EXHIBIT 4.1

                                 FIRST AMENDMENT
                             TO AMENDED AND RESTATED
                                CREDIT AGREEMENT

     FIRST  AMENDMENT,  dated as of August 13,  1998 (the  "Amendment"),  to the
AMENDED AND  RESTATED  CREDIT  AGREEMENT,  dated as of  December 2, 1997,  among
PAYLESS CASHWAYS,  INC., a Delaware  corporation (the  "Borrower"),  each of the
financial institutions from time to time party thereto as lenders (together with
their  successors and assigns,  the  "Lenders"),  the  Underwriters  (as therein
defined),  CANADIAN IMPERIAL BANK OF COMMERCE (acting through one or more of its
agencies, branches, or affiliates,  "CIBC"), as the issuer of standby letters of
credit,  U.S.  BANK  NATIONAL  ASSOCIATION,  in its  capacity  as the  issuer of
documentary letters of credit and CIBC, as coordinating and collateral agent (in
such  capacity,  the "Agent") for the  Lenders,  the Fronting  Banks (as therein
defined), the Underwriters and the other Secured Parties (as therein defined):

                              W I T N E S S E T H:

     WHEREAS,  the Borrower,  the Lenders,  the  Underwriters  and the Agent are
parties to that  certain  Amended and  Restated  Credit  Agreement,  dated as of
December  2, 1997 (as the same may be further  amended,  amended  and  restated,
supplemented or otherwise  modified from time to time, the "Credit  Agreement");
and

     WHEREAS,  the Borrower,  the Lenders,  the  Underwriters and the Agent have
agreed, on the terms and conditions set forth herein,  to certain  modifications
to the Credit Agreement; and

     WHEREAS, from and after the Effective Date (as hereinafter defined) of this
Amendment,  the Credit Agreement shall be amended, subject to and upon the terms
and conditions set forth herein, as follows:

     NOW, THEREFORE, the parties hereto hereby agree as follows:

1. Unless  otherwise  defined  herein,  all terms that are defined in the Credit
Agreement shall have the same meanings when used herein.

2. The definition of the term  "Required  Inventory" set forth in Section 1.1 of
the Credit Agreement is hereby amended in its entirety to read as follows:

     "Required  Inventory"  shall  mean  Inventory  in the  Borrower's
     possession and not subject to any Liens (except Liens in favor of
     the  Agent  and other  Liens  permitted  by  Section  6.1)  (such
     Inventory hereafter being referred to as the "Qualifying Required
     Inventory")  which shall have a minimum  aggregate FIFO Value, at
     least  equal to $325  

<PAGE>2

     million,  after  deduction  of all amounts  secured by such other
     Liens  permitted  by Section  6.1;  provided,  that no  Inventory
     subject  to  Liens  created  pursuant  to the GE  Credit  Program
     Documents  or Liens on  Inventory  subject  to a  purchase  money
     security  interest  of the type  described  in clause  (v) of the
     definition of Permitted Liens shall have any value ascribed to it
     for purposes of  calculating  Required  Inventory;  and provided,
     further, that the $325 million Required Inventory amount referred
     to herein  shall be  reduced by $1.5  million  for each store the
     Borrower permanently closes;  provided,  however, that regardless
     of the number of stores  closed by the Borrower,  the  Qualifying
     Required  Inventory shall have a minimum aggregate FIFO value, at
     least  equal to $300  million,  after  deduction  of all  amounts
     secured by other Liens permitted by Section 6.1.

3.  Section  1.1 of the Credit  Agreement  is hereby  amended by  inserting  the
following new definition in the appropriate alphabetical order:

     "Qualifying  Required Inventory" shall have the meaning set forth
     in the definition of the term "Required Inventory."

4. The first  sentence  of  Section  2.1(b) of the  Credit  Agreement  is hereby
amended in its entirety to read as follows:

     The  outstanding  principal  amount  of New Term  Loans  shall be
     payable  in  semi-annual  installments  of  $5  million  each  on
     September 15 and May 15 of each year,  commencing  September  15,
     1998.

