EXHIBIT 99

                               PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (the "Agreement") is made as of the 14th day of March,
2005, between SPIRIT OF AMERICA NATIONAL BANK, a national banking association,
as assignee of Catherines, Inc. ("Purchaser"), with a principal place of
business in Milford, Ohio and an address at 450 Winks Lane, Bensalem, PA 19020,
and CITIBANK USA, N.A., formerly known as Hurley State Bank a national banking
association ("Seller"), with an address at 701 East 60th Street North, Sioux
Falls, SD 57104 and, for the purposes of paragraphs 2.5, 3.1, 9.2 and 9.7
hereof, CATHERINES, INC., a Delaware corporation with an address at 450 Winks
Lane, Bensalem, PA 19020.

                              W I T N E S S E T H:

         WHEREAS, Purchaser desires to purchase, and Seller desires to sell,
upon the terms and conditions set forth herein, the Assets to be Sold (as
defined herein);

         NOW, THEREFORE, Purchaser and Seller agree, on the terms and conditions
herein set forth, as follows:

1. Definitions For purposes of this Agreement, the following terms shall have
the meanings indicated:

         "Account" means a credit account on which a purchase transaction may be
or has been made by (or by a person authorized by) the Cardholder pursuant to a
Credit Card.

         "Account Balance" means any and all amounts owing to Seller in respect
of such Account by the Cardholder (including principal amounts for the payment
of goods and services, accrued interest, periodic finance charges, late charges,
fees and any and all other finance and service charges, fees and expenses)
whether or not billed, including Ineligible Account Dollars.

         "Account Duties" means the duties to the Cardholders under the
Cardholder Agreements to bill, administer and collect the Assets to be Sold.

         "Adjusted Closing Statement" has the meaning set forth in Section
3.2(b).

         "Adjusted Payment Amount" means an amount calculated in the same manner
as the Payment Amount, except that such amount shall be calculated to take into
account (w) transactions occurring between the Valuation Date and the Transfer
Date, (x) any transactions that were unposted or unaccounted for as of the
Transfer Date, including without limitation payments, credits, unallocated
items, errors and other similar items relating to periods ending on or prior to
the Transfer Date but posted to the Accounts after the Transfer Date, (y) the
resolution on or after the Transfer Date of Cardholder Disputes, provided,
however, that nothing herein shall limit Seller's ability to pursue its
chargeback rights against Catherines, Inc. as set forth in the Existing Merchant
Services Agreement related to disputes (other than credit disputes); and (z)
information which became known to the parties which would (i) cause an Account
to be classified as of the



Transfer Date as an Ineligible Account or (ii) cause any portion of an Account
Balance to be classified as Ineligible Account Dollars as of the Adjustment Date
due to matters arising on or before the Transfer Date. It is understood that the
Transfer Date will occur in the middle of a Cycle for most Accounts. In order to
adjust the Payment Amount as contemplated by this definition, Purchaser will
prior to the Adjustment Date determine whether the circumstances giving rise to
such adjustment (each, an "Adjustment Event") occurred on or prior to the
Transfer Date. Seller shall cooperate with Purchaser in making such
determination. Purchaser shall provide such documentation as Seller shall
reasonably request to validate Purchaser's determination hereunder.

          "Adjustment Amount" has the meaning set forth in Section 3.2(b).

         "Adjustment Date" means the sixtieth (60th) day after the Closing Date
(or, if such day is not a business day, the next succeeding business day).

         "Agreement" means this Purchase Agreement, including all schedules and
exhibits hereto, and, if amended, modified or supplemented, as the same may be
so amended, modified or supplemented from time to time.

         "Assets to be Sold" shall have the meaning set forth in Section 2.1.

         "Assignment and Bill of Sale" means that document prepared by Seller
and delivered to Purchaser on the Closing Date which provides for the assignment
and transfer to Purchaser of all of Seller's rights, title and interest in the
Assets to be Sold in the form of Exhibit 2.

         "Assumption Agreement" means an assumption agreement from Purchaser to
Seller in the form of Exhibit 3, pursuant to which Purchaser confirms its
assumption and agreement to pay, perform and discharge the Credit Balances
existing as of the Transfer Date and the Account Duties.

         "Cardholder" means a person to whom a Credit Card is issued and in
whose name the Account, in connection with which the Credit Card may be used, is
established.

         "Cardholder Agreement" means an agreement between Seller and a
Cardholder under which one or more Credit Cards are issued or utilized.

         "Cardholder Dispute" means, as to any Eligible Account, any product or
billing error dispute raised by a Cardholder which arises out of or relates to
the business or operations of the Credit Card Business prior to the Transfer
Date.

         "Certain Reaged Accounts" means (x) any Eligible Account which was
reaged by Seller within the one (1) year period immediately preceding the
Transfer Date and (y) any Eligible Account which on the Transfer Date is in any
of the following programs maintained by Seller: LILI, CAP or Settlement, and (z)
any Eligible Account which on the Transfer Date is in the Match Pay program
maintained by Seller if the Match Pay program has resulted in a principal
reduction on the Account made by Seller.



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         "Closing" shall have the meaning set forth in Section 4.

         "Closing Date" means the Transfer Date; provided however, that the
Closing Date shall be delayed to a later date in the event that the parties
mutually agree.

         "Closing Statement" means a statement prepared by one party hereto
(subject to confirmation by the other party hereto) with respect to the books
and records of the Credit Card Business as of the Transfer Date in the same
form, and on the same basis, as the statement attached hereto as Exhibit 1.

         "Conveyance Documents" shall have the meaning set forth in Section
10.5(a) hereof.

         "Credit Balance" means, as to any Eligible Account, any and all amounts
owing by Seller to the Cardholder in respect of such Account as a credit balance
whether or not billed.

         "Credit Card" means a card issued by Seller or its Predecessor in
Interest and bearing the name, logo or symbol(s) of Catherines, Catherines
Advantage, Catherines Plus Sizes (including PS Plus Sizes . . . Plus Savings),
Catherines Stout Shoppe, Clothes for Eve, Catherines, Inc., Virginia Specialty
Stores, Added Dimensions, The Answer, Other Dimensions, VSSI, or Virginia
Specialty Stores, Inc., and commonly known as a credit card.

         "Credit Card Business" means the Assets to be Sold, together with the
other covenants, obligations, agreements and restrictions stated herein which
relate to the Seller's business and operations relating to Credit Cards, and all
aspects of Seller's Credit Card activities related thereto.

         "Cycle" shall mean each monthly billing cycle for an Account, as
determined by Seller or Purchaser (as applicable) in accordance with its normal
practice (or as otherwise mutually agreed).

         "Eligible Account" means any Account which is not an Ineligible
Account.

         "Existing Merchant Services Agreement" means the First Amended and
Restated Merchant Services Agreement dated as of December 1, 1998, between
Citibank USA, N.A., formerly known as Hurley State Bank, and Catherines, Inc.,
as amended by that certain First Amendment to Merchant Services Agreement dated
July 23, 2001, that certain Second Amendment to Merchant Services Agreement
dated as of April 13, 2004, that certain letter agreement dated May 26, 2004,
and that certain Third Amendment to Merchant Services Agreement dated as of July
23, 2004, and as further modified, amended, or supplemented from time to time.

          "Financial Information Computation Date" shall have the meaning set
forth in Section 8.3 hereof.



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         "Ineligible Account" means any of the following:

         (a) Any Account with respect to which the Cardholder has, prior to the
Transfer Date, filed a petition or a petition has been filed against the
Cardholder seeking relief under the federal bankruptcy law or any other law
dealing with the insolvency of a consumer or the inability of a consumer to pay
his debt, in either case for which notice of the same has been received by
Seller or Purchaser not later than sixty (60) days after the Transfer Date;

         (b) Any Account which, on the Transfer Date, includes any amount which
is more than one hundred seventy nine (179) days past due or otherwise
represents a "charged off" Account on Seller's books;

         (c) Any Account as to which Seller shall, at any time prior to the
Adjustment Date, have received notification, not thereafter rescinded, of any
actual or possible fraud loss or lost or stolen Credit Card occurring prior to
the Transfer Date, except to the extent the Account has been reaffirmed;

         (d) Any Account as to which Purchaser gives notice to Seller, on or
before the Adjustment Date, with respect to which Purchaser reasonably
demonstrates to Seller that the origination, administration or collection of
such Account are not in material compliance with the Seller's policies,
practices or procedures and, as a result, Purchaser's ability to collect the
full account balance from the Cardholder has been adversely affected.

         (e) Any Account as to which Seller was notified prior to the Transfer
Date by the Cardholder of a billing error or dispute (the subject matter of
which was within the control of Seller) concerning the goods or services
purchased using a Credit Card which has not been resolved prior to the
Adjustment Date, or where Purchaser is notified after the Transfer Date of such
dispute or billing error on Credit Card sales made prior to the Transfer Date
which has not been resolved prior to the Adjustment Date; it being understood
and agreed that, prior to the Adjustment Date, the existence of such billing
error or dispute shall not prevent an Account from being an Eligible Account so
long as the amount purported to be in error or dispute is included in the
calculation of Ineligible Account Dollars and provided further that nothing
herein shall limit Seller's ability to pursue chargebacks for non-credit related
disputes against Catherines, Inc. pursuant to the Existing Merchant Services
Agreement;

         (f) Any Account in which the Cardholder has died prior to the Transfer
Date;

         (g) [Reserved];

         (h) Accounts in which the Cardholder's address as of the Transfer Date
is not within the United States, District of Columbia, Puerto Rico or another
United States territory or Canada or is not a U.S. A.P.O. or U.S. F.P.O.
address;



                                       4


         (i) Accounts in which the Cardholder as of the date the Account was
opened had not attained the age of eighteen (unless the Cardholder subsequently
affirmed the Account after attaining the age of eighteen, it being agreed that
use of the Credit Card by the Cardholder after attaining the age of eighteen
shall be deemed an affirmation of the Account). If an Account is a joint
account, such Account shall be an Ineligible Account only if no Cardholder of
the Account has attained the age of eighteen; or

         (j) Accounts in which as of the Transfer Date the Cardholder is a
business or which, to Seller's knowledge, otherwise represent a commercial
receivable.

         "Ineligible Account Dollars" means the sum of the amounts, for all
Eligible Accounts, as to which a Cardholder Dispute exists, calculated as of the
Transfer Date.

         "Ineligible Account Purchase Agreement" means the Purchase Agreement
between Fashion Service Corp., a Delaware corporation ("FSC"), and Seller dated
of even date herewith pursuant to which FSC shall purchase and Seller shall sell
certain of the Ineligible Accounts and related assets, which Ineligible Account
Purchase Agreement shall be in the form attached hereto as Exhibit 5.

         "Interested Parties" means with respect to any securitization or other
transfer of the Account Balances attributable to the Accounts, brokers,
placement agents, rating agencies, certificate holders, investors, credit
enhancement providers and other persons that may acquire an interest in the
Account Balances (whether or not evidenced by securities), and their respective
affiliates, accountants, attorneys and other representatives.

         "Interim Period" means the interval from the date of this Agreement to
and including the Transfer Date.

         "Liens" means all assignments, security interests, claims, liens,
encumbrances or rights or other interests of third parties whatsoever.

          "New Merchant Services Agreement" means any merchant services
agreement entered into between Catherines, Inc. and Purchaser or any third
party, in connection with a purchase by such third party of the Assets to be
Sold.

         "Payment Amount" shall have the meaning set forth in Section 3.2.

         "Predecessor in Interest" means Hurley State Bank and any other bank or
financial institution affiliated with Seller or Hurley State Bank or any special
purpose entities created or administered by any of the foregoing, which in any
case is in the chain of title of the Assets to be Sold.

         "Securitization Agreement" shall mean an agreement between Seller and a
third party which may include a limitation or delay in the timing of the
Seller's right to cause the purchase (or Catherines's or Purchaser's right to
purchase) of the receivables on


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certain Accounts covered under such securitization agreement under the Existing
Merchant Services Agreement.

         "Service Agreement" shall mean an Agreement between Purchaser and
Seller, in the form attached hereto as Exhibit 6.

         "Transfer Date" means the close of business on March 18, 2005, or such
other date as the parties may mutually agree.

         "Valuation Date" means a mutually agreeable date not less than three
(3) days nor more than five (5) days prior to the Transfer Date.

2.       Assets to be Sold, Assumption of Credit Balances

         2.1 Sale and Purchase

         On the Transfer Date, Seller agrees to sell, assign and transfer to
Purchaser, and Purchaser agrees to purchase from Seller, all rights, titles and
interests of Seller in and to the properties and assets of the Credit Card
Business excluding the Ineligible Accounts but including, without limitation,
the following assets and properties as in existence on the Transfer Date
(collectively, the "Assets to be Sold"):

         (i) All Eligible Accounts (including the Account Balances thereunder);

         (ii) All Cardholder Agreements relating to Eligible Accounts; and

         (iii) All Books and Records (as defined in Section 2.4).

         The sale of the Eligible Accounts (including the Account Balances
thereunder) and the other Assets to be Sold is made without recourse to Seller,
subject only to Seller's representations and warranties under Section 8, and
Seller's indemnification under Section 7.1.

         2.2 Transfer and Assumption

         On the Transfer Date Purchaser agrees to assume, and Seller agrees to
transfer to Purchaser, the Credit Balances and Account Duties relating to the
Eligible Accounts by execution and delivery to Purchaser on the Transfer Date of
the Assignment and Bill of Sale (and such other document as are required to
effectuate such sale) and Purchaser agrees to confirm such assumption by
execution and delivery to Seller on the Transfer Date, of the Assumption
Agreement.

         2.3 Consents

         Seller shall obtain and deliver to Purchaser, as promptly as reasonably
practicable after the date of this Agreement and in any event prior to the
Transfer Date, all consent(s) required to be obtained by Seller in connection
with the sale, transfer and assignment to


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Purchaser of the Assets to be Sold, each of which is listed on Schedule 2.3
attached hereto.

         2.4 Books and Records

         Seller shall deliver to Purchaser and Purchaser shall on the Transfer
Date receive possession of, any and all of Seller's right, title and interest
in, all data, books, records, files (including, without limitation, all customer
file notes, and affidavits and police reports on account claims) and any other
written or recorded information directly relating to the Credit Card Business
and the Assets to be Sold (collectively, "Books and Records"); provided,
however, that Seller may retain any Books and Records directly relating to
Ineligible Accounts except to the extent the same are sold to FSC pursuant to
the Ineligible Accounts Purchase Agreement and provided further that Seller may
retain one copy of the Books and Records for regulatory compliance purposes.
Seller represents and Purchaser acknowledges that Seller only maintains customer
service and collection notes in electronic format for a limited period of time
(with the balance being stored on fiche intermingled with Seller's other
accounts) and, therefore, the customer service and collection notes data to be
transferred to Purchaser on the Closing Date in electronic format shall be
limited to a twelve (12) month period preceding the Closing Date. For customer
service and collection notes for periods prior to such twelve (12) months (and
to the extent Seller otherwise retains possession of any Books and Records
relating to the Assets to be Sold), Seller shall provide to Purchaser reasonable
access to such information and shall promptly forward originals and copies of
such information relating to individual account records to Purchaser in
accordance with Section 6.6(f).

         2.5 Excluded Assets/Ineligible Accounts

         Nothing contained in this Agreement, or in any document executed in
connection herewith, shall be deemed to transfer any of Seller's right, title
and interest in, and the Assets to be Sold shall not include, the Ineligible
Accounts, any other credit card accounts owned by Seller, Seller's names or
marks used in association with the Accounts or the Credit Card Business, any
credit insurance or debt cancellation program related to the Accounts or any
other asset of Seller not specifically identified in Section 2.1 (the "Excluded
Assets"), and Purchaser shall have no obligations or liabilities with respect to
any Excluded Assets. Notwithstanding the foregoing, Catherines, Inc. has
notified Seller of its election to purchase certain of the Ineligible Accounts
in accordance with the provisions of the Existing Merchant Services Agreement
and has assigned the right to purchase such Ineligible accounts to FSC. Seller
shall transfer such Ineligible Accounts to FSC pursuant to the Ineligible
Accounts Purchase Agreement. By execution of this Agreement, Catherines, Inc.
acknowledges and agrees that it has assigned its right to purchase the Assets to
be Sold to Purchaser and has assigned its rights to purchase such Ineligible
Accounts to FSC.




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3. Transfer Date, Conversion, Consideration for Assets to be Sold, Service
Agreement.

         3.1 Transfer Date and Conversion. Until the Transfer Date, Seller will
operate the Credit Card Business in the ordinary course of business, subject to
and in accordance with this Agreement and the Existing Merchant Services
Agreement. The parties agree that the Existing Merchant Services Agreement is
hereby extended on the same terms and conditions until the Transfer Date and by
execution of this Agreement, Catherines, Inc. agrees to such extension. In
addition to the foregoing:

         (a) Between the date hereof and the Transfer Date, Seller and Purchaser
shall mutually cooperate and take all action reasonably necessary to plan for
and effectuate (i) the orderly conversion and delivery on the Transfer Date by
Seller to Purchaser's processing system of the Assets to be Sold (regardless of
how embodied or in what medium) relating to the Credit Card Business, and (ii)
the operation by Purchaser of the Credit Card Business on and after the Transfer
Date in the ordinary course of business. Schedule 3.1 attached hereto sets forth
the current conversion plan for the transfer of the Accounts, including key
dates for delivery of information (the "Conversion Schedule"). The parties agree
to use commercially reasonable efforts to comply with the Conversion Schedule
and Seller shall deliver to Purchaser the information requested on the dates
specified (as the same may be revised by mutual consent) in the Conversion
Schedule. In addition to the foregoing, promptly following execution of this
Agreement, Seller shall provide to Purchaser an overview (the "Overview"), in
reasonable detail, setting forth the credit scoring methodology, portfolio
management process, credit limit and authorization processes, finance charge and
late fee calculation methodologies (including any risk-based pricing), customer
service interactive voice protocols (IVRs), and any other business process
utilized in the management of the Assets to be Sold that will enable Purchaser
to prepare to respond to Cardholder inquiries with respect to the service
activity on the Accounts, which Overview shall be accurate and complete in all
material respects. Purchaser acknowledges that the Overview is not an Asset to
be Sold; however Purchaser shall be entitled to use the Overview in connection
with the conversion, administration and operation of the Credit Card Business.

         (b) On the Transfer Date, Seller shall deliver to Purchaser's
processing system a copy of the master data file for the Credit Card Business,
in a form, substance, and manner sufficient to enable Purchaser to be able to
operate the Credit Card Business in the ordinary course of business; provided,
however, that such transfer shall not relieve Seller of its obligations under
the Service Agreement.

         (c) Between the Valuation Date and the Transfer Date, Seller shall
continue to operate the Credit Card Business in the ordinary course of business
subject to and in accordance with this Agreement and the Existing Merchant
Services Agreement and will provide daily trailing activity to Purchaser
detailing all activity on the Accounts during such period.





