<PAGE>   1
                                                                    EXHIBIT 10.2

                                  PRIVATE LABEL

                          CREDIT CARD PROGRAM AGREEMENT

                                 BY AND BETWEEN

                      WORLD FINANCIAL NETWORK NATIONAL BANK

                                       AND

            UNITED RETAIL GROUP, INC. AND UNITED RETAIL INCORPORATED

                                   DATED AS OF

                                JANUARY 27, 1998

<PAGE>   2

                                  PRIVATE LABEL
                          CREDIT CARD PROGRAM AGREEMENT

            This Private Label Credit Card Program Agreement is made as of
January 27, 1998 by and among World Financial Network National Bank ("Bank"),
United Retail Group, Inc. ("URGI") and United Retail Incorporated (the latter
two entities being collectively referred to herein as "Retailer"). Capitalized
terms used herein have the meanings given to them in Article I (Definitions)
hereof.

                              W I T N E S S E T H:

            WHEREAS, Retailer is engaged in the business of selling women's
clothing and other merchandise at retail; and

            WHEREAS, Bank is engaged in the business of establishing private
label consumer credit card programs for retailers and providing credit to
consumers under credit card accounts established in connection therewith; and

            WHEREAS, Bank and Retailer have been engaged in discussions
regarding the establishment and operation by Bank of a private label credit card
program for Retailer's customers under the terms and conditions set forth below;
and

            WHEREAS, Bank understands that (i) Retailer currently is a party to
that certain Credit Plan Agreement with Citibank (as hereinafter defined), dated
June 3, 1992, as amended by that certain Amendment to Credit Plan Agreement,
dated December 6, 1993 (the "Existing Agreement"); (ii) Retailer may terminate
the Existing Agreement as of January 30, 1999 and designate a bank to purchase
the Transferred Assets (as hereinafter defined) in connection with such
termination, provided that notice of termination and the bank designation
(collectively, the "Termination Notice") are provided by January 30, 1998, and
(iii) the Termination Notice (including the designation provided therein) is
irrevocable; and

            WHEREAS, Retailer wishes to terminate the Existing Agreement,
designate Bank as the purchaser of the Transferred Assets and have Bank operate
the Program (as hereinafter defined); and

            WHEREAS, Bank wishes Retailer to terminate the Existing Agreement,
designate Bank as the purchaser of the Transferred Assets and have Bank to
operate the Program; and

            WHEREAS, on January 30, 1999 (or such other date prior to March 31,
1999 agreed to by the parties), Bank shall purchase the Transferred Assets and
thereafter establish and operate the Program in accordance with the terms
hereof;
<PAGE>   3

            NOW, THEREFORE, in consideration of the terms, conditions and mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Bank and Retailer
hereby agree as follows:


                                    ARTICLE I
                                   DEFINITIONS

            1.1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:

            "Account" means and includes the following: (i) any open-end
revolving Credit Card Agreement, between a Cardholder and Bank under the
Program, pursuant to which such Cardholder may finance Purchases on credit,
including all Existing Accounts; (ii) all Receivables, contract rights, general
intangibles, chattel paper, and instruments related to, comprising, securing or
evidencing the obligation, or the receivables therefrom; and (iii) any and all
other rights, remedies, benefits, interests and titles, both legal and
equitable, to which Bank may now or at any time hereafter be entitled in respect
of the foregoing.

            "Account Documentation" means, with respect to an Account, Credit
Cards, Credit Card Applications and Credit Card Agreements.

            "Actual Royalty Payment" shall mean, for any six-month period, an
amount equal to (i) the Net Transaction Volume for that six-month period,
multiplied by (ii) the Actual Royalty Payment Index applicable to that six-month
period

            "Actual Royalty Payment Index" shall mean during the period from the
Conversion Date to July 31, 1999 and during every six-month period thereafter, a
fraction, converted to a percentage, the numerator of which is the total Monthly
Program Revenues, minus the total Monthly Program Costs for such six-month
period, and the denominator of which is Net Transaction Volume for that
six-month period.

            "Affiliate" means, with respect to any Person, each Person that
controls, is controlled by, or is under common control with, such Person. For
the purpose of this definition, "control" of a Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by
contract or otherwise.

            "Agreement" means this Private Label Credit Card Program Agreement,
including all amendments, modifications, supplements, annexes, exhibits and
schedules.


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**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

            "Approval Rate" means the percentage of Credit Card Applications
submitted by applicants that are approved by Bank.

            "Approval-Related Percentage" shall mean, for any 12- month period,
the percentage opposite the Approval Rate for that period in the following
table:

Approval Rate                 Approval-Related Percentage

**                                  **
**                                  **
**                                  **
**                                  **
**                                  **
**                                  **
**                                  **
**                                  **
**                                  **
**                                  **
**                                  **
**                                  **
**                                  **
**                                  **
**                                  **
** or more                          **

            "Bank" shall have the meaning assigned to such term in the
introductory paragraph hereto.

            "Bankruptcy Code" means Title 11 of the United States Code, as
amended, or any other applicable state or federal bankruptcy, insolvency,
moratorium or other similar Laws.

            "BDIP" means the parties' bad debt incentive program.

            "BDIP Base Write-Off Percentage" means any BDIP Write- Off
Percentage between ** and **.

            "BDIP Incentive Percentage" means, the percentage opposite the BDIP
Write-Off Percentage for the year at issue in the following table:

BDIP Write-Off                      BDIP Incentive Percentage
Percentage                          -------------------------
----------
                  Year         Year        Year        Year        Year
                 Ending       Ending      Ending      Ending      Ending
               1/31/2000    1/31/2001   1/31/2002   1/31/2003   2/29/2004
               ---------    ---------   ---------   ---------   ---------

** and over       N/A             **          **          **          **
** to **          N/A             **          **          **          **
** to **          N/A             **          **          **          **
** to **            0              0           0           0           0
** to **           **              0           0           0           0
** to **           **             **          **          **          **


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**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY


**  to **          **             **          **          **          **
less than **       **             **          **          **          **

            "BDIP Lagged AR" means, with respect to the period from February 1,
1999 through January 31, 2000, the sum of the Receivables (excluding all late
fees billed on Receivables), as of the end of each Billing Cycle during the
period from July 1, 1997 through June 30, 1998, and, for each February 1 to
January 31 thereafter, the sum of the Receivables (excluding all late fees
billed on Receivables), for the comparable July 1 through June 30 period,
divided by twelve (12).

            "BDIP Net Write-Off Amount" means, for any 12-month period, an
amount equal to (a) the amount of Receivables (excluding all late fees billed on
Receivables) written off by Bank in accordance with the Write-Off Policy in such
period, less (b) an amount equal to (i) the gross amount of cash recoveries in
respect of written-off Receivables (including Receivables from Existing Accounts
written off prior to or after the Conversion Date) received in such period
(including in connection with any sale by Bank of written-off Receivables), less
(ii) with respect to the collection of such write-offs, attorneys' fees,
collection agency fees and other out-of-pocket collection fees paid by Bank.

            "BDIP Write-Off Percentage" means, for the 12-month period preceding
January 31, 2000 and each 12-month period thereafter, a fraction, converted to a
percentage (rounded to the nearest tenth), the numerator of which is the BDIP
Net Write-Off Amount for that 12-month period, and the denominator of which is
the BDIP Lagged AR for that 12-month period.

            "Billing Cycle" means Bank's practice of posting Consumer Charges,
Cardholder payments and credits to Accounts on a monthly basis.

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

            "Cardholder" means any natural Person who has entered into a Credit
Card Agreement with Bank or who is or may become obligated under or with respect
to an Account.

            "Cardholder List" shall mean an identification (in magnetic tape
format) of (i) all Cardholders (including those obligated in respect of Existing
Accounts), and (ii) all applicants for Accounts (including Existing Accounts),
including the name, address, telephone number and social security number of any
such Person, and, in the case of a Cardholder, the date on which and Store trade
name in which she last made a Purchase. The foregoing notwithstanding, the
parties acknowledge and agree that the Cardholder List shall not contain
identifications or other information with respect to Existing Accounts or
applicants


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**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

for Existing Accounts unless such identifications or information were received
by Bank from Citibank or are accepted by Bank after the Conversion Date.

            "Charge Data" means identification and transaction information
reviewed and balanced by Retailer with regard to each Purchase by Cardholders
and each return of a Purchase for credit to an Account.

            "Charge Slip" means a sales receipt, register receipt tape or other
invoice or documentation, whether in hard copy or electronic draft capture form,
in each case evidencing a Purchase.

            "Citibank" means Citibank (South Dakota), N.A. and its successors
and assigns.

            "Collateral Account" shall have the meaning assigned to such term in
Section 13.9(a) (Collateral Account).

            "Collateral Amount" shall have the meaning assigned to such term in
Section 13.8 (Alternative to Termination).

            "Collection Policies and Procedures" shall have the meaning assigned
to such term in Section 4.9(a) (Collections).

            "Consumer Charges" means late fees, finance charges and return
payment fees as set forth in Exhibit 2.3 with such changes therein and additions
thereto as may be proposed, reviewed and approved in accordance with Section
2.3(a) (Consumer Terms and Policies).

            "Conversion Date" shall mean the date on which Bank purchases the
Transferred Assets or such later date agreed to by the parties.

            "Cost of Funds" means, for any period, the following: (a) for up to
the first ** tranche of Receivables, the cost of financing such Receivables for
the three (3) month period commencing February 1, 1999 and for each three (3)
month period thereafter will be based on one-year treasuries plus ** basis
points to be reset every three (3) months, with one (1) year treasuries not to
be more than ** per annum and not to be less than ** per annum for the purpose
of this calculation, and (b) for the balance of the Receivables, the cost of
financing such Receivables for that period, based on the following: the average
annualized cost of borrowings of the Master Trust(s) for that period (weighted
at ** of the cost of financing) and the average annualized cost of Bank's
borrowings for that period (weighted at ** of the cost of financing), it being
understood that Bank shall use its best efforts to obtain appropriate derivative
instruments in respect of tranches of Receivables other than the first **
tranche of Receivables for amounts acceptable to Retailer


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<PAGE>   7

("Appropriate Derivative Instruments"), provided that such amounts shall be
treated as Pass Through Expenses.

            "Credit Card" means the plastic card owned by Bank under the Program
exclusively for use with the Program, which card evidences a Cardholder's right
to make Purchases.

            "Credit Card Agreement" means the open-end revolving credit
agreement between Bank and each Cardholder pursuant to which such Cardholder may
make Purchases, on credit provided by Bank, together with any modifications or
amendments which may be made to such agreement.

            "Credit Card Application" means Bank's credit application which must
be submitted to Bank by applicants who wish to become Cardholders for review and
approval or disapproval by Bank.

            "Credit Documentation" means, with respect to an Account, any and
all documentation relating to the Account, including, without limitation, Credit
Cards, Credit Card Applications, Credit Card Agreements, Charge Data, Charge
Slips, Credit Slips, checks and stubs, credit bureau reports, adverse action
information, change of terms notices and correspondence.

            "Credit Sales Day" means any day, whether or not a Business Day, on
which Goods and/or Services are sold by Retailer.

            "Credit Slip" means a sales credit receipt or other documentation,
whether in hard copy or electronic draft capture form, evidencing a return or
exchange of Goods or a credit on an Account as an adjustment for Services
rendered or not rendered to a Cardholder by (i) Retailer or (ii) a Person
authorized by Retailer and approved by Bank (such approval not to be
unreasonably withheld).

            "Damages" shall have the meaning assigned to such term in Section
14.1 (Indemnification by Retailer).

            "Direct Marketing Program" means the sale of Goods and/or Services
outside of Stores, including sales through direct mail, Internet, and bill
stuffers.

            "Estimated Royalty Payment" shall mean, for any six-month period, an
amount equal to (i) the Net Transaction Volume for that six-month period,
multiplied by (ii) the Estimated Royalty Payment Index applicable to that
six-month period.

            "Estimated Royalty Payment Index" shall mean:

            (i) for any calendar month or portion thereof during the period from
            the Conversion Date through July 31,



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            1999, a pro forma percentage, calculated using data that arose in
            connection with the Existing Agreement, that is a fraction,
            converted to a percentage, the numerator of which is the monthly
            program revenues under the Existing Agreement for the six-month
            period immediately preceding the Conversion Date minus the monthly
            program costs under the Existing Agreement for the six-month period
            immediately preceding the Conversion Date, which costs shall be
            adjusted to reflect the estimated Cost of Funds as of the Conversion
            Date, and the denominator of which is the net transaction volume
            under the Existing Agreement for the six-month period immediately
            preceding the Conversion Date; and

            (ii) for any calendar month during any six-month period thereafter,
            the Actual Royalty Payment Index for the immediately preceding
            six-month period.

            "Event of Bankruptcy" means, with respect to any Person, the
occurrence of any of the following events: (a) a decree or order, by a
Governmental Authority having jurisdiction, is entered with respect to such
Person and is not vacated, discharged, stayed or bonded within 60 days after the
date of entry thereof, (i) for relief in respect of such Person pursuant to the
Bankruptcy Code, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee, or sequestrator (or similar official) of such Person or of any
substantial part of its properties, or (iii) ordering the winding-up or
liquidation of the affairs of such Person, or (b) a person or entity other than
such Person files a petition seeking the institution of any proceedings
specified in clauses (a)(i), (ii) or (iii) in respect of such Person, and such
petition shall not be discharged or dismissed within 60 days after the date of
filing thereof, or (c) such Person (i) files a petition seeking relief pursuant
to the Bankruptcy Code, (ii) consents to the institution of proceedings pursuant
thereto or to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) of such Person or of any substantial part of
its properties, or the winding up or liquidation of its affairs or (iii) takes
corporate action in furtherance of any such action.

            "Existing Accounts" means those private label credit card accounts
bearing the names or trademarks, tradenames or logos of Retailer owned by
Citibank, which shall be conveyed to Bank by Citibank in accordance with Section
2.1 (Existing Accounts: Purchase and Conversion).

            "Existing Agreement" shall have the meaning assigned to such term in
the fourth recital hereto.


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            "Extended Term" has the meaning assigned to such term in Section
13.1(a) (Term of Agreement).

            "Final Liquidation Date" shall mean the date on which Bank no longer
owns any Accounts that have a balance outstanding which has not been written off
under the Write-Off Policy.

            "Force Majeure Event" shall have the meaning assigned to such term
in Section 12.6 (Force Majeure).

            "Goodwill Adjustments" means credits to Accounts that are neither
payments, returns or other in-store adjustments, write-offs nor chargebacks.

            "Goods and/or Services" means all merchandise and services which may
be purchased by Cardholders from Retailer or a Person authorized by Retailer and
approved by Bank (such approval not to be unreasonably withheld) or pursuant to
Value-Added Programs or through Direct Marketing Programs.

            "Governmental Authority" means any government, any state, or any
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, in each case whether federal, state or local.

            "Indebtedness" means liability for borrowed money.

            "Initial Term" has the meaning assigned to such term in Section
13.1(a) (Term of Agreement).

            "Insert Fees" means those fees set forth on Exhibit 4.4.

            "Law" means all laws, codes, statutes, ordinances, rules,
regulations, decrees and orders of any Governmental Authority.

            "Lien" means any mortgage, pledge, assignment, claim, lien
(statutory or other), right of first refusal, charge or encumbrance,
imperfection of title or other matters affecting title, and any rights of third
parties whatsoever, including, without limitation, any liens or encumbrances
(whether choate or inchoate) arising in respect of taxes.

            "Master Trust" means any trust to which Bank sells any Receivables
(including Receivables from Existing Accounts) set up for purpose of
securitization pursuant to a Master Trust Agreement.

            "Measurement Notice" shall have the meaning assigned to such term in
Section 4.1(b) (Bank's Responsibilities).


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            "Monthly Net Revenue" shall have the meaning assigned to such term
in Section 13.7(b) (Failure of Retailer to Purchase Accounts Following
Termination).

            "Monthly Net Revenue Requirement" shall have the meaning assigned to
such term in Section 13.7(b) (Failure of Retailer to Purchase Accounts Following
Termination).

            "Monthly Program Costs" shall have the meaning assigned to such term
in Section 6.1(a) (Program Economics).

            "Monthly Program Revenues" shall have the meaning assigned to such
term in Section 6.1(a) (Program Economics).

            "Net Transaction Volume" means, with respect to any period, an
amount equal to the aggregate amount of Purchases (including all applicable
shipping, handling and taxes) on Accounts for such period (as reflected in
Charge Data) less the aggregate amount of Credit Slips for such period (as
reflected in Charge Data).

            "Non-Compliance Notice" shall have the meaning assigned to such term
in Section 4.1(b) (Bank's Responsibilities).

            "Non-Permitted Credit Program" means any consumer credit, debit or
charge program which may be utilized for the purchase of Goods and Services,
other than a program which the Retailer is permitted to accept, utilize, market
or promote pursuant to Section 12.1 (Retailer Acquisitions).

            "Operating Procedures" means the instructions and procedures to be
followed by the parties in connection with the Program, as such instructions and
procedures may be provided by Bank to Retailer from time to time in accordance
herewith.

            "Other Clients' Policies and Procedures" shall have the meaning
assigned to such term in Section 4.9 (Collections).

            "Other Credit Terms and Criteria" shall have the meaning assigned to
such term in Section 2.3(b) (Consumer Terms and Policies).

            "Owner" shall have the meaning assigned to such term in Section
12.4(a) (Use of Retailer Marks).

            "Pass Through Expenses" means those expenses incurred by Bank in
servicing the Accounts which are listed on Exhibit 5.2 hereto.

            "Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or Governmental Authority.