5.  Section  2.4 of the  Credit  Agreement  is hereby  amended  by (i)  changing
subsection (c) to subsection (e) and (ii) replacing  subsections  (a) and (b) in
their entirety with the following new subsections (a), (b), (c) and (d):

     (a) Subject to the  provisions of Section 2.8, each New Term Loan
     which is an ABR Loan shall bear  interest  (computed on the basis
     of the actual  number of days elapsed over a year of 360 days) at
     a rate per annum equal to the Alternate Base Rate plus 1-1/2%.

     (b) Subject to the  provisions of Section 2.8, each New Term Loan
     which is a Eurodollar  Loan shall bear interest  (computed on the
     basis of the  actual  number of days  elapsed  over a year of 360
     days) at a rate per annum  equal,  during  each  Interest  Period
     applicable  thereto, to the Adjusted LIBOR Rate for such Interest
     Period in effect for such New Term Loan plus 2-1/2%.


<PAGE>3

     (c) Subject to the  provisions of Section 2.8, each New Revolving
     Loan which is an ABR Loan shall bear  interest  (computed  on the
     basis of the  actual  number of days  elapsed  over a year of 360
     days) at a rate per annum equal to the  Alternate  Base Rate plus
     2%.

     (d) Subject to the  provisions of Section 2.8, each New Revolving
     Loan which is a Eurodollar Loan shall bear interest  (computed on
     the basis of the actual number of days elapsed over a year of 360
     days) at a rate per annum  equal,  during  each  Interest  Period
     applicable  thereto, to the Adjusted LIBOR Rate for such Interest
     Period in effect for such New Revolving Loan plus 3%.

6. Section 2.8(a) of the Credit Agreement is hereby amended by replacing clauses
(x) and (y) appearing in lines eight through  eleven  therein in their  entirety
with the following:

     (w) in the case of (i)  Borrowings  which are both New Term Loans
     and ABR Loans,  and (ii) all other  amounts  due  hereunder,  the
     Alternate  Base Rate plus 3-1/2%,  (x) in the case of  Borrowings
     which are both New Term Loans and Eurodollar  Loans, the Adjusted
     LIBOR Rate in effect for such Borrowings plus 4-1/2%,  (y) in the
     case of (i) Borrowings which are both New Revolving Loans and ABR
     Loans, and (ii) Letter of Credit Outstandings, the Alternate Base
     Rate plus 4%,  and (z) in the case of  Borrowings  which are both
     New Revolving Loans and Eurodollar Loans, the Adjusted LIBOR Rate
     in effect for such New Revolving Loan plus 5%.

7.  Section  2.12 of the Credit  Agreement  is hereby  amended  by (a)  changing
subsection  (i) to  subsection  (j) and (b)  inserting  the  following  as a new
subsection (i):

     (i) Notwithstanding  any of the foregoing,  the Total Commitments
     shall be automatically and irrevocably reduced by (x) $10 million
     upon the  expiration of the  Unsupported  Trade Standby Letter of
     Credit and (ii) $5 million on May 15, 1999.

8.  Section  5.1(f) of the  Credit  Agreement  is hereby  amended  by adding the
following  immediately  following  the  words  "balance  of  such  fiscal  year"
appearing in the seventh line thereof:

     "and  quarterly  balance  sheet,  income  statement and cash flow
     projections for such period"

9. Section  6.7(a) of the Credit  Agreement  is hereby  amended in its
entirety to read as follows:


<PAGE>4

     (a)  Permit  cumulative  EBITDA for the four  consecutive  fiscal
     quarters  ending  nearest  to the last day of the  months  listed
     below to be less than the amount  specified  opposite  such month
     (increased,  in the case of the  first  three  periods  set forth
     below,  by the  amount,  if any,  by which  EBITDA for the fourth
     quarter  of  the  Borrower's   1997  fiscal  year  exceeds  $11.5
     million):

           Fiscal Quarter Ending             EBITDA

           February 1998                     $43,200,000
           May 1998                          $33,600,000
           August 1998                       $39,200,000
           November 1998                     $44,600,000

           February 1999                     $47,400,000
           May 1999                          $44,300,000
           August 1999                       $44,900,000
           November 1999                     $59,000,000

           February 2000                     $78,800,000
           May 2000                          $87,000,000
           August 2000                       $95,700,000
           November 2000                     $101,000,000

           February 2001                     $103,000,000
           May 2001                          $106,200,000
           August 2001                       $109,100,000
           November 2001                     $113,400,000

           February 2002                     $113,700,000
           May 2002                          $113,100,000
           August 2002                       $115,800,000.

10. Section  6.7(b) of the Credit  Agreement  is hereby  amended in its
entirety to read as follows:

     (b) Permit the Debt to EBITDA  Ratio to be more,  on the last day
     of any fiscal quarter of the Borrower ending during any month set

<PAGE>5

     forth below,  than the ratio set forth  opposite  the  applicable
     month below:

           Month                     Ratio

           February 1998             11.9 to 1
           May 1998                  15.0 to 1
           August 1998               11.9 to 1
           November 1998             9.0 to 1

           February 1999             9.8 to 1
           May 1999                  10.5 to 1
           August 1999               10.2 to 1
           November 1999             7.5 to 1

           February 2000             5.6 to 1
           May 2000                  4.9 to 1
           August 2000               4.2 to 1
           November 2000             3.7 to 1

           February 2001             4.0 to 1
           May 2001                  3.9 to 1
           August 2001               3.6 to 1
           November 2001             3.3 to 1

           February 2002             3.7 to 1
           May 2002                  3.7 to 1
           August 2002               3.4 to 1.


11. Section  9.10 of the  Credit  Agreement  is hereby  amended  by  adding  the
following sentence at the end thereof:

     Notwithstanding  any of the foregoing  provisions of this Section
     9.10 or anything to the contrary contained in this Agreement, any
     Lender  which  has  requested  that  it  not  receive   material,
     non-public  information  concerning  the  Borrower  and  which is
     therefore  unable or  unwilling  to vote with respect to an issue
     arising under the Credit Agreement will agree to vote and will be
     deemed to have voted its

<PAGE>6

     Loans and Participating  Interests under the Credit Agreement pro
     rata  in   accordance   with  the   percentages   of  Loans   and
     Participating  Interests in favor of and the percentages of Loans
     and  Participating  Interests  against  any such issue  under the
     Credit Agreement.

12. The Credit Agreement is hereby further amended by replacing  Exhibit M (form
of Inventory  Compliance  Certificate) to the Credit  Agreement with Schedule M1
hereto.

13. The Borrower hereby agrees to pay an amendment  fee in  connection  with the
execution of this  Amendment in an amount equal to  $1,500,000  (the  "Amendment
Fee"),  which fee shall be  payable  to the  Agent  for the  account  of the New
Revolving Lenders (or their respective  successors and assigns,  as the case may
be). The Borrower also agrees that its  obligations  set forth in Section 9.5 of
the Credit Agreement shall extend to the preparation,  execution and delivery of
this Amendment,  including the reasonable fees and  disbursements  of counsel to
the Agent. 

14. The Borrower  represents  and warrants to the Agent and the Lenders
that:

     (a)  the  execution,  delivery  and  performance  by the  Borrower  of this
Amendment and the performance by the Borrower of the Credit Agreement as amended
by this  Amendment  (i) have been duly  authorized  by all  requisite  corporate
action  on the part of the  Borrower;  and (ii)  will  not (x)  violate  (A) any
provision of any statute, rule or regulation or the Certificate of Incorporation
or By-laws (or similar governing documents) of the Borrower,  (B) any applicable
order of any  court or any  rule,  regulation  or order of any  other  agency of
government  or (C) any  indenture,  agreement or other  instrument  to which the
Borrower is a party or by which it or any of its  property  is bound,  (y) be in
conflict with, result in a breach of or constitute (with notice or lapse of time
or both) a default under any such indenture,  agreement or other  instrument (z)
result in the creation or  imposition of any Lien upon any property or assets of
the Borrower except as contemplated by the Security and Pledge  Agreement or any
of the other Security Documents executed in connection with the Credit Agreement
in favor of the Agent or the Lenders;  

     (b) upon the  occurrence of the Effective  Date (as  hereinafter  defined),
this Amendment will  constitute the legal,  valid and binding  obligation of the
Borrower, enforceable in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy,  insolvency,  reorganization or
other  similar  laws  affecting  creditors'  rights  generally  and  by  general
equitable  principles  (regardless  of whether  the issue of  enforceability  is
considered in a proceeding in equity or at law);

     (c) the representations and warranties set forth in Article 3 of the Credit
Agreement  are true and correct in all  material  respects on and as of the date
hereof, as if made on and as of the date hereof,  except to the extent that such
representations and warranties expressly relate to an earlier date; and


<PAGE>7


     (d) after giving  effect to this  Amendment,  the Borrower is in compliance
with all of the terms and  provisions  set forth in the Credit  Agreement  to be
observed  and  performed  and no Default or Event of Default has occurred and is
continuing.

15. This Amendment  shall not become  effective  until the date (the " Effective
Date") on which this  Amendment  shall have been executed by the  Borrower,  the
Agent and the Majority Lenders and the following conditions precedent shall have
been satisfied:

(i)  Receipt  by the  Agent  of fully  executed  original  counterparts  of this
Amendment,  together with delivery of other closing  documentation,  all in form
and substance satisfactory to the Agent and the Majority Lenders.

(ii)  Payment  by the  Borrower  (x) to the Agent  (for the  account  of the New
Revolving Lenders) of the Amendment Fee and (y) of the costs and expenses of the
Agent (including reasonable attorneys' fees and expenses) incurred in connection
with the negotiation and preparation of this Amendment. 

(iii) The  Borrower  shall  have  delivered  to the Agent  and the  Lenders  its
quarterly  balance sheet,  income  statement and cash flow  projections  through
December 1999 in form satisfactory to the Agent and the Majority Lenders.

(iv) After giving effect to this Amendment,  the Borrower shall be in compliance
with all of the terms and  provisions  set forth in the Credit  Agreement  to be
performed  and no  Default  or Event  of  Default  shall  have  occurred  and be
continuing.

(v) All representations and warranties  contained in this Amendment,  the Credit
Agreement and the documents executed in connection  herewith and therewith shall
be true and correct in all material  respects on and as of the  Effective  Date,
except to the  extent  that such  representations  and  warranties  relate to an
earlier date.

(vi) The Agent  shall  have  received  such  other  instruments,  documents  and
assurances as the Agent or its counsel may reasonably  request. 

16. Except to the extent hereby  amended,  the Credit  Agreement and each of the
Loan  Documents  remain in full force and effect  and are  hereby  ratified  and
affirmed.

17. This Amendment shall be limited precisely as written and shall not be deemed
(a) to be a consent  granted  pursuant to, or a waiver or  modification  of, any
other term or condition of the Credit  Agreement  or any of the  instruments  or
agreements referred to therein or (b) to prejudice any right or rights which the
Agent or the Lenders may now have or have in the future  under or in  connection
with the Credit  Agreement or any of the  instruments or agreements  referred to
therein.


<PAGE>8


Whenever the Credit  Agreement is referred to in the Credit  Agreement or any of
the  instruments,  agreements or other documents or papers executed or delivered
in  connection  therewith,  such  reference  shall be deemed to mean the  Credit
Agreement as modified by this  Amendment.  

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

19. THIS AMENDMENT  SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

             [The remainder of this page intentionally left blank]


<PAGE>9


     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Amendment to be
duly executed as of the day and the year first above written.

                                 PAYLESS CASHWAYS, INC.