                                       8


         3.2 Payment Amount

         (a) The amount to be paid by Purchaser to Seller for the Assets to be
Sold shall be an amount equal to (x) one hundred percent (100%) of the total of
the Account Balances, net of all Credit Balances, on all Eligible Accounts other
than Certain Reaged Accounts plus (y) an amount equal to fifty percent (50%) of
the total of the Account Balances on all Certain Reaged Accounts less (z) the
Ineligible Account Dollars as of the Transfer Date (the "Payment Amount"). At
least three (3) days before the Transfer Date, Seller shall deliver a Valuation
Date Closing Statement (the "Preliminary Closing Statement") to Purchaser
setting forth the estimated Payment Amount as of the Valuation Date and shall
provide Purchaser and its authorized representatives reasonable access to its
Books and Records relating to the same. At the Closing, Purchaser will pay
Seller by wire transfer in immediately available funds to an account designated
by Seller an amount equal to the estimated Payment Amount shown in the
Preliminary Closing Statement (subject to mutually agreed adjustments).
Notwithstanding the foregoing, if the Payment Amount is paid to Seller prior to
Seller's delivery of a complete set of the master tapes for the Eligible
Accounts in accordance with the Conversion Schedule, then Seller shall hold the
Payment Amount IN TRUST and shall not release the same from trust until delivery
of such master tapes to Purchaser's representative. Sixty (60) days after the
Transfer Date, the parties shall perform a "true-up" of the Payment Amount, as
set forth in clause (b) below.

         (b) Within five (5) business days after finalization of the Adjusted
Closing Statement as set forth in this Section 3.2(b), the Payment Amount shall
be adjusted and either Purchaser or Seller, as the case may be, shall pay to an
account designated by the other party, by wire transfer in immediately available
funds, the Adjustment Amount. On the Adjustment Date, Purchaser shall prepare
and deliver to Seller an adjusted Closing Statement (as modified by mutual
agreement of the Purchaser and Seller, the "Adjusted Closing Statement")
relating to and specifying in reasonable detail the calculation of the
Adjustment Amount, together with the total Account Balance for each of the
Eligible Accounts as of the Transfer Date and shall provide Seller and its
authorized representatives reasonable access to its books and records relating
to same. The "Adjustment Amount" shall be the difference between (i) the Payment
Amount, and (ii) the Adjusted Payment Amount as set forth on the Adjusted
Closing Statement, together with interest on such difference calculated at the
federal funds rate (at weighted average daily rates reported by the Federal
Reserve System) from the Transfer Date to the date of payment. A positive
Adjustment Amount shall be payable by Seller to Purchaser; a negative Adjustment
Amount shall be payable by Purchaser to Seller. Except for claims relating to a
breach of representations and subject to the indemnification provisions
hereunder, the adjustment set forth herein is the parties' sole remedy for
mischaracterization of accounts as Eligible Accounts or Ineligible Accounts. The
parties acknowledge that any Accounts which are determined to be ineligible
accounts on the Adjustment Date which would have been purchased by FSC under the
Ineligible Accounts Purchase Agreement had the same been designated as
Ineligible Accounts on the Transfer Date shall thereupon be purchased by FSC
pursuant to the Ineligible Account Purchase Agreement and Purchaser shall
execute such assignments as Seller may request to effectuate such transfer to
FSC on behalf of Seller. Seller and Purchaser


                                       9


hereby agree that Seller may offset against any such payment due Purchaser the
amount owed to Seller by FSC under the Ineligible Accounts Purchase Agreement as
a result of the sale of such accounts to FSC

         (c) Dispute Resolution. In the event Seller shall disagree with any
item on the Adjusted Closing Statement provided by Purchaser, and if the parties
are not able to agree to such modification, adjustment or other change, such
dispute shall be handled in accordance with Section 14.1 of this Agreement. Any
such request related thereto shall be in writing, with a copy provided
simultaneously to Purchaser, and shall specify with particularity the
adjustment, modification or other change requested. The determination of the
Adjustment Amount rendered thereby shall be final.

         3.3 Service Agreement

         On or before March 15, 2005, Seller or Seller's servicing affiliate and
Purchaser shall mutually execute and deliver the Service Agreement.

         3.4 Sales Tax

         Seller agrees to pay any sales, transfer, instrument, recording, or
similar taxes payable by reason of the purchase and sale of the Assets to be
Sold and the transfer and assumption of Credit Balances under this Agreement,
except for any such taxes which may be imposed by the State of Ohio in
connection with the recordation or filing of instruments or financing statements
which evidence an indebtedness arising due to Purchaser's acquisition of the
Assets to be Sold.

4.       Closing

         The closing in respect of the sale and purchase of the Assets to be
Sold (the "Closing") shall take place on the Transfer Date at a location
mutually agreed to by the parties.

5.       Agreements of Seller During Interim Period

         During the Interim Period:

         5.1 Access to Records and Information

         Seller shall afford to Purchaser and its authorized agents and
representatives full access to the Books and Records. Seller shall during such
period cause its personnel to provide to Purchaser assistance in Purchaser's
investigation of matters relating to the Credit Card Business and to the Assets
to be Sold; provided, however, that Purchaser's investigation shall be conducted
at Purchaser's expense in a reasonable manner which does not unreasonably
interfere with Seller's normal operations.





                                       10


         5.2 Operation of Credit Card Business

         Except as otherwise required hereunder, Seller agrees to keep and
maintain records and books of account in the same manner as it has in the past
and as in effect on the date of this Agreement of all revenues and expenses with
respect to the business and operations of the Credit Card Business. Seller
further agrees in accordance with its past practices to use reasonable efforts
(consistent with past practices) to collect or arrange for the collection of all
revenues and other receipts with respect to the Credit Card Business, in
accordance with the Existing Merchant Services Agreement and to otherwise
operate the Credit Card Business in accordance with past practices and the
provisions of the Existing Merchant Services Agreement.

         5.3 Communications with Cardholders

         Purchaser, with Seller's prior consent (which consent shall not be
unreasonably withheld), shall, at Purchaser's expense, be entitled during the
Interim Period to communicate with, and deliver information, brochures,
bulletins, press releases and other communications to Cardholders concerning the
transactions contemplated by this Agreement, any New Merchant Services
Agreement, and the business and operations of Purchaser. In furtherance thereof,
Seller, if so requested by Purchaser, shall on behalf of Purchaser, insert a
communication from Purchaser to Cardholders in all billing statements made
during one or more calendar months advising of the purchase and of any terms or
changes which Purchaser proposes to make. In addition and subject to the
foregoing, if Purchaser so elects, Seller will at the written request of
Purchaser effect a single, simultaneous blanket mailing to all Cardholders,
informing such Cardholders of the expected Transfer Date and of any terms or
changes which will be imposed or made by Purchaser effective as of the Transfer
Date. Except for costs such as envelopes and postage which would otherwise be
incurred by Seller in connection with the billing statement referred to in the
second sentence of this Section 5.3, Purchaser shall pay all of the costs of
communications referred to in this Section. All notices and forms provided by
Purchaser shall comply with all applicable laws and regulations. During the
Interim Period, Seller shall not deliver any brochures, bulletins, press
releases or other communications to Cardholders without Purchaser's prior
consent except as necessary for the operation of the Credit Card business.

         5.4 Conduct of Business Prior to Transfer Date

         Except as may be otherwise required by law or regulatory requirement,
or unless Purchaser otherwise consents in writing, between the date hereof and
the Transfer Date:

         (a) Seller will manage and operate the Credit Card Business in the
ordinary course of business and in substantially the same manner (except as
otherwise required hereunder) as heretofore managed and operated by Seller;

         (b) With respect to the Credit Card Business, Seller will not engage or
participate in any transaction or incur any obligation outside the ordinary
course of business, and shall not engage or participate in any material or
unusual transaction or


                                       11


voluntarily incur any material, extraordinary or unusual obligation, liability
or commitment;

         (c) Seller will keep Purchaser informed on a current basis with respect
to all material aspects of the Credit Card Business, will consult with Purchaser
on an ongoing basis with respect to any material action proposed to be taken
with respect to the Credit Card Business and will not take any such material
action to which Purchaser objects, unless such action is required to comply with
law and Seller will continue to comply with the terms of the Existing Merchant
Services Agreement with respect to any such actions;

         (d) Seller will use all reasonable efforts to maintain good relations
with its employees employed in the Credit Card Business and with Cardholders;

         (e) Until the date which is sixty (60) days prior to the Transfer Date,
except as otherwise provided in the Existing Merchant Agreement, Seller will not
materially decrease its expenditures on the Credit Card Business for
advertising, promotion and similar purposes;

         (f) Seller will duly comply with all laws, rules and regulations
applicable to the Credit Card Business, and will maintain customary insurance
with respect to the properties and assets of the Credit Card Business in
accordance with its past practice;

         (g) Seller will not transfer, assign, encumber or otherwise dispose of
or enter into any contract, agreement or understanding to transfer, assign,
encumber or otherwise dispose of any Accounts or Assets to be Sold, except for
assignments of Accounts for collection in the ordinary course of business;

         (h) Seller will promptly advise Purchaser in writing of actions, suits
or proceedings which are commenced, threatened or may arise against or,
affecting the Credit Card Business and will promptly advise Purchaser in writing
of any other actual or prospective material adverse change in the financial
condition, business or prospects of the Credit Card Business;

         (i) Seller will not waive, compromise or settle any material claim
owned by Seller relating to the Assets to be Sold and will not breach any
material obligation under any contract, commitment or agreement relating to the
Assets to be Sold;

         (j) Seller will take such actions or refrain from taking such actions
as may be necessary to ensure the accuracy of the representations and warranties
of Seller under this Agreement as of the Closing Date;

         (k) Except to the extent the information set forth in the Cardholder
List is available to Seller independent of the Accounts and the Credit Card
Business, Seller shall not sell, assign, transfer or disclose to any third party
(including, without limitation, any affiliate of Seller) any names, telephone
numbers, e-mail addresses or addresses of Cardholders (the "Cardholder List")
and shall not use the Cardholder List for any purpose


                                       12


(including, without limitation, marketing of other products of Seller or its
affiliates)other than the operation of the Credit Card Business; and

         (l) Notwithstanding the prior provisions of this Section 5.4,
commencing March 14, 2005, Seller shall not accept or process any applications
for new Accounts. In the event Seller receives any application for a new Account
after such date, to the extent permitted by applicable law, Seller shall
promptly deliver same to Catherines, Inc. or its designee, and Catherines, Inc.
or its designee shall be entitled to extend an offer to the applicant for an
account issued by Catherines, Inc. or its affiliates. Catherines, Inc. or its
designee shall make any such offer in full compliance with all applicable laws.

6.       Certain Agreements of Purchaser and Seller

         6.1 Cardholder Disputes

         Subject to its chargeback rights against Catherines, Inc. pursuant to
the Existing Merchant Services Agreement, Seller shall be responsible for final
resolution of all Cardholder Disputes (involving matters within Seller's
control) of which Seller receives notice on or before the Transfer Date. Seller
shall either resolve the Cardholder Dispute prior to the Transfer Date in
accordance with its normal procedures and applicable law and regulations, or if
it is unable to so resolve the Cardholder Dispute, mail such acknowledgements as
are required by law or regulation, and promptly furnish to Purchaser all
materials relating to the Cardholder Dispute. In addition, the Payment Amount
shall be adjusted on the Adjustment Date pursuant to Section 3.2(b) of this
Agreement to take into account Cardholder Disputes relating to matters arising
prior to the Transfer Date of which Seller or Purchaser receives notice prior to
the Adjustment Date.

         6.2 Purchaser's Securitization of Accounts.

         Seller shall make available such additional information regarding the
Credit Card Business as is reasonably requested by Purchaser in connection with
Purchaser's securitization or other transfer of the Account Balances
attributable to the Accounts. Seller acknowledges that the disclosure of
information relating to the Assets to be Sold to potential investors and their
representatives in connection with Purchaser's securitization of the Accounts
shall not be limited by the obligations of Section 6.3; provided, however, that
(i) Purchaser shall only disclose such information as is reasonably required to
support the securitization and the sale of the certificates issued thereunder
and (ii) Purchaser shall advise such potential investors and their
representatives of the confidential nature of such information. If Purchaser
becomes aware of any use of such information by such investors or their
representatives contrary to the terms of this Agreement, Purchaser shall
promptly notify Seller and shall cooperate in Seller's efforts to protect the
confidentiality of such information; provided, however, that Purchaser shall not
be liable to Seller for any damages to Seller resulting from the breach of such
confidentiality by such potential investors and their representatives. Without
limiting the foregoing, Seller hereby acknowledges and agrees that Seller has
consented to the disclosure of information regarding the Seller and any
Predecessor in Interest and the


                                       13


origination and servicing of the Accounts which was included in the Offering
Memorandum dated July 21, 2004 (the "Offering Memorandum"). Seller hereby agrees
that (i) updated information of the type set forth in the Offering Memorandum
may be included in materials prepared by Purchaser or its transferee and
delivered to Interested Parties in connection with the securitization of the
Accounts; and (ii) Purchaser may assign its rights and remedies under this
Agreement, the Service Agreement and the Conveyance Documents to subsequent
holders of the Assets to be Sold in conjunction with Purchaser's securitization
of the Accounts. In addition to the foregoing, Seller shall reasonably cooperate
with Purchaser and provide such additional information as is reasonably required
by the Interested Parties for the addition of the Accounts to Purchaser's
securitization program.

           6.3  Confidentiality of Information

                  (a) In accordance with this Agreement, until the Closing,
Purchaser and its agents and representatives shall treat all information
obtained in the investigation or otherwise from or on behalf of Seller and not
otherwise known to Purchaser or its affiliates or already in the public domain
(or subsequently entering the public domain other than as a result of breach of
Purchaser's obligations under this Section) as confidential, and shall not
disclose such information to third parties (other than Purchaser's affiliates,
accountants, attorneys, and other representatives who agree to be bound by
Purchaser's obligations under this Section 6.3(a), or governmental agencies and
regulators and except as otherwise provided in Section 6.2) except as may
otherwise be required by law. Purchaser agrees that until the Closing of this
Agreement, it will not sell to third parties any lists of Accounts derived from
the Accounts purchased hereunder.

                  (b) In accordance with this Agreement, from the date hereof
and for a period of two (2) years after the Transfer Date, Seller shall (and
shall cause its affiliates and each Predecessor in Interest to) treat the Books
and Records (including without limitation Cardholder Lists) which are retained
by it as confidential, and will not (and will not permit any Predecessor in
Interest to) disclose such information to third parties except as required by
law or in connection with tax matters and shall not make use of such information
relating to the Assets to be Sold or the Books and Records in any manner.
Information protected hereunder includes "NPI," which for purposes of this
Agreement, includes "Nonpublic Personal Information" as defined in Title V of
the Gramm-Leach-Bliley Act of 1999 and personally identifiable information
protected under the applicable laws, rule or regulation of any jurisdiction, all
as may be amended from time to time (collectively, "Privacy Laws"). Seller shall
undertake, and shall cause its agents and representatives to undertake, measures
to protect NPI from unauthorized disclosure that are consistent, in all material
respects, with the requirements of the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information (12 CFR part 364, Appendix B).
In addition to the foregoing, Seller shall protect and treat all NPI as
confidential for such longer period of time as may be required by the Privacy
Laws.



                                       14


                  (c) In accordance with this Agreement, for a period of two (2)
years after the Transfer Date, except for permitted disclosures as provided in
Section 6.2 Purchaser shall treat all information disclosed to Purchaser by
Seller in connection with this Agreement and the transaction contemplated
hereunder (excluding the Books and Records and information otherwise known to
Purchaser or in the public domain due to no breach of this Section by Purchaser)
as confidential, and will not (and will not permit any affiliate to) disclose
such information to third parties except to Purchaser's affiliates, accountants,
attorneys and other representatives with a need to know who agree to be bound by
Purchaser's obligations under this Section, governmental agencies and
regulators, as required by law or in connection with tax matters, and shall not
make use of such information in any manner other than to effectuate the
transaction contemplated by this Agreement.

         6.4 Payments Received by Seller and Purchaser

         Seller will hold in trust for and promptly remit to Purchaser (in the
form received, properly endorsed to Purchaser and, where possible, properly
identifying the Account on which payment was received) all monies, checks and
other payments on Accounts (including all recoveries on Accounts in which the
balance was previously written off by Seller prior to the Transfer Date) which
are received by Seller after the Transfer Date on any Accounts purchased
hereunder by Purchaser from Seller. Seller hereby authorizes and empowers
Purchaser to sign and endorse Seller's name on all checks, drafts, money orders
or other forms of payment relating to such Accounts purchased by Purchaser.

         Purchaser will hold in trust for and promptly remit to Seller or its
designee (in the form received, properly endorsed to Seller and, where possible,
properly identifying the Account on which payment was received) all monies,
checks and other payments on Ineligible Accounts which are received by Purchaser
after the Transfer Date on any Accounts not purchased hereunder by Purchaser
from Seller. Seller hereby directs Purchaser to remit such funds received on
account of all Ineligible Accounts which are purchased by FSC to FSC and to
remit all such funds received on account of all other Ineligible Accounts
directly to Seller.

         6.5  Collection of Purchased Accounts

         Purchaser shall have the right to take, or cause to be taken, such
action to enforce Purchaser's rights with respect to any Account purchased
hereunder as Purchaser may deem necessary or appropriate in the circumstances.
Upon Purchaser's request, Seller shall execute in favor of Purchaser such
Account-specific assignment documents as may be reasonably necessary to allow
Purchaser to pursue, in Purchaser's own name, collection or enforcement action
on the Accounts. Seller hereby constitutes and appoints Purchaser its true and
lawful attorney-in-fact for such purpose, with full power of substitution in the
premises, to endorse checks, drafts, orders and other instruments tendered in
payment of any Account and to settle, compromise, prosecute or defend any claims
Purchaser or Seller may have with respect such instruments. This power of
attorney shall be deemed to be a power coupled with an interest. Any collection
of such


                                       15


Accounts by Purchaser shall be performed in accordance with all applicable laws
and regulations.

           6.6  Further Assurances/Post-Closing Covenants

The parties hereto hereby covenant as follows, which covenants shall survive the
Transfer Date:

         (a) On and after the Transfer Date, Seller shall (for itself and for
its Predecessor(s) in Interest) (i) execute, acknowledge and deliver all such
acknowledgements, certificates, assignments and other instruments and take such
further action as may be reasonably necessary and appropriate effectively to
vest in Purchaser the full legal and equitable title to the Assets to be Sold,
free and clear of all Liens, and (ii) use reasonable efforts to assist Purchaser
in the orderly transition of the operations acquired by Purchaser. In addition,
to the extent transferable, as soon as reasonably practicable after the Transfer
Date, Seller shall assist in the acquisition by Purchaser (or relinquish for the
benefit of Purchaser) of all toll-free customer service telephone numbers which
are dedicated solely to servicing the Accounts.

         (b) On and after the Transfer Date, Purchaser shall execute,
acknowledge and deliver all such acknowledgements and other instruments and take
such further action as may be necessary and appropriate to relieve and discharge
effectively Seller from any obligations remaining under those liabilities and
obligations assumed by Purchaser pursuant to the terms hereof.

         (c) On and after the Transfer Date, Seller and Purchaser shall
cooperate with each other by furnishing any additional information and executing
and delivering any additional documents as may be reasonably requested by the
other party to aid in the preparation of any regulatory filing, financing
statements, financial statement or tax return; provided, however, that any such
additional documents must be reasonably satisfactory to each of the parties and
not impose upon either party any material liability, risk, obligation, loss,
cost or expense not contemplated by this Agreement.

         (d) Within thirty (30) days after the Transfer Date, Seller shall
provide to the credit reporting agencies used by Seller in connection with the
Credit Card Business a letter of closure and deletion of the Seller's
"Catherines" trade line records.

