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                                      AMENDMENT
                                          TO
                                   CREDIT AGREEMENT


         THIS AMENDMENT (the "Amendment") dated as of December 23, 1996, is
made and entered into among MONTGOMERY WARD & CO., INCORPORATED (the "Company")
and the banks listed on the signature pages hereof (herein, together with their
respective successors and assigns, collectively called the "Lenders" and
individually called a "Lender").

         WHEREAS the Lenders are parties to that certain Credit Agreement dated
as of October 4, 1996 (the "Credit Agreement"), among Montgomery Ward & Co.,
Incorporated, various Lenders, The Bank of New York as Documentation Agent, and
The Bank of Nova Scotia, as Administrative Agent; and

         WHEREAS the Company and the Lenders desire to amend the Credit
Agreement in certain respects;

         NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto hereby agree as follows:

                                      ARTICLE I

                                      AMENDMENTS

         1.1  SECTION 1.1 of the Credit Agreement is hereby amended by adding
definitions of "Guarantor" and "Guaranty" and by amending the following
definitions to read in their entirety as follows:

         "EXISTING CREDIT AGREEMENTS" means collectively (i) the Long-term
    Credit Agreement, dated September 15, 1994, as amended through December 23,
    1996 (and with the consent of the Required Lenders, as further amended or
    modified from time to time), among the Company, various lenders from time
    to time party thereto and certain agents listed on the signature pages
    thereof (the "Long Term Credit Agreement"), (ii) the Short Term Credit
    Agreement, dated September 15, 1994, as amended through December 23, 1996
    (and, with the consent of the Required Lenders, as further amended and
    modified from time to time PROVIDED, THAT any increase in the aggregate
    commitments thereunder which is provided for therein shall not be deemed an
    amendment or modification) among the Company, various lenders from time to
    time party thereto and certain agents

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    listed on the signature pages thereof (the "Short Term Credit Agreement").

         "GUARANTOR" means Lechmere, Inc.

         "GUARANTY" means the guaranty substantially in the form of EXHIBIT F.

         "TERMINATION DATE" means, with respect to each Lender, the earlier to
    occur of (i) August 29, 1997, or (ii) such other date on which the
    Aggregate Commitments shall terminate pursuant to SECTION 5 or 13.2 or be
    reduced to zero pursuant to SECTION 2.6 and, if in any case such day is not
    a Business Day, the next preceding Business Day.

         1.2  SECTION 11 of the Credit Agreement is hereby amended
by replacing in SUBSECTION (i) the phrase "the Effective Date" with "December
23, 1996".

         1.3 EVENTS OF DEFAULT.  SECTION 13.1(e) of the Credit Agreement is
amended to read in its entirety as follows:

         (e)  SPECIFIED NON-COMPLIANCE WITH THIS AGREEMENT.  Failure by the
    Company to comply with or to perform its obligations under SECTIONS 11.3,
    11.4, 11.5, 11.6, 11.17, 11.18, 11.20 or 11.21 of the Existing Credit
    Agreements as incorporated herein pursuant to SECTION 11.

         1.4 SECTION 13.1 of the Credit Agreement is further amended by adding
thereto SECTION 13.1(l) as follows:

         (l)  GUARANTOR DEFAULTS.  Guarantor fails in any material respect to
    perform or observe any term, covenant or agreement in its Guaranty; or the
    Guaranty of Guarantor is for any reason partially (including with respect
    to future advances) or wholly revoked or invalidated, or otherwise ceases
    to be in full force and effect, or Guarantor or any other Person contests
    in any manner the validity or enforceability thereof or denies that it has
    any further liability or obligation thereunder.

         1.5 The Credit Agreement is further amended by adding EXHIBIT F in the
form attached hereto.

                                      ARTICLE II

                            REPRESENTATIONS AND WARRANTIES

         The Company hereby represents and warrants to the Agents and the
Lenders as follows:

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         2.1  NO DEFAULT.  No Event of Default or Unmatured Event of Default
has occurred and is continuing or will exist after giving effect to this
Amendment.

         2.2  DUE EXECUTION.   The execution, delivery and performance of this
Agreement, (i) are within the Company's corporate powers, (ii) have been duly
authorized by all necessary corporate action, (iii) do not require any
governmental approval which has not been previously obtained (and each such
governmental approval that has been previously obtained remains effective), (iv)
do not and will not contravene or conflict with any provision of law, or of any
judgment, decree or order, or of the Company's charter or by-laws, and (v) do
not and will not contravene or conflict with, or cause any Lien to arise under,
any provision of any agreement binding upon the Company, any Subsidiary or any
of their respective properties.

