FIRST AMENDMENT TO LOAN AGREEMENT

     This FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and 
entered into effective as of November 24, 1997 by and among the following 
parties:

          (a)  HOMELAND STORES, INC. ("Borrower"), a Delaware corporation,
          
          (b)  HOMELAND HOLDING CORPORATION ("Parent"), a Delaware 
               corporation
          
               (Borrower and Parent are sometimes hereinafter collectively  
               referred to as the "Companies" and individually as a 
               "Company"),
          
          (c)  IBJ SCHRODER BUSINESS CREDIT CORPORATION ("IBJ"), the 
               assignee of IBJ Schroder Bank & Trust Company,
          
          (d)  HELLER FINANCIAL, INC. ("Heller"),
          
          (e)  NATIONAL BANK OF CANADA ("NBC"),
          
               (such lenders and other financial institutions and their    
               respective successors and assigns, individually, a "Lender" 
               and collectively, the "Lenders"), and
          
          (f)  NBC, as agent for the Lenders (in such capacity, the "Agent").

                                   RECITALS:
          
     A.   Pursuant to that certain Loan Agreement dated as of August 2, 1996, 
by and among Borrower, Parent, Lenders and Agent (as the same may be amended, 
renewed, extended, restated or otherwise modified from time to time, the  
"Loan Agreement"), Lenders agreed to provide to Borrower a senior secured 
revolving credit and letter of credit facility in the maximum aggregate
principal amount of Twenty-Seven Million Five Hundred Thousand Dollars 
($27,500,000).

     B.   Borrower and Parent have requested that Agent and Lenders amend the 
Loan Agreement, as follows:

          (1)  to increase the Revolving Loan Facility Commitment from 
     Twenty-Seven Million Five Hundred Thousand Dollars ($27,500,000) to 
     Thirty-Two Million Dollars ($32,000,000);
     
          (2)  to include the Eligible Vendor Receivables in the calculation 
     of the Borrowing Base, with an advance rate of sixty-five percent 
     (65%); and
     
          (3)  to authorize certain Permitted Acquisitions, including,  
     without limitation, the acquisition of certain assets of Food Lion, 
     Inc. pursuant to the terms of the Contract of Sale (the "Food Lion 
     Agreement"), dated October 13, 1997, by and between Food Lion, Inc. 
     and Borrower.
     
                                 AGREEMENTS:

     NOW, THEREFORE, in consideration of the mutual covenants and agreements  
contained herein and for other good and valuable consideration, the receipt 
and sufficiency of which are hereby acknowledged, the parties hereto hereby 
agree as follows:

     1.   Terms Defined.   Unless otherwise defined in this Amendment, each 
capitalized term used in this Amendment has the meaning given to such term 
in the Loan Agreement (as amended by this Amendment).

     2.   Additional Definitions.  Section 1.1 of the Loan Agreement is  
hereby amended by adding thereto each of the following definitions in 
alphabetical order to read in their entirety as follows:

          "Eligible Vendor Receivables" shall mean only such Vendor 
     Receivables of Borrower as the Agent, in its reasonable discretion,  
     shall from time to time, (a) determine are free from off-set, 
     counterclaim and any other method of reduction, and (b) otherwise elect 
     to consider Eligible Vendor Receivables for purposes of this Agreement.
     The value of such Vendor Receivables (the "Net Amount of Eligible Vendor  
     Receivables") shall be determined at any time by reference to the then 
     most recent Borrowing Base Certificate delivered under Section 11.1(j)  
     hereof, which Borrowing Base Certificate shall reflect the value of such
     Vendor Receivables at their book value determined in accordance with  
     GAAP (on a basis consistent with the accounting method used by Borrower 
     as of the First Amendment Closing Date).  Criteria for eligibility may 
     be fixed and revised from time to time by the Agent in its reasonable
     discretion.  By way of example only, and without limiting the discretion  
     of the Agent to consider any Vendor Receivables not to be Eligible Vendor 
     Receivables, the Agent may consider any of the following classes of 
     Vendor Receivables not to be Eligible Vendor Receivables:

                (i)   Vendor Receivables subject to any Lien (whether or not 
          any such Lien is permitted under this Agreement), other than those 
          granted in favor of the Agent;
          
               (ii)   Vendor Receivables for which there is (A) no executed  
          Vendor Offset Agreement by the applicable vendor and (B) no waiver  
          by the Agent of any requirement for a Vendor Offset Agreement with  
          regard to a particular vendor; and
          
              (iii)   Vendor Receivables in respect of which the relevant 
          Security Agreement, after giving effect to the related filings of 
          financing statements that have then been made, if any, does not or 
          has ceased to create a valid and perfected first priority Lien in
          favor of the Lenders securing the Lender Debt.
     
          "First Amendment Closing Date" shall mean November 24, 1997.
     
          "Food Lion" shall mean Food Lion, Inc., a North Carolina corporation.
     
          "Net Amount of Eligible Vendor Receivables" shall have the meaning 
     set forth in the definition of Eligible Vendor Receivables.

          "Permitted Acquisition" shall mean any Investment in assets or  
     properties (exclusive of stock, securities or Indebtedness of a Person, 
     other than Indebtedness incurred as the result of a Permitted 
     Acquisition) that:
     
                (a)   constitute a food retailing business that carries a mix  
          of grocery, meat, produce, household goods, and variety products, 
          and may contain specialty departments, such as a pharmacy;
          
                (b)   constitute in purchase price, together with the 
          aggregate purchase price of other Permitted Acquisitions made 
          during the then current Fiscal Year, no more than either:
          
                      (i)   twenty percent (20%) of the indicated amount of 
                Net Capital Expenditures as permitted under Section 12.1 
                hereof, without adjustment for Excess Cash Flow, as provided  
                in Section 12.1; or
               
                     (ii)   twenty percent (20%) of the actual amount of Net 
                Capital Expenditures made during the then current Fiscal 
                Year;
          
                (c)   would cause, after giving effect to the proposed terms 
          hereof, no Default under this Agreement;
          
                (d)   have a purchase price which does not exceed six (6) 
          times the pro forma EBITDA attributable to the Investment under 
          consideration for qualification as a Permitted Acquisition, as 
          calculated for the thirteen (13) Calendar Months immediately 
          following the proposed date of consummation of such Investment; 
          and
          
                (e)   with respect to Permitted Acquisitions involving a 
          purchase price of $500,000 or more, would not cause the pro forma 
          Borrowing Base Availability, as calculated on a monthly basis for 
          the thirteen (13) Calendar Months immediately following the proposed 
          date of the consummation of such Investment, after giving effect 
          to such Investment, to be less than Four Million Dollars 
          ($4,000,000).
     
          "Project Oklahoma" shall mean the acquisition by Borrower of certain 
     assets of Food Lion under that certain Contract of Sale by and between 
     Food Lion and Borrower, effective as of October 13, 1997, together with 
     the Capital Expenditures more fully described on Schedule 1.1 (D) 
     attached hereto.
     
          "Vendor Inventory" of any Person shall mean any and all Inventory  
     and stock supplied by an independent, third-party vendor to Borrower or 
     to a supplier (e.g., AWG) of Borrower, intended for sale or lease or to  
     be furnished under contracts of service in the ordinary course of 
     business of such Person, of every kind and description.

          "Vendor Offset Agreement" shall mean a vendor offset agreement  
     substantially in the form of Exhibit 1.1 (a) hereto (with such 
     modifications as are acceptable to the Agent and as amended, modified 
     or supplemented from time to time).

          "Vendor Rebate Agreement" shall mean any written agreement or 
     written commitment pursuant to which an independent, third-party vendor 
     to Borrower or to a supplier (e.g., AWG) of Borrower becomes obligated 
     to pay to Borrower funds in connection with product rebates, promotional
     discounts, advertising incentives and other marketing arrangements.

          "Vendor Receivables" shall mean and include all accounts, contract  
     rights (including rebates, promotional discounts and incentives), 
     instruments, documents, chattel paper and general intangibles, whether 
     secured or unsecured, now existing and hereafter created, of the Credit  
     Parties, whether or not specifically sold or assigned to the Agent or
     the Lenders, and arising from a sale or other disposition of Vendor 
     Inventory by Borrower or from cooperative advertising services provided 
     by the Borrower in the ordinary course of Borrower's business, which is 
     payable to Borrower by an independent, third-party vendor to Borrower or 
     to a supplier (e.g., AWG) of Borrower pursuant to the terms of a Vendor
     Rebate Agreement.

     3.   Amendments to Borrowing Base and Revolving Loan Facility Commitment.  
Section 1.1 of the Loan Agreement is hereby amended by amending each of the 
following definitions contained therein to read in their entirety as follows:


          "Borrowing Base" shall mean, as of any time, an amount equal to the 
     sum of the following:

                     (a)   up to sixty-five percent (65%) of the Net Amount of 
          Eligible Inventory,
          
                     (b)   up to sixty-five percent (65%) of the Net Amount of 
          Eligible Pharmaceutical Inventory,
          
                     (c)   up to eighty-five percent (85%) of the Net Amount 
          of Eligible Coupons,
          
                     (d)   up to fifty percent (50%) of the Net Amount of 
          Eligible Pharmaceutical Receivables, and
          
                     (e)   up to sixty-five percent (65%) of the Net Amount 
          of Eligible Vendor Receivables,
          
          as determined by reference to and as set forth in the last Borrowing  
          Base Certificate required to be delivered to the Agent and each 
          Lender prior to such time pursuant to Section 11.1(j) hereof.

          "Revolving Loan Facility Commitment" shall mean Thirty-Two Million 
     Dollars ($32,000,000).

     4.   Amendment to Reporting Requirements. Section 11.1 of the Loan  
Agreement is hereby amended by adding the following Section 11.1(s):

          (s)  with reasonable promptness, information regarding Vendor 
     Receivables as Agent may from time to time reasonably request, including, 
     without limitation, copies of Vendor Rebate Agreements.

     5.  Audits in Connection with Permitted Acquisitions. Section 11.14(b)  
of the Loan Agreement is hereby amended by adding the following sentence at 
the end of the existing Section 11.14(b):

     Further, each of Parent and Borrower shall allow, and shall cause each of 
     Borrower's Subsidiaries to allow, the Agent or Lenders, in conjunction 
     with the Agent, or their designees to enter any locations at which assets 
     and properties that either are proposed to be transferred to Borrower or  
     have been transferred to Borrower, as a result of a Permitted 
     Acquisition, are located, at any reasonable time or times during regular 
     business hours, to inspect such assets and properties and to inspect, 
     audit and to make copies or extractions from the books, records, 
     journals, orders, receipts, correspondence and other data relating to
     such assets and properties for the purpose of determining the 
     eligibility of such assets and properties for inclusion in the
     Borrowing Base.
     
     6.  Compliance with Vendor Rebate Agreements. Section 11 of the Loan 
Agreement is hereby amended by adding the following Section 11.23:

         Sec. 11.23.  COMPLIANCE WITH VENDOR REBATE AGREEMENTS. Each of Parent 
     and Borrower shall comply, and shall cause each of Borrower's Subsidiaries 
     to comply, in all material respects, with all Vendor Rebate Agreements;  
     and each of Parent and Borrower shall duly observe, and cause each of 
     Borrower's Subsidiaries to duly observe, in all material respects, all 
     valid requirements of applicable Vendor Rebate Agreements, the 
     non-observance of which could reasonably be expected to have a Material 
     Adverse Effect.
     
     7.  Agreements Regarding Permitted Acquisitions. Section 11 of the Loan  
Agreement is hereby amended by adding the following Section 11.24:

         Sec. 11.24.  AGREEMENTS REGARDING PERMITTED ACQUISITIONS. Borrower 
     covenants as follows in connection with each Permitted Acquisition:
     
                (a)  Prior to or simultaneously with consummation of any 
         Permitted Acquisition, Borrower shall deliver to Agent all of the  
         following, in form and substance satisfactory to Agent:
          
                     (i)  Security Documents And Instruments. All of the 
                instruments and documents then required to be delivered  
                pursuant to Section 7 of this Agreement or any other provision 
                of this Agreement or pursuant to the instruments and documents
                referred to in Section 7 of this Loan Agreement with regard to 
                the assets and properties being acquired by Borrower pursuant 
                to the Permitted Acquisition; and the same shall be in full 
                force and effect and shall grant, create or perfect the Liens,  
                rights, powers, priorities, remedies and benefits contemplated 
                herein or therein, as the case may be.
               
                    (ii)  Evidence Of Insurance.  Evidence, in form, scope and 
                substance and with such insurance carriers reasonably 
                satisfactory to the Agent, of all insurance policies required  
                pursuant to Section 11.3(a) of this Agreement with regard to
                the assets and properties being acquired by Borrower pursuant 
                to the Permitted Acquisition.
               
                   (iii)  Additional Information.  Such additional documents, 
                instruments and information as Agent or its legal counsel, 
                special counsel to the Agent, and all local counsel to the 
                Agent, may reasonably request.
          
                (b)  Litigation.  As of the consummation of the Permitted 
         Acquisition, there shall be no pending or, to the knowledge of any 
         Company, threatened litigation with respect to the Permitted  
         Acquisition, which challenges or relates to the Permitted Acquisition,
         which pending or threatened litigation could be expected to have a 
         Material Adverse Effect. There shall exist no judgment, order, 
         injunction or other similar restraint prohibiting any transaction 
         contemplated by the Permitted Acquisition.
          
                (c)  Landlord's Liens.  None of the assets or properties to  
         be acquired pursuant to the Permitted Acquisition shall be subject 
         to any contractual or statutory Lien or Liens in favor of any lessor  
         under any Lease, except such Liens as the Agent, in its sole 
         discretion, shall deem not material, and except such Liens that have 
         been waived or subordinated to the Liens in favor of Agent and the 
         Lenders in a manner satisfactory to the Agent, in its sole 
         discretion.
          
                (d)  Collection Account.  If applicable, Borrower shall have 
         established one or more Collection Accounts into which the cash 
         receipts for each store, if any, to be acquired pursuant to the 
         Permitted Acquisition (to the extent such cash receipts constitute 
         proceeds of any Collateral) shall be deposited.
          
                (e)  No Default.  No Default or Event of Default shall have 
         occurred and be continuing.
          
                (f)  Representations and Warranties.  The representations and 
         warranties contained herein and in all other Loan Documents shall be 
         true and correct as of the date hereof as if made on the date of the
         Permitted Acquisition.
          
                (g)  Delivery of Documents.  All agreements, documents and  
         instruments executed and/or delivered pursuant hereto, and all legal  
         matters incident thereto, shall be satisfactory to Agent and its  
         legal counsel.
     
                (h)  Permitted Acquisition Certificate.  Borrower shall have 
         delivered to Agent a certificate pertaining to the Permitted 
         Acquisition, in the form as set forth in Exhibit 11.24 attached 
         hereto.
     
     8.  Amendment to Permitted Investments.  Section 12.4 (p) of the Loan 
Agreement is hereby amended and restated to read in its entirety as follows:

     (p) Investments that are Permitted Acquisitions.

     9.  Validity of Vendor Receivables.  Section 14 of the Loan Agreement is  
hereby amended by adding the following Section 14.21:

         Sec. 14.21.  VALIDITY OF VENDOR RECEIVABLES.  (a) Except with respect 
     to Vendor Receivables, the aggregate amount of which would not constitute 
     a material percentage of all Vendor Receivables at any given time and 
     Vendor Receivables the failure of which to satisfy the following 
     requirements, would not have a material adverse effect on the value of 
     the Collateral, each Vendor Receivable existing on the First Amendment 
     Closing Date is, and each future Vendor Receivable will be, at the time 
     of its creation, a genuine obligation enforceable against the Vendor who 
     is the account debtor thereof in accordance with the terms of the Vendor  
     Rebate Agreement applicable to such Vendor Receivable, and represents 
     an undisputed and bona fide indebtedness owing to Borrower by the Vendor 
     identified as being so indebted to Borrower in the applicable Vendor 
     Rebate Agreement, without defense, setoff or counterclaim, free and clear 
     of all Liens other than the security interest in favor of the Agent under
     the Security Documents; and no payment has been received with respect to  
     any Vendor Receivable and no Vendor Receivable is subject to any credit  
     or extension or agreement therefor.
     
           (b)  No Vendor Receivable is evidenced by any note, draft, trade 
acceptance or other instrument for the payment of money.

     10.   Amendments to Exhibits.  The Loan Agreement is hereby amended as 
follows:

           (a)  Form of Vendor Offset Agreement.  Exhibit 1.1(a) is added in  
     its entirety as set forth on Exhibit 1.1(a) attached hereto;

           (b)  Form of Borrowing Base Certificate.  Exhibit 11.1(j) is 
     amended and restated to read in its entirety as set forth on Exhibit 
     11.1(j) attached hereto; and

           (c)  Form of Permitted Acquisition Certificate.  Exhibit 11.23 is 
     added in its entirety as set forth on Exhibit 11.23 attached hereto.