         (e) Seller shall, for a period of ninety (90) days commencing on the
Transfer Date, for no additional consideration, reasonably cooperate with the
Purchaser in connection with the conversion of the Accounts to Purchaser's
processor limited to answering any questions regarding data and the portfolio
within Seller's knowledge and providing additional information on interpreting
the data to the extent within Seller's knowledge.

         (f) To the extent not provided to Purchaser on the Transfer Date, and
provided Seller maintained such information in connection with the operation of
the Credit Card Business, subsequent to the Transfer Date Seller shall provide
to Purchaser,

                                       16


no later than seven (7) business days after written request from Purchaser
accompanied with such information as is reasonably required by Seller to
identify the records requested, either electronic copies or paper copies of the
following general media: credit card transaction posting documents, credit limit
decrease letters, letters received by the customers and support letters sent to
customers for those customers who request specific reasons for declination for a
request for increase in credit, billing statement copies, proof of claims for
filing bankruptcy filings and copies of payment media (electronic, phone
payments or imaged copies of checks), and customer service and collection
service notes, subject to the limitations on Seller's obligation to maintain
such items as set forth on Exhibit 4 (the "Supplemental Information"). Purchaser
shall pay Seller a fee of $1.00 per item delivered. Without limiting the
foregoing, following the Transfer Date, Seller shall cooperate with Purchaser in
providing Supplemental Information requested by Purchaser relating to the
Accounts as set forth on Exhibit 4 and covering the time periods set forth on
Exhibit 4. Seller shall maintain all Supplemental Information which is in its
possession or control in accordance with Seller's record retention policy as in
effect on the date hereof and shall use commercially reasonable efforts to
maintain the availability of such Supplemental Information. Supplemental
Information shall be made available to Purchaser, to the extent that the same is
then available to Seller, for so long as the same is maintained by Seller in
accordance with such record retention policy. Seller represents that its record
retention policy as related to Supplemental Information is in compliance with
all applicable laws, rules and regulations.

         (g) Seller agrees that from and after the date hereof, Seller shall not
and shall not permit any Predecessor in Interest to sell to third parties the
Cardholder List or use any such Cardholder List for its own benefit (including,
without limitation, marketing competing credit cards) except as necessary for
the operation of the Credit Card Business. This Section (g) shall not preclude
Seller from using such information to the extent the same was available to
Seller independent of the Accounts and the Credit Card Business (such as if the
Cardholder is also the holder of another credit card issued by Seller and such
information is held by Seller by virtue of such other credit card).

         (h) On and after the Transfer Date, Seller and Purchaser shall
cooperate with each other by furnishing any additional information and executing
and delivering any additional documents as may be reasonably requested by the
other party to aid in the defense by the other party of any pending or
threatened suit, arbitration, bankruptcy proceeding or other legal proceeding or
investigation relating to the Credit Card Business, an Account or a Cardholder;
provided, however, that any such additional documents must be reasonably
satisfactory to each of the parties and not impose upon either party any
material liability, risk, obligation, loss, cost or expense not contemplated by
this Agreement.

         (i) Within sixty (60) days after the Transfer Date, Purchaser shall
reissue new credit cards to Cardholders for all Eligible Accounts which have had
account activity within the eight (8) year period prior to the Transfer Date,
which new credit cards shall not bear any logo of Seller. Purchaser shall
request Cardholders replace their existing Credit Cards with the newly issued
credit cards. Seller agrees that Purchaser shall be entitled to continue
accepting the existing Credit Cards following the Transfer


                                       17


Date. Following the Transfer Date Purchaser shall use diligent efforts to ensure
that all Cardholders receive and use only the new credit cards.

         (j) Between the date hereof and the Transfer Date, subject to the terms
and conditions of this Agreement, each party shall use its commercially
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary or appropriate hereunder to consummate
the transactions contemplated by this Agreement. Each party further agrees to
use its commercially reasonable efforts to obtain consents of all third parties
and governmental agencies necessary for the consummation of the transactions
contemplated by this Agreement.

         (k) [Reserved].

7.       Indemnification

         7.1 Indemnification by Seller

         Seller will defend and indemnify Purchaser and hold Purchaser harmless
for, from and against any claim, demand, liability, loss, cost or expense,
including reasonable attorneys' fees, which shall result from or arise out of or
be incurred in connection with (i) the untruthfulness of any of Seller's
representations or warranties contained in this Agreement, (ii) the breach by
Seller of any of its covenants or agreements herein contained, or (iii) the
breach by Seller of any of its covenants or agreements in the Assignment or Bill
of Sale, or (iv) any liability or obligation, contingent or otherwise, of Seller
relating to the Credit Card Business which is not assumed by Purchaser pursuant
to this Agreement or the Assumption Agreement and which exists on, or arises out
of any event or condition occurring or existing at any time prior to, the
Transfer Date (including without limitation liabilities arising from any Account
Duties existing as of the Transfer Date which have not been fulfilled by Seller
prior to the Transfer Date or which relate to periods prior to the Transfer
Date); provided, however, in no event shall Seller be obligated under this
Section 7.1 to defend, indemnify and hold Purchaser harmless, for, from and
against any claim, demand, liability, loss, cost or expense which shall result
from Purchaser's willful misconduct or gross negligence.

         7.2 Indemnification by Purchaser

         Purchaser will defend and indemnify Seller and hold it harmless for,
from and against any claim, demand, liability, loss, cost or expense, including
reasonable attorneys' fees, which shall result from or arise out of or be
incurred in connection with (i) the untruthfulness of any of Purchaser's
representations or warranties in this Agreement, (ii) the breach by Purchaser of
any of its covenants or agreements herein contained, (iii) the breach by
Purchaser of any of its covenants or agreements in the Assumption Agreement,
(iv) any liabilities, contingent or otherwise, assumed by Purchaser pursuant to
this Agreement or the Assumption Agreement; or (v) the operation by Purchaser of
the Credit Card Business from and after the Transfer Date; provided, however,
that in no event shall Purchaser be obligated under this Section 7.2 to defend
and indemnify Seller and hold Seller harmless for, from and against any claim,
demand,


                                       18


liability, loss, cost or expense which shall result from Seller's willful
misconduct or gross negligence.

         7.3      Indemnification Procedures.

         In case any claim is made, or any suit or action is commenced against
either Seller or Purchaser in respect of which indemnification may be sought
under Section 7.1 or 7.2 (the "Indemnitee"), the Indemnitee shall promptly give
the other party (the "Indemnitor") notice thereof and the Indemnitor shall be
entitled to participate in (or, if the Indemnitee does not desire to defend, to
conduct) the defense thereof at the Indemnitor's expense. The Indemnitor may
(but need not) defend or participate in the defense of any such claim, suit or
action, but the Indemnitor shall promptly notify the Indemnitee if the
Indemnitor shall not desire to defend or participate in the defense of any such
claim, suit or action. If the Indemnitor fails to provide a defense of any such
claim and the Indemnitee provides the defense, the Indemnitor shall be
responsible for payment of the reasonable legal fees incurred by the Indemnitee
in connection with such participation. Nothing herein shall obligate the
Indemnitor to undertake such defense. The Indemnitee may at any time notify the
Indemnitor of its intention to settle or compromise any claim, suit or action
against the Indemnitee in respect of which payments may be sought by the
Indemnitee hereunder (and in the defense of which the Indemnitor has not
previously elected to participate), and the Indemnitee may settle or compromise
any such claim, suit or action unless the Indemnitor notifies the Indemnitee in
writing (within ten (10) days after the Indemnitee has given the Indemnitor
written notice of its intention to settle or compromise) that the Indemnitor
intends to conduct the defense of such claim, suit or action. Any such
settlement or compromise of, or any final judgment or decree entered on or in,
any claim, suit or action which the Indemnitee has defended or participated in
the defense of in accordance herewith shall be deemed to have been consented to
by, and shall be binding upon, the Indemnitor as fully as if the Indemnitor had
assumed the defense thereof and a final judgment or decree had been entered in
such suit or action, or with regard to such claim, by a court of competent
jurisdiction for the amount of such settlement, compromise, judgment or decree.

         7.4      Limitation on Indemnification and Other Claims.

         (a) Notwithstanding anything to the contrary contained in this
Agreement, except for claims arising from an alleged breach of Seller's
representations set forth in Sections 8.7, 8.12 or 8.13 (all of which shall have
no limitations), following the Transfer Date (and subject to the provisions of
this Section 7.4(a)): (i) neither party shall have any obligation with respect
to any indemnification payments payable pursuant to this Article 7 due to a
breach or alleged breach of the representations contained in Article 8 or
Article 9 hereof except to the extent that the aggregate of all of such
obligations (including all costs and reasonable attorneys fees incurred in
connection therewith as otherwise provided above) exceed $500,000 (the "Floor"),
in which case Indemnitor shall be responsible for all obligations in excess of
the Floor; provided, however, that in the event any single claim, action or
cause of action results in liability of $100,000 or more (including all costs
and reasonable attorneys fees as provided above), such claim, action or cause of
action shall not be subject to the Floor and the Indemnitor shall be responsible



                                       19


for the full amount of any such claim, action, or cause of action; (ii) the
indemnification provided for herein shall not cover, and in no event shall any
party hereto be liable for, any indirect damages claimed by the Indemnitee,
including consequential, incidental, exemplary or punitive damages claimed by
the Indemnitee (except that the indemnification provided for herein shall cover
reasonable attorneys fees incurred by the Indemnitee as otherwise provided above
and shall also cover judgments awarded to third parties for indirect damages,
including consequential and punitive damages); and (iii) the aggregate amount of
indemnification either party is obligated to provide under this Agreement shall
not exceed the Payment Amount (the "Ceiling"), unless the claim arises from the
willful misconduct of the Indemnitor. Notwithstanding the foregoing limits or
any other provision of this Section 7.4(a) to the contrary, (i) any claims
arising from an alleged breach of Seller's representations set forth in Sections
8.7, 8.12 or 8.13 shall not be subject to the Floor or the Ceiling and Seller
shall be responsible for the full amount of any such claim and (ii) any claims
arising from an alleged breach of Seller's representations set forth in Section
8.6 shall not be subject to the Floor for a period of sixty (60) days from the
Transfer Date and Seller shall be responsible for the full amount of any such
claim up to the Ceiling to the extent such claim is made within such sixty (60)
day period. In addition, if as a result of a party's breach of a representation
the Closing does not occur and this Agreement is terminated, all of the
non-breaching party's and its affiliates' direct costs incurred as a direct
result of the delay or failure to close by the Transfer Date (including without
limitation costs related to the delay in conversion of the Accounts and costs
related to Purchaser's anticipated securitization of the Accounts) shall be
deemed direct damages of the non-breaching party not subject to the Floor.
Furthermore, the Floor shall not in any event apply to Purchaser's damages
arising from Seller's failure to use commercially reasonable efforts to comply
with the Conversion Schedule as set forth in Section 3.1(a).

         (b) In calculating the amount of any losses of any Indemnitee under
this Article 7, there will be subtracted the amount of any third-party payments
(including insurance payments) actually received by the Indemnitee with respect
to such losses; provided, however that nothing herein shall limit such third
party's rights to pursue recovery against the Indemnitor for any such payments
made by such third party. In the event that the Indemnitor reimburses the
Indemnitee for any losses prior to the occurrence of the events contemplated
above, the Indemnitee will remit to the Indemnitor any such amounts that the
Indemnitee subsequently receives in reimbursement of such losses (not to exceed
the amount previously reimbursed in respect thereof).

         (c) Without limiting their respective rights and obligations as set
forth elsewhere in this Article 7, and subject to the procedures for
indemnification claims set forth in this Article 7, Seller or Purchaser as an
Indemnitee, as the case may be, will act in good faith, will use commercially
reasonable efforts to mitigate any losses, will use similar discretion in the
use of personnel and the incurring of expenses as the Indemnitee would use if
they were engaged and acting entirely at their own cost and for their own
account, will render to the Indemnitor such assistance as Indemnitor may
reasonably require in order to insure prompt and adequate defense of any suit,
claim or proceeding, and will consult regularly with the Indemnitor regarding
the conduct of any proceedings or the taking of any action for which
indemnification may be sought.

                                       20


         (d) After the Closing Date, except for those matters expressly
addressed in Article 3, this Article 7 will constitute Purchaser's and Seller's
exclusive remedy for any of the matters addressed in this Article 7; provided,
however, that nothing contained herein shall prevent an Indemnitee from pursuing
remedies as may be available to such party under applicable law in the event of
an Indemnitor's failure to comply with its indemnification obligations
hereunder.

         (e) The Indemnitor shall be subrogated to any claims or rights of the
Indemnitee as against any other persons with respect to any amounts paid by the
Indemnitor under this Article 7. The Indemnitee shall cooperate with the
Indemnitor, at the Indemnitor's expense, in the Indemnitor's assertion of any
claim based on the right of subrogation.

8.       Warranties and Representations of Seller

         Seller represents and warrants to Purchaser as follows:

         8.1 Organization

         Seller is a national banking association duly organized and validly
existing under the laws of the United States and is formerly known as Hurley
State Bank.

         8.2 Authority

         Seller has the corporate power and authority to enter into and perform
this Agreement and to effect the transactions contemplated hereby. The
execution, delivery and performance by Seller of this Agreement (and all
documents, agreements, and instruments contemplated hereby) have been approved
by all requisite corporate action on the part of Seller. This Agreement
constitutes, (and each such document, agreement, and instrument when executed
and delivered will constitute) a valid and binding obligation of Seller
enforceable against it in accordance with their respective terms. No consents
are required for the execution and performance of Seller's obligations hereunder
except for the consents set forth on Schedule 2.3 attached hereto.

         8.3 Financial Information

Seller has provided to Purchaser financial information relating to the Credit
Card Business, computed as of May 31, 2004 (the "Financial Information
Computation Date"), which (i) includes as of the Financial Information
Computation Date, the number of Eligible Accounts and Ineligible Accounts, the
then Account Balance (or Credit Balance) of each, the average percentage of
Cardholders who pay their Accounts in full for each billing cycle and the loss
history of the Credit Card Business for the prior 36 months together with the
additional Account information set forth on Schedule 8.3 hereof (collectively
the "Financial Information"), (ii) is accurate in all material respects as of
the respective date thereof and (iii) does not, as of such date, contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements


                                       21


made, in light of the circumstances under which they were made, not misleading.
The Preliminary Closing Statement will be accurate in all material respects as
of the date thereof. The financial information underlying the Preliminary
Closing Statement to be submitted to Purchaser, taken in the aggregate, will not
differ materially from such financial information previously provided to
Purchaser by Seller, except for non-materially adverse changes in the ordinary
course of business and non-materially adverse changes contemplated by this
Agreement. All charge or credit transactions (including payments) as to which
the records thereof shall have been received by Seller on or before the Transfer
Date shall have been posted to the appropriate Account as of the close of
business on the Transfer Date. The master datafile and all other files delivered
to Purchaser set forth true, correct and complete list of the Eligible Accounts
and Account Balances as of the date of their preparation.

         8.4 Legal Proceedings

         There are no actions, suits or proceedings or governmental or
regulatory violations or investigations which are pending, threatened or to the
knowledge of Seller may arise, against or affecting the Assets to be Sold or the
Credit Card Business or affecting the Assets to be Sold or Seller's ability to
consummate this Agreement or the transaction contemplated hereunder.

         8.5 Finders or Brokers

         Seller has not agreed to pay any fee or commission to any agent,
broker, finder or other person for or on account of services rendered as a
broker or finder in connection with this Agreement or the transactions
contemplated hereby or thereby.

         8.6 Compliance with Law and Other Instruments

         The execution and delivery of this Agreement by Seller and the
consummation of the transactions contemplated hereby by Seller will not
constitute a violation of or be in conflict with any applicable law or
regulation. The business and operations of the Credit Card Business (including
without limitation all origination procedures, credit approval procedures,
finance charges, late fee calculation methodologies, disclosures, collection
practices and marketing practices) have been conducted by Seller and its
Predecessors in Interest in accordance with all applicable laws, rules and
regulations and regulatory directives (including, without limitation, guidelines
of the FFIEC) and the Assets to be Sold are not subject to any claim arising
from any violation thereof. The execution, delivery and performance by Seller of
this Agreement (and the documents, agreements, and instruments contemplated
hereby) will not violate or be in conflict with Seller's charter or by-laws or
any contract or other instrument to which it is a party or by which it is bound.
All Accounts sold to Purchaser hereunder and all amounts paid thereunder are in
compliance with all applicable laws and the obligation of the Cardholder to pay
the unpaid Account Balance thereunder is legal, valid and binding and
enforceable. Seller's fulfillment of all Account Duties has been performed in
accordance with all applicable laws, rules and regulations.



                                       22


         8.7. Condition of Assets to be Sold

         Seller is now the owner of all right, title and interest in and to all
Assets to be Sold, free and clear of all Liens (other than those arising under
this Agreement). On the date hereof, and on the Transfer Date, Seller is and
will be, the owner of all right, title and interest in and to all Assets to be
Sold, free and clear of all Liens (including, without limitation, any Lien
related to the Securitization Agreements); and immediately after such sale, such
ownership interest will be vested in Purchaser, in each case protected and
perfected against all persons to the maximum extent permitted by law. Each
Account Balance is, and on the Transfer Date will be, freely assignable and
transferable to Purchaser. Each Account sold to Purchaser hereunder, as to which
an Account Balance is used in computing the Payment Amount, will, as of the
close of business on the Transfer Date, be an Eligible Account having an unpaid
Account Balance owing, as of the close of business on the Transfer Date, equal
to the Account Balance, if any, shown on the Preliminary Closing Statement, and
the obligation of the Cardholder thereunder to pay such unpaid Account Balance
will be fully effective and, except only for Cardholder Disputes (which are
specifically addressed in Section 6.1 of this Agreement), will not be subject to
any offset, counterclaim or other defense of any kind or nature or be the
subject of any pending litigation or other judicial or administrative
proceeding.

         8.8 Seller Agreements and Accounts

         Seller's Cardholder Agreements in effect on the date of this Agreement,
and Seller's related periodic statement forms, are attached as Schedule 8.8.1
and Schedule 8.8.2, respectively. There are no other Cardholder Agreements or
periodic statement forms in use or in effect on the date of this Agreement. The
Cardholder Agreements and periodic statement forms comply in all material
respects with all applicable laws and accurately represent the agreements
between Seller and Cardholders and the methods of computing balances and finance
charges. None of the Cardholder Agreements, periodic statement forms or Accounts
includes a provision for annual fees and there are no obligations to Cardholders
except as set forth in the Cardholder Agreements. There are no leases, contracts
or other agreements that are material to the conduct of the Credit Card Business
that would affect the purchase or operation thereof by the Purchaser. Seller is
not in breach of any contract or agreement to be sold or transferred to the
Purchaser hereunder. Seller shall, as of the close of business on the Transfer
Date, be in possession of a genuine, valid and enforceable contractual
obligation of the Cardholder under each Eligible Account sold to Purchaser,
together with all the documents relating to each such Eligible Account.

         8.9 Credit Card Business

         Since the Financial Information Computation Date, except for changes
resulting from the Third Amendment to the Existing Merchant Services Agreement
dated as of July 23, 2004 and except as modified by Seller in accordance with
this Agreement, Seller has not (i) effected any material or significant change
in the accounting practices, procedures or methods employed in connection with
the Credit Card Business, (ii) effected any material or significant change in
its business, credit or, collection policies,


                                       23


re-aging policies, practices or procedures relating to the Credit Card Business
or (iii) entered into any transaction or made any commitment or agreement in
connection with the Credit Card Business other than in the ordinary course of
such business and on commercially reasonable terms. Since the Financial
Information Computation Date, there has not occurred any material adverse change
(financial or otherwise) in the condition of the Assets to be Sold or the Credit
Card Business or Seller's operation thereof.

