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                                                                    EXHIBIT 10.8

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                   PRIVATE LABEL CREDIT CARD PROGRAM AGREEMENT

                                     BETWEEN

                      WORLD FINANCIAL NETWORK NATIONAL BANK

                                       AND

                                  SPIEGEL, INC.
                                       AND
                                EDDIE BAUER, INC.

                             DATED AS OF MAY 2, 2003

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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

                                TABLE OF CONTENTS

SECTION 1 DEFINITIONS
     1.1       Certain Definitions
     1.2       Other Definitions

SECTION 2 THE PLAN
     2.1       Establishment and Operation of the Plan
     2.2       Applications for Credit Under the Plan; Billing Statements
     2.3       Operating Procedures
     2.4       Plan Documents
     2.5       Marketing
     2.6       Administration of Accounts
     2.7       Credit Decision
     2.8       Ownership of Accounts and Mailing Lists
     2.9       Debt Cancellation and Enhancement Marketing Services
    2.10       Ownership of Spiegel Group Name

SECTION 3 OPERATION OF THE PLAN
     3.1       Honoring Credit Cards
     3.2       Additional Operating Procedures
     3.3       Cardholder Disputes Regarding Goods or Services
     3.4       No Special Agreements
     3.5       Cardholder Disputes Regarding Violations of Law or Regulation
     3.6       Payment to Spiegel Group; Ownership of Accounts; Fees; Accounting
     3.7       Insertion of Spiegel Group's Promotional Materials
     3.8       Payments
     3.9       Chargebacks
    3.10       Assignment of Title in Charged Back Purchases
    3.11       Promotion of Program and Card Plan; Non-Competition
    3.12       Postage
    3.13       Reports

SECTION 4 REPRESENTATIONS AND WARRANTIES OF SPIEGEL GROUP
     4.1       Organization, Power and Qualification
     4.2       Authorization, Validity and Non-Contravention
     4.3       Accuracy of Information
     4.4       Validity of Charge Slips
     4.5       Intentionally Left Blank
     4.6       Spiegel Group's Name, Trademarks and Service Marks
     4.7       Intellectual Property Rights

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
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TABLE OF CONTENTS, CONTINUED

SECTION 5 COVENANTS OF SPIEGEL GROUP
     5.1       Notices of Changes
     5.2       Financial Statements
     5.3       Inspection
     5.4       Spiegel Group's Business
     5.5       Spiegel Group's Stores
     5.6       Insurance
     5.7       Spiegel Group's Tracking Reports.
     5.8       Compliance with Law

SECTION 6 REPRESENTATIONS AND WARRANTIES OF BANK
     6.1       Organization, Power and Qualification
     6.2       Authorization, Validity and Non-Contravention
     6.3       Accuracy of Information
     6.4       Intentionally Left Blank
     6.5       Intellectual Property Rights
     6.6       Litigation & Solvency.

SECTION 7 COVENANTS OF BANK
     7.1       Notices of Changes
     7.2       Financial Statement
     7.3       Inspection
     7.4       Bank's Business
     7.5       Insurance
     7.6       Bank's Funding Facility
     7.7       Compliance with Law

SECTION 8 INDEMNIFICATION
     8.1       Indemnification Obligations
     8.2       Limitation on Liability
     8.3       No Warranties
     8.4       Notification of Indemnification; Conduct of Defense

SECTION 9 TERM AND TERMINATION
     9.1       Term
     9.2       Termination with Cause by Bank; Bank Termination Events
     9.3       Termination with Cause by Spiegel Group; Spiegel Group
                Termination Events
     9.4       Termination of Particular State
     9.5       Purchase of Accounts
     9.6       Termination of Plan Participation

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

TABLE OF CONTENTS, CONTINUED

SECTION 10 MISCELLANEOUS
    10.1       Entire Agreement
    10.2       Coordination of Public Statements
    10.3       Amendment
    10.4       Successors and Assigns
    10.5       Waiver
    10.6       Severability
    10.7       Notices
    10.8       Captions and Cross-References
    10.9       Governing Law
   10.10       Counterparts
   10.11       Force Majeure
   10.12       Relationship of Parties
   10.13       Survival
   10.14       Mutual Drafting
   10.15       Independent Contractor
   10.16       No Third Party Beneficiaries
   10.17       Confidentiality
   10.18       Taxes

SECTION 11  CONTINGENT HOLDBACK
    11.1       Holdback
    11.2       Monthly Reconciliation
    11.3       Retention of Holdback
    11.4       Bank's Rights to Charge Against the Holdback
    11.5       Reduction in Holdback
    11.6       Release and Termination of Holdback After Bankruptcy Emergence
    11.7       Release and Termination of Holdback After Sale

SCHEDULES
       1       Implementation Phases Plan
     1.1       Discount Rate
     2.1       Service Standards
     2.5       Marketing Promotions
     2.8       Monthly Master File Information
    3.13       Bank Reports

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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
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IS MARKED [***] HEREIN.

                   PRIVATE LABEL CREDIT CARD PROGRAM AGREEMENT

      THIS PRIVATE LABEL CREDIT CARD PROGRAM AGREEMENT is made as of this 2nd
day of May 2003 (the "Effective Date") by and between SPIEGEL, INC. ("Spiegel")
with its principal office at 3500 Lacey Road, Downers Grove, Illinois 60515, and
EDDIE BAUER, INC. ("Eddie Bauer") with its principal office at 15010 N.E. 36th
Street, Redmond, Washington 98052, (Spiegel and Eddie Bauer shall be
collectively referred to herein as "Spiegel Group"), and WORLD FINANCIAL NETWORK
NATIONAL BANK, with its principal office at 800 Tech Center Drive, Gahanna, Ohio
43230, (hereinafter referred to as "Bank").

                                   WITNESSETH:

      WHEREAS, Spiegel Group has requested Bank to extend credit, to qualifying
individuals in the form of private label open-ended credit card accounts for the
purchase of Goods and/or for Services from its Businesses and to issue Credit
Cards to such individuals; and

      WHEREAS, Bank shall own all such Credit Card Accounts, and Cardholder
payments will be sent to such location as Bank shall from time to time direct;
and

      WHEREAS, Bank has agreed to extend credit under Credit Card Accounts
subject to the terms and conditions as more fully set forth herein;

      NOW THEREFORE, in consideration of the terms and conditions hereof, and
for other good and valuable consideration, the receipt of which is hereby
mutually acknowledged by the parties, Spiegel Group and Bank agree as follows.

                             SECTION 1. DEFINITIONS

      1.1 Certain Definitions. As used herein and unless otherwise required by
the context, the following terms shall have the following respective meanings.

      "Account" shall mean an individual open-end revolving line of credit
      established by Bank for a Customer pursuant to the terms of a Credit Card
      Agreement.

      "Address Verification Service" shall mean an adjunct process to the credit
      authorization process where the Cardholder's reported billing address is
      verified against the Bank's address on file for such Cardholder.

      "Affiliate" shall mean with respect to either Bank or Spiegel Group any
      entity that is owned by, owns, or is under common control with such party.

      "Agreement" shall mean this Private Label Credit Card Program Agreement
      and any future amendments, extensions, waivers, schedules, exhibits or
      supplements thereto.

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

      "Applicable Law" shall mean any applicable federal, state or local law,
      rule, or regulation, including but not limited to the provisions of the
      Gramm-Leach-Bliley Act and the Fair Credit Reporting Act.

      "Applicant" shall mean an individual who is a Customer who applies for an
      Account under the Plan.

      "Automated Telephone Application" shall mean an application procedure
      designed to open Accounts at the point of sale or order entry, in which an
      application for credit is processed without a paper application being
      completed by an Applicant; instead, the Applicant's information is keyed
      into the telephone.

      "Batch Prescreen Application" shall mean a process where Bank's offer of
      credit is made to certain Customers prequalified by Bank, in a batch mode
      typically within a direct mail environment.

      "Business" shall mean Eddie Bauer's retail stores, catalogs, and/or
      Internet businesses and any other New Businesses developed or acquired by
      any Spiegel Group entity after the Effective Date of this Agreement and
      added to this Agreement pursuant to Section 2.1(c), and shall include the
      successors (by name change or otherwise) to such businesses that are owned
      by Spiegel Group.

      "Business Day" shall mean any day, except Saturday, Sunday or a day on
      which banks in Ohio are required to be closed.

      "Cardholder" shall mean any natural person to whom an Account has been
      issued by Bank and/or any authorized user of the Account.

      "Catalog" shall mean Spiegel Catalog, Inc.

      "Charge Slip" shall mean a sales receipt, register receipt tape, invoice
      or other documentation, whether in hard copy or electronic form, in each
      case evidencing a Purchase that is to be charged to a Cardholder's
      Account.

      "Credit Card" shall mean the plastic credit card issued by Bank to
      Cardholders for purchasing Goods and Services pursuant to the Plan.

      "Credit Card Agreement" shall mean the open-end revolving credit agreement
      between a Cardholder and Bank governing the Account and Cardholder's use
      of the Credit Card, together with any modifications or amendments which
      may be made to such agreement.

      "Credit Sales Day" shall mean any day, whether or not a Business Day, on
      which Goods and/or Services are sold by Spiegel Group and Spiegel Group's
      Stores.

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

      "Credit Slip" shall mean a sales credit receipt or other documentation,
      whether in hard copy or electronic form, evidencing a return or exchange
      of Goods or a credit on an Account as an adjustment by Spiegel Group or
      Spiegel Group's Stores for goodwill or for Services rendered or not
      rendered by Spiegel Group or Spiegel Group's Stores to a Cardholder.

      "Customer" shall mean any individual consumer who is a customer or
      potential customer of a Business.

      "Discount Fee" shall mean an amount to be charged by Bank equal to Net
      Sales multiplied by the Discount Rate.

      "Discount Rate" shall have the meaning set forth in Schedule 1.1.

      "Eddie Bauer" shall mean Eddie Bauer, Inc.

      "Effective Date" shall mean the date set forth in the first paragraph on
      page one of this Agreement.

      "Electronic Bill Presentment and Payment" shall mean a procedure where
      Cardholders can elect to receive their Account billing statements
      electronically and that also allows them an opportunity to remit their
      Account payment to Bank electronically.

      "Forms" shall have the meaning set forth in Section 2.4.

      "Full Implementation" shall mean all phases of implementation set forth in
      Schedule 1 attached hereto have been fully completed.

      "Goods and/or Services" shall mean those goods and/or services sold at
      retail by a Business through stores, catalog, or Internet to the general
      public for individual, personal, family or household use.

      "Initial Term" shall have the meaning set forth in Section 9.1.

      "Instant Credit Application" shall mean an in store or catalog application
      procedure designed to open Accounts at point of sale or order entry
      whereby an application for credit is communicated to Bank either verbally
      at point of sale or systemically during the catalog order entry process
      according to Bank's Operating Procedures.

      "Marketing Fund" shall have the meaning set forth in Section 2.5(b).

      "Net Proceeds" shall mean Purchases less: (i) credits to Accounts for the
      return or exchange of Goods or a credit on an Account as an adjustment by
      Spiegel Group and Spiegel Group's Stores for goodwill or for Services
      rendered or not rendered by Spiegel Group or Spiegel Group's Stores to a
      Cardholder, all as shown in the Transaction Records (as corrected by Bank
      in the event of any

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      computational error), calculated each Business Day; (ii) payments from
      Cardholders received by Spiegel Group and Spiegel Group's Stores from
      Cardholders on Bank's behalf; (iii) any applicable Discount Fees in effect
      on the date of calculation; (iv) the amounts pursuant to Section 11.1(a);
      and (v) any other fees or charges imposed by Bank pursuant to this
      Agreement if not paid when due.

      "Net Sales" shall mean Purchases, less credits or refunds for Goods and/or
      Services, all as shown in the Transaction Records (as corrected by Bank in
      the event of any computational error), calculated each Business Day.

      "New Business" shall have the meaning set forth in Section 2.1(c).

      "On-Line Prescreen" shall mean a process where a pre-screened offer of
      credit is made to Customers meeting Bank's credit criteria in a real-time
      pre-approved process according to Bank's Operating Procedures. The process
      utilizes traditional order entry data elements to build Customer records.
      The Customer records are pre-screened by a credit bureau using Bank's
      established criteria to determine if an offer of credit is appropriate.
      Customer records passing the Bank's pre-screening credit criteria are
      returned to the point of order entry where the pre-approved offer to open
      an Account is made. Records not passing the credit criteria are not
      returned and no offer is made.

      "Newport" shall mean Newport News, Inc.

      "Operating Procedures" shall mean Bank's instructions and procedures as
      written by Bank and provided to Spiegel Group to be followed by Spiegel
      Group and Spiegel Group's Stores in connection with the Plan.

      "Plan" shall mean the private label credit card program established and
      administered by Bank for Customers of Spiegel Group and Spiegel Group's
      Stores by virtue of this Agreement.

      "Plan Commencement Date" shall mean the date on which Bank commences
      operation of the Plan. Bank shall be deemed to have commenced operation of
      the Plan on the earlier of the date on which Bank begins to issue new
      Accounts or the date on which Bank notifies Spiegel Group in writing that
      Bank has commenced operation of the Plan.

      "Plan Year" shall mean each consecutive twelve (12) month period
      commencing on the Plan Commencement Date or the first day of the first
      full calendar month following the Plan Commencement Date if the Plan
      Commencement Date is not the first day of a calendar month and each
      anniversary thereof.

      "Prescreen Acceptance" shall mean a point of sale procedure designed to
      recognize and activate Bank's pre-approved offers for Accounts for
      Customers.

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

      "Principal Accounts Receivable Balance" shall mean the month-end
      principal-only accounts receivable. The principal portion of the accounts
      receivable relate to Purchases, Third Party Program Charges and
      Enhancement Marketing Services charges, and other charges not related to
      interest and fees.