     11.   Amendments to Schedules.  The Loan Agreement is hereby amended as 
follows:

           (a)  Lenders and Commitments.  Schedule 1.1(A) is amended and 
     restated to read in its entirety as set forth on Schedule 1.1(A) attached 
     hereto;

           (b)  Special Account Stores.  Schedule 11.17(c) is amended by 
     supplementing the existing Schedule 11.17(c) with Schedule 11.17(c) 
     attached hereto;

           (c)  Environmental Report Stores.  Schedule 11.18 is amended by  
     supplementing the existing Schedule 11.18 with Schedule 11.18 attached 
     hereto;

           (d)  Existing Indebtedness for Borrowed Money and Contingent 
     Obligations.  Schedule 12.3(c) is amended by supplementing the existing 
     Schedule 12.3(c) with Schedule 12.3(c) attached hereto;

           (e)  Real Property.  Schedule 14.5(a) is amended by supplementing  
     the existing Schedule 14.5(a) with Schedule 14.5(a) attached hereto; and
     
           (f)  Environmental Information.  Schedule 14.15 is amended by 
     supplementing the existing Schedule 14.15 with Schedule 14.15 attached 
     hereto.

     12.   Waivers Regarding Project Oklahoma.  Lenders hereby waive the 
following in regards to Project Oklahoma:

           (a)  Section (b) of the definition of Permitted Acquisition as 
     defined in Section 1.1 of the Loan Agreement:

           (b)  Section 10(a) of the Loan Agreement;

           (c)  the inclusion of the Capital Expenditures incurred by 
     Borrower as a result of Project Oklahoma in the calculation of the 
     Maximum Net Capital Expenditures for Fiscal Years 1997 and 1998 in  
     Section 12.1(a) of the Loan Agreement; and

           (d)  in regards to that leasehold estate to be evidenced by that 
     certain Lease Agreement by and between Food Lion and Borrower, whereby 
     Food Lion will lease to Borrower and Borrower will rent from Food Lion,  
     certain premises located at 11241 West Reno, Yukon, Oklahoma, Section 
     7.2(a) of the Loan Agreement.

Lenders' waivers in this Section 12 are limited to Project Oklahoma, and do  
not constitute a waiver of either any other section of the Loan Agreement, 
or any other section of this Amendment.

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

           (a)   Agent shall have received all of the following, each dated  
     (unless otherwise indicated) the date of this Amendment, in form and 
     substance satisfactory to Agent:

                 (i)  Amendment Documents.  This Amendment and any other  
           instrument, document or certificate required by Agent or Lenders  
           to be executed or delivered by Borrower, Parent or any other party 
           in connection with this Amendment, duly executed by the parties  
           thereto (the "Amendment Documents").

                (ii)  Security Documents And Instruments.  All the instruments 
           and documents then required to be delivered pursuant to Section 7 
           of the Loan Agreement or any other provision of the Loan Agreement 
           or pursuant to the instruments and documents referred to in Section  
           7 of the Loan Agreement with regard to the assets of Food Lion 
           being acquired by Borrower pursuant to the Food Lion Agreement; 
           and the same shall be in full force and effect and shall grant, 
           create or perfect the Liens, rights, powers, priorities, remedies  
           and benefits contemplated herein or therein, as the case may be.
          
               (iii)  Notes.  A Note for each Lender, each duly completed, 
           executed and delivered in accordance with Section 2.3 of the Loan 
           Agreement.
          
                (iv)  Evidence Of Insurance.  Evidence, in form, scope and  
           substance and with such insurance carriers reasonably satisfactory 
           to the Agent, of all insurance policies required pursuant to 
           Section 11.3(a) of the Loan Agreement with regard to the assets of 
           Food Lion being acquired by Borrower pursuant to the Food Lion 
           Agreement.
          
                 (v)  Disbursement Authorization.  A disbursement 
           authorization letter, substantially in the form of Exhibit 8.12 of 
           the Loan Agreement, duly executed and delivered by Borrower as to 
           the disbursement on the First Amendment Closing Date of the 
           proceeds of the Advance on such date.
          
                (vi)  Other Fees And Expenses.  Evidence that the costs and  
           expenses (including, without limitation, reasonable attorneys' 
           fees and expenses) incurred by Agent incident to this Amendment or 
           required to be paid in accordance with Section 15.5 of the Loan 
           Agreement, to the extent incurred and submitted to Borrower, shall
           have been paid in full by Borrower.

               (vii)  Additional Information.  Such additional documents, 
           instruments and information as Agent or its legal counsel, Hughes 
           & Luce, L.L.P., special counsel to the Agent, and all local counsel 
           to the Agent, may reasonably request to effect the transactions
           contemplated hereby.
          
           (b)  Closing Fee.  Borrower shall pay to the Agent for the account 
     of Lenders a closing fee in the amount of Twenty-Two Thousand Five 
     Hundred Dollars ($22,500), which shall be distributed by Agent to Lenders 
     on a pro rata basis of their Commitments.
     
           (c)  Qualification.  Each Company shall be duly qualified and in 
     good standing in each jurisdiction in which it owns or leases property 
     or in which the conduct of its business requires it to so qualify, except 
     where the failure to so qualify could not reasonably be expected to have  
     a Material Adverse Effect.

           (d)  Food Lion Agreement.  The Agent and all Lenders shall have  
     had the opportunity to examine the Food Lion Agreement and the related 
     material contracts, properties, books of account, records, leases, 
     contracts, insurance coverage and properties of each Company, and to 
     perform such other due diligence regarding each Company as the Agent or
     any Lender shall have requested, the results of all of which shall have 
     been satisfactory to the Agent and all Lenders in all material respects.

           (e)  Litigation.  There shall be no pending or, to the knowledge of 
     any Company, threatened litigation with respect to any Company or any of 
     its Subsidiaries or (relating to the transactions contemplated herein) 
     with respect to the Agent or any of the Lenders, which challenges or 
     relates to the financing arrangements to be provided hereunder, or to
     the business, operations, liabilities, assets, properties, prospects or  
     condition (financial or otherwise) of any Company or its Subsidiaries, 
     which pending or threatened litigation could, in the Agent's reasonable  
     judgment, be expected to have a Material Adverse Effect. There shall
     exist no judgment, order, injunction or other similar restraint 
     prohibiting any transaction contemplated hereby.

           (f)  Compliance with Law.  The Agent shall be satisfied that each  
     Company (a) has obtained all authorizations and approvals of any 
     governmental authority or regulatory body required for the due execution, 
     delivery and performance by such Company of each Amendment Document to
     which it is or will be a party and for the perfection of or the exercise  
     by the Agent and each Lender of their respective rights and remedies 
     under the both the Amendment Documents and the Loan Documents, and (b)  
     shall be in compliance with, and shall have obtained appropriate 
     approvals pertaining to, all applicable laws, rules, regulations and 
     orders, including, without limitation, all governmental, environmental, 
     ERISA and other requirements, regulations and laws, the violation or 
     failure to obtain approvals for which could reasonably be expected to  
     have a Material Adverse Effect.

           (g)  Proceedings; Receipt of Documents.  All requisite corporate  
     action and proceedings in connection with the borrowings and the 
     execution and delivery of the Amendment Documents shall be satisfactory 
     in form and substance to the Agent and the Agent shall have received, on 
     or before the First Amendment Closing Date, all information and copies  
     of all documents, including, without limitation, records of requisite 
     corporate action and proceedings, which the Agent may have requested in 
     connection therewith, such documents where requested by the Agent to be 
     certified by appropriate corporate Persons or governmental authorities.   
     Without limiting the generality of the foregoing, the Agent shall have  
     received on or before the First Amendment Closing Date the following,  
     each dated such day (unless otherwise specified), in form and substance 
     satisfactory to the Agent (unless otherwise specified) and, except for 
     the Notes, in sufficient copies for each Lender:

                  (i)  a copy of any amendments to the articles or 
            certificate of incorporation, as the case may be, of each  
            Company, to the extent such amendments have been effected  
            subsequent to the Closing Date, in each case certified (as of  
            a date reasonably near the First Amendment Closing Date), by 
            the Secretary of State of Delaware as being a true and correct 
            copy thereof;
     
                 (ii)  a copy of any amendments to the bylaws of each  
            Company, to the extent such amendments have been effected 
            subsequent to the Closing Date;
     
                (iii)  certified copies of the resolutions of the Board 
            of Directors of each Company approving this Amendment, the Notes, 
            and each other Amendment Document to which it is a party or by 
            which it is bound, and of all documents evidencing other 
            necessary corporate action and governmental approvals, if any, 
            with respect to this Agreement, the Notes, and each other 
            Amendment Document;
     
