchange of
     electronic messages on an electronic messaging system, which in each case
     will be sufficient for all purposes to evidence a binding supplement to
     this Agreement. The parties will specify therein or through another
     effective means that any such counterpart, telex or electronic message
     constitutes a Confirmation.


(f)  No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g)  Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

10.  Offices; Multibranch Parties

(a)  If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.

(b)  Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.

(c)  If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.

11.  Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document

                                       12
<PAGE>

to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.

12.  Notices

(a)  Effectiveness.  Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--

     (i)  if in writing and delivered in person or by courier, on the date it is
     delivered;

     (ii)  if sent by telex, on the date the recipient's answerback is received;

     (iii) if sent by facsimile transmission, on the date that transmission is
     received by a responsible employee of the recipient in legible form (it
     being agreed that the burden of proving receipt will be on the sender and
     will not be met by a transmission report generated by the sender's
     facsimile machine);

     (iv)  if sent by certified or registered mail (airmail, if overseas) or the
     equivalent (return receipt requested), on the date that mail is delivered
     or its delivery is attempted; or

     (v)   if sent by electronic messaging system, on the date that electronic
     message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

(b)  Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.

13.  Governing Law and Jurisdiction

(a)  Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b)  Jurisdiction.  With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--

     (i)  submits to the jurisdiction of the English courts, if this Agreement
     is expressed to be governed by English law, or to the non-exclusive
     jurisdiction of the courts of the State of New York and the United States
     District Court located in the Borough of Manhattan in New York City, if
     this Agreement is expressed to be governed by the laws of the State of New
     York; and

     (ii)  waives any objection which it may have at any time to the laying of
     venue of any Proceedings brought in any such court, waives any claim that
     such Proceedings have been brought in an inconvenient forum and further
     waives the right to object, with respect to such Proceedings, that such
     court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or re-
enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

(c)  Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any

                                       13
<PAGE>

reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.

(d)  Waiver of Immunities.  Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

14.  Definitions

As used in this Agreement:--

"Additional Termination Event" has the meaning specified in Section 5(b).

"Affected Party" has the meaning specified in Section 5(b).

"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.

"Applicable Rate" means:--

(a)  in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b)  in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

(c)  in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-
default Rate; and

(d)  in all other cases, the Termination Rate.

"Burdened Party" has the meaning specified in Section 5(b).

"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.

"Consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

"Credit Event Upon Merger" has the meaning specified in Section 5(b).

"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.

"Credit Support Provider" has the meaning specified in the Schedule.

"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

                                       14
<PAGE>

"Defaulting Party" has the meaning specified in Section 6(a).

"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"Illegality" has the meaning specified in Section 5(b).

"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).

"Law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.

"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for  business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.

"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the  relevant Early Termination
Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or
(3) or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.

"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference Market-
maker to enter into a transaction (the "Replacement Transaction") that would
have the effect of preserving for such party the economic equivalent of any
payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have

                                       15
<PAGE>

been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date.  The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values.  If exactly three such quotations are provided, the Market Quotation
will be the quotation remaining after disregarding the highest and lowest
quotations.  For this purpose, if more than one quotation has the same highest
value or lowest value, then one of such quotations shall be disregarded.  If
fewer than three quotations are provided, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or group of Terminated
Transactions cannot be determined.

"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

"Non-defaulting Party" has the meaning specified in Section 6(a).

"Office" means a branch or office of a party, which may be such party's head or
home office.

"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.

"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"Set-Off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:--

(a)  the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and

(b)  such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.

"Specified Entity" has the meaning specified in the Schedule.

                                       16
<PAGE>

"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.

"Stamp Tax" means any stamp, registration, documentation or similar tax.

"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.

"Tax Event" has the meaning specified in Section 5(b).

"TaX Event Upon Merger" has the meaning specified in Section 5(b).

"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).

"Termination Currency" has the meaning specified in the Schedule.

"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date.  The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.

"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.

"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market

                                       17
<PAGE>

value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate.  Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed.  The fair market value of any obligation referred to in clause (b)
above shall be reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it shall be
the average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.






MORGAN GUARANTY TRUST                     SPIEGEL CREDIT CARD MASTER
COMPANY OF NEW YORK                       NOTE TRUST
---------------------------------         ------------------------------------
       (Name of Party)                            (Name of Party)
                                         By: Bankers Trust Company, not in its
                                         individual capacity, but solely as
                                         owner trustee


By: /s/ James Dwyer                      By: /s/ Eileen M. Hughes
    -----------------------------            ---------------------------------
Name:                                    Name:

Title:  Vice President                   Title:  Vice President

Date:                                    Date:

                                       18
<PAGE>

(Multicurrency--Cross Border)


                                   ISDA (R)
                 International Swap Dealers Association, Inc.

                                   SCHEDULE
                                    to the
                               Master Agreement

                           dated as of July 19, 2001


between     MORGAN GUARANTY TRUST       and      SPIEGEL CREDIT CARD MASTER
            COMPANY OF NEW YORK                  NOTE TRUST
              ("Party A")                         ("Party B")

                        PART 1:  Termination Provisions
                                 ----------------------

(a)  "Indenture" means the Master Indenture dated as of December 1, 2000,
     between Spiegel Credit Card Master Note Trust, as Issuer, and The Bank of
     New York, as Indenture Trustee, as supplemented by the Series 2001-A
     Indenture Supplement dated as of July 19, 2001, between Spiegel Credit Card
     Master Note Trust, as the Issuer or the Trust, and The Bank of New York, as
     the Indenture Trustee, in each case, as amended, modified, supplemented,
     restated or replaced from time to time.

(b)  "Specified Entity" means in relation to Party A for the purpose of:-

     Section 5(a)(v)  (Default under Specified Transaction),  none;

     Section 5(a)(vi) (Cross Default),                        none;

     Section 5(a)(vii) (Bankruptcy),                          none; and

     Section 5(b)(iv) (Credit Event Upon Merger),             none;

     in relation to Party B for the purpose of:-

     Section 5(a)(v) (Default under Specified Transaction)    none;

     Section 5(a)(vi) (Cross Default),                        none;

     Section 5(a)(vii) (Bankruptcy),                          none; and

     Section 5(b)(iv) (Credit Event Upon Merger),             none.

(c)  "Specified Transaction" will have the meaning specified in Section 14.

                                       1
<PAGE>

(d)  The "Breach of Agreement" provisions of Section 5(a)(ii), the
"Misrepresentation" provisions of Section 5(a)(iv), the "Default under Specified
Transactions" provisions of Section 5(a)(v) and the "Cross Default" provisions
of Section 5(a)(vi) will not apply to Party A or Party B.

(e)  Section 5(a)(iii)(1) is hereby amended and restated in its entirety as
follows:

     "(1) Failure by any Credit Support Provider of the party to perform any
     payment obligation to be performed by it in accordance with any Credit
     Support Document (as defined below), if such failure is continuing after
     any applicable grace period has elapsed;".

(f)  The "Illegality" provision of Section 5(b)(i)
               will not apply to Party A
               will not apply to Party B.

(g)  The "Tax Event" provision of Section 5(b)(ii)
               will not apply to Party A
               will not apply to Party B.

(h)  The "Tax Event Upon Merger" provision of Section 5(b)(iii)
               will not apply to Party A
               will not apply to Party B.

(i)  The "Credit Event Upon Merger" provisions of Section 5(b)(iv)
          will not apply to Party A
          will not apply to Party B.

(j)  The "Automatic Early Termination" provision of Section 6(a)
          will not apply to Party A
          will not apply to Party B.

(k)  Payments on Early Termination.  For the purpose of Section 6(e):

     (i)  Market Quotation will apply.

     (ii) The First Method will apply.

(l)  "Termination Currency" means United States Dollars.

(m)  Additional Termination Event; Redemption of the Secured Notes.

          (a)  Party B shall, as provided in the Indenture, direct the Indenture
          Trustee to notify Party A if notice is given pursuant to the Indenture
          of a redemption by Party B of all of the Notes (any such redemption by
          Party B of all of the Notes, a "Redemption Event").

          (b)  If a Redemption Event occurs it shall be an Additional
          Termination Event for which Party B shall be the sole Affected Party
          and each Transaction shall be an Affected Transaction.

          (c)  If a Redemption Event is to occur, the Early Termination Date in
          respect of each Affected Transaction shall be deemed to occur on the
          Distribution Date in respect of

                                       2
<PAGE>

          such Redemption Event. Any Settlement Amount payable in respect of
          such Redemption Event shall be paid, in the case of Party B, on the
          date of such Early Termination Date; provided that no such payments
          shall be made by Party B until the Note Principal Balance (as defined
          in the Indenture Supplement) has been reduced to zero.

(n)  Unauthorized Amendments.  Party B shall deliver to Party A a copy of any
     proposed Supplemental Indenture before such document takes effect.

(o)  Downgrade of Party A. If a Ratings Event (as defined below) shall occur and
     be continuing with respect to Party A, then Party A shall, within 5 Local
     Business Days of such Ratings Event, (A) give notice to Party B of the
     occurrence of such Ratings Event, and (B) use reasonable efforts to
     transfer Party A's rights and obligations under the Agreement and all
     Confirmations to another party, subject to satisfaction of the Rating
     Agency Condition (as defined below), and at the cost of Party A. If such a
     transfer by Party A has not occurred within 20 Local Business Days after
     the occurrence of a Ratings Event, Party B shall demand that Party A
     deliver Eligible Collateral on a mark-to-market basis, to secure Party B's
     exposure, if any, to Party A, and such Eligible Collateral shall be
     delivered in accordance with a Credit Support Annex to be attached hereto
     and made a part hereof within 10 Local Business Days of Party B's demand
     therefor. The Eligible Collateral to be posted and the Credit Support Annex
     to be executed and delivered shall be subject to the Rating Agency
     Condition. Notwithstanding the addition of the Credit Support Annex and the
     posting of Eligible Collateral, Party A shall continue to use reasonable
     efforts to transfer its rights and obligations to an acceptable third
     party; provided, however, that Party A's obligations to find a transferee
     and to post Eligible Collateral under such Credit Support Annex shall
     remain in effect only for so long as a Ratings Event is continuing with
     respect to Party A. For the purpose of this Part 1(k), a "Ratings Event"
     shall occur with respect to Party A if the long-term and short-term senior
     unsecured deposit ratings of Party A cease to be at least A+ and A-1 by
     Standard & Poor's Ratings Service or any successor thereto ("S&P"), or at
     least A1 and P-1 by Moody's Investors Service, Inc. or any successor
     thereto ("Moody's"), or at least A+ and F-1 by Fitch Ratings, Inc. or any
     successor thereto ("Fitch"), to the extent such obligations are rated by
     S&P, Moody's or Fitch. "Rating Agency Condition" has the meaning specified
     in the Indenture defined in Part 1(a) of this Schedule.

     The failure by Party A to post Eligible Collateral in accordance herewith
     shall constitute an Event of Default with Party A as the Defaulting Party.

(p)  Notwithstanding anything to the contrary in Section 6(e) of the Agreement,
     if an Early Termination Date is designated due to the occurrence of a
     Termination Event or an Additional Termination Event and the Settlement
     Amount calculated in respect thereof is a negative number, then the
     Settlement Amount shall be deemed to be zero.

                          PART 2:  Tax Representations
                                   -------------------

(a)  Payer Tax Representations. For the purpose of Section 3(e) of this
     Agreement, Party A and Party B will make the following representation:-

     It is not required by any applicable law, as modified by the practice of
     any relevant governmental revenue authority of any Relevant Jurisdiction to
     make any deduction or withholding for or on account of any Tax from any
     payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
     Agreement) to be made by it to the other party under this Agreement. In
     making this

                                       3
<PAGE>

     representation, it may rely on (x) the accuracy of any representations made
     by the other party pursuant to Section 3(f) of this Agreement, (y) the
     satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of
     this Agreement and the accuracy and effectiveness of any document provided
     by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
     Agreement and (z) the satisfaction of the agreement of the other party
     contained in Section 4(d) of this Agreement, provided that it shall not be
     a breach of this representation where reliance is placed on clause (y) and
     the other party does not deliver a form or document under Section 4(a)(iii)
     by reason of material prejudice to its legal or commercial position.

(b)  Payee Tax Representations. For the purpose of Section 3(f) of this
     Agreement, Party A and Party B will make the following representations
     specified below, if any:- none

                    PART 3:  Agreement to Deliver Documents
                             ------------------------------

For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents:

(a)  Tax forms, documents or certificates to be delivered are:

     Party            Form/Document/Certificate      Date by which
     required to                                     to be delivered
     deliver
     document
     ---------------  -----------------------------  ------------------
     Party A and      Any form, document or          Upon request
     Party B          certificate as may be
                      requested pursuant to Section
                      4(a)(iii) of this Agreement.

     Party B          An executed United States      (i) As soon as
                      Internal Revenue Service Form  reasonably practicable
                      W-9 (or any successor          after execution of this
                      thereto), as applicable.       Agreement, (ii)
                                                     promptly upon
                                                     reasonable demand by
                                                     Party A and (iii)
                                                     promptly upon learning
                                                     that any such form
                                                     previously provided by
                                                     Party B has become
                                                     obsolete or incorrect.

(b)  Other documents to be delivered are:-

    Party             Form/Document/Certificate      Date by      Covered by
    required to                                      which to be  Section 3(d)
    deliver                                          delivered    Representation
    document
    ----------------  ----------------------------   -----------  --------------

                                           4
<PAGE>

<TABLE>
<CAPTION>
 Party                              Form/Document/Certificate                 Date by                  Covered by
 required to                                                                  which to be              Section 3(d)
 deliver                                                                      delivered                Representation
 document
-----------------------             --------------------------                -----------              --------------
<S>                                 <C>                                      <C>                      <C>
 Party B                            Annual Report of Party B and of any       As soon as                Yes
                                    Credit Support Provider thereof           available and in
                                    containing audited financial              any event within
                                    statements certified by independent       120 days after the
                                    certified public accountants and          end of each fiscal
                                    prepared in accordance with               year of Party B
                                    generally accepted accounting             and of the Credit
                                    principles in the country in which        Support Provider
                                    such party and such Credit Support
                                    Provider is organized

