<PAGE>

                                                                 EXHIBIT (10.13)
================================================================================



                         CONSTRUCTION AGENCY AGREEMENT

                          dated as of August 27, 1999


                                    between


                         ATLANTIC FINANCIAL GROUP, LTD.


                                      and


                              ROWE FURNITURE, INC.
                             as Construction Agent



================================================================================
<PAGE>

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>

                                                                                   Page
<S>............................................................................    <C>

ARTICLE I       DEFINITIONS....................................................     1
     1.1.  Defined Terms.......................................................     1

ARTICLE II      APPOINTMENT OF CONSTRUCTION AGENT..............................     1
     2.1.  Appointment.........................................................     1
     2.2.  Acceptance; Construction............................................     2
     2.3.  Commencement of Construction........................................     2
     2.4.  Supplements to this Agreement.......................................     2
     2.5.  Term................................................................     3
     2.6.  Identification of Properties; Construction Documents................     3
     2.7.  Scope of Authority..................................................     3
     2.8.  Covenants of the Construction Agent.................................     5

ARTICLE III     THE BUILDING; INDEMNITY........................................     6
     3.1.  Amendments; Modifications...........................................     6
     3.2.  Casualty, Condemnation and Construction Force
           Majeure Events......................................................     6
     3.3.  Indemnity...........................................................     6

ARTICLE IV      PAYMENT OF FUNDS...............................................     7
     4.1.  Funding of Property Acquisition Costs and Property
           Buildings Costs.....................................................     7

ARTICLE V       CONSTRUCTION AGENCY EVENTS OF DEFAULT..........................     7
     5.1.  Construction Agency Events of Default...............................     7
     5.2.  Damages.............................................................     8
     5.3.  Remedies; Remedies Cumulative.......................................     9

ARTICLE VI      NO CONSTRUCTION AGENCY FEE.....................................     9
     6.1.  Lease as Fulfillment of Lessor's Obligations........................     9

ARTICLE VII     LESSOR'S RIGHTS; CONSTRUCTION AGENT'S RIGHTS...................    10
     7.1.  Exercise of the Lessor's Rights.....................................    10
     7.2.  Lessor's Right to Cure Construction Agent's
           Defaults............................................................    10
ARTICLE VIII    MISCELLANEOUS..................................................    10
     8.1.  Notices.............................................................    10
     8.2.  Successors and Assigns..............................................    10
     8.3.  GOVERNING LAW.......................................................    11
     8.4.  Amendments and Waivers..............................................    11
     8.5.  Counterparts........................................................    11
     8.6.  Severability........................................................    11
     8.7.  Headings and Table of Contents......................................    11

</TABLE>

                                      -i-
<PAGE>

EXHIBITS

Exhibit A Form of Supplement to Construction Agency Agreement

                                      -ii-
<PAGE>

                         CONSTRUCTION AGENCY AGREEMENT
                         -----------------------------


     CONSTRUCTION AGENCY AGREEMENT, dated as of August 27, 1999 (as amended,
supplemented or otherwise modified from time to time, this "Agreement"), between
                                                            ---------
ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership, (the "Lessor"), and
                                                                   ------
ROWE FURNITURE, INC., a Virginia corporation ("Rowe Furniture", and in its
                                               --------------
capacity as construction agent, the "Construction Agent").
                                     ------------------


                             PRELIMINARY STATEMENT

     A.  Lessor, the Guarantors, the Lessees signatory thereto, the Lenders
signatory thereto and Crestar Bank, as agent for such Lenders (in such capacity,
the "Agent") are parties to that certain Master Agreement, dated as of even date
     -----
herewith (as amended, supplemented or otherwise modified from time to time
pursuant thereto, the "Master Agreement").
                       ----------------

     B.  Subject to the terms and conditions hereof, (i) the Lessor desires to
appoint Rowe Furniture as the Construction Agent to act as its sole and
exclusive agent for the construction of the Buildings in accordance with the
Plans and Specifications and pursuant to the Master Agreement, and (ii) the
Construction Agent desires, for the benefit of the Lessor, to cause such
Buildings to be constructed in accordance with the Plans and Specifications and
pursuant to the Master Agreement and this Agreement, in each case in accordance
with the terms herein set forth.

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

      1.1  Defined Terms.  Capitalized terms used but not otherwise defined in
           -------------
this Agreement shall have the meanings set forth in the Master Agreement.


                                  ARTICLE II

                       APPOINTMENT OF CONSTRUCTION AGENT

      2.1  Appointment.  Pursuant to and subject to the terms and conditions set
           -----------
forth herein and in the Master Agreement and the

                                      -1-
<PAGE>

other Operative Documents, the Lessor hereby irrevocably designates and appoints
Rowe Furniture as the Construction Agent to act as its exclusive agent for the
construction of the Buildings in accordance with the Plans and Specifications on
such Land.

      2.2  Acceptance; Construction.  Rowe Furniture hereby unconditionally
           ------------------------
accepts the designation and appointment as Construction Agent.  The Construction
Agent will cause the Buildings to be constructed on the Land substantially in
accordance with the Plans and Specifications and, in accordance with the
Operative Documents, to be equipped in substantial compliance in all material
respects with all Requirements of Law and insurance requirements.  If a Leased
Property will be leased by a Lessee other than Rowe Furniture, Rowe Furniture
may appoint such Lessee as its sub-construction agent with respect to such
Leased Property, provided that such appointment shall not affect Rowe
                 --------
Furniture's obligations hereunder, which obligations shall be primary and shall
remain in full force and effect.

      2.3  Commencement of Construction.  Subject to Construction Force Majeure
           ----------------------------
Events, the Construction Agent hereby agrees, unconditionally and for the
benefit of the Lessor, to cause construction of a Building to commence on each
parcel of Land as soon as is reasonably practicable, in its reasonable judgment,
after the Closing Date in respect of such Land. For purposes hereof,
construction of a Building shall be deemed to commence on the date (the
"Construction Commencement Date") on which excavation for the foundation for
-------------------------------
such Building commences. Without limiting the foregoing, no phase of such
construction shall be undertaken until all permits required for such phase have
been issued therefor.

      2.4  Supplements to this Agreement.  On the Closing Date of each parcel of
           -----------------------------
Land, the Lessor and the Construction Agent shall each execute and deliver to
the Agent a supplement to this Agreement in the form of Exhibit A to this
                                                        ---------
Agreement, appropriately completed, pursuant to which the Lessor and the
Construction Agent shall, among other things, each acknowledge and agree that
the construction and development of such Land will be governed by the terms of
this Agreement. Following the execution and delivery of a supplement to this
Agreement as provided above, such supplement and all supplements previously
delivered under this Agreement shall constitute a part of this Agreement. On or
prior to the Closing Date of each parcel of Land, the Construction Agent shall
prepare and deliver to the Lessor and the Agent a construction budget (the
"Construction Budget") for the related Leased Property, which shall be attached
--------------------
as an exhibit to the related Supplement to this Agreement, setting forth in
reasonable detail the budget for the Construction of the proposed Building on
such Land in accordance
                                      -2-
<PAGE>

with the Plans and Specifications therefor, and all related costs, including the
capitalized interest and Yield expected to accrue during the related
Construction Term, provided, however, the Construction Agent may prepare and
deliver to the Lessor and the Agent a preliminary construction budget for the
related Leased Property on the Closing Date, but, in any event, and as a
condition to any Funding occurring after the Closing Date, the Construction
Agent shall deliver a final Construction Budget (which shall not differ
materially from the preliminary construction budget) to the Lessor and the Agent
within 30 days of the Closing Date.

      2.5  Term.  This Agreement shall commence on the date hereof and shall
           ----
terminate with respect to any given Leased Property upon the first to occur of:

          (a)  payment by the related Lessee of the Leased Property Balance and
     termination of the Lease with respect to such Leased Property in accordance
     with the Lease;

          (b)  the expiration or earlier termination of the Lease;

          (c)  termination of this Agreement pursuant to Article V hereof;
                                                         ---------

          (d) the payment by the Construction Agent of the Leased Property
     Balance or the Construction Failure Payment with respect to such Leased
     Property pursuant to this Agreement; and

          (e) the completion after the Completion Date of all punchlist items.

      2.6  Identification of Properties; Construction Documents. The
           ----------------------------------------------------
Construction Agent may execute any of its duties and obligations under this
Agreement by or through agents, contractors, employees or attorneys-in-fact, and
the Construction Agent, as agent for the Lessor, shall enter into such
agreements with architects and contractors as the Construction Agent deems
necessary or desirable for the construction of the Buildings pursuant hereto
(the "Construction Documents"); provided, however, that no such delegation shall
      ----------------------    --------  -------
limit or reduce in any way the Construction Agent's duties and obligations under
this Agreement; provided, further, contemporaneously with the execution and
                --------  -------
delivery of a Construction Document, the Construction Agent will execute and
deliver to the Lessor the Security Agreement and Assignment, pursuant to which
the Construction Agent assigns to the Lessor, among other things, all of the
Construction Agent's rights under and interests in such Construction Documents.
Each construction contract with a

                                      -3-
<PAGE>

general contractor shall be with a reputable general contractor with experience
in constructing projects that are similar in scope and type to the proposed
Building, and shall provide for a commercially reasonable retainage amount.

      2.7  Scope of Authority.  (a)  Subject to the terms, conditions,
           ------------------
restrictions and limitations set forth in the Operative Documents, the Lessor
hereby expressly authorizes the Construction Agent, or any agent or contractor
of the Construction Agent, and the Construction Agent unconditionally agrees,
for the benefit of the Lessor, to take all action necessary or desirable for the
performance and satisfaction of all of the Construction Agent's obligations
hereunder with respect to the Leased Properties acquired or leased by the Lessor
upon which a Building is to be constructed, including, without limitation:

          (i)  overseeing, directing, supervising and monitoring all design and
     supervisory functions relating to the construction of the Buildings and all
     engineering work related to the construction of the Buildings;

          (ii)  negotiating and entering into all contracts or arrangements to
     procure the equipment and services necessary to construct the Buildings on
     such terms and conditions as are customary and reasonable in light of local
     standards and practices;

          (iii)  obtaining all necessary permits, licenses, consents, approvals
     and other authorizations, including those required under Applicable Law
     (including Environmental Laws), from all Governmental Authorities in
     connection with the development of the Land and the construction of the
     Buildings on the Land in accordance with the Plans and Specifications;

          (iv)  maintaining all books and records with respect to the
     construction, operation and management of the Leased Properties; and

          (v)  performing any other acts necessary or appropriate in connection
     with the identification, acquisition (or leasing) and development of the
     Land and construction of the Buildings in accordance with the Plans and
     Specifications.

     (b)  Neither the Construction Agent nor any of its Affiliates or agents
shall enter into any contract which would, directly or indirectly, impose any
liability or obligation on the Lessor unless such contract expressly contains an
acknowledgment by the other party or parties thereto that the obligations of the
Lessor are non-recourse, and that the Lessor shall have no

                                      -4-
<PAGE>

personal liability with respect to such obligations. Nothing contained herein
shall be construed to require advance waiver of statutory mechanics lien rights,
any such waiver, if secured, being pursuant to a separate instrument. Subject to
the foregoing, the Lessor shall execute such documents and take such other
actions as the Construction Agent shall reasonably request, at the Construction
Agent's expense, to permit the Construction Agent to perform its duties
hereunder.

     (c)  Subject to the terms and conditions of this Agreement and the other
Operative Documents, the Construction Agent shall have sole management and
control over the construction means, methods, sequences and procedures with
respect to the construction of the Buildings.

      2.8  Covenants of the Construction Agent.  The Construction Agent hereby
           -----------------------------------
covenants and agrees that it will:

          (a)  following the Construction Commencement Date, cause construction
     of a Building on the Land to be prosecuted diligently and without undue
     interruption substantially in accordance with the Plans and Specifications
     for such Land, in accordance with the Construction Budget for such Leased
     Property and in compliance in all material respects with all Requirements
     of Law and insurance requirements;

          (b)  notify the Lessor and the Agent in writing not less than thirty
     (30) days after the occurrence of each Construction Force Majeure Event;

          (c)  take all reasonable and practical steps to cause the Completion
     Date for such Leased Property to occur on or prior to the Scheduled
     Construction Termination Date for such Leased Property, and cause all Liens
     (including, without limitation, Liens or claims for materials supplied or
     labor or services performed in connection with the construction of the
     Buildings), other than Permitted Liens and Lessor Liens, to be discharged
     or bonded off if disputed in good faith by appropriate proceedings by the
     Construction Agent;

          (d)  following the Completion Date for each Leased Property, cause all
     outstanding punch list items with respect to the Buildings on such Leased
     Property to be completed within a reasonable time after said Completion
     Date; and

          (e)  at all times during construction of any Building, cause all title
     to all personalty financed by the Lessor on or within such Leased Property
     to be and remain vested in

                                      -5-
<PAGE>

     the Lessor and cause to be on file with the applicable filing office or
     offices all necessary documents under Article 9 of the Uniform Commercial
     Code to perfect such title free of all Liens other than Permitted Liens, it
     being understood and acknowledged that such Lessor's rights, title and
     interest in and to said personalty have been assigned to the Agent pursuant
     to the Operative Documents.


                                  ARTICLE III

                            THE BUILDING; INDEMNITY

      3.1  Amendments; Modifications.  The Construction Agent may, subject to
           -------------------------
the conditions, restrictions and limitations set forth herein and in the
Operative Documents (but not otherwise), at any time during the term hereof
revise, amend or modify the Plans and Specifications and the related
Construction Documents without the consent of the Lessor; provided, however,
                                                          --------  -------
that the Lessor's prior written consent (which shall not be unreasonably
withheld, conditioned or delayed) will be required in the following instances:
(x) such revision, amendment or modification by its terms would result in the
Completion Date of the Buildings occurring after the Scheduled Construction
Termination Date, or (y) such revision, amendment or modification would result
in the cost for such Leased Property exceeding the then remaining Commitments or
exceeding the Construction Budget for such Leased Property, or (z) the aggregate
effect of such revision, amendment or modification, when taken together with any
previous or contemporaneous revision, amendment or modification to the Plans and
Specifications for such Leased Property, would be to reduce the Fair Market
Sales Value of such Leased Property in a material respect when completed.

      3.2  Casualty, Condemnation and Construction Force Majeure Events.  If at
           ------------------------------------------------------------
any time prior to the Completion Date with respect to any Building there occurs
a Casualty or a Construction Force Majeure Event or the Lessor or the
Construction Agent receives notice of a Condemnation, then, except as otherwise
provided in the Lease, in each case the Construction Agent shall promptly and
diligently take all commercially reasonable and practical steps to cause the
construction of the Building to be completed substantially in accordance with
the Plans and Specifications and with the terms hereof, and cause the Completion
Date to occur on or prior to the Scheduled Construction Termination Date.

      3.3  Indemnity.  During the Construction Term for each Leased Property,
           ---------
the Construction Agent agrees to assume liability for, and to indemnify,
protect, defend, save and hold harmless the Lessor, on an After-Tax Basis, from
and against, any and all Claims that may be imposed on, incurred by or asserted
or

                                      -6-
<PAGE>

threatened to be asserted, against the Lessor, whether or not the Lessor
shall also be indemnified as to any such Claim by any other Person, in any way
relating to or arising out of (i) the Construction Agent's (or any
subcontractor's) own actions or failures to act while in possession or control
of any Leased Property, (ii) fraud, misapplication of funds, illegal acts or
willful misconduct on the part of the Construction Agent (or any subcontractor),
(iii) any event described in paragraph (f) of Article XII of the Lease with
respect to the Construction Agent or (iv) the inaccuracy of any representation
or warranty made by the Construction Agent.  The foregoing indemnities are in
addition to, and not in limitation of, the indemnities with respect to
environmental claims set forth in Section 7.2 of the Master Agreement.  The
provisions of Section 7.3 of the Master Agreement shall apply to any amounts
that the Construction Agent is requested to pay pursuant to this Section 3.3.
                                                                 -----------
The provisions of this Section 3.3 shall survive termination of this Agreement.
                       -----------

                                  ARTICLE IV

                               PAYMENT OF FUNDS

      4.1  Funding of Property Acquisition Costs and Property Buildings Costs.
           ------------------------------------------------------------------
(a) During the course of the construction of the Buildings on any Land, the
Construction Agent may request that the Lessor advance funds for the payment of
acquisition, transaction and closing costs of any fixtures and equipment (other
than Lessee's Property) or property improvements costs, and the Lessor will
comply with such request to the extent provided for under, and subject to the
conditions, restrictions and limitations contained in, the Master Agreement and
the other Operative Documents.

     (b)  The proceeds of any funds made available to the Lessor to pay
acquisition, transaction and closing costs or improvements costs shall be made
available to the Construction Agent in accordance with the Funding Request
relating thereto and the terms of the Master Agreement.  The Construction Agent
will use such proceeds only to pay the acquisition, development, transaction and
closing costs of any fixtures and equipment (other than Lessee's Property) or
property improvement costs for the Leased Properties specified in the Funding
Request relating to such funds.

                                   ARTICLE V

                     CONSTRUCTION AGENCY EVENTS OF DEFAULT

      5.1  Construction Agency Events of Default.  If any one or more of the
           -------------------------------------
following events (each a "Construction Agency Event of Default") shall occur and
                          ------------------------------------
be continuing (after expiration of

                                      -7-
<PAGE>

applicable notice and cure periods, if any, provided for herein or in any other
Operative Document):

          (a)  the Construction Agent fails to apply any funds paid by, or on
     behalf of, the Lessor to the Construction Agent for the purposes
     contemplated under the Operative Documents;

          (b)  subject to Construction Force Majeure Events, the Construction
     Commencement Date with respect to any Leased Property shall fail to occur
     for any reason on or prior to the date that is one year after the Closing
     Date with respect to such Leased Property;

          (c)  the Completion Date with respect to any Leased Property shall
     fail to occur for any reason on or prior to the earlier of the Funding
     Termination Date and the Scheduled Construction Termination Date for such
     Leased Property;

          (d)  any Event of Default shall have occurred and be continuing; or

          (e)  the Construction Agent shall fail to observe or perform in any
     material respect any term, covenant or condition of this Agreement (except
     those specified in clauses (a) through (d) above), and such failure shall
                        -----------         ---
     remain uncured for a period of thirty (30) days after written notice
     thereof to the Construction Agent; provided, however, no Construction
                                        --------  -------
     Agency Event of Default shall be deemed to occur if such failure or breach
     cannot reasonably be cured within such period, so long as the Construction
     Agent shall have promptly commenced the cure thereof and continues to act
     with diligence to cure such failure or breach and such failure or breach is
     cured within one hundred eighty (180) days after written notice thereof to
     the Construction Agent;

then, in any such event, the Lessor may, in addition to the other rights and
remedies provided for in this Article, immediately terminate this Agreement as
to any Leased Property or Properties or all of the Leased Properties,
separately, successively or concurrently (all in Lessor's sole discretion) by
giving the Construction Agent written notice of such termination, and upon the
giving of such notice, this Agreement shall terminate as to such Leased Property
or Properties or all of the Leased Properties (as the case may be) and all
rights of the Construction Agent and, subject to the terms of the Operative
Documents, all obligations of the Lessor under this Agreement with respect to
such Leased Property or Properties or all of the Leased Properties (as the case
may be) shall cease.

                                      -8-
<PAGE>

      5.2  Damages.  The termination of this Agreement pursuant to Section 5.1
           -------                                                 -----------
shall in no event relieve the Construction Agent of its liability and
obligations hereunder which accrued prior to such termination, all of which
shall survive any such termination.

      5.3  Remedies; Remedies Cumulative.  (a)  If a Construction Agency Event
           -----------------------------
of Default shall have occurred and be continuing, the Construction Agent shall
have the right, at its option, to cure such Construction Agency Event of Default
by purchasing the affected Leased Property or Properties for the Leased Property
Balance(s) therefor from the Lessor within thirty (30) days after the occurrence
of the Construction Agency Event of Default in accordance with the terms, and
subject to the conditions, restrictions and limitations of Section 14.5 of the
Lease; in the event that the Construction Agent does not exercise its option to
purchase such Leased Property or Properties, the Construction Agent shall pay to
the Lessor the Construction Failure Payment(s) therefor within five (5) Business
Days of the demand therefor by the Lessor, and shall surrender and return such
Leased Property or Properties to the Lessor or its designee in accordance with
the terms of Section 14.8 of the Lease.  In the event that the Construction
Agent returns any Leased Property to the Lessor pursuant to the previous
sentence, the Construction Agent shall take such action as the Lessor may
reasonably request in order to transfer to the Lessor (or its designee) all of
the Construction Agent's rights and claims in, to and under the related
Construction Contract(s), Architect's Agreement(s), all agreements, security
deposits, guaranties and surety bonds related thereto and all governmental
permits related to such Construction, and the Construction Agent shall provide
to the Lessor copies of all books, records and documentation with respect to the
foregoing.


     (b)  No failure to exercise and no delay in exercising, on the part of the
Lessor, any right, remedy, power or privilege under this Agreement or under the
other Operative Documents shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.  The rights, remedies, powers and
privileges provided in this Agreement are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

                                      -9-
<PAGE>

                                  ARTICLE VI

                          NO CONSTRUCTION AGENCY FEE

      6.1  Lease as Fulfillment of Lessor's Obligations.  All obligations,
           --------------------------------------------
duties and requirements imposed upon or allocated to the Construction Agent
shall be performed by the Construction Agent at the Construction's Agent's sole
cost and expense, and the Construction Agent will not be entitled to, and the
Lessor shall not have any obligation to pay, any agency fee or other fee or
compensation, and the Construction Agent shall not be entitled to, and the
Lessor shall not have any obligation to make or pay, any reimbursement therefor,
it being understood that this Agreement is being entered into as consideration
for and as an inducement to the Lessor entering into the Lease and the other
Operative Documents.


                                  ARTICLE VII

                 LESSOR'S RIGHTS; CONSTRUCTION AGENT'S RIGHTS

      7.1  Exercise of the Lessor's Rights.  The Construction Agent hereby
           -------------------------------
acknowledges and agrees that the rights and powers of the Lessor under this
Agreement have been assigned to, and may be exercised by, the Agent, for the
benefit of the Lenders, pursuant to the Loan Agreement and the related Operative
Documents.

      7.2  Lessor's Right to Cure Construction Agent's Defaults. The Lessor,
           ----------------------------------------------------
without waiving or releasing any obligation or Construction Agency Event of
Default, may, upon prior written notice to the Construction Agent and expiration
of any applicable cure period (but shall be under no obligation to), remedy any
Construction Agency Event of Default for the account of and at the sole cost and
expense of the Construction Agent.  All reasonable out of pocket costs and
expenses so incurred (including actual and reasonable fees and expenses of
counsel), together with interest thereon at the Overdue Rate from the date on
which such sums or expenses are paid by the Lessor, shall be paid by the
Construction Agent to the Lessor on demand.


                                 ARTICLE VIII

                                 MISCELLANEOUS

      8.1  Notices.  All notices, consents, directions, approvals, instructions,
           -------
requests, demands and other communications required or permitted by the terms
hereof to be given to any Person shall be given in writing in the manner

                                      -10-
<PAGE>

provided in, shall be sent to the respective addresses set forth in, and the
effectiveness thereof shall be governed by the provisions of, Section 8.2 of the
Master Agreement.

      8.2  Successors and Assigns.  This Agreement shall be binding upon and
           ----------------------
inure to the benefit of the Lessor, the Construction Agent and their respective
legal representatives, successors and permitted assigns.  Except as permitted
herein, the Construction Agent shall not assign its rights or obligations
hereunder without the prior written consent of the Lessor and the Agent.

      8.3  GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
           -------------
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF VIRGINIA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.