      "Promotional Programs" shall mean any special Cardholder payment terms
      approved by Bank for certain Purchases, including without limitation
      deferred finance charges and deferred payments and subject to any terms
      and conditions set forth in writing by Bank. The initial Promotional
      Programs approved by Bank, if any, are set forth in Schedule 1.1. Third
      Party Program Purchases shall not be eligible for Promotional Programs.

      "Purchase" shall mean a purchase of Goods and/or Services and Third Party
      Program vendors' goods and services, including without limitation all
      applicable taxes and shipping costs, with a specific extension of credit
      by Bank to a Cardholder using an Account or to another Bank cardholder
      using another credit card account owned by Bank and honored by Spiegel
      Group pursuant to Section 3.1.

      "Quick Credit" shall mean an in-store application procedure designed to
      open Accounts as expeditiously as possible at point of sale, whereby an
      application for an Account is processed without a paper application being
      completed by an Applicant. An Applicant's credit card (Visa, MasterCard,
      American Express, Discover or other Bank approved private label card) is
      electronically read by a terminal that captures the Applicant's name and
      credit card account number. Other data shall be entered into that same
      terminal by the Spiegel Group's Store associate as specified in the
      Operating Procedures. This data is used by Bank to request a credit bureau
      report and make a decision whether to approve or decline the Applicant.

      "Regular Revolving Purchases" shall mean Purchases which are not subject
      to any Promotional Programs.

      "Renewal Term" shall have the meaning set forth in Section 9.1.

      "Spiegel" shall mean Spiegel, Inc.

      "Spiegel Group Deposit Account" shall mean a deposit account maintained by
      Spiegel Group as set forth in Section 3.6 (a).

      "Spiegel Group's Stores" shall mean those certain retail locations selling
      Goods and/or Services, which are owned and operated by Spiegel Group or
      which are licensees or franchisees of Spiegel Group.

      "Standard Implementation" shall mean Spiegel Group shall solely work with
      its Third Party Program vendor to certify the vendor's interface with Bank
      and Bank will not be required to provide any significant technical support
      with respect to

                                       5
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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

      establishing the vendor interface and the vendor will comply with Bank's
      procedures for the interface and settlement process without any
      customization for such vendor.

      "Term" shall mean the Initial Term and any Renewal Terms.

      "Third Party Programs" shall have the meaning set forth in Section 2.9(d).

      "Transaction Record" shall mean, with respect to each Purchase of Goods or
      Services by a Cardholder from Spiegel Group and/or Spiegel Group's Stores,
      each credit or return applicable to a Purchase of Goods or Services, and
      each payment received by Spiegel Group and Spiegel Group's Stores from a
      Cardholder on Bank's behalf: (a) the Charge Slip or Credit Slip
      corresponding to the Purchase, credit or return; or (b) a computer
      readable tape/cartridge or electronic transmission containing the
      following information: the Account number of the Cardholder, the Spiegel
      Group's Store number at which the Purchase, credit or return was made, the
      total of (i) the Purchase price of Goods or Services purchased or amount
      of the credit, as applicable, plus (ii) the date of the transaction, a
      description of the Goods or Services purchased, credited or returned and
      the authorization code, if any, obtained by Spiegel Group or Spiegel
      Group's Store prior to completing the transaction; or (c) electronic
      record whereby Spiegel Group or Spiegel Group's Store electronically
      transmits the information described in subsection (b) hereof to a network
      provider (selected by Spiegel Group at its expense), which in turn
      transmits such information to Bank by a computer tape/cartridge or
      electronic tape or transmission.

      1.2 Other Definitions. As used herein, terms defined in the introductory
paragraph hereof and in other sections of this Agreement shall have such
respective defined meanings. Defined terms stated in the singular shall include
reference to the plural and vice versa.

                               SECTION 2. THE PLAN

      2.1 Establishment and Operation of the Plan. (a) The Plan is established
for the primary purpose of providing Customer financing for Goods and/or
Services purchased from Businesses. Spiegel Group and Bank shall use reasonable
efforts to commence the Plan on or before May 1, 2003, or such other date as the
parties mutually agree upon in writing. Spiegel Group shall use its best efforts
to meet all of its obligations under the Phase 1 implementation requirements set
forth in Schedule 1 on or before May 31, 2003. In the event Spiegel Group
completes, and Bank certifies the performance of, all implementation
requirements set forth in Schedule 1 on or before September 30, 2003, Bank will
contribute to the Marketing Funds during the months of October, November and
December, 2003, an amount equal to .0010 multiplied by the Net Sales for the
prior fiscal month. Qualified Applicants desiring to use the Plan shall be
granted an Account by Bank with a credit line in an amount to be determined by
Bank in its discretion for each individual Applicant. Subject to Section 3.6 (d)
and Applicable

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IS MARKED [***] HEREIN.

Law, Bank shall determine the terms and conditions of the Account to be
contained in a Credit Card Agreement.

      (b) Commencing sixty (60) days after the Full Implementation, Bank shall
operate the Plan in accordance with the Service Standards set forth in Schedule
2.1 (the "Service Standards"). Prior thereto, Bank shall use reasonable efforts
to meet the Service Standards set forth in Schedule 2.1, however, failure to do
so, shall not constitute a breach of this Agreement. Bank will provide Spiegel
Group with a monthly summary of Bank's performance regarding the Service
Standards.

      (c) When Spiegel Group internally develops or acquires a new business
(including but not limited to new divisions, stores, catalogs, Internet sites
and other entities) for the sale of consumer goods and/or services after the
Effective Date (referred to as a "New Business"), Spiegel Group shall notify
Bank of such New Business. With respect to an internally developed New Business,
if such New Business has substantially the same customer base as that in
existence for the then current Businesses and cross-shopping exists with respect
to such customer base (i.e., the Credit Card may be used in more than one
Business), then the parties (including Spiegel Group and Bank in cases where the
New Business is an operating division of Spiegel Group; but including Spiegel
Group, Bank, and the New Business in cases where the New Business is a separate
entity from Spiegel Group) shall execute an addendum to this Agreement
incorporating the New Business into this Agreement, subject to the same terms
and conditions as set forth in this Agreement. With respect to an internally
developed New Business that does not meet the standards set forth in the
immediately preceding sentence, or the acquisition by Spiegel Group of a New
Business, Bank shall have a right of first refusal to add such New Business to
the Plan and if Bank desires to do so, then Spiegel Group and Bank shall
negotiate in good faith the pricing and other terms that shall apply to Bank
issuing Accounts to customers of the New Business, and the parties (including
Spiegel Group and Bank in cases where the New Business is an operating division
of Spiegel Group; but including Spiegel Group, Bank, and the New Business in
cases where the New Business is a separate entity from Spiegel Group) shall
execute an addendum to this Agreement defining the terms and conditions that
will apply to the New Business, which addendum shall be incorporated into this
Agreement. Each time an addendum is executed by the parties, the New Business
shall become a party to this Agreement, and all of the terms of this Agreement
shall be deemed to cover the New Business, unless otherwise specifically agreed
to by the parties in the addendum adding the New Business to this Agreement, and
the term "Spiegel Group" shall be deemed to include the New Business.

      2.2 Applications for Credit Under the Plan; Billing Statements. (a)
Applicants who wish to apply for an Account under the Plan must submit a
completed application on a form or in an electronic format approved by Bank, and
Bank shall grant or deny the request for credit based solely upon Bank's credit
criteria. Spiegel Group or Spiegel Group's Stores shall provide a copy of the
Credit Card Agreement to the Applicant to be retained for the Applicant's
records. The application shall be submitted to Bank by the Applicant or
submitted by Spiegel Group or Spiegel Group's Stores on behalf of the Applicant,
as required in the Operating Procedures. If Bank grants the request for an

                                       7
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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

Account, Bank will issue a Credit Card to the Applicant which accesses an
individual line of credit in an amount determined by Bank.

      (b) Bank shall make available to Spiegel Group and Spiegel Group shall
utilize a Quick Credit application procedure, as well as Batch Prescreen and
catalog On-Line Prescreen application procedures. Bank will bear the credit
bureau expense for Quick Credit, Internet applications, Instant Credit
Applications and take-one applications. Concerning catalog On-Line Prescreen,
Bank will bear 100% of the On-Line Prescreen credit bureau expense during Plan
Year 1 and thereafter Bank shall bear such expense provided the Eddie Bauer
Business' annual aggregate telephone acceptance rate is at least equal to the
"Target Acceptance Rate". The Target Acceptance Rate shall be [***]% for Plan
Year 2; [***] % for Plan Year 3 and [***]% for Plan Year 4; [***]% for Plan Year
5 and thereafter. If the aggregate acceptance rate of the Eddie Bauer Business
is less than the Target Acceptance Rate for any given Plan Year, Spiegel Group
will compensate Bank for the shortfall in performance according to this formula:

[***]
This formula applies regardless of the approval rate. Bank may offset such
amount against the Net Proceeds owed to Spiegel Group.

If the aggregate acceptance rate of the Eddie Bauer Business is less than [***]%
at the end of Plan Year 2, then Bank shall have the right to terminate catalog
On-Line Prescreen and in such event Bank will consider making additional
contributions to the Marketing Fund.

      (c) Spiegel Group agrees that it and Spiegel Group's Stores will keep
confidential the information on such applications and shall not disclose the
information to anyone other than authorized representatives of Bank.

      (d) All Cardholders will receive from Bank a periodic statement (the
"Billing Statement") listing the amounts of Purchases made and credits received
and other information, as required by Applicable Law or deemed desirable by
Bank.

      (e) Bank shall make available to Spiegel Group Internet application
procedures and Charge Slip processing. In such event, Spiegel Group shall be
responsible for integrating and maintaining on its website at its sole expense a
link to the Bank's Internet application processing website. Spiegel Group
represents and warrants that, to integrate and maintain the link, and to ensure
access to the Internet application processing website and reduce technical
errors, its software providing the link will (to the extent within Spiegel
Group's reasonable control) function, and continue to function, in a sound
technical manner. Spiegel Group shall appropriately monitor the link to ensure
it is functioning properly. In the event Bank changes or otherwise modifies the
website address for Internet application processing, Spiegel Group will either
update or modify the link as directed by Bank. In providing the link, Spiegel
Group shall make it clear and conspicuous that the Customer is leaving Spiegel
Group's website and is being directed to Bank's website for the exclusive
purpose of accessing Bank's Internet application

                                       8
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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

processing website. Spiegel Group agrees that, in connection with the link, it
will only use Bank's name, or any logo, statements, or any other information
that is related to Bank, only as directed by Bank, or as approved in advance and
in writing by Bank. Without limiting the generality of the scope of required
approvals, but by way of example, Spiegel Group shall seek Bank's approval not
only with respect to content, but also with respect to any typestyle, color, or
abbreviations used in connection with the link. Spiegel Group agrees that, in
the event the Internet Account approval rate is at least [***] % less than the
approval rate for Accounts originated through other sources, then Bank may
impose a fee for Internet applications, provided that Bank shall notify Spiegel
Group in advance from time to time of the amount of such fee, in writing, and
Spiegel Group may elect not to utilize Internet application and/or Charge Slip
processing. Spiegel Group will promote to its Customers the Bank's Electronic
Bill Presentment and Payment.

      2.3 Operating Procedures. Spiegel Group, Spiegel Group's Stores and their
Third Party Program vendors shall observe and comply with the Operating
Procedures and such other reasonable procedures as Bank may prescribe on not
less than ninety (90) days' prior written notice to Spiegel Group or otherwise
required by Applicable Law. Spiegel Group shall ensure that Spiegel Group's
Stores are trained regarding the Operating Procedures and shall exercise
commercially reasonable efforts to ensure their compliance with them. Bank will
observe and comply with its obligations under the Operating Procedures. The
Operating Procedures may be amended or modified by Bank from time to time in its
reasonable discretion; provided, however, unless such changes are required by
Applicable Law, a copy of any such amendment or modification shall be provided
to Spiegel Group at least ninety (90) Business Days before its effective date,
and for those changes required by Applicable Law, notice shall be given as soon
as practicable.

      2.4 Plan Documents. Bank shall design, with Spiegel Group's review, the
Credit Card Agreement, application, Credit Card, card mailer and billing
statement to be used under the Plan, subject to and in compliance with the
requirements of Applicable Law. The degree to which Spiegel Group's tradenames,
trademarks, servicemarks or logos appear on applications, card mailers, Credit
Cards, billing statements, letters, and other documents and forms (collectively,
"Forms") is a matter to be determined by Bank after consultation and
coordination with Spiegel Group and subject to Spiegel Group's right to reject
any Form as provided in Section 2.10, and in accordance with Applicable Law.
Bank and Spiegel Group shall mutually agree upon the marketing creative aspects
of the Forms. Bank shall provide at Bank's expense appropriate quantities of the
Credit Card Agreements, applications, Credit Card plastics, card mailer and
billing statements. Spiegel Group shall pay the costs of all Credit Card
plastics, including embossing and encoding, card carriers, envelopes, Credit
Card Agreements and postage related to any reissuances requested by Spiegel
Group for any reissuance of Credit Cards to Cardholders (other than replacements
made by Bank from time to time at a Cardholder's request on an individual
basis). In the event any Forms become obsolete as a result of changes requested
by Spiegel Group, Spiegel Group shall reimburse Bank for its itemized and
documented costs associated with any unused obsolete Forms. Only one design
shall be used for each form. In the event Spiegel Group's catalog service center
cannot support Bank's required real-time Cardholder notification requirements,
Spiegel

                                       9
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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

Group shall pay the costs incurred in connection with any required inactive
Cardholder mailings.