         8.10 Fees and Charges; Compliance with law

         The fees and charges charged by Seller for the Accounts or reserved in
the agreements evidencing the Accounts do not exceed the fees and charges
permitted by all applicable laws. The accounting for, and disclosure to
Cardholders of, all payments, credits, balances, finance charges, debits and all
other fees and charges complies with (and at all times has complied with) all
applicable laws and the Cardholder Agreements. The Accounts, the Cardholder
Agreements, the periodic statements issued pursuant to the Accounts, the monies
(including finance charges or fees) collected under the Accounts and any form
letters sent to Cardholders do not violate and are in compliance with any and
all applicable federal laws and regulations, and the foregoing do not violate
and are in compliance with all applicable laws and regulations with respect to
(1) finance charge rate (including minimum finance charges), (2) balance
calculation methods and assessments, and (3) disclosure and assessment of any
fees (including late charges and returned check charges).

         8.11 Accounts Not Business Accounts

         None of the Accounts sold to Purchaser hereunder are with business
entities or, to Seller's knowledge, otherwise represent commercial receivables.

         8.12 Conveyance of Assets to be Sold

         Seller is not insolvent at the time of the conveyance of title and the
sale of the Assets to be Sold by Seller hereunder is a conveyance for reasonably
equivalent value to Purchaser. At the time each Predecessor in Interest conveyed
title to the Assets to be Sold to Seller or another Predecessor in Interest,
such Predecessor in Interest was not insolvent and such conveyance was for
reasonably equivalent value to such Predecessor in Interest. The transfer by
Seller of the Assets to be Sold is not made for or on account of an antecedent
debt and Seller will not be insolvent on the date of (nor will it become
insolvent as a result of) such transfer. No transfer by Seller of any Asset to
be Sold hereunder is or may be voidable under any law dealing with bankruptcy,
insolvency, creditors' rights or similar laws. Schedule 8.12 sets forth a true
and complete description of all transfers and assignments of the Accounts and
all receivables related thereto that have occurred since Seller's or its
Predecessors in Interests acquisition or origination of the Accounts.





                                       24


         8.13 Securitization Agreements and Credit Insurance

         Seller has (i) removed all Accounts from the Securitization Agreements
and removed any and all Liens related thereto from the Accounts and the Assets
to be Sold and (ii) cancelled and terminated any credit insurance certificates
on the Accounts and notified the affected Cardholders of such termination, all
in accordance with applicable law and the same are of no further force and
effect and Purchaser shall have no liability resulting therefrom. Upon request,
Seller shall provide evidence of compliance with the foregoing. There are no
Securitization Agreements in effect relating to the Assets to be Sold. From and
after the date hereof, Seller shall not enter into any other Securitization
Agreements with respect to the Assets to be Sold. Prior to the date hereof
Seller has caused all Securitization Agreements (and all UCC financing
statements filed in connection therewith), to the extent they affect the Assets
to be Sold or the Credit Card Business, to be released and discharged, such that
the Account Balances will be sold to Purchaser hereunder on the Transfer Date
free of the encumbrances of any Securitization Agreements.

         8.14  Accuracy of Statements

         No statement contained in any document provided or delivered by Seller
to Purchaser in connection with the transaction contemplated hereby, as of the
date of such statement, contains any untrue statement of a material fact, or
omits to state a material fact necessary to make the statement contained therein
not misleading.

9.       Warranties and Representations of Purchaser

         Purchaser hereby represents and warrants to Seller as follows:

         9.1 Organization

         Purchaser is a national banking association duly organized and validly
existing under the laws of the United States and is authorized to conduct its
business under those laws.

         9.2 Authority

         Purchaser has the corporate power and authority to enter into and
perform this Agreement and to effect the transactions contemplated hereby. The
execution, delivery and performance of this Agreement, (and all documents,
agreements, and instruments contemplated hereby) have been approved by all
requisite corporate action on the part of Purchaser, and this Agreement
constitutes (and each such document, agreement and instrument when executed and
delivered will constitute) a valid and binding obligation of Purchaser,
enforceable against it in accordance with their respective terms. Catherines,
Inc. has duly assigned its rights to purchase the Assets to be Sold to
Purchaser.





                                       25


         9.3 Legal Proceedings

         There are no actions, suits or proceedings or governmental or
regulatory violations or investigations which are pending, threatened or to the
knowledge of Purchaser may arise, against or affecting Purchaser's ability to
consummate this Agreement or the transactions contemplated hereby.

         9.4 Finders or Brokers

         Purchaser has not agreed to pay any fee or commission to any agent,
broker, finder or other person for or on account of services rendered as a
broker or finder in connection with this Agreement or the transactions
contemplated hereby which would give rise to any valid claim against Seller for
any brokerage commission or finder's fee or like payment.

         9.5 Governmental Notices

         Purchaser has not received notice from any federal or state
governmental agency indicating that it would oppose or not grant or issue its
consent or approval, if required, with respect to the transactions contemplated
by this Agreement.

         9.6 Compliance with Law and Other Instruments

         The execution and delivery of this Agreement by Purchaser and the
consummation of the transactions contemplated hereby by Purchaser will not
constitute a violation of or be in conflict with any applicable law or
regulation. The execution, delivery and performance by Purchaser of this
Agreement (and the documents, instruments, and agreements contemplated hereby)
will not violate or be in conflict with Purchaser's charter or by-laws or any
material contract or other instrument to which it is a party or by which it is
bound.

         9.7 Termination of Existing Merchant Services Agreement, Operation of
New Merchant Services Agreement

         Notwithstanding any agreement to the contrary between Seller and
Catherines, Inc. in the event that the Existing Merchant Services Agreement has
not terminated on the Transfer Date, then it shall automatically be deemed to
terminate as of the Transfer Date. From and after the Transfer Date, the Credit
Card Business shall be operated by Purchaser (and/or Catherines) pursuant to the
terms of any New Merchant Services Agreement. The foregoing provisions shall not
be deemed to release Seller or Catherines, Inc. from any liabilities,
obligations or duties to each other under the Existing Merchant Services
Agreement which (pursuant to the terms thereof) survive the termination thereof.






                                       26


10.      Conditions, Precedent to Purchaser's Obligations

         The obligations of Purchaser to consummate the purchase provided for
herein are subject to the fulfillment (except to the extent, if any, waived by
Purchaser) of the following conditions at or prior to the Transfer Date:

         10.1 Regulatory-Approvals

         Any required licenses, approvals, consents or notifications of any
federal or state regulatory agencies in respect of the transactions provided for
herein or contemplated hereby, shall have been obtained or made, and any
necessary conditions, including any legally required waiting notice or protest
periods, shall have been fully satisfied.

         10.2 Absence of Litigation

         There shall not be pending on the Transfer Date any action or
proceeding instituted by any person, entity or governmental authority against
Seller or Purchaser to prevent the consummation of the sale of the Credit Card
Business hereunder and, on the Transfer Date, there shall be no injunction,
decree or similar legal restraint preventing the consummation of such sale and
there shall be no statute, rule or regulation in effect which would prevent
Seller from selling or Purchaser from purchasing the Assets to be Sold or the
Credit Card Business as contemplated by this Agreement.

         10.3 Truth of Representations, Delivery of Lien Releases

         The representations and warranties of Seller set forth in Section 8 of
this Agreement shall be true in all material respects as though made again on
and as of the Transfer Date (except for those representations and warranties
made as of a particular date, which such representations and warranties shall be
true in all material respects as of such particular date), and Seller has caused
to be delivered on or before the Transfer Date all applicable Lien releases and
termination statements as required under this Agreement.

         10.4 Performance of Covenants

         The covenants and agreements of Seller set forth in this Agreement and
to be performed on or before the Transfer Date shall have been performed in all
material respects.

         10.5 Items to be Delivered by Seller

         Seller shall have delivered to Purchaser:

         (a) Such bills of sale, assignments, certificates, UCC terminations or
assignments, opinions and other instruments and documents as counsel for
Purchaser may reasonably require as necessary or desirable for confirming the
transfer, assignment and conveyance of title to the Assets to be Sold to
Purchaser, all in form and substance satisfactory to Purchaser, including
without limitation the Assignment and Bill of Sale


                                       27


(collectively, the "Conveyance Documents") and such certificates as are
necessary to support the issuance of a "true sale" opinion and favorable UCC
opinion in connection with the securitization or other transfer of the Account
Balances attributable to the Accounts by Purchaser.

         (b) Favorable opinions of counsel to Seller addressed to the Purchaser,
dated the Closing Date, to the effect that:

                  (i) Seller has duly and validly authorized, executed and
delivered this Agreement, the Conveyance Documents, the Service Agreement, and
the Assumption Agreement;

                  (ii) Seller is a validly existing national bank with full
corporate power to enter into and perform this Agreement, the Service Agreement,
the Conveyance Documents, and the Assumption Agreement;

                  (iii) Neither the execution and delivery of this Agreement,
the Conveyance Documents, the Service Agreement or the Assumption Agreement, nor
Seller's performance of each is restricted by or violates the charter or by-laws
of Seller or any material contractual or other obligation of Seller of which
such counsel has knowledge after reasonable investigation;

                  (iv) All consents and approvals required by law or this
Agreement to be obtained by Seller (and, as to the Service Agreement, Seller's
servicing affiliate) at or prior to the Closing Date to authorize and, to the
best of such counsel's knowledge, after reasonable investigation, to consummate
the transactions contemplated hereby, or by the Conveyance Documents, the
Service Agreement or the Assumption Agreement, have been obtained and are in
full force and effect;

                  (v) This Agreement, the Conveyance Documents, the Service
Agreement and the Assumption Agreement constitute the legal and binding
obligations of Seller(and, as to the Service Agreement, Seller's servicing
affiliate), enforceable against it in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, or other similar laws affecting creditors' rights
generally, or general principles of equity;

                  (vi) To counsel's best knowledge, after reasonable
investigation, there are no proceedings or investigations pending, or threatened
against Seller (and, as to the Service Agreement, Seller's servicing affiliate);
(A) asserting the invalidity or unenforceability of this Agreement, the
Conveyance Documents, the Service Agreement or the Assumption Agreement, (B)
seeking to bar the consummation of the transactions contemplated under this
Agreement, the Service Agreement, the Conveyance Documents, or the Assumption
Agreement, or (C) seeking any decision or ruling which reasonably could
materially and adversely affect the performance by and party of its obligations
and this Agreement, the Conveyance Documents, the Service Agreement or the
Assumption Agreement; and



                                       28


                  (vii) All things have been done and all documents and notices
required under this Agreement have been filed wherever necessary to consummate
the sale to Purchaser of the Assets to be Sold and vest all right, title and
interest thereof in Purchaser, free of the Liens. Further, to the best of
counsel's knowledge, after reasonable inquiry, there are no Liens on the Assets
to be Sold existing as of the Closing Date; and

                  (viii) Seller has transferred the Assets to be Sold to
Purchaser in a manner that would be characterized as a "true sale" (and not
merely as a pledge) and the Assets to be Sold no longer constitute properties of
Seller.

         In rendering the foregoing opinion, Seller's counsel's opinion shall be
limited to the substantive laws and regulations of the State of South Dakota
(the State of Seller's principal place of business in operating the Credit Card
Business) and to federal law.

         In addition, in rendering the foregoing opinions, to the extent the
opinions in subparagraph (iii), (iv), (v) or (vii) relate to agreements
evidencing Accounts, Seller's counsel shall be entitled to rely on Seller's
representation that the forms of agreements available to Seller's counsel are
the sole forms of agreements in effect.

         (c) A certificate signed by a duly authorized officer of Seller to the
effect that (i) the warranties and representations of Seller in Section 8 are
true as of the Closing Date or, if any such warranties and representations are
not then true, specifying the deficiency in reasonable detail; and (ii) the
covenants and agreements of Seller to be performed hereunder on or before the
Transfer Date have been performed in all material respects, or, if any such
covenants have not been so performed, specifying the deficiency in reasonable
detail.

         (d) [Reserved].

         (e) The Preliminary Closing Statement.

         (f) A schedule of all actions, suits or proceedings which are pending,
threatened or, to the knowledge of Seller may arise, against or affecting the
Assets to be Sold or the Credit Card Business.

         (g) A favorable opinion of counsel addressed to the Purchaser, dated as
of the Closing Date, that the Accounts, the agreements evidencing the Accounts,
the periodic statements issued pursuant to the Accounts, the monies (including
finance charges or fees) collected under the Accounts and any form letters sent
to Cardholders do not violate and are in compliance with any and all applicable
federal laws and regulations, and such other opinions customarily given by
sellers' counsel in transactions of this nature as may be reasonably requested
by Purchaser. In addition, counsel will provide a research memorandum that the
foregoing do not violate and are in compliance with federal laws and the laws
and regulations of the State of South Dakota with respect to (1) finance charge
rate (including minimum finance charges), (2) balance calculation methods and
assessments, and (3) disclosure and assessment of any fees (including late
charges and returned check charges).



                                       29


         10.6 Assumption Agreement

         Seller shall have entered into the Assumption Agreement with Purchaser.

         10.7 Service Agreement

         Seller or Seller's servicing affiliate shall have entered into the
Service Agreement with Purchaser.

         10.8 UCC Financing Statement

         Seller hereby confirms that, for purposes of the UCC, it is "located"
in the State of South Dakota, and hereby authorizes Purchaser to file in such
location financing statements in favor of Purchaser, as secured party, against
Seller, as debtor, reflecting the sale of the Assets to be Sold hereunder.
Seller further confirms that it has identified to Purchaser all financing
statements filed against Seller or any Predecessor in Interest to perfect an
interest in the Assets to be Sold, and authorizes Purchaser to file financing
statements assigning the interests of the secured parties thereunder to
Purchaser.

         10.9 Cure of Non-Compliance

          Seller, prior to the Closing Date, shall cure or otherwise bring into
compliance any violation or other instances of non-compliance with applicable
law or regulations that occur or are discovered prior to the Closing Date.

         10.10 Absence of Matters which Materially Adversely Affect Credit Card
Business

         On the Transfer Date, there shall not be reflected in the fully
completed Exhibits or Schedules hereto, and there shall not exist, any matter,
condition or event which materially adversely affects substantially the entire
Credit Card Business or the Assets to be Sold taken as a whole, excluding,
however, any matter, condition or event which is primarily within the control of
Catherines, Inc.

11.      Conditions Precedent to the Obligations of Seller

         The obligation of Seller to consummate the sale provided for herein is
subject to the fulfillment (except to the extent, if any, waived by Seller) of
the following conditions at or prior to the Transfer Date:

         11.1 Regulatory Approvals

         Any required licenses, approvals, consents or notifications of any
federal or state regulatory agencies in respect of the transactions provided for
herein shall have been obtained or made, and any necessary conditions, including
any legally required waiting notice or protest periods, shall have been fully
satisfied.



                                       30


         11.2 Absence of Litigation

         There shall not be pending on the Transfer Date any action or
proceeding instituted by any person, entity or governmental authority against
Seller or Purchaser to prevent the consummation of the sale of the Credit Card
Business by Seller to Purchaser pursuant hereto, and on the Transfer Date there
shall be no injunction, decree or similar legal restraint preventing the
consummation of such sale and there shall be no statute, rule or regulation in
effect which would prevent Seller from Selling or Purchaser from purchasing the
Assets to be Sold or the Credit Card Business as contemplated by this Agreement.

         11.3 Truth of Representations

         The representations and warranties of Purchaser set forth in Section 9
shall be true in all material respects as though made again on and as of the
Transfer Date (except for those representations and warranties made as of a
particular date, which such representations and warranties shall be true in all
material respects as of such particular date).

         11.4 Performance of Covenants

         The covenants and agreement of Purchaser set forth in this Agreement
and to be performed on or before the Transfer Date shall have been performed in
all material respects.

         11.5 Items to be Delivered by Purchaser

         Purchaser shall have delivered to Seller:

         (a) A payment to Seller by transfer of funds immediately available in
the amount (subject to the provisions of Section 14) provided for in Section
3.2.

         (b) A favorable opinion of counsel to Purchaser, dated the Closing
Date, to the effect that:

                  (i) Purchaser has duly and validly authorized, executed and
delivered this Agreement, the Service Agreement and the Assumption Agreement;

                  (ii) Purchaser is a national banking association duly
organized and existing under the laws of the United States, with full corporate
power to enter into and perform this Agreement, the Service Agreement and the
Assumption Agreement;

                  (iii) Neither the execution and delivery of this Agreement,
the Service Agreement or the Assumption Agreement nor Purchaser's performance of
each, is restricted by or violates or conflicts with the charter or by-laws of
Purchaser or any


                                       31


material contractual or other obligation of Purchaser of which such counsel has
knowledge after reasonable investigation;

                  (iv) All consents and approvals required by law or this
Agreement to be obtained by Purchaser at or prior to the Transfer Date to
authorize, and to the best of such counsel's knowledge after reasonable
investigation, to consummate the transactions contemplated hereby and by the
Service Agreement and the Assumption Agreement, have been obtained and are in
full force and effect; and

                  (v) This Agreement, the Service Agreement and the Assumption
Agreement constitute the legal and binding obligations of Purchaser enforceable
against it in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally, or general principles of equity;

and containing such other opinions customarily given by purchasers' counsel in
transactions of this nature as may be reasonably requested by Seller.

         (c) A certificate signed by a duly authorized officer of Purchaser to
the effect that (i) the warranties and representations of Purchaser in Section 9
are true as of the Transfer Date or, if any such warranties and representations
are not then true, specifying the deficiency in reasonable detail; and (ii) the
covenants and agreements of Purchaser to be performed hereunder on or before the
Transfer Date have been performed in all material respects, or, if any such
covenants have not been so performed, specifying the deficiency in reasonable
detail.

         (d) Resolutions of the Board of Directors of Purchaser, certified by
its Secretary or an Assistant Secretary, authorizing the execution and delivery
of this Agreement, the Assumption Agreement, and the consummation of the
transactions contemplated hereby and thereby.

         11.6 Other Agreements

         Purchaser shall have entered into the Assumption Agreement and the
Service Agreement.

12.      Survival of Representations and Warranties

         Notwithstanding any investigation made by or on behalf of either party
at any time, all covenants, agreements, representations, indemnifications and
warranties made herein and in any certificate delivered pursuant hereto shall
survive the execution and delivery of this Agreement and Closing hereunder until
the expiration of twenty-four (24) months following the Transfer Date; provided
that the representations and warranties contained in Section 8.7 (and the
indemnifications related thereto) will survive indefinitely and the
representations and warranties contained in Sections 8.6, 8.8 and 8.10 (and the
indemnifications related thereto) will survive for the period of the applicable
statute of limitations. Notwithstanding the foregoing, any representation or
warranty that


                                       32


would otherwise terminate shall survive with respect to losses asserted in any
claim for indemnification hereunder of which notice is given pursuant to this
Agreement prior to the end of the applicable survival period, until such claim
is finally resolved and any related losses are paid.

13.      Termination of Agreement

         This Agreement, and the sale herein provided, and all other
transactions contemplated hereby, may be terminated at any time prior to the
Transfer Date and shall be of no further force or effect upon the occurrence of
the following:

                  (i) The expiration of fifteen (15) days from the date one
party shall have given notice to the other party (the "Defaulting Party") of a
breach or default by the Defaulting Party in the performance of any covenant,
agreement, representation or warranty hereunder; provided, however, that no such
termination shall be effective if, within such fifteen (15) day period, the
Defaulting Party shall have substantially corrected and cured the grounds for
termination as set forth in such notice of termination;

                  (ii) There shall have been a material adverse change
(financial or otherwise) in the condition, business or assets of the Credit Card
Business since the Financial Information Computation Date and Purchaser elects
to terminate this Agreement as a result thereof;

                  (iii) Seller or Purchaser (as applicable in this clause (iii),
the "Bankrupt Party") becomes insolvent or generally fails to pay, or admits in
writing its inability to pay, its debts as they become due; or the Bankrupt
Party applies for, consents to, or acquiesces in the appointment of, a trustee,
receiver or other custodian for the Bankrupt Party or any property thereof, or
makes a general assignment for the benefit of creditors; or in the absence of
such application, consent of acquiescence, a trustee, receiver or other
custodian is appointed for the Bankrupt Party or for a substantial part of its
property and is not discharged within thirty (30) days; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is
commenced in respect to the Bankrupt Party, and if such case or proceeding is
not commenced by the Bankrupt Party or remains for thirty (30) days undismissed;
or the Bankrupt Party takes any corporate action to authorize, or in furtherance
of, any of the foregoing and in any such event the non-Bankrupt Party elects to
terminate this Agreement;

                  (iv) Upon mutual agreement of Seller and Purchaser; or

                  (v) The Closing has not occurred on or before thirty (30) days
after the initial date which was mutually agreed by the parties to be the
Transfer Date, unless both parties have mutually agreed in writing to extend
such Transfer Date, and the party not at fault for the delay elects to terminate
this Agreement.

         A termination of this Agreement under the foregoing circumstances
automatically terminates the sale and all other transactions contemplated
hereby. A notification of


                                       33


termination from the electing party shall be required in the event of a
termination of this Agreement under clauses (i), (ii) or (v) above; in the case
of a termination under clause (iii) above, no such notification shall be
required and such termination shall be automatic upon the occurrence of the
event(s) described therein. No termination of this Agreement pursuant to this
Section or otherwise shall release, or be construed as releasing, either party
hereto from any liability for damages to the other party hereto arising out of,
in connection with or otherwise relating to, directly or indirectly, such
party's breach or default of any of its representations, warranties, covenants,
agreements, duties or obligations arising under this Agreement or the Existing
Merchant Services Agreement.

14.      Delayed Payment After Closing

         14.1 Final Settlement and Disputes

         In the event that Purchaser and Seller disagree prior to or after the
Closing as to any item or amount (or the computation or determination in
accordance with the terms of this Agreement of any item or amount) reflected,
set forth in or relating to the Preliminary Closing Statement or any Adjusted
Closing Statement, the Payment Amount, the Adjustment Amount or any amounts due
either party for the Service Agreement or Supplemental Information or any amount
payable to Purchaser under Section 3, then the parties shall not be entitled to
terminate this Agreement under Section 13 and shall (if the Closing has not yet
occurred) close the Transaction on the Transfer Date, and any payment required
to be made under this Agreement shall be made when due on the basis of such
items or amounts as to which the parties do not disagree. Either party hereto
shall thereupon be entitled to request a firm of nationally recognized
independent accountants as Purchaser and Seller may jointly designate which does
not have a material relationship with either Purchaser or Seller (or if such
firm can not be mutually agreed upon within ten (10) days after request of a
party, PriceWaterhouseCooper) to determine, in accordance with the provisions of
this Agreement, such disputed item or amount (or the computation or
determination thereof). Any such request shall be in writing and shall specify
with particularity the disputed items, amounts and computations being submitted
for determination, and the requesting party shall furnish the other parties
hereto with a copy of such request at the same time it is submitted to the
independent accountants. The firm of independent accountants to which any
dispute is referred hereunder shall as promptly as practicable determine, in
accordance with the provisions of this Agreement, the proper amount of any
disputed item or other amount, or the computation thereof, and such
determination shall be final, conclusive and binding on all parties hereto. In
acting pursuant to this Agreement, such firm of independent accountants shall
constitute, and be entitled to the privileges and immunities of, arbitrators.
Seller and Purchaser shall cooperate fully in assisting such firm in making any
determination requested hereunder, including giving such firm full access to all
files, books and records relevant thereto and providing such other information
as such firm may reasonably request in connection with the determination to be
made by it hereunder. The fees and disbursements in connection with such firm's
determination shall be borne equally by Purchaser and Seller. In the event that
a determination by independent accountants pursuant to this Section 14.1
requires any previously suspended payment to be made by any party, such payment
shall be made promptly (and in any event within ten (10) days) after receipt by
such party from


                                       34


such independent accountants of written notice of such determination. Such firm
of accountants shall promptly and substantially simultaneously notify Purchaser
and Seller in writing of any determination by it hereunder. In the event of any
litigation between the parties regarding this Agreement, the prevailing party
shall be entitled to seek recovery of all costs and expenses (including
attorney's fees) incurred by the prevailing party in such litigation.

         14.2 Interest

         Any amount payable by any party to another party pursuant to Section
14.1 shall bear interest from the date such amount would originally have been
required to be paid hereunder had no dispute over such amount existed to the
date of payment at the federal funds rate (at weighted average daily rates
reported by Federal Reserve System) during the period(s) involved.

         14.3 Records and Financial Information

         The party having control of the relevant records and financial
information used in connection with any adjustment provided for in this Section
14 shall certify the accuracy of such records and financial information if so
requested by the other party.

15.      Miscellaneous

         15.1 Expenses

         Except as is otherwise specifically provided in this Agreement, each
party shall pay its own costs and expenses in connection with this Agreement and
the transactions contemplated hereby, including, but not by way of limitation,
all regulatory fees, attorneys' fees, accounting fees and other expenses.

         15.2 Notices

         All notices, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered in person or by
United States mail, certified or registered, with return receipt requested, or
otherwise actually delivered, as follows:

         (i) If to Purchaser, to:
             Spirit of America National Bank
             450 Winks Lane
             Bensalem, PA 19020
             Attention: President

             With a copy to:
             450 Winks Lane
             Bensalem, PA  19020
             Attention:  Legal Dept.

                                       35


         (ii) If to Seller, to:
              Citibank USA, N.A.
              701 East 60th Street North
              Sioux Falls, SD 57104
              Attn. General Counsel

              With a copy to:
              Citi Commerce Solutions
              Four Parkway North
              P.O. Box 865
              Deerfield, IL  60015
              Attention:  Legal Department

         The persons or addresses to which mailings or deliveries shall be made
may be changed from time to time by notice given pursuant to the provisions of
this Section 15.2. Any notice, demand or other communication given pursuant to
the provisions of this Section 15.2 shall be deemed to have been given on the
date actually delivered or three (3) days following the date deposited in the
United States mail, properly addressed, postage prepaid, as the case may be.

         15.3 Successors and Assigns

         All terms and provisions of this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. This Agreement and all rights, privileges, duties and liabilities,
and obligations of the parties hereto, may be assigned or delegated by any party
without the consent of the other party. In order for any such assignment to be
effective, the assigning party and the assignee must first execute a written
agreement (and deliver a copy thereof to the other party hereto) by which the
assigning party assigns the particular rights or privileges to the assignee. In
order for any such delegation to be effective, the delegating party and the
delegatee must first execute a written agreement (and deliver a copy thereof to
the other party hereto) by which the delegating party delegates the particular
duties, liability or obligations to the delegatee and such delegatee expressly
assumes the performance and discharge thereof when due. No such assignment or
delegation shall relieve Purchaser or Seller of any of their respective duties,
obligations, or liabilities to the other hereunder which are not performed or
discharged in full by such assignee or delegatee.

         15.4 Counterparts

         This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one instrument.

         15.5 Governing Law

         The laws of the State of South Dakota applicable to contracts executed
and wholly performed therein shall govern the validity and interpretation hereof
and the


                                       36


performance of the parties hereto of their respective duties and obligations
hereunder; provided, however, that the representations set forth herein related
to the Accounts and the Credit Card Business shall be deemed made under federal
law and, as applicable, the laws of South Dakota.

         15.6 Captions

         The captions contained in this Agreement are for convenience of
reference only and no not form a part of this Agreement.

         15.7 Entire Agreement

         The making, execution and delivery of this Agreement by the parties
hereto have been induced by no representations, statements, warranties or
agreements other than those herein expressed. This Agreement and other written
agreements specifically referred to herein embody the entire understanding of
the parties and there are no further or other agreements or understandings,
written or oral, in effect between the parties relating to the subject matter
hereof. This instrument and the agreements contained herein may be amended or
modified only by a written instrument signed by both parties or their duly
authorized agents.

         15.8  Miscellaneous.

         It is the intention of the Seller and the Purchaser that the transfer
of the Assets to be Sold hereunder shall constitute a sale, which sale is
absolute and irrevocable and provides Purchaser with the full benefits of
ownership of the Accounts. The parties shall execute such additional documents
as are reasonably necessary to confirm the foregoing.



                      [THE NEXT PAGE IS THE SIGNATURE PAGE]


                                       37






         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

                                            CITIBANK USA, N.A.


                                            By:_________________________
                                            Title:________________________



                                            SPIRIT OF AMERICA NATIONAL BANK


                                            By:___________________________
                                            Title:__________________________


ACCEPTED AND AGREED FOR PURPOSES OF SECTIONS 2.5, 3.1, 9.2 and 9.7:

CATHERINES, INC.


BY:________________________
Title:____________________



                                       38




                             EXHIBITS AND SCHEDULES

Exhibit 1 -       Pro forma Closing Statement

Exhibit 2 -       Form of Assignment and Bill of Sale

Exhibit 3  -      Form of Assumption Agreement

Exhibit 4 -       Supplemental Information

Exhibit 5 -       Form of Ineligible Accounts Purchase Agreement

Exhibit 6 -       Service Agreement

Schedule 2.3 -    Required Consents

Schedule 3.1 -    Conversion Schedule

Schedule 8.3 -    Additional Financial Information


 Schedule 8.8.1 - Form of Cardholder Agreement (Section 8.8)

Schedule 8.8.2 -  Form of Seller's billing Statement (Section 8.8)


Schedule 8.12 -   Transfers and assignments of Accounts












                                       39




                                    EXHIBIT 1

                           Pro forma Closing Statement
                            As of __________________

Substantially in the form of the attached and clearly providing the information
contained therein.

VALUATION DATE:

CLOSING DATE:

TOTAL ACCOUNTS:
--------------

    GROSS NUMBER OF CARD ACCOUNTS
    (INCL. INELIGIBLE): #######

    LESS: INELIGIBLE ACCOUNTS (AS DEFINED
                           IN PURCHASE AGT):                           (######)
                                                                       --------

    EQUALS TOTAL:  TOTAL ELIGIBLE ACCOUNTS:                            #######

    TOTAL DOLLARS:


    TOTAL ACCOUNT BALANCES OF ELIGIBLE ACCOUNTS
    (NET OF CREDIT BALANCES BUT INCLUDING
    INELIGIBLE ACCOUNT DOLLARS):                                       $$$$$$$$$

    LESS: INELIGIBLE ACCOUNT DOLLARS (AS
                           DEFINED IN PURCHASE AGT):                  ($$$$$$$$)
                                                                      ----------


    EQUALS: TOTAL OF TOTAL ELIGIBLE ACCOUNTS:                         $$$$$$$$$$

    LESS: 50% OF CERTAIN REAGED ACCOUNTS:                             ($$$$$$$$)

    EQUALS: TOTAL DOLLARS DUE SELLER:                                ___________





                                    EXHIBIT 2
                           ASSIGNMENT AND BILL OF SALE

THIS ASSIGNMENT AND BILL OF SALE (this "Assignment") is made and entered into as
of the ___ day of March, 2005 by and between CITIBANK USA, N.A., a national
banking association (the "Assignor"), and SPIRIT OF AMERICA NATIONAL BANK, a
national banking association (the "Assignee"),


                              W_I_T_N_E_S_S_E_T_H:


         WHEREAS, the Assignor (or its Predecessor in Interest) has heretofore
entered into certain Cardholder Agreements and established certain Accounts for
Cardholders in connection with a Credit Card Business for Credit Cards bearing
the names or logos of Catherines, Catherines Advantage, Catherines Plus Sizes
(including PS Plus Sizes ... Plus Savings), Catherines Stout Shoppe, Clothes for
Eve, Catherines, Inc., Virginia Specialty Stores, Added Dimensions, The Answer,
Other Dimensions, VSSI or Virginia Specialty Stores, Inc.; and

         WHEREAS, pursuant to the terms and provisions of that certain Purchase
Agreement dated as of March 14, 2005 (the "Purchase Agreement") among Assignor
and Assignee, the Assignor desires to transfer and assign to the Assignee, and
the Assignee desires to accept the assignment of the Eligible Accounts and the
transfer of the Assets to be Sold together with all Account Balances related
thereto (capitalized terms used in this Assignment and not otherwise defined
herein shall have the meaning ascribed to such terms as set forth in the
Purchase Agreement);

         NOW, THEREFORE, in consideration of the terms, agreements, covenants
and conditions herein set forth, together with the sum of Ten Dollars ($10.00)
and other good and valuable consideration, the receipt and sufficiency of all of
which are hereby acknowledged, Assignor and Assignee, intending to be legally
bound, agree as follows:


         1. Assignor hereby assigns, assigns, sells, transfers, conveys and
forever remises to Assignee and its successors and assigns, all of the right,
title and interest of the Assignor in and to:

         (i)      All Eligible Accounts (including the Account Balances
                  thereunder);
         (ii)     All rights of recovery related to the Account Balances;
         (iii)    All Cardholder Agreements relating to the Eligible Accounts;
                  and
         (iv)     all Books and Records.

and all of the rights, benefits and privileges of the Assignor thereunder, free
and clear of any and all liens, encumbrances or other interests of third parties
(collectively, the




"Assets to be Sole"). TO HAVE AND TO HOLD, the Assets to be Sold unto Assignee,
its successors and assigns, to and for its own proper use and benefit forever.

         And Assignor, for its successors and assigns does hereby covenant with
Assignee, its successors and assigns, that it is the true and lawful owner of
the Assets to be Sold hereby sold, and has full power to sell and convey the
same; that the title so conveyed is free, clear and unencumbered; that apart
from the Assets to be Sold (or as otherwise set forth in the Purchase Agreement)
there are no other assets attributable to the Credit Card Business; and further
that it does warrant and will forever defend the same against the claim or
claims of all persons whomsoever claiming or to claim the same or any part
thereof, subject to the limitations expressly set forth in the Purchase
Agreement.

                  2. Assignor's obligations and Assignee's rights, relating to
causes of action arising from a breach of, or any event relating to, the
Cardholder Agreements and the Account Duties thereunder occurring prior to the
date hereof shall be as set forth in the Purchase Agreement, the terms of which
are incorporated herein by reference.

                  3. [Reserved]

                  4. All of the terms, agreements, covenants and conditions set
forth herein shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns.

                  5. Nothing contained in this Assignment shall be deemed to
limit or supersede any of the provisions of the Purchase Agreement.

                  6. Whenever possible, each provision of this Assignment shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Assignment shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Assignment. Assignor shall execute such
other documents and instruments as Assignee may reasonably request to effectuate
the assignment and transfer set forth herein.

                  7. The laws of the State of South Dakota applicable to
contracts executed and wholly performed therein shall govern the validity and
interpretation hereof and the performance of the parties hereto of their
respective duties and obligations hereunder.

                  8. This Assignment has been executed in a number of
counterparts, each of which shall be considered an original and no other
counterpart need be produced.







         IN WITNESS WHEREOF, the parties hereto have executed this Assignment
and Bill of Sale as of the day and year first set forth above.


                            CITIBANK USA, N.A.

                            BY:______________________



                            SPIRIT OF AMERICA NATIONAL BANK


                            BY:______________________


STATE  OF ______________________)
                                                ) SS.:
COUNTY OF ____________________ )


         On this _____ day of March, 2005, before me, the undersigned Notary
Public, personally appeared __________________________________________ and
___________________, personally known to me, who acknowledged themselves to be
the ____________ and ______________ of Citibank USA, N.A., a national banking
association, and who acknowledged that they, being duly authorized to do so,
executed the foregoing instrument as such officers for the purposes therein set
forth.

         WITNESS my hand and official seal.



                                  ------------------------------
                                  Notary Public








44




STATE  OF ______________________)
                                                ) SS.:
COUNTY OF ____________________ )


         On this _____ day of March, 2005, before me, the undersigned Notary
Public, personally appeared __________________________________________ and
___________________, personally known to me, who acknowledged themselves to be
the ____________ and ______________ of Spirit of America National Bank, a
national banking association, and who acknowledged that they, being duly
authorized to do so, executed the foregoing instrument as such officers for the
purposes therein set forth.

         WITNESS my hand and official seal.



                                  ------------------------------
                                  Notary Public






                                    EXHIBIT 3

                              ASSUMPTION AGREEMENT

         This Assumption Agreement made as of this ______ day of March by
CITIBANK USA, N.A., a national bank ("Seller"), to SPIRIT OF AMERICA NATIONAL
BANK, a national banking association ("Purchaser").

                              W I T N E S S E T H:

         WHEREAS, under Section 2.2 of that certain Purchase Agreement between
Seller and Purchaser dated as of March 14, 2005 (the "Purchase Agreement") by
and between Seller and Purchaser, Purchaser agreed to assume and agreed to pay
and discharge or perform certain liabilities and obligations of Seller which
relate to the Credit Card Business.

         NOW, THEREFORE, in consideration of the foregoing, it is agreed as
follows:

         1. Terms used in this Assumption Agreement with initial capital letters
and not otherwise defined herein shall have the respective meanings given hereto
in the Purchase Agreement.

         2. Purchaser hereby agrees that it has assumed and does hereby assume
from Seller, and has agreed and does hereby agree to pay and discharge or
perform for Seller, as of the Transfer Date, the Credit Balances and the Account
Duties in existence on or arising after the Transfer Date relating to the
Eligible Accounts (provided, however, that Purchaser does not assume any
liabilities arising from Seller's failure to perform Account Duties prior to the
Transfer Date and Seller shall retain all liabilities related thereto and
indemnify Purchaser from all costs relating thereto in accordance with the terms
of the Purchase Agreement).

         3. Nothing contained in this Assumption Agreement shall be deemed to
limit or supersede any of the provisions of the Purchase Agreement.

         4. Whenever possible, each provision of this Assumption Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Assumption Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Assumption Agreement.

         5. The laws of the State of South Dakota applicable to contracts
executed and wholly performed therein shall govern the validity and
interpretation hereof and the performance of the parties hereto of their
respective duties and obligations hereunder.





         6. This Assumption Agreement has been executed in a number of
counterparts, each of which shall be considered an original and no other
counterpart need be produced.

         IN WITNESS WHEREOF, Purchaser has caused this Assumption Agreement to
be executed by a corporate officer of Purchaser thereunto duly authorized, all
as of the day and year first above written.


SELLER:                             PURCHASER:


CITIBANK USA, N.A.                  SPIRIT OF AMERICA NATIONAL BANK


By:___________________________      By:_________________________
Its:__________________________      Its:________________________






                                    EXHIBIT 4

                            Supplemental Information
                    [Document Request Support from Citicorp]




o        Card Applications and Related Correspondence
o        Correspondence related to Card Applications
o        Credit Bureaus (from card apps)
o        General Correspondence with Cardholders (in any form--including written
         or electronic correspondence).
o        Payment Records (including mail-in, online, phone-initiated, lock box,
         and in-store, and payments in process)
o        Records Related to Credit Balance Refunds
o        Account Closure Documentation (in any form).
o        Collection Agency Records and Correspondence (in any form).
o        Bankruptcy Documentation
o        Consumer Dispute Verification (CDV) Forms
o        CCCS Payment Plans and General Correspondence (in any form).
o        Customer Dispute Documentation (including written or electronic
         correspondence).
o        Fraud Documentation (including police reports, affidavits,
         investigative reports, and correspondence with customers in any form).
o        Hardship Payment Plan Documentation (including copies of plans and all
         correspondence with customers in any form).
o        Copies of Cardholder Complaints to OCC or Other Regulatory or
         Enforcement Agency (in any form)
o        Records of All Pending or Threatened Litigation (in any form)
o        Records of Deceased Cardholders
o        Account Agreements Used Within Two Years Prior to Closing
o        Initial Disclosures Used Within Two Years Prior to Closing
o        Change in Terms Notifications Used Within Two Years Prior to Closing








                                    Exhibit 5
                     Ineligible Accounts Purchase Agreement


                         RECEIVABLES PURCHASE AGREEMENT


                                     Between

                              FASHION SERVICE CORP.

                                       and

                               CITIBANK USA, N.A.


                              Dated March 14, 2005






................................................................................








                         RECEIVABLES PURCHASE AGREEMENT

         RECEIVABLES PURCHASE AGREEMENT (this "Agreement") is made and entered
into this14th day of March, 2005 by and between Fashion Service Corp., a
Delaware corporation with its principal office at 3411 Silverside Road, 103
Springer Building, Wilmington. Delaware ("Purchaser"), and Citibank USA, N.A., a
national banking association ("Seller"), with its principal office in Sioux
Falls, South Dakota.

                               R E C I T A L S:

          WHEREAS, Seller is a national banking association whose credit
activities result in the creation of credit card loans and accounts receivable
including the issuance of credit cards bearing the name, logo or symbol(s) of
Catherines, Catherines Advantage, Catherines Plus Sizes (including PS Plus Sizes
. . . Plus Savings), Catherines Stout Shoppe, Clothes for Eve, Catherines, Inc.,
Virginia Specialty Stores, Added Dimensions, The Answer, Other Dimensions, VSSI,
or Virginia Specialty Stores, Inc. (such credit card being referred to herein as
a "Credit Card" and the credit account on which a purchase transaction may be or
has been made by (or by a person authorized by) the cardholder (collectively, a
"Cardholder") pursuant to a Credit Card is referred to herein as an "Account";

         WHEREAS, Purchaser's affiliate, Catherines, Inc., is entitled, pursuant
to the terms of that certain Merchant Services Agreement dated as of December 1,
1998, (as amended, the "Merchant Agreement") to purchase from Seller certain
Ineligible Accounts, as defined therein, and has designated Purchaser to
purchase such Ineligible Accounts; and

         WHEREAS, Seller wants to sell, and Purchaser wants to buy, the
Ineligible Accounts and all receivables related thereto, on the terms and
conditions set forth in this Agreement;

         NOW, THEREFORE, in consideration of these recitals and the mutual
covenants and conditions contained in this Agreement, it is agreed as follows:

         1.       Sales And Purchase Of Receivables.
         On the closing date, which shall be March 18, 2005 or such other date
as the parties shall mutually agree, it being agreed that the closing shall
occur concurrently with the closing under that certain Purchase Agreement (the
"Eligible Accounts Purchase Agreement") dated of even date herewith between
Seller and Spirit of America National Bank ("Spirit") relating to the Eligible
Accounts (as defined in the Eligible Accounts Purchase Agreement) (the "Closing
Date"), on the terms and subject to the conditions contained herein, Seller
agrees to sell, convey, transfer and assign to Purchaser, and Purchaser agrees
to purchase from Seller, for the consideration herein provided, the





Ineligible Accounts (as hereafter defined), including the receivables thereunder
and all right, title, and interest that Seller has in such Ineligible Accounts
as of the Closing Date. On the Closing Date, Seller shall execute and deliver to
Purchaser a Bill of Sale (the "Bill of Sale") in the form of Exhibit "A" hereto
and a Verification (the "Verification") in the form of Exhibit "B." The
consummation of the transactions contemplated herein on the Closing Date is
referred to herein as the "Closing". The parties acknowledge and agree that the
Ineligible Accounts purchased hereunder shall not include any Bankruptcy Account
or Fraud Account, as such terms are hereafter defined, and Seller shall retain
all Bankruptcy Accounts and Fraud Accounts.

         As used in this Agreement, "Bankruptcy Account" means any Account for
which the obligor on the account has on or before the Closing Date voluntarily
commenced, or against whom there was commenced, a proceeding or petition under
any bankruptcy, insolvency or similar law or seeking a discharge or
reorganization or the appointment of a receiver, trustee, custodian or
liquidator for such person or a substantial portion of such person's property,
assets or business or to effect a plan or other arrangement with its creditors.

         As used in this Agreement, "Fraud Account" means any Account the
origination of which is alleged to have arisen under fraudulent circumstances or
the account balances of which are alleged to have been fraudulently incurred on
or before the Closing Date.

          As used in this Agreement, "Ineligible Accounts" shall mean all of the
following:

         (a) Any Account which, on the Closing Date, includes any amount which
is more than one hundred seventy nine (179) days past due ("179 Accounts") or
otherwise represents a "charged off" Account on Seller's books, which Account
does not otherwise meet the definition of Ineligible Account in clauses (b)
through (h) below;

         (b) Any Account as to which Seller shall, at any time prior to the
Adjustment Date, have received notification, not thereafter rescinded, of any
actual or possible fraud loss (excluding, however Fraud Accounts) or lost or
stolen Credit Card occurring prior to the Closing Date, except to the extent the
Account has been reaffirmed;

         (c) Any Account as to which Spirit shall have given notice to Seller,
on or before the Adjustment Date, that Spirit has elected not to purchase
pursuant to and in accordance with Spirit's right to exclude such Account under
the Eligible Accounts Purchase Agreement;

         (d) Any Account as to which Seller was notified prior to the Closing
Date by the Cardholder of a billing error or dispute (the subject matter of
which was within the control of Seller) concerning the goods or services
purchased using a Credit Card which has not been resolved prior to the
Adjustment Date, or where Spirit is notified after the Closing Date of such
dispute or billing error on Credit Card sales made prior to the Closing Date
which has not been resolved prior to the Adjustment Date;

         (e) Any Account in which the Cardholder has died prior to the Closing
Date;




         (f) Accounts in which the Cardholder's address as of the Closing Date
is not a U.S. A.P.O. or F.P.O. address or within the United States, District of
Columbia or Puerto Rico or other United States territory or Canada (a "Foreign
Account");

         (g) Accounts in which no Cardholder as of the date the Account was
opened had attained the age of eighteen (unless the Cardholder subsequently
affirmed the Account after attaining the age of eighteen, it being agreed that
use of the Credit Card by the Cardholder after attaining the age of eighteen
shall be deemed an affirmation of the Account).; or

         (h) Accounts in which as of the Closing Date the Cardholder is a
business or which, to Seller's knowledge, otherwise represent a commercial
receivable.

         As used in this Agreement, "Valuation Accounts" shall mean any Accounts
which are coded by Seller in accordance with its standard policies and
procedures in any one of the following categories:

CCCS
CEASE & DESIST
INTERNAL
LEGAL
MIDPRIME
POST QUAD INTERNAL
PRE BK
PRIMARY
PRIMARY PRE CHARGE OFF
PROBATE
QUATERNARY
SECONDARY
TERTIARY

plus any 179 Accounts which have not otherwise been charged off by the Seller
prior to the Closing Date.

         2. Purchase Price. The purchase price for the Ineligible Accounts shall
be (x) an amount equal to three and 75/100 percent (3.75%) (the "Applicable
Percentage") of the principal Balance of the Valuation Accounts as of the
Closing Date other than the Foreign Accounts plus (y) an amount equal to one
hundred percent (100.00%) of the principal Balance of the Foreign Accounts as of
the Closing Date (the "Purchase Price"), subject to adjustment as set forth
herein. Subject to the terms and conditions of this Agreement, at the Closing
Purchaser shall pay and deliver to Seller, an amount equal to the Purchase Price
calculated as of the date not less than three days before nor more than five
days before the Closing Date (the "Valuation Date"). The Purchase Price is
subject to adjustment as follows:

         (a) On the Valuation Date Seller shall deliver a Valuation Date Closing
Statement (the "Preliminary Closing Statement") to Purchaser setting forth the
Purchase Price as of the Valuation Date and shall provide Purchaser and its
authorized representatives reasonable access to its books



and records relating to the same to verify the Purchase Price. At the Closing,
Purchaser will pay Seller by wire transfer in immediately available funds to an
account designated by Seller an amount equal to the Purchase Price shown in the
Preliminary Closing Statement (subject to mutually agreed adjustments). Sixty
(60) days after the Closing Date, the parties shall perform a "true-up" of the
Purchase Price, as set forth below.

          (b) Within five (5) business days after finalization of the Adjusted
Closing Statement as set forth in this Section 2(b), the Purchase Price shall be
adjusted and either Purchaser or Seller, as the case may be, shall pay to an
account designated by the other party, by wire transfer in immediately available
funds, the Adjustment Amount. On the relevant Adjustment Date, Purchaser shall
prepare and deliver to Seller an adjusted Closing Statement (as modified by
mutual agreement of the Purchaser and Seller, the "Adjusted Closing Statement")
relating to and specifying in reasonable detail the calculation of the
Adjustment Amount, together with the total Account Balance for each of the
Ineligible Accounts as of the Closing Date and shall provide Seller and its
authorized representatives reasonable access to its books and records relating
to same. The "Adjustment Amount" shall be the difference between (i) the
Purchase Price, and (ii) the Adjusted Purchase Price as set forth on an Adjusted
Closing Statement, together with interest on such difference calculated at the
federal funds rate (at weighted average daily rates reported by the Federal
Reserve System) from the Closing Date to the date of payment. A positive
Adjustment Amount shall be payable by Seller to Purchaser; a negative Adjustment
Amount shall be payable by Purchaser to Seller.

         3. No Assumption Of Liabilities By Purchaser. Seller shall sell, convey
transfer and assign the Ineligible Accounts to Purchaser free and clear of all
liens, charges, encumbrances, debts and liabilities; and Purchaser does not
assume, accept or undertake any obligations, duties, debts or liabilities of
Seller of any kind at all.

         4. Representations And Warranties Of Seller. As of the date hereof, and
as of the Closing Date, Seller represents and warrants to Purchaser as follows:

                  (a) Seller is a national banking association that is duly
organized, validly existing and in good standing under the laws of the United
States with full corporate power and authority to enter into this Agreement, to
sell the Ineligible Accounts and to carry out the terms and provisions of this
Agreement. In connection with the origination of the Ineligible Accounts and
Seller's subsequent administration and collection of them, Seller had, and
continues to have, the corporate power and authority and all licenses and
permits ("Authorizations") required by governmental authority to carry on its
business which relates to the Ineligible Accounts, and these Authorizations are
in full force and effect. Seller may lawfully sell, transfer and assign the
Ineligible Accounts to Purchaser without affecting the obligations of the
obligors thereunder.

                  (b) Seller has all necessary authority and has taken all
action necessary to enter into this Agreement, to consummate the transactions
contemplated hereby and to perform its obligations hereunder. This Agreement
and, when duly executed and delivered by Seller, the Bill of Sale is the legal
valid and binding obligation of Seller, enforceable against it in accordance
with its terms.

                  (c) Neither the execution and delivery of this Agreement by
Seller nor the performance by Seller of any of its obligations hereunder will
result in: (i) a violation of Seller's organizational documents, (ii) a breach
of or default under any term or provision of any contract, agreement,
indebtedness, lease commitment, license, permit or authorization to which Seller
is a



party or by which its assets are bound or (iii) a violation by Seller of any
statute, rule, regulation, ordinance, code, order, judgment, injunction, decree
or award by which Seller is bound.


                  (d) No consent, approval, authorization of, or declaration,
filing or registration with, any governmental or regulatory authority, or any
other person, is required to be made or obtained by Seller in connection with
its execution, delivery or performance of this Agreement.

                  (e) There is no action, order, writ, injunction, judgment or
decree outstanding, or claim, suit, litigation, proceeding, labor dispute,
arbitral action or investigation pending, or, to the knowledge of Seller,
threatened as the date of this Agreement, against or relating to Seller or the
Ineligible Accounts which has a reasonable possibility of an adverse
determination and which, if adversely determined, would be likely to have a
material adverse effect on Seller's ability to consummate the transactions
contemplated hereby.

                  (f) Seller's execution and delivery of this Agreement and the
Bill of Sale and the performance hereunder and thereunder have been duly
authorized by all necessary action on the part of Seller.

                  (g) Seller has good and valid title to the Ineligible
Accounts, which are not subject to a mortgage, pledge, lien, conditional sale
agreement, security interest or encumbrance.

                  (h) With respect to each Ineligible Account sold, the name is
correct; there is an address indicated (which may or may not be currently
correct); the stated Current Principal Balance due is correct as of the date of
each computer transmission made pursuant to Section 9 hereof and, to Seller's
knowledge, the other Account Information set forth in the computer transmission
made pursuant to Section 9 hereof is accurate. The Current Principal Balance of
the Ineligible Accounts set forth on the computer transmission do not include
any finance or late charges assessed after any of the Ineligible Accounts were
charged-off by Seller. All Ineligible Accounts for which the obligor on the
account is deceased, will be identified as such on the Closing Date.

                  (i) Seller has performed all of its obligations on the
Ineligible Accounts including but not limited to, making any adjustments to the
Ineligible Accounts for payments, fees, or finance charges, all of which have
been performed in compliance with all applicable laws, rules and regulations.

                   (j) Except as otherwise provided herein, Seller shall sell
and transfer all Ineligible Accounts to Purchaser without recourse as to whether
the Ineligible Accounts are collectable.

                  (k) Each Ineligible Account listed on Schedule A was
originated and has been managed and serviced in material compliance with
provisions of all applicable state and federal consumer credit laws, including
without limitation, the Truth-In-Lending Act, the Equal Credit Opportunity Act
and the Fair Credit Billing Act. The business and operations of the Credit Card
business (including without limitation all origination procedures, credit
approval procedures, collection practices and marketing practices) have been
conducted by Seller in accordance with all applicable laws, rules and
regulations and the Ineligible Accounts are not subject to any claim arising
from any violation thereof.




                  (l) Each Ineligible Account listed on Schedule A is governed
by an agreement similar to the one of the form agreements attached hereto as
Exhibit "C" ("Cardmember Agreement"). The Cardmember Agreements governing the
Ineligible Accounts vary with respect to the amount and structure of the finance
charge, whether or not there is a grace period on finance charge, the amount of
the minimum payment and the amount of other fees and charges; provided, however,
that all Cardmember Agreements comply with applicable laws.

                  (m) The debt represented by such Ineligible Account has not
been satisfied.

                  (n) Each Ineligible Account is the legal, valid and binding
obligation of the obligor on such Ineligible Account.

                  (o) [Reserved].

                  (p) No obligor on any Ineligible Account has been released
from liability on such Ineligible Account.

                  (q) Except as otherwise identified to Purchaser on the Closing
Date, there is no action, suit or proceeding, pending, or threatened with
respect to any Ineligible Account.

                  (r) With respect to any Ineligible Account which has been
placed for collection, charged to profit and loss, or any similar action prior
to the Closing Date, Seller is providing Purchaser with accurate information as
of the Closing Date as to the Charge-Off Date, Date of Last Payment, and Open
Date.

                  (s) Seller has not utilized any broker, investment banker or
finder in connection with the transaction contemplated hereby who might be
entitled to a fee or commission upon consummation of the transaction
contemplated by this Agreement.




         5.       Covenants Of Seller.

                  (a) If: (i) within one hundred eighty (180) days of the
Closing Date, Seller receives money or property, which represents payment of all
or any portion of any Ineligible Account or (ii) following one hundred eighty
(180) days after the Closing Date, Purchaser presents Seller with reasonable
proof that money or property representing payment of all or a portion of any
Ineligible Account has been remitted to Seller, or (iii) Seller at any time
following one hundred eighty (180) days after the Closing Date determines that
it has received money or property, which represents payment for all or any
portion of any Ineligible Account, in any such case, Seller covenants and agrees
to remit such money or property to Purchaser, with proper endorsements. Seller
shall remit money or property to Purchaser monthly unless otherwise agreed to in
writing by Seller and Purchaser. Seller agrees to indicate on its internal
records that the Ineligible Accounts have been sold to, and are the property of
Purchaser. Notwithstanding the foregoing, Seller shall have no obligation to
remit such money or property to Purchaser under clause (ii) above to the extent
Purchaser's request therefor is received more than two (2) years after the
applicable payment was remitted to Seller unless prior to expiration of such two
(2) year period Seller determined that it



received such payment on account of an Ineligible Account and Seller failed to
remit the same to Purchaser as required by clause (iii) above.

                 (b) Seller covenants and agrees to deliver to Purchaser on the
Closing Date a duly executed power of attorney in the form of Exhibit "C"
attached hereto and incorporated herein by reference.

                 (c) Seller covenants and agrees that from time to time it will,
without further consideration, execute and deliver such instruments of transfer,
conveyance and assignment (in addition to those delivered under paragraph 9
hereof), including affidavits of lost instruments, and shall take such other
action, as Purchaser may reasonably request, to more effectively and properly
transfer, convey and assign to, and vest in, Purchaser full, good and valid
title to, and to put Purchaser in possession and control of, each Ineligible
Account.

                  (d) Seller covenants and agrees that within thirty (30) days
after the Closing Date, Seller shall provide to the credit reporting agencies
used by Seller a letter of closure and deletion of the "Catherines" trade line
records.

                  (e) At Purchaser's request, Seller covenants and agrees to
notify the obligors on the Ineligible Accounts that the Ineligible Accounts have
been sold to Purchaser upon condition that Purchaser reimburses Seller for the
expense of producing and mailing such notices. Seller shall be entitled to
review and approve any such notices, which approval shall not unreasonably be
withheld.

                  (f) Until the Closing Date, Seller will not materially change
its methods of operation so as to result in increased collections with respect
to the Ineligible Accounts (i.e. Seller shall not reduce its standards of
collections by offering better payment terms to Cardholders than were usual and
customary). In addition to the foregoing, between the date hereof and the
Closing Date, Seller and Purchaser shall mutually cooperate and take all action
reasonably necessary to plan for and effectuate the transfer of the Ineligible
Accounts to Purchaser. Without limiting the foregoing, Seller shall provide
Purchaser reasonable opportunity to complete such independent investigation and
examination of the Ineligible Accounts that Purchaser reasonably deems
necessary.

         6. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as follows:

                  (a) Purchaser is duly organized, validly existing and in good
standing under the laws of its state of incorporation, with full corporate power
and authority to conduct its business as it is presently being conducted.

                  (b) Purchaser has all necessary corporate authority and has
taken all corporate action necessary to enter into this Agreement, to consummate
the transactions contemplated hereby and to perform its obligations hereunder.
This Agreement, when duly executed and delivered by Purchaser is a legal valid
and binding obligation of Purchaser, enforceable against it in accordance with
its terms.





