EXHIBIT 10.3

CORESTATES LEASING, INC.                                  MASTER LEASE AGREEMENT
                                                          TRUE LEASE

                  MASTER LEASE AGREEMENT NO. __________________

THIS MASTER LEASE AGREEMENT (the "Lease"), dated as of the 17th day of
October 1997, is executed by and between CORESTATES LEASING, INC., a
Pennsylvania corporation, with a place of business located at One Meridian
Boulevard, Wyomissing, PA 19610 (together with its successors and assigns, if
any, the "Lessor") and LADD FURNITURE, INC., a corporation organized under the
laws of the State of North Carolina, with its mailing address and chief place of
business at One Plaza Center, Box HP3, High Point, NC 27261 (the "Lessee").

  The Parties hereto, for good and valuable consideration and intending to be
legally bound, hereby agree as follows:

1.       MASTER LEASE WITH SCHEDULES:
  (a) SCHEDULES. Subject to the terms and conditions set forth below, Lessor
agrees to lease to Lessee and Lessee agrees to lease from Lessor such unit or
units of equipment (the "Equipment" and individually sometimes "Item" or "Item
of Equipment") described in any Master Lease Schedule (a "Schedule") now or
hereafter from time to time executed by the parties pursuant hereto, and any and
all such Schedules are deemed a part hereof. Each Schedule shall incorporate
this Lease by reference. Capitalized terms not otherwise defined herein will
have the meaning provided for in the related Schedules.
  (b) CONDITIONS PRECEDENT. Lessor has no obligation to purchase Equipment from
the manufacturer or supplier thereof who may be the Lessee in a sale and
leaseback transaction ("Supplier") or to lease the same to Lessee under any
Schedule unless each of the following is satisfied and delivered to Lessor prior
to the Commencement Date with respect to the Schedule in form and substance
satisfactory to Lessor: (i) a Schedule relating to the Equipment then being
leased hereunder reflecting Lessor's Cost and a term and rate satisfactory to
Lessor, (ii) unless the transaction is a sale and leaseback or Lessor has
delivered its purchase order for the purchase of such Equipment, a Purchase
Order Assignment and Consent in form satisfactory to Lessor, (iii) a Certificate
of Acceptance and Closing Certificate in form satisfactory to Lessor, and (iv) a
certificate of insurance which complies with the requirements of Section 7 and
the Schedule. The execution by Lessee of the Certificate of Acceptance will (i)
confirm that each Item of Equipment described thereon has been delivered to and
irrevocably accepted by Lessee for lease hereunder, and (ii) constitute Lessee's
acknowledgment that Lessee has received a copy of and has approved the contract
under which Lessor acquired the Equipment. Lessee hereby waives as between
Lessor and Lessee any right to revoke acceptance of the Equipment under this
Lease once evidenced by its Certificate of Acceptance. Lessee shall also deliver
such other documents related to the Master Lease, Master Lease Schedule and
equipment as Lessor may reasonably request.

2.       TERM:
  The lease of and rent for Equipment leased under any Schedule will commence on
the day specified in the Schedule as the Commencement Date, and will continue
for the period specified as the "term" in such Schedule as the same may be
extended pursuant to the terms hereof.

3.       RENT:
  Lessee promises to pay rent during the term of the Lease on the due dates and
in the amount set forth in the Schedule and acknowledges that rent will not be
prorated for any cause or reason except as herein specifically provided. If one
or more advance payments of rent are required, the advance rent will be due and
paid in the amount specified in the Schedule upon acceptance by Lessor of each
Schedule providing for such rent. Lessor will apply said advance rent toward the
first basic rent payment and, provided no default is then existent hereunder,
the balance, if any, of the advance rent will be applied to the final rent
payment. Subsequent rent payments will be due periodically thereafter as
specified in the Schedule. In no event will any advance rent or any other rent
payment be refunded to Lessee, it being the intention of the parties hereto that
the rents and other amounts payable by the Lessee hereunder will continue to be
payable in all events unless the obligation to pay the same will be terminated
pursuant to the terms hereof. All rent will be paid to Lessor in immediately
available funds without notice or demand on the due dates with respect thereto
at Lessor's address set forth above or as otherwise directed by Lessor in
writing. In order to secure all obligations of Lessee hereunder, under each
Schedule and under all other obligations of Lessee to Lessor or to CoreStates
Financial Corp., or any of its direct or indirect subsidiaries (each, a
"CoreStates Company") under any other agreement, Lessee hereby grants to Lessor
and to each CoreStates Company a security interest in the amount of any advance
rent not applied to the first basic rent payment and in all other funds,
balances, accounts and/or other property of any kind of Lessee or in which
Lessee has an interest now or hereafter in the possession, custody or control of
Lessor or any CoreStates Company.