                 (iv)  a copy of a certificate of the Secretary of State of 
            each State listed on Schedule 8.15 of the Loan Agreement, dated 
            a date reasonably near the date of the First Amendment Closing 
            Date, stating that Borrower and each Company, as the case may be, 
            is duly qualified and in good standing as a foreign entity in 
            such State;
     
                  (v)  a  certificate of each Company signed on behalf of 
            such Person by an appropriate officer of such Person, certifying 
            as to the absence of any amendments to the charter and the bylaws 
            of such Person since the Closing Date; and
     
                 (vi)  a certificate of the Secretary or an Assistant  
            Secretary of each Company certifying the names and true 
            signatures of the officers of such Person authorized to sign, 
            on behalf of such Person, this Amendment, the Notes and each 
            other Loan Document, to which such Person is a party or by which  
            it is bound.

            (h)  No Market Disruption.  There shall have occurred no  
     disruption or adverse change in the financial or capital markets   
     generally which the Agent, in its reasonable discretion, deems material.
     
            (i)  Landlord's Liens.  None of the Collateral shall be subject  
     to any contractual or statutory Lien or Liens in favor of any lessor 
     under any Lease, except such Liens as the Agent, in its sole discretion, 
     shall deem not material, and except such Liens that have been waived or 
     subordinated to the Liens in favor of Agent and the Lenders in a manner
     satisfactory to the Agent, in its sole discretion.

            (j)  Collection Account.  Prior to the First Amendment Closing  
     Date, except as otherwise permitted by the Loan Agreement, Borrower 
     shall have established one or more Collection Accounts into which the 
     cash receipts for each store operated by Borrower or a Subsidiary of 
     Borrower (to the extent such cash receipts constitute proceeds of any
     Collateral) shall be deposited.

            (k)  No Default.  No Default or Event of Default shall have  
     occurred and be continuing (after giving effect to Paragraphs 2 through 
     11 of this Amendment).

            (l)  Representations and Warranties.  The representations and 
     warranties contained herein and in all other Loan Documents, as amended 
     hereby, shall be true and correct as of the date hereof as if made on 
     the date hereof.
     
            (m)  Delivery of Documents.  All corporate proceedings taken in  
     connection with the transactions contemplated by this Amendment and all  
     other agreements, documents and instruments executed and/or delivered 
     pursuant hereto, and all legal matters incident thereto, shall be 
     satisfactory to Agent and its legal counsel, Hughes & Luce, L.L.P.

     14.    Conditions Subsequent to Amendment.  Notwithstanding anything to  
the contrary contained in paragraph 12(a)(i), Borrower, and Parent agree to 
execute and deliver (as applicable) any other agreements, documents or 
instruments related to the attachment, creation or perfection of Lender's 
Liens on any of the Collateral, including, without limitation, UCC-3  
amendments to financing statements previously filed in favor of Agent, in
form and substance reasonably satisfactory to Agent, within 30 days of the   
date of this Amendment. Borrower, and Parent further agree that failure to 
execute and deliver the Amendment Documents referred to in this paragraph 13  
shall constitute an Event of Default under the Loan Agreement and that such  
Loan Documents shall be included within the definition of Amendment Documents 
contained herein.

     15.    Representations and Warranties.  Each Company hereby represents 
and warrants to Agent and Lenders that, as of the date of and after giving 
effect to this Amendment, (a) the execution, delivery and performance of this 
Amendment and any and all other Amendment Documents executed and/or delivered  
in connection herewith have been authorized by all requisite corporate action
on the part of each Company and will not violate the corporate charter or 
bylaws any Company, (b) all representations and warranties set forth in the 
Loan Agreement and in any other Loan Documents are true and correct, in all 
material respects, as if made again on and as of such date (including, 
without limitation, the representations and warranties previously made as of  
the Closing Date in the Loan Agreement), (c) no Default or Event of Default  
has occurred and is continuing (after giving effect to Paragraphs 2 through 
11 of this Amendment), and (d) the Loan Agreement (as amended by this 
Amendment), the Notes and the other Loan Documents are and remain legal,  
valid, binding and enforceable obligations of each Company, as applicable.

     16.    Amendment Documents as Loan Documents.  The term Loan Documents 
as defined in the Loan Agreement and as used in any of the Loan Documents 
includes, without limitation, this Amendment and each of the other Amendment 
Documents executed in connection herewith.