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**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

            "Pooling and Servicing Agreement" means a Pooling and Servicing
Agreement entered into in connection with a Master Trust by Bank and a trustee,
including each supplement thereunder, as the same may be amended, supplemented
or otherwise modified from time to time.

            "Principal Balance" means Receivables less billed Consumer Charges,
including delinquent Consumer Charges.

            "Program" means the credit card program established pursuant to this
Agreement and made available to qualified customers of Retailer to make
Purchases.

            "Program Assets" shall have the meaning assigned to such term in
Section 13.6(a) (Purchase Following Termination).

            "Purchase(s)" means purchase(s), for personal, family or household
purposes, by a Cardholder of any Goods and/or Services on an Account, whether
such purchase occurs in a Store, by mail order, through a catalogue, by
telephone order, by computer or other direct access method or by any other
medium or method through which a purchase can be effected.

            "Put Notice" shall have the meaning assigned to such term in Section
13.6(b) (Purchases Following Termination).

            "Receivable" means any and all amounts owed from time to time with
respect to the Purchases on an Account including, without limitation, any unpaid
balances, Consumer Charges (including finance charges, deferred finance charges,
fees and other charges), and charges for sales tax, regardless of whether such
Receivable consists of an "account," "chattel paper," an "instrument" or a
"general intangible" under and as defined in Article or Division 9 of the UCC
applicable to such Receivable, and all proceeds of any of the foregoing.

            "Retailer" shall have the meaning assigned to such term in the
introductory paragraph hereto.

            "Retailer Marks" means the various tradenames, trademarks,
servicemarks and logos of Retailer set forth on Exhibit A hereto.

            "Securitization Fees" means Bank's actual cost incurred with respect
to any securitization of the Accounts and/or Receivables (including costs
related to the establishment of the securitization of Receivables), including,
without limitation, outside legal fees, due diligence costs, underwriting and
other out-of-pocket costs, provided, however, that the total of such costs
incurred from time to time for which Retailer is responsible pursuant to Section
6.3(c) (Other Payments) does not exceed **.


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            "Service Fee" means, with respect to any month, the amount payable
by Retailer for Bank's servicing of the portfolio for such month, calculated as
set forth on Exhibit 6.1(b).

            "Service Fee Adjustment" shall mean, with respect to any service
identified on Exhibit 4.1(b)(2), the amount specified as such on Exhibit
4.1(b)(2).

            "Servicer" shall have the meaning assigned to such term in Section
4.3(b) (In-Store Payments).

            "Solvent" means, when used with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that shall be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person is able to realize upon its assets
and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (d) such Person
does not intend to, and does not believe that it shall, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person is
engaged.

            "Store Account" shall have the meaning assigned to such term in
Section 4.3(b) (In-Store Payments).

            "Store Payment Notice" shall have the meaning assigned to such term
in Section 4.3(b) (In-Store Payments).

            "Stores" means any and all stores which are operated, conduct
business or make sales under a Retailer Mark.

            "Termination Notice" shall have the meaning assigned to such term in
the fourth recital hereto.

            "Transferred Assets" shall have the meaning assigned to such term in
Section 2.1 (Existing Accounts: Purchase and Conversion).

            "UCC" means the Uniform Commercial Code (or analogous personal
property security Law) of the jurisdiction with respect to which such term is
used as in effect from time to time.

            "Unsafe and Unsound Banking Practice" means an unsafe and unsound
banking practice as defined in banking laws and


                                       11
<PAGE>   13

regulations applicable to federally chartered credit card banks located in the
State of Ohio.

            "URGI" shall have the meaning assigned to such term in the
introductory paragraph hereto.

            "Value-Added Program" shall have the meaning assigned to such term
in Section 3.4 (Value-Added Programs).

            "Write-Off Amount" shall mean, for any period, an amount equal to
(a) the Principal Balances written off by Bank in accordance with the Write-Off
Policy in such period, less (b) the gross amount (without deduction for
attorneys' fees, collection agency fees or other collection fees) of cash
recoveries in respect of written-off Receivables (including Receivables from
Existing Accounts written off prior to and after the Conversion Date) received
in respect of such period (including in connection with any sale by Bank of such
written-off receivables).

            "Write-Off Policy" shall mean the policy by which Bank writes off,
as of the last day of every Billing Cycle, Accounts: (i) that are 180 days
contractually past due during that Billing Cycle, (ii) as to which Bank has
received official notice that the Cardholders obligated in respect thereof have
filed petitions for relief under the Bankruptcy Code at least fifteen (15) days
prior to the last day of that Billing Cycle, (iii) as to which the Cardholders
are deceased, and/or (iv) which contain fraudulent charges, as such write-off
policy may be modified in accordance with Section 4.9(c) (Collections).


                                   ARTICLE II
                                   THE PROGRAM

            2.1. Existing Accounts: Purchase and Conversion.

            (a) As of the date of termination of the Existing Agreement (or such
other date prior to March 31, 1999 as may be agreed to by the parties): (i)
without recourse to Retailer or Citibank, except as provided, respectively,
herein, or in any agreement between Bank and Citibank, Bank shall purchase and
Retailer shall designate Bank as purchaser with respect to all of Citibank's
right, title and interest in and to the Existing Accounts (including accrued
finance charges) and credit agreements and credit cards relating thereto, all
records maintained by Citibank in connection with the Existing Agreement, the
names, addresses and credit history of persons obligated in respect of Existing
Accounts and, to the extent of Citibank's ownership, the credit standards used
by Citibank in evaluating credit card applications under the Existing Agreement
(collectively, the "Transferred Assets"); and (ii) Bank shall assume liability
for any credit balances as set forth in such records and shall refund credit
balances in accordance with


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<PAGE>   14

applicable legal requirements. Bank shall pay to Citibank for the Transferred
Assets an amount equal to the aggregate outstanding balances of the Existing
Accounts on the purchase date, less the amount of such balances written off by
Citibank as of the purchase date.

            (b) Retailer represents and warrants to Bank as of the Conversion
Date that:

                    (i) Citibank (or its assignor) has previously issued to each
            person obligated in respect of the Existing Account a credit card in
            full compliance with all federal and applicable state laws and
            regulations relating to the issuance of credit cards or requests
            therefor;

                   (ii) Citibank (or its assignor) has entered into a valid,
            binding and enforceable credit agreement signed or otherwise
            accepted by each person obligated in respect of the Existing
            Account;

                  (iii) each periodic billing statement rendered prior to and as
            of the last billing date in respect of the Existing Account was in
            full compliance with federal and all applicable state laws and
            regulations relating to truth-in-lending and the computation,
            disclosure, explanation and adjustment of credit accounts and
            finance charges thereof; and

                   (iv) the Existing Account has been incurred in accordance
            with the operating procedures in effect under the Existing Agreement
            at the time it was incurred, and, whether or not such procedures so
            provided, the following shall be true:

                        (1) the Receivables thereon were incurred by a charge
                  customer solely as consideration for a bona fide sale of goods
                  or services by Retailer or an authorized third party provider
                  under the Existing Agreement (in connection with which neither
                  such charge customer nor any person on his or her behalf
                  received any cash refund or rebate).

                        (2) If a credit card was used, the card appeared to be
                  valid on its face and showed no signs of having been altered,
                  defaced or tampered with and the last name of the name signed
                  on the card was the same as the last name of the name embossed
                  or otherwise placed on the card by the issuer, and the
                  signature of the customer signed on the sales slip or loan
                  order form compared favorably with the signature on the
                  signature panel of the credit card.


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<PAGE>   15

                        (3) The charge customer was given or sent a sales slip
                  or loan order setting forth a description of the goods or
                  services, the date of the transaction, and the full price
                  including taxes, and any other information required by Law.

            (c) It is acknowledged and agreed that the costs associated with the
purchase of Transferred Assets and the conversion of the Existing Accounts shall
be borne solely by Bank.

            (d) Bank shall use commercially reasonable efforts to convert the
Existing Accounts in a manner designed to minimize any adverse effects on
Cardholders. Retailer shall use commercially reasonable efforts to assist Bank
in such conversion, including by asking for the cooperation of Citibank with
respect thereto.

            (e) Retailer shall ask Citibank to allow Bank to continue to use the
account numbers and credit cards of the Existing Accounts. If such permission is
obtained, Bank shall not reissue credit cards in respect of the Existing
Accounts and, instead, at Bank's expense, Bank shall provide active Cardholders
of Existing Accounts with decals identifying Bank for application to their
Credit Cards.

            2.2. Retailer to Honor Credit Card. (a) Pursuant to the terms and
conditions of this Agreement, Retailer and Bank hereby establish the Program for
the purpose of making open-end credit available (up to such credit limits as
from time to time may be established and/or modified in accordance herewith) to
qualified customers of Retailer for Purchases.

            (b) Retailer shall participate in the Program and honor any valid
Credit Cards for Purchases. Only the cash selling price of Goods and Services
(which shall include all applicable shipping, handling and taxes) shall be
charged to Accounts. Retailer shall permit customers with Accounts to charge
Goods and Services to their Accounts, subject to and in accordance with the
Operating Procedures.

            (c) With respect to each applicant under the Program who qualifies
for credit under Bank's credit standards as established under this Agreement,
Bank shall open an Account, issue to such qualified applicant a Credit Card,
activate such applicant's Credit Card in accordance with the Operating
Procedures and grant credit to such applicant for Purchases. The terms and
conditions upon which a Cardholder may use the Credit Card and upon which Bank
may extend credit to a Cardholder shall be governed by the Credit Card Agreement
between the Cardholder and Bank.


                                       14
<PAGE>   16

            2.3. Consumer Terms and Policies. (a) The initial Consumer Charges
applicable to Accounts are set forth in Exhibit 2.3 hereto. Except as provided
in subsection (d) below, Bank shall consult with Retailer concerning whether and
when to impose other charges under Credit Card Agreements and the amount of such
additional charges. Such additional charges shall be reviewed and may be
approved or disapproved by Retailer in its reasonable discretion. Except as
provided in subsection (d) below, Bank shall consult with Retailer concerning
any future changes to any Consumer Charges (including Consumer Charges specified
on Exhibit 2.3 hereto), which changes shall be reviewed and may be approved or
disapproved by Retailer in its reasonable discretion; provided, however, that
Bank in its reasonable discretion on an individual Cardholder basis, may reduce
and/or waive any such Consumer Charges in the ordinary course of providing
customer service in respect of, and collecting, Accounts.

            (b) Bank shall set the credit standards used in connection with the
issuance of Credit Cards, the range of credit limits to be made available to
individuals, the standards for increasing credit limits, the standards for
termination or suspension of credit privileges, the terms for soliciting
preapproved customers, the grace periods applicable to Accounts, the amount of
minimum payments on Accounts and the other terms and conditions (other than
Consumer Charges) under which credit is extended to Cardholders (collectively
referred to herein as the "Other Credit Terms and Criteria"), all of which Other
Credit Terms and Criteria shall be reviewed and may be approved or disapproved
by Retailer in its reasonable discretion. Except as provided in subsection (d)
below, any changes made by Bank to Other Credit Terms and Criteria also shall be
reviewed and may be approved or disapproved by Retailer in its reasonable
discretion.

            (c) Exhibit 2.3(c) hereto sets forth certain of the initial terms
and conditions relating to Accounts.

            (d) Notwithstanding any other provision of this subsection to the
contrary, (i) each party, without the other's approval, may take any actions at
any time that it in good faith determines are required by law or demand of any
Governmental Authority and (ii) Bank may take any actions that it in good faith
determines are required to prevent the operation of the Program from becoming an
Unsafe and Unsound Banking Practice and shall give such notice to Retailer as is
reasonable under the circumstances. The determinations made by the parties in
accordance with the preceding sentence shall take into account, if pertinent,
the overall economics of the Program, including (among other things) the
semi-annual reconciliation provided for in Section 6.4 (Semi-Annual
Reconciliation). Any changes so made by any party shall be made in a manner
designed to ameliorate any negative impact on the other party or Cardholders.


                                       15
<PAGE>   17

            2.4. Bank to Extend Credit. Subject to (i) the terms of this
Agreement, (ii) the credit limits applicable to each Account and (iii) the terms
and conditions in the Credit Card Agreement, Bank shall extend credit to
Cardholders in amounts set forth as the total for any Purchases reflected in
Charge Data received and accepted by Bank.

            2.5. Commencement of Program. The Program shall commence on the
Conversion Date.


                                   ARTICLE III
                                 ADMINISTRATION

            3.1. Program Documents; Related Materials. (a) Bank and Retailer
shall cooperate and assist each other in the preparation of all documents to be
used in connection with the Program. Bank shall, following consultation with
Retailer, provide Retailer with Credit Cards, credit card mailers and such other
documents as are necessary for the operation of the Program, as well as forms of
Credit Card Applications and Credit Card Agreements, all of which documents
shall contain the Consumer Charges and Other Credit Terms and Criteria
established pursuant to Section 2.3 (Consumer Terms and Policies).

            (b) All Credit Card Applications, Credit Card Agreements and Credit
Cards shall clearly disclose that credit is being extended to Cardholders by
Bank except as otherwise agreed by Bank. No Account Documentation shall be
utilized unless Bank and Retailer have expressly approved the form and content
of such documents in writing; provided, however, that if changes to Account
Documentation are required by Law, then Bank shall not be required to obtain
Retailer's approval for any such change.

            (c) The foregoing subsections notwithstanding, Bank acknowledges and
agrees that: (i) all Program documents and related materials needed to operate
the Program (except in-store signage, temporary cards and applications) shall be
provided by Bank at Bank's expense and be in a form and of a quality
substantially similar to that being used by Retailer immediately prior to the
date hereof, and (ii) Bank, at Bank's expense, shall accept electronic
applications in the form currently used by Retailer and provide the dial-in
networks to receive such forms.

            3.2. Credit Rejection. The rejection for credit of any applicant
under the Program in accordance with the terms hereof shall not give rise to any
claim, liability, demand, offset, defense, counterclaim or other right or action
by Retailer against Bank and Retailer hereby waives and releases any such claim
that it may have against Bank, provided, however, that Bank shall indemnify
Retailer in accordance with Section 14.2(vi) (Indemnification by Bank).


                                       16
<PAGE>   18

            3.3. Ownership of Accounts. Bank shall be the sole and exclusive
owner of all Accounts, Receivables and Account Documentation and shall be
entitled to receive all payments made by Cardholders on Accounts, and Retailer
acknowledges and agrees that it has no right, title or interest in any of the
foregoing and no right to any payments made by Cardholders on Accounts or any
proceeds in respect of the Accounts.

            3.4. Value-Added Programs. Retailer or its designees, at Retailer's
expense, may solicit Cardholders for credit insurance programs and other
products and services including, without limitation, products and services that
enhance Accounts and/or the Program such as travel clubs, extended warranties,
legal services, auto clubs, renters' insurance and membership clubs
(collectively referred to herein as "Value-Added Programs"). All proceeds of
Value-Added Programs shall be the property of Retailer. Bank and Retailer shall
agree, for each Value-Added Program, on the amount to be paid by Retailer to
Bank to reimburse Bank for its reasonable costs to set-up, manage and administer
the Value-Added Program (which amounts to be paid by Retailer shall constitute
Pass Through Expenses). Bank shall have the right to disapprove any proposed
program only if (i) Bank does not have the ability to support such program, it
being understood that such support shall not unreasonably be withheld, or (ii)
such Value-Added Program, if conducted, likely would, in the Bank's reasonable
opinion, damage the reputation of Bank.

            3.5. Cardholder List and Other Cardholder Information. Retailer
acknowledges and agrees that Bank is the sole and exclusive owner of the
Cardholder List. Bank hereby grants to Retailer for the term of this Agreement
an exclusive and royalty-free license to use (or sublicense or assign the right
to use) the Cardholder List for all purposes, including for advertisements,
solicitations or other marketing efforts, regardless of the manner or media
through which the marketing effort is made, and regardless of whether the
product or service has previously been marketed by Retailer, except that Bank
shall have the exclusive right (even as to Retailer) to use the Cardholder List
(or any other lists including information relating to Cardholders or applicants
for Accounts obtained in connection herewith) to operate the Program in
accordance with this Agreement. Bank shall not use the Cardholder List (or any
other lists including information relating to Cardholders or applicants for
Accounts obtained in connection herewith) except in connection with the Program
in accordance with this Agreement. Bank shall maintain, update and provide
Retailer with a Cardholder List monthly at no charge to Retailer. If requested
by Retailer, Bank also shall (a) update and provide Retailer with the Cardholder
List more frequently than monthly, and/or (b) provide Retailer with any other
lists including information relating to Cardholders or applicants for Accounts
obtained in connection herewith, at costs to be agreed upon by the parties.


                                       17
<PAGE>   19

            3.6. Publicity. Any press releases, advertisements, publicity or
other materials which promote the Program shall not be publicly distributed or
disseminated without the prior written consent of Retailer and Bank; provided,
however, that (i) neither party shall be required to obtain the other's consent
for any portion of a document containing disclosures or other information which
in such person's judgment is required by or appropriate to comply with, any
applicable Law; and (ii) Retailer shall not be required to obtain Bank's consent
for any materials that do not contain or reference credit terms, the Program or
the Bank.

            3.7. Promotions. Retailer shall use its reasonable efforts to
promote the use of Credit Cards and to acquire new Cardholders through, for
example, making available to new Cardholders "instant credit," "quick credit,"
pre-approved solicitations and applications and the use of promotional material
displayed in stores and special offers to Cardholders.


                                   ARTICLE IV
                   OPERATING RESPONSIBILITIES OF THE PARTIES

            4.1. Bank's Responsibilities. (a) Bank, itself or through its
Affiliates, shall operate all credit operations and facilities with respect to
the Accounts. Bank's responsibilities shall include, without limitation,
providing the following services during the term of this Agreement:

                  (i) Account approval (including scoring methodology) and
            set-up (including approval and set-up in respect of electronic
            quick-credit applications and quick-credit referral applications);

                  (ii) purchase authorizations (including pursuant to downtime
            procedures or floor limits reasonably acceptable to Retailer);

                  (iii) customer service;

                  (iv) systems services;

                  (v) billing statement processing and mailing;

                  (vi) credit card embossing and mailing;

                  (vii) payment processing;

                  (viii) ensuring legal compliance of Account Documentation and
            other Program documents;

                  (ix) maintaining disaster recovery plan sufficient to protect
            the interests of Retailer;


                                       18
<PAGE>   20

                  (x) providing a real time open-to-buy functionality (i.e.,
            providing availability of credit based upon In-Store Payments
            immediately after receipt of notice of such In-Store Payments);

                  (xi) risk management (including credit limit management,
            collection strategy and collection management);

                  (xii) conducting periodic Cardholder satisfaction surveys and
            using commercially reasonable efforts to respond to the results of
            such surveys;

                  (xiii) referring Cardholder inquiries to the providers of the
            Value-Added Program subject to inquiry (or to such other Person as
            Retailer may designate), provided, however, that Bank shall do no
            more than make such referrals;

                  (xiv) approving credit marketing materials submitted by
            Retailer in respect of the Program within five (5) days after
            receipt thereof; and

                  (xv) replying in writing to the authors of presidential
            complaints and providing Retailer with a copy of each such reply.

In the event that Bank operates the Program through its Affiliate(s), Bank shall
be and remain responsible for the conduct of such Affiliate(s) hereunder.

            (b) Bank shall perform its services hereunder in accordance with the
service standards set forth on Exhibit 4.1(b)(1) (the "Service Standards"). Not
later than ten (10) Business Days after each calendar month, Bank shall advise
Retailer in writing of the extent to which it has complied with the Service
Standards during the preceding full calendar month (a "Measurement Notice"). If
any Measurement Notice provided after the third full calendar month following
the Conversion Date indicates that Bank failed to meet or exceed the Service
Standard for any service identified on Exhibit 4.1(b)(1), Retailer shall be
entitled to notify Bank in writing within ten (10) Business Days thereafter
whether it shall seek a Service Fee Adjustment (as indicated on Exhibit
4.1(b)(2)) for such non-compliance (the "Non-Compliance Notice"). If (i)
Retailer sends a Non-Compliance Notice in respect of any Service Standard(s)
during the previous calendar month and (ii) Bank fails to meet the indicated
Service Standard(s) in the calendar month in which the Non-Compliance Notice was
delivered, then, commencing for the calendar month in which the Non-Compliance
Notice was delivered and continuing for each consecutive calendar month
thereafter in respect of which Bank fails to meet Service Standard(s) and
Retailer, delivers a Non-Compliance Notice, the Service Fee for such calendar
month(s)


                                       19
<PAGE>   21

shall be modified to reflect the Service Fee Adjustment(s) applicable to the
failure(s) to meet the indicated Service Standard(s). (For example, if Retailer
properly sends Bank a Non-Compliance Notice in May stating that Bank failed to
meet the Service Standards applicable for collections during April and Bank
still fails to meet those standards in May, the Service Fee for May Collections
would be decreased to reflect the applicable Service Fee Adjustment.) If
Retailer delivers a Non-Compliance Notice in any month and receives any Service
Fee Adjustment pursuant to this subsection, Retailer shall have no right to
terminate this Agreement pursuant to Section 13.4(c) (Retailer Termination
Events) or to seek any other remedy, based on conduct during the month for which
it received the Service Fee Adjustment.

            (c) Bank may, from time to time, provide special services relating
to the Program, including, without limitation, consulting services, gift
certificate calls and fulfillment, rebate fulfillment, telemarketing, and
special processing or accounting reports required in connection with promotional
activities. Bank agrees that if it offers any such special services to other
retailers, it shall offer such services to Retailer. Bank shall be entitled to a
fee from Retailer for any such additional services as agreed to by Bank and
Retailer on a program-by-program basis, which fee shall be reasonably comparable
to those charges for substantially similar services in the open market.

            (d) Bank shall designate a manager to serve as Bank's coordinator of
the Program with Retailer. Such manager shall be knowledgeable about this
Agreement, the Program and Bank's practices in connection herewith, as well as
Bank's private label programs generally, and shall serve as a liaison to
Retailer with regard to the day-to-day operation of the Program.

            4.2. Retailer's Responsibilities. (a) Retailer shall perform the
following in-store activities:

                  (i) permitting Cardholders to purchase Goods and Services on
            Accounts, in accordance with the Operating Procedures;

                  (ii) promoting and accepting Credit Card Applications, and
            communicating credit information therefrom about prospective
            Cardholders to Bank;

                  (iii) providing Cardholders with appropriate instructions in
            respect of notifying Bank of Cardholders' changes in billing
            addresses;

                  (iv) obtaining electronic credit authorizations from Bank
            unless the network is down (in which event


                                       20
<PAGE>   22

            Retailer shall follow floor limits or other downtime
            authorization procedures);

                  (v) assisting Cardholders in communication with Bank;

                  (vi) displaying promotional material related to Accounts;

                  (vii) obtaining proper identification from all Cardholders (1)
            in connection with all Purchases where Credit Cards are not
            presented or (2) when requested to do so by Bank in its reasonable
            discretion in individual instances as part of the authorization
            process;

                  (viii) obtaining the Cardholder's account number where a
            Cardholder does not have her Credit Card in her possession;

                  (ix) providing Bank with copies of presidential complaints
            related to the Program, Cardholders or Accounts; and

                  (x) subject to Section 4.3 (In-Store Payments), accepting
            In-Store Payments, if applicable, and forwarding to Bank complete
            information regarding all such In-Store Payments.

            (b) Retailer shall retain a legible copy of each Charge Slip for six
(6) months following the date of each Purchase and shall provide such copy to
Bank within fifteen (15) days of Bank's request therefor. Retailer shall arrange
for Bank to have access to all electronically captured data and information
related to the Program, including, without limitation, all electronically
captured sales data and Cardholder signatures.

            (c) Retailer shall designate a manager to serve as Retailer's
coordinator of the Program with Bank. Such manager shall be knowledgeable about
this Agreement, the Program and Retailer's practices in connection herewith and
shall serve as a liaison to Bank with regard to the day-to-day operations of the
Program. Bank shall provide adequate workspace for such manager at the Bank
during such times that such manager visits the Bank.

            4.3.  In-Store Payments.  (a)  Retailer may accept cash
payments from Cardholders for amounts due on Accounts ("In-Store
Payments").

            (b) Notwithstanding the provisions of Section 4.3(a) (In-Store
Payments), if any Event of Bankruptcy has occurred with respect to Retailer (and
so long as the same has not been


                                       21
<PAGE>   23

dismissed), Retailer shall promptly comply with any written instruction (a
"Store Payment Notice") received by Retailer from Bank or any successor to Bank
as "Servicer" under the Pooling and Servicing Agreement (Bank or any such
successor being the "Servicer") to take either of the following actions (as
specified in such instruction):

                  (i) cease accepting In-Store Payments and thereafter inform
            Cardholders who wish to make In-Store Payments that payment should
            instead be sent to Servicer; or

                  (ii) (A) deposit an amount equal to all In-Store Payments
            received by each Store, not later than the Business Day following
            receipt, into a segregated trust account (the "Store Account")
            established by Retailer for this purpose and, pending such deposit,
            to hold all In-Store Payments in trust for Bank and its assigns, (B)
            use commercially reasonable efforts not to permit any amounts or
            items not constituting In-Store Payments to be deposited in the
            Store Account and (C) cause all available funds in each Store
            Account to be transferred on a daily basis to an account designated
            in the Store Payment Notice;

provided that Retailer need not take the actions specified in clause (i) or
clause (ii) if Retailer or any of its Affiliates provides the Servicer or the
Trustee under (and as defined in) the Pooling and Servicing Agreement with a
letter of credit, surety bond or other similar instrument covering collection
risk with respect to In-Store Payments.

            (c) Within one (1) day after receiving any payment for an Account,
Retailer shall notify Bank of such payment by electronic data transmission
(including payment date, amount, and account number) and Bank shall deduct such
amount from any amounts due Retailer hereunder unless such amount shall be
deposited in the Store Account in accordance with Section 4.3(b)(ii) above.

            4.4. Statement Messages and Inserts. Subject to the right of Bank to
include in mailings to Cardholders periodic billing statements and any legal
notices necessary to send to Cardholders, Retailer shall have the sole right to
have materials advertising its Goods and Services and any Value-Added Programs
included in the envelopes containing the periodic statements. Bank shall not
include with any periodic statements any materials other than legal notices
necessary to send to Cardholders. Such materials shall conform to size
requirements reasonably established from time to time by Bank with reasonable
prior notice of any changes. Retailer shall use reasonable efforts to (i) notify
Bank at least fifteen (15) days before the proposed billing cycle of any such
statement insert, and (ii) provide Bank


                                       22
<PAGE>   24

with a draft copy of any such advertising material at the time it notifies Bank
of such mailing for Bank and, with respect to any references to Bank, the Credit
Card or the Accounts, provide Bank with the opportunity to review and approve or
disapprove such draft copy in its reasonable discretion. Retailer shall provide
Bank with the materials to be included in the mailing not less than two (2)
Business Days prior to the initial insertion date. The initial five (5) inserts
provided by Retailer for inclusion in each periodic billing statement shall be
without charge to Retailer. Each additional insert shall be subject to a charge
by Bank as described on Exhibit 4.4 (the "Insert Fee"). Retailer shall also have
the right, without charge, to have messages printed on billing statements,
provided that Retailer meets any reasonable specifications of Bank in respect
thereof.

            4.5. Scoring and Credit Management. Bank shall consult with Retailer
concerning the initial scoring and credit limit management policies and
procedures, which policies and procedures shall be reviewed and may be approved
or disapproved by Retailer in its reasonable discretion. Bank shall consult with
Retailer concerning any changes to the scoring and credit limit management
policies and procedures, which changes shall be reviewed and may be approved or
disapproved by Retailer in its reasonable discretion. In the event that the
scoring and credit limit management policies and procedures used in connection
with the Program are less favorable to Retailer than the scoring and credit
limit management policies and procedures used in connection with any of Bank's
other retail client programs in similar industries, Bank shall so advise
Retailer promptly and, if Retailer so requests, shall revise the scoring and
credit limit management policies and procedures of the Program to reflect the
favorable elements of the other retail client policies and procedures. In
addition, upon Retailer's request, Bank shall review with Retailer the
performance of the Accounts and Receivables and shall provide Retailer on a
monthly basis with such reports as shall be mutually agreed upon regarding the
ongoing performance of the Accounts and Receivables. Notwithstanding any other
provision of this subsection to the contrary, (i) each party, without the
other's approval, may take any actions at any time that it in good faith
determines are required by Law or demand of any Governmental Authority and (ii)
Bank may take any actions that it in good faith determines are required to
prevent the operation of the Program from becoming an Unsafe and Unsound Banking
Practice and shall give such notice as is reasonable under the circumstances.
The determinations made by the parties in accordance with the preceding sentence
shall take into account, if pertinent, the overall economics of the Program,
including (among other things) the semi-annual reconciliation provided for in
Section 6.4 (Semi-Annual Reconciliation). Any changes so made by any party shall
be made in a manner designed to ameliorate any negative impact on the other
party or Cardholders.


                                       23
<PAGE>   25

            4.6. Operation of the Program. (a) During the term of this
Agreement, Bank shall operate, maintain and promote the Program for all Stores
and Direct Marketing Programs in a professional manner in accordance with the
Operating Procedures. Bank shall consult with Retailer concerning the initial
Operating Procedures, which Operating Procedures shall be reviewed and may be
approved or disapproved by Retailer in its reasonable discretion. In this
connection, Bank and Retailer shall meet prior to the Conversion Date in order
to discuss the initial Operating Procedures. Bank shall consult with Retailer
concerning any changes to the Operating Procedures, which changes shall be
reviewed and may be approved or disapproved by Retailer in its reasonable
discretion. The parties shall cooperate in the operation of the Program and in
developing and implementing procedures necessary for the operation of the
Program. Notwithstanding any other provision of this subsection to the contrary,
(i) each party, without the other's approval, may take any actions at any time
that it in good faith determines are required by Law or demand of any
Governmental Authority and (ii) Bank may take any actions that it in good faith
determines are required to prevent the operation of the Program from becoming an
Unsafe and Unsound Banking Practice and shall give such notice as is reasonable
under the circumstances. The determinations made by the parties in accordance
with the preceding sentence shall take into account, if pertinent, the overall
economics of the Program including (among other things) the semi-annual
reconciliation provided for in Section 6.4 (Semi-Annual Reconciliation). Any
changes so made by any party shall be made in a manner designed to ameliorate
any negative impact on the other party or Cardholders.

            (b) Bank shall operate the Program as separate programs for each
separate group of Stores of Retailer to the following extent. To the extent that
the name, trademark or tradename used by United Retail Incorporated or one or
more of its groups of Stores appears on the credit cards, billing and dunning
statements, customer correspondence, applications, etc., Bank shall divide the
Cardholders into not more than eight groups and use for each group the name or
mark specified by Retailer for such group, but unless otherwise agreed Bank
shall administer the Program uniformly for all groups. All Accounts (for all
groups) will be billed in no more than three consecutive Billing Cycles within
the same calendar week each month.

            4.7. Reports. Bank shall provide Retailer with the reports specified
on Exhibit 4.7 hereto in the frequency specified on Exhibit 4.7, and with such
other reports as Retailer reasonably may request from time to time. If such
other reports are not readily available, Retailer shall pay Bank for
customization in accordance with Exhibit 5.2.

            4.8.  Equipment; Systems.  (a)  Retailer shall maintain
at its own expense the point of sale and authorization terminals,


                                       24
<PAGE>   26

credit card imprinters and other items of equipment as used by it prior to the
date hereof to receive authorizations, transmit Charge Slip and Credit Slip
information, process Credit Card Applications and perform its obligations under
this Agreement.

            (b) Bank shall maintain at its own expense the equipment and
computer systems needed to perform its obligations hereunder in accordance with
the standards set forth herein.

            (c) The computer programs and telecommunications protocols to
facilitate communications between Bank and Retailer shall be mutually agreed
upon from time to time subject to reasonable prior notice of any change in such
programs, equipment or protocols.

            4.9. Collections. (a) Certain collection policies and procedures to
be used in connection with the Program are summarized on Exhibits 4.1(b)(1) and
4.9 hereto. Except as may be provided in subsection (d) below, Bank shall
consult with Retailer concerning any changes to the collection policies and
procedures, which changes shall be reviewed and may be approved or disapproved
by Retailer in its reasonable discretion.

            (b) In the event that the collection policies and procedures used in
connection with the Program (including timing of collection calls, collector
experience levels and collection technology but excluding the average number of
delinquent accounts assigned to a collector) are less favorable to Retailer than
the comparable collection policies and procedures used in connection with Bank's
other retail clients in similar industries ("Other Client Policies and
Procedures"), Bank shall advise Retailer within thirty (30) days and shall
promptly thereafter improve the collection policies and procedures used in
connection with the Program (excluding the average number of delinquent accounts
assigned to a collector) to a level and quality at least equal to the Other
Client Policies and Procedures without any additional cost to Retailer.

            (c) In the event that the average number of delinquent accounts
assigned to a collector for the Program is higher than the average number
assigned to a collector for any of Bank's other retail clients in similar
industries, Bank shall advise Retailer within thirty (30) days and shall
promptly deliver to Retailer an estimate of Bank's additional cost that would be
incurred if the average number of delinquent accounts assigned to a collector
for the Program were reduced to the average assigned to a collector for such
other client of Bank. Upon request by Retailer and at Retailer's expense, Bank
shall promptly reduce the average number of delinquent accounts assigned to a
collector for the Program to the number requested by Retailer and the fee
associated therewith shall be adjusted by Bank accordingly.


                                       25
<PAGE>   27

            (d) Notwithstanding any other provision of this subsection to the
contrary, (i) each party, without the other's approval, may take any actions at
any time that it in good faith determines are required by Law or demand of any
Governmental Authority and (ii) Bank may take any actions that it in good faith
determines are required to prevent the operation of the Program from becoming an
Unsafe and Unsound Banking Practice, and shall give such notice as is reasonable
under the circumstances. The determinations made by the parties in accordance
with the preceding sentence shall take into account, if pertinent, the overall
economics of the Program including (among other things) the semi-annual
reconciliation provided for in Section 6.4 (Semi-Annual Reconciliation). Any
changes so made by any party shall be made in a manner designed to ameliorate
any negative impact on the other party or Cardholders.

            4.10. Costs of the Program. Except to the extent of Pass Through
Fees and other fees expressly provided for herein, Bank shall bear all costs
associated with the administration of the Program.


                                    ARTICLE V
                              SETTLEMENT PROCEDURES

            5.1. Daily Settlement For Charge Data. (a) Retailer shall
electronically transmit all Charge Data to Bank in a format mutually agreed upon
by the parties. Upon receipt, Bank shall promptly verify and process such Charge
Data, and in the time frames specified herein, Bank shall remit to Retailer an
amount equal to the remainder of the Net Transaction Volume indicated by such
Charge Data for the Credit Sales Day(s) for which such remittance is made less
any In-Store Payments received on that day and not deposited in a Store Account.
In the event Bank discovers any discrepancies in the amount of Charge Data
submitted by Retailer or paid by Bank to Retailer, Bank shall notify Retailer in
detail of the discrepancy, and credit or debit Retailer, as the case may be, in
a subsequent daily settlement. Bank shall transfer funds via wire transfer to an
account designated in writing by Retailer to Bank. If Charge Data is received by
Bank's processing center before noon Eastern time on a Business Day, Bank shall
pay the amount owed to Retailer by 9:00 a.m. Eastern time on the next Business
Day thereafter. In the event that the Charge Data is received in the afternoon
Eastern time on a Business Day, then Bank shall pay the amount owed to Retailer
no later than 9:00 a.m. Eastern time on the second Business Day thereafter.

            (b) Notwithstanding the foregoing, if any Event of Bankruptcy has
occurred with respect to Retailer (and so long as the same has not been
dismissed), Credit Slips payable by Retailer to Bank as part of the Net
Transaction Volume shall no longer be netted against Purchases on Accounts, but
instead


                                       26
<PAGE>   28

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

Retailer shall transfer the amount of such Credit Slips to Bank by wire transfer
of immediately available funds (or, if the aggregate amount to be transferred
pursuant to this Section is less than **, by check sent to Bank by overnight
delivery service), not later than the second Business Day following the date on
which the events giving rise to such credits occur (and amounts payable by Bank
for Purchases on Accounts shall be made without deduction for Credit Slips). If
Retailer does not pay to Bank the amount of all Credit Slips as required by the
immediately preceding sentence, Bank shall have the right to set off all such
amounts against daily settlements or other amounts to be paid to Retailer.

            5.2. Pass-Through Expenses and Insert Fees. Bank shall invoice
Retailer monthly for the Pass-Through Expenses and Insert Fees payable by
Retailer pursuant to this Agreement. Retailer shall pay Bank within fifteen (15)
Business Days of receipt of each such invoice.

            5.3. Taxes. Retailer shall be responsible for, and shall either pay
or reimburse Bank for, any and all federal, state and local taxes or assessments
of any kind levied on or with respect to the Program, except for any franchise
or income taxes of Bank, its parent or other affiliates, or those assessed on
the net worth of Bank or its parent or other Affiliates.

            5.4. Settlement Reports. Bank shall provide a daily settlement
report to Retailer documenting each day's settlement under Section 5.1 (Daily
Settlement for Charge Data) hereof. Bank shall provide a monthly report to
Retailer, prior to or with each invoice under Section 5.2 (Pass-Through Expenses
and Insert Fees) hereof containing detailed documentation of all fees and
expenses.


                                   ARTICLE VI
                                PROGRAM ECONOMICS

            6.1. Monthly Statements. (a) On or about the fourteenth (14th)
Business Day of each calendar month, Bank shall provide Retailer with a
statement (each a "Monthly Statement") setting forth with respect to the
preceding calendar month (i) the Monthly Program Costs incurred by Bank for such
calendar month, (ii) the Monthly Program Revenues for such calendar month, and
(iii) such other data which may reasonably be requested by Retailer to document
and substantiate the foregoing. For purposes hereof, Monthly Program Costs are
defined as: (A) the Cost of Funds with respect to the calendar month at issue,
plus (B) the Write-Off Amount for the calendar month at issue, plus (C) all
Consumer Charges written off by Bank in accordance with the Write-Off Policy
with respect to the calendar month at issue. Monthly Program Revenues are
Consumer Charges billed by Bank with respect to the calendar month at issue
(including any real-time


                                       27
<PAGE>   29

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

adjustments made by Bank during that month), excluding revenues in respect of
Value-Added Programs.

            (b) On or about the fourteenth (14th) Business Day of each calendar
month, Bank also shall provide Retailer with a statement (each a "Monthly
Retailer Statement") setting forth with respect to the preceding calendar month
(i) the Service Fees incurred for such calendar month, calculated in accordance
with Exhibit 6.1(b) hereto, (ii) Pass Through Expenses, (iii) the amounts
charged back pursuant to Article VII (Chargebacks) and (iv) such other data
which may reasonably be requested by Retailer to document and substantiate the
foregoing.

            6.2. Royalty Payments. Within fifteen (15) days after the end of
each calendar month, Bank shall pay to Retailer an amount equal to the product
of the Estimated Royalty Payment Index applicable to that calendar month
multiplied by Net Transaction Volume for that calendar month (except that, if
such amount is a negative, Retailer shall pay the amount to Bank).

            6.3. Other Payments. (a) Within thirty days after receipt by
Retailer of the Monthly Retailer Statement, Retailer shall pay to Bank, an
amount equal to the sum of the Service Fee and the charged back amount, all for
the applicable month as set forth on the Retailer Monthly Statement for such
month.

            (b) Retailer shall pay to Bank on the date hereof ** as an
inducement fee.

            (c) Bank shall bill Retailer an amount equal to the Securitization
Fees upon the initial sale of Receivables hereunder to the Master Trust.
Retailer shall pay such amount within ten (10) days after receipt of such bill

            6.4. Semi-Annual Reconciliation. As of July 31, 1999 and each
January 31 and July 31 thereafter, Bank shall calculate the Actual Royalty
Payment for the preceding six-month period. In the event that the Actual Royalty
Payment for the six-month period exceeds the Estimated Royalty Payment during
the six-month period, Bank shall pay the difference between the two such amounts
to Retailer within fifteen (15) Business Days after receipt of the Monthly
Statement for the last month in the six-month period. In the event that the
Estimated Royalty Payment exceeds the Actual Royalty Payment, Retailer shall pay
the difference between the two such amounts to Bank within fifteen (15) Business
Days after receipt of the Monthly Statement for the last month in the six-month
period. The foregoing notwithstanding, the parties acknowledge and agree that:
(a) in the event that this Agreement shall expire in accordance with Section
13.1(a) (Term of Agreement), calculations in respect of the period from the
preceding August through the scheduled termination date shall be made for that
seven-month period with such adjustments hereto as may be necessary to
accommodate such


                                       28
<PAGE>   30

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

change, and (b) if this Agreement terminates on any date other than January 31
or July 31 except in accordance with Section 13.1(a) (Term of Agreement), the
foregoing calculation shall take place on the scheduled calculation date but the
payments shall be adjusted to reflect only the period during which this
Agreement was in effect.

            6.5. Service Fee Adjustment. (a) The Parties agree that the Service
Fees set forth on Exhibit 6.1(b) shall remain in effect without adjustment
during the first twelve (12) months of the Initial Term, except as provided in
subsection (b) below. Commencing with each 12-month anniversary thereafter, Bank
may increase or shall decrease the Service Fees for such year by an amount not
to exceed ** of the prior year's actual CPI-U percentage increase or decrease,
provided that the amount of any postage costs or bank clearing fees shall not be
subject to the CPI-U increase or decrease. For the purposes of this Section 6.5,
"CPI-U percentage increase or decrease" shall mean the average percentage
increase or decrease in the Consumer Price Index for all Urban Consumers
("CPI-U"), published by the Bureau of Labor Statistics of the U.S. Department of
Labor, over or below the then most recent twelve (12)-month period for which
such statistics are available; provided that, if the CPI-U is no longer being
published, the parties shall agree upon use of the most comparable consumer
price index being published at such time.

            (b) Exhibit 6.5(b) sets out the assumptions used to calculate
certain Service Fees. In the event that, within three months after the purchase
of the Existing Accounts, Bank demonstrates material variances from such
assumptions, such Service Fees shall be adjusted as indicated on Exhibit 6.5(b).
Such fee adjustments shall be effective between the dates three (3) months and
fifteen (15) months after such demonstration. Bank shall provide Retailer with
information reasonably requested by Retailer to determine whether adjustments
are warranted.

            6.6. Program Incentive Payment. Bank shall make a non-refundable
payment of ** for the initial year of the Agreement. The payment shall be made
on January 31, 2000.

            6.7. Postage. Postage costs for Credit Card statements that exceed
one ounce shall be a direct Pass Through Expense to Retailer. However, Bank
promptly shall notify Retailer of each instance in which inserts provided to
Bank in accordance with Section 4.4 (Statement Messages and Inserts), when taken
together with a one-page statement, envelope and remittance envelope, will
exceed one ounce. Unless, within eight (8) hours after receipt of such notice,
Retailer advises Bank to exclude any insert(s) from its mailings, the additional
postage cost shall be passed through as a Pass Through Expense in accordance
herewith. Any additional out-of-pocket expenses incurred by Bank in postage to
mail billing statements and other


                                       29
<PAGE>   31

correspondence due to an increase in the cost of postage from the United States
Postal Service after the date hereof also shall be borne by Retailer and Bank
shall increase the fees for statement generation, embossing and letters (all as
indicated on Exhibit 6.1(b)) accordingly. Adjustments shall be made for any
subsequent decreases in such expenses.

            6.8. Bad Debt Incentive Program. The parties acknowledge and agree
that it is in the best interest of the Program and the parties hereto that the
BDIP Write-Off Amount for any and all periods be carefully monitored and kept as
low as possible (within the parameters of this Agreement and keeping in mind
customer relations concerns). To that end, in the event that, during the
12-month period preceding January 31, 2000 or any 12-month period thereafter,
the BDIP Write-Off Percentage is less than the BDIP Base Write-Off Percentage,
Retailer shall pay to Bank in respect of such year an amount equal to: the
product of (a) the BDIP Incentive Percentage for that period, multiplied by (b)
the BDIP Lagged AR for that period, which product shall then be multiplied by
(c) the Approval-Related Percentage. In the event that, during the 12-month
period preceding January 31, 2001 or any 12-month period thereafter, the BDIP
Write-Off Percentage is higher than the BDIP Base Write-Off Percentage, Bank
shall pay to Retailer in respect of such year an amount equal to: (a) the
applicable BDIP Incentive Percentage, multiplied by (b) BDIP Lagged AR. The
parties agree that, if this Agreement terminates on February 29, 2004, the
foregoing calculation shall be made for the 13-month period preceding February
29, 2004 and appropriate adjustments shall be made to reflect such fact.

            6.9. Reconciliation of Disputes. (a) Each party agrees to cooperate
fully with the other parties in furnishing any information or performing any
action reasonably requested of such party to enable the requesting party to
perform its obligations under this Agreement and to comply with applicable Laws
and regulations.

            (b) The parties agree that it is their desire to use their best
efforts to resolve amicably any and all disputes or disagreements that may arise
between them with respect to the interpretation or application of any provision
of this Agreement or with respect to the performance by each party of its
obligations under this Agreement, in order to avoid an early termination of this
Agreement and in order to avoid litigation between the parties. Toward that end,
the parties agree that in the event any dispute or disagreement arises that
cannot be resolved at the operating level by the employees of each party having
direct responsibility for the performance or operating function in question,
each of the parties shall promptly appoint a senior officer to confer for the
purpose of endeavoring to resolve such dispute or negotiate an adjustment to
such provision. Any disputes that, if not resolved, may lead to an


                                       30
<PAGE>   32

allegation by one party that it has a right to terminate this Agreement early,
shall be referred to the Chief Financial Officer of Retailer and the Chief
Financial Officer of Bank, who shall confer and diligently attempt to find
reasonable methods of correcting the condition giving rise to the anticipated
early termination event. No legal proceedings for the resolution of any such
dispute shall be commenced or notice of termination of this Agreement shall be
served until such officers have so conferred, and unless and until a party
concludes, in good faith, that amicable resolution through continued negotiation
of the matter at issue does not appear likely and such party provides written
notice of same to the other parties.

            (c) All disputes about financial computations under this Agreement
which cannot be resolved in accordance with the terms of subsection 6.9(b) above
shall be resolved by an arbitrator in New York, New York (but, at the parties'
request, the arbitrator shall travel to the relevant books and records), in
accordance with the rules of the American Arbitration Association then
obtaining, unless the parties mutually agree in writing to the contrary. Such
arbitrator shall be an active or retired partner of a major accounting firm. The
award rendered by the arbitrator shall be final and judgment may be entered upon
it in accordance with the applicable law in any court having jurisdiction
thereof. Retailer and Bank and their respective accountants shall make readily
available to the arbitrator all relevant books, records, work papers and
personnel reasonably requested by the arbitrator. The resolution of all disputes
about financial computations by the arbitrator shall be final and binding on
Retailer and Bank upon written notice thereof to each such party. The fees and
expenses of the arbitrator shall be borne by the party found accountable by the
arbitrator.


                                   ARTICLE VII
                                   CHARGEBACK

            7.1. Bank's Right to Chargeback. Bank shall have the right, at its
option, to chargeback to Retailer the amount of any Charge Slip or Credit Slip
in accordance with the chargeback procedures set forth in the Operating
Procedures if with respect thereto:

            (a) a Cardholder asserts any claim or defense against Bank as a
result of any act or omission of Retailer, any other Person authorized to accept
Credit Cards or any Person providing Value-Added Programs or Direct Marketing
Programs allegedly in violation of any applicable law, statute, ordinance, rule
or regulation;

            (b) an Cardholder disputes the amount or existence of the
transaction covered by such Charge Slip or refuses to pay alleging
dissatisfaction with Goods and Services received, a


                                       31
<PAGE>   33

breach of any warranty or representation by Retailer, any other Person
authorized to accept Credit Cards or any Person providing Value-Added Programs
or Direct Marketing Programs in connection with the transaction, or an offset or
counterclaim against Bank based on an act or omission of Retailer, any other
Person authorized to accept Credit Cards or any Person providing Value- Added
Programs or Direct Marketing Programs; and

            (c) Retailer fails to promptly retrieve and deliver to Bank within
fifteen (15) days after a request by Bank, a hard copy of such Charge Slip
(unless such Charge Slip arose in connection with a mail order sale, in which
event, no hard copy need be provided by Retailer).

            7.2. Exercise of Chargeback. Bank shall provide to Retailer a
reasonably detailed explanation of the basis of chargebacks from time to time
during each month. Retailer shall pay Bank in respect of charged back amounts
monthly in accordance with Section 6.3 (Service Fee Payment). Upon receipt of
such amount, Bank shall assign, without recourse, all right to payment for such
Charge Slip or portion thereof to Retailer.


                                  ARTICLE VIII
                  REPRESENTATIONS AND WARRANTIES OF RETAILER

            8.1. Representations and Warranties of Retailer. To induce Bank to
establish and administer this Program, Retailer makes the following
representations and warranties to Bank, each of which shall survive the
execution and delivery of this Agreement, and each of which shall be deemed to
be restated and remade on each day on which any Account is opened or Charge Data
is submitted to Bank:

            (a) Existence. Each of Retailer (i) is a corporation duly organized,
validly existing, and in good standing under the Laws of the State of Delaware;
(ii) is duly qualified and in good standing under the Laws of each jurisdiction
where its ownership or lease of property or the conduct of its business require
such qualification except where failure to so qualify or the lapse of such
qualification has not or is not expected to have a material adverse effect on
its ability to perform its obligations hereunder; (iii) has the requisite power
and authority and the legal right to own and operate its properties, to lease
the properties it operates under lease, and to conduct its business as now
conducted and hereafter contemplated to be conducted; (iv) has all necessary
licenses, permits, consents, or approvals from or by, and has made all necessary
notices to all governmental authorities having jurisdiction, the absence of
which would have a material adverse effect on its operation; and (v) is in
compliance with its organizational documents in all material respects.


                                       32
<PAGE>   34

            (b) Power, Authorization; Enforceable Obligation. The execution,
delivery, and performance of this Agreement and all instruments and documents to
be delivered by each of Retailer hereunder: (i) is within its corporate power;
(ii) has been duly authorized by all necessary or proper corporate action; (iii)
does not and shall not contravene any provisions of its organizational
documents; (iv) shall not violate any Law or regulation or any order or decree
of any court or governmental instrumentality; (v) shall not conflict with or
result in the breach of, or constitute a default under, any indenture, mortgage,
deed of trust, lease, agreement, or other instrument to which it is a party or
by which it or any of its assets or property are bound; and (vi) does not
require any filing or registration with or the consent or approval of any
governmental authority or any other person which has not been made or obtained
previously. This Agreement has been duly executed and delivered by each of
Retailer, and constitutes a legal, valid, and binding obligation of each of
Retailer, enforceable against Retailer in accordance with its terms (except as
such enforceability may be limited by equitable principles of general
application and subject to applicable bankruptcy and other laws affecting the
rights of creditors generally).

            (c) Litigation. As of the date of this Agreement, there is no claim,
litigation, proceeding, arbitration, investigation or material controversy
pending before any court, tribunal, governmental body or governmental agency to
which either of Retailer is a party and by which it is bound, which is likely to
have a material adverse effect on the ability of that Retailer to consummate the
transactions contemplated hereby, and, to the best of each Retailer's knowledge
and information, no such claim, litigation, proceeding, arbitration,
investigation or controversy has been threatened or is contemplated and to the
best of its knowledge no facts exist which would provide a basis for any such
claim, litigation, proceeding, arbitration, investigation or controversy.

            (d) Executive Office and Name. The legal name and address of the
chief executive office and principal place of business of each of Retailer is
and shall continue to be set forth on Exhibit 8.1(d) hereto (as modified from
time to time by notice from Retailer to Bank).

            (e) Solvency.  Retailer is Solvent.

                                   ARTICLE IX
                              COVENANTS OF RETAILER

            Retailer covenants to do the following during the term of this
Agreement:


                                       33
<PAGE>   35

            9.1. Cooperation. Retailer shall respond to, and cooperate with,
Bank promptly in connection with the resolution of disputes with Cardholders.

            9.2. Exchange Policy. Retailer shall maintain a policy for the
exchange and return of Goods and adjustments for Services rendered or not
rendered that is in accordance with all applicable Laws and, to the extent the
adjustment took place at a Store, shall promptly deliver a Credit Slip to the
Cardholder and include credit for such return or adjustment in the Charge Data
in accordance with the Operating Procedures in the event the return/exchange has
been authorized in accordance with Retailer's policies.

            9.3. Treatment of Cardholders. Retailer shall not seek or obtain any
special agreement or condition from, nor discriminate in any way against,
Cardholders with respect to the terms of any transaction.

            9.4. Financial Reporting. (a) So long as Retailer is subject to the
reporting requirements of Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended (i) as soon as reasonably available and in any event
within ninety (90) days after the close of its fiscal year, Retailer shall
submit to Bank an audited annual report of Retailer's annual earnings, including
its audited consolidated balance sheets, income statements and statement of cash
flows and changes in financial position and (ii) promptly after the filing
thereof, Retailer shall submit to Bank copies of all proxy statements, and all
reports on Forms 10-K, 10-Q and 8-K filed with the Securities and Exchange
Commission by Retailer.

            (b) If Retailer is not subject to the reporting requirements of
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(i) as soon as reasonably available and in any event within ninety (90) days
after the close of its fiscal year, Retailer shall submit to Bank an audited
annual report of Retailer's annual earnings, including its audited consolidated
balance sheets, income statements and statement of cash flows and changes in
financial position together with the opinion of its independent accountants, and
(ii) as soon as reasonably available and in any event within 45 days after the
close of each of its fiscal quarters, Retailer shall submit to Bank an unaudited
quarterly report of Retailer's earnings, including its consolidated balance
sheets, income statements and statement of cash flows and changes in financial
position, accompanied by the certification on behalf of Retailer by Retailer's
chief financial officer that such financial statements were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis and present fairly the consolidated financial position of URGI as of the
end of such fiscal quarter and the results of its operations.


                                       34
<PAGE>   36

            9.5. Compliance with Law. Each of Retailer shall comply in all
material respects with all Laws applicable to it, its business and its
properties (it being understood that this covenant in no event imposes on either
Retailer liability for any elements of the Program for which Bank is responsible
hereunder).

            9.6. Communications. Promptly after receipt, each of Retailer shall
deliver to Bank copies of any communications relating to an Account from a
Cardholder or any Governmental Authority.

            9.7. Audit and Access. Retailer shall permit Bank, during normal
business hours and upon reasonable notice, to visit the offices of Retailer from
time to time, and shall permit Bank from time to time to discuss the Program
with Retailer and its officers and employees and to examine the books and
records of Retailer relating to the Program or have the same examined by Bank's
attorneys and/or accountants. In connection therewith, Retailer agrees, subject
to applicable privacy and other laws, to make all documents and data regarding
the Program available to Bank, and in connection therewith to permit Bank to
make copies of all such documents and data.

            9.8. Use of Credit Cards. Retailer shall not permit Cardholders to
effect Purchases of goods or services not otherwise sold by Retailer in its
Stores or through Direct Marketing Programs or Value-Added Programs.

            9.9. Application Processing. Retailer shall accept and transmit
Credit Card Applications only at Stores or, to the extent Bank agrees, in
connection with Direct Marketing Programs and Retailer shall not otherwise
authorize any Person to accept or transmit Credit Card Applications.


                                    ARTICLE X
                     REPRESENTATIONS AND WARRANTIES OF BANK

            10.1. Representations and Warranties of Bank. Bank makes the
following representations and warranties to Retailer, each of which shall
survive the execution and delivery of this Agreement, and each of which shall be
deemed to be restated and remade on each day on which any Account is opened or
Charge Data is submitted to Bank:

            (a) Corporate Existence. Bank (i) is, and at all times during the
term of this Agreement shall remain, a national banking association duly
organized, validly existing, and in good standing under the laws of the United
States; (ii) has the requisite power and authority and the legal right to own,
pledge, mortgage, and operate its properties, to lease the properties it
operates under lease, and to conduct its business as now


                                       35
<PAGE>   37

conducted and hereafter contemplated to be conducted; and (iii) is in compliance
with its articles of association and bylaws.

            (b) Power, Authorization; Enforceable Obligations. The execution,
delivery, and performance of this Agreement and all instruments and documents to
be delivered by Bank hereunder: (i) are within Bank's corporate power; (ii) have
been duly authorized by all necessary or proper corporate action; (iii) do not
and shall not contravene any provision of Bank's articles of association or
bylaws; (iv) shall not violate any Law or regulation or an order or decree of
any court or governmental instrumentality to which Bank is subject; (v) shall
not conflict with or result in the breach of, or constitute a default under, any
indenture, mortgage, deed of trust, lease agreement, or other instrument to
which Bank is a party or by which Bank or any of its property is bound; and (vi)
do not require any filing or registration by Bank with or the consent or
approval of any Governmental Authority or any other Person which has not been
made or obtained previously. This Agreement, and the consummation by Bank of the
transactions contemplated herein, have been duly authorized and duly executed
and delivered by Bank, and constitute the legal, valid, and binding obligation
of Bank, enforceable against Bank in accordance with their terms (except as such
enforceability may be limited by equitable principles of general application and
subject to applicable bankruptcy and other laws affecting the rights of
creditors generally).

            (c) Litigation. As of the date of this Agreement, there is no claim,
litigation, proceeding, arbitration, investigation or material controversy
pending before any court, tribunal, governmental body or governmental agency to
which Bank is a party and by which it is bound, which is likely to have a
material adverse effect on the ability of Bank to consummate the transactions
contemplated hereby, and, to the best of Bank's knowledge and information, no
such claim, litigation, proceeding, arbitration, investigation or controversy
has been threatened or is contemplated and to the best of Bank's knowledge no
facts exist which would provide a basis for any such claim, litigation,
proceeding, arbitration, investigation or controversy.

            (d)   Solvency.  Bank is Solvent.

            (e) Bank as Creditor; Compliance with Law. Bank is the owner and
creditor in respect of Accounts and Receivables and will export Consumer Charges
in accordance with all applicable Laws, including all applicable banking and
consumer credit laws and regulations. Except to the extent of Retailer's
representations in respect of Existing Accounts, the terms, conditions and
structure of the Program and Accounts comply with all such applicable laws and
regulations (it being understood that this representation in no event imposes on
Bank liability


                                       36
<PAGE>   38

CONFIDENTIAL TREATMENT REQUESTED

for any elements of the Program for which Retailer is responsible hereunder).

            (f) Integrity of Computer Systems. For each calendar month during
1997, Bank's computer processing system relating to Bank's customized revolving
credit programs was operational and performed its functions for which it is
intended for at least ** of the time such system was scheduled to be operational
during such month.


                                   ARTICLE XI
                                COVENANTS OF BANK

            Bank covenants to do the following during the term of this
Agreement:

            11.1. Compliance with Law. Except to the extent of Retailer's
representations in respect of Existing Accounts, the Program and all (i) actions
taken by Bank, (ii) agreements with Cardholders, forms, letters, notices,
statements or other materials used by Bank in connection with the performance of
its duties and obligations in connection with the Accounts and Receivables,
(iii) actions taken by Bank in connection with each sale of Goods and Services
resulting in an Account or Receivable, and (iv) Account Documentation and other
Program documents, to the extent such documentation has been prepared by or at
the direction of Bank, in each case taken as a whole, shall materially comply
with all applicable Laws, including, without limitation, the federal Consumer
Credit Protection Act and Regulation Z under Title I thereof and federal and
state banking and rate exportation laws. Bank shall comply in all material
respects with all Laws with respect to Bank, its business, the Program and its
properties.

            11.2. Audit and Access. Bank shall permit Retailer, during normal
business hours and upon reasonable notice, to visit the offices of Bank from
time to time, and shall permit Retailer from time to time to discuss the Program
with Bank and its officers and employees, monitor calls, including collection
and customer service calls (except to the extent prohibited by applicable Law or
otherwise requested by a Cardholder) and examine the books and records of Bank
relating to the Program or have the same examined by Retailer's attorneys and/or
accountants (it being understood that the books and records referenced in this
sentence shall not include Bank's internal profit and loss statements unless
Bank has taken the position that the operation of the Program is or may become
an Unsafe and Unsound Banking Practice). In connection therewith, Bank agrees,
subject to applicable Laws, to make all documents and data regarding the Program
(including documents and data needed to verify fees and payments made hereunder
as well as documents and data necessary to determine that the Service Standards
and standards in respect


                                       37
<PAGE>   39

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

of collections are being met) available to Retailer, and in connection therewith
to permit Retailer to make copies of all such documents and data. Without
limiting the generality of the foregoing, Bank agrees to provide to Retailer,
upon Retailer's request, (a) documents indicating the forms of statement
messages sent to Cardholders with delinquent Accounts at each stage of
delinquency, (b) copies of collection and customer service scripts and training
manuals provided by Bank to its employees for use in connection with the
Program, and (c) information indicating the circumstances under and times at
which the scripts and manuals described in subsection (b) are used. It is
acknowledged and agreed that (i) any documents or information described in
subsection (b) or (c) of the preceding sentence that are provided to Retailer is
confidential information of Bank subject to the terms of Section 12.7
(Confidentiality) and (ii) none of the documents and information described in
the preceding sentence shall constitute Program Assets. All audits shall be at
Bank's expense if material discrepancies in amounts paid or charged by Bank or
in services and activities provided by Bank are discovered. Bank acknowledges
that Retailer intends to conduct a formal audit in respect of the Program on an
annual basis.

            11.3. Financial Information. Within thirty (30) days after first
publicly available, Bank shall provide Retailer with copies of all publicly
available portions of its quarterly call reports.

            11.4. Operating Procedures. Bank shall comply with the Operating
Procedures.

            11.5. Cooperation. Bank shall respond to and cooperate with Retailer
promptly in connection with the resolution of disputes with Cardholders.

            11.6. Communications Concerning Litigations. Promptly after receipt,
Bank shall deliver to Retailer any communications relating to litigation
involving the Program.


                                   ARTICLE XII
                                OTHER AGREEMENTS

            12.1. Retailer Acquisitions. In the event that Retailer or any of
its Affiliates, directly or indirectly, acquires (i) all or substantially all of
the assets of any other Person engaged in the business of retail sales, (ii)
more than ** of the outstanding voting securities of such a Person or (iii) the
power to direct or cause the direction of such a Person's management or
policies, whether through the ownership of securities, control of its board of
directors, contract or otherwise, then (1) Retailer or any of its Affiliates may
determine not to operate a private label credit card program in


                                       38
<PAGE>   40

connection with such acquired business, (2) if such acquired Person maintains or
utilizes a private label credit card program at the time the acquisition by
Retailer is consummated, Retailer or any of its Affiliates may maintain such
program (except that at the time (if any) that such acquired Person entertains
bids in respect of such program, Bank shall be provided with a right of first
refusal with respect thereto, exercisable on thirty (30) days' notice to
Retailer, and (3) if such acquired Person does not maintain a credit program but
Retailer or its Affiliates determine to establish such a program, Retailer or
such Affiliates may establish such a program inhouse or with a third party
(except that Bank shall have a right of first refusal with respect to a proposed
third party program, exercisable on thirty (30) days notice to Retailer).

            12.2. Exclusivity. During the term of this Agreement, Retailer shall
not, directly or indirectly, advertise, promote, sponsor, solicit, permit
solicitation of, or make available to customers of Retailer for Purchases or
otherwise provide at any Store any credit program, credit facility, credit card
program, charge program or debit or secured card program or facility which is
similar in purpose or effect to this Program, other than (i) credit provided in
connection with the Program hereunder, (ii) credit provided by generally
accepted multi-purpose credit or charge cards such as American Express,
Mastercard, Visa and the Discover card or by any generally accepted
multi-purpose debit or secured cards (provided that none of the cards referred
to in this clause (ii) may be "co-branded," "sponsored" or "co-sponsored" with
Retailer) and (iii) those authorized pursuant to Section 12.1 (Retailer
Acquisitions).

            12.3. Grant of Security Interest; UCC Matters. (a) The parties
hereto agree that the transactions contemplated herein shall constitute a
program for the extension of consumer credit and service to customers of
Retailer. Notwithstanding the foregoing, in the event that Article 9 of the UCC
applies or may apply to the transactions contemplated hereby, and to otherwise
secure payment of and performance by Retailer of any and all indebtedness,
liabilities or obligations, now existing or hereafter arising whatsoever
pursuant to this Agreement, Retailer hereby grants to Bank a continuing security
interest in and to all of Retailer's right, title and interest now owned or
existing or hereafter acquired or arising in, to and under the following
property (in each case, existing at any time, past, present or future) together
with the proceeds thereof: (A) all Accounts, Receivables and Account
Documentation; (B) any deposits, credit balances and reserves on Bank's books
relative to any Accounts; and (C) all proceeds of the foregoing. All creditors
of Retailer seeking to obtain a security interest in any of the foregoing
collateral shall be required to subordinate their security interests to the
security interest of Bank in the foregoing collateral as a condition precedent
to obtaining any such security interest. Retailer agrees to cooperate fully with
Bank


                                       39
<PAGE>   41

as Bank may reasonably request in order to give effect to the security interest
granted by this Section 12.3, including, without limitation, the filing of UCC-1
or comparable statements in order to perfect such security interest.

            (b) Retailer shall give Bank not less than thirty (30) days' written
notice prior to (i) Retailer transferring its executive offices to any location
other than that set forth in Exhibit 8.1(d) hereto, and (ii) Retailer changing
its corporate name; and, notwithstanding (i) and (ii) hereof, no such change may
be effected before the Retailer shall have furnished to Bank signed copies of
all filings and all actions as Bank may reasonably determine to be necessary or
appropriate to preserve and maintain at all times the perfection and priority of
the Liens granted or purported to be granted to Bank hereunder with respect to
the Accounts and the Receivables.

            (c) Retailer shall not change its name, identity or structure in any
manner that might make any financing statement filed to preserve and maintain
the perfection and priority of any Liens, if any, granted or purported to be
granted to Bank hereunder seriously misleading within the meaning of Section
9-402(7) (or comparable provision) of the UCC unless Retailer shall have given
Bank at least thirty (30) days' prior written notice thereof and shall have
furnished to Bank signed copies of any amendments to such financing statements
and all other filings and all other actions as may be necessary to preserve and
maintain at all times the perfection and priority of the security interests
granted or purported to be granted to Bank hereunder.

            12.4. Use of Retailer Marks. (a) Retailer hereby shall cause The
Avenue, Inc. ("Owner") to grant to Bank a non-exclusive, royalty-free,
non-transferable right and license to use the Retailer Marks in the United
States in connection with the creation, establishment, marketing and
administration of, and the provision of services related to, the Program, all
pursuant to, and in accordance with, this Agreement. Those services shall be the
solicitation of Cardholders, acceptance of Credit Card Applications, issuance
and reissuance of Credit Cards, the provision of accounting services to
Cardholders, the provision of billing statements and other correspondence
relating to Accounts to Cardholders, the extension of credit to Cardholders, and
the advertisement or promotion of the Program. The license hereby granted is
solely for the use of Bank and shall not be sublicensed by Bank.

            (b) The license granted hereunder shall terminate upon the later of
(i) the termination of this Agreement or (ii) the Final Liquidation Date, but in
no event later than five (5) years after the effective date of termination of
this Agreement.


                                       40
<PAGE>   42

            (c) Upon the termination of the license as provided in subsection
(b) above, all rights in the Retailer Marks shall revert to Owner, the goodwill
connected therewith shall remain the property of Owner and Bank shall: (i)
discontinue immediately all use of the Retailer Marks, or any of them, and any
colorable imitation thereof; and (ii) at its option, delete the Retailer Marks
from, destroy or return to Retailer unused all Credit Cards, Credit Card
Applications, Account Documentation, periodic statements, materials, displays,
advertising and sales literature and any other items bearing any of the Retailer
Marks.

            (d) Bank acknowledges that (1) the Retailer Marks, all rights
therein, and the goodwill associated therewith, are, and shall remain, the
exclusive property of Owner, (2) it shall take no action which shall adversely
affect Owner's exclusive ownership of the Retailer Marks or the goodwill
associated with the Retailer Marks, and (3) any and all goodwill arising from
use of the Retailer Marks by Bank shall inure to the benefit of Owner. Nothing
herein shall give Bank any proprietary interest in or to the Retailer Marks,
except the right to use the Retailer Marks in accordance with this Agreement and
Bank shall not contest Retailer's title in and to the Retailer Marks.

            (e) Bank shall use the Retailer Marks as set forth in this Section
and shall provide services under the Retailer Marks in accordance with the
standards set forth herein. Bank shall provide Retailer with representative
samples of Credit Cards, card mailing materials, displays, advertising and sales
literature and any other items bearing or intended to bear any of the Retailer
Marks (the "Materials"), which Materials shall be reviewed and may be approved
or disapproved by Retailer in its reasonable discretion.

            (f) Bank shall not use the Retailer Marks, or any colorable
imitation thereof, other than as provided herein. In addition, Bank shall not
adopt or use as a trademark, service mark, logo or tradename, or claim any
rights in or to, any of the Retailer Marks or other marks confusingly similar to
any of the Retailer Marks.

            (g) If any of the Retailer Marks is infringed, Owner alone has the
right, in its sole discretion, to take whatever action it deems necessary to
prevent such infringing use. Bank shall reasonably cooperate with and assist
Owner in the prosecution of those actions that Owner determines, in its sole
discretion, are necessary or desirable to prevent the infringing use of any of
the Retailer Marks.

            12.5. Power of Attorney. Retailer authorizes and empowers Bank and
grants to Bank a power of attorney to sign and endorse Retailer's name on all
checks, drafts, money orders or other forms of payment in respect of Accounts
under the Agreement. This limited power of attorney conferred hereby is


                                       41
<PAGE>   43

deemed a power coupled with an interest and shall be irrevocable prior to the
Final Liquidation Date.

            12.6. Force Majeure. Notwithstanding any other provision of this
Agreement, neither party shall be liable in any manner to the other for any
delay, failure in performance, loss or damage due to fire, industry-wide strike,
embargo, explosion, earthquake, flood, war, industry-wide labor disputes, civil
or military authority, acts of God or the public enemy, inability to secure fuel
or acts or omissions of telecommunications carriers (each, a "Force Majeure
Event"), except that (a) to the extent the Force Majeure Event affects Bank's
performance hereunder in such a manner as would warrant any Service Fee
Adjustments, the Service Fee owed by Retailer in respect of periods during the
Force Majeure Event shall be decreased to reflect such Service Fee Adjustments,
(b) to the extent that the Force Majeure Event causes Bank to fail to provide
any services to be paid for by the Service Fee, Retailer shall have no
obligation to pay that portion of the Service Fee to Bank during the period of
the Force Majeure Event, (c) the defaulting party shall take all steps to
alleviate the impact of the Force Majeure Event on the non-defaulting party that
it is taking with respect to any other Person with whom it does business, and
(d) the non-defaulting party shall have a right of termination as and to the
extent provided in Section 13.2(h) (Bank Termination Events) or 13.4(j)
(Retailer Termination Events), as the case may be.

            12.7. Confidentiality. (a) All proprietary and non-public material
and information (i) supplied by Retailer to Bank or learned by Bank from
Retailer, (ii) supplied by Bank to Retailer or learned by Retailer from Bank, or
(iii) relating to the Program including, without limitation, the terms of this
Agreement, marketing plans and test results relating to the Program, information
relating to the performance of Accounts, the Cardholder List and any other lists
of information related to Cardholders or applicants for Accounts obtained in
connection herewith, are confidential and proprietary ("Confidential
Information"); provided, however, that this Agreement may be filed with the
Securities and Exchange Commission by URGI provided that URGI shall request
confidential treatment of all percentage numbers and dollars figures contained
herein. Confidential Information shall not include any information which (A) at
the time of disclosure by one party hereto is generally available or known to
the public (other than as a result of an unauthorized disclosure by the
disclosing party); (B) was available to one party on a non-confidential basis
from a source other than the other party (provided that such source, to the best
of such party's knowledge, was not obligated to the other party to keep such
information confidential); or (C) was in one party's possession prior to
disclosure by the other party to it.

            (b) Confidential Information shall be used by each party solely in
the performance of its obligations or exercise of


                                       42
<PAGE>   44

its rights pursuant to this Agreement, provided, however, that if Retailer
purchases the Program Assets after termination of this Agreement, Retailer may
use the Program Assets in any way permitted by Law. Each party shall receive
Confidential Information in confidence and not disclose Confidential Information
to any third party, except (i) as may be necessary to perform its obligations or
exercise its rights pursuant to this Agreement or, in the case of Bank, to
effect a securitization or participation of the Accounts or Receivables, (ii) as
may be agreed upon in writing by the other party, or (iii) as otherwise required
by Law or judicial or administrative process, provided, however, that if
Retailer purchases the Program Assets after termination of this Agreement,
Retailer may use the Program Assets in any way permitted by Law. Each party
shall use its best efforts to ensure that its officers, employees and agents
take such action as shall be necessary or advisable to preserve and protect the
confidentiality of Confidential Information. Upon written request or upon the
termination of this Agreement, each party shall destroy or return to the other
party all Confidential Information other than Program Assets in its possession
or control, subject to the each party's respective document retention policies
with respect to information required to be maintained by regulatory authorities
(it being understood that any information so retained shall be held in
confidence and not disclosed except as in the circumstances described in
subsections (i) through (iii) above). Each party acknowledges that the other
party's Confidential Information is such other party's valuable asset and any
breach of the confidentiality obligations with respect thereto shall result in
damage to such other party.


                                  ARTICLE XIII
                              TERM AND TERMINATION

            13.1. Term of Agreement. (a) Unless otherwise sooner terminated
pursuant to this Article XIII (Term and Termination), this Agreement shall
remain in full force and effect for a period (the "Initial Term") commencing on
the date hereof through and including February 29, 2004. Thereafter, this
Agreement shall be automatically renewed for successive three (3) year terms
(the term of this Agreement, as so renewed, being referred to herein as the
"Extended Term") thereafter unless either Retailer, on the one hand, or Bank, on
the other hand, shall have delivered written notice to the other party in
accordance with the provisions of Section 13.1(b) hereof of its election to
terminate this Agreement at the expiration of the Initial Term or the Extended
Term, as the case may be.

            (b) In order to be effective, any notice of an election to terminate
this Agreement at the expiration of the Initial Term or of an Extended Term, as
the case may be, must be delivered at least one hundred and eighty (180)
Business Days


                                       43
<PAGE>   45

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

prior to the expiration of the Initial Term or of any Extended Term, as the case
may be.

            13.2. Bank Termination Events. The occurrence of any one or more of
the following events (regardless of the reason therefor) shall constitute a
"Bank Termination Event":

            (a) Retailer shall fail to pay Bank any undisputed amount when due
and payable (it being understood that any undisputed portion of any disputed
amount shall be paid) or any amount determined to be due and payable pursuant to
Section 6.9(c) (Reconciliation of Disputes), and such failure to pay shall
remain unremedied for a period of thirty (30) days after delivery of written
demand therefor by Bank to Retailer.

            (b) Any representation or warranty of Retailer contained in this
Agreement shall fail to be true and correct either as of the date hereof or on
the date when made or remade and such failure shall remain unremedied for a
period of thirty (30) days after delivery of written notice thereof by Bank to
Retailer and have (or with the passage of time, likely will have) a material
adverse effect on Bank.

            (c) Retailer shall fail to perform any of the covenants or
agreements required to be complied with and performed by Retailer pursuant to
this Agreement and such failure shall remain uncured for sixty (60) days after
delivery of written notice thereof by Bank to Retailer and have (or with the
passage of time, likely will have) a material adverse effect on Bank.

            (d) An Event of Bankruptcy shall have occurred with respect to
Retailer.

            (e) One or more defaults shall have occurred under any agreement,
indenture or instrument under which Retailer then has outstanding Indebtedness
in excess of **, and, in any such case, such default (i) continues beyond any
period of grace provided with respect thereto, (ii) has not been waived, and
(iii) results in such Indebtedness becoming due prior to its stated maturity.

            (f) A judgment shall have been entered against Retailer by a
Governmental Authority, which judgment creates a liability of ** or more in
excess of insured amounts and has not been stayed (by appeal or otherwise),
vacated, discharged, or otherwise satisfied within sixty (60) days of the entry
of such judgment.

            (g) Retailer shall implement or participate in, directly or
indirectly, any Non-Permitted Credit Program and fail to cease such
participation for sixty (60) days after delivery of written notice thereof by
Bank to Retailer.


                                       44
<PAGE>   46

            (h) A Force Majeure Event shall have occurred and be continuing for
a period of more than one hundred eighty (180) days and such Force Majeure Event
has had or likely shall have a material adverse effect on Bank, Cardholders
and/or the Program unless Retailer diligently shall have taken all steps to cure
all negative impact from the Force Majeure Event on Bank, Cardholders and/or the
Program and demonstrates that such Event shall be cured within thirty (30) days
thereafter.

            (i) The Conversion Date shall not have occurred on or prior to March
1, 1999.

            13.3. Bank's Rights Following a Bank Termination Event. Subject to
Section 13.8 (Alternative to Termination), if any Bank Termination Event shall
have occurred and, in the case of Bank Termination Events described in Section
13.2(e) or (f) (Bank Termination Events), shall be continuing, Bank, in its sole
discretion, may (i) terminate this Agreement by delivering written notice to
Retailer setting forth the basis for termination and the effective date of
termination and/or (ii) exercise any other rights or remedies available to it at
Law or in equity, subject to the terms of this Agreement.

            13.4. Retailer Termination Events. The occurrence of any one or more
of the following events (regardless of the reason therefor) shall constitute a
"Retailer Termination Event":

            (a) Bank shall fail to pay to Retailer any undisputed amount when
due and payable (it being understood that any undisputed portion of any disputed
amount shall be paid) or any amount determined to be due and payable pursuant to
Section 6.9(c) (Reconciliation of Disputes), and such failure to pay shall
remain unremedied for a period of three (3) days after delivery of written
demand therefor by Retailer to Bank.

            (b) Any representation or warranty of Bank contained in this
Agreement shall fail to be true and correct either as of the date hereof or on
the date when made or remade and have (or with the passage of time, likely will
have) a material adverse effect on Retailer, Cardholders or the Program.

            (c) Bank shall fail to perform any of the covenants or agreements
required to be complied with and performed by Bank pursuant to this Agreement
and such failure shall not have been cured within sixty (60) days after delivery
of written notice thereof by Retailer to Bank and have (or with the passage of
time, likely will have) a material adverse effect on Retailer, Cardholders or
the Program.

            (d) An Event of Bankruptcy shall have occurred with respect to Bank.


                                       45
<PAGE>   47

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

            (e) One or more defaults shall have occurred under any agreement,
indenture or instrument under which Bank then has outstanding Indebtedness in
excess of **, and, in any such case, such default (i) continues beyond any
period of grace provided with respect thereto, (ii) has not been waived and
(iii) results in such Indebtedness becoming due prior to its stated maturity.

            (f) A judgment shall have been entered against Bank by a
Governmental Authority which judgment creates a liability of ** or more in
excess of insured amounts and has not been stayed (by appeal or otherwise),
vacated, discharged, or otherwise satisfied within sixty (60) days of the entry
of such judgment.

            (g) Bank, without Retailer's prior written approval, shall make a
change to Consumer Charges, Other Consumer Terms and Criteria, the Operating
Procedures or the collection policies necessary to comply with Law that applies
only to banks located in the State of Ohio and such change has or likely will
have a material adverse effect on Retailer, Cardholders and/or the Program,
unless Bank shall have demonstrated that it can remedy such effect within twelve
(12) months and at all times has taken all available steps to do so.

            (h) The BDIP Write-Off Percentage for the twelve-month period
preceding January 31, 2000 or any 12-month period thereafter shall exceed **.

            (i) The Approval Rate shall be less than ** for any period of four
(4) consecutive calendar months.

            (j) A Force Majeure Event shall have occurred and be continuing for
a period of more than one hundred and eighty (180) days and such Force Majeure
Event has had or likely shall have a material adverse effect on Retailer,
Cardholders and/or the Program, unless Bank diligently shall have taken all
steps to cure all negative impact of the Force Majeure Event on Retailer,
Cardholders and/or the Program, and demonstrates that such cure shall occur
within thirty (30) days thereafter.

            (k) The Conversion Date shall not have occurred on or before March
1, 1999.

            13.5. Retailer's Rights Following a Retailer Termination Event. If
any Retailer Termination Event shall have occurred, Retailer, in its sole
discretion, may (i) terminate this Agreement by delivering written notice to
Bank setting forth the basis for termination and the effective date of
termination and/or (ii) exercise any other rights or remedies available to it at
Law or in equity, subject to the terms of this Agreement.

            13.6. Purchase Following Termination. (a) In the event that this
Agreement expires by its terms or is terminated earlier for any reason, Retailer
or a designee shall have the


                                       46
<PAGE>   48

right, exercisable by delivery of written notice to Bank, to purchase all of the
Accounts and Receivables (including those Accounts and Receivables that have
been written off by Bank and inactive accounts) owned by Bank as of such
purchase date, the Credit Cards, the Cardholder List, all records and other data
obtained in connection with the operation of the Program (including any lists
other than the Cardholder List containing information relating to Cardholders or
applicants for Accounts obtained in connection herewith), all credit scores and
methodologies and algorithms needed to implement such scores obtained by Bank
from Citibank or provided to Bank by Retailer, including any modifications made
thereto by Bank (unless Bank is contractually prohibited from transferring such
modifications) and, if Bank independently developed or purchased credit scores
and the methodologies and algorithms needed to implement such scores
specifically for the Program, those independently developed or purchased scores,
methodologies and algorithms (unless Bank is contractually prohibited from
transferring such scores, methodologies and algorithms (it being understood that
Bank shall use commercially reasonable efforts to avoid such contractual
prohibitions)) (all of the foregoing items being collectively referred to herein
as the "Program Assets"), all for a purchase price as determined in accordance
with Section 13.6(c). In connection with such purchase, Bank agrees that (i) it
shall make to Retailer or its designee representations and warranties in respect
of the Program Assets comparable to those made by Retailer or Citibank in
respect of the Transferred Assets and (ii) unless required by Law, it will not
require Retailer or its designee to reissue Credit Cards provided Cardholders
are sent decals for application to their Credit Cards indicating the change of
ownership of their Credit Cards. Upon such purchase, Bank no longer shall use
any Program Assets in any manner. In order to be effective, any notice of an
election to purchase pursuant to this Section 13.6(a) must be irrevocable and
delivered by Retailer to Bank (i) in the event this Agreement is terminated by
Retailer other than as a result of a Retailer Termination Event, within ninety
(90) Business Days after delivery of Retailer's written notice of termination,
(ii) in the event this Agreement is terminated by Bank as a result of a Bank
Termination Event, within sixty (60) Business Days after delivery of Bank's
written notice of termination and (iii) in the event this Agreement otherwise
terminates, within one hundred seventy (170) Business Days after notice of
termination is given.

            (b) If this Agreement terminates or expires and Retailer has not
exercised its rights under subsection (a) above, Retailer promptly shall notify
Bank of any determination to commence itself or through another issuer a
proprietary credit card program within two (2) years after expiration or
termination of this Agreement. If Retailer provides such a notice, Bank shall
have the right to require Retailer to purchase all of the Program Assets for a
purchase price as determined in accordance with Section 13.6(c). Bank may
exercise this right by delivering


                                       47
<PAGE>   49

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

written notice to Retailer of Bank's election to require Retailer to purchase
the Program Assets (a "Put Notice") within a period of three (3) months from the
date of termination if such Program commences on termination or, if Bank
receives notice of commencement of such a program after termination, for a
period of three (3) months following the date upon which notice was received. If
Bank delivers a Put Notice to Retailer pursuant to this Section 13.6(b),
Retailer shall be obligated to close the purchase of the Program Assets not
later than one hundred eighty (180) days after the effective date of termination
of this Agreement or ninety (90) days after receiving a Put Notice, whichever
comes later.

            (c) The purchase price to be paid by Retailer for the Program Assets
purchased by it pursuant to Section 13.6(a) or 13.6(b) shall be equal to the sum
of (i) the aggregate of Receivables on the date of purchase (excluding the
amounts of any Receivables written off by Bank in accordance with the Write-Off
Policy) plus (ii) if the Program Assets include credit scores and methodologies
and algorithms needed to implement such scores independently developed or
purchased by Bank specifically for the Program, an amount not to exceed the
lesser of (1) ** per scorecard for each scorecard developed by Bank or (2) the
amount paid by Bank for each scorecard purchased by Bank. The foregoing
notwithstanding, Retailer may determine to exclude any or all scorecards
developed or purchased by Bank from the Program Assets and no payment shall be
owed in respect of scorecards so excluded.

            (d) Bank shall cooperate in good faith with Retailer and/or its
designee in transferring the Program Assets and the operation of the Program
Assets and shall make available to Retailer and/or its designee in advance the
master file tape and other records necessary to assist the Retailer and/or its
designee in analyzing such Receivables and in establishing its own records for
operations. On the purchase date, Bank will deliver one or more computer tapes
containing all of the information normally maintained by Bank with respect to
the Program Assets for purposes of billing, credit review, dunning and
collection, and a description of the format in which such information is
recorded on tape, and all of the written records and documents maintained by
Bank with respect to the foregoing. Bank shall provide such additional
cooperation and information as the purchaser shall reasonably request provided
that Bank shall not be required to incur expense to do so. Without limitation to
the foregoing, Bank shall use good faith efforts to assist any successor
provider to any to analyze pertinent account information and portfolio
assistance and documentation that Bank has required or requested of Citibank and
Retailer in connection with the conversion hereunder.

            13.7. Failure of Retailer to Purchase Accounts Following
Termination. (a) Upon any termination of this


                                       48
<PAGE>   50

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

Agreement, if Retailer does not elect to purchase the Program Assets pursuant to
Section 13.6(a) (Purchase Following Termination) and Bank does not deliver the
Retailer Put Option, Bank shall have the right, in addition to and retaining all
other rights it may have under the terms of this Agreement or applicable Law, to
liquidate the Accounts and Receivables (using the Cardholder List to do so) in
any such lawful manner which may be expeditious or economically advantageous to
Bank including, without limitation, the issuance of replacement or substitute
credit cards and the sale of such Accounts and Receivables to any Person not a
party to this Agreement, provided that in no event shall any replacement or
substitute card, whether issued by Bank or a purchaser of the Accounts bear on
its face a trademark, service mark or name of a retail competitor of Retailer
and provided further that Bank shall continue to hold (and ensure that any
purchaser of Accounts holds) confidential all Confidential Information of
Retailer. The foregoing and any other provision to the contrary contained herein
notwithstanding, if Retailer does not purchase the Program Assets, Bank may use
the Cardholder List (or any other lists of information relating to Cardholders)
only to liquidate Accounts and Retailer shall retain the exclusive right
(without any fee being payable to Bank and with all revenue and income derived
therefrom belonging to Retailer) to use (or sublicense or assign the right to
use) the Customer List for all purposes, including for advertisement,
solicitations or other marketing efforts, regardless of the manner or media
through which the marketing effort is made, regardless of whether the product or
service was previously marketed by Retailer.

            (b) If Retailer does not elect to purchase the Program Assets
pursuant to Section 13.6(a) (Purchase Following Termination) and Bank does not
deliver to Retailer a Put Notice, Retailer shall pay to Bank in connection with
Bank's liquidation of the Accounts and Receivables an amount to be determined as
follows. Upon liquidation of the Accounts, Bank shall determine the "Net
Revenue" for the Program. The "Net Revenue" shall be equal to (i) the sum of the
Monthly Program Revenues for each month during the liquidation period, minus
(ii) the sum of the Monthly Program Costs for each month during the liquidation
period. The Net Revenue Requirement shall be an amount equal to ** of the
average outstanding balances of the Receivables, excluding amounts written off
by Bank in accordance with the Write-Off Policy, during the liquidation period.
If the cumulative average monthly Net Revenue after the date of termination of
this Agreement is less than the Net Revenue Requirement after the date of
termination of this Agreement, Bank shall invoice Retailer for the difference,
less any amounts previously paid by Retailer to Bank in accordance with this
sentence, and Retailer shall pay such amount within fifteen (15) days from
receipt of such invoice.


                                       49
<PAGE>   51

            13.8. Alternative to Termination. Bank shall not exercise its right
to terminate this Agreement pursuant to Section 13.3 (Bank's Rights Following A
Bank Termination Event) so long as (i) no Bank Termination Event has occurred
and is continuing except one or more of those described in this section, (ii)
Retailer shall within two (2) Business Days after receiving notice of
termination pursuant to Section 13.2(b) or (c) (Bank Termination Events)
establish and thereafter maintain the Collateral Account pursuant to Section
13.9(a) (Collateral Account) or the Letter of Credit pursuant to Section 13.10
(Letter of Credit) and the aggregate amount of such Collateral Account and the
undrawn amount of such Letter of Credit (collectively, the "Collateral Amount")
shall equal or exceed the sum of all amounts required by this section, and (iii)
Retailer is diligently taking all action necessary to correct such event
promptly (whether or not such failure can be corrected in a reasonable time).
The Collateral Amount shall be the amount of damages which Bank would suffer if
this Agreement were terminated immediately.

            13.9. Collateral Account. (a) For the purposes of complying with
Section 13.8 (Alternative to Termination), Retailer may open and maintain, with
a bank, the deposits of which are F.D.I.C.-insured, a collateral account pledged
to Bank (the "Collateral Account") to secure payment by Retailer of all of its
obligations then or thereafter existing under this Agreement. Retailer shall be
entitled to the interest that accrues and is earned on the Collateral Account
and Bank shall authorize Retailer to withdraw such amount on the last Business
Day of each month.

            (b) Upon the payment in full of Retailer's obligations hereunder,
Bank shall pay to Retailer such of the collateral as shall not have been applied
pursuant to the terms hereof. To the extent that the amount of the Collateral
Account exceeds the amount required by Section 13.8 (Alternative to Termination)
Bank shall return the excess to Retailer or if no Retailer Termination Event is
continuing and the Agreement has not otherwise terminated, Bank shall return the
full amount of the Collateral Account to Retailer.

            13.10. Letter of Credit. In lieu of any amount required to be paid
into or maintained in the Collateral Account, Retailer may deliver to Bank a
Letter of Credit in favor of Bank issued by a bank organized in the United
States or another financial institution, whose debt obligations are rated at
least comparable to Bank and which is otherwise acceptable to Bank, payable (i)
from time to time upon certification by Bank that obligations in excess of the
funds in the Collateral Account are due and payable and unpaid by Retailer after
demand and that the funds drawn shall be applied to such obligations, and (ii)
up to the full amount upon certification by Bank, within the 60 day period prior
to the expiry date of the Letter of Credit, that the


                                       50
<PAGE>   52

funds in the Collateral Account are less than Bank's good faith estimate of the
obligations expected thereafter to accrue and become due, and that the funds
drawn shall be added to the Collateral Account and held and applied in
accordance with the terms of this Agreement. The undrawn amount of such Letter
of Credit shall be added to the amount of the Collateral Account in determining
whether additional payments into or refunds from the Collateral Account are
required under Section 13.8 (Alternative to Termination).


                                   ARTICLE XIV
                                 INDEMNIFICATION

            14.1. Indemnification by Retailer. Retailer shall indemnify and hold
Bank, each of its Affiliates, and all officers, directors, employees and other
agents of Bank and/or its Affiliates, harmless from and against any actions,
suits, losses, liabilities, settlements, costs and expenses, including any
reasonable attorneys' fees (collectively, "Damages"), relating to, arising out
of, or in connection with:

                  (i) the failure of any representation or warranty of Retailer
            hereunder to be true and correct when made or remade;

                  (ii) the breach by Retailer of any of its covenants or
            agreements hereunder;

                  (iii) the failure of Retailer, or any of its employees, agents
            or designees (including those working at Retailer's fulfillment
            center), to comply with the Operating Procedures or other policies
            and procedures established hereunder applicable to its, or any of
            their, conduct;

                  (iv) any misrepresentation by Retailer or any of its
            employees, agents or designees relating to credit terms;

                  (v) any and all advertising conducted by or on behalf of
            Retailer, other than credit marketing materials approved by Bank;
            and

                  (vi) any Goods or Services, including, without limitation, any
            product liability claims with respect thereto.

            14.2. Indemnification by Bank. Bank shall indemnify and hold the
Retailer and each of its Affiliates, and all officers, directors, employees and
other agents of the Retailer and/or its Affiliates, harmless from and against
any Damages relating to, arising out of, or in connection with:


                                       51
<PAGE>   53

                  (i) the failure of any representation or warranty of Bank
            hereunder to be true and correct when made or remade;

                  (ii) the breach by Bank of any of its covenants or agreements
            hereunder;

                  (iii) the failure of Bank, or any of its employees, agents or
            designees, to comply with the Operating Procedures, the Service
            Standards or other policies and procedures established hereunder
            applicable to its conduct;

                  (iv) any misrepresentation by Bank or any of its employees,
            agents or designees relating to credit terms;

                  (v) credit marketing materials approved by Bank; and

                  (vi) the rejection for credit of any applicant by Bank under
            the Program except to the extent it results from any action or
            omission of Retailer.

            14.3. Effect of Knowledge or Materiality. For purposes of
indemnification under Sections 14.1 and 14.2 hereof, a breach or inaccuracy of a
representation, warranty, covenant or agreement contained in this Agreement
shall be deemed to occur or exist if such representation, warranty, covenant or
agreement would have been so breached or inaccurate if it had not contained (i)
any limitation or qualification as to materiality or material and adverse
effect, or any limitation or qualification as to a party's knowledge.

            14.4. Notice. Each party shall promptly notify the other party of
any claim, demand, suit or threat of suit of which that party becomes aware
(except with respect to a threat of suit either party might institute against
the other) which may give rise to a right of indemnification pursuant to this
Agreement. The indemnifying party shall be entitled to participate in the
settlement or defense thereof and, if the indemnifying party elects, to take
over and control the settlement or defense thereof with counsel satisfactory to
the indemnified party. In any case, the indemnifying party and the indemnified
party shall cooperate (at no cost to the indemnified party) in the settlement or
defense or any such claim, demand, suit or proceeding.


                                   ARTICLE XV
                                  MISCELLANEOUS

            15.1. Assignability. Neither Bank nor Retailer may assign its rights
and obligations under this Agreement without


                                       52
<PAGE>   54

the prior written consent of the other party, provided that Bank may assign all
or part of its rights and obligations under this Agreement to an Affiliate
without such prior written consent if such Affiliate shall enter into an
agreement with Retailer, in form and substance reasonably satisfactory to
Retailer, assuming all of Bank's obligations hereunder that shall have been
assigned by Bank to such Affiliate. No assignment by Bank shall release Bank
from liability for Damages relating to, arising out of or in connection with
this Agreement, whether incurred prior to assignment or thereafter.

            15.2. Amendment. This Agreement may not be amended except by written
instrument signed by the parties hereto.

            15.3. Non-Waiver. No delay by any party hereto in exercising any of
its rights hereunder, or the partial or single exercise of such rights, shall
operate as a waiver of that or any other right. The exercise of one or more of
any party's rights hereunder shall not be a waiver of, nor preclude the exercise
of, any rights or remedies available to such party under this Agreement or in
Law or equity.

            15.4. Severability. If any provision of this Agreement is held to be
invalid, void or unenforceable, all other provisions shall remain valid and be
enforced and construed as if such invalid provision were never a part of this
Agreement.

            15.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Ohio without regard to
internal principles of conflict of Laws.

            15.6. Captions. Captions of the Sections of this Agreement are for
convenient reference only and are not intended as a summary of such Sections and
do not affect, limit, modify or construe the contents thereof.

            15.7. Further Assurances. Each party hereto agrees to execute all
such further documents and instruments and to do all such further things as the
other party may reasonably request in order to give effect and to consummate the
transactions contemplated hereby.

            15.8. Entire Agreement. This Agreement is the entire agreement of
the parties with respect to the subject matter hereof and supersedes all other
prior understandings and agreements whether written or oral.

            15.9. Notices. All notices, demands and other communications
hereunder shall be in writing and shall be sent by hand, by first class mail
(return receipt requested), facsimile (with verbal confirmation of receipt) or
by nationally recognized overnight courier service addressed to the party to
whom such notice or other communication is to be given or made at such


                                       53
<PAGE>   55

party's address as set forth below, and shall be deemed given when received as
follows:

            if to Retailer:         United Retail Group, Inc.
                                    365 West Passaic Street
                                    Rochelle Park, NJ  07662
                                    Attention:  Chief Financial Officer
                                    Fax:  (201) 909-2122

            if to Bank:             World Financial Network
                                      National Bank
                                    800 Techcenter Drive
                                    Columbus, OH  43213
                                    Attention:  Chief Financial Officer
                                    Fax:  (614) 729-4299

provided, however, that if either of the above parties shall have designated a
different address by notice to the other, notice shall be sent to the last
address so designated.

            15.10. Binding Effect. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns.

            15.11. Independent Contractor. Nothing contained in this Agreement
shall be construed to constitute Bank and Retailer as partners, joint venturers,
principal and agent, or employer and employee. Bank shall act hereunder solely
as an independent contractor and shall exercise exclusive control over any and
all persons hired by it.

            15.12. Press Releases. Except as may be required by Law or a court
or regulatory authority or any stock exchange, neither Bank nor Retailer, nor
their respective parent, subsidiary or affiliated companies, shall issue a press
release or make any public announcement relating to the Program without the
prior consent of all parties hereto, which consent shall not unreasonably be
withheld or delayed.

            15.13. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated thereby may be brought
against any of the parties in the United States District Court for the Southern
District of Ohio or any state court sitting in the City of Columbus, Ohio, and
each of the parties hereby consents to the exclusive jurisdiction of such court
(and of the appropriate appellate courts) in any such suit, action or proceeding
and waives any objection to venue laid therein. Process in any such suit, action
or proceeding may be served on any party anywhere in the world. Without limiting
the foregoing, the parties agree that service of process upon such party at the
address referred


                                       54
<PAGE>   56

to in Section 15.9 (Notices), together with written notice of such service to
such party, shall be deemed effective service of process upon such party.

            15.14. Counterparts. This Agreement may be executed in any number of
multiple counterparts, all of which shall constitute but one and the same
original.

            15.15. Agreement Executed by Facsimile. This Agreement may be
executed by facsimile originals and each copy of this Agreement bearing the
facsimile transmitted signature of the authorized representatives of each party
shall be deemed to be an original. Notwithstanding the validity of the facsimile
originals, it is intended that two copies of the Agreement shall be manually
executed by each party and delivered to the other party hereunder.

            15.16. Waiver of Jury Trial. EACH OF THE PARTIES HERETO KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY EXHIBIT OR SCHEDULE HERETO, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING OR STATEMENTS (WHETHER VERBAL OR WRITTEN) MADE BY THE PARTIES.

            15.17. Survival. No termination (regardless of cause or procedure)
of this Agreement shall in any way affect or impair the powers, obligations,
duties, rights, indemnities, liabilities, undertakings, covenants, warranties
and/or representations of the parties with respect to times and/or events
occurring prior to such termination, including the obligation to make payments
in respect of obligations (including indemnification obligations) arising prior
to the termination date. No powers, obligations, duties, rights, indemnities,
liabilities, undertakings, covenants, warranties and/or representations of the
parties with respect to times and/or events occurring after termination shall
survive termination except 6.4 (Semi-Annual Reconciliation), 6.7 (Postage),
6.9(c) (Reconciliation of Disputes), 12.4 (Use of Retailer Marks), 12.7
(Confidentiality), 13.3 Bank's Rights Following a Bank Termination Event), 13.5
(Retailer's Rights Following a Retailer Termination Event), 13.6 (Purchase
Following Termination), 13.7 (Failure of Retailer to Purchase Accounts Following
Termination), 15.4 (Severability), 15.5 (Governing Law), 15.6 (Captions), 15.8
(Entire Agreement), 15.9 (Notices), 15.10 (Binding Effect), 15.12 (Press
Releases), 15.13 (Jurisdiction), 15.14 (Counterparts), 15.15 (Agreement Executed
by Facsimile), 15.16 (Waiver of Jury Trial), 15.17 (Survival), Article 7
(Chargebacks) and Article 14 (Indemnification).

            IN WITNESS WHEREOF, Bank and Retailer have caused this Agreement to
be executed by their respective officers thereunto duly authorized as the date
first above written.


                                       55
<PAGE>   57

                                    WORLD FINANCIAL NETWORK NATIONAL
                                      BANK


                                    By: /s/ DANIEL T. GROOMES
                                        -----------------------------
                                        Name:   Daniel T. Groomes
                                        Title:  President


                                    UNITED RETAIL GROUP, INC.


                                    By: /s/ GEORGE R. REMETA
                                        -----------------------------
                                        Name:   George R. Remeta
                                        Title:  Vice Chairman


                                    UNITED RETAIL INCORPORATED


                                    By: /s/ JON GROSSMAN
                                        -----------------------------
                                        Name: Jon Grossman
                                        Title: Vice President - Finance


                                       56
<PAGE>   58

                                    Exhibit A
                                 Licensed Marks



                                  THE AVENUE(R)

                                   AVENUE PLUS

                                 SIZES UNLIMITED

                                 SIXTEEN PLUS(R)

                                   SIZES WOMAN

                                   SMART SIZE

                                   SIZES GOLD
<PAGE>   59

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

                                  Exhibit 2.3

                      Initial Account Terms and Conditions

o     Annual Percentage Rate: **

o     Period for Assessing Late Fee: 5 Days after due date

o     Method of Computing the Balance for Purchases: Average Daily Balance
      (including new purchases, finance charges and fees)

o     Grace Period for finance charges if Account paid in full before the next
      billing date: 25 days

o     Annual Fee: None

o     Minimum Finance Charge: **

o     Late Fee: **

o     Return Payment Fee: **

o     Minimum Payment: Greater of ** or ** of the balance due
<PAGE>   60

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

                               Exhibit 4.1(b)(1)

                             Bank Service Standards

=========================================================================
                Service                      Service Level Standard
-------------------------------------------------------------------------
     Voice Authorization
o  Average Speed of Answer                   ** within 20 seconds 
   (Including account number
   lookups) as measured from 
   time of switch presentment 
   to a live agent                                     **
o  Percentage of Calls
   Abandoned
-------------------------------------------------------------------------
 Customer Service Phone Inquiry
o  Average Speed of Answer                    ** within 20 seconds
o  Percentage of Calls                                 **
   Abandoned
-------------------------------------------------------------------------
     Mail Response Time
o  All (including FCB)                          ** within 7 Days
   Cardholder correspondence                    ** within 30 Days
   responses
o  Presidential Complaints -
   Attempt Cardholder contact
   within                                             1 Day
-------------------------------------------------------------------------
      Statement Processing
o  Number of days elapsed from                   4 days or less
   billing date to mailed date
-------------------------------------------------------------------------
      Payment Processing
o  Number of days to process                 ** deposited same day,
   and deposit                                  ** within 2 days

o  Number of errors per 10,000                          1
   payments (except to the
   extent of payments to
   Citibank, which shall be
   processed in accordance
   with the above on Bank's
   receipt)
-------------------------------------------------------------------------
      Plastic Turnaround
o  Elapsed time from date                            3 days
   application approved until
   credit card is mailed
-------------------------------------------------------------------------


                                       1
<PAGE>   61

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

-------------------------------------------------------------------------
      Collection Standards
o  attempts per autodial                     o  average of 6 attempts
   matrixed account                             per autodial matrixed
                                                  account

                                             o  minimum 7 attempts in
                                                respect of Accounts
                                                moving from CA1 to
                                                CA2 (as defined on
                                                  Exhibit 4.9)**

                                             o  minimum 15 attempts
                                                in respect of Accounts
                                                moving from CA2 to CA3
                                                (as defined on Exhibit
                                                4.9)**

o  matrixed accounts per                     o  500-550 accounts per
   midrange collector                           midrange collector
=========================================================================

     **     Accounts rolling from one category to another in respect of which
            there has been a broken promise shall be excluded when determining
            whether this standard has been met.

NOTE: Service level standard shall be measured using a simple average for each
calendar month, except that Collection Standards shall be measured using a
simple average for each cycle billing period.


                                       2
<PAGE>   62

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

                                Exhibit 4.1(b)(2)

                             Service Fee Adjustments


================================================================================
                                               Service Fee Adjustment
                                               ----------------------
                                                (as decrease to fees
                                                 on Exhibit 6.1(b))
--------------------------------------------------------------------------------
                                                                Consecutive
                                                                  Months
                                                                Thereafter
     Category of                     First Month                Subject to
    Failure Service             Subject to Adjustment           Adjustment
    ---------------             ---------------------           ----------
------------------------------------------------------------------------------
Voice Authorization                      **                         **
------------------------------------------------------------------------------
Customer Service                         **                         **
------------------------------------------------------------------------------
Mail Response                            **                         **
------------------------------------------------------------------------------
Statement Processing                     **                         **
------------------------------------------------------------------------------
Payment Processing                       **                         **
------------------------------------------------------------------------------
Plastic Turnaround                       **                         **
------------------------------------------------------------------------------
Collections (Accounts         Accts per
Per Midrange Collector)       Collector        Adjustment       Adjustment
                              ---------        ----------       ----------

                             >550,<575             **
                             >=575,<600            **
                             >=600,<625            **              SAME
                             >=625,<650            **
                             >=650,<675            **
                             >=675,<700            **
                             >=700,<725            **
                             725 or more           **
==============================================================================


                                       3
<PAGE>   63

                                   Exhibit 4.4

                         Insert Fees and Specifications

                          INSERTS FOR BILLING ENVELOPES

Creative Specifications

Mailing Piece needs to be at .95 oz. or Less; this allows for humidity, etc. -
The total weight of the mail piece needs to be determined prior to the creation
of the scheduler file to ensure the piece is within this weight limit.

Inserts should always have a minimum of 3/8" clearance on all sides from
envelope.

Finished Size:

                                 Minimum                 Maximum

Height                               3"                  3 5/8"

Horizontal Length                5 1/2"                  6 3/4"

Thickness                         .004"                   1/16"

Recommended Paper Properties:

1.    Single Panel 70# or 60#

2.    Multiple Panels:

      Minimum      50#

      Maximum      70#

      Preferred    60#

3.    Paper preferences:

      White Wove

      White semi-gloss

      White matte

Folding:

The preferred method is to fold the insert in half with a single fold. If the
insert is tri-folded, the method requires folding


                                       1
<PAGE>   64

the first panel inside and the second panel should fold over to ensure that the
leading edge is solid as it is pulled from the select feed station to the track.
NO "accordion" fold should be used.

Note:

If the design for the mail piece package is not within the above specifications,
the Retailer must get approval from Bank's Mail Services Department.

Multiple fold inserts may have stacking problems not only in the machine hoppers
but in the cartons if not packed properly. Staples cannot be used.

                          INSERTS FOR EMBOSSING PACKAGE

Creative Specifications:

Embossing piece needs to be at .95 ozs. or less; this allows for humidity.

The total weight of the embossing piece needs to be determined prior to
production to ensure the price is within this weight limit.

Inserts should always have a minimum of 3/8" clearance on all sides from
envelope.

Finished Size:          Minimum 3 1/4" x 5"

                        Maximum 3 1/2" x 8 1/4"

Recommended Paper Properties:

1.    Single Panel            70#

2.    Multiple Panels:

      Minimum                 50#

      Maximum                 70#

      Preferred               60#


                                       2
<PAGE>   65

**CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

3.    Paper Preferences

      White Wove

      White semi-gloss

      White matte

Folding:

The preferred method is to fold the insert in half with a single fold. If the
insert is tri-folded, the method requires folding the first panel inside and the
second panel should fold over to ensure that the leading edge is solid as it is
pulled from the select feed station to the track.

NO "accordion" fold should be used

Note:

If the design for the embossing piece package is not within the above
specifications, the Retailer must get approval from Bank's Embossing Office.

Multiple fold inserts may have stacking problems not only in the machine hoppers
but in the cartons if not packed properly. Staples cannot be used. See packing
instructions for inserts.

INSERT FEES:

Retailer shall pay the excess costs of postage when Statements with Retailers
inserts, in the aggregate, weigh over one ounce.

Retailer shall pay ** for each insert in excess of five inserts per Statement.


                                       3
<PAGE>   66

                                  Exhibit 4.7

                                     Reports

================================================================================
                      REPORT LISTING                             FREQUENCY
================================================================================
--------------------------------------------------------------------------------
     I.    Statement and Letter Production
--------------------------------------------------------------------------------
   A.      Number of statements mailed                         Cycle, Monthly
--------------------------------------------------------------------------------
   B.      Days to produce and mail statements                    Monthly
--------------------------------------------------------------------------------
   C.      Number of letters mailed by type                       Monthly
--------------------------------------------------------------------------------
    II.    Payments
--------------------------------------------------------------------------------
   A.      Dollars and items processed                            Monthly
--------------------------------------------------------------------------------
   B.      Average number of days to process                      Monthly
================================================================================
   III.    Queues
--------------------------------------------------------------------------------
   A.      Accounts with bills held more than                     Monthly
           two consecutive months
--------------------------------------------------------------------------------
   B.      Accounts with excessive credits (to                     Daily
           be defined and agreed upon)
--------------------------------------------------------------------------------
    IV.    Non-Compliance
--------------------------------------------------------------------------------
   A.      Authorization not called in by store,                  Monthly
           division
--------------------------------------------------------------------------------
     V.    Statements of Policy
--------------------------------------------------------------------------------
   A.      Control of system security                             Annually
--------------------------------------------------------------------------------
   B.      Disaster recover/emergency                             Annually
           procedures available
--------------------------------------------------------------------------------
    VI.    Collection Reports
--------------------------------------------------------------------------------
   A.      Cycle aging report number of accounts                   Cycle
           and balances by age category
--------------------------------------------------------------------------------
   B.      Delinquency roll rates by age                          Monthly
--------------------------------------------------------------------------------
   C.      Number of dollars of accounts                          Monthly
           entering collections this month and
           total in this month
--------------------------------------------------------------------------------
   D.      Number of matrixed accounts per                        Monthly
           collector by type (power dial,
           midrange)
--------------------------------------------------------------------------------


                                       1
<PAGE>   67

--------------------------------------------------------------------------------
   E.      Average number of attempts per                         Monthly
           matrixed autodial account
--------------------------------------------------------------------------------
   F.      Number of accounts in collection                       Monthly
           without a phone number
--------------------------------------------------------------------------------
   G.      Number of accounts with returned mail                  Monthly
           or to be skip traced
--------------------------------------------------------------------------------
   H.      Bankruptcy liquidation - numbers,                      Monthly
           dollars and Chapter 13 payments
--------------------------------------------------------------------------------
   I.      Number of accounts coded bankrupt                      Monthly
           this month, # pending, oldest date
--------------------------------------------------------------------------------
   J.      Recover:  Agency inventory, In-house                   Monthly
           inventory (if applicable) -
           liquidation
--------------------------------------------------------------------------------
  VII.     Communications - Results for Each Function
           Authorization/Account lookup, Customer Service,
           Inbound Collections
--------------------------------------------------------------------------------
   A.      Number of calls (manually handled                   Weekly/Monthly
           versus ARU)
--------------------------------------------------------------------------------
   B.      Number of calls abandoned                           Weekly/Monthly
--------------------------------------------------------------------------------
   C.      Average length of conversation                      Weekly/Monthly
--------------------------------------------------------------------------------
   D.      Average speed of answer (seconds) -                    Monthly
           Authorizations, Customer Services
--------------------------------------------------------------------------------
   E.      Reasons for Cardholder inquiries                       Monthly
--------------------------------------------------------------------------------
    VIII.  New Accounts
--------------------------------------------------------------------------------
   A.      New accounts by source, store,                         Monthly
           geographic region, division
--------------------------------------------------------------------------------
   B.      Number approval/decline by store,                      Monthly
           geographic region, division
--------------------------------------------------------------------------------
   C.      Electronic report of declines                          Monthly
--------------------------------------------------------------------------------
      IX.  Authorizations
--------------------------------------------------------------------------------
   A.      Total all transactions - number and                    Monthly
           dollars
--------------------------------------------------------------------------------
   B.      Total all transactions automatically                   Monthly
           approved
--------------------------------------------------------------------------------
   C.      Total referrals number and dollars                     Monthly
--------------------------------------------------------------------------------
   D.      Approved referrals - number and                        Monthly
           dollars, percentage of those referred
--------------------------------------------------------------------------------


                                       2
<PAGE>   68

--------------------------------------------------------------------------------
   E.      Declined referrals - number and                        Monthly
           dollars, percentage of those referred
--------------------------------------------------------------------------------
   F.      "Soft referrals" - number and dollars                  Monthly
           (i.e. Check ID)
--------------------------------------------------------------------------------
     X.    Customer Service
--------------------------------------------------------------------------------
   A.      Number of address changes by type                      Monthly
           (phone or mail) average days to turn,
           number pending, oldest item
--------------------------------------------------------------------------------
   B.      Customer correspondence by type,                       Monthly
           number, average days to turn,
           pending, oldest item
--------------------------------------------------------------------------------
   C.      President complaints number average                    Monthly
           days to turn
--------------------------------------------------------------------------------
    XI.    Financial Reports
--------------------------------------------------------------------------------
   A.      Financial Summary - sales, payments,                   Monthly
           returns, finance charge reversals,
           late fees, write-off
--------------------------------------------------------------------------------
   B.      Cycle charge off recovery - number                     Monthly
           and dollars of accounts charged off,
           number and dollars recovered averages
--------------------------------------------------------------------------------
   C.      Number and dollars of accounts                         Monthly
           charged off in a rolling 12 months
--------------------------------------------------------------------------------
   D.      Sales on deferred billing -                            Monthly
           transactions and dollars:  All other
           promo sales by type
--------------------------------------------------------------------------------
   E.      Balances deferred - number of                          Monthly
           accounts and dollars
--------------------------------------------------------------------------------
   F.      Number of accounts purchases active                    Monthly
           last 12 month's - By type (i.e.
           Instant Credit, Mail ins, etc.)
--------------------------------------------------------------------------------
   G.      Chargeback reversals - number and                      Monthly
           dollars by type
--------------------------------------------------------------------------------
   H.      Chargeback number and dollars by type                  Monthly
--------------------------------------------------------------------------------
   I.      Value-Added Program income by program                  Monthly
           - number of accounts, number with
           transactions this month, sales,
           returns
--------------------------------------------------------------------------------


                                       3
<PAGE>   69

--------------------------------------------------------------------------------
   J.      Fraud by type (i.e. application by                     Monthly
           type, unauthorized use, etc.) #$ of
           accounts, dollars
--------------------------------------------------------------------------------
   K.      Late fees by cycle, number of                          Monthly
           accounts assessed, dollars, reversed,
           number reversed
--------------------------------------------------------------------------------
   XII.    Risk
--------------------------------------------------------------------------------
   A.      Credit limit distribution reports -                    Monthly
           new accounts seasoned accounts
--------------------------------------------------------------------------------
   B.      Credit limit utilization new account,                  Monthly
           seasoned accounts
--------------------------------------------------------------------------------
   C.      Credit limit maintenance by agent                       Daily
--------------------------------------------------------------------------------
   D.      Maximum delinquency by score range                     Monthly
           (to be defined and agreed upon)
--------------------------------------------------------------------------------
   E.      Bad debt by score range (to be                         Monthly
           defined and agreed upon)
--------------------------------------------------------------------------------


                                       4
<PAGE>   70

                                   Exhibit 4.9

                           Initial Collection Policies

================================================================================
            Account Status
      (Amount billed and unpaid)                        Activity
      --------------------------                        --------
--------------------------------------------------------------------------------
            0-29 days (CAO)              None
--------------------------------------------------------------------------------
           30-59 days (CA1)              Autodial collection calls
--------------------------------------------------------------------------------
           60-89 days (CA2)              Autodial collection calls
--------------------------------------------------------------------------------
           90-120 days (CA3)             Midrange collector assigned
                                         and calls
--------------------------------------------------------------------------------
          121-149 days (CA4)             Midrange collector assigned
                                         and calls
--------------------------------------------------------------------------------
          150-179 days (CA5)             Midrange collector assigned
                                         and calls
--------------------------------------------------------------------------------
          180-209 days (CA6)             Midrange collector assigned
                                         and calls
--------------------------------------------------------------------------------
           > 210 days (CA7)              Write-Off
================================================================================

Note: Bank and Retailer shall agree on each matrix used in connection with the
implementation of these policies.
<PAGE>   71

                                   Exhibit 5.2

                              Pass-Through Expenses

o     Collection agency commissions, Consumer Credit Counseling costs and
      outside attorneys' fees related to the collection of Accounts

o     Postage cost for customer statements that exceed one ounce

o     Credit Bureau products (i.e. pre-approved listings, New Account scoring
      products, warning mechanisms, etc.), to the extent requested by Retailer
      and excluding standard in file credit bureau reports for basic processing
      of applications and inquiries

o     Cardholder Goodwill Adjustments and any other finance charge or late fee
      reversals or adjustments (to the extent authorized by the Operating
      Procedures)

o     Costs related to a mass Credit Card reissue (i.e. embossing, card carrier,
      plastic and postage)

o     Telecommunications cost such as additional toll free lines (other than
      those required in connection with New Accounts, Customer Service,
      Authorizations, Collections to enable Bank to perform its obligations
      thereunder) (to the extent requested by Retailer)

o     In-Store signage, applications and temporary Credit Cards (to the extent
      Retailer requests that Bank purchase)

o     Customized reporting and systems enhancements (to the extent requested by
      Retailer)

o     The amounts owed to Bank pursuant to Section 3.4 (Value- Added Programs)

o     The amounts paid by Bank for Appropriate Derivative Instruments (as
      defined in the definition of "Cost of Funds")
<PAGE>   72

      **CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

                                Exhibit 6.1(b)

                                  Service Fees

A.    New Account Acquisition

------------------------------------------------------------------------
Mail-In                     per application                     **
Applications
------------------------------------------------------------------------
Quick Credit                per application                     **
Referrals
------------------------------------------------------------------------
Quick Credit                per application                     **
------------------------------------------------------------------------
Embossing                   per card                            **
(Including Postage
of **)
------------------------------------------------------------------------

B.    Processing and Servicing Fees

------------------------------------------------------------------------
Statement                   Per statement based
Generation                  on monthly volume
(Including Postage
of **)
------------------------------------------------------------------------
                            500,001 - and over                   **
------------------------------------------------------------------------
                            400,001 - 500,000                    **
------------------------------------------------------------------------
                            300,001 - 400,000                    **
------------------------------------------------------------------------
                            250,001 - 300,000                    **
------------------------------------------------------------------------
                            200,001 - 250,000                    **
------------------------------------------------------------------------
                            150,001 - 200,000                    **
------------------------------------------------------------------------
Remittance                  per remittance                       **
processing
------------------------------------------------------------------------
Customer service
  phone (800#
included)                   per inquiry                          **
  Written                   per inquiry                          **
  Automated                 per inquiry                          **
response
------------------------------------------------------------------------


                                       1
<PAGE>   73

      **CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

------------------------------------------------------------------------
Letters (Including
Postage of ***)
   Collection               per letter mailed                    **
   Customer Service         per letter mailed                    **
   Decline                  per letter mailed                    **
   Retailer's               per letter mailed                    **
   adverse
   action regret
   letter
------------------------------------------------------------------------
Voice                       per inquiry                          **
Authorizations
(800# included)
------------------------------------------------------------------------
Collection Accounts

Collector accounts          per collector                        **
                            account worked


Dialer accounts             per dialer account                   **
                            worked
------------------------------------------------------------------------
Network                     per transaction                      **
Authorization
========================================================================

Notes:

o     Quick Credit Referrals - Pricing for quick credit referrals (**) assume
      that if a referral charge is incurred that a quick credit charge is not
      incurred (**).

o     Statement Generation - Pricing for statement generation assumes that zero
      balance statements are not generated. If Retailer decides to use zero
      balance statements as a marketing tool, Bank will provide separate
      pricing.

o     Remittance Processing - In-Store Payments do not count as chargeable
      remittance processing transactions (**).

o     Network Authorizations - Authorization pricing assumes that if a Credit
      Card is swiped at the POS, dials the ADS host for authorization and the
      host returns a "call center" message, both a voice authorization (**) and
      network authorization (**) fee will be incurred.


                                       2
<PAGE>   74

      **CONFIDENTIAL TREATMENT REQUESTED OF INFORMATION FILED SEPARATELY

                                 Exhibit 6.5(b)

                             Service Fee Assumptions
                                 and Adjustments

================================================================================
         Fee Base Assumptions                    Service Fee Adjustments
================================================================================
Average length of customer               o  If average length of
service phone inquiry expected              customer service phone
to be 2.5 minutes during any                inquiry exceeds 3.5
month                                       minutes, an additional
                                            ** will be added to the
                                            Service Fee

                                         o  If average length of customer
                                            service phone inquiry is less than
                                            1.5 minutes, ** will be subtracted
                                            from the Service Fee
--------------------------------------------------------------------------------
Average length of voice                  o  If average length of
authorization expected to be 2              voice authorization
minutes during any month                    exceeds 2.5 minutes, an
                                            additional ** will be
                                            added to the Service Fee

                                         o  If average length of voice
                                            authorization is less than 1.5
                                            minutes, ** will be subtracted from
                                            the Service Fee
================================================================================
<PAGE>   75

                                 Exhibit 8.1(d)

                   Legal Name and Executive Office of Retailer

                                    Retailer:

                            United Retail Group, Inc.

                             365 West Passaic Street

                             Rochelle Park, NJ 07662


                           United Retail Incorporated

                             365 West Passaic Street

                             Rochelle Park, NJ 07662