<PAGE>
                               PROGRAM AGREEMENT

    THIS PROGRAM AGREEMENT is made and entered into this 12th day of October,
1989, by and between MONTGOMERY WARD & CO., INCORPORATED, an Illinois
corporation, having its principal executive office and place of business at
Montgomery Ward Plaza, Chicago, Illinois ("MW") and GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation having its principal office at 570
Lexington Avenue, New York, New York and administrative offices at 1600
Summer Street, Stamford, Connecticut ("GE Capital").


                                   WITNESSETH:

    WHEREAS, MW acquires Inventory (as hereinafter defined) from certain
manufacturers and distributors for resale to its customers; and
    WHEREAS, MW has requested GE Capital to pay to such manufacturers and
distributors whose payment terms are approved by GE Capital from time to time
in its sole discretion as hereinafter provided ("Vendors") the invoice price
of such Inventory acquired after the date of this Agreement (net of any
applicable discount); and
    WHEREAS, GE Capital is willing to make such payments for MW if it is
reimbursed for such payments on the terms and subject to the conditions
herein set forth;
    NOW, THEREFORE, the parties hereto, in consideration of the terms,
covenants, provisions and conditions hereinafter set forth, have agreed as
follows:
    1.   PAYMENTS BY GE CAPITAL. At MW's request, GE Capital shall, from time
to time, make payments to Vendors in amounts equal to the invoice price (net
of any applicable discount) for Inventory acquired by MW ("Payments"). GE
Capital shall from time to time in GE Capital's sole discretion approve or
refuse to approve specific purchase orders from any Vendors based upon each
such Vendor's payment terms.  If GE Capital shall refuse

                                      -1-

<PAGE>

such approval for any purchase order(s) from a Vendor at any time for any
reason it shall not have the right to rescind such approval for any
previously approved purchase order(s) from such Vendor.  GE Capital shall be
under no obligation to make Payments to Vendors with respect to any purchase
orders which it has not approved. For purposes of this Agreement, the term
"Inventory" shall mean appliances, electronics, furniture and such other
items of merchandise as the parties may agree from time to time shall
constitute Inventory purchased by MW from Vendors for resale in its retail
stores. The aggregate amount of outstanding Payments and other amounts
payable hereunder, at any given time, shall not exceed One Hundred Million
Dollars ($100,000,000.00).
    Whenever GE Capital is notified orally or in writing, in any manner, by
any Vendor, that MW desires GE Capital to pay for the acquisition of
Inventory to be sold to MW by such Vendor, GE Capital may rely upon such
notice as a request from MW to pay for such acquisition. Notwithstanding the
foregoing, GE Capital shall not be obligated to pay for any acquisition of
furniture by MW if after giving effect to such acquisition, the aggregate
amount of unreimbursed Payments made with respect to furniture would exceed
twenty-five percent (25%) of the aggregate amount of unreimbursed Payments
made with respect to all Inventory. Any invoice, notice of shipment or
schedule ("Invoice") pertaining to Inventory, which lists GE Capital as
vendee or which otherwise indicates that GE Capital will pay for the
acquisition of such Inventory for MW, shall be conclusive evidence that MW
has agreed that GE Capital is to pay for the acquisition of such Inventory
for MW under the terms of this agreement. The amount of any Payment plus any
applicable charges provided for on any supplement(s) attached hereto (each of
which, when signed by the parties hereto, shall become a part of this
Agreement) ("Supplement"), shall be subject to the reimbursement provisions
of this Agreement and any such applicable Supplement(s).

                                      -2-

<PAGE>

    2.   MW REIMBURSEMENTS. MW shall, following receipt of Invoices from GE
Capital, reimburse GE Capital for Payments. Such reimbursements shall be
equal to the gross amount due as shown on such Invoices (prior to deducting
any applicable discount). Such reimbursement shall be made when due, as
determined in accordance with any applicable Supplement(s). MW shall make all
reimbursements at or to the GE Capital office located at 1600 Summer Street,
Stamford, Connecticut, or such other office address as GE Capital may
hereafter specify in writing for such purpose. Reimbursements shall be
applied by GE Capital against the Payments outstanding at the time
reimbursements are made. If any reimbursement is not received by GE Capital
on or before the date due, MW agrees to pay applicable charges as provided in
any applicable Supplement(s).
    MW hereby assigns to GE Capital any credits or payments received by MW in
connection with the Inventory paid for by GE Capital hereunder, for
application in GE Capital's sole discretion to any amounts owed by MW.
    GE Capital shall provide monthly, or at other intervals mutually agreed
to by GE Capital and MW, an accounting of Payments made to Vendors and
reimbursements received from MW. Each such accounting shall (absent manifest
error) be deemed prima facie evidence in all respects as to all matters
reflected therein, unless MW shall, within twenty (20) days after the date
any such accounting is rendered, notify GE Capital in writing of any objection
which MW may have to any such accounting, describing the basis for such
objection with specificity.