     17.    Governing Law.  THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS SHALL 
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF 
NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

     18.    Counterparts.  This Amendment may be executed in any number of  
counterparts, all of which when taken together shall constitute one agreement, 
and any of the parties hereto may execute this Amendment by signing any such 
counterpart.

     19.    No Oral Agreements.  THIS AMENDMENT, TOGETHER WITH THE LOAN 
AGREEMENT AND THE OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENT THE FINAL 
AGREEMENTS BETWEEN AND AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED  
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE  
PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN (A) BORROWER, OR  
PARENT, AND (B) AGENT OR ANY LENDER.

     20.    Loan Agreement Remains in Effect: No Waiver.  Except as expressly 
provided herein, all terms and provisions of the Loan Agreement and the other 
the Loan Documents shall remain unchanged and in full force and effect and  
are hereby ratified and confirmed. No waiver by Agent or any Lender of any  
Default or Event of Default shall be deemed to be a waiver of any other 
Default or Event of Default. No delay or omission by Agent or any Lender in 
exercising any power, right or remedy shall impair such power, right or remedy 
or be construed as a waiver thereof or an acquiescence therein, and no single  
or partial exercise of any such power, right or remedy shall preclude other or  
further exercise thereof or the exercise of any other power, right or remedy 
under the Loan Agreement, the Loan Documents or otherwise.

     21.    Ratification of Guaranty.  Parent reaffirms Parent's obligations  
under the Guaranty, agrees that the Guaranty shall remain in full force and 
effect not withstanding execution of this Amendment and the Amendment 
Documents, and agrees that the Guaranty and the Loan Agreement shall continue 
to be legal, valid and binding obligations of the Guarantor, enforceable in
accordance with the terms therein with regard to the Indebtedness, as 
increased pursuant to this Amendment.

     22.    Survival of Representations and Warranties.   All representations  
and warranties made in this Amendment or any other Amendment Document shall 
survive the execution and delivery of this Amendment and the other Amendment  
Documents, and no investigation by Lender or any closing shall affect the 
representations and warranties or the right of Lender to rely upon them.

     23.    Reference to Loan Agreement.   Each of the Loan Documents, 
including the Loan Agreement, the Amendment Documents and any and all other 
agreements, documents or instruments now or hereafter executed and/or 
delivered pursuant to the terms hereof or pursuant to the terms of the Loan 
Agreement as amended hereby, are hereby amended so that any reference in such 
Loan Documents to the Loan Agreement shall mean a reference to the Loan 
Agreement as amended hereby.

     24.    Severability.  Any provision of this Amendment held by a court of 
competent jurisdiction to be invalid or unenforceable shall not impair or 
invalidate the remainder of this Amendment and the effect thereof shall be 
confined to the provision so held to be invalid or unenforceable.

     25.    Successors and Assigns.  This Amendment is binding upon and shall 
inure to the benefit of Agent, Lenders, Borrower, and Parent and their  
respective successors and assigns, except Borrower, and Parent may not assign 
or transfer any of their rights or obligations hereunder without the prior 
written consent of Lenders.

     26.    Headings.  The headings, captions and arrangements used in this 
Amendment are for convenience only and shall not affect the interpretation of 
this Amendment.


                   [This space intentionally left blank].

     IN WITNESS WHEREOF, Borrower, Parent, Agent and Lenders have caused this 
Amendment to be executed and delivered by their duly authorized officers 
effective as of the date first above written.

                                BORROWER:
                                
                                HOMELAND STORES, INC.
                                
                                
                                
                                By: ___________________________________
                                           Larry W. Kordisch
                                           Acting Chief Executive Officer
                                
                                PARENT:
                                
                                HOMELAND HOLDING CORPORATION
                                
                                
                                By: ___________________________________
                                           Larry W. Kordisch
                                           Acting Chief Executive Officer
                                

                                AGENT AND A LENDER:
                                
                                NATIONAL BANK OF CANADA
                                
                                
                                By: ___________________________________
                                           Larry L. Sears,
                                           Group Vice President
                                
                                
                                By: ___________________________________
                                           Randall K. Wilhoit,
                                           Vice President
                                
                                ADDITIONAL LENDERS:
                                
                                IBJ SCHRODER BUSINESS CREDIT
                                CORPORATION
                                
                                
                                
                                By:
                                Name:
                                Title:
                                
                                
                                
                                
                                HELLER FINANCIAL, INC.
                                
                                
                                
                                By:
                                Name:
                                Title: