LOAN AND SECURITY AGREEMENT

            THIS AGREEMENT is made as of this 15^th day of April, 2002 between Fleet Retail Finance Inc., a Delaware corporation with offices at 40 Broad Street, Boston, Massachusetts 02109 as agent (in such capacity, herein the "Administrative Agent") for the benefit of the Lenders, on a Pro Rata basis, based upon each Lender's Percentage Commitment, who are, at present, those financial institutions identified on the signature pages of this Agreement and who in the future are those Persons (if any) who become a "Lender" in accordance with the provisions of Article VII of the Agency Agreement (defined below); Fleet Retail Finance Inc., a Delaware corporation with offices at 40 Broad Street, Boston, Massachusetts 02109 as agent (in such capacity, herein the "Collateral Agent") for the benefit of the Lenders and the Administrative Agent, Wells Fargo Retail Finance, LLC, a Delaware limited liability company with offices at One Boston Place, Boston, Massachusetts 02108 (in such capacity, herein, the "Documentation Agent") and Duckwall-Alco Stores, Inc., a Kansas corporation, ("Lead Borrower" and a "Borrower"), SPD Truck Line, Inc., a Kansas corporation, and Duckwall-Alco, LP, a Kansas limited partnership, (collectively the "Borrowers" or the "Borrower" and each individually, a "Borrower"), each of which has its principal executive offices at 401 Cottage Avenue, Abilene, Kansas 67410-2832  in consideration of the mutual covenants contained herein and benefits to be derived herefrom,

WITNESSETH:

ARTICLE I. - Definitions:

As herein used, the following terms have the following meanings or are defined in the section of this Agreement so indicated:

"Acceleration":  With respect to any Indebtedness, its becoming due and payable prior to its stated maturity.  Derivations of the word "Acceleration" (such as "Accelerate") are used with like meaning in this Agreement.

"Accounts":  "Accounts" as defined in the UCC.

"ACH":  Automated clearing house.

"Account Debtor":  Has the meaning given that term in the UCC.

"Administrative Agent":  Defined in the Preamble.

"Affiliate":

(a)        With respect to any two Persons, a relationship in which (i) one holds, directly or indirectly, not less than Twenty Five Percent (25%) of the capital stock, beneficial interests, partnership interests, or other equity interests of the other; or (ii) one has, directly or indirectly, the right, under ordinary circumstances, to elect a majority  of the directors (or other body or Person who has those powers customarily vested in a board of directors of a corporation); or (iii) the same third Person holds, directly or indirectly, not less than Twenty Five Percent (25%) of their respective capital stock, beneficial interests, partnership interests or other equity interests; or has directly or indirectly the right to elect the majority of directors of both such parties; or

(b)        Any corporation, limited liability company, trust, partnership, joint venture, or other enterprise which: is a parent, brother-sister, subsidiary, or affiliate, of any Borrower; could have such enterprise's tax returns or financial statements consolidated with the Lead Borrower's; could be a member of the same controlled group of corporations (within the meaning of Section 1563(a)(1), (2) and (3) of the Internal Revenue Code of 1986, as amended from time to time) of which the Lead Borrower is a member; controls or is controlled by the Lead Borrower.

"Agreement":  This Loan and Security Agreement, and it may be modified, amended, supplemented or restated from time to time.

"Agency Agreement":   That certain Agency Agreement dated April 15, 2002 by and among the Administrative Agent, the Collateral Agent, and the Lenders.

"Agent":  When not preceded by "Administrative" or "Collateral", the terms "Agent" or "Agents" refer collectively and individually to the Administrative Agent and the Collateral Agent.

"Agent Fees":   Defined in Section 2.13 hereof.

 "Agent's Rights and Remedies":  Defined in Section 11.6.

"Aggregate Commitments":  The sum of all the Lender's Commitments hereunder.

"Appraised Inventory Liquidation Value":  The product of (a) the Cost of Eligible Inventory (net of Inventory Reserves) multiplied by (b) that percentage, determined by the Collateral Agent from the then most recent appraisal of the Borrowers' Inventory obtained by the Collateral Agent, to reflect the appraiser's estimate of the net realization on Cost of the Liquidation of the Borrowers' Inventory.

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