SPIEGEL INC
SECOND AMENDMENT TO TRANSFER & SERVICE AGREE
<DOCUMENT>
<TYPE>EX-10.48
<SEQUENCE>45
<FILENAME>dex1048.txt
<DESCRIPTION>SECOND AMENDMENT TO TRANSFER & SERVICE AGREE
<TEXT>
<PAGE>

EXECUTION COPY

                                                                   EXHIBIT 10.48

                                Second amendment
                                       TO
                        TRANSFER AND SERVICING AGREEMENT

     This SECOND AMENDMENT (this "Amendment") TO TRANSFER AND SERVICING
AGREEMENT is made as of October 31, 2002 by and among SPIEGEL CREDIT CORPORATION
III, as Seller, FIRST CONSUMERS NATIONAL BANK, as Servicer and SPIEGEL CREDIT
CARD MASTER NOTE TRUST, as Issuer.

                               W I T N E S S E T H

     WHEREAS, the parties hereto have entered into the Transfer and Servicing
Agreement, dated as of December 1, 2000, as amended (the "Transfer and Servicing
Agreement");

     WHEREAS, MBIA Insurance Corporation ("MBIA"), Spiegel Credit Corporation
III, Spiegel, Inc. ("Spiegel"), Spiegel Acceptance Corporation and First
Consumers National Bank ("FCNB"), have entered into the letter agreement dated
May 16, 2002, (together with all exhibits and supplements thereto the "Letter
Agreement"); and

     WHEREAS, in accordance with the terms of the Letter Agreement, the parties
have agreed to amend the Transfer and Servicing Agreement as hereinafter
provided.

     NOW THEREFORE, in consideration of the Letter Agreement and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:

Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Transfer and Servicing Agreement.

     Section 1. Amendments.

          (a)   Article VII shall be amended by changing the caption thereof to
     read in its entirety "SERVICER DEFAULTS AND SERVICER TERMINATION EVENTS"

          (b)   The heading and the phrase preceding clause (a) of Section 7.1
     shall be amended to read in its entirety as follows:

                "Section 7.1. Servicer Defaults and Servicer Termination Events.
          (X) If any one of the following events (a "Servicer Default") shall
          occur and be continuing:".

          (c)   A new Section 7.1(Y) shall be added following clause (d) of
     Section 7.1(X) as follows:

                "(Y). If any one of the following events (a "Servicer
          Termination Event" shall occur and be continuing:

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               (a)  FCNB is not sold, disposed of, or otherwise liquidated
                    (whether by sale of its ownership interests or substantially
                    all of its assets) on or before December 15, 2002 (the
                    "Disposition Date") in a manner that is acceptable to MBIA
                    Insurance Corporation ("MBIA"); provided that if the Office
                    of the Comptroller of the Currency extends the date by which
                    FCNB must be sold, disposed of, or otherwise liquidated to a
                    date beyond December 31, 2002, the Disposition Date shall be
                    fifteen (15) days prior to the date of such extension; or

               (b)  FCNB shall be dissolved, liquidated or cease to be 100%
                    owned by Spiegel except (i) pursuant to a sale, disposition
                    or liquidation meeting the requirements of clause (a) above
                    or (ii) with the prior written consent of MBIA; or

               (c)  the ratio of Tangible Equity to total assets of FCNB is less
                    than 20%; where Tangible Equity means the remainder of total
                    equity less intangible assets (in each case as shown on the
                    monthly financial statements of FCNB and calculated in
                    accordance with US Generally Accepted Accounting
                    Principles); or

               (d)  managed assets (i.e., assets owned or serviced by FCNB) of
                    FCNB in excess of 10% in the aggregate of FCNB's total
                    managed assets are sold, transferred or otherwise disposed
                    of, including, without limitation, to any affiliate of FCNB,
                    without the prior written consent of MBIA, excluding the
                    transfer of receivables in the ordinary course of business
                    pursuant to the Receivables Purchase Agreement; or

               (e)  the Servicer shall change or amend the Charge Account
                    Agreements or Charge Account Guidelines with respect to the
                    private label portfolio in any material respect without the
                    prior written consent of MBIA, which consent shall not be
                    unreasonably withheld, conditioned or delayed; or

               (f)  any quarterly servicing audit conducted by or on behalf of
                    MBIA shall reveal that the Servicer has failed to comply in
                    any material respect with the Charge Account Guidelines or
                    the Conditions Precedent Documents and such failure shall
                    not be cured within 30 days of such audit as determined by
                    MBIA by means

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                    of a follow up audit and is not otherwise deemed cured by
                    MBIA; or

                (g) FCNB shall have Liquid Assets in an amount less than the
                    greatest of (i) 12% of its Total Assets, (ii) $15,000,000
                    and (iii) 35% of the sum of (a) Deposit Liabilities, (b)
                    Operating Expenses, (c) Accounts Payable, (d) Accrued and
                    Other Liabilities, and (e) Debt or other Borrowings, in each
                    case maturing in less than 90 days; where "Liquid Assets"
                    for the purpose of clause (i) above means as of the end of
                    any calendar month, the sum of (a) cash, (b) cash
                    equivalents, and (c) repurchase agreements (in each case as
                    shown on the monthly financial statements of FCNB and
                    calculated in accordance with US Generally Accepted
                    Accounting Principles); for the purpose of clause (ii) above
                    means as of the end of any calendar month, the sum of (a)
                    cash and (b) cash equivalents (in each case as shown on the
                    monthly financial statements of FCNB and calculated in
                    accordance with US Generally Accepted Accounting Principles)
                    and for the purpose of clause (iii) means the sum of (a)
                    bank deposits (excluding deposits in transit and outstanding
                    checks) and (b) for purposes of this calculation only, the
                    amount of cash on deposit at Deutsche Bank Trust Company
                    Americas being held pursuant to Article I, Section 7(i) of
                    the Consent Order dated May 14, 2002 between FCNB and the
                    Office of the Comptroller of the Currency to the extent such
                    amount relates to Deposit Liabilities maturing in less than
                    90 days; or

                (h) FCNB shall assign or delegate its duties or obligations as
                    Servicer under the Transaction Documents without the prior
                    written consent of MBIA;

          (d)   The first sentence of the undesignated paragraph concluding
     Article VII and now following Section 7.1(Y) shall be amended to read as
     follows:

                    "then, so long as any such Servicer Default or Servicer
                Termination Event shall not have been remedied, either the
                Indenture Trustee, or the Noteholders holding more than 50% of
                the aggregate outstanding principal amount of the Notes, by
                notice then given in writing to the Servicer (and to the
                Indenture Trustee if given by the Noteholders) (a "Termination
                Notice"), may terminate all of the rights and except as
                otherwise provided herein, the obligations of the Servicer as
                Servicer under this

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                Agreement and in and to the Receivables and the proceeds
                thereof."

          (e)   The first parenthetical in the second sentence of Section 7.2(a)
     shall be amended to read as follows:

               "(with the consent of the Noteholders holding more than 50% of
               the aggregate outstanding principal amount of the Notes, and with
               prior written notice to the Rating Agencies)"

     Section 2. Conditions Precedent. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent:

          (a)   Officer's Certificate. The Seller shall have delivered to the
     Indenture Trustee and the Owner Trustee an Officer's Certificate, dated the
     date hereof, stating that the Seller reasonably believes that this
     Amendment will not have an Adverse Effect.

          (b)   Rating Agency Condition. The Rating Agency Condition shall have
     been satisfied.

    Section 3.  References. On and after the effective date of this Amendment,
each reference in the Transaction Documents to the "Transfer and Servicing
Agreement" shall mean and be a reference to the Transfer and Servicing Agreement
as amended hereby.

     Section 4. Full Force and Effect. Except as specifically amended above, the
Transfer and Servicing Agreement and the other Transaction Documents are and
shall continue to be in full force and effect. This Amendment shall not have the
effect of restating the representations and warranties contained in the
Transaction Documents nor shall this Amendment have the effect of waiving or
otherwise modifying such representations and warranties or any provisions
relating thereto,

     Section 5. Counterparts; Governing Law. This Amendment may be executed in
any number of counterparts and by any combination of the parties hereto in
separate counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument. THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS
(WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES WHICH WOULD REQUIRE THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION).

     Section 6. Effectiveness. This Amendment shall become effective as of the
date first written above when counterparts of this Amendment shall have been
accepted and agreed to by each of the parties hereto and the conditions
precedent set forth in Section 2 hereof shall be satisfied.

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     IN WITNESS WHEREOF, the parties hereto have executed this Amendment on this
31st day of October, 2002.

SPIEGEL CREDIT CORPORATION III, as Seller


By:  /s/ John R. Steele
   --------------------------------
   Name:  John R. Steele
   Title: Treasurer


FIRST CONSUMERS NATIONAL BANK


By:  /s/ John R. Steele
   --------------------------------
   Name:  John R. Steele
   Title: Treasurer


SPIEGEL CREDIT CARD MASTER NOTE TRUST
By: Deutsche Bank Trust Company Americas,
    not in its individual capacity but solely as Owner Trustee

By: /s/ Peter T. Becker
    ---------------------------------
    Name:  Peter T. Becker
    Title: Vice President

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