EXECUTION COPY


     THIRD AMENDMENT, dated as of March 15, 1995 (this
"Amendment"), to the Loan and Security Agreement, dated as of
December 15, 1993 (as heretofore amended, supplemented or otherwise
modified, the "Loan Agreement"), between BankAmerica Business
Credit, Inc. (the "Lender") and Grossman's Inc. (the "Borrower").


                      W I T N E S S E T H :


     WHEREAS, the Lender and the Borrower are parties to the Loan
Agreement;

     WHEREAS, the Borrower has requested that the Lender amend
the Loan Agreement to increase the amount of the Total Facility
to $75,000,000 and to increase the advance rate with respect to
Eligible Inventory; and

     WHEREAS, the Lender is willing to make such amendments but
only on the terms and conditions set forth herein;

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

     1.   Defined Terms. Unless otherwise defined herein,
capitalized terms used herein have the respective meanings
ascribed thereto in the Loan Agreement.

     2.   Amendment of Section 1.1 (Defined Terms).  Section 1.1
of the Loan Agreement is hereby amended by:

          (a)  deleting from the definition of "Availability" the
     amount "$60,000,000" appearing in clause (i) of paragraph
     (a) of such definition and substituting therefor the amount
     "$75,000,000";

          (b)  deleting from the definition of "Availability" 
     the phrase "fifty percent (50%)"" appearing in clause
     (ii)(B) of paragraph (a) of such definition and substituting
     therefor the phrase "the Applicable Percent";

          (b)  adding the following new defined term in its
     appropriate alphabetical order:

               "'Applicable Percent' means 

               (a) for each calendar month from March, 1995
          through October, 1995, the lesser of (i) sixty percent
          (60%) and (ii) a percent notified by the Borrower to
          the Lender on or prior to the first day of such month
          as the Applicable Percent to be effective for such
          month; provided that the Applicable Percent for the
          month of March, 1995 shall be a percent notified by the
          Borrower to the Lender (not to exceed 60%) on or before
          March 17, 1995; provided, further, that any reduction
          of the Applicable Percent shall be a permanent
          reduction; and provided, still further, that if the
          Borrower fails to give any such notice in respect of
          any calendar month, the Applicable Percent in effect
          for the preceding month shall remain in effect for such
          calendar month; and

               (b)  for each calendar month thereafter,
          commencing with November, 1995, fifty percent (50%).

     3.   Amendment of Section 2.1 (Total Facility).  Section 2.1
of the Loan Agreement is hereby amended by deleting the amount
"$60,000,000" appearing therein and substituting therefor the
amount "$75,000,000".

     4.   Amendment of Section 3.4 (Commitment Fee).  Section 3.4
of the Loan Agreement is hereby amended by deleting the amount
"$50,000,000" appearing therein and substituting therefor the
amount "$75,000,000".

     5.   Addition of New Section 3.5.  Article 3 of the Loan
Agreement is hereby amended by adding after Section 3.4 a new
Section 3.5 reading in it entirety as follows:

          "3.5 Additional Fee.  The Borrower further agrees to
     pay an additional monthly fee to the Lender on the first
     Business Day of each calendar month, commencing April 3,
     1995, through November 1, 1995, computed as set forth in the
     following sentence.  Such fee shall be equal to the product
     of (a) $10,000 times (b) the Applicable Percent (expressed
     as a whole number and not as a percent) for the month just
     ended minus 50.  (For purposes of clarification and by way
     of example only, if the Applicable Percent for the month of
     April, 1995 were 58%, the fee payable pursuant to this
     Section 3.5 on May 1, 1995 would be computed as follows: 
     $10,000 x (58-50) = $80,000.)"

     6.   Representations and Warranties.  To induce the Lender
to enter into this Amendment, the Borrower hereby represents and
warrants to the Lender as follows, with the same effect as if
such representations and warranties were set forth in the Loan
Agreement:

          (a)  The Borrower has the corporate power and authority
     to enter into this Amendment and has taken all corporate
     action required to authorize its execution and delivery of
     this Amendment and its performance of the Loan Agreement, as
     amended hereby (as so amended, the "Amended Agreement"). 
     This Amendment has been duly executed and delivered by the
     Borrower and the Amended Agreement constitutes the valid and
     binding obligation of the Borrower, enforceable against the
     Borrower in accordance with its terms.  The execution,
     delivery, and performance of this Amendment and the Amended
     Agreement by the Borrower will not violate its certificate
     of incorporation or by-laws or any agreement or legal
     requirement binding on the Borrower.

          (b)  On the date hereof and after giving effect to the
     terms of this Amendment, (i) the Loan Agreement and the
     other Loan Documents are in full force and effect and
     constitute the Borrower's binding obligations, enforceable
     against the Borrower in accordance with their respective
     terms; (ii) no Event or Event of Default has occurred and is
     continuing; and (iii) the Borrower does not have any defense
     to or setoff, counterclaim or claim against payment of the
     Obligations and enforcement of the Loan Documents based upon
     a fact or circumstance existing or occurring on or prior to
     the date hereof.

     7.   Effectiveness.  This Amendment shall be effective as of
the date first written above upon receipt by the Lender of a
counterpart hereof duly executed by the Borrower.

     8.   Limited Effect.  This Amendment shall be limited solely
to the matters expressly set forth herein and shall not (a)
constitute an amendment of any other term or condition of the
Loan Agreement or of any instrument or agreement referred to
therein or (b) prejudice any right or rights which the Lender may
now have or may have in the future under or in connection with
the Loan Agreement or any instrument or agreement referred to
therein. Except as expressly amended hereby, all of the covenants
and provisions of the Loan Agreement are and shall continue to be
in full force and effect.

     9.   GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK.

     10.  Counterparts.  This Amendment may be executed by the
parties hereto in any number of separate counterparts, each of
which shall be an original, and all of which taken together shall
be deemed to constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective
proper and duly authorized officers as of the day and year first
above written.


                              BANKAMERICA BUSINESS CREDIT, INC.



                              By:                               
                                   Name:
                                   Title:


                              GROSSMAN'S INC.



                              By:                               
                                   Name:
                                   Title: