<PAGE>
 
                                                                 10.(i)(L)(5)



                             WAIVER, AMENDMENT AND
                              EXTENSION AGREEMENT



          THIS WAIVER, AMENDMENT AND EXTENSION AGREEMENT ("Agreement") dated as
of August 29, 1997, is made and entered into among SIGNATURE
FINANCIAL/MARKETING, INC. (the "Borrower") and the banks listed on the signature
pages hereof (herein, together with their respective successors and assigns,
collectively called the "Banks" and individually called a "Bank").

          WHEREAS the Banks are parties to that certain Credit Agreement dated
as of September 27, 1996, as amended and restated as of October 21, 1996 and as
further amended or modified as of December 23, 1996, March 27, 1997 and July 15,
1997 (as heretofore amended or modified, the "Credit Agreement"), among
Signature Financial/Marketing, Inc., various Banks, The Bank of New York as
Documentation Agent, and The Bank of Nova Scotia, as Administrative Agent; and


          WHEREAS the Borrower desires to extend the Maturity Date of the Credit
Agreement from August 29, 1997 to January 31, 1998;

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

                                   ARTICLE I

                        WAIVER, AMENDMENT AND EXTENSION


          1.1  The Banks hereby waive an Event of Default (the "Specified
Default") arising solely by reason of the failure of the Borrower on August 29,
1997 through the effective date of this Agreement to pay in full all Notes and
other Obligations.

          1.2  Section 1.1 of the Credit Agreement is hereby amended by adding
the following definitions thereto:

               "Account-Related Agreements" means, collectively, (i) the Bank
                -------------------------- 
     Credit Card Program Agreement, dated as of April 1, 1996 by and between
     Monogram Credit Card Bank of Georgia ("Monogram") and Montgomery Ward &
     Co., Incorporated ("MW"), and (ii) the Account-Related Agreement, dated as
     of April 1, 1996, by and between Montgomery Ward Credit Corporation
     ("MWCC") and MW, in each case as heretofore or, with Bankruptcy Court
     approval, hereafter amended.

               "Alternative Credit Program" means an agreement or agreements
                --------------------------
     which are intended to replace in whole or in substantial part the Account-
     Related Agreements and provide MW with private label credit and charge
     cards on terms and conditions not less favorable to MW than those set forth
     in the Account Related Agreements.

                                       1
<PAGE>
 
               "Credit Card Program" means (i) the private label credit and
                -------------------
     charge card program as evidenced by the Account Related Agreements or (ii)
     the Alternative Credit Program

          1.3  The Maturity Date is hereby extended by substituting "January 31,
     1998" for "August 29, 1997" in the definition of Maturity Date as set forth
     in Section 1.1 of the Credit Agreement.

          1.4  Article II is hereby amended by adding the following Section 2.12
     thereto:

          2.12 Extension Fee. (a) Concurrent with the execution by each Bank of
               -------------
     the Waiver, Amendment and Extension Agreement dated as of August 29, 1997
     ("Extension Agreement") among the Banks and the Borrower, the Borrower
     agrees to pay directly to each Bank in immediately available funds a fee
     equal to 1/4% of the aggregate outstanding principal amount of the Loans
     then outstanding from each Bank (it being understood that such fee shall be
     retained by such Bank regardless of whether the Extension Agreement becomes
     effective).

          (b)  The Borrower agrees to pay to the Administrative Agent in
     immediately available funds, for the prorata account of each Bank, a fee of
     $2,000 per day for each day the Loans (or any principal amount thereof)
     remain outstanding during the month of January 1998. Such fee shall be
     payable on the earlier of the day all the Loans are repaid in full or
     January 31, 1998.

          1.5  Section 8.1 of the Credit Agreement is amended by adding thereto
     Sections 8.1(q), (r) and (s) as follows:

          (q)  MW Dip Financing. Any Event of Default shall occur and be
               ----------------
     continuing under the Post Petition Loan and Guaranty dated as of July 8,
     1997, as amended or modified as of July 30, 1997 (as the same may be
     amended, supplemented or otherwise modified from time to time) by and among
     MW and various debtor affiliates of MW, General Electric Capital
     Corporation, as Agent and Lender, and the other Lenders named therein, as
     approved by order dated August 1, 1997 of the United States Bankruptcy
     Court for the District of Delaware, In Re Montgomery Ward Holding Corp., a
     Delaware Corporation, et al., Case No. 97-1049 (PJW) or any subsequent
                           -- --
     order of the such court.