<PAGE>

                                                                    EXHIBIT 10.3


4.       USE, OPERATION AND INDEMNIFICATION:
  (a) Lessee will not , except as expressly provided for herein, assign, sublet,
mortgage, hypothecate or alter any of the Equipment leased hereunder or any
interest in the Lease, nor will Lessee remove any of the Equipment from the
location specified in the Schedule (except in the ordinary course of its
business for use or maintenance) without the prior written consent of Lessor,
and any attempt to so assign, sublet, mortgage, hypothecate, alter or remove
will constitute a default hereunder and such assignment, sublease, mortgage, or
hypothecation will be void and without effect. Lessee may only sublease to
subsidiaries, so long as Lessee remains primarily liable. Lessee will keep all
Equipment leased hereunder free and clear from all claims, liens, and
encumbrances whatsoever, and upon becoming aware thereof, the Chief Financial
Officer of Lessee shall promptly notify Lessor of any default or event which
with notice and/or the passage of time would become a default under this Section
or otherwise under the Lease. Lessee will at all times use the Equipment only in
compliance with all applicable laws and consistent with the instructions
supplied by the Supplier and manufacturer thereof. Lessee will not use the
Equipment to carry, contain or produce directly or indirectly any hazardous
substances (as defined under applicable federal, state or local law or
regulation), except as utilized in the ordinary course of business in compliance
with all applicable laws.
  (b) Lessee agrees to indemnify, save and keep harmless Lessor, its agents,
employees, successors and assigns from and against any and all losses, damages,
penalties, injuries, claims, actions and suits, including reasonable legal
expenses of whatsoever kind and nature, in contract or tort, howsoever arising
from any cause whatsoever including, but not limited to Lessor's strict
liability in tort, or otherwise arising out of (i) the selection, manufacture,
purchase, financing, acceptance or rejection of Equipment (ii) the ownership of
Equipment during the term of this Lease, (iii) liability to third parties after
disposition of the equipment by Lessor based on strict liability in tort, (iv)
Lessee's negligence in the delivery, lease, possession, maintenance, uses,
condition, environmental impact, return or operation of Equipment (including,
without limitation, latent and other defects, whether or not discoverable by
Lessor or Lessee and any claim for patent, trademark or copyright infringement).
Lessee hereby represents and warrants that each Item of Equipment acquired and
leased hereunder is new and not previously used unless specifically disclosed on
the Schedule, and Lessee agrees to indemnify, save and keep harmless Lessor
against any loss howsoever arising directly or indirectly from any subsequent
determination that the Supplier has sold Items of Equipment for lease hereunder
which have been previously used. Lessee upon request will defend, at its own
expense any and all actions based on, or arising out of, any of the foregoing
and this indemnification will survive cancellation or termination of the Lease.
  (c) Lessee will not without the prior written consent of Lessor, which consent
shall not be unreasonably withheld, make or authorize any improvement, change,
addition or alteration to the Equipment (i) if such improvement, change,
addition or alteration will impair the originally intended function or use of
the Equipment or impair the value of the Equipment as it existed immediately
prior to such improvement, change, addition or alteration; or (ii) if any parts
installed in or attached to or otherwise becoming a part of the Equipment as a
result of any such improvement, change, addition or alteration shall not be
readily removable without damage to the Equipment. Any part added to the
Equipment without violating the provisions of the immediately preceding sentence
and which is not a replacement or substitution for any part of the Equipment
shall remain the property of Lessee and may be removed by Lessee at any time
prior to the termination or earlier cancellation of the term. All such parts
shall be and remain free and clear of any liens. Any such part which is not so
removed shall without further act, become the property of Lessor. Lessee and
Lessor agree that although the equipment may be attached to real estate or
personal property, it will not constitute a fixture.

