AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT

                                  PAMIDA, INC.
                                  8800 F Street
                              Omaha, Nebraska 68127

                            SEAWAY IMPORTING COMPANY
                                  8800 F Street
                              Omaha, Nebraska 68127

                                January 31, 1997

Congress Financial Corporation (Southwest)
1201 Main Street
Dallas, Texas  75250

BankAmerica Business Credit, Inc.
40 East 52nd Street
New York, New York  10017

Gentlemen:

     Congress  Financial  Corporation  (Southwest),  a Texas  corporation in its
individual capacity  ("Congress"),  BankAmerica  Business Credit, Inc., formerly
known as BA Business Credit Inc., a Delaware  corporation ("BABC," together with
Congress each  individually  a "Lender" and  collectively,  "Lenders"),  Pamida,
Inc., a Delaware  corporation  ("Pamida"),  Seaway Importing Company, a Nebraska
corporation  ("Seaway,"  together with Pamida,  collectively,  "Borrowers")  and
Congress Financial Corporation  (Southwest),  a Texas corporation,  as Agent for
Lenders  (in  such  capacity,  "Agent")  have  entered  into  certain  financing
arrangements pursuant to the Loan and Security Agreement,  dated March 30, 1993,
by and among Agent, Lenders and Borrowers (as amended by Amendment No. 1 to Loan
and Security Agreement dated as of January 23, 1995, and Amendment No. 2 to Loan
and Security  Agreement dated as of January 28, 1996 and Amendment No. 3 to Loan
and Security Agreement dated as of September 16, 1996 and as amended hereby, the
"Loan Agreement", and together with all agreements, documents and instruments at
any time executed and/or  delivered in connection  therewith or related thereto,
as the same now  exist or may  hereafter  be  amended,  modified,  supplemented,
extended,   renewed,   restated  or  replaced,   collectively,   the  "Financing
Agreements").

     Borrowers have requested that the advance rate  provisions of the Financing
Agreement be amended, and Agent and Lenders are willing to amend such provisions
of the  Financing  Agreements,  subject  to the terms and  conditions  contained
herein.  By this Amendment,  Agent,  Lenders and Borrowers  desire and intend to
evidence such amendments.

     In  consideration  of  the  foregoing  and  the  agreements  and  covenants
contained herein, the parties hereto agree as follows:




     1.  Definitions.  All capitalized terms used herein shall have the meanings
assigned thereto in the other Financing  Agreements,  unless  otherwise  defined
herein.

     2. Revolving Loans;  Advance Rate.  Section 2.1(a) of the Loan Agreement is
hereby deleted in its entirety and the following substituted therefor:

(a)  Subject to, and upon the terms and conditions  contained  herein and in the
     other Financing  Agreements,  at the request of Borrowers,  each of Lenders
     severally,  but not jointly, agrees to lend to Borrowers and authorizes and
     appoints Agent to make Revolving Loans to Borrowers, for the account of and
     as Agent for  Lenders,  in such  amounts  from time to time as Agent  shall
     determine,  in its  discretion,  at Borrowers'  request  during the periods
     indicated below of up to the percent of the value of Eligible  Inventory of
     Borrowers  indicated for such period (or such greater or lesser  percentage
     thereof as Agent may determine from time to time), in any year:

                     Period                         Percent
     ----------------------------------             -------
     (i)    from February 1 through and               45%
              including April 30

     (ii)   from October 1 through and                45%
              including November 30

     (iii)  at all other times                        40%

     3. Representations, Warranties and Covenants. In addition to the continuing
representations,  warranties  and  covenants  heretofore  or  hereafter  made by
Borrowers to Agent and Lenders pursuant to the Financing  Agreements,  Borrowers
hereby represent,  warrant and covenant with and to Agent and Lenders as follows
(which representations, warranties and covenant are continuing and shall survive
the execution and delivery hereof and shall be incorporated into and made a part
of the Financing Agreements):

(a)  No Event of  Default  exists on the date of this  Amendment  (after  giving
     effect  to  the  amendments  to  the  Financing  Agreements  made  by  this
     Amendment).

(b)  This Amendment and the other amendment  agreements  delivered in connection
     herewith,  have been duly  authorized,  executed  and  delivered by each of
     Borrowers  and are in full force and effect as of the date hereof,  and the
     agreements  and  obligations  of each of  Borrowers  contained  herein  and
     therein  constitute  legal,  valid  and  binding  obligations  of  each  of
     Borrowers  enforceable  against each of Borrowers in accordance  with their
     respective terms.

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(c)  All required  consents or  approvals of any persons  other than Lenders and
     Agent to the  authorization,  execution and delivery of this  Amendment and
     the other amendment  agreements  delivered in connection herewith have been
     obtained  by each  of  Borrowers  and  Guarantors,  and the  authorization,
     execution  and delivery  hereof does not violate or breach any provision of
     or constitute a default  under any material  indenture,  mortgage,  deed of
     trust,  agreement or  instrument to which any of Borrowers or Guarantors is
     or may be bound, including, without limitation, the Note Indenture.

     4. Conditions  Precedent.  The  effectiveness  of the amendments  contained
herein shall be subject to the satisfaction of each of the following  conditions
precedent in a manner satisfactory to Agent on behalf of Lenders:

(a)  Agent shall have received, in form and substance  satisfactory to Agent, an
     executed  original  of  this  Amendment,  duly  authorized,   executed  and
     delivered by each of Borrowers and Guarantors; and

(b)  no Event of Default  shall have  occurred  and be  continuing  and no event
     shall have  occurred or condition be existing and  continuing  which,  with
     notice or passage of time or both, would constitute an Event of Default.

     5. Effect of this  Amendment.Except  as modified  pursuant hereto, no other
changes or modifications to the Financing Agreements are intended or implied and
in all other respects the Financing Agreements are hereby specifically ratified,
restated and confirmed by all parties hereto as of the effective date hereof. To
the extent of any  conflict  between the terms of this  Amendment  and the other
Financing Agreements, the terms of this Amendment shall control.

     6. Further  Assurances.  The parties  hereto shall execute and deliver such
additional  documents  and take such  additional  action as may be  necessary or
desirable to effectuate the provisions and purposes of this Amendment.

     7.  Governing  Law.  The rights and  obligations  hereunder  of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the laws of the State of New York.

     8.  Binding  Effect.This  Amendment  shall be binding upon and inure to the
benefit  of each of the  parties  hereto  and their  respective  successors  and
assigns.

     9.  Counterparts.   This  Amendment  may  be  executed  in  any  number  of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one  counterpart  thereof  signed by each of
the parties hereto.

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     Please  sign  the  enclosed  counterpart  of this  Amendment  in the  space
provided below,  whereupon this Amendment,  as so accepted by Agent and Lenders,
shall become a binding agreement among Borrowers, Agent and Lenders.

                                       Very truly yours,

                                       PAMIDA, INC.

                                       By:    /s/ George R. Mihalko
                                       Title:     Sr. V.P.

                                       SEAWAY IMPORTING COMPANY

                                       By:    /s/ George R. Mihalko
                                       Title:     Sr. V.P.

AGREED:

CONGRESS FINANCIAL CORPORATION
  (SOUTHWEST), individually and as Agent

By:    /s/ Edward Franco
Title:     Sr. Vice President

BANKAMERICA BUSINESS CREDIT, INC., formerly known as BA Business Credit Inc.

By:    /s/ Patrick J. Wilson
Title:     Vice President

ACKNOWLEDGED AND AGREED:

PAMIDA HOLDINGS CORPORATION

By:    /s/ George R. Mihalko
Title:     Sr. V.P.

PAMIDA TRANSPORTATION COMPANY

By:    /s/ George R. Mihalko
Title:     Sr. V.P.

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