          (r)  Citicorp Commitment Letter. (i) Any party to that certain
               --------------------------
     Commitment Letter, dated as of October 23, 1997, between Citicorp USA, Inc.
     and the Borrower (the "Commitment Letter") revokes, withdraws, or
     terminates the Commitment Letter, or (ii) any amendment, modification or
     waiver is made to the Commitment Letter which is not acceptable to the
     Banks, or (iii) the Commitment Letter shall cease to be in full force and
     effect.

                                       2
<PAGE>
 
          (s)  Credit Card Program. (i) An amendment shall be made to the Credit
               -------------------
     Card Program which is not approved by the Bankruptcy Court, or (ii) the
     Credit Card Program shall fail to remain in full force and effect, or (iii)
     any default by MW under the Credit Card Program (after the expiration of
     any applicable grace period) shall occur and be continuing which has not
     been waived and which provides any party thereunder with the right to
     terminate obligations of such party to extend credit to the customers of MW
     pursuant thereto or to purchase customer receivables thereunder from MW, as
     the case may be, or (iv) a court of competent jurisdiction shall enter an
     order terminating all or a substantial part of such Credit Card Program, or
     (v) a court of competent jurisdiction shall enter an order rejecting any
     Account Related Agreement as an executory contract pursuant to Section 365
     of the Bankruptcy Code unless an Alternate Credit Program shall be in full
     force and effect as of the date of such rejection.

          1.6   Schedules 5.5, 5.7, 5.11, 5.12, 5.16, and 5.17 are each hereby
                -------------  ---  ----  ----  ----      ----
amended by adding thereto the items set forth in the applicable section of
Schedule I attached hereto.

          1.7  The waiver, amendment and extension contained herein are limited
precisely to their terms and shall not constitute a waiver, amendment or other
modification generally or for any other purpose.


                                  ARTICLE II

                        REPRESENTATIONS AND WARRANTIES
                        ------------------------------

          The Borrower hereby represents and warrants to the Agents and the
Banks as follows:

          II.1 No Default. No Default or Event of Default has occurred and is
               ----------
continuing, other than the Specified Default, or will exist after giving effect
to this Agreement.

          II.2 Due Execution.   The execution, delivery and performance of this
               -------------
Agreement, (i) are within the Borrower'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 Borrower'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 Borrower, any Subsidiary or any
of their respective properties.

          II.3 Validity. The Credit Agreement as extended by this Agreement
               --------
constitutes the legal, valid and binding obligations of the Borrower,
enforceable against it in accordance with its respective terms, without defense,
counterclaim or offset.

          II.4 Credit Agreement. All representations and warranties of the
               ----------------
Borrower contained in Article 5 (except Section 5.11(b)) of the Credit Agreement
are true and correct as of the date hereof with the same effect as though made
on the date hereof. Since December 31, 1995, there has not occurred any event
which (i) materially impairs the ability of the Borrower to perform its
obligations under any Loan Document or to avoid, after the effective date
hereof, any Event of Default, or (ii) materially adversely effects the legality,
validity, binding effect or enforceability against the Borrower of any Loan
Document.

                                       3
<PAGE>
 
                                  ARTICLE III

                                    GENERAL
                                    -------

          III.1  Expenses. The Borrower agrees to pay all fees and expenses of
                 --------   
each of the Agents and the Banks (including all legal fees and related expenses
of separate counsel for each of the Banks and the Agents) in connection with the
preparation, execution and delivery of this Agreement.