 Party B                            Monthly Reports of Party B and            As soon as                Yes
                                    quarterly unaudited financial             available and in
                                    statements of any Credit Support          any event within
                                    Provider thereof containing               30 days after the
                                    financial statements of such              end of each fiscal
                                    party's fiscal quarter prepared in        quarter of Party B
                                    accordance with generally accepted        and of the Credit
                                    accounting principles in the              Support Provider
                                    country in which  such Credit
                                    Support Provider is organized

 Party B                            A duly executed copy of the Credit        At or within              No
                                    Support Document specified in Part        thirty days after
                                    4 of the Schedule or in any               execution hereof
                                    Confirmation

 Party A and                        Certified copies of all corporate         Upon execution and        Yes
 Party B                            authorizations and any other              delivery of this
                                    documents with respect to the             Agreement
                                    execution, delivery and performance
                                    of this Agreement and the
                                    Indenture; legal opinion from
                                    in-house counsel for MBIA with
                                    respect to enforceability of Policy
                                    and related matters.

 Party A and                        Certificate of authority and              Upon execution and        Yes
 Party B                            specimen signatures of individuals        delivery of this
                                    executing this Agreement, any             Agreement and
                                    Credit Support Document and any           thereafter upon
                                    Confirmations                             request of the
                                                                              other party
</TABLE>

                                       5
<PAGE>

<TABLE>
--------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                       <C>                              <C>
Party B                             An opinion of counsel to Party B on       Upon execution and delivery      Yes
                                    the enforceability of the Agreement       of this Agreement
                                    and the Confirmation in respect of
                                    Party B, reasonably satisfactory in
                                    form and substance to Party A.
--------------------------------------------------------------------------------------------------------------------------------
Party A                             An opinion of counsel to Party A on       Upon execution and delivery      Yes
                                    the enforceability of the Agreement       of this Agreement
                                    and the Confirmation in respect of
                                    Party A, reasonably satisfactory in
                                    form and substance to Party B.
--------------------------------------------------------------------------------------------------------------------------------
Party A and                         Such other documents as the other         Promptly upon request            Yes
Party B                             party may reasonably request in
                                    connection with each Transaction.
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                            PART 4:  Miscellaneous
                                     -------------

(a)  Address for Notices.  For the purpose of Section 12(a) of this Agreement:-

     Address for notice or communications to Party A:


          Morgan Guaranty Trust Company of New York
          60 Wall Street
          New York, NY 10260
          Attn.: Global Swap Unit
          Telex No.: WVD 649216
          Answerback: M6T VI
          Facsimile No.: 212-648-5922

     Address for notice or communications to Party B:


          Spiegel Credit Card Master Note Trust
          c/o Bankers Trust Company
          Four Albany Street, 10/th/ Floor
          New York, NY 10006
          Attention: Corporate Trust & Agency Services
          Telephone No.: 212-250-6323
          Facsimile No.: 212-250-6439

                                       6
<PAGE>

          With a copy to:

          John R. Steele, Treasurer
          Spiegel, Inc.
          3500 Lacey Road
          Downers Grove, IL 60515-5432
          Telephone No.: 630-769-3250
          Facsimile No.: 630-769-3750

          And a copy to:

          Attention:  Manager, International Structured Finance Surveillance
          MBIA Insurance Corporation
          113 King Street
          Armonk, New York 10504
          Telephone No.: 914-273-4545
          Facsimile No.: 914-273-3665


   (b)    Process Agent.  For the purpose of Section 13(c):


          Party A appoints as its Process Agent:  Not applicable.


          Party B appoints as its Process Agent:  Not applicable.


   (c)    Offices. The provisions of Section 10(a) will apply to this Agreement.


   (d)    Multibranch Party. For the purpose of Section 10 of this Agreement:-


          Party A is a Multibranch Party and may act through any Office
          specified in the Confirmation for a Transaction.


          Party B is not a Multibranch Party.


   (e)    Calculation Agent. The Calculation Agent is Party A unless otherwise
          agreed to in writing by Party A or unless Party A is the sole
          Defaulting Party with respect to an Event of Default, in which case
          the Calculation Agent shall be appointed by the Indenture Trustee. If
          a party disagrees with a determination of market value made by the
          Calculation Agent, such party shall promptly provide to the
          Calculation Agent the basis for its disagreement. The original
          determination of market value made by the Calculation Agent shall
          remain valid unless the Calculation Agent, on the basis of the
          information provided by the disputing party, determines otherwise.


   (f)    Credit Support Document. Details of any Credit Support Document:


          Each of the following, as amended, supplemented, modified, renewed,
          replaced, consolidated, substituted or extended from time to time, is
          a "Credit Support Document" with respect to Party B:

                                       7
<PAGE>

          Financial Guaranty Insurance Policy No. [ ] (the "Policy") issued by
          MBIA Insurance Corporation ("MBIA") on July 19, 2001, to the Indenture
          Trustee as beneficiary. The Policy shall be a Credit Support Document
          solely with respect to net Fixed Amounts payable by Party B, and shall
          not be available to support, and may not be drawn on in respect of,
          any amounts due from Party B under Section 6(e) or any other provision
          of the Agreement.


          Party B agrees that the security interests in collateral granted to
          the Indenture Trustee on behalf of Party A as an Enhancement Provider
          under the Indenture in respect of Series 2001-A shall secure the
          obligations of Party B to Party A under this Agreement.


   (g)    Credit Support Provider.

          Credit Support Provider means in relation to Party A:  Not applicable.

          Credit Support Provider means in relation to Party B:  MBIA.

   (h)    Governing Law. This Agreement will be governed by and construed in
          accordance with the laws of the State of New York (without reference
          to its conflict of laws doctrine, other than Section 5-1401 of the
          General Obligations Law).


   (i)    Netting of Payments. All amounts payable on the same date, in the same
          currency and in respect of the same Transaction shall be netted in
          accordance with Section 2(c) of this Agreement. The election contained
          in the last paragraph of Section 2(c) of this Agreement shall not
          apply for the purposes of this Agreement.


   (j)    Amendments. Any amendments to the Agreement, Schedule and/or
          Confirmation shall be subject to the Rating Agency Condition.


   (k)    "Affiliate" will have the meaning specified in Section 14 of this
          Agreement.


                           PART 5: Other Provisions
                                   ----------------

   (a)    Additional Agreements. Party A agrees that it shall not enter a
          transaction of the type referred to in 5(a)(viii) (Merger Without
          Assumption) where the resulting, surviving or transferee entity fails
          to assume all of the obligations of Party A hereunder.


   (b)    Delivery of Confirmations. For each Transaction entered into
          hereunder, Party A shall promptly send to Party B a Confirmation via
          facsimile transmission. Party B agrees to respond to such Confirmation
          within two (2) Local Business Days, either confirming agreement
          thereto or requesting a correction of any error(s) contained therein.
          Failure by Party A to send a Confirmation or of Party B to respond
          within such period shall not affect the validity or enforceability of
          such Transaction. Absent manifest error, there shall be a presumption
          that the terms contained in such Confirmation are the terms of the
          Transaction.


   (c)    Recording of Conversations. Each party to this Agreement acknowledges
          and agrees to the tape recording of conversations between trading and
          marketing personnel of the parties to this Agreement whether by one or
          other or both of the parties or their agents, and that any such tape
          recordings may be submitted in evidence in any Proceedings relating to
          the Agreement.

                                       8
<PAGE>

   (d)    Furnishing Specified Information. Section 4(a)(iii) is hereby amended
          by inserting "promptly upon the earlier of (i)" in lieu of the word
          "upon" at the beginning thereof and inserting "or (ii) such party
          learning that the form or document is required" before the word "any"
          on the first line thereof.


   (e)    Notice by Facsimile Transmission. Section 12(a) is hereby amended by
          inserting the words "2(b)," between the word "Section" and the number
          "5" and inserting the words "or 13(c)" between the number "6" and the
          word "may" in the second line thereof.


   (f)    Section 3(a) of this Agreement is amended by (i) deleting the word
          "and" at the end of clause (iv); (ii) deleting the period at the end
          of clause (v) and inserting therein "; and "; and (iii) by inserting
          the following additional representation:


               "(vi)  Eligible Contract Participant. It is an 'eligible contract
                      participant' as defined under the Commodity Exchange Act,
                      Section 1(a)(12)."


   (g)    Section 3 is revised so as to add the following Section (g) at the end
          thereof:


          "(g)   Relationship Between Parties. Each party represents to the
                 other party and will be deemed to represent to the other party
                 on the date on which it enters into a Transaction that (absent
                 a written agreement between the parties that expressly imposes
                 affirmative obligations to the contrary for that Transaction):-


                 (i)      Non-Reliance. It is acting for its own account, and it
                          has made its own independent decisions to enter into
                          that Transaction and as to whether that Transaction is
                          appropriate or proper for it based upon its own
                          judgment and upon advice from such advisors as it has
                          deemed necessary. It is not relying on any
                          communication (written or oral) of the other party as
                          investment advice or as a recommendation to enter into
                          that Transaction; it being understood that information
                          and explanations related to the terms and conditions
                          of a Transaction shall not be considered investment
                          advice or a recommendation to enter into that
                          Transaction. Further, such party has not received from
                          the other party any assurance or guarantee as to the
                          expected results of that Transaction.

                 (ii)     Evaluation and Understanding. It is capable of
                          evaluating and understanding (on its own behalf or
                          through independent professional advice), and
                          understands and accepts, the terms, conditions and
                          risks of that Transaction. It is also capable of
                          assuming, and assumes, the financial and other risks
                          of that Transaction.

                 (iii)    Status of Parties. The other party is not acting as an
                          agent, fiduciary or advisor for it in respect of that
                          Transaction."