5.       SERVICE AND MAINTENANCE:
  Unless otherwise provided in the related Schedule, Lessee will service and
maintain the Equipment as provided hereinafter. Lessee will at its sole expense
at all times maintain all Equipment consistent with recommendations of the
Supplier and manufacturer thereof and as required by the conditions of any
warranty in order to maintain same current and effective and in good operating
order, repair, condition and appearance and keep all Equipment protected from
the elements, except during use in the normally contemplated manner. Lessee will
at its own expense provide all maintenance and service and make all repairs and
replacements reasonably necessary for such purposes. If any parts of the
Equipment are worn out, lost or are otherwise rendered unfit for use, Lessee
will, at its own expense, replace such parts promptly by replacement parts of at
least equal value and utility with title thereto vesting in Lessor free and
clear of all liens and encumbrances. Upon request of Lessor, Lessee will affix
in a prominent position on each Item of Equipment plates, tags or other
identifying labels supplied by Lessor showing ownership of the Equipment by
Lessor. Lessor will at all reasonable times upon reasonable notice have the
right to inspect the Equipment and Lessee's maintenance records related thereto.
Lessee will at its sole expense make all alterations and modifications with
respect to the Equipment that may at any time during the term of the Lease be
required to comply with any applicable law or any governmental rule or
regulation for the continued use thereof.



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<PAGE>
                                                                    EXHIBIT 10.3



6.       RETURN OF EQUIPMENT:
  Unless otherwise provided in the Schedule, upon cancellation of the Lease or
of any Schedule upon default or by expiration of the term thereof or upon
termination for any other cause, Lessee will, at its sole cost and expense,
promptly return the Equipment to Lessor at any address specified by Lessor
within 500 miles of last location in the same condition as received, reasonable
wear and tear and normal depreciation from proper use and maintenance alone
excepted, capable of performing its originally intended use at its originally
rated capacity. Lessee will be responsible for all costs and expenses for
packing, shipping and insuring the Equipment until delivered to the location
designated by Lessor. Lessee will also provide storage to Lessor, if requested,
for up to ninety (90) days after the termination of the Lease. Lessor will pay
reasonable costs for storage at Lessee's incremental costs, including cost of
insurance, maintenance, and other similar items. At least ninety (90) days prior
to the last day of the term, Lessee shall deliver to Lessor the report of an
independent expert advising Lessor on the condition of the Equipment and its
compliance with the terms hereof. In addition to Lessor's other rights and
remedies hereunder, if the Equipment is not returned on the last day of the
term, due to Lessee's failure to act, or repairs are necessary to place the
Equipment in the condition required hereby, Lessee shall continue to pay for the
period of delay and acceptance of such rents by Lessor will not constitute a
renewal of the Lease or a waiver of Lessor's right to a prompt return.

7.       INSURANCE:
  Lessee hereby assumes all risks of damage, loss, theft, and destruction,
partial or complete, with respect to each Item of Equipment during the term of
the Lease and during any storage period in accordance with Section 6 above until
Lessee has returned or disposed of the Equipment as provided for herein. Lessee
will at its own expense keep each Item of Equipment insured against all risks
with extended coverage and insurance companies reasonably satisfactory to
Lessor, with Lessor named as loss payee for an amount at least equal to the
greater of (i) the fair market value of the Equipment, or (ii) the then current
Stipulated Loss Value of the Equipment determined by reference to the related
Schedule. Lessee agrees to obtain and maintain at its expense with insurance
companies of nationally known standing and financially sound condition,
liability insurance for the protection of Lessor and Lessee, as their interests
may appear, in an amount at all times reasonably satisfactory to Lessor and
otherwise as specified in the related Schedule against claims for bodily injury,
death or property damage arising out of the use, ownership, possession,
operation or condition of the Equipment. Each insurer will agree, by endorsement
upon the policy or policies issued by it, or by independent instruments
furnished to Lessor, Lessor shall be named as additional insured and additional
loss payee with respect to said policy, that it will give Lessor ten (10) days
written notice before the policy or policies in question will be altered in a
manner which would affect this Lease Agreement or coverage of equipment leased
under this Agreement, or canceled and that no act or default of any person other
than Lessor, its agents, or those claiming under Lessor, will affect Lessor's
rights to recover under such policy or policies in case of loss. Lessee will
deliver to Lessor the policies or evidence of insurance and renewal thereof
satisfactory to Lessor prior to the Commencement Date and ten (10) days prior to
each expiration date thereof for each Item of Equipment. The failure of Lessee
to secure or maintain such insurance will constitute a default under this Lease.
In the event of such breach, Lessor may, but will not be obligated to, obtain
such insurance. In the event that Lessor obtains such insurance, an amount equal
to the cost of such insurance will be deemed supplemental rent to be paid
forthwith by Lessee.