      2.5 Marketing. (a) Spiegel Group agrees to prominently advertise and
actively promote the Plan wherever Customers can purchase Goods and Services,
including, without limitation, those marketing promotions set forth in Schedule
2.5 and such other methods mutually agreed upon by Spiegel Group and Bank.
Spiegel Group and Bank will jointly agree upon programs to market the Plan
involving the use of the Marketing Funds, both initially and on a continuing
basis. Spiegel Group shall solely determine any advertising conducted by Spiegel
Group without the use of Marketing Funds, subject to Bank's review and approval
of references to the Plan for compliance with Applicable Law. Once Spiegel Group
and Bank agree upon standards for the use of Bank's and Spiegel Group's names or
any trademark, service mark or trade name of Bank and Spiegel Group, neither
party will deviate from such standards without express prior approval of the
other party.

      (b) Commencing with the second Plan Year, Bank shall contribute, to apply
to marketing and promotion expenses associated with the Plan in each Plan Year,
an amount equal to [***]. In addition, in the event the aggregate Net Sales
during any Plan Year reaches or exceeds $[***] for Eddie Bauer, then Bank shall
contribute an additional amount equal to [***], in excess of such amount, for
the remainder of the Plan Year and if such additional amounts are not used in
that Plan Year they will roll over to the next Plan Year, but shall not have any
cash value upon termination. All of such funds shall be referred to herein as
the "Marketing Funds." Immediately upon the elimination of the Holdback as set
forth in Section 11.1(f), the above rate shall be increased to [***]. Bank shall
determine a separate Marketing Fund for each individual Business, based on such
Business' Net Sales. If the Marketing Funds are not used in the Plan Year they
will not roll over to the next Plan Year and shall not have any cash value.
Spiegel Group shall, to the extent applicable, pay all marketing and promotion
expenses directly as they are incurred, and shall send Bank an invoice for the
aggregate amount of the expenditures mutually agreed upon by the parties
together with copies of paid invoices or other supporting documentation
reasonably satisfactory to Bank for such expenses and Bank shall reimburse
Spiegel Group within thirty (30) days of invoice date until Bank's maximum
contribution amount for the applicable Plan Year has been met. If Bank is
notified of the termination of this Agreement by Spiegel Group pursuant to
Section 9, then Bank shall have the right to cease the availability of the
Marketing Funds contributed by Bank for any future marketing or promotions,
however, if the Term is renewed by Spiegel Group prior to the end of the Term,
then Bank shall continue to contribute any unused Marketing Funds for such Plan
Year on a retroactive basis.

      (c) Bank has entered into separate private label credit card program
agreements with Spiegel and each of Catalog, Newport and Eddie Bauer. Bank
agrees that during the Term, Bank will pay for the prescreening expenses for up
to an aggregate total of [***] names (that pass Bank's prescreening criteria) of
Customers and/or customers or potential customers of the Businesses of Catalog,
Newport and Eddie Bauer, for a prequalified offer for an Account and/or for an
account issued by Bank for customers of Eddie Bauer, provided that Bank shall
not incur any expenses in mailing

                                       10
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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

the offer. Spiegel shall determine how to apportion the total number among
Catalog, Newport and Eddie Bauer and shall advise Bank in writing. Spiegel Group
shall provide Bank with the names to be prescreened. Spiegel Group will consult
with Bank regarding the selection criteria used by Spiegel and the parties will
subsequently review the results from such lists.

      2.6 Administration of Accounts. Bank shall perform, in compliance with
Applicable Law, all functions necessary to administer and service the Accounts,
including but not limited to: processing of applications; Credit Card production
and issuance; making all necessary credit investigations; notifying Applicants
in writing of acceptance or rejection of credit under the Plan; preparing and
mailing billing statements; billing error investigation; adjusting credit
limits; making collections; handling Cardholder inquiries; and processing
payments.

      2.7 Credit Decision. The decision to extend credit to any Applicant under
the Plan shall be Bank's decision. Bank's credit underwriting policy shall be in
compliance with any requirements of Bank's funding for the Plan and the
requirements of Applicable Law. Bank will work in good faith with Spiegel Group
to develop business strategies with respect to the issuance of Credit Cards
which are intended to maximize the potential of the Plan, and which are mutually
beneficial to Spiegel Group and Bank. Spiegel Group may from time to time
request Bank to consider offering certain types of special credit programs. Bank
shall reasonably consider Spiegel Group's requests and negotiate with Spiegel
Group in good faith. However, Bank shall, in its sole discretion, subject to
Applicable Laws and safety and soundness considerations, determine whether or
not to offer any of such programs. In the event Bank agrees to any special
credit program, Spiegel Group and Bank shall mutually agree upon any special
terms and fees associated with the program. [***]

      2.8 Ownership of Accounts and Mailing Lists. The Customer's names and
addresses and other Customer information collected by Spiegel Group and Eddie
Bauer independent of Bank and set forth in Eddie Bauer's records, shall be the
exclusive property of Eddie Bauer, but Spiegel Group shall during the Term of
this Agreement as requested by Bank make the names and addresses of Customers
available to Bank, as permitted by Applicable Law to be used only for purposes
of solicitation, as provided hereunder, of such Customers to become Cardholders
of Bank and in connection with the administration of the Plan in accordance with
the terms of this Agreement. Bank shall provide to Spiegel Group monthly one (1)
master file extract initially containing the information set forth on Schedule
2.8 to the extent such information is available to Bank, but subject to change
by Bank at any time, and any other information agreed to by Spiegel Group and
Bank, to the extent permitted by Applicable Law, which Spiegel Group may use
solely in connection with maintaining and servicing the Accounts and for the
purpose of marketing its Goods and Services to the Cardholders, as permitted by
Applicable Law. Spiegel Group shall keep such Cardholder information
confidential and shall not sell, lease, transfer or disclose such information to
any third party without Bank's prior written consent. The Accounts and all
information related thereto, including without limitation the receivables,
names, addresses, credit and transaction information of Cardholders, as set
forth in Bank's records shall be the exclusive property of Bank

                                       11
<PAGE>

ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

during and after the Term of this Agreement unless the Accounts are purchased by
Spiegel Group pursuant to Section 9. Bank shall have the right to take a
security interest in the Goods purchased with an Account, and is solely liable
for any action taken with respect to such security interest or lien as to such
Goods. Bank will promptly assign any such interest to the Spiegel Group in the
event of purchase of Accounts pursuant to Section 9.5 or a chargeback pursuant
to Section 3.10.

      2.9 Debt Cancellation and Enhancement Marketing Services. (a) Spiegel
Group and Bank agree that Bank will exclusively make available to Cardholders
various types of insurance and/or debt cancellation programs (collectively
referred to herein as "Debt Cancellation Products") offered by Bank and/or its
vendors or Affiliates. Such products shall include, but not be limited to,
credit life insurance, accidental death and disability insurance and debt
cancellation programs. Bank shall, prior to offering any Debt Cancellation
Products to Cardholders, review the proposed solicitations and offerings with
Spiegel Group. Bank may make up to six (6) offers (call transfer and call to
confirm programs shall not constitute offers) per Plan Year, up to two (2) of
which may be statement inserts as long as the weight of each monthly insert does
not exceed 0.085 ounces and up to two (2) of which may be outbound telemarketing
contact offers. The charges for Debt Cancellation Products shall be charged to
the applicable Cardholder's Account. Spiegel Group will assist Bank's effort to
offer Debt Cancellation Products so long as such assistance will not require
Spiegel Group to incur any direct expense or cost. Bank shall not make more than
two (2) outbound telemarketing contact offers per Cardholder per Plan Year and
Spiegel Group shall have the right to approve the script, which approval shall
not be unreasonably withheld.

      (b) Spiegel Group and Bank agree that Bank will make available to
Cardholders various types of other products and services (collectively referred
to herein as "Enhancement Marketing Services") through solicitations made in
connection with their Accounts. Such Enhancement Marketing Services may include
but are not limited to travel clubs, legal services, card registration programs
and merchandise products. Such Enhancement Marketing Services will be offered
through various direct marketing channels including but not limited to direct
mail, telemarketing, call transfer, call to confirm, statement inserts,
statement messaging and IVR. Bank shall have the right to utilize up to 2
statement inserts and 1 statement envelope (bangtail) each month during four
months per Plan Year, up to a total combined weight equal to 0.310 ounces, for
Enhancement Marketing Services. Bank will notify Spiegel Group of the proposed
offer prior to its execution and obtain Spiegel Group's prior written consent,
which shall not be unreasonably withheld. The charges for the products and
services will be billed to the applicable Cardholder's Account when appropriate.

      (c) Spiegel Group shall receive from Bank [***] % of the net profit
(Bank's revenues, commissions and other incentives minus Bank's total direct
expenses) generated by Debt Cancellation Products (to the extent permitted by
Applicable Law and Bank's insurer) and Enhancement Marketing Services, payment
to be made on a monthly basis, together with a statement setting forth the
revenues, expenses and profits in reasonable detail.

                                       12
<PAGE>

ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

      (d) Spiegel Group may with Bank's prior written approval and subject to
Bank's ability to support the programs enter into its own third party marketing
efforts ("Third Party Programs") to make available to Cardholders various types
of other products and services, and Bank shall process and settle such Purchases
for such Third Party Programs, subject to the terms and conditions set forth in
this Agreement. In consideration for such processing by Bank, Spiegel Group's
Third Party Program vendor shall pay to Bank a one time start-up and
administrative expense equal to $ [***] for a Standard Implementation and $
[***] for a non-Standard Implementation, and for all marketing done outside of
Bank's statements an on-going processing fee equal to at least [***]% of the Net
Sales related to such Third Party Program charges, in lieu of all applicable
Discount Fees related to such charges, which fees shall be offset by Bank
against the settlement amounts to be paid to the vendor. In the event such Third
Party Program vendor fails to pay such amounts to Bank, Spiegel Group shall
reimburse Bank for all amounts owed by its Third Party Program vendors with
respect to returns, cancellations or other credits to the Credit Card. For all
Third Party Programs where the marketing efforts utilize Bank's statements, in
lieu of the [***]% fee set forth above, Spiegel Group shall pay to Bank [***]%)
of the net profit (Spiegel Group's revenues, commissions and other incentives
minus Spiegel Group's total expenses) generated by such Third Party Programs,
payment to be made on a monthly basis, together with a statement setting forth
the revenues, expenses and profits in reasonable detail. Bank and Spiegel Group
shall enter into written agreements with such Third Party Program vendors
setting forth the conditions herein and any other terms and conditions that are
mutually satisfactory to the parties.

      2.10 Ownership of Spiegel Group Name. Anything in this Agreement to the
contrary notwithstanding, Spiegel Group shall retain all rights in and to
Spiegel Group's name and the name selected by Spiegel Group for use on the
Credit Card and all trademarks, service marks and other rights pertaining to
such names (collectively, the "Name Rights") and all goodwill associated with
the use of the Name Rights whether under this Agreement or otherwise shall inure
to the benefit of the Spiegel Group. Spiegel Group shall have the right, in its
sole and absolute discretion, to prohibit the use of any of its Name Rights in
any Forms, advertisements or other materials proposed to be used by Bank which
Spiegel Group in its reasonable business judgment deems objectionable or
improper. Bank shall cease all use of the Name Rights upon the termination of
this Agreement for any reason unless Bank retains the Accounts after termination
of the Agreement, in which case Bank may use the Name Rights solely in
connection with the administration and collection of the balance due on the
Accounts. Spiegel Group grants Bank the limited right during the Term to use
Spiegel Group's Name Rights, as specified by Spiegel Group, in connection with
Bank and its Affiliates' marketing and promotion materials and literature in
written and electronic form regarding advertising of Bank's private label
program and their business client lists.

                        SECTION 3. OPERATION OF THE PLAN

      3.1 Honoring Credit Cards. Spiegel Group agrees that Spiegel Group and
Spiegel Group's Stores will honor any Credit Card properly issued and currently
authorized by Bank pursuant to the Plan, Bank's Eddie Bauer credit cards and to
the

                                       13
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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

extent agreed to by Spiegel Group and Bank on a case-by-case basis, any other
credit cards owned by Bank that Bank has designated. Spiegel Group shall deliver
to Bank all Transaction Records evidencing transactions made under the Plan, in
accordance with the provisions of this Agreement and the Operating Procedures.

      3.2 Additional Operating Procedures. In addition to the procedures,
instructions and practices contained in the Operating Procedures, Spiegel Group
agrees that Spiegel Group and Spiegel Group's Stores will comply with the
following procedures:

      (a) In each Credit Card transaction Spiegel Group and Spiegel Group's
Stores must obtain all the information contained in clause (b) of the definition
of Transaction Record. The date which appears on the Charge Slip or Credit Slip
will be prima facie evidence of the transaction date, and Spiegel Group shall be
required to transmit all Transaction Records relating to such Charge Slip and/or
Credit Slip so that Bank receives such Transaction Records no later than the
second Business Day after the transaction date (excluding any unforeseen systems
malfunctions). The "Cardholder Copy" of each Charge Slip shall be delivered to
the Cardholder at the time of the transaction if the Cardholder is in the store.

      (b) All Charge Slips will evidence the total price of the sale minus any
cash down payment. Spiegel Group shall retain the "Merchant Copy" (in a hard
copy, or scanned or other digital or electronic image form) of all Spiegel Group
and Spiegel Group's Store generated Charge and Credit Slips for each transaction
for a period of twelve (12) months from the date of presentation to Bank or in
the case of Promotional Programs, twelve (12) months from the end of the
applicable Promotional Program, as applicable.