      8.4  Amendments and Waivers.  The Lessor and the Construction Agent may
           ----------------------
from time to time, enter into written amendments, supplements or modifications
hereto.

      8.5  Counterparts.  This Agreement may be executed on any number of
           ------------
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same agreement.

      8.6  Severability.  Any provision of this Agreement which is prohibited or
           ------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

      8.7  Headings and Table of Contents.  The headings and table of contents
           ------------------------------
contained in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

                                      -11-
<PAGE>

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

                              ROWE FURNITURE, INC.


                              By:  /s/ Garry W. Angle
                                 -----------------------------
                                 Name: Garry W. Angle
                                 Title: Treasurer


                                      S-1
<PAGE>

                              ATLANTIC FINANCIAL GROUP, LTD.

                              By:  Atlantic Financial Managers,
                                   Inc., its General Partner



                                    By  /s/ Stephen Brookshire
                                      ------------------------
                                      Name: Stephen Brookshire
                                      Title: President


                                      S-2
<PAGE>

                                                                       EXHIBIT A



                  Supplement to Construction Agency Agreement
                  -------------------------------------------


     SUPPLEMENT to Construction Agency Agreement, dated as of ______________,
____, between ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (the
"Lessor"), and ROWE FURNITURE, INC., a Virginia corporation (in its capacity as
-------
construction agent, the "Construction Agent"). Capitalized terms used but not
------------------
otherwise defined herein shall have the meanings given them in the Construction
Agency Agreement.

     The Lessor and the Construction Agent are parties to that certain
Construction Agency Agreement, dated as of August ___, 1999 (as amended,
supplemented or otherwise modified, the "Construction Agency Agreement"),
                                         -----------------------------
pursuant to which (i) the Lessor has appointed the Construction Agent as its
sole and exclusive agent in connection with the development of the Land and
construction of the Buildings in accordance with the Plans and Specifications,
and (ii) the Construction Agent has agreed, for the benefit of the Lessor, to
cause the construction of the Buildings to be completed in accordance with the
Plans and Specifications.

     Subject to the terms and conditions of the Construction Agency Agreement,
the Lessor and the Construction Agent desire that the terms of the Construction
Agency Agreement apply to the Land described in Schedule 1 and wish to execute
                                                ----------
this Supplement to provide therefor.

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:

     1.  The Construction Agent agrees to act as Construction Agent and to
perform its obligations under the Construction Agency Agreement in connection
with the completion of construction of the Building on the Land described in
Schedule 1 in accordance with the Plans and Specifications for such Land. The
----------
Construction Agent hereby represents and warrants to Lessor that the
Construction Agent has heretofore delivered to Lessor a true, correct and
complete copy of the Plans and Specifications for the Building on the Land
described in Schedule 1 or, if not available on the date hereof, will deliver
----------
such Plans and Specifications as soon as available.



                                     A-1
<PAGE>

     2.  Each of the Lessor and the Construction Agent acknowledges and agrees
that the development of the Land described in Schedule 1 and the construction of
                                              ----------
the Buildings thereon shall be governed by the terms of the Construction Agency
Agreement, the Lease and the Master Agreement.

     3.  The anticipated construction budget relating to the construction and
development of the Building on the Land described in Schedule 1 is set forth on
                                                     ----------
Schedule 2.  The acquisition cost of the Land described in Schedule 1 was
----------                                                 ----------
$___________.

     4.  This Supplement shall, upon its execution and delivery, constitute a
part of the Construction Agency Agreement.

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

                                     ROWE FURNITURE, INC.



                                     By
                                       ------------------------------
                                       Name:
                                       Title:


                                     ATLANTIC FINANCIAL GROUP, LTD.
                                     By:  Atlantic Financial Managers,
                                          Inc., its General Partner



                                     By
                                       ------------------------------
                                       Name:
                                       Title:


                                      A-2
<PAGE>

                                                        Schedule 1 to Supplement



                              Description of Land
                              -------------------



                                      A-3
<PAGE>

                                                        Schedule 2 to Supplement



                              Construction Budget
                              -------------------


                                      A-4