         2.3  VALIDITY.  The Credit Agreement as amended by this Amendment
constitutes the legal, valid and binding obligations of the Company, enforceable
against it in accordance with its respective terms, without defense,
counterclaim or offset.

         2.4  CREDIT AGREEMENT.  All representations and warranties of the
Company contained in SECTIONS 10.1, 10.2, 10.3, 10.4(a), 10.7, 10.10, 10.11,
10.12, 10.15 and 10.18 of the Credit Agreement are true and correct as of the
date hereof with the same effect as though made on the date hereof.

                                     ARTICLE III

                                       GENERAL

         3.1  EXPENSES.  The Company agrees to pay all fees and expenses of
McDermott, Will & Emery as counsel to the Documentation Agent and the
Administrative Agent in connection with the preparation, execution and delivery
of this Amendment.

         3.2  EFFECTIVENESS.  Article I of this Amendment shall become
effective as of the date on which, the Documentation Agent shall have received
the following in form and substance reasonably satisfactory to the Documentation
Agent:

         (a)  AMENDMENT.  Counterparts of this Amendment, whether on the same
    or different counterparts, executed by the Company and the Required Lenders
    (or in the case of any Lender as to which an executed counterpart shall not
    have been so received, telegraphic, telefax, telex or other written
    confirmation of execution of a counterpart hereof by such Lender).

         (b)  GUARANTY.  The Guaranty executed by the Guarantor;

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         (c)  RESOLUTIONS.   Copies of the resolutions of the board of
    directors of each of the Company and the Guarantor authorizing the
    transactions contemplated by this Amendment and the Guaranty, certified by
    the Secretary or an Assistant Secretary (or in the case of the Guarantor,
    the Clerk or Assistant Clerk) of the Company and the Guarantor;

         (d)  INCUMBENCY.    A certificate of the Secretary or Assistant
    Secretary (or in the case of the Guarantor, the Clerk or Assistant Clerk)
    of each of the Company and the Guarantor certifying the names and true
    signatures of the officers of the Company or the Guarantor authorized to
    execute, deliver and perform, as applicable, this Amendment and the
    Guaranty; and

         (e)  OPINION OF COUNSEL FOR THE COMPANY AND THE GUARANTOR.  A letter
    from Altheimer & Gray, counsel for the Company and the Guarantor, addressed
    to the Agents and the Banks substantially in the form attached hereto.

         3.3  DEFINITIONS.  Except as otherwise herein specifically defined,
all the capitalized terms contained herein shall have the meaning ascribed to
such terms in the Credit Agreement.

         3.4  REAFFIRMATION.  Except as hereinabove expressly provided, all the
terms and provisions of the Credit Agreement shall remain in full force and
effect and all references therein and in any related documents to the Credit
Agreement shall henceforth refer to the Credit Agreement as amended by this
Amendment.  This Amendment shall be deemed incorporated into, and a part of, the
Credit Agreement.

         3.5  SUCCESSORS.  This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.

         3.6  GOVERNING LAW.  This Amendment shall be governed by and construed
in accordance with the laws of the State of Illinois.

         3.7  COUNTERPARTS.  This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same agreement.

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         Delivered at Chicago, Illinois as of the day, month and year first
above written.

                                       MONTGOMERY WARD & CO., INCORPORATED


                                       By: /s/ Douglas V. Gathany
                                             ----------------------------------
                                       Name:   Douglas V. Gathany



ACCEPTED AND APPROVED:


THE BANK OF NEW YORK, in its
individual capacity and in
its capacity as Documentation Agent


By: /s/ Michael Flannery
   -------------------------------------
Name:   Michael Flannery


THE BANK OF NOVA SCOTIA, in its
individual capacity and in its
capacity as Administrative Agent


By: /s/ J.H. Youssef
   -------------------------------------
Name:   J.H. Youssef
Title:  Senior Manager Finance & Administration

GENERAL ELECTRIC CAPITAL CORPORATION,
in its individual capacity


By: /s/ J. S. Werner
   -------------------------------------
Name:   J. S. Werner
Title:  Senior V.P.