8.       LOSS OR DAMAGE:
  (a) Lessee hereby assumes and is solely responsible for, during the term of
the Lease and thereafter during any storage period in accordance with Section 6
until returned as provided for herein, the entire risk of use, operation and or
loss of the Equipment and for each and every accident or hazard resulting
therefrom and all losses and damages associated therewith howsoever arising.
  (b) In the event of the total loss, destruction, theft or damage beyond repair
(determined without reference to the remaining term with respect thereto) of the
Equipment or any Item during the period referred to the preceding subsection
8(a) (a "Casualty Occurrence"), Lessee will pay to Lessor on the earlier of the
next due date for rent following the Casualty Occurrence or on the last day of
the term with respect to such Equipment (or if the term has expired or has been
canceled, thirty days after the Casualty Occurrence) an amount equal to the rent
then due plus an amount equal to the Stipulated Loss Value of such Equipment as
of such due date. Upon payment of such amounts, and provided no default exists
hereunder, Lessee will be entitled to recover possession of such Item and title
thereto will vest in Lessee free and clear of the right and interest of Lessor.
  (c) In the event of damage to any Item of Equipment which does not amount to a
Casualty Occurrence, Lessee will give prompt notice of such damage to Lessor
and, at Lessee's sole cost and expense, Lessee will promptly repair such Item,
restoring it to its previous condition and the condition assuming Lessee had met
all of its obligations required for maintenance hereunder. Provided Lessee is
not in breach or default of this Lease, any proceeds of insurance received by
Lessor with respect to any such loss will be paid over by Lessor to Lessee or
vendor as Lessee designates to the extent necessary to reimburse Lessee for
costs incurred and paid by Lessee in repairing such damaged Equipment, but only
upon evidence satisfactory to Lessor that such repairs have been accomplished.



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<PAGE>

                                                                    EXHIBIT 10.3

9.       TRANSFER OF WARRANTIES:
  Notwithstanding anything contained herein to the contrary and to the extent
permitted by law and contract, Lessor will pass through without representation
to Lessee the benefit of all warranties, if any, of the Supplier of the
equipment and, so long as there exists no default hereunder, Lessee will have
the right to, and will, directly avail itself of all warranties made by the
Supplier with respect to the Equipment. Lessee will give Lessor notice of any
claim made by Lessee against the Supplier of the Equipment for breach of
warranty by supplier which may materially affect the value, use or resale of the
Equipment and any cash settlement of any such claim will be applied to
correcting the breach of warranty with respect to the Equipment.