                  (c) Neither the execution and delivery of this Agreement by
Purchaser nor the performance by Purchaser of any of its obligations hereunder
will result in (i) a violation of Purchaser's articles or certificate of
incorporation, (ii) a breach of or default under any term, provision of any
contract, agreement, indebtedness, lease commitment, license, permit, or
authorization to which Purchaser is a party or by which its assets are bound,
which breach or default would have a material adverse effect on its business or
financial condition or its ability to consummate the transactions contemplated
hereby, or (iii) or a violation of Purchaser of any statute, rule, regulation,
ordinance, code order, judgment, injunction, decree, or award, which violation
would have a material adverse affect on its business or financial condition or
its ability to consummate the transactions contemplated hereby.

                  (d) No consent, approval, authorization of, or declaration,
filing or registration with, any governmental or regulatory authority, or any
other person, is required to be made or obtained by Purchaser in connection with
the execution of this Agreement, delivery and performance of this Agreement and
the performance of its obligations hereunder.

                  (e) There is no action, order, writ, injunction, judgment, or
decree outstanding or claim, suit, litigation, proceeding, labor dispute,
arbitral action or investigation pending, or to the knowledge of Purchaser
threatened as of the date of this Agreement, against or relating to Purchaser
which has a reasonable possibility of an adverse determination and which, if
adversely determined, would be likely to have a material adverse effect on
Purchaser or this Agreement or the transactions contemplated hereby.

                  (f) Purchaser has obtained all necessary state and federal
approvals and licenses necessary to perform collection activities on the
Ineligible Accounts sold hereunder.

                  (g) Purchaser and any affiliate of Purchaser that will be
collecting the Ineligible Accounts has $1,000,000 general comprehensive
liability insurance.

                  (h) Purchaser is a sophisticated buyer and its decision to
purchase the Ineligible Accounts is based upon its own independent expert
evaluation of the nature, validity, collectibility, enforceability and value of
the Ineligible Accounts. Purchaser has had (or prior to the Closing will have)
sufficient opportunity to complete the independent investigation and examination
of the Ineligible Accounts that Purchaser deems necessary. Purchaser enters into
this Agreement solely on the basis of that investigation and Purchaser's own
judgment and the representations expressly set forth in this Agreement.
Purchaser has made an independent determination that the Purchase Price
represents the Ineligible Accounts' fair and reasonable value. Purchaser is not
acting in reliance on any representation of Seller except for those expressly
listed in Section 4 hereof.

                  (i) Purchaser has not utilized any broker, investment banker
or finder in connection with the transaction contemplated hereby who might be
entitled to a fee or commission upon consummation of the transaction
contemplated by this Agreement.







         7.       Covenants and Agreements of Purchaser

                   (a) Purchaser covenants and agrees that it will not attempt
to collect on any Ineligible Account where it has notice that the obligor is
deceased or has filed for Chapter 7 bankruptcy except to the extent permitted by
applicable law.

                  (b) Purchaser covenants and agrees that it, its successor(s)
in interest, or any entity collecting the Ineligible Account on Purchaser's
behalf will not use Seller's name in collecting the Ineligible Accounts, other
than to explain that Purchaser bought the accounts from Seller, and Purchaser
will not represent to the obligor that Purchaser is in any way affiliated with
Seller or that Purchaser is collecting the Ineligible Accounts on Seller's
behalf.

                  (c) Purchaser covenants and agrees that it will not use
Seller's name in reporting the Ineligible Accounts or the status thereof to any
third party, including without limitation, credit reporting companies. Any
reporting to credit reporting companies shall comply with the Fair Credit
Reporting Act and any other laws or regulations governing credit reporting
companies.

                  (d) Purchaser may resell or transfer the ownership of any
Ineligible Account to a third party, including the transfer of Cardholder
information (such as names and addresses) to any third party, (each referred to
as "Third Party Buyer"); provided, however, that (except for Purchaser's sale,
pledge or transfer of Ineligible Accounts to one or more of its wholly owned
subsidiaries or affiliates or to a trust or other special purpose vehicle which
is wholly owned by such subsidiary for the sole purpose of obtaining financing
and/or issuing asset-backed securities secured by such Ineligible Accounts
(collectively, a "Permitted Buyer")) Purchaser shall conduct commercially
reasonable due diligence of the Third Party Buyer prior to such transfer.
Purchaser shall defend, indemnify and hold harmless Seller from any and all
causes of action, claims, expenses or judgments incurred by Seller to the extent
a Third Party Buyer or any buyer of Third Party Buyer (collectively referred to
herein as "Downstream Buyer") is responsible. Purchaser shall require all
Downstream Buyers (other than Permitted Buyers) to agree to be bound to all of
the Purchaser's obligations and limitations under this Agreement with respect to
the Ineligible Accounts and to acknowledge all of Seller's on-going rights under
this Agreement. All Downstream Buyers' requests for documentation pursuant to
Section 10 must be made to Seller through Purchaser, unless Seller otherwise
agrees in writing. Nothing in this Section 7(d) shall modify the indemnification
provisions between Seller and Purchaser as set forth in Sections 13 and 14 of
this Agreement.

                  (e) Purchaser covenants and agrees that in the collection of
Ineligible Accounts, Purchaser and its affiliates will materially comply with
all applicable state and federal laws, including, but not limited to, debt
collection laws.

                  (f) Purchaser covenants and agrees that it and any of its
affiliates involved in collection of the Ineligible Accounts will maintain
$1,000,000 general comprehensive liability insurance coverage for as long as
Purchaser or its affiliates is engaged in collecting Ineligible Accounts.

                  (g) If Seller has not notified the Cardholders of the sale of
the Ineligible Accounts pursuant to Section 5(e), Purchaser covenants and agrees
to notify the obligors on the Ineligible



Accounts, in the first collection communication sent to the obligor with respect
to the Ineligible Account by Purchaser or Purchaser's agent, that Purchaser has
bought the Ineligible Account from Seller. Seller shall have the right to review
and approve all written notices sent by Purchaser to the Ineligible Account
holders informing the Cardholders of Ineligible Accounts of the transfer of the
Cardholder's Ineligible Account to Purchaser, which approval shall not be
unreasonably withheld.

                  (h) Purchaser covenants and agrees that it or any entity
collecting the Ineligible Accounts on its behalf will maintain all necessary
state and federal licenses required to perform collection activity on the
Ineligible Accounts.

                  (i) If: (i) within one hundred eighty (180) days of the
Closing Date, Purchaser receives money or property, which represents payment of
all or any portion of any account of Seller's that is not an Ineligible Account
(an "Excluded Account") or (ii) following one hundred eighty (180) days after
the Closing Date, Seller presents Purchaser with reasonable proof that money or
property representing payment of all or a portion of any Excluded Account has
been remitted to Purchaser, or (iii) Purchaser at any time following one hundred
eighty (180) days after the Closing Date determines that it has received money
or property, which represents payment for all or any portion of any Excluded
Account, in any such case, Purchaser covenants and agrees to remit such money or
property to Seller, with proper endorsements, and, where possible, properly
identifying the Account on which payment was received. Purchaser shall remit
money or property to Seller monthly unless otherwise agreed to in writing by
Seller and Purchaser.

         8. Conditions Of Closing. The obligations of Seller to perform
hereunder and sell the Ineligible Accounts and the obligations of Purchaser to
perform hereunder and purchase the Ineligible Accounts shall be subject to the
satisfaction on or before the Closing Date of the following further conditions:
(i) Seller's and Purchaser's representations and warranties contained in
paragraphs 4 and 6 hereof shall be true and correct in all respects on the
Closing Date as if made on such date; (ii) Seller and Purchaser shall have
performed and observed all covenants, agreements and conditions hereof to be
performed or observed by each on or before the Closing Date; and (iii) there
shall not have been any materially adverse change in the Ineligible Accounts
that have not been waived by Purchaser.

         9. Closing. At the Closing, Purchaser shall deliver to Seller the
Purchase Price by wire transfer to a bank account designated by Seller as
otherwise provided in Section 2 hereof. Seller will provide a computer
transmission of the Ineligible Accounts to Purchaser and deliver to Purchaser an
executed Bill of Sale in the form of Exhibit "A", a Verification in the form of
Exhibit "B", and a duly executed power of attorney in the form of Exhibit "C".
The computer transmission will include the following information: Cardholder's
name, address, phone number, social security number, name of any comaker,
address of any comaker, telephone number of any comaker, social security number
of any comaker, originating balance, date of charge off, last payment date,
current interest rate, current principal balance, and whether the Cardholder is
deceased (the "Account Information"). In addition to the Bill of Sale,
Verification and power of attorney, Seller shall deliver to Purchaser such,
assignments, conveyances and other good and sufficient instruments of transfer
(all of which shall be consistent with the terms set forth in this Agreement),
as shall be effective to



vest in Purchaser good and valid title to the Ineligible Accounts.

         10. Account Applications And Billing Statements. Within one hundred
eighty (180) days of the Closing Date, upon request by Purchaser, Seller shall
provide Purchaser with copies of applications and/or billing statements that
Seller may have in its possession for any Ineligible Account (collectively,
"Supplemental Information"). During such one hundred eighty (180) day period,
Seller shall provide Purchaser with Supplemental Information on up to ten
percent (10%) of the Ineligible Accounts transferred on the Closing Date at no
cost. If during such one hundred eighty (180) day period Seller provides
Purchaser with Supplemental Information on more than ten percent (10%) of the
Ineligible Accounts, Purchaser shall pay Two dollars ($2.00) per page for those
copies in excess of ten percent (10%).

                  After expiration of such one hundred eighty (180) day period,
Seller shall provide Purchaser with Supplemental Information until the date
three hundred sixty-five (365) days after the Closing Date. For requests made
during such period, Purchaser shall pay Seller Two dollars ($2.00) per request
plus Two dollars ($2.00) per page provided irrespective of whether Seller has
provided Purchaser with Supplemental Information on more than ten percent (10%)
of the Ineligible Accounts. After the date three hundred sixty five (365) days
following the Closing Date, to the extent the same is then available to Seller,
Seller shall provide Purchaser with Supplemental Information until the date two
(2) years after the Closing Date. For requests made during such period,
Purchaser shall pay Seller Ten dollars ($10.00) per request plus Two dollars
($2.00) per page. After the date two (2) years following the Closing Date Seller
shall have no obligation to provide Purchaser with Supplemental Information.
Seller shall not dispose of any Supplemental Information for Ineligible Accounts
in its possession prior to expiration of two (2) years after the Closing Date.
Seller shall maintain all Supplemental Information which is in its possession or
control in accordance with Seller's record retention policy as in effect on the
date hereof. Seller represents that its record retention policy as related to
Supplemental Information is in compliance with all applicable laws, rules and
regulations.

         11. Seller's Repurchase Of Ineligible Accounts. With respect to any
Ineligible Account of which Purchaser gives Seller notice under Paragraph 12(a)
below, Seller shall repurchase the Ineligible Account at the same price that
Purchaser paid Seller for such Ineligible Account, less any payments received by
Purchaser on the Ineligible Account. Seller agrees to pay this amount within
thirty (30) days (or at any other time mutually agreed to in writing by the
Parties) after Purchaser's notice. Seller is only obligated to repurchase
Ineligible Accounts for which Purchaser has provided notice in accordance with
paragraph 12(a) below.

         12.      Purchaser's Presentment of Accounts for Repurchase.

                  (a) If Purchaser, its agent, its successor in interest, or its
successor in interest's agent discovers that, within one hundred eighty (180)
days following the Closing Date as of 12:01 a.m. on the Closing Date:

                  (i)      The name on an Ineligible Account sold on the Closing
                           Date was incorrect;
                  (ii)     The stated amount of the obligation due on an
                           Ineligible Account sold on the Closing Date was
                           incorrect because of reasons including but not
                           limited to


                           the following: Seller has released the obligor, the
                           debt is invalid, or the Ineligible Account has been
                           satisfied;
                  (iii)    An Ineligible Account sold on the Closing Date was
                           subject to liens for attorney fees; or
                  (iv)     Seller has breached any other of its representations
                           or warranties under Section 4 hereof with respect to
                           such Ineligible Account,

Purchaser shall have the right to notify Seller of such event as set forth in
12(b) below within two hundred ten (210) days of the Closing Date, and tender
the Ineligible Account to Seller as set out in paragraph 11, in which case
Seller shall be obligated to effect such repurchase as provided in paragraph 11.

                  (b)For any Ineligible Account which Purchaser submits to
Seller for repurchase as a result of the stated amount of the obligation due
being incorrect because Seller discharged all or a portion of the Ineligible
Account's outstanding balance due to fraudulent activity on the Ineligible
Account, Purchaser shall provide Seller with reasonable proof from the
Cardholder attesting that Seller discharged all or a portion of the Ineligible
Account because of fraudulent activity on the Ineligible Account.

13.      Indemnification  By Purchaser

                  (a) Purchaser covenants and agrees to defend, indemnify, and
hold harmless Seller and its respective parents, officers, employees,
affiliates, agents and representatives against any liabilities, judgments,
damages, claims, demands, costs, expenses or losses (including reasonable
attorney's fees): (i) incurred by reasons of any representation or warranty made
by Purchaser in or in connection with this Agreement having been untrue or
incorrect in any respect when made or deemed made, or the breach by Purchaser of
any covenant or agreement made by it herein, or by reason of any action or
proceeding being instituted by any person based upon an allegation or assertion
which, if true, would show the existence of any of the foregoing circumstances;
or (ii) arising after the Closing Date (due to matters first occurring after the
Closing Date) and relating to the Ineligible Accounts or to actions or omissions
by Purchaser or its representatives, agents, successors in interest, or any
entity collecting on behalf of a successor in interest, with respect the
Ineligible Accounts, including but not limited to, failure to be licensed under
all applicable state laws to engage in the collection of the Ineligible
Accounts, and failure to comply with all applicable state and federal laws,
including, but not limited to debt collection laws. Purchaser shall not be
liable to defend, indemnify, and hold harmless Seller for any damages, claims,
demands, costs, expenses, or losses resulting from inaccurate Ineligible Account
information provided by Seller provided, however, that if Purchaser continues to
attempt to collect the Ineligible Account after it has knowledge of, or is on
notice of such inaccurate information Purchaser shall indemnify and hold Seller
harmless as provided herein.

         (b) Each party shall notify the other of any demand, assertion, or
claim ("Claims"), including but not limited to a claim brought in the context of
litigation (e.g., an original claim, counter-claim, cross claim, etc.,) by any
Ineligible Account Cardholder or a third party against



Seller, Purchaser or any servicer involving the Ineligible Accounts, immediately
but in no event more than five (5) days after becoming aware of any such Claim.
In the event that a Claim: (1) involves an act or failure to act by Seller; or
(2) is related to a business practice of Seller or its parent or affiliate
companies; then, in addition to the indemnification obligations set forth in
Section 14, Seller shall, in its sole discretion, have the right to do any or
all of the following: (a) assume the defense and/or settlement of the Claim (and
all legal costs associated therewith); (b) repurchase the Ineligible Account;
(c) participate in the defense of the Claim including, but not limited to,
retaining additional or substitute counsel. If Seller does not elect to assume
the defense or repurchase the Ineligible Account, Purchaser shall have the
right, but not the obligation, to defend the Claim and Seller shall reimburse
Purchaser for all fees and costs (including reasonable attorneys fees) incurred
by Purchaser in so defending. Notwithstanding anything in this Agreement to the
contrary, Purchaser shall not, without the written consent of Seller, settle or
compromise any Claim or consent to the entry of any judgment which imposes any
future obligation on Purchaser which does not include, as an unconditional term
thereof, the giving by the claimant and or plaintiff to Seller, a release from
all liabilities in respect to any and all Claims. Seller's exercise of its
rights under this section of the Agreement will not constitute a waiver, of or
release from, any claim Seller might have against Purchaser nor, without a
specific written agreement to the contrary, will Seller's exercise of its rights
hereunder constitute or be construed as an agreement to or an admission of an
obligation to indemnify or hold Purchaser harmless with respect to Seller, the
Ineligible Account holder, or any third party.

     (c) Notwithstanding any other provision hereof, it is understood and agreed
that Seller shall not be entitled to any indemnification payments hereunder
unless and until the aggregate amount recoverable exceeds twenty-five thousand
dollars ($25,000). Seller shall then be entitled to recover all amounts due in
respect of indemnification hereunder in excess of twenty-five thousand dollars
($25,000).

         14.      Indemnification By Seller.

                  (a) Seller covenants and agrees to defend, indemnify, and hold
harmless Purchaser and its respective parents, officers, employees, affiliates,
agents and representatives against any liabilities, judgments, damages, claims,
demands, costs, expenses or losses (including reasonable attorney's fees): (i)
incurred by reasons of any representation or warranty made by Seller in or in
connection with this Agreement having been untrue or incorrect in any respect
when made or deemed made, or the breach by Seller of any covenant or agreement
made by it herein, or by reason of any action or proceeding being instituted by
any person based upon an allegation or assertion which, if true, would show the
existence of any of the foregoing circumstances; or (ii) arising from events
that have occurred prior to the Closing Date and relating to the Ineligible
Accounts or to actions or omissions of Seller, its representatives or agents
with respect thereto.

                  (b) Each party shall notify the other of any demand,
assertion, or claim ("Claims"), including but not limited to a claim brought in
the context of litigation (e.g., an original claim, counter-claim, cross claim,
etc.) by any Ineligible Account Cardholder or a third party against



Seller, Purchaser or any servicer involving the Ineligible Accounts, immediately
but in no event more than five (5) days after becoming aware of any such Claim.
In the event that a Claim: (1) involves an act or failure to act by Purchaser;
or (2) is related to a business practice of Purchaser or its parent or affiliate
companies; then, Purchaser shall, in its sole discretion, have the right to do
any or all of the following: (a) assume the defense and/or settlement of the
Claim; (b) participate in the defense of the Claim including, but not limited
to, retaining additional or substitute counsel. If Purchaser does not elect to
assume the defense, Seller shall have the right, but not the obligation, to
defend the Claim and Purchaser shall reimburse Seller for all fees and costs
(including reasonable attorneys fees) incurred by Purchaser in so defending.
Notwithstanding anything in this Agreement to the contrary, Seller shall not,
without the written consent of Purchaser, settle or compromise any Claim or
consent to the entry of any judgment which imposes any future obligation on
Seller which does not include, as an unconditional term thereof, the giving by
the claimant and or plaintiff to Purchaser a release from all liabilities in
respect to any and all Claims. Purchaser's exercise of its rights under this
section of the Agreement will not constitute a waiver, of or release from, any
claim Purchaser might have against Seller nor, without a specific written
agreement to the contrary, will Purchaser's exercise of its rights hereunder
constitute or be construed as an agreement to or an admission of an obligation
to indemnify or hold Seller harmless with respect to Purchaser, the Ineligible
Account holder, or any third party.

         (c) Notwithstanding any other provision hereof, it is understood and
agreed that Purchaser shall not be entitled to any indemnification payments
hereunder unless and until the aggregate amount recoverable exceeds twenty-five
thousand dollars ($25,000). Purchaser shall then be entitled to recover all
amounts due in respect of indemnification hereunder in excess of twenty-five
thousand dollars ($25,000).