   (h)    Waiver of Right to Trial by Jury. EACH PARTY HEREBY IRREVOCABLY WAIVES
          ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL
          PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
          TRANSACTION CONTEMPLATED HEREBY.

                                       9
<PAGE>

   (i)    Provisions Relating to MBIA:


          (a)    The parties agree that MBIA shall be a third party beneficiary
          of this Agreement and shall have the right to enforce this Agreement
          against Party A.


          (b)    Any notices required to be given by Party B may be given by or
          at the direction of the Trustee on Party B's behalf. All notices
          required to be given to Party B by Party A shall also be given to the
          Indenture Trustee, as defined in Part 1(a), and MBIA, and any such
          notice not so given to both the Indenture Trustee and MBIA shall be
          ineffective unless receipt of such notice is waived by the party to
          whom it should have been given but was not given. Any requirement
          contained herein for obtaining the consent or agreement of MBIA shall
          not apply so long as a Control Transfer Event (as defined in the
          Indenture) has occurred and is continuing.


          (c)    No action or consent permitted or required to be taken or given
          by Party B under this Agreement (other than the performance by Party B
          of its payment obligations hereunder) shall be effective without the
          prior written consent of MBIA so long as no Control Transfer Event has
          occurred and is continuing. If a Control Transfer Event has occurred
          and is continuing, any provision giving MBIA the right to direct,
          appoint or consent to, approve of, or take any action (or waive any
          right to take action) under this Agreement, shall be inoperative and
          any such consent or approval shall be deemed to have been given for
          the purpose of such provisions.

          (d)    The rights of MBIA under this Part 5(i) shall terminate upon
          the later to occur of (x) the termination date of the Policy and (y)
          the day which is one year and one day after the date on which all
          amounts have been paid to MBIA under the Insurance Agreement.


   (j)    Non-Petition. Party A hereby agrees that it will not, prior to the
          date which is one year and one day after all Series 2001-A Notes
          issued by Party B pursuant to the Indenture have been paid in full,
          acquiesce, petition or otherwise invoke or cause Party B to invoke the
          process of any court or governmental authority for the purpose of
          commencing or sustaining a case against Party B under any federal or
          state bankruptcy, insolvency or similar law or for the purpose of
          appointing a receiver, liquidator, assignee, trustee, custodian,
          sequestrator or other similar official for Party B or any substantial
          part of the property of Party B, or for the purpose of ordering the
          winding up or liquidation of the affairs of Party B. Nothing herein
          shall prevent Party A from participating in any such proceeding once
          commenced.

   (k)    Limited Recourse. The obligations of Party B under this Agreement are
          limited recourse obligations of Party B, payable solely from the Trust
          Estate (as such term is defined in the Indenture), subject to and in
          accordance with the terms of the Indenture, and, following realization
          of the Trust Estate, any claims of Party A against Party B shall be
          extinguished. No recourse shall be had for the payment of any amount
          owing in respect of this Agreement against the trustee, or any
          officer, member, director, employee, security holder or incorporator
          thereof (each, an "Affiliated Person") of Party B or its successors or
          assigns for any amounts payable under this Agreement. It is understood
          that the foregoing provisions shall not (i) prevent recourse to the
          Trust Estate for the sums due or to become due under any security,
          instrument or agreement which is part of the Trust Estate (subject to
          the priority of payments set forth in the Indenture), or (ii)
          constitute a waiver, release or discharge of any obligation of Party B
          arising under this Agreement until the Trust Estate have been realized
          and the proceeds applied in accordance with the Indenture, whereupon
          any outstanding obligation of Party B under this Agreement shall be
          extinguished, or (iii) prevent recourse by the Indenture Trustee on
          behalf of

                                       10
<PAGE>

          Party A to MBIA, as the Credit Support Provider in respect
          of Party B, to the extent set forth in the related Credit Support
          Document.


   (l)    Transfer. Section 7 of the Agreement is supplemented by the additional
          requirement that any transfer or assignment by Party A of its
          obligations under the Agreement (including any Confirmation), and any
          amendments to the Agreement (including any Confirmation), shall be
          subject to the Rating Agency Condition. Party A consents to the pledge
          and assignment by Party B of its rights and obligations hereunder and
          under any Transaction to the Indenture Trustee pursuant to the
          Indenture.


   (m)    Events of Default. (i) Section 5(a)(i) of the Agreement is amended by
          substituting the following therefor: "Failure by the party to make,
          when due, any payment under this Agreement or delivery under Section
          2(a)(i) or 2(e) required to be made by it within five days of the date
          due under this Agreement and, upon at least one Business Days' prior
          notice to the other party."


   (n)    Rating of Party A. Party A represents to Party B that, on the date of
          this Agreement, (i) its long-term unsecured debt is rated at or above
          "A+" by S&P, "A1" by Moody's and "A+" by Fitch, and (ii) its short-
          term unsecured debt is rated at or above "A-1" by S&P, "P-1" by
          Moody's and "F1" by Fitch.

                                       11
<PAGE>

Accepted and agreed:

MORGAN GUARANTY TRUST COMPANY   SPIEGEL CREDIT CARD MASTER NOTE
OF NEW YORK                     TRUST

                                By: Bankers Trust Company, not in its individual
                                capacity, but solely as Owner Trustee

By: /s/ Guiseppe Pagano.
   Name:                        By: /s/ Robert D. Foltz
   Title:  Vice President           Name:
                                    Title:  Authorized Agent

                                       12
<PAGE>

                CONFIRMATION FOR U.S. DOLLAR INTEREST RATE SWAP
                    TRANSACTION UNDER 2001 MASTER AGREEMENT

<TABLE>
<S>       <C>                                        <C>        <C>
Date:     July 19, 2001                              Our ref:   Morgan Reference Number 493227
To:       Spiegel Credit Card Master Note Trust      From:      Morgan Guaranty Trust Company of
          c/o Bankers Trust Company                             New York
          Four Albany Street, 10/th/ Floor                      270 Park Avenue, 8/th/ Floor
          New York, NY  10006                                   New York, NY 10017
Attn:     Corporate Trust & Agency Services          Contact:   Marisol Collazo
Fax No:   212-250-6439                               Fax No:    212-834-6580
Tel No:   212-250-6323                               Tel No:    212-834-5597
</TABLE>


Dear Sir/Madam,

     The purpose of this letter agreement is to confirm the terms and conditions
of the Transaction entered into between Spiegel Credit Card Master Note Trust
and Morgan Guaranty Trust Company of New York (each a "party" and together "the
parties") on the Trade Date specified below (the "Transaction"). This letter
agreement constitutes a "Confirmation" as referred to in the ISDA Master
Agreement specified in paragraph 1 below (the "Agreement").

     The definitions and provisions contained in the 1991 ISDA Definitions, as
amended by the 1998 Supplement thereto (each as published by the International
Swaps and Derivatives Association, Inc., the "Definitions") are incorporated
into this Confirmation. In the event of any inconsistency between the
Definitions and this Confirmation, this Confirmation will govern. Capitalized
terms used herein and not otherwise defined have the meanings set forth in the
Definitions or the Indenture dated as of December 1, 2000, between Party B and
The Bank of New York, as indenture trustee (the "Indenture") as supplemented by
the Series 2001-A Indenture Supplement, dated as of July 19, 2001 (the
"Indenture Supplement" and together with the Indenture, the "Indenture").

1.   This Confirmation supplements, forms part of, and is subject to, the ISDA
Master Agreement (including the Schedule thereto) dated as of July 19, 2001, as
amended and supplemented from time to time (the "Agreement"), between the
parties. All provisions contained in the Agreement govern this Confirmation
except as expressly modified below.

     In this Confirmation "Party A" means Morgan Guaranty Trust Company of New
York and "Party B" means Spiegel Credit Card Master Note Trust.

2.   The terms of the particular Transaction to which this Confirmation relates
are as follows:

      Notional Amount:             Initially, USD600,000,000 and thereafter an
                                   amount equal for each Calculation Period to
                                   the Note Principal Balance (as defined in the
                                   Indenture Supplement) at the end of the first
                                   day of that Calculation Period.

      Trade Date:                  July 19, 2001

      Effective Date:              July 19, 2001
<PAGE>

      Termination Date:            The earlier of (i) March 15, 2010, subject to
                                   adjustment in accordance with the Following
                                   Business Day Convention, and (ii) the date on
                                   which the Note Principal Balance (as defined
                                   in the Indenture Supplement) is reduced to
                                   zero, subject to early termination in
                                   accordance with the terms of the Agreement.
                                   In accordance with the Indenture Supplement,
                                   the Expected Principal Distribution Date is
                                   March 15, 2005, subject to the Following
                                   Business Day Convention.


     Fixed Amounts:

      Fixed Rate Payer:            Party B

      Fixed Rate Payer             The 15/th/ of each month commencing August
      Payment Dates:               15, 2001 and ending on the Termination Date,
                                   subject to adjustment in accordance with the
                                   Following Business Day Convention

      Fixed Rate:                  5.205% per annum

      Fixed Rate Day Count         Actual/360
      Fraction:

      Floating Amounts:

     Floating Rate Payer:          Party A

      Floating Rate Payer          The 15/th/ of each month commencing August
      Payment Dates:               15, 2001 and ending on the Termination Date,
                                   subject to adjustment in accordance with the
                                   Following Business Day Convention.

      Floating Rate for initial
      Calculation Period:          3.82875%

      Floating Rate Option:        USD-LIBOR-BBA

      Designated Maturity:         1 Month, including initial Calculation
                                   Period.