10.      TAX TREATMENT AND INDEMNIFICATIONS:
  (a) Unless otherwise provided in the related Schedule, it is acknowledged and
agreed by the parties that they are entering into the Lease under each Schedule
with the assumption that Lessor and the consolidated group of which Lessor is a
member (all references to Lessor in this Section include such consolidated
group) will be treated for federal income tax purposes (and to the extent
allowable, for state and local tax purposes) as the owner of all Equipment
leased hereunder.
  (b) Unless otherwise provided in the related Schedule, the Lessee acknowledges
and agrees that each Schedule has been executed by Lessor based upon the
following representations and warranties of Lessee: (i) each Item of Equipment
has been placed in service on the Commencement Date; (ii) Lessor will not under
the Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder (the "Code"), be required to include in its gross income, for federal
income tax purposes, any amount with respect to any improvement, modification or
addition made by Lessee to any Item of Equipment; (iii) Lessor shall be entitled
to accelerated cost recovery deductions ("Recovery Deductions") for Lessor's
Cost of each Item of Equipment over the number of years indicated on the related
Schedule by using the 200% declining balance method permitted under Code Section
168 and the half year convention, unless otherwise required by operation of Code
Section 168(d) (3) (A); (iv) no Item of Equipment is limited use property within
the meaning of Rev. Proc. 76-30; and (v) for federal income tax purposes, all
amounts included in the gross income of Lessor with respect to each Item of
Equipment will be treated as derived from or allocable to sources within the
United States.
  (c) If by reason of (1) the inaccuracy of any representations or warranties of
Lessee set forth in Subsections (a) or (b) of this Section, (2) the material
inaccuracy of any statement or any letter or document furnished to Lessor by or
on behalf of Lessee in connection with the transactions contemplated under the
Lease, or (3) the act, failure to act or omission of or by Lessee, Lessor will
(i) lose, will not have the right to claim or if there will be disallowed with
respect to Lessor all or any portion of the Recovery Deduction as to any Item of
Equipment on such Schedule, (ii) be required to include in its gross income any
alteration, modifications or addition to, any Item, other than an alteration,
modification or addition which is permitted without adverse tax consequences to
Lessor under Rev. Proc. 75-21, 76-30 or 79-48 (an "Improvement Loss"), or (iii)
suffer a decrease in Lessor's net return over the then remaining portion of the
term of the Lease (any such occurrence referred to hereinafter as "Loss") for
such Schedule, then at Lessee's option either (X) the rent on such Schedule
will, on and after the next succeeding date for the payment thereof upon notice
to Lessee by Lessor that a Loss has occurred and describing the amount as to
which Lessor intends to claim indemnification and the reason for such adjustment
in reasonable detail, be increased by such amount which will cause Lessor's net
return over the then remaining portion of the term of the Lease (taking into
account the tax effect from deferred utilization of tax basis resulting from
changes in the method of calculating Recovery Deductions) to equal the net after
tax return that would have been available if such Loss had not occurred, or (Y)
in lieu of a rent increase, the Lessee shall pay to Lessor on such next
succeeding date for the payment of rent such sum as will cause Lessor's net
after tax return over the term of the Lease in respect of the Equipment to equal
the net return that would have been available if such Loss had not occurred. If
such Loss occurs after the termination or cancellation of the Lease, Lessor will
notify Lessee of such Loss and Lessee will, within sixty (60) days after such
notice, pay to Lessor such sum as required by the preceding clause (Y). Lessee
will forthwith pay on demand to Lessor an amount on an after-tax basis which
will be equal to the amount of any interest and/or penalties which may be
assessed by the United States or any state against Lessor as a result of the
Loss.
  (d) Unless otherwise provided in the related Schedule, for purposes of this
Section 10, a Loss will occur upon the earlier of , (1) the payment by Lessor to
the Internal Revenue Service of the tax increase, if any, resulting from such
Loss, or (2) the adjustment of the tax return of Lessor to reflect such Loss.
Lessor will be responsible for, and will not be entitled to a payment under this
Section on account of, any Loss due solely to one or more of the following
events: (i) the failure of Lessor to have sufficient taxable income to benefit
from the Recovery Deduction; (ii) any disposition of the Equipment by Lessor
prior to any default which has occurred and is continuing under the Lease; or
(iii) the failure of Lessor to properly claim the Recovery Deduction.
  (e) The indemnities and assumptions of liability provided for herein and all
Lessor's rights and privileges herein will continue in full force and effect
notwithstanding the termination or cancellation of the Lease.



                                       4
<PAGE>

                                                                    EXHIBIT 10.3

11.      DISCLAIMER:
  LESSEE ACKNOWLEDGES THAT IT ALONE SELECTS THE EQUIPMENT AND THE SUPPLIER(S)
THEREOF. LESSEE UNDERSTANDS AND AGREES THAT LESSOR MAKES NO REPRESENTATION OR
WARRANTY OF ANY KIND, EXPRESSED OR IMPLIED, WITH RESPECT TO THE EQUIPMENT. IT IS
UNDERSTOOD AND AGREED THAT NO WARRANTY IS TO BE IMPLIED WITH RESPECT TO THE
CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY, THE FITNESS OF THE EQUIPMENT
FOR A PARTICULAR PURPOSE, OR WITH RESPECT TO PATENT, TRADEMARK, COPYRIGHT OR
OTHER INFRINGEMENT OR THE LIKE. NOTHING HEREIN CONTAINED WILL BE CONSTRUED AS
DEPRIVING THE LESSEE OF WHATEVER RIGHTS, IF ANY, LESSEE MAY HAVE AGAINST THE
SUPPLIER AND/OR MANUFACTURER OF THE EQUIPMENT AND LESSEE AGREES TO LOOK SOLELY
TO SUCH THIRD PARTIES WITH RESPECT TO ANY AND ALL CLAIMS CONCERNING THE
EQUIPMENT.

12.      NO ABATEMENT:
  This Lease is a net Lease, intended by the parties to constitute a "finance
lease" under Article 2A of the Uniform Commercial Code as in effect in
Pennsylvania (the "UCC") and Lessee waives any right to suspend the performance
of all or any its obligations hereunder. This is not a consumer lease and the
promises of Lessee hereunder and under each Schedule are irrevocable upon
acceptance of the Equipment under each Schedule. Lessor and Lessee each hereby
waive the provisions of the UCC, Section 2A 401 through 403 inclusive, and it is
the intent of the parties that under no circumstances is the Lease or any
Schedule to be subject to repudiation by either party. Lessee's obligation to
pay rent and all other amounts due hereunder is absolute, unconditional and not
subject to cancellation. Lessee agrees to pay rent and all other amounts due
hereunder when due without abatement or reduction, irrespective of any claims,
demands, set-offs, actions, suits or proceedings that it may have or assert
against Lessor or any Supplier or manufacturer of Equipment or any part thereof.
Lessor will have no liability to Lessee in the event that any Supplier,
manufacturer or one or more others fails to perform any obligations at any time
due to Lessor, Lessee, persons in privity with Lessor or Lessee and any other
persons, or any one or more of the foregoing.

13.      DEFAULT:
  Each of the following will constitute a default hereunder:
  (1) Lessee fails to pay rent or any other amount when due under any Schedule
and such failure will continue for five (5) business days from the notification
date thereof; (2) Lessee fails to provide or maintain the insurance required
hereunder; (3) Lessee breaches any of the other terms or covenants hereof
(including without limitation any Schedule) or commits any other act of default
specified in any other Section of this Lease and, if and only if such breach is
capable of being cured within forty-five (45) days and Lessee has previously
reported such breach promptly to Lessor, such breach shall remain uncorrected
for a period of forty-five (45) days after notice from Lessor during which
forty-five days Lessee shall be diligently pursuing corrective action; (4) any
material representation or warranty of Lessee contained herein or in any other
document or instrument delivered in connection herewith or made from time to
time hereafter is false or misleading when made; (5) Lessee becomes insolvent or
ceases to do business as a going concern; (6) the Equipment or any Item is
abused, illegally used, or misused; (7) Lessee makes any assignment for the
benefit of creditors, receivership or the like is filed with respect to Lessee,
or any substantial part of Lessee's property is attached or a receiver, trustee
or liquidator is appointed for Lessee or any substantial part of Lessee's
property or whenever Lessor may deem itself insecure hereunder; (8) Lessee fails
to perform or observe any term, covenant, agreement or condition contained in,
or there shall occur any payment or other default under or as defined in, any
indebtedness for borrowed money, lease, installment sale obligation, or other
agreement applicable to Lessee by which Lessee is bound (as used herein, an
"Other Agreement") involving a liability, indebtedness or other obligation of
Lessee in an amount equal to or in excess of $2,000,000.00, which shall not be
remedied within the period of time (if any) within which such Other Agreement
permits such default to be remedied, if such default is not waived by any other
party to such Other Agreement or produces or results in the acceleration of such
liability, indebtedness or other obligation; (9) final judgment for the payment
of money aggregating in excess of $2,000,000.00 will be outstanding against
Lessee for more than sixty (60) days from the date of entry and will not have
been discharged in full or stayed or fully bonded.

14.      REMEDIES:

  (a) On the occasion of any default hereunder, Lessor, at its option, may do
any one or more of the following: (1) declare this Lease and any or all
Schedules in default upon notice to Lessee, whereupon the entire amount of rent
and all other amounts remaining to be paid over the balance of the term of all
Equipment then leased hereunder, computed from the date of Lessee's default,
will become immediately due and payable and be accelerated; (2) proceed by
appropriate court action or actions at law or in equity or in bankruptcy to
enforce performance by Lessee of the covenants and terms of this Lease and/or to
recover damages for the breach thereof; (3) cancel this Lease and any or all
Schedules upon notice to Lessee; (4) whether or not this Lease or


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                                                                    EXHIBIT 10.3


any Schedules be so canceled, upon demand by Lessor, Lessee will return the
Equipment consistent with its obligation in Section 6 hereof. Lessor may without
notice to Lessee, following notice of default, with or without legal process,
peacefully enter any premises where the collateral or any portion is located and
remove the same for sale or other disposition in a commercially reasonable
manner, without liability or suit, action or other proceedings by Lessee, except
for liability for damage caused by Lessor to Lessee's real or personal property.
  (b) With respect to any Equipment returned to Lessor, or repossessed by Lessor
pursuant to provision (4) in the preceding subsection, Lessor may hold or use
such Equipment for any purpose whatsoever or either sell same at a private or
public sale, cash or credit, or re-lease same for such term and upon such rental
as will be solely determined by Lessor. In the event of the sale or re-leasing
by Lessor of any such Equipment, Lessee will be liable for, and Lessor may
forthwith recover from Lessee as liquidated damages for breach of this Lease,
and not as a penalty, an amount equal to (X) the entire amount of rent which
would have accrued for the balance of the term for such Equipment computed from
the date of Lessee's default, plus (Y) an amount determined by multiplying
Lessor's Cost by the percentage indicated for the Stipulated Loss Values for the
final rent period during the term hereof, less (Z) the proceeds of any sale or
re-leasing of such Equipment, after first deducting therefrom all reasonable
costs and expenses of repossession, storage, repairs, reconditioning, sale,
re-leasing, reasonable attorneys' fees and collection fees with respect to such
Equipment. If Lessee fails to return any Equipment to Lessor or Lessor is
unable, for any reason, to effect repossession of any Equipment, then with
respect to such Equipment, Lessee will be liable for, and Lessor may forthwith
recover from Lessee as liquidated damages for breach of this Lease, and not as a
penalty, an amount equal to the sum of the amounts specified in items (X) and
(Y) above for such Equipment. Whether or not any Equipment is returned to, or
repossessed by Lessor, as aforesaid, Lessee will also be liable for, and Lessor
may forthwith recover from Lessee, all unpaid rent and other unpaid sums that
accrued prior to the date of Lessee's default. In addition to the foregoing,
Lessor may also recover from Lessee all reasonable costs and expenses, including
without limitation reasonable attorneys' fees and fees of collection agencies,
incurred by Lessor in exercising any of its rights or remedies hereunder. Since
pursuant to the foregoing Lessor may receive or recover payment of the amounts
specified in provision (1) of the preceding paragraph and items (X) and (Y)
above earlier than Lessor would otherwise be entitled to receive or recover same
but for Lessee's default, such amounts will be discounted to their then present
value at the rate of seven percent (7%) per annum, and there will be added to
such amounts, after such discount, interest at the Default Rate specified in
Section 18 hereof from the date of Lessee's default up to the date of the
payment of such amounts to Lessor.
  (c) Lessee consents to the jurisdiction of the courts of Pennsylvania and the
Federal District Court for the Eastern District of Pennsylvania in any action or
proceeding which may be brought under or in connection with this Lease or any
obligation with respect thereto or to enforce any agreement contained herein or
in any such obligation, and in the event such action or proceeding will be
brought against it, Lessee agrees not to raise any objection to such
jurisdiction or the laying of venue in Berks County, Pennsylvania. Lessee
irrevocably appoints each of the Chief Executive Officer and Chief Financial
Officer of Lessee as its attorney upon whom may be served by certified mail any
process, notice or pleading in any action or proceeding against it under this
Lease or related thereto.

15.      CUMULATIVE REMEDIES:

  The remedies herein provided in favor of Lessor are not exclusive, but will be
cumulative and will be in addition to all other remedies in Lessor's favor
existing in law, in equity or in bankruptcy. The receipt and acceptance by
Lessor of any rent or other payment after occurrence of a default will not be
deemed to be a waiver of such default on the part of Lessor. In the event that
any court of competent jurisdiction determines that any provision of this Lease
is invalid or unenforceable in whole or in part, such determination will not
prohibit Lessor from establishing its damages sustained as a result of any
breach of this Lease in any action or proceeding in which Lessor seeks to
recover such damages. Any repossession or resale of any Equipment will not bar
an action for damages for breach of this Lease, as hereinbefore provided, and
the bringing of an action or the entry of judgment against Lessee will not bar
Lessor's right to repossess any or all Equipment.

16.      ASSIGNMENTS:

  Subject to the restrictions set forth in the last sentence of this Section,
Lessor may without the consent of Lessee sell, assign or otherwise transfer or
grant a security interest in, its right, title and interest in the Equipment,
this Lease or any Schedule and the rent due or to become due thereunder and when
so sold, assigned, transferred or encumbered, Lessee will after notice and
direction from Lessor make all payments under this Lease to such assignee free
of any counterclaim, set-off, defense or cross-claim by Lessee as against Lessor
or any other person whatsoever whether arising, before or after such sale,
assignment, transfer or security grant. Restrictions to this assignment would be
1) not less than all schedules: 2) not to competitor of Lessee: and 3) Assignee
to have a Tangible Net Worth greater than $25,000,000.00; as long as no default
has occurred under the Lease.



                                       6
<PAGE>

                                                                    EXHIBIT 10.3

17.      PAYMENT OF TAXES:

  Lessee agrees to pay promptly when due, and to indemnify and hold Lessor
harmless from, all license, title and registration fees whatsoever, all levies,
imposts, duties, charges or withholdings whatsoever, and all sales, use,
personal property, franchise (howsoever calculated), and other taxes whatsoever
(together with any penalties, fines or interest thereon) whether assessed,
levied or imposed by any governmental or taxing authority against or upon Lessor
or otherwise, with respect to any Equipment or the purchase, acquisition,
ownership, delivery, leasing, possession, use, operation, control, return, or
other disposition thereof, or the rents, receipts or earnings arising therefrom,
or with respect to this Lease, excluding, however (i) any such taxes or charges
to the extent they are included in Lessor's Cost, (ii) any federal taxes levied
on Lessor's net income, or (iii) state or local taxes levied on Lessor's net
income. In the event any such fees, levies, imposts, duties, charges or taxes
are paid by Lessor, or if Lessor be required to collect or pay any thereof,
Lessee will reimburse Lessor therefor (plus any penalties, fines or interest
thereon) promptly upon demand. Until Lessor notifies Lessee to the contrary,
Lessee will promptly before any penalty attaches, prepare and file in Lessor's
name or on Lessor's behalf all personal property tax returns covering the
Equipment and Lessee will pay the personal property taxes levied or assessed
thereon directly to the levying authority. If Lessor timely notifies Lessee that
Lessor will prepare and/or file any such return, Lessee will, promptly upon
being invoiced by Lessor, reimburse Lessor for the full amount of such personal
property taxes so paid by Lessor. Lessee's obligations under this Section with
respect to any fees, levies, imposts, duties, charges, withholdings and taxes
(plus any penalties, fines or interest thereon and, in the event that any of the
foregoing are deemed to be income to Lessor, any attendant income tax) assessed,
levied, imposed or accrued prior to the termination or other cancellation of
this Lease will continue in full force and effect notwithstanding such
termination or cancellation. Lessee will either provide Lessor a copy of all
property and other tax returns filed hereunder by Lessee in Lessor's name or on
Lessor's behalf or provide to Lessor an affidavit of a responsible corporate
officer certifying that the property taxes so identified therein have been
reported and are current.

18.      LATE CHARGE:

  If any rent or any other amount due hereunder from Lessee other than the
amounts due under this Section 18 is not paid within five (5) business days
after the due date, all amounts past due hereunder shall accrue interest at a
rate (the "Default Rate") equal to Prime + 2.5% on the amount of such delinquent
rent or other payment, but not exceeding the maximum permissible amount under
applicable law.

19.      LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS:

  In case of failure of Lessee to comply with any provision of the Lease or any
Schedule, Lessor will have the right, but will not be obligated, to effect such
compliance in whole or in part, and all money spent and expenses incurred by
Lessor in effecting such compliance will constitute additional rent and will be
paid by Lessee forthwith on demand and will bear interest at the daily
equivalent of the Default Rate from the date said amounts were paid or expenses
incurred. Lessor's action in effecting such compliance will not be a waiver of
Lessee's default.

20.      SEVERABILITY:

  Any provision herein contained which may be invalid under applicable law or
any governmental rule or regulation, will be deemed omitted, modified or altered
to conform thereto.

21.      NOTICES:

  All notices required or permitted to be given hereunder will be in writing and
will be deemed given if sent by registered or certified mail to the address of
Lessor or Lessee stated herein or in any Schedule or to such other place as
either party may in writing direct pursuant to this Section.

22.      LEGAL CONSTRUCTION:

  The validity, construction and performance of the Lease and any Schedule will
in all respects be governed by the laws of the Commonwealth of Pennsylvania.



                                       7
<PAGE>

                                                                    EXHIBIT 10.3

23.      FINANCIAL INFORMATION:

   Lessee agrees to provide Lessor with: a 10Q and 10K within 45 days of the
fiscal quarter ended, or 90 days after the fiscal year end respectively.

24.      ADDITIONAL DOCUMENTS:

  Lessee agrees to execute or obtain and deliver to Lessor at Lessor's request
such additional documents as Lessor may reasonably deem necessary or appropriate