    3.   REPRESENTATIONS AND WARRANTIES. MW represents and warrants to GE
Capital that:
         (a)  MW is a corporation duly organized, validly existing and in
good standing under the laws of the State of Illinois;
         (b)  MW is duly authorized to enter into this Agreement, has taken
all necessary corporate action to authorize the execution and consummation of
this Agreement, and shall furnish

                                      -3-

<PAGE>

GE Capital with satisfactory evidence of same upon request.  This Agreement
is a legal, valid and binding obligation of MW enforceable against MW in
accordance with its terms except as such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally;
         (c)  The execution, delivery and performance of this Agreement do
not constitute a breach of any provisions contained in MW's Articles of
Incorporation or Bylaws;
         (d)  The execution, delivery or performance of this Agreement is not
in contravention of any applicable provision of law, governmental rule or
regulation and does not require the consent of approval or any governmental
entity or authority or any other person which has not been obtained;
         (e)  The execution, delivery or performance of this Agreement is
not in contravention of any order binding upon MW, or any agreement,
indenture or other instrument, including, without limitation, any loan
agreement to which MW is a party or by which MW or its property is or may be
bound, and will not result in a breach or termination thereof, constitute a
default thereunder, or accelerate any performance required thereby or result
in the creation or imposition of a lien on any of its properties;
         (f)  The financial statements which have been delivered by or for MW
to GE Capital, have been prepared in accordance with generally accepted
accounting principles, and accurately reflect MW's financial condition as of
the dates of such statements.  MW has no material contingent liabilities not
provided for or disclosed in the financial statements delivered to GE Capital;
         (g)  No litigation which might impair the enforceability of this
Agreement or MW's ability to perform its obligations hereunder ("Material
Litigation") is pending or, to MW's knowledge, threatened against MW;
         (h)  (1)  All tax returns, reports and forms required to be filed
with any domestic or foreign taxing authority in connection with any
activities or assets of MW have been filed, except were the failure to file
any such return, report or form

                                      -4-

<PAGE>

would not have any material adverse effect on the business or financial
condition of MW and its subsidiaries taken as a whole.
              (2)  All taxes required to be paid with respect to the
activities or assets of MW and its subsidiaries have been duly paid or
provisions deemed appropriate where made by Mobil Corporation ("Mobil"),
Marcor Inc. ("Marcor") and/or MW and its subsidiaries, on the books and
records therefor, except such amounts (i) as are contested in good faith and
as to which adequate reserves were provided by MW in accordance with the
best estimates of ultimate liability by the entity responsible therefor or
(ii) the non-payment of which would not have a material adverse effect on the
business or financial condition of MW and its subsidiaries taken as a whole.
              (3)  From July 1, 1976 through June 22, 1988, for federal
income tax purposes, MW and its subsidiaries were a member of the affiliated
group of which Mobil, MW's ultimate parent corporation, was the common
parent, and the income of MW and its subsidiaries were included in the
consolidated federal income tax returns of Mobil through June 22, 1988. All
filings and payments with respect thereto were made directly by Mobil, and
all refunds with respect thereto have been or will be paid directly to Mobil;
payments have been or are made and received by MW and its subsidiaries with
respect to such taxes under tax sharing agreements with Mobil and Marcor.
Accordingly, all representations and warranties made in Sections 3(h) (1) and
(2) with respect to federal income taxes are qualified to the best of MW's
general knowledge of Mobil's practices and procedures. To the best of its
knowledge, MW has made all payments which are due to Mobil and Marcor as
determined by Mobil and Marcor, under such tax sharing agreements.
         (i)  The Inventory is not covered by or subject to, in whole or in
part, (1) any effective security agreement or equivalent security or lien
instrument, or (2) any financing statement or continuation statement on file
or of record in any public office.
         (j)  MW's principal place of business is located at the address
indicated above.