      Spread:                      None

      Floating Rate Day Count      Actual/360

      Fraction:

      Reset Dates:                 First day of each Calculation Period

      Business Days:               New York, Portland, Oregon, and Chicago,
                                   Illinois

      Calculation Agent:           Party A

3.   Additional Amounts Upon Partial Termination

                                  Page 2 of 4
<PAGE>

     On any Payment Date prior to the Expected Principal Distribution Date (as
defined in the Indenture Supplement), where as a result of principal payments on
the Series 2001-A Notes (as defined in the Indenture Supplement), the Notional
Amount would be reduced by the corresponding reduction in the Note Principal
Balance (as defined in the Indenture Supplement), the parties hereto shall treat
the portion of such reduction (without duplication) as terminated on such
Payment Date (a "Terminated Transaction"). Party A shall calculate the Market
Quotation for the Terminated Transaction as set forth below.

     "Market Quotation" means, with respect to a Terminated Transaction, an
amount determined on the basis of quotations from Reference Market-makers. Each
quotation will be for an amount, if any, that would be paid to Party A
(expressed as a negative number) or by Party A (expressed as a positive number)
in consideration of an agreement between Party A and the quoting Reference
Market-maker to enter into such Terminated Transaction (with the same fixed and
floating payment rates and remaining term as this Transaction) on the relevant
Payment Date. Party A will request each Reference Market-maker to provide its
quotation to the extent reasonably practicable as of the same day and time
(without regard to different time zones) on or as soon as reasonably practicable
prior to the relevant Payment Date. The day and time as of which those
quotations are to be obtained will be selected in good faith by Party A. If more
than three quotations are provided, the Market Quotation will be the arithmetic
mean of the quotations, without regard to the quotations having the highest and
lowest values. If exactly three such quotations are provided, the Market
Quotation will be the quotation remaining after disregarding the highest and
lowest quotations. For this purpose, if more than one quotation has the same
highest value or lowest value, then one of such quotations shall be disregarded.
If fewer than three quotations are provided, Party A will determine the Market
Quotation in good faith. Notwithstanding the foregoing, Party A shall be the
sole Reference Market-maker unless: (a) the reduction in the Notional Amount of
the Transaction is equal to or greater than $50 million on such Payment Date,
and (b) the Servicer or the Indenture Trustee requests that quotations from
Reference Market-makers other than Party A are utilized.

     If the amount so determined by Party A in respect of a Terminated
Transaction is positive, Party B shall owe such amount to Party A, which shall
be payable (with interest thereon accruing from such Payment Date and calculated
at the Fixed Rate) on the next Distribution Date to the extent provided in the
Indenture; provided that no such payments shall be made by Party B until the
Note Principal Balance (as defined in the Indenture Supplement) has been reduced
to zero. If such amount is negative, no amounts shall be payable by Party A or
Party B in respect of the Terminated Transaction.

4.   Credit Support Documents:          With respect to Party B and solely with
                                        respect to net Fixed Amounts payable by
                                        Party B, and not with respect to any
                                        amount due under Section 6(e) or any
                                        other provision of the Agreement, the
                                        Financial Guaranty Insurance Policy,
                                        dated as of July 19, 2001, issued by
                                        MBIA.

5.   Account Details:

     Account for payments to Party A:   Name:  Morgan Guaranty Trust Company of
                                        New York

                                        City: New York

                                        ABA#  021-000-239

                                        Ref:  Spiegel Credit Card Master Note
                                        Trust

                                  Page 3 of 4
<PAGE>

                                        Acct:  999-97-979

     Account for payments to Party B:   The Bank of New York
                                        ABA #021000018
                                        Name:  Spiegel Credit Card Master Note
                                               Trust Collection Account
                                        Acct: 341807

6.   Offices:
     The Office of Party A for this     270 Park Avenue, 8/th/ Floor
     Transaction is:
                                        New York, NY 10017

     The Office of Party B for this     Four Albany St., 10/th/ Floor
     Transaction is:
                                        New York, NY 10006


      Please confirm that the foregoing correctly sets forth the terms
      and conditions of our agreement by responding within three (3)
      Business Days by returning via telecopier an executed copy of
      this Confirmation to the attention of Marisol Collaza (fax no.
      212-834-6580).

Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation of
the terms and conditions contained herein, absent manifest error.

J.P. MORGAN SECURITIES INC., as      Accepted and confirmed as of the date first
agent for Morgan Guaranty Trust      written:
Company of New York
                                     SPIEGEL CREDIT CARD MASTER NOTE TRUST,
                                     By: Bankers Trust Company, not in its
                                     individual capacity, but solely as Owner
By: /s/ David Greenberg              Trustee
   --------------------
Name:
Title:  Vice President

By:                                  By:    /s/ Eileen M Hughes
                                          -------------------------------------
Name:                                Name and Title:
                                                       Vice President
Title:

                                  Page 4 of 4