          III.2  Effectiveness. This Agreement shall become effective on the
                 -------------
date on which, the Documentary Agent shall have received each of the following:

          (a)    Agreement. Counterparts of this Agreement whether on the same
                 ---------
     or different counterparts, executed by the Borrower and the Required Banks
     (or in the case of any Bank 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 Bank);

          (b)    Agreement Fee.  Evidence of payment from the Borrower to each
                 -------------
     Bank of the fee provided for in Section 2.12(a) of the Credit Agreement as
     herein amended; and

          (c)    MW Court Order. The entry of an order by the United States
                 --------------
     Bankruptcy Court, District of Delaware, In Re Montgomery Ward Holding
     Corp., a Delaware Corporation, et. al., Case No. 97-1409(PJW) substantially
                                    --  --
     in the form attached to the Waiver and Rescission of Acceleration dated as
     of July 15, 1997 (but modified so as to conform to this Agreement).


          III.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.

          III.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 extended by this
Agreement. This Agreement shall be deemed incorporated into, and a part of, the
Credit Agreement.

          III.5  Successors. This Agreement shall be binding upon and inure to
                 ----------
the benefit of the parties hereto and their respective successors and assigns.

          III.6  Governing Law. This Agreement shall be governed by and
                 -------------   
construed in accordance with the laws of the State of Illinois.

          III.7  Counterparts. This Agreement 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.



                                       4
<PAGE>
 
  Dated at Chicago, Illinois as of the day, month and year first above written
but executed and delivered on or after November 10, 1997.

                              SIGNATURE FINANCIAL/MARKETING, INC.

                              By: /s/ John B. Euwema
                                  -----------------------------
                              Name:  John B. Euwema

ACCEPTED AND APPROVED:


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

By:  /s/ Julie B. Follosco
    --------------------------
Name:  Julie B. Follosco


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

By:  /s/ D. N. Gillespie
   --------------------------
Name:   D. N. Gillespie
        Assistant General Manager

                                       5
<PAGE>
 
REAFFIRMATION OF GUARANTY:

Each Guarantor hereby confirms and agrees that (i) its Guaranty dated as of
September 27, 1996, as heretofore reaffirmed from time to time, is, and shall
continue to be in full force and effect and is hereby ratified and confirmed in
all respects, as applied to the Credit Agreement as modified above; (ii) to the
extent the liability of any Guarantor under its Guaranty is limited by
applicable law, such Guarantor shall be nonetheless liable under its Guaranty to
the maximum extent permitted by applicable law, and (iii) to the extent that a
Guarantor shall have paid more than its proportionate share of any payment made
under its Guaranty, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor which has not paid its
proportionate share of such payment (it being understood that (a) such
Guarantor's right of contribution shall be subordinated to the obligations of
such Guarantor to the Banks and shall not be paid until all of the Obligations
under the Credit Agreement have been indefeasibly paid in full, and (b) the
provisions of this clause (iii) shall in no respect limit the obligations and
liabilities of any Guarantor to the Banks, and each Guarantor shall remain
liable to the Banks for the full amount guaranteed by such Guarantor under its
Guaranty).


CREDIT CARD SENTINEL, INC
ISS AGENCY, INC.
MONTGOMERY WARD CLUBS, INC.
MONTGOMERY WARD ENTERPRISES, INC.
SIGNATURECARD, INC.
MONTGOMERY WARD FINANCIAL
CENTER, INC.
MONTGOMERY WARD AGENCY, INC.
NATIONAL DENTAL SERVICE, INC.
SIGNATURE DIRECT, INC.
SIGNATURE INVESTMENT ADVISORS,
INC.
AMOCO MOTOR CLUB, INC.


By:  /s/ John B. Euwema
   ------------------------
Name:  John B. Euwema

                                       6
<PAGE>
 
                                  SCHEDULE I



Schedule 5.5 (Litigation) is hereby amended by adding thereto the following:


Schedule 5.7 (ERISA) is hereby amended by adding thereto the following:


Schedule 5.11 (Permitted Liabilities) is hereby amended by adding thereto the
following:


Schedule 5.12 (Environmental Matters) is hereby amended by adding thereto the
following:


Schedule 5.16 (Subsidiaries and Minority Interests) is hereby amended by adding
thereto the following:


Schedule 5.17 (Insurance Matters) is hereby amended by adding thereto the
following:

                                       7