      (c) Spiegel Group and Spiegel Group's Stores will maintain a fair policy
for the exchange and return of Goods and adjustment for Services rendered and
for that purpose will give credit to Accounts upon such exchange, return or
adjustment. Spiegel Group and Spiegel Group's Stores will not make cash refunds
to Cardholders on Credit Card Purchases. If any Goods are returned, price
adjustment is allowed, or debt for Services is adjusted, Spiegel Group and
Spiegel Group's Stores will notify the Bank and provide appropriate
documentation thereof to the Cardholder. Upon receipt of Transaction Records
reflecting a credit to which there has been a corresponding debit, Bank will net
against amounts payable by Bank to Spiegel Group the total shown on the Credit
Slip, and credit the Cardholder's Account in the amount of such Credit Slip. If
the Spiegel Group Deposit Account contains insufficient funds, Spiegel Group
shall remit the amount of such Credit Slips, or any unpaid portion thereof, to
Bank immediately upon written demand.

      (d) Spiegel Group's Stores shall not, when the Cardholder or authorized
user is present in the store, accept a transaction to be charged to an Account
without presentation of a Credit Card or proper identification as outlined in
the Operating Procedures.

                                       14
<PAGE>

ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

      3.3 Cardholder Disputes Regarding Goods or Services. Spiegel Group and
Spiegel Group's Stores shall act promptly to investigate and work to resolve
disputes with Cardholders regarding Goods or Services obtained through Spiegel
Group and Spiegel Group's Stores pursuant to the Plan. Spiegel Group and Spiegel
Group's Stores shall timely process credits or refunds for Cardholders utilizing
the Plan.

      3.4 No Special Agreements. Neither Spiegel Group nor Spiegel Group's
Stores will extract any special agreement, condition or security from
Cardholders in connection with their use of a Credit Card, unless approved in
advance by Bank in writing.

      3.5 Cardholder Disputes Regarding Violations of Law or Regulation. Spiegel
Group and Bank shall use reasonable efforts to assist the other to investigate
and help resolve any Applicant or Cardholder claim, dispute, or defense which
may be asserted under Applicable Law or other Cardholder complaint.

      3.6 Payment to Spiegel Group; Ownership of Accounts; Fees; Accounting. (a)
Spiegel Group shall electronically transmit all Transaction Records from Spiegel
Group and Spiegel Group's Stores to Bank in a format acceptable to Bank. Upon
receipt, Bank shall use commercially reasonable efforts to promptly verify and
process such Transaction Records, and in the time frames specified herein, Bank
will remit to Spiegel Group an amount equal to the Net Proceeds indicated by
such Transaction Records for the Credit Sales Day(s) for which such remittance
is made. In the event Bank discovers any discrepancies in the amount of
Transaction Records submitted by Spiegel Group or paid by Bank to Spiegel Group,
Bank shall promptly notify Spiegel Group in writing in detail of the
discrepancy, and credit Spiegel Group, or net against amounts owed to Spiegel
Group, as the case may be, in a subsequent daily settlement. Bank will transfer
funds via Automated Clearing House ("ACH") to an account designated in writing
by Spiegel Group to Bank (the "Spiegel Group Deposit Account"). If Transaction
Records are received by Bank's processing center before 12 noon Eastern time on
a Business Day, Bank will initiate such ACH transfer by 12 noon Eastern time on
the next Business Day thereafter. In the event that the Transaction Records are
received after 12 noon Eastern time on a Business Day, then Bank will initiate
such transfer no later than 12 noon Eastern time on the second Business Day
thereafter. Bank shall remit funds to one Spiegel Group designated account and
shall not remit funds to individual Businesses or Spiegel Group's Stores. The
term "initiate" shall mean that Bank shall transmit an ACH file to Bank's
financial institution for settlement on the next Business Day.

      (b) Bank shall own all the Accounts under the Plan from the time of
establishment, and except as otherwise provided herein, neither Spiegel Group
nor Spiegel Group's Stores shall have any right to any indebtedness on an
Account or to any Account payment from a Cardholder arising out of or in
connection with any Purchases under the Plan. Effective upon the delivery of
each Charge Slip by Spiegel Group and Spiegel Group's Stores to Bank and payment
to Spiegel Group by Bank pursuant to Section 3.6(a), Spiegel Group and Spiegel
Group's Stores shall be deemed to have transferred, conveyed, assigned and
surrendered to Bank all right, title or interest in all such Charge Slips and in
all other rights and writings evidencing such Purchases, if any.

                                       15
<PAGE>

ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

      (c) All Transaction Records are subject to review and acceptance by Bank
in accordance with its usual and customary practices for reviewing and accepting
Transaction Records. In the event of a computational or similar error of an
accounting or record keeping nature with respect to such Transaction Records,
Bank may credit to the Spiegel Group's Deposit Account or net against the Net
Proceeds (as the case may be) the proper amount as corrected. If the Net
Proceeds are insufficient, Spiegel Group shall remit the proper amount to Bank
immediately upon written demand. Upon any such correction Bank shall give same
day notice thereof to Spiegel Group.

      (d) Subject to Applicable Law and the terms and conditions set forth in
the Credit Card Agreement, Bank shall initially charge each Cardholder a finance
charge on the unpaid balance in their Account at a variable annual percentage
rate equal to the Prime Rate plus 16.5% with a minimum of 22.8% and a default
rate equal to the maximum amount permitted by law (currently 24.8%, but not
greater than 29.9%; a $1 minimum finance charge; late fees equal to $25; and
returned check fees equal to $25. Bank may make any changes in these terms of
the Credit Card Agreement at any time as required by Applicable Law or on an
individual Account by Account basis in connection with its servicing of the
Accounts. With respect to any other changes in terms affecting the APR and/or
fees charged by Bank as set forth above Bank will, prior to making any changes,
review and discuss such changes with Spiegel Group in order to maximize the
potential of the Plan and mutually benefit Spiegel Group and the Bank.

      (e) Spiegel Group and Spiegel Group's Stores shall obtain and maintain at
their own expense such point of sale terminals, cash registers, network
(electronic communication interchange system), telephone or other communication
lines, software, hardware and other items of equipment as are necessary for it
to request and receive authorizations, transmit Charge Slip and Credit Slip
information, process Credit Card Applications and perform its obligations under
this Agreement. The computer programs and telecommunications protocols necessary
to facilitate communications between Bank and Spiegel Group and Spiegel Group's
Stores shall be determined by Bank from time to time subject to reasonable prior
notice of any change in such programs, equipment or protocols. Such changes as
determined by Bank shall be required of all similar Bank clients, and if the
actual annual (per Plan Year) costs of such changes for Spiegel Group and any
Spiegel Group Affiliates that also have private label credit card program
agreements with Bank similar to this Agreement, in the aggregate exceed $ [***],
Bank shall split the excess costs with Spiegel Group above such amount.

      (f) Spiegel Group may from time to time offer Promotional Programs to
Cardholders. Spiegel Group shall be responsible for ensuring that all Purchases
subject to any Promotional Programs are properly designated as such on the
Transaction Record in accordance with Bank's instructions.

      (g) Bank may, if Spiegel Group fails to pay Bank any amounts due to Bank
pursuant to this Agreement for more than thirty (30) days after the due date,
offset such

                                       16
<PAGE>

ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

amounts against the Net Proceeds or any other amounts owed by Bank to Spiegel
Group under this Agreement and will provide written detail in the daily
settlement report.

      3.7 Insertion of Spiegel Group's Promotional Materials. Bank shall from
time to time insert Spiegel Group's promotional materials for Spiegel Group's
Goods and Services, which are provided by Spiegel Group at Spiegel Group's
expense or from the Marketing Fund, into the Account billing statements and new
Credit Card mailers, so long as the materials: (a) are provided to Bank at least
fifteen (15) Business Days prior to the scheduled mailing date of such
statements or notices; (b) if they reference Bank or the Plan in any manner, are
approved by Bank as to content, in Bank's reasonable discretion; (c) meet all
size, weight, or other specifications for such inserts as shall be reasonably
set by Bank from time to time with at least 30 days prior written notice to
Spiegel Group of such standards; (d) there is sufficient space in Bank's
standard envelope for the insert in addition to any legally required material,
Cardholder notices and other materials which Bank is including in the mailing,
including Enhancement Marketing Services in accordance with Section 2.9(b), and
where notification of any inclusion of any such insert, the weights, etc. has
been provided by Bank to Spiegel Group as soon as possible; and (e) Spiegel
Group pays any and all additional postage costs caused by Bank's insertion of
materials provided by Spiegel Group, if instructed by Spiegel Group to insert
regardless of the additional postage costs.

      3.8 Payments. All payments to be made by Cardholders with respect to any
amounts outstanding on the Accounts shall be made in accordance with the
instructions of Bank and at the location or address specified by Bank. Spiegel
Group hereby authorizes Bank, or any of its employees or agents, to endorse
"World Financial Network National Bank" upon all or any checks, drafts, money
orders or other evidence of payment, made payable to Eddie Bauer and intended as
payment on an Account, that may come into Bank's possession from Cardholders and
to credit said payment against the appropriate Cardholder's Account. Spiegel
Group shall not accept any payments made with respect to the Plan. Bank has the
sole right to receive and retain all payments made with respect to all Accounts
and to pursue collection of all amounts outstanding, unless an Account or
Purchase is charged back to Spiegel Group pursuant to the provisions of Sections
3.9 and 3.10 hereof. Upon emergence from bankruptcy and upon at least ninety
(90) days prior written request from Spiegel Group, payment may be accepted at
Spiegel Group's Stores. Spiegel Group further agrees that if Spiegel Group is
permitted by Bank to receive any payment made with respect to an Account,
Spiegel Group and Spiegel Group's Stores will on Bank's behalf hold such payment
in trust for Bank and will within one (1) Business Day after receipt include the
amount of such payment in the Transaction Records sent to Bank pursuant to this
Agreement. Bank will charge the amount of such payment against the Spiegel Group
Deposit Account, or, if the Spiegel Group Deposit Account contains insufficient
funds, Spiegel Group shall remit the amount of such payment, or any unpaid
portion thereof, to Bank immediately upon written demand. Payments made by
Cardholders at Spiegel Group's Stores shall not be deemed received by Bank until
Bank receives and accepts the Transaction Records. Spiegel Group shall promptly
comply with any written instruction by Bank or any successor to Bank to cease
accepting Account payments and thereafter inform Cardholders who wish to make
payments that payments should be made to Bank.

                                       17
<PAGE>

ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

      3.9 Chargebacks. Bank shall have the right to demand immediate purchase by
Spiegel Group of any Purchase and charge back to Spiegel Group the unpaid
balance (including principal, accrued and billed finance charges, fees, charges
and any of such amounts written off by Bank), if and whenever:

      (a) Any unresolved Cardholder claim, defense or dispute is asserted
against Bank with respect to such Purchase or the Account as a result of an
action or inaction by Spiegel Group and/or Spiegel Group's Stores pursuant to
and within the time limits under Applicable Law; or

      (b) Bank determines that with respect to such Purchase or the Account: (i)
there is a breach of any warranty or representation made by or with respect to
Spiegel Group under this Agreement relating to such Purchase or Account; (ii)
there is a failure by Spiegel Group to comply with any term or condition of this
Agreement relating to such Purchase or Account, which failure shall not have
been cured within fifteen (15) days after receipt of written notice thereof from
Bank; or (iii) after receipt of a fraud affidavit from the Cardholder, Bank
determines that the signature on any Charge Slip has been forged or is
counterfeit; or

      (c) After reasonable notice to Spiegel Group, any Purchase amount is not
paid when due, and the Cardholder has stated in writing that the Cardholder's
reason for such nonpayment is an alleged breach of warranty or representation by
Spiegel Group or Spiegel Group's Stores or the result of a dispute by a
Cardholder in connection with the sale of Goods, or the furnishing of Services
by Spiegel Group or Spiegel Group's Stores to such Cardholder; or

      (d) Any Cardholder claim, defense, dispute or fraud is asserted against
Bank with respect to such Purchase and the Transaction Record from Spiegel Group
did not contain the appropriate Bank authorization code for such Purchase
(excluding, through June 30, 2003, those certainTransactions identified by
Spiegel Group with transaction code 331 with the descriptor "catalog debit
adjustment"); or

      (e) For any chargeback reason as set forth in the Operating Procedures.

      3.10 Assignment of Title in Charged Back Purchases. With respect to any
amount of a Purchase to be charged back to and to be purchased by Spiegel Group,
Spiegel Group shall either pay such amount directly to Bank in immediately
available funds or Bank will offset such amount as part of the Net Proceeds to
be paid to Spiegel Group, to the extent the balance thereof is sufficient. Upon
payment of such amount by Spiegel Group to Bank, or off-setting, as the case may
be, Bank shall assign and transfer to Spiegel Group, without recourse, all of
Bank's right, title and interest in and to such Purchase and deliver all
documentation (or copies) in Bank's possession with respect thereto. Spiegel
Group further consents to all extensions or compromises given any Cardholder
with respect to any such Purchase, and agrees that such shall not affect any
liability of Spiegel Group hereunder or right of Bank to charge back any
Purchase as provided in this Agreement; provided, however, that Bank shall not
have the right to

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

charge back for any Purchase the amount of any reductions, or compromises of
amounts owed by a Cardholder to Bank. Spiegel Group shall not resubmit or
re-transmit any charged back Purchases to Bank, without Bank's prior written
consent.

      3.11 Promotion of Program and Card Plan; Non-Competition. Throughout the
Term of this Agreement, Spiegel Group shall actively and consistently market,
promote, participate in and support the Plan as set forth in this Agreement.
Spiegel Group shall not accept or honor any other private label credit cards for
the purchase of Goods and/or Services. Spiegel Group agrees that in
consideration and as an inducement for Bank to make the Plan available to
Spiegel Group as outlined in this Agreement and the Operating Procedures, from
the Effective Date and for as long as this Agreement is in existence, Spiegel
Group will not, without the prior written consent of Bank, contract or establish
with any other credit card processor/provider or provide or process on its own
behalf any "private label" or "co-brand" revolving credit or other credit card
issuance or processing arrangement or programs similar in purpose to the Plan or
to the services and transactions contemplated under this Agreement, except that
if either party provides notice of termination pursuant to Section 9.1 of this
Agreement or if Spiegel Group terminates under Section 9.3, Spiegel Group may
enter into a contract with another credit card processor/provider effective on
or after termination of this Agreement. Spiegel Groups' Affiliates shall not
issue or establish a credit card program for financing the purchase of Goods
and/or Services. Notwithstanding the foregoing, nothing contained in this
Agreement will be construed to prohibit or prevent Spiegel Group from: (i)
accepting any major general purpose credit card (including without limitation,
American Express Card, MasterCard, Visa, or NOVUS), or any stored value card or
gift card, or any form of general purpose debit card or fixed payment
(installment) credit programs for Applicants declined by Bank, as a means of
payment by Cardholders and Customers for purchase of Goods and Services; or (ii)
entering into a contract with another credit card provider for a particular
state after Bank has terminated the operation of the Plan in such state pursuant
to Section 9.4; or (iii) accepting any private label credit cards issued by
Eddie Bauer to a Customer prior to the Effective Date.

      3.12 Postage. Any increase(s), in Bank's cost of mailing Account billing
statements, form letters or new Credit Cards due to increase(s) in the first
class pre-sort cost of postage from the United States Postal Service occurring
on or after the Effective Date, which increase(s) in the aggregate exceed the
increases in the national Consumer Price Index for Urban Consumers (CPI-U) for
the same time period shall be borne by Spiegel Group. Adjustments will be made
for any subsequent decreases in the cost of postage. Bank will use commercially
reasonable efforts to obtain the best bulk rate discount.

      3.13 Reports. Bank will deliver to Spiegel Group the reports set forth in
Schedule 3.13 attached hereto as specified therein. Bank may provide any
additional reports requested by Spiegel Group upon such terms and at the costs
mutually agreed to by the parties.

      3.14 Security and Fraud Prevention. The Operating Procedures provide for
general guidelines regarding security efforts of Bank and the Spiegel Group to
limit and

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

prevent the fraudulent opening of Accounts and the fraudulent compromising of
Accounts. Bank shall be responsible for all damages related to any and all
Purchases placed upon an Account that was fraudulently opened, provided that
Spiegel Group has followed all Operating Procedures. Spiegel Group shall be
responsible for any Chargeback arising out of a Purchase by a non-cardholder who
has compromised an Account where Spiegel Group has failed to follow all
Operating Procedures regarding the acceptance of the Credit Card. The parties
will exercise best efforts in developing and/or utilizing commercially
reasonable and appropriate industry best practices and preventative measures, as
such change from time to time during the Term, to prevent and lower fraudulent
Account openings and Purchases, and to protect information exchanged hereunder,
including but not limited to, any information referenced in Section 10.17 or
otherwise delivered to the other pursuant to this Agreement or for system
testing and reconciliation.

           SECTION 4. REPRESENTATIONS AND WARRANTIES OF SPIEGEL GROUP

      Spiegel Group hereby represents and warrants to Bank during the Term as
follows:

      4.1 Organization, Power and Qualification. Spiegel and Eddie Bauer are
corporations duly organized, validly existing and in good standing under the
laws of the state of Delaware and have full corporate power and authority to
enter into this Agreement and to carry out the provisions of this Agreement.
Each entity is duly qualified and in good standing to do business in all
jurisdictions where they are located, except where the failure to so qualify
would not have a material adverse effect on their business, or where the failure
to so qualify would not have a material adverse effect on Spiegel Group's or
Bank's ability to continue operation of the Plan.

      4.2 Authorization, Validity and Non-Contravention. (a) This Agreement has
been duly authorized by all necessary corporate proceedings, has been duly
executed and delivered by Spiegel Group and, subject to and upon the approval of
the United States Bankruptcy Court for the Southern District of New York, is a
valid and legally binding agreement of Spiegel Group duly enforceable in
accordance with its terms (except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equity principles).

      (b) Other than the approval of the United States Bankruptcy Court for the
Southern District of New York, no consent, approval, authorization, order,
registration or qualification of or with any court or regulatory authority or
other governmental body having jurisdiction over Spiegel Group is required for,
and the absence of which would adversely affect, the legal and valid execution
and delivery of this Agreement, and the performance of the transactions
contemplated by this Agreement.

      (c) The execution and delivery of this Agreement by Spiegel Group
hereunder and the compliance by Spiegel Group with all provisions of this
Agreement: (i) will not conflict with or violate any Applicable Law; and (ii)
will not conflict with or result in a

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

breach of or default under any of the terms or provisions of any indenture, loan
agreement or other contract or agreement under which Spiegel Group is an obligor
or by which its property is bound where such conflict, breach or default would
have a material adverse effect on Spiegel Group, nor will such execution,
delivery or compliance violate or result in the violation of the respective
Articles of Incorporation or By-Laws of Spiegel and Eddie Bauer.

      4.3 Accuracy of Information. All factual information furnished by Spiegel
Group to Bank in writing at any time pursuant to any requirement of, or
furnished in response to any written request of Bank under this Agreement or any
transaction contemplated hereby has been, and all such factual information
hereafter furnished by Spiegel Group to Bank will be, to Spiegel Group's best
knowledge and belief, true and accurate in every respect material to the
transactions contemplated hereby on the date as of which such information was or
will be stated or certified.

      4.4 Validity of Charge Slips. (a) As of the date any Transaction Records
are presented to Bank in accordance with the provisions of this Agreement, each
Charge Slip relating to such Transaction Records shall represent the obligation
of a Cardholder in the respective amount set forth therein for Goods sold or
Services rendered, together with applicable taxes, if any, and shall not involve
any element of credit for any other purpose.

      (b) As of the date any Transaction Records are presented to Bank in
accordance with the provisions of this Agreement, Spiegel Group has no knowledge
or notice of any fact or matter which would immediately or ultimately impair the
validity of any Charge Slip relating to such Transaction Records, the
transaction evidenced thereby, or its collectibility.

      4.5 [Intentionally Left Blank]

      4.6 Spiegel Group's Name, Trademarks and Service Marks. Spiegel Group has
the legal right to use and to permit the Bank to use, to the extent set forth
herein, the various tradenames, trademarks, logos and service marks specified by
Spiegel Group for use in connection with the Plan.

      4.7 Intellectual Property Rights. In the event Spiegel Group provides any
software or hardware to Bank, Spiegel Group has the legal right to such software
or hardware and the right to permit Bank to use such software or hardware, and
such use shall not violate any intellectual property rights of any third party.
Any software or other technology developed by or for Spiegel Group or its
Affiliates, to facilitate the Plan, including but not limited to, software and
software modifications developed in response to Bank's request or to accommodate
Bank's special requirements and all derivative works, regardless of the
developer thereof, will remain the exclusive property of Spiegel Group and/or
its Affiliates. Nothing in this Agreement shall be deemed to convey a
proprietary interest to Bank or any third party in any of the software,
hardware, technology or any of the derivative works thereof which are owned or
licensed by Spiegel Group and/or its Affiliates. Any software, hardware or
technology provided by Spiegel

                                       21
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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

Group is without warranty of merchantability or warranty of fitness for a
particular use, and is provided "AS IS".

                      SECTION 5. COVENANTS OF SPIEGEL GROUP

      Spiegel Group hereby covenants and agrees as follows:

      5.1 Notices of Changes. Spiegel Group will as soon as reasonably possible
notify Bank of any: (a) change in the name or form of business organization of
Spiegel Group, change in the location of its chief executive office or the
location of the office where its records concerning the Plan are kept; (b)
merger or consolidation of Spiegel Group or the sale of a significant portion of
its stock or of any substantial amount of its assets not in the ordinary course
of business or any change in the control of Spiegel Group; (c) material adverse
change in its financial condition or operations or the commencement of any
litigation which would have a material adverse effect on Spiegel Group in its
ability to perform hereunder; or (d) the planned opening or closing of any
Spiegel Group Store. Spiegel Group will furnish such additional information with
respect to any of the foregoing as Bank may request for the purpose of
evaluating the effect of such change on the financial condition and operations
of Spiegel Group and on the Plan.

      5.2 Financial Statements. Spiegel Group shall furnish to Bank upon request
the following information pertaining to Spiegel Group: (a) a consolidated
balance sheet as of the close of each fiscal year; (b) a consolidated statement
of income, retained earnings and paid-in capital to the close of each fiscal
year; (c) a consolidated statement of cash flow to the close of each such
period; and (d) a copy of the opinion submitted by Spiegel Group's independent
certified public accountants in connection with such of the financial statements
as have been audited.

      5.3 Inspection. Spiegel Group will permit, once per Plan Year, unless Bank
has reasonable cause to do so, authorized representatives designated by Bank, at
Bank's expense, to visit and inspect, to the extent permitted by Applicable Law,
any of the Spiegel Groups' and Spiegel Group's Stores, books and records
pertaining to Transaction Records, Third Party Programs and the Plan and to make
copies and take extracts therefrom, and to discuss the same with its officers
and independent public accountants, all at reasonable times during normal
business hours.

      5.4 Spiegel Group's Business. Spiegel Group shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and to comply with all Applicable Laws in connection with its business
and the sale of Goods and Services. Spiegel Group shall provide to Bank upon
request not more than once per quarter a forecast of Spiegel Group's total sales
and the forecasted number of stores and a weekly unaudited report of the actual
total sales by sales channel.

      5.5 Spiegel Group's Stores. Spiegel Group shall cause all of Spiegel
Group's Stores to comply with the obligations, restrictions and limitations of
this Agreement as such are applicable at the point of sale of the Goods and
Services.

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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

      5.6 Insurance. Spiegel Group shall maintain insurance policies with
insurers and in such amounts and against such types of loss and damage as are
customarily maintained by other companies within Spiegel Group's industry
engaged in similar businesses as Spiegel Group.

      5.7 Spiegel Group's Tracking Reports. Spiegel Group shall use its best
efforts to commence within eighteen (18) months after the Effective Date,
providing Bank with weekly On-Line Prescreen acceptance and activation results
by telemarketing associate, supervisor and call center facility.

      5.8 Compliance with Law. Any action or inaction taken by Spiegel Group and
Spiegel Group's Stores (where Spiegel Group or Spiegel Group's Stores have a
duty to act) in connection with the Plan and the sales of Goods and/or Services
and any Third Party Programs shall be in compliance with all Applicable Law
except where the failure to comply does not or will not have an adverse effect
on Spiegel Group, the Bank or the Plan.

                SECTION 6. REPRESENTATIONS AND WARRANTIES OF BANK

      Bank hereby represents and warrants to Spiegel Group during the Term as
follows:

      6.1 Organization, Power and Qualification. Bank is a national banking
association duly organized, validly existing and in good standing under the laws
of the United States of America and has full corporate power and authority to
enter into this Agreement and to carry out the provisions of this Agreement.
Bank is duly qualified and in good standing to do business in all jurisdictions
where such qualification is necessary for Bank to carry out its obligations
under this Agreement.

      6.2 Authorization, Validity and Non-Contravention. (a) This Agreement has
been duly authorized by all necessary corporate proceedings, has been duly
executed and delivered by Bank and is a valid and legally binding agreement of
Bank duly enforceable in accordance with its terms (except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general equity
principles).

      (b) No consent, approval, authorization, order, registration or
qualification of or with any court or regulatory authority or other governmental
body having jurisdiction over Bank is required for, and the absence of which
would materially adversely affect, the legal and valid execution and delivery of
this Agreement, and the performance of the transactions contemplated by this
Agreement.

      (c) The execution and delivery of this Agreement by Bank hereunder and the
compliance by Bank with all provisions of this Agreement: (i) will not conflict
with or violate any Applicable Law; (ii) will not conflict with or result in a
breach of the terms or provisions of any indenture, loan agreement or other
contract or agreement under which Bank is an obligor or by which its property is
bound where such conflict, breach or

                                       23
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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

default would have a material adverse effect on Bank, nor will such execution,
delivery or compliance violate or result in the violation of the Charter or
By-Laws of Bank.

      6.3 Accuracy of Information. All factual information (including all
information concerning the Bank's funding facility) furnished by Bank to Spiegel
Group in writing at any time pursuant to any requirement of, or furnished in
response to any written request of Spiegel Group under this Agreement or any
transaction contemplated hereby has been, and all such factual information
hereafter furnished by Bank to Spiegel Group will be, to Bank's best knowledge
and belief, true and accurate in every respect material to the transactions
contemplated hereby on the date as of which such information has or will be
stated or certified.

      6.4 [Intentionally Left Blank]

      6.5 Intellectual Property Rights. In the event Bank provides any software
or hardware to Spiegel Group, Bank has the legal right to such software or
hardware and the right to permit Spiegel Group to use such software or hardware,
and such use shall not violate any intellectual property rights of any third
party. Any software or other technology developed by or for Bank or its
Affiliates, to facilitate the Plan, including but not limited to, software and
software modifications developed in response to Spiegel Group's request or to
accommodate Spiegel Group's special requirements and all derivative works,
regardless of the developer thereof, will remain the exclusive property of Bank
and/or its Affiliates. Nothing in this Agreement shall be deemed to convey a
proprietary interest to Spiegel Group or any third party in any of the software,
hardware, technology or any of the derivative works thereof which are owned or
licensed by Bank and/or its Affiliates. Any software, hardware or technology
provided by Bank is without warranty of merchantability or warranty of fitness
for a particular use, and is provided "AS IS".

      6.6 Litigation & Solvency. As of the Effective Date, there is no
outstanding litigation, arbitrated matter or other dispute to which Bank is a
party, which, if decided unfavorably to Bank, would reasonably be expected to
have a material adverse effect on Bank's ability to fulfill its obligations
under this Agreement. As of the Effective Date Bank is solvent, has not had a
receiver or trustee appointed, and has not executed any assignment for the
benefit of its creditors.

                          SECTION 7. COVENANTS OF BANK

Bank hereby covenants and agrees as follows:

      7.1 Notices of Changes. Bank will as soon as reasonably possible notify
Spiegel Group of any: (a) change in the name or form of business organization of
Bank, change in the location of its chief executive office or the location of
the office where its records concerning the Plan are kept; (b) merger or
consolidation of Bank or the sale of a significant portion of its stock or of
any substantial amount of its assets not in the ordinary course of business or
any change in the control of Bank; (c) material adverse

                                       24
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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

change in its financial condition or operations or the commencement of any
litigation which would have a material adverse effect on the Plan. Bank will
furnish such additional information with respect to any of the foregoing as
Spiegel Group may request for the purpose of evaluating the effect of such
transaction on the financial condition and operations of Bank and on the Plan.

      7.2 Financial Statement. Bank shall furnish to Spiegel Group upon request
by Spiegel Group and as soon as available the following information pertaining
to Bank: (a) a consolidated balance sheet as of the close of each fiscal year;
(b) a consolidated statement of income, retained earnings and paid-in capital to
the close of each fiscal year; (c) a consolidated statement of cash flow to the
close of each such period; and (d) a copy of the opinion submitted by Bank's
independent certified public accountants in connection with such of the
financial statements as have been audited.

      7.3 Inspection. Bank will permit, once per Plan Year unless Spiegel Group
has reasonable cause to do so, authorized representatives designated by Spiegel
Group, at Spiegel Group's expense, to visit and inspect, to the extent permitted
by Applicable Law, any of Bank's books and records pertaining to the Discount
Fees, credit bureau costs reimbursement pursuant to Section 2.2(b) to the extent
permitted by Bank's third party contracts (if not permitted, Bank will provide
an officer's certification of the costs), the Holdback, the Debt Cancellation
Products and Enhancement Marketing Services Programs' commissions, revenues and
expenses set forth in Section 2.9, and Purchases and to make copies and take
extracts therefrom, and to discuss the same with its officers and independent
public accountants, all at reasonable times during normal business hours. Bank
shall permit Spiegel Group, once per Plan Year, during normal business hours and
upon reasonable notice, and in a manner which does not disrupt the operations,
to visit the offices at which services relating to the Plan are provided, to
monitor the activities of Bank and its subcontractors.

      7.4 Bank's Business. Bank shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and to comply with all Applicable Laws in connection with its business and the
issuance of credit by Bank.

      7.5 Insurance. Bank shall maintain insurance policies with insurers and in
such amounts and against such types of loss and damage as are customarily
maintained by other banks engaged in similar businesses as Bank.

      7.6 Bank's Funding Facility. Bank will during the pending Spiegel Group
bankruptcy proceedings use reasonable efforts to obtain and maintain its funding
facility for the Plan. Bank will during the pending Spiegel Group bankruptcy
proceedings provide Spiegel Group with the conditions that trigger termination
of Bank's funding facility and any changes thereto and will provide monthly
reporting to Spiegel Group of Bank's performance with respect to the conditions
that trigger termination of the funding facility.

      7.7 Compliance with Law. The Plan, the Credit Card Agreements and the
Enhancement Marketing Services and any action or inaction taken by Bank (where
Bank has a duty to act) in connection with same shall be in compliance with all
Applicable Law

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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

except where the failure to so comply does not or will not have an adverse
effect on the Bank, Spiegel Group or the Plan.

                           SECTION 8. INDEMNIFICATION

      8.1 Indemnification Obligations. (a) Spiegel Group shall be liable to and
shall indemnify and hold Bank and its Affiliates and their respective officers,
directors, employees, subcontractors and their successors and assigns, harmless
from any and all Losses (as hereinafter defined) incurred by reason of: (i)
Spiegel Group's breach of any representation, warranty or covenant hereunder;
(ii) Spiegel Group's failure to perform its obligations as required hereunder;
(iii) any property damage or personal injury caused by or related to Goods
and/or Services charged to an Account; and/or (iv) any action or failure to act
by Spiegel Group, Spiegel Group's Stores and/or Third Party Program vendors
(where Spiegel Group, Spiegel Group's Stores or the Third Party Program vendors
have a duty to act) and their respective officers, directors and employees which
results in a claim against Bank, its officers, employees, Affiliates, unless the
proximate cause of any such claim is an act or failure to act by Bank, its
Affiliates or any subcontractor, or their respective officers, directors or
employees.

      (b) Bank shall be liable to and shall indemnify and hold Spiegel Group and
its Affiliates and their respective officers, directors, employees,
sub-contractors and their successors and assigns, harmless from any and all
Losses (as hereinafter defined) incurred by reason of: (i) Bank's breach of any
representation, warranty or covenant hereunder; (ii) Bank's failure to perform
its obligations as required hereunder; (iii) any action or failure to act by
Bank (where Bank has a duty to act) and its officers, directors, and employees
which results in a claim against Spiegel Group, its officers, employees,
Affiliates, unless the proximate cause of any such claim is an act or failure to
act by Spiegel Group, its Affiliates or any subcontractor, or their respective
officers, directors or employees; and/or (iv) the rejection for credit of any
Applicant by Bank under the Plan except to the extent it results from any action
or omission of Spiegel Group.

      (c) For purposes of this Section 8.1 the term "Losses" shall mean any
liability, damage, costs, fees, losses, judgments, penalties, fines, and
expenses, including without limitation, any reasonable attorneys' fees,
disbursements, settlements (which require the other party's consent which shall
not be unreasonably withheld), and court costs, reasonably incurred by Bank or
Spiegel Group, as the case may be, without regard to whether or not such Losses
would be deemed material under this Agreement except that Losses may not include
any overhead costs that either party would normally incur in conducting its
everyday business.

      8.2 LIMITATION ON LIABILITY. (a) IN NO EVENT SHALL EITHER PARTY BE LIABLE
TO THE OTHER PARTY FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES ARISING OUT OF THIS AGREEMENT, PROVIDED, HOWEVER, THAT THIS LIMITATION
SHALL NOT APPLY WITH RESPECT TO A PARTY'S INTENTIONAL BREACH OF THIS AGREEMENT.

                                       26
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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

      (b) BANK'S TOTAL ANNUAL LIABILITY TO SPIEGEL GROUP FOR ALL DAMAGES FOR ANY
CAUSE WHATSOEVER OCCURRING DURING ANY YEAR OF THE TERM OF THIS AGREEMENT, SHALL
NOT EXCEED [***]. BANK'S TOTAL CUMULATIVE LIABILITY TO SPIEGEL GROUP FOR ALL
DAMAGES FOR ANY CAUSE WHATSOEVER, SHALL NOT EXCEED [***] PROVIDED, HOWEVER, THAT
THIS LIMITATION SHALL NOT APPLY WITH RESPECT TO BANK'S INTENTIONAL BREACH OF
THIS AGREEMENT.

      (c) SPIEGEL GROUP'S TOTAL ANNUAL LIABILITY TO BANK FOR ALL DAMAGES FOR ANY
CAUSE WHATSOEVER OCCURRING DURING ANY YEAR OF THE TERM OF THIS AGREEMENT, SHALL
NOT EXCEED [***]. SPIEGEL GROUP'S TOTAL CUMULATIVE LIABILITY TO BANK FOR ALL
DAMAGES FOR ANY CAUSE WHATSOEVER, SHALL NOT EXCEED [***] PROVIDED, HOWEVER, THAT
THIS LIMITATION SHALL NOT APPLY WITH RESPECT TO SPIEGEL GROUP'S INTENTIONAL
BREACH OF THIS AGREEMENT.

      8.3 NO WARRANTIES. EXCEPT AS PROVIDED HEREIN, THERE ARE NO EXPRESS OR
IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, RESPECTING THE SERVICES AND/OR OTHER PRODUCTS
SOLD OR PROVIDED BY BANK PURSUANT TO THIS AGREEMENT.

      8.4 Notification of Indemnification; Conduct of Defense. (a) In no case
shall the indemnifying party be liable under Section 8.1 of this Agreement with
respect to any claim or claims made against the indemnified party or any other
person so indemnified unless it shall be notified in writing of the nature of
the claim within a reasonable time after the assertion thereof, but failure to
so notify the indemnifying party shall not relieve it from any liability which
it may have under other provisions of this Agreement.

      (b) The indemnifying party shall be entitled to participate, at its own
expense, in the defense, or, if it so elects, within a reasonable time after
receipt of such notice, to assume the defense of any suit brought against the
indemnified party which gives rise to a claim against the indemnifying party,
but, if the indemnifying party so elects to assume the defense, such defense
shall be conducted by counsel chosen by it and approved by the indemnified party
or the person or persons so indemnified, who are the defendant or defendants in
any suit so brought, which approval shall not be unreasonably withheld. If the
indemnifying party elects to assume the conduct of the defense of any suit
brought to enforce any such claim and retains counsel to do so, the indemnified
party or the person or persons so indemnified who are the defendant or
defendants in the suit, shall bear the fees and expenses of any additional
counsel thereafter retained by the indemnified party or such other person or
persons.

                         SECTION 9. TERM AND TERMINATION

      9.1 Term. This Agreement shall become effective as of the Effective Date
when executed by authorized officers of each of the parties and shall remain in
effect for [***] years from the Plan Commencement Date plus any additional
calendar days needed

                                       27
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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

to end the Term on the last day of a calendar month (the "Initial Term") and
shall automatically renew for successive [***]-year terms (each a "Renewal
Term") thereafter unless either party provides the other with at least twelve
(12) month's written notice of its intention to terminate the Agreement prior to
the expiration of the Initial or then current Renewal Term, or unless otherwise
terminated as provided herein.

      9.2 Termination with Cause by Bank; Bank Termination Events. Any of the
following conditions or events shall constitute a "Bank Termination Event"
hereunder, and Bank may terminate this Agreement immediately without further
action by delivering written notice to Spiegel Group setting for the Bank's
reason for termination and the effective date of termination, if such Bank
Termination Event occurs:

      (a) If the Spiegel Group's pending bankruptcy proceeding shall be
converted from a Chapter 11 proceeding to a Chapter 7 proceeding; or

      (b) If after emergence from bankruptcy, Spiegel Group shall: (i) generally
not pay its debts as they become due; (ii) file, or consent by answer or
otherwise to the filing against it, of a petition for relief, reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction; (iii) make an
assignment for the benefit of its creditors; (iv) consent to the appointment of
a custodian, receiver, trustee or other officer with similar powers of itself or
of any substantial part of its property; (v) be adjudicated insolvent or be
liquidated; (vi) take corporate action for the purpose of any of the foregoing
and such event shall materially adversely affect the ability of Spiegel Group to
perform under this Agreement or the Plan; (vii) have a materially adverse change
in its financial condition, including, but not limited to receiving a bond
downgrade or being downgraded by a rating agency to a rating below of BB-
according to Standard and Poor's index or an equivalent rating from a comparable
source; or (viii) receive an adverse opinion by its auditors or accountants as
to its viability as a going concern; or (ix) breach or fail to perform or
observe any covenant or other term contained in any creditor loan agreement,
debt instrument or any other material agreement to which it is bound, and shall
not have remedied such breach or failure within any applicable cure period; or

      (c) If after emergence from bankruptcy, a court or government authority of
competent jurisdiction shall enter an order appointing, without consent by
Spiegel Group, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or if an order for relief shall be entered in any case or proceeding
for liquidation or reorganization or otherwise to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding up or liquidation of Spiegel Group, or if any petition for any such
relief shall be filed against Spiegel Group and such petition shall not be
dismissed within sixty (60) days; or

      (d) If Spiegel Group shall default in the performance of or compliance
with any term or violates any of the material covenants, representations,
warranties or agreements contained in this Agreement and Spiegel Group shall not
have remedied

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IS MARKED [***] HEREIN.

such default within thirty (30) days after written notice thereof shall have
been received by Spiegel Group from Bank; or

      (e) If at anytime the type of Goods and/or Services sold by all Businesses
of Spiegel Group materially changes from the type of Goods and/or Services sold
by Spiegel Group on the date of execution of this Agreement; or

      (f) If while Spiegel Group remains in bankruptcy, Bank's funding for the
Plan is terminated (other than as a result of a default by Bank under the terms
of such funding facility) and Bank is unable to obtain funding on substantially
similar terms and Bank has provided Spiegel Group with at least ninety (90) days
prior written notice of such termination; or

      (g) If Spiegel Group does not obtain permanent DIP financing on or before
July 31, 2003; or

      (h) If Spiegel Group does not obtain approval of this Agreement from the
United States Bankruptcy Court for the Southern District of New York on or
before July 31, 2003.

      9.3 Termination with Cause by Spiegel Group; Spiegel Group Termination
Events. Any of the following conditions or events shall constitute a "Spiegel
Group Termination Event" hereunder, and Spiegel Group may terminate this
Agreement immediately without further action by delivering written notice to
Bank setting for the reason for termination and the effective date of
termination if such Spiegel Group Termination Event occurs:

      (a) If Bank shall: (i) generally not be paying its debts as they become
due; (ii) file or consent by answer or otherwise to the filing against it, of a
petition for relief, reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy or insolvency
law of any jurisdiction; (iii) make an assignment for the benefit of its
creditors; (iv) consent to the appointment of a custodian, receiver, trustee or
other officer with similar powers for itself or of any substantial part of its
property; (v) be adjudicated insolvent or be liquidated; or (vi) take corporate
action for the purpose of any of the foregoing and such event shall materially
adversely affect the ability of Bank to perform under this Agreement or the
operation of the Plan and such event shall materially adversely affect the
ability of Bank to perform under this Agreement or the Plan; or (vii) have a
materially adverse change in its financial condition, including, but not limited
to being downgraded by a rating agency to a rating below an investment grade
rating; or (viii) receive an adverse opinion by its auditors or accountants as
to its viability as a going concern; or (ix) breach or fail to perform or
observe any covenant or other term contained in any creditor loan agreement,
debt instrument or any other material agreement to which it is bound, and shall
not have remedied such breach or failure within any applicable cure period; or

      (b) If a court or government authority of competent jurisdiction shall
enter an order appointing, without consent by Bank, a custodian, receiver,
trustee or other officer

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IS MARKED [***] HEREIN.

with similar powers with respect to it or with respect to any substantial part
of its property, or if an order for relief shall be entered in any case or
proceeding for liquidation or reorganization or otherwise to take advantage of
any bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding up or liquidation of Bank, or if any petition for any such
relief shall be filed against Bank and such petition shall not be dismissed
within sixty (60) days; or

      (c) If Bank shall default in the performance of or compliance with any
term (other than the Service Standards) or violates any of the material
covenants, representations, warranties or agreements contained in this Agreement
and Bank shall not have remedied such default within thirty (30) days (ten (10)
days in the case of failure to pay Spiegel Group pursuant to Section 3.6(a))
after written notice thereof shall have been received by Bank from Spiegel
Group; or

      (d) If Bank fails for three (3) consecutive months to perform any one of
the same Service Standards in a Service Factor Category, as set forth in
Schedule 2.1, and such failure is not the result of an act of Spiegel Group,
Spiegel Group's Stores, or as a result of a force majeure event specified in
Section 10.11, and Bank fails to remedy such failure within thirty (30) days
after receipt of written notice from Spiegel Group.

      9.4 Termination of Particular State. In addition, Bank may terminate the
operation of the Plan in a particular state or jurisdiction if the Applicable
Law of the state or jurisdiction is amended or interpreted in such a manner so
as to render all or any part of the Plan illegal or unenforceable, and in such
event Bank will provide as much advance notice as possible of such proposed
amendment or such interpretation and, if requested, assist Spiegel Group with
finding a new credit provider for such state or jurisdiction.

      9.5 Purchase of Accounts. Upon the termination of this Agreement by either
party, Spiegel Group or its designee shall purchase from Bank all unpaid and
outstanding Accounts, excluding Accounts that are 181 or more days contractually
past due (in the case of termination in a particular state, for the purposes of
this Section 9.5, the term "Accounts" shall refer to Accounts belonging to
Cardholders with billing addresses in such state) and the listing of names and
addresses of such Cardholders at a purchase price to be determined by Bank which
shall be equal to the book value of such Accounts and the receivables related
thereto, including without limitation all accrued finance charges and fees,
whether or not billed or posted to the Accounts. Provided, however, that (i) in
the event of termination of the Agreement by Spiegel Group for a Spiegel Group
Termination Event, or (ii) if at the time of termination Spiegel Group has not
emerged from its pending bankruptcy proceeding; or (iii) if this Agreement is
terminated pursuant to Section 10.11; or (iv) termination of the Plan in a
particular state by Bank (in the case of termination in a particular state, for
the purposes of this Section 9.5, the term "Accounts" shall refer to Accounts
belonging to Cardholders with billing addresses in such state), Spiegel Group
shall not be required, but may elect to do so with prior written notice to Bank,
to purchase the Accounts as set forth above unless Spiegel Group shall establish
(itself or through an Affiliate or third party) another private

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IS MARKED [***] HEREIN.

label or co-branded private label credit card program for its Businesses within
24 months after the termination date of this Agreement. Bank agrees that upon
receipt of notice of termination from Spiegel Group, Bank will not from the date
of receipt of such notice until the termination date, unless required by
Applicable Law or safety and soundness considerations, make any material changes
in Bank's collections or new Accounts underwriting procedures.

            In the case of either termination of the Agreement or termination of
the Plan in a particular state and upon payment of the purchase price to Bank,
Bank shall assign to Spiegel Group or its designee, without recourse, all of its
right, title and interest in and to the Accounts and receivables related thereto
being transferred and will deliver all related documentation.

                            SECTION 10. MISCELLANEOUS

      10.1 Entire Agreement. This Agreement constitutes the entire Agreement and
supersedes all prior agreements and understandings, whether oral or written,
among the parties hereto with respect to the subject matter hereof and merges
all prior discussions between them.

      10.2 Coordination of Public Statements. Bank's parent company, Alliance
Data Systems Corporation, as a public company, will issue a news release
disclosing this Agreement between Spiegel Group and Bank, such news release must
be approved by both parties prior to its issuance. In all other cases, except as
required by Applicable Law, neither party will make any public announcement of
the Plan or provide any information concerning the Plan to any representative of
any news, trade or other media without the prior approval of the other party,
which approval will not be unreasonably withheld. Neither party will respond to
any inquiry from any public or governmental authority, except as required by
law, concerning the Plan without prior consultation and coordination with the
other party. Upon Bank's reasonable request from time to time, Spiegel Group
shall provide references or participate in marketing campaigns or testimonial
initiatives for Bank regarding the services provided by Bank in connection with
the Plan.

      10.3 Amendment. Except as otherwise provided for in this Agreement, the
provisions herein may be modified only upon the mutual agreement of the parties,
however, no such modification shall be effective until reduced to writing and
executed by both parties.

      10.4 Successors and Assigns. This Agreement and all obligations and rights
arising hereunder shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, transferees and assigns. In the event
Spiegel Group sells or otherwise transfers its ownership interests in or
transfers all or substantially all of the assets of or relating to any Business
to any other entity, Spiegel Group shall require that the party acquiring such
ownership interests or assets will be bound by this Agreement, except that upon
90 days advance prior written notice to Bank whenever possible, but not less
than 60 days advance prior written notice, there shall be no obligation for the

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IS MARKED [***] HEREIN.

Spiegel Group to continue to honor any former Spiegel Group Affiliate's credit
card that is issued and serviced by the Bank, (i.e. no more "cross-shopping").

      10.5 Waiver. No waiver of the provisions hereto shall be effective unless
in writing and signed by the party to be charged with such waiver. No waiver
shall be deemed to be a continuing waiver in respect of any subsequent breach or
default either of similar or different nature unless expressly so stated in
writing. No failure or delay on the part of either party in exercising any power
or right under this Agreement shall be deemed to be a waiver, nor does any
single or partial exercise of any power or right preclude any other or further
exercise, or the exercise of any other power or right.

      10.6 Severability. If any of the provisions or parts of the Agreement are
determined to be illegal, invalid or unenforceable in any respect under any
applicable statute or rule of law, such provisions or parts shall be deemed
omitted without affecting any other provisions or parts of the Agreement which
shall remain in full force and effect, unless the declaration of the illegality,
invalidity or unenforceability of such provision or provisions substantially
frustrates the continued performance by, or entitlement to benefits of, either
party, in which case this Agreement may be terminated by the affected party,
without penalty.

      10.7 Notices. All communications and notices pursuant hereto to either
party shall be in writing and addressed or delivered to it at its address shown
below, or at such other address as may be designated by it by notice to the
other party, and shall be deemed given when delivered by hand, or two (2)
Business Days after being mailed (with postage prepaid) or when received by
receipted courier service:

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

If to Bank:                                If to Spiegel Group:

800 TechCenter Drive                       Eddie Bauer, Inc.
Gahanna, OH  43230                         15010 N. E. 36th Street
Attn.: Daniel T. Groomes, President        Redmond, WA  98052
                                           Attn: Vice President Marketing

With a Copy to:
Karen Morauski, VP & Counsel

                                           With Copies  to:
                                           Spiegel, Inc.
                                           3500 Lacey Road
                                           Downers Grove, IL  50515-5432
                                           Attn: Chief Financial Officer
                                                 And Copy to:
                                                 Attn: General Counsel

      10.8 Captions and Cross-References. The table of contents and various
captions in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to any Section are to such Section of this
Agreement.

      10.9 GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF OHIO, REGARDLESS OF THE DICTATES
OF OHIO CONFLICTS OF LAW, AND THE PARTIES HEREBY SUBMIT TO EXCLUSIVE
JURISDICTION AND VENUE IN THE UNITED STATES FEDERAL DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF OHIO OR ANY OF THE STATE COURTS LOCATED IN FRANKLIN COUNTY,
OHIO.

      10.10 Counterparts. This Agreement may be signed in one or more
counterparts, all of which shall be taken together as one agreement.

      10.11 Force Majeure. Neither party will be responsible for any failure or
delay in performance of its obligations under this Agreement because of
circumstances beyond its reasonable control, and not due to the fault or
negligence of such party, including, but not limited to, acts of God, flood,
criminal acts, fire, riot, computer viruses or hackers where such party has
utilized commercially reasonable means to prevent the same, accident, strikes or
work stoppage, embargo, sabotage, inability to obtain material, equipment or
phone lines, government action (including any laws, ordinances, regulations or
the like which restrict or prohibit the providing of the services contemplated
by this Agreement), and other causes whether or not of the same class or kind as
specifically named above. In the event a party is unable to perform
substantially for any of the reasons described in this Section, it will notify
the other party promptly of its inability so to perform, and if the inability
continues for at least one-hundred eighty (180) consecutive days (thirty (30)
days in the cases of credit authorizations and processing of new Accounts), the
party so notified may then terminate this Agreement forthwith. This

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IS MARKED [***] HEREIN.

provision shall not, however, release the party unable to perform from using its
best efforts to avoid or remove such circumstance and such party unable to
perform shall continue performance hereunder with the utmost dispatch whenever
such causes are removed.

      10.12 Relationship of Parties. This Agreement does not constitute the
parties as partners or joint venturers and neither party will so represent
itself.

      10.13 Survival. No termination of this Agreement shall in any way affect
or impair the powers, obligations, duties, rights, indemnities, liabilities,
covenants or warranties and/or representations of the parties with respect to
times and/or events occurring prior to such termination. No powers, obligations,
duties, rights, indemnities, liabilities, covenants or warranties and/or
representations of the parties with respect to times and/or events occurring
after termination shall survive termination except for the following Sections:
Section 2.10, Section 3.3, Section 3.5, Section 3.6, Section 3.8, Section 3.9,
Section 3.10, Section 8, Section 9.5, Section 10.7, Section 10.9, Section 10.11,
Section 10.17, Section 10.18 and Section 11.

      10.14 Mutual Drafting. This Agreement is the joint product of Spiegel
Group and Bank and each provision hereof has been subject to mutual
consultation, negotiation and agreement of Spiegel Group and Bank; therefore to
the extent any language in this Agreement is determined to be ambiguous, it
shall not be construed for or against any party based on the fact that either
party controlled the drafting of the document.

      10.15 Independent Contractor. The parties hereby declare and agree that
Bank is engaged in an independent business, and shall perform its obligations
under this Agreement as an independent contractor; that any of Bank's personnel
performing the services hereunder are agents, employees, Affiliates, or
subcontractors of Bank and are not agents, employees, Affiliates, or
subcontractors of Spiegel Group; that Bank has and hereby retains the right to
exercise full control of and supervision over the performance of Bank's
obligations hereunder and full control over the employment, direction,
compensation and discharge of any and all of the Bank's agents, employees,
Affiliates, or subcontractors, including compliance with workers' compensation,
unemployment, disability insurance, social security, withholding and all other
federal, state and local laws, rules and regulations governing such matters;
that Bank shall be responsible for Bank's own acts and those of Bank's agents,
employees, Affiliates, and subcontractors; and that except as expressly set
forth in this Agreement, Bank does not undertake by this Agreement or otherwise
to perform any obligation of Spiegel Group, whether regulatory or contractual,
or to assume any responsibility for Spiegel Group's business or operations.

      10.16 No Third Party Beneficiaries. The provisions of this Agreement are
for the benefit of the parties hereto and not for any other person or entity.

      10.17 Confidentiality. (a) Neither party shall disclose any information
not of a public nature concerning the business or properties of the other party
which it learns as a result of negotiating or implementing this Agreement,
including, without limitation, the

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

terms and conditions of this Agreement, Customer names, Cardholder personal or
Account information, sales volumes, test results, and results of marketing
programs, Plan reports generated by Bank, trade secrets, business and financial
information, source codes, business methods, procedures, know-how and other
information of every kind that relates to the business of either party except to
the extent disclosure is required by applicable law, is necessary for the
performance of the disclosing party's obligation under this Agreement, or is
agreed to in writing by the other party; provided that: (i) prior to disclosing
any confidential information to any third party, the party making the disclosure
shall give notice to the other party of the nature of such disclosure and of the
fact that such disclosure will be made; and (ii) prior to filing a copy of this
Agreement with any governmental authority or agency, the filing party will
consult with the other party with respect to such filing and shall redact such
portions of this Agreement which the other party requests be redacted, unless,
in the filing party's reasonable judgment based on the advice of its counsel
(which advice shall have been discussed with counsel to the other party), the
filing party concludes that such request is inconsistent with the filing party's
obligations under applicable laws. Neither party shall acquire any property or
other right, claim or interest, including any patent right or copyright
interest, in any of the systems, procedures, processes, equipment, computer
programs and/or information of the other by virtue of this Agreement. Neither
party shall use the other party's name for advertising or promotional purposes
without such other party's written consent.

      (b) The obligations of this Section, shall not apply to any information,
other than consumer personal information:

            (i)   which is generally known to the trade or to the public at the
                  time of such disclosure; or

            (ii)  which becomes generally known to the trade or the public
                  subsequent to the time of such disclosure; provided, however,
                  that such general knowledge is not the result of a disclosure
                  in violation of this Section; or

            (iii) which is obtained by a party from a source other than the
                  other party, without breach of this Agreement or any other
                  obligation of confidentiality or secrecy owed to such other
                  party or any other person or organization; or

            (iv)  which is independently conceived and developed by the
                  disclosing party and proven by the disclosing party through
                  tangible evidence not to have been developed as a result of a
                  disclosure of information to the disclosing party, or any
                  other person or organization which has entered into a
                  confidential arrangement with the non-disclosing party.

      (c) If any disclosure is made pursuant to the provisions of this Section,
to any Affiliate or third party, the disclosing party shall be responsible for
ensuring that such Affiliate or third party keeps all such information in
confidence and that any third party

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

executes a confidentiality agreement provided by the non-disclosing party. Each
party covenants that at all times it shall have in place practices and
procedures designed to assure that each of its employees who is given access to
the other party's confidential information shall protect the privacy of such
information. Each party acknowledges that any breach of the confidentiality
provisions of this Agreement by it will result in irreparable damage to the
other party and therefore in addition to any other remedy that may be afforded
by law any breach or threatened breach of the confidentiality provisions of this
Agreement may be prohibited by restraining order, injunction or other equitable
remedies of any court. The provisions of this Section will survive termination
or expiration of this Agreement.

      (d) Bank acknowledges that it is aware, and agrees that it will advise any
persons with access to or who receive material, non-public information
concerning Spiegel and any of its subsidiaries and/or affiliates and the matters
that are the subject of this Agreement, including, without limitation, Spiegel
Group confidential information, sales forecasts, store closings, etc., that
applicable securities laws prohibit any entity or person from purchasing or
selling securities of Spiegel on the basis of such material, non-public
information. In addition, applicable federal and state securities laws restrict
such persons from communicating such material, non-public information to any
other person under circumstances in which it is reasonably foreseeable that such
entity or person is likely to purchase or sell securities of Spiegel based upon
that information, and/or otherwise prohibit such persons from violating
applicable securities laws.

      10.18 Taxes. Spiegel Group will be responsible for, and agrees to pay, all
sales, use, excise, and value-added taxes, or taxes of a similar nature
(excluding franchise taxes, personal property taxes and taxes based on Bank's
income or those assessed on the net worth of Bank, which shall be borne by
Bank), imposed by the United States, any state or local government, or other
taxing authority, on all goods and/or services provided by Bank under this
Agreement. The parties agree to cooperate with each other to minimize any
applicable sales, use, or similar tax and, in connection therewith, the parties
shall provide each other with any relevant tax information as reasonably
requested (including without limitation, resale or exemption certificates,
multi-state exemption certificates, information concerning the use of assets,
materials and notices of assessments). All amounts set forth in this Agreement
are expressed and shall be paid in lawful U.S. dollars.

                         SECTION 11. CONTINGENT HOLDBACK

      11.1 Holdback. Bank will withhold from the Net Proceeds paid to Spiegel
Group an amount initially equal to twenty percent (20%) of the Net Sales, but
subject to adjustment by Bank as set forth below (such withheld amounts being
referred to as the "Holdback"). The Holdback shall not be held by Bank in a
separate account.

      11.2 Monthly Reconciliation. (a) Bank shall on a monthly basis, within ten
(10) Business Days after the end of each month, compare the actual amount of the
Holdback at month end to an amount equal to twenty percent (20%) of the
Principal Accounts Receivable Balance at month end (such 20% amount being
referred to herein

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

as the "Reconciliation Amount"). If the actual amount of the Holdback plus any
amount charged to the Holdback by Bank in accordance with subsection 11.4 is
greater than the Reconciliation Amount, then Bank will pay such excess amount to
Spiegel Group within three (3) Business Days. If the actual amount of the
Holdback plus any amount charged to the Holdback by Bank in accordance with
subsection 11.4 is less than the Reconciliation Amount, then Bank shall have the
right to offset the amount of the deficit against the Net Proceeds until such
deficit is obtained by Bank.

      (b) Provided, however, that if (i) the Trigger Event in subsection
11.4(a)(i) has occurred; or (ii) the Trigger Event in subsection 11.4(a)(ii) has
occurred and was not caused solely as a result of Bank's default under the terms
of such funding facility (but not including Bank's inability to secure funding
at the end of the term of its initial Plan funding if Spiegel Group has not
emerged from its pending bankruptcy); or (iii) the Trigger Event in subsection
11.4(a)(iii) has occurred, then Bank shall, for purposes of future monthly
comparisons pursuant to subsection 11.2(a) above freeze the Reconciliation
Amount at the dollar amount equal to twenty percent (20%) of the Principal
Accounts Receivable Balance on the month end date preceding the date on which
the condition was met. In the event the Trigger Event causing such freeze is
pursuant to subsection 11.4(a)(iii), then Bank will freeze the Reconciliation
Amount for a period of eighteen (18) months after the date such Trigger Event
occurred, and thereafter will resume utilizing the Reconciliation Amount
determined pursuant to subsection 11.2(a)

      (c) In addition Bank will adjust the amount of the Holdback to account for
receivables generated from Debt Cancellation Products and Enhancement Marketing
Services, by reducing the Principal Accounts Receivable Balance by a percentage
equal to the total charges for Debt Cancellation Products and Enhancement
Marketing Services divided by the total Net Sales for the month being reviewed.

      11.3 Retention of Holdback. Subject to Bank's right to charge against the
Holdback as set forth herein, the Holdback shall be held by Bank during the Term
of this Agreement and thereafter until (i) all of the outstanding receivables of
the Accounts have been fully paid, in which case Bank shall pay to Spiegel Group
any then remaining Holdback; or (ii) Spiegel Group or its designee purchases the
Accounts from Bank pursuant to Section 9.5, in which case Bank shall offset the
then current amount of the Holdback against the purchase price due from Spiegel
Group to Bank; or (iii) the condition for partial release under Sections 11.5 is
met in which case Bank shall pay to Spiegel Group a portion of the Holdback as
set forth in such Section 11.5; or (iv) the conditions for release under either
of Sections 11.6 or 11.7 are met in which case Bank shall transfer to Spiegel
Group any then remaining Holdback.

      11.4 Bank's Rights to Charge Against the Holdback. (a) Bank shall have the
right at any time, on a monthly basis, to charge against the Holdback if any one
of the following "Trigger Events" has occurred, and in such event, Bank shall be
entitled to charge amounts to reimburse Bank for Bank's monthly gross principal
balance write-offs for Accounts that exceed 9% of the average principal accounts
receivable for the Accounts, and for Bank's operating costs equal to $1.00 per
statement generated by

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BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

Bank; provided, however, that if the Trigger Event shall be due to subsection
(iii)(1) below Bank's operating costs shall be limited to statements generated
in states exited by Spiegel Group; and if the Trigger Event shall be solely due
to subsections (iii)(2) or (iii)(3) below Bank shall not be entitled to charge
any of Bank's operating costs of $1.00 per statement.

               Each of the following is referred to as a "Trigger Event":

            (i)   If any Business ceases its business operations; or

            (ii)  Bank's Plan funding terminates prior to Spiegel Group's
                  emergence from bankruptcy and Bank is unable to obtain
                  equivalent funding (in such case Bank would provide Spiegel
                  Group with ninety (90) days' advance written notice of such
                  event); or

            (iii) The operations of the Businesses, at the end of each Plan
                  Year, are significantly changed from the operations in place
                  at the end of the twelfth (12th) month after the Plan
                  Commencement Date such that:

                  1)    More than twenty percent (20%) of the retail markets are
                        exited; or

                  2)    More than twenty percent (20%) of Spiegel Group's Stores
                        are closed; or

                  3)    The quantity of pages circulated to existing Cardholders
                        and to preapproved potential Cardholders is reduced by
                        twenty percent (20%) or more; or

            (iv)  If the Agreement is terminated at anytime while Spiegel
                  Group's bankruptcy proceeding is pending, unless such
                  termination is for a Spiegel Group Termination Event.

      (b) Provided, however, that Bank shall not have the right to charge
against the Holdback if:

(1)   The sole cause of such Trigger Event was the result of Bank's exiting a
      state pursuant to Section 9.4 and the Business was profitable in such
      state prior to such exit by Bank, and the Plan market share (Net Sales
      divided by Spiegel Group's total sales from all funding sources) was equal
      to or greater than 20% prior to such exit by Bank; or

(2)   If Bank's Plan funding terminates prior to Spiegel Group's emergence from
      bankruptcy as a result of Bank's default under the terms of such funding
      facility, but not including Bank's inability to secure funding at the end
      of the term of its initial Plan funding if Spiegel Group has not emerged
      from its pending bankruptcy; or

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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

(3)   In the case of the Trigger Event under subsection 11.4(a)(iii)(1) above,
      if the sole cause of such triggering event was Bank's change in its new
      Account underwriting FICO score requirement by twenty points or more and
      the Business was profitable prior to such change by Bank and the Plan
      market share (Net Sales divided by Spiegel Group's total sales from all
      funding sources) was equal to or greater than 20% prior to such exit by
      Bank.

Bank shall not charge against the Holdback except as otherwise expressly
permitted in this Agreement.

      11.5 Reduction in Holdback. Notwithstanding the provisions of Section
11.2(b), upon Spiegel Group's emergence from bankruptcy, Bank will reduce the
future amounts withheld by Bank from Net Sales, pursuant to subsection 11.1
above to ten percent (10%) of the Net Sales and will reduce the twenty percent
(20%) monthly reconciliation amount in subsection 11.2 to ten percent (10%) of
the Principal Accounts Receivable Balance.

      11.6 Release and Termination of Holdback After Bankruptcy Emergence.
Commencing when Spiegel Group emerges from bankruptcy, upon receipt of the first
annual audited financial statements thereafter and each year thereafter, Bank
will review Spiegel's financial condition and when the following conditions have
been met with respect to Spiegel, Bank will pay to Spiegel Group the amount of
any remaining Holdback and will discontinue withholding any future Holdback
pursuant to subsection 11.1 above when Spiegel has obtained all of the
following:

(i)   An Interest Coverage (earnings before interest and taxes divided by
      interest charges) equal to or greater than 1.5 ; and

(ii)  Net Equity (total tangible assets less total liabilities) equal to or
      greater than $200,000,000; and

(iii) Earnings before taxes, depreciation, amortization and non-recurring
      charges (in accordance with GAAP) equal to three percent (3%) or greater
      of net sales.

      11.7 Release and Termination of Holdback After Sale. (a) In the event
Eddie Bauer or substantially all of its assets are sold by Spiegel and the
acquired or successor entity is not in bankruptcy and is part of an operating
group of the acquirer, then when the following conditions have been met, Bank
will pay to such entity the amount of any remaining Holdback and will
discontinue withholding any future Holdback pursuant to subsection 11.1 above:

(i)   The acquirer's Interest Coverage (earnings before interest and taxes
      divided by interest charges) is equal to or greater than 1.5 times, as
      shown on its most recently audited financial statements; and

                                       39
<PAGE>

ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

(ii)  The successor or new entity's Net Equity (total tangible assets less total
      liabilities) is equal to or greater than 16.7% of the total of the
      acquirer's net sales before the acquisition, as shown on its most recently
      audited financial statements; and

(iii) The acquirer's Earnings before taxes, depreciation, amortization and
      non-recurring charges (in accordance with GAAP) is equal to three percent
      (3%) or greater of revenue, as shown on its most recently audited
      financial statements.

      (b) In the event Eddie Bauer or substantially all of its assets are sold
by Spiegel and the successor entity is not in bankruptcy and is a separate stand
alone entity (and not part of an operating group), then commencing one year
after such transfer and annually thereafter, Bank will review such new entity's
financial condition as shown on its most recently audited financial statements
and when the following conditions have been met with respect to such entity,
Bank will pay to such entity the amount of any remaining Holdback and will
discontinue withholding any future Holdback pursuant to subsection (a) above:

(i)   An Interest Coverage (Earnings before interest and taxes divided by
      interest charges) equal to or greater than 1.5 times; and

(ii)  Net Equity for the new entity is equal to or greater than an amount
      calculated by multiplying $200,000,000 times a percentage determined by
      dividing the acquired entity's total net sales for the 12 months prior to
      the acquisition by Spiegel's total sales for the same 12 months period;
      and

(iii) The acquirer's earnings before taxes, depreciation, amortization and
      non-recurring charges (in accordance with GAAP) is equal to three percent
      (3%) or greater of net sales.

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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

            IN WITNESS WHEREOF, the parties hereto have executed this Agreement
      in manner and form sufficient to bind them as of the date first above
      written.

                                               WORLD FINANCIAL NETWORK
SPIEGEL, INC.                                  NATIONAL BANK

By:_______________________                     By:______________________________

Title:____________________                     Title:___________________________

Date:_____________________                     Date:____________________________

EDDIE BAUER, INC.

By:_______________________

Title:____________________

Date:_____________________

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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

                                   SCHEDULE 1

                                      [***]

                                       42
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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

                                  SCHEDULE 1.1

                                      [***]

                                       43
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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

                                  SCHEDULE 2.1

                                      [***]

                                       44
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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

                                  SCHEDULE 2.5

                                      [***]

                                       45
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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

                                  SCHEDULE 2.8

                                      [***]

                                       46
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ANY TEXT REMOVED PURSUANT TO THE COMPANY'S CONFIDENTIAL TREATMENT REQUEST HAS
BEEN SEPARATELY SUBMITTED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND
IS MARKED [***] HEREIN.

                                  SCHEDULE 3.13

                                      [***]

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