         15. Nature And Survival Of Representations And Warranties and
Indemnification. Seller's representations and warranties, which exclude Seller's
indemnification under Section 14 above, will survive hereunder for one (1) year
from the Closing Date. Purchaser's representations and warranties, which exclude
Purchaser's indemnification under Section 13 above, will survive hereunder for
one (1) year from the Closing Date.

         16. Expenses. Except as otherwise expressly provided herein, each party
hereto shall bear and pay its own costs and expenses.

         17. Notices. Any notice or other communication provided for herein or
given hereunder to a party hereto shall be in writing and shall be delivered in
person to such party or mailed by first class registered or certified mail,
postage prepaid, addressed as follows:

                           If to Seller:
                                    Citibank USA, N.A.
                                    701 E. 60th Street North
                                    Sioux Falls, South Dakota 57104
                                    Attn:  Senior Vice President



                           With a copy to:
                                    Citi Commerce Solutions
                                    Four Parkway North, P. O. Box 865
                                    Deerfield, IL 60015-0865
                                    Attention:    Legal Department

                           If to Purchaser:
                                    Fashion Service Corp.
                                    Attn:  Legal Department
                                    450 Winks Lane
                                    Bensalem, Pa 19020

         18. Severability. If any provision, or application thereof, of this
Agreement is held unlawful or unenforceable in any respect, the parties hereto
agree that such illegality or unenforceability shall not affect other provisions
or applications that can be given effect, and this Agreement shall be construed
as if the unlawful or unenforceable provision or application had not been
contained herein. The parties hereto agree that any court may modify the
objectionable provision so as to make it valid, reasonable and enforceable and
agree to be bound by the terms of such provision, as modified by the court.

         19. Amendments. This Agreement may be amended, modified or waived only
by a written instrument executed by all the parties hereto.

         20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute but one instrument.

         21. Headings. The headings contained in this Agreement and in the
exhibits appended hereto are for convenience only and shall not be deemed to
affect the interpretation of the provisions of this Agreement.

         22. Governing Law. This Agreement is made pursuant to, and shall be
construed under, the substantive laws of the State of South Dakota.

         23. Entire Agreement. This Agreement is intended to define the full
extent of the legally enforceable undertakings of the parties hereto, and no
related promise or representation, written or oral, which is not set forth
explicitly in this Agreement is intended by either party to be legally binding.
Both parties acknowledge that in deciding to enter into this transaction they
have relied on no representations, written or oral, other than those explicitly
set forth in this Agreement.

         24. No Third-Party Rights. Except as otherwise provided herein, this
Agreement is for the sole benefit of the parties hereto and their permitted
assigns, and nothing herein expressed or implied shall give or be construed to
give to any person, other than the parties hereto and such assigns, any legal or
equitable rights hereunder.




         25. Sales, Use or Transfer Taxes. If any sales, use or transfer tax is
assessed or otherwise payable as a result of the transaction contemplated
hereby, Purchaser and Seller shall assume the obligation to pay such tax that is
its responsibility to pay, to the extent such taxes relate to, or accrue on or
after the Closing Date.

         26. Seller's Right to Repurchase Ineligible Accounts.

                  (a) Ineligible Accounts Affected. Seller shall have the right
to repurchase any Ineligible Account that has not been paid in full, released or
compromised by Purchaser, if Seller reasonably determines that there is a
pending or threatened suit, arbitration or other legal proceeding or
investigation relating to the Ineligible Account or the Ineligible Account
holder, and naming Seller or otherwise involving Seller's interest therein in a
manner unacceptable to Seller, or Seller otherwise determines (in its reasonable
discretion) that such matter cannot be resolved and/or that Seller's interest
therein cannot be adequately protected without Seller owning such Ineligible
Account.

                  (b) Right to Repurchase. Upon notice to Purchaser, Seller may
repurchase any Ineligible Account described in 26(a) by repaying to Purchaser an
amount determined as follows:

         (i) if the applicable Account was a Valuation Account, the purchase
         price for such Account will be determined by multiplying the balance of
         the Account as of the Closing Date by the Applicable Percentage and
         then subtracting any non-refundable recoveries received by Purchaser on
         the Account; and

         (ii) if the applicable Account was a Foreign Account, the purchase
         price for such Account will be the balance of the Account as of the
         Closing Date less any non-refundable recoveries received by Purchaser
         on the Account; and

         (iii) if the applicable Account was not a Valuation Account or Foreign
         Account, the purchase price will be One Dollar ($1.00).

         27. Waiver of Jury Trial. In any suit or action arising out of this
Agreement, EACH OF THE PARTIES HEREBY KNOWINGLY AND WILLINGLY WAIVES AND
SURRENDERS SUCH PARTY'S RIGHT TO TRIAL BY JURY AND AGREES THAT SUCH LITIGATION
SHALL BE TRIED TO A JUDGE SITTING ALONE AS THE TRIER OF BOTH FACT AND LAW, IN A
BENCH TRIAL, WITHOUT A JURY.

         28. Limitation of Damages. EXCEPT FOR A PARTY'S OBLIGATION TO INDEMNIFY
THE OTHER PARTY AGAINST THE CLAIMS OF THIRD PARTIES PURSUANT TO SECTIONS 13 AND
14 HEREOF, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY
INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES, OR
FOR ANY LOSS OF PROFITS OR REVENUE, REGARDLESS OF WHETHER SUCH PARTY KNEW OR
SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES.




         29. Non-waiver. The failure of either party to insist, in any one or
more instances, on the performance of any terms or conditions of this Agreement
shall not be construed as a waiver or relinquishment of any rights granted
hereunder or of the future performance of any such term or condition, and the
obligations of the non-performing party with respect thereto shall continue in
full force and effect.





                      [THE NEXT PAGE IS THE SIGNATURE PAGE]





         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first above written.


                                            CITIBANK USA, N.A.


                                             By: _________________________
                                             Its: _________________________

                                            FASHION SERVICE CORP.

                                             By: _________________________
                                             Its: _________________________









                                   Exhibit "A"
                                  BILL OF SALE


         For value received and in further consideration of the mutual covenants
and conditions set forth in the Receivables Purchase Agreement (the "Agreement")
dated March 14th, 2005, by and among CITIBANK USA, N.A., a national banking
association ("Seller"), and Fashion Service Corp. ("Purchaser"), and by the
terms of the Agreement, the undersigned has bargained and sold and by these
presents does hereby grant, convey, sell, transfer and assign unto Purchaser,
its successors and permitted assigns, all of the accounts receivable, loans
receivable, notes receivable and contract rights of, in and relating to all
Ineligible Accounts, as defined in the Agreement, as set forth in the file
transferred to Purchaser today by computer transmission as evidenced by the
attached verification (collectively the "Ineligible Accounts" and singularly an
"Ineligible Account").

                  TO HAVE AND TO HOLD, unto Purchaser, its successors and
assigns, to and for its own proper use and benefit forever.



         IN WITNESS WHEREOF, on this 18th day of March, 2005, Seller has
executed this Bill of Sale and affixed Seller's corporate seal to it.

                                          CITIBANK USA, N.A.

                                            By:_______________________________

                                            Its:_______________________________







                                   Exhibit "B"

                                  VERIFICATION



         On this the 18th day of March, 2005, Citibank USA, N.A., as Seller, has
transferred to Fashion Service Corp., as Purchaser by computer transmission
_______ Ineligible Accounts with outstanding balances totaling
$__________________ for a total purchase price of $_____________. Said accounts
represent all Ineligible Accounts as defined in the Receivables Purchase
Agreement between Seller and Purchaser dated as of March 14, 2005.


[Remainder of Page intentionally left blank]









         CITIBANK USA, N.A.


         BY:___________________________

         ITS:___________________________





                                   Exhibit "C"

                                POWER OF ATTORNEY
                           FOR COLLECTION OF ACCOUNTS


___________________________
___________________________
___________________________


Gentlemen:

         This Power of Attorney is being executed and delivered by the
undersigned, CITIBANK USA, N.A., a national banking association ("Seller" or the
"undersigned") at the closing of the transactions pursuant to that certain
Receivables Purchase Agreement dated March 14, 2005 ("Agreement") between Seller
and Fashion Service Corp., ("you" or "Purchaser"). Pursuant to the Agreement
Seller will sell, transfer and assign to Purchaser certain credit card accounts
receivable, (collectively the "Ineligible Accounts" and singularly an
"Ineligible Account").

         In connection with the foregoing, and to facilitate the collection by
Purchaser of the Ineligible Accounts, the undersigned hereby appoints Purchaser
as Attorney-in-Fact of and for the undersigned, in accordance with the following
provisions.

         1. Power of Attorney. The undersigned hereby appoints Purchaser as
Attorney-in-Fact of and for the undersigned, with full power of substitution,
with all power and authority in the name of the undersigned:
                  (a) To make, endorse, accept, receive, sign, seal, execute,
         acknowledge and deliver notes, assignments, agreements, certificates,
         hypothecations, checks, bonds, vouchers, receipts, and other written
         instruments of whatever kind and nature which evidence or are related
         to the Ineligible Accounts and any property given in pledge or as
         security therefor; and
                  (b) To deposit and withdraw for your own use, in either the
         undersigned's name or Purchaser's name, or jointly in both our names,
         any funds, monies or properties which may come into your hands and
         which are proceeds from, or other payment upon, any account.

         2. Governing Law. This Power of Attorney shall be construed in
accordance with the laws of the State of South Dakota applicable to agreements
made and to be performed entirely within such State.

         3. Authority. This instrument constitutes a representation of the
authority of the undersigned to execute and deliver this Power of Attorney.

                                      Very truly yours,


                                      CITIBANK USA, N.A.

                                      By:______________________________________

                                      Its:_____________________________________







                                    Exhibit 6
                                Service Agreement

                             SUB-SERVICING AGREEMENT


         This SUB-SERVICING AGREEMENT (the "Agreement"), dated as of March 15,
2005, is made by and between SPIRIT OF AMERICA, INC., a Delaware corporation
("Servicer"), and CITICORP CREDIT SERVICES, INC. (USA), a Delaware corporation
("Sub-Servicer").

         WHEREAS, pursuant to a Purchase Agreement, dated March 14, 2005 (the
"Purchase Agreement"), by and between Spirit of America National Bank, a
national banking association ("Purchaser"), and Citibank USA, N.A., a national
banking association ("Seller"), Purchaser has agreed to purchase, and Seller has
agreed to sell, upon the terms and conditions set forth therein, the Assets to
be Sold; and

         WHEREAS, Purchaser and Seller will enter into that certain Assignment
and Bill of Sale and that certain Assumption Agreement, each to be dated as of
March 18, 2005; and

         WHEREAS, Servicer desires that Sub-Servicer provide certain processing
services to Servicer with respect to the conversion, delivery, processing and
administration of the Credit Card Business for an interim period on the terms
and conditions set forth herein;

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged (all capitalized terms used and not
defined herein shall have the meanings assigned to such terms in the Purchase
Agreement):

                                   ARTICLE 1.
                                INTERIM SERVICING

         1.1 Transfer of Servicing. Servicer shall use reasonable efforts to
assume the administration, management, processing and servicing of the Credit
Card Business promptly (and in any event within ninety (90) days) after the
Transfer Date. Sub-Servicer shall cooperate with Servicer in the transfer of
such administration, management, processing and servicing.

         1.2 Interim Servicing. Until 9:30 p.m. Eastern Time on March 21, 2005,
or such earlier time as Servicer notifies Sub-Servicer in writing of the
revocation of such power and authority, Sub-Servicer, on Servicer's behalf, (a)
shall conduct its duties in accordance with Purchaser's policies and procedures
relating to the operation of its credit card business in effect on the date
hereof (as such policies and procedures may be amended from time to time, the
"Cardholder Guidelines"), which Purchaser acknowledges, for the purpose of the
downtime servicing being provided by Sub-Servicer hereunder, shall consist of
the activities set forth in Exhibit A attached hereto; (b) may take or permit to
be taken such action with respect thereto as it may deem necessary or advisable
for the servicing of the Credit Card Business; and (c) shall service the Credit
Card Business using the same degree of skill and attention that Sub-Servicer has
exercised in the past with respect to accounts that it has serviced for itself
or others.

         1.3 Payment. Sub-Servicer agrees to perform under this Agreement for no
additional consideration beyond that consideration payable to Seller under the
Purchase Agreement.




         1.4 Indemnities. Servicer shall defend, indemnify and hold harmless
Sub-Servicer from all damages and liabilities arising from claims or actions
brought as a result of the activities of Sub-Servicer under the authority
granted herein, except for any damage or liability which shall result from
Sub-Servicer's willful misconduct or negligence. Sub-Servicer shall defend,
indemnify and hold harmless Servicer from all damages and liabilities arising
from claims or actions brought as a result of Sub-Servicer's failure to perform
its duties and obligations in accordance with the terms of this Agreement.

                                   ARTICLE 2.
                                  MISCELLANEOUS


         2.1 Notices. All notices, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered in
person or by United States mail, certified or registered, with return receipt
requested, or otherwise actually delivered, as follows:

                  If to Servicer, to:

                  Spirit of America, Inc.
                  c/o Charming Shoppes, Inc.
                  450 Winks Lane
                  Bensalem, PA  19020
                  Attention:  General Counsel

                  If to Sub-Servicer, to:

                  Citicorp Credit Services, Inc. (USA)
                  701 East 60th Street North
                  Sioux Falls, SD 57104
                  Attention:  General Counsel

                  With a copy to:
                  Citi Commerce Solutions
                  Four Parkway North
                  P.O. Box 865
                  Deerfield, IL  60015
                  Attention:  Legal Department

         The persons or addresses to which mailings or deliveries shall be made
may be changed from time to time by notice given pursuant to the provisions of
this Section 2.1. Any notice, demand or other communication given pursuant to
the provisions of this Section 2.1 shall be deemed to have been given on the
date actually delivered or three (3) days following the date deposited in the
United States mail, properly addressed, postage prepaid, as the case may be.




         2.2 Successors and Assigns. All terms and provisions of this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns. This Agreement and all rights,
privileges, duties and liabilities, and obligations of the parties hereto, may
be assigned or delegated by any party without the consent of the other party. In
order for any such assignment to be effective, the assigning party and the
assignee must first execute a written agreement (and deliver a copy thereof to
the other party hereto) by which the assigning party assigns the particular
rights or privileges to the assignee. In order for any such delegation to be
effective, the delegating party and the delegatee must first execute a written
agreement (and deliver a copy thereof to the other party hereto) by which the
delegating party delegates the particular duties, liability or obligations to
the delegatee and such delegatee expressly assumes the performance and discharge
thereof when due. No such assignment or delegation shall relieve Servicer or
Sub-Servicer of any of their respective duties, obligations, or liabilities to
the other hereunder which are not performed or discharged in full by such
assignee or delegatee.

         2.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.

         2.4 Governing Law. The laws of the State of South Dakota applicable to
contracts executed and wholly performed therein shall govern the validity and
interpretation hereof and the performance of the parties hereto of their
respective duties and obligations hereunder.

         2.5 Captions. The captions contained in this Agreement are for
convenience of reference only and do not form a part of this Agreement.

         2.6 Entire Agreement. The making, execution and delivery of this
Agreement by the parties hereto have been induced by no representations,
statements, warranties or agreements other than those herein expressed. This
Agreement and other written agreements specifically referred to herein embody
the entire understanding of the parties and there are no further or other
agreements or understandings, written or oral, in effect between the parties
relating to the subject matter hereof. This instrument and the agreements
contained herein may be amended or modified only by a written instrument signed
by both parties or their duly authorized agents.






         IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed on their behalf by duly authorized officers as of the day and year
first above written.


                                       SPIRIT OF AMERICA, INC.


                                       By:__________________________
                                       Name:  Kirk R. Simme
                                       Title:  Vice President



                                       CITICORP CREDIT SERVICES, INC. (USA)



                                       By:__________________________
                                       Name:
                                       Title:









                                    Exhibit A

The Cardholder Guidelines shall consist of the following:

1. Collection Processing: None.

2. Remittance Payment Processing: None

3. Statement Processing: None

4. New Account Processing: Effective March 15, 2005, Sub-Servicer shall no
longer process requests for new accounts.

5. Customer Service: Effective March 16, 2005, Sub-Servicer will no longer
process account maintenance and perform full service customer service functions.
Processing will be limited to the following downtime card servicing that is
limited to:

         o        Monetary adjustments: Late fee credits, finance charge
                  credits, credit processing
         o        Credit limit increase processing
         o        Account status changes: Closed account processing, reopen
                  account processing, updated address processing
         o        Plastic replacement order processing

The activity shall be accurately recorded on downtime forms that have been
approved by Charming Shoppes, Inc.

6. Automated POS Authorization: Effective March 16, 2005 as of 8:00 a.m. Eastern
Time, Sub-Servicer shall support POS authorization processing, as it exists on
the date of this Agreement, until March 20, 2005 at 9:00 p.m. Eastern Time, or
until such earlier time as Servicer so notifies Sub-Servicer in writing.







                        SCHEDULE 2.3 - REQUIRED CONSENTS


                                      NONE






                                  SCHEDULE 3.1
                               CONVERSION SCHEDULE

--------------------------------------------------------------------------------
Updated 3/4/05    ver 3.0                       All times EST except where noted


CITIGROUP Conversion Schedule (by category)




                                                               Day of Week     Date        Time
                                                               -----------     ----        ----
                                                                                 
                          A. FILE CONVERSION

Last full processing day on FDR System (full service)          Tuesday         3/15/2005   11:59 PM

Citigroup posts last transactions to FDR System                Wednesday       3/16/2005   5:00 PM

Master Tapes Cut by FDR                                        Friday          3/18/2005   8:00 AM (MST)

Primary Master Tapes Handed to a Charming Representative       Friday          3/18/2005   2:00 PM (MST)

Secondary Master Tapes Delivered to Delta Airlines  (flight
#1153                                                          Friday          3/18/2005   5:00 PM (MST)

Secondary Master Tapes delivered to TSYS in Atlanta, GA (via
Delta Dash)                                                    Friday          3/18/2005   10:30 PM

Financial Sale and Transfer Date                               Friday          3/18/2005

Wire Transfer of Funds to Citigroup                                                        Prior to delivery
                                                               Friday          3/18/2005   of Master Tapes


                          B. SERVICING

Citigroup begins to perform downtime store/customer service    Wednesday       3/16/2005   8:00 AM

Citigroup ends performing downtime store/customer service      Sunday          3/20/2005   9:30 PM

Citigroup emails downtime records to Charming/BPM              Monday          3/21/2005   9:30 AM



                      C. PAYMENT TRANSFER

Last day of remittance processing by Citigroup                 Tuesday         3/15/2005   11:59 PM

Citigroup starts overnighting payments to First Express        Wednesday       3/16/2005    4:00 PM








         SCHEDULE 8.3 - ADDITIONAL FINANCIAL INFORMATION


Information computed as of Financial Information Computation Date and Transfer
Date:

Stratifications:
Attrition
Balances
Credit Limits
Age
Residence

Five Year Histories Showing $ and/or # of:

Active Accounts
Statements
New Accounts Approved
Ending Net Receivables
Sales
Payments
Billed Finance Charges
Late Fees
NSF Fees
Charge-offs
Delinquency
Fraud Amounts





                  SCHEDULE 8.8.1 - FORM OF CARDHOLDER AGREEMENT






               SCHEDULE 8.8.2 - FORM OF PERIODIC/BILLING STATEMENT






              SCHEDULE 8.12 - TRANSFERS AND ASSIGNMENTS OF ACCOUNTS

                                      NONE