                                 By:  /s/ Richard G. Luse
                                    ---------------------------------
                                 Title: Sr. V.P. Finance

                                 CANADIAN IMPERIAL BANK OF COMMERCE,
                                 as Coordinating and Collateral Agent


                                 By:  /s/ R. B. Layman
                                    ---------------------------------
                                 Title: General Manager

                                 By:_/s/ Robert N. Greer
                                 Title:  Assistant General Manager

                                 CIBC INC., as a New Term Lender and a New 
                                 Revolving Lender


                                 By:  /s/ Robert N. Greer
                                    ---------------------------------
                                 Title:  Executive Director

                                 Nationsbank, N.A. f/k/a
                                 NATIONSBANK OF TEXAS, N.A., as a New Term 
                                 Lender and a New Revolving Lender


                                 By:  /s/ Jay T. Wampler
                                    ---------------------------------
                                 Title:  Senior Vice President

                                 LEHMAN COMMERCIAL PAPER INC. , as a
                                 New Term Lender and a New Revolving Lender


                                 By:  /s/ Michele Swanson
                                    ---------------------------------
                                 Title:  Authorized signatory

<PAGE>10


                                 GOLDMAN SACHS CREDIT PARTNERS L.P.,
                                 as a New Term Lender and a New Revolving Lender


                                 By:  /s/ John Urban
                                    ---------------------------------
                                 Title: Authorized signatory

                                 FREMONT FINANCIAL CORPORATION,
                                 as a New Revolving Lender


                                 By:  /s/ John P. Neher
                                    ---------------------------------
                                 Title: SVP

                                 VAN KAMPEN  AMERICAN  CAPITAL  PRIME
                                 RATE  INCOME  TRUST,  as a New  Term
                                 Lender and a New Revolving Lender


                                 By:  /s/  Jeffrey W. Maillet
                                    ---------------------------------
                                 Title:  Sr. Vice Pres. & Director


                                 U.S. BANK NATIONAL ASSOCIATION,
                                 as a New Term Lender


                                 By:  /s/ Jack L. Quitmeyer
                                    ---------------------------------
                                 Title:  Vice President

                                 ABN AMRO BANK N.V., as a New Term Lender


                                 By:  /s/
                                    ---------------------------------
                                 Title:

                                 BANK OF AMERICA NATIONAL TRUST AND
                                 SAVINGS ASSOCIATION, as a New Term Lender


                                 By:  /s/
                                    ---------------------------------
                                 Title:



<PAGE>11


                                 THE BANK OF NOVA SCOTIA, as a New Term Lender


                                 By:  /s/
                                    ---------------------------------
                                 Title:

                                 BEAR, STEARNS & CO. INC., as a New Term Lender


                                 By:  /s/ Gregory A. Hanley
                                    ---------------------------------
                                 Title: Senior Managing Director

                                 NATIONAL CITY BANK, INDIANA, 
                                 as a New Term Lender


                                 By:  /s/
                                    ---------------------------------
                                 Title:

                                 MORGENS WATERFALL DOMESTIC 
                                   PARTNERS II, L.L.C., a New Term Lender


                                 By:  /s/
                                    ---------------------------------
                                 Title:


                                 NATIONSBANK, N.A., as a New Term Lender


                                 By:  /s/ Jay T. Wampler
                                    ---------------------------------
                                 Title: Senior Vice President

                                 OAKTREE CAPITAL MANAGEMENT, LLC, 
                                 as a New Term Lender


                                 By:  /s/
                                    ---------------------------------
                                 Title:



<PAGE>12


                                 TRANSAMERICA BUSINESS CREDIT CORPORATION, 
                                 as a New Revolving Lender


                                 By:  /s/ Perry Vavoules
                                    ---------------------------------
                                 Title:  SVP

                                 WAYLAND  INVESTMENT FUND, LLC., as a New Term
                                 Lender and a New  Revolving Lender 
                                 By:  CFSC  Wayland  Advisers, INC., its Manager

                                 By:  /s/ Steven Adams
                                    ---------------------------------
                                 Title: A.V.P.