                                      -5-


<PAGE>

   4. FINANCIAL STATEMENTS AND INFORMATION. For so long as MW shall have
any obligation to GE Capital under this Agreement, it shall deliver to GE
Capital:
      (a) Within one hundred five (105) days after the close of each
fiscal year, a copy of the annual financial statements of MW and Parent,
consisting of a balance sheet, income statement and statements showing
changes in financial position, certified by independent public accountants
regularly retained by MW and Parent and accompanied by such accountants'
certification stating that, in the normal course of their audit, such
accountants have not become aware of any Event of Default under this
Agreement (or, if there is any such Event of Default, describing it and the
steps, if any, being taken to cure it);
      (b) Within sixty (60) days after the end of each quarter, except the
last quarter of each fiscal year of MW, a copy of an unaudited financial
statement of MW prepared in the same manner as the audit report referred to
in Section (a) above and consisting of a balance sheet as of the close of
that quarter, statements of earnings for that quarter and statements of
earnings and cash flows for the period from the beginning of that fiscal year
to the close of that quarter;
      (c) Within thirty (30) days after learning of the occurrence of
either of the following written notice thereof, describing the same and the
steps (if any) being taken by MW with respect thereto: (i) the occurrence of
any Event of Default (whether or not cured), or (ii) the institution of any
Material Litigation or development which might lead to Material Litigation.
      The financial statements which are delivered by or for MW to GE
Capital pursuant to Section 4(a) and (b) shall be prepared in accordance with
generally accepted accounting principles, and accurately reflect MW's
financial condition as of the date of such statements.

   5. COVENANTS. MW covenants and agrees that, for so long as it shall have
any obligation to GE Capital hereunder, it shall:
      (a) Except as permitted in Section 5(b) below,


                                     -6-

<PAGE>

preserve and maintain its corporate existence and rights, privileges and
franchises in connection therewith;
      (b) Not consolidate or merge with or into any other entity or convey
its property as an entirety or substantially as an entirety to any other
entity unless: (i) in the case of a merger, MW shall be the surviving entity,
and immediately after such consolidation or merger no Event of Default shall
exist, or (ii) if MW shall not be the surviving entity, the entity into which
MW is consolidated or merged shall specifically assume in a writing
satisfactory to GE Capital any and all of the liabilities of MW under this
Agreement and the related documents, including any Supplement(s) hereto;
      (c) Not violate any of the requirements of any applicable laws, rules,
regulations, and orders of any governmental authority (federal, state, local
or foreign, including, without limitation, environmental, health and safety
laws, rules, regulations and orders); provided, however, that any violation
by MW of any environmental, health or safety order, rule or regulation shall
not be deemed a violation of this Section 5(c) so long as MW shall, upon
notice of such violation, immediately take appropriate action to cure such
violation;
      (d) Promptly pay when due all taxes, assessments or other charges owing
by MW except taxes, assessments and other charges which shall be diligently
contested in good faith by appropriate proceedings and as to which adequate
reserves shall have been set aside in accordance with generally accepted
accounting principles;
      (e) Not grant a security interest in, or otherwise create a lien on,
the Inventory without forty-five (45) days prior written notice to GE Capital;
      (f) Not change its principal place of business without giving GE
Capital thirty (30) days prior written notice thereof;
      (g) Permit a GE Capital employee designated by GE Capital to work on
MW's premises in MW's accounts payable operation to administer this program;
MW agrees to allow such


                                     -7-

<PAGE>

employee access to all MW books and records as necessary to perform this
function;
      (h) Use its best efforts to implement streamlined payment and other
procedures, including but not limited to tape to tape purchasing, mutually
agreed to by GE Capital and MW in order to administer this Agreement; and
      (i) Indemnify and hold GE Capital harmless from and against any and all
third party suits, actions, proceedings, claims, damages, losses, liabilities
and expenses (including without limitation, reasonable attorneys' fees and
disbursements, including those incurred upon any appeal) which may be
instituted or asserted against or incurred by GE Capital as the result of its
having entered into this Agreement or made Payments hereunder; provided,
however, that MW shall not be liable for such indemnification to GE Capital
to the extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results from GE Capital's gross negligence or willful
misconduct.

   6. TERM. This Agreement shall remain in effect for one year commencing on
the date hereof, unless sooner terminated as provided in this Section 6 or in
Section 7, and shall continue thereafter from year to year unless terminated
by either party by giving the other party thirty (30) days written notice
prior to any anniversary date hereof. Notwithstanding the foregoing, GE
Capital may terminate this Agreement at any time upon thirty (30) days prior
written notice to MW or upon the occurrence of an Event of Default specified
in Section 7.
   Upon termination of this Agreement by either party, pursuant to this
Section 6, MW shall reimburse to GE Capital (a) the amount of Payments which
have not been reimbursed as of the date of termination (including Payments
covering any Inventory shipped to MW for which the Invoice(s) has not yet
been received by GE Capital) which amount of Payments shall be due and
payable in accordance with the terms of any applicable Supplement(s), and (b)
all applicable charges and any other unpaid amounts owing pursuant to this
Agreement and any Supplement(s),


                                     -8-

<PAGE>

which charges and other unpaid amounts shall be immediately due and payable
unless otherwise provided in any applicable Supplement(s).

   7. EVENTS OF DEFAULT.
      (a) Each of the following shall constitute an Event of Default under
this Agreement:
          (1) Failure by MW to make any reimbursement due under Section 2 or
any applicable Supplement(s) and the continuance thereof for five (5)
business days after notice thereof to MW by GE Capital;
          (2) Failure by MW to make any other payment under any other
provision of this Agreement or any applicable Supplement(s) and continuance
of such failure for ten (10) days after notice thereof to MW by GE Capital;
          (3) Failure by MW to comply with or to perform its obligations
under any material provision of this Agreement (and not constituting an Event
of Default under any of the other provisions of this Section (7) and (i)
continuance of such failure for thirty (30) days after notice thereof to MW
by GE Capital specifying such failure if such failure can be cured with
diligence within such 30-day period by MW or can be cured by the payment of
money, or (ii) continuance of such failure for sixty (60) days after notice
thereof to MW by GE Capital specifying such failure if such failure cannot
with diligence be cured within such 30-day period and cannot be cured by the
payment of money.
          (4) Default by MW in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any Debt
(as hereinafter defined) of MW or default in the performance or observance of
any obligation or condition with respect to any such Debt, if (i) such
default has not been remedied within five (5) business days after notice
thereof to MW by the holder or holders of such Debt or any trustee or agents
for such holders; (ii) the effect of such default is to accelerate the
maturity of any such Debt or cause any of such Debt to be prepaid, purchased
or


                                     -9-

<PAGE>

redeemed; or (iii) the holder of holders thereof, or any trustee or agent for
such holder(s) (x) causes such Debt to become due and payable prior to its
express maturity or to be prepaid, purchased or redeemed or (y) receives any
payment (other than any payment which was scheduled to be made prior to the
occurrence of such default), guaranty or security or other concession from or
on behalf of MW, or any subsidiary; provided, however, that no such default
under this Section 7(a)(4) shall constitute an Event of Default unless the
amount of Debt so affected is at least $5,000,000. For purposes hereof,
"Debt" with respect to MW means, as of the date of determination thereof, (i)
all of MW's indebtedness for borrowed money, (ii) all of MW's capitalized
lease obligations, (iii) all of MW's actual or contingent reimbursement
obligations with respect to letters of credit issued for MW's account (iv)
all of MW's actual or contingent obligations with respect to interest swap
agreements or currency swap agreements or other hedge agreements relating to
fluctuations in interest rates or currencies, (v) all of MW's liabilities
under Title IV of ERISA, and (vi) any and all indebtedness or obligations of
any of the types described in the preceding clauses (i), (ii), (iii), (iv)
and (v) for which MW is liable, directly or indirectly, under a guaranty.
          (5) The Account Purchase Agreement (the "Account Purchase
Agreement") dated as of June 24, 1988 between MW and Montgomery Ward Credit
Corporation ("MWCC") shall be amended or modified in any material respect, or
shall fail to remain in full force and effect, or (ii) any "Seller Default"
or "Buyer Default", as defined in the Account Purchase Agreement, shall occur
thereunder, or (iii) MW or MWCC shall give notice of termination or take any
action to terminate thereunder, or (iv) MWCC shall exercise an option to
repurchase any receivables thereunder.


                                     -10-


<PAGE>

          (6) The occurrence of any of the following events: (i) MW shall
become insolvent or generally fail to pay, or shall admit in writing its
inability or refusal to pay debts as they become due, or (ii) MW shall apply
for, consent to, or acquiesce on the appointment of a trustee, receiver, or
other custodian shall be appointed for MW or for a substantial part of its
property and shall not be discharged within sixty (60) days, or (iv) any
bankruptcy, reorganization, debt arrangement, or other case or proceeding
under any bankruptcy or insolvency law, or any dissolution or liquidation
proceeding shall be commenced in respect to MW, and if such case or
proceeding is not commenced by MW, it shall be consented to or acquiesced in
by MW or remain for sixty (60) days undismissed, or (v) MW shall generally
fail to pay its debts as they become due, or (vi) MW shall take any corporate
action to authorize, or in furtherance of, any of the foregoing.
          (7) Any representation or warranty made by MW herein is breached or
contains any statement which is false or misleading in any material respect.
          (8) The rendering of any final judgment or judgments (after the
expiration of all times to appeal therefrom) for the payment of money in
excess of One million dollars ($1,000,000.00) in the aggregate against MW, if
the same shall not be (i) fully covered by insurance, or (ii) vacated, stayed,
bonded, paid or discharged for a period of sixty (60) days;
      (b) EFFECT OF EVENT OF DEFAULT.  If any Event of Default shall occur,
GE Capital may immediately, by written notice to MW, terminate this
Agreement, cease making further Payments to Vendors pursuant to Section 1
hereof, and declare all of MW's obligations under this Agreement and any
applicable Supplement(s) to be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by MW, and GE Capital may proceed to enforce payment of same.

    8. SELECTION OF INVENTORY; DICLAIMER OF WARRANTY/ MAINTENANCE. MW has
selected both the Inventory and the Vender from whom it shall acquire the
Inventory and MW acknowleges and agrees that GE Capital makes no
representation

                                           -11-

<PAGE>

or warranty as to, and MW assumes all responsibility and risk for the
Inventory including, without limitation, the existence, character, quality,
condition and value of the Inventory. MW irrevocably waives any claims against
GE Capital with respect to the Inventory, whether for breach of warranty or
otherwise. Any such claims shall not alter, diminish or otherwise impair MW's
liabilities or obligations to GE Capital hereunder. Without limiting the
foregoing, MW shall be obligated to REIMBURSE GE Capital in full even if the
Inventory is defective or fails to conform to the warranties extended by
Vendors. MW shall not assert against GE Capital any claim or defense MW may
have against any Vendor.

    9. COLLECTIONS FROM VENDORS BY GE CAPITAL.
       (a) Notwithstanding anything to the contrary contained herein, GE
Capital's right to any reimbursement under this Agreement shall be subject to
MW's right of deduction of any valid claim of MW asserted in good faith
against a Vendor to the extent that, at the time MW notifies GE Capital of
such valid claim, there are unpaid Payments due from GE Capital on Invoices
from such Vendor or it is reasonably expected by MW that GE Capital will be
requested to make Payments to such Vendor in the future. The deduction shall
be no greater than the amount of the valid claim charged back by or on behalf
of MW to said Vendor. A copy of the chargeback documentation shall be
furnished to GE Capital at the time MW asserts such right of deduction.
       Valid claims shall be limited to (i) claims respecting Inventory which
result from returned merchandise, damaged merchandise, or incorrect unit
pricing or quantities of merchandise, or (ii) other such bona fide claims
directly related to the Inventory merchandise.
       GE Capital shall use its best efforts to resolve any valid claims
submitted as chargebacks to Vendor. MW will indemnify GE Capital and will
hold harmless GE Capital from and against any and all losses, liabilities,
claims, expenses, charges, demands, suits, judgements, and awards (including
all attorney's fees) (collectively "Losses") arising from the taking of any
deduction by MW, including without limitation

                                        -12-

<PAGE>

(i) any Losses arising from GE Capital's inability to withhold an amount
equal to such deduction from amounts payable on Invoices to the applicable
Vendor if (a) such inability arises from the fact that MW has ceased doing
business with such Vendor and (b) sixty (60) days have passed since the date
GE Capital learned that MW has ceased doing business with such Vendor and
(ii) any Losses arising from any chargeback withheld from such Vendor which
is disputed by such Vendor and which cannot be resolved satisfactorily with
such Vendor within one hundred (120) days after the date MW notified GE
Capital of such valid claim; provided that MW shall not be required to
indemnify GE Capital to the extent that the Losses arise solely from GE
Capital's negligence or misconduct and provided, further, that with respect
to indemnification under (ii) above, GE Capital shall not make payment to the
Vendor of the amount represented by the disputed chargeback which was
previously deducted by GE Capital, but shall assign the claim to MW, and MW
shall assume all obligations for resolving such claim. MW shall remit
promptly to GE Capital all amounts which become payable pursuant to the above
indemnity upon the expiration of the time periods referred to in (i) and (ii)
above, but in no case shall such amounts be remitted sooner than one hundred
twenty (120) days from the earlier of (i) the shipping date of the Inventory
covered by such Invoice or (ii) the date of such Invoice. Without limiting
the foregoing, if amounts previously deducted by MW become payable to GE
Capital pursuant to the above indemnity and are not remitted immediately to
GE Capital when due, such amounts shall be subject to interest at a rate
equal to the prime rate in effect on the last business day of the month
preceeding the month in which such amounts become payable.
    (b) GE Capital agrees that it shall, during the term of this Agreement,
at no cost to MW, use its best efforts to collect from any Vendor with whom
MW has ceased doing business any debit balance owed to MW by such Vendor with
regard to Inventory for which GE Capital has made Payments, provided that

                                       -13-

<PAGE>

MW requests that GE Capital do so and provides GE Capital with documentation
verifying said debit balance. Notwithstanding the foregoing, MW shall not be
entitled to deduct any such debit balance from any reimbursement due to GE
Capital and shall remain obligated to reimburse GE Capital in full for any
Payment made with respect to such Inventory in accordance with the applicable
Supplement(s). MW shall indemnify GE Capital against Losses arising in
connection with any such collection efforts; provided that MW shall not be
required to indemnify GE Capital to the extent that the Losses arise solely
from GE Capital's negligence, willful misconduct or failure to comply with
applicable law.

    10. GENERAL PROVISIONS.
        (a) GE Capital's rights and remedies under this Agreement shall be
cumulative and non-exclusive of any other rights or remedies which it may
have under any other agreement or instrument, by operation of law or
otherwise.
        (b) This Agreement may not be assigned by GE Capital or MW without
the prior written consent of the other party, which consent shall not be
unreasonably withheld. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
assigns.
        (c) Wherever this Agreement provides for notice from one party to the
other (except as expressly provided to the contrary), it shall be given by
messenger, electronic transmission, telegram or mail, effective when received
by the corporate party to whom addressed, and shall be addressed as follows,
or to such other address as the party affected may hereafter designate in
writing to the other party:

            If to GE Capital:

            General Electric Capital Corporation
            260 Long Ridge Road
            Stamford, Connecticut 06902
            Attention: S.P. Joyce

                                            -14-

<PAGE>

           With a copy to:

           General Electric Capital Corporation
           260 Long Ridge Road
           Stamford, Connecticut 06904

           Attention: Counsel, Retailer Financial Services

           and if to MW:

           Montgomery Ward & Co., Incorporated
           Montgomery Ward Plaza
           Chicago, Illinois 60671
           Attention: E.G. Pohlmann

           with a copy to:

           Montgomery Ward & Co, Incorporated
           Montgomery Ward Plaza
           Chicago, Illinois 60671
           Attention: Corporate Secretary

       (d) No delay or failure on the part of GE Capital in exercising any
right, privilege, remedy or option hereunder shall operate as a waiver of
such or of any other right, privilege, remedy or option and no waiver
whatsoever shall be valid unless in writing and signed by an officer of GE
Capital and then only to the extent therein set forth.
       (e) In the event that GE Capital employs counsel, other than salaried
employees of GE Capital, with respect to the enforcement or defense of this
Agreement, or the relationship created hereby, all reasonable attorney's fees
arising from such services, and any expenses, costs and charges relating
thereto shall constitute additional obligations of MW, payable on demand.
       (f) This Agreement and the Supplement(s) to which it expressly refers
constitute the complete agreement between the parties with respect to the
subject matter and may not be

                                           -15-

<PAGE>

changed, modified, waived, amended or terminated orally, but only by a
writing signed by the party to be charged.
       (g) The validity of this Agreement and of all transactions provided
for herein shall be governed by, interpreted and construed under, and in
connection with, the laws of the State of New York.

       IN WITNESS WHEREOF, this Agreement has been duly executed as of the
day and year first above written.

                                  General Electric Capital Corporation

                                  By:
                                     ------------------------------------

                                  Title: Vice President
                                        ---------------------------------

                                  Montgomery Ward & Co., Incorporated

                                  By:
                                     ------------------------------------

                                  Title: Sr. Vice President
                                        ---------------------------------

                                            -16-


<PAGE>

                              SUPPLEMENT NO. 1 TO PROGRAM AGREEMENT


TO:  GENERAL ELECTRIC CAPITAL CORPORATION

   MW hereby supplements and amends its Program Agreement ("Agreement") with
GE Capital dated October 12, 1989, to include and incorporate by reference
the following additional terms and conditions:
   In consideration of the Payments made from time to time by GE Capital for
MW under the Agreement, for certain Invoices covering Inventory acquired by
MW from Vendors, MW agrees to make reimbursement in full of each such Invoice
paid by GE Capital no later than 120 days from the earlier of (i) the
shipping date of the Inventory covered by such Invoice or (ii) the date of
such Invoice. If for any reason any reimbursement is received by GE Capital
later than the applicable due date, MW agrees to pay to GE Capital a late
charge fee equal to the sum of (i) two (2) basis points (.02% or .0002) times
the amount due times the number of days past due up to fifteen (15) days and
(ii) five (5) basis points (.05% or .0005) times the amount due times the
number of days past due in excess of fifteen (15) days.
   With respect to each six (6) month period during the term of the
Agreement, (beginning with the period which ends on the date which is six (6)
months from the date of the Agreement), GE Capital shall calculate whether MW
is entitled to a discount rebate ("Discount Rebate").  GE Capital shall
calculate the Discount Rebate for each six (6) month period as follows:
   (1)  GE Captial shall first make the following calculations with respect
        to each month during such six month period:
        (a)   Determine the actual number of days elapsed between (i) the
              earlier of (y) the shipping date of the Inventory covered by
              each Invoice for which reimbursement has been made by MW to GE
              Capital during such month (each such reimbursed Invoice herein
              referred to as a "Paid Invoice") and (z) the date of such Paid
              Invoice, and (ii) the date reimbursement for such Paid Invoice
              has been received by GE Capital ("Actual Number of Elapsed
              Days").


                                     -1-

<PAGE>

        (b)   Determine the "Required Dollar Discount" for each Paid Invoice.
              The "Required Dollar Discount" with respect to a Paid Invoice
              shall equal the "Required Percent Discount" for such Paid
              Invoice times the gross amount due as shown on such Invoice
              (prior to deducting any applicable discount). The "Required
              Percent Discount" for such Paid Invoice shall be determined by
              reference to Exhibit A hereto, based on the applicable "Prime
              Rate" and the Actual Number of Elapsed Days with respect to
              such Paid Invoice.  The applicable "Prime Rate" shall be the
              highest prime rate as published in the Money Rates Table of THE
              WALL STREET JOURNAL on the last business day of the month
              preceeding the month in which the Paid Invoice was paid to the
              Vendor by GE Capital; and
         (c)  Determine the actual discount received by GE Capital with
              respect to its payment to Vendors of each Paid Invoice with
              respect to such month ("Actual Dollar Discount"); and
         (d)  Aggregate the Required Dollar Discounts for all Paid Invoices
              with respect to such month ("Aggregate Required Dollar
              Discounts");  and
         (e)  Aggregate the Actual Dollar Discounts for all Paid Invoices
              with respect to such month ("Aggregate Actual Dollar
              Discounts"); and
         (f)  Compute the "Base Discount Rebate" for all Paid Invoices with
              respect to such month by (i) multiplying .003 times the gross
              amount due as shown on each Paid Invoice (prior to deducting
              any applicable discount) and (ii) adding such products
              together; and
         (g)  Compute the "Average Number of Elapsed Days" by (i) aggregating
              the Actual Number of Elapsed Days for all Paid Invoices with
              respect to such month and (ii) dividing such aggregate by the
              number of Paid Invoices with respect to such month; and

                                      -2-


<PAGE>


        (h)   Determine the "Required 120 Day Dollar Discount" for each Paid
              Invoice.  The "Required 120 Day Dollar Discount" with respect
              to a Paid Invoice shall be computed in the same manner as the
              "Required Dollar Discount" in subparagraph (b) above with the
              exception that the Actual Number of Elapsed Days shall be
              assumed to be 120 days for all Paid Invoices; and
        (i)   Aggregate the Required 120 Day Dollar Discounts for all Paid
              Invoices with respect to such month ("Aggregate Required 120
              Day Dollar Discounts").
   (2)  GE Capital shall then apply such calculations as follows with
        respect to each month during such six (6) month period:
        (a)   If Aggregate Actual Dollar Discounts exceed Aggregate Required
              Dollar Discounts, GE Capital shall credit all or a portion of
              the amount of such excess to a MW Rebate Memorandum Account
              ("Rebate Account") as follows:  (i) First, an amount equal to
              the amount by which, if any, the Aggregate Required 120 Day
              Dollar Discount exceeds the Aggregate Required Dollar Discount
              shall be credited by GE Capital to the Rebate Account; (ii)
              Second, GE Capital shall determine the amount by which, if any,
              the Aggregate Actual Dollar Discount exceeds the Aggregate
              Required 120 Day Dollar Discount (the "Shared Excess"); (iii)
              Third, GE Capital shall credit the Rebate Account with all or a
              portion of the Shared Excess as follows:
              (1)  If the Shared Excess is less than the Base Discount
              Rebate, all of the Shared Excess shall be credited to the
              Rebate Account.


                                     -3-

<PAGE>


             (2)  If the Shared Excess exceeds the Base Discount Rebate, GE
             Capital shall credit the Rebate Account in an amount equal
             to (X) the Base Discount Rebate, plus (Y) fifty percent
             (50%) of the portion of the Shared Excess which exceeds
             the Base Discount Rebate plus (Z) if the Average Number of
             Elapsed Days is less than one hundred twenty (120) and
             greater than seventy (70), an additional one percent (1%)
             of the portion of the Shared Excess which exceeds the Base
             Discount Rebate for each such day by which the Average
             Number of Elapsed Days is less than one hundred twenty
             (120), but in no event more than fifty percent (50%) of
             such portion.
        (b)   If Aggregate Actual Dollar Discounts are less than Aggregate
              Required Dollar Discounts, GE Capital shall debit the Rebate
              Account in an amount equal to such difference.
   (3)  At the end of each six (6) month period of the Agreement, GE Capital
        shall net the credits and debits made to the Rebate Account during
        such six month period (including any carried over from prior six (6)
        month periods.) Any net credit amount shall be the Discount Rebate
        and shall be remitted to MW by check.  Any net debit amount shall be
        carried over to future six (6) month periods.
   GE Capital shall provide a monthly accounting of the Rebate Account to MW.
   GE Capital shall have the right to set off any late charge fees and other
amounts, including Payments, due and unpaid pursuant to this Supplement
and/or the Agreement, against any Discount Rebates owed to MW hereunder.



                                      -4-



<PAGE>

          In no event shall late charge fees due hereunder exceed the maximum
amount of such charges permissible under applicable law.  In the event that a
court of competent jurisdiction, notwithstanding the provisions of the
preceding sentence, shall make a final determination that GE Capital has
received late charge fees hereunder in excess of the maximum permissible
under applicable law GE Capital shall, to the extent permitted by applicable
law, promptly apply such excess first to any due and unpaid reimbursements
under the Agreement, and thereafter shall refund any excess to MW or as a
court of competent jurisdiction may otherwise order.
          The parties agree that this Supplement contains the entire
Agreement between the parties relating to the subject matter hereof.  There
are merged herein all prior representations, promises and conditions, whether
oral or written, which relate to the subject matter, and any representation,
promise or condition not incorporated herein will not be binding upon the
parties.  All terms used in this Supplement will have the meanings defined in
the Agreement.  If any provisions of this Supplement are inconsistent with
any provisions of the Agreement or any other Supplement(s) executed on or
prior to the date hereof, the provisions of this Supplement will prevail and
govern and the inconsistent provisions of the Agreement or such other
Supplement(s) will be deemed to be amended accordingly.
          The parties agree that this Supplement may not be varied, altered
or its provisions waived except by another agreement in writing signed by the
parties' authorized representatives.  This Supplement will be binding on the
respective permitted successors and assigns of MW and GE Capital under the
Agreement, their legal representatives, heirs, executors and administrators.


                                    -5-

<PAGE>

     IN WITNESS WHEREOF, this Supplement is hereby signed and sealed this
12th day of October, 1989.

                                       MONTGOMERY WARD & CO., INCORPORATED

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


CORPORATE SEAL                         By
                                          --------------------------------


                                        Title   Sr. Vice President
                                             -----------------------------

ACCEPTED:



GENERAL ELECTRIC CAPITAL CORPORATION


By:
  ----------------------------------


Title:  Vice President
      ------------------------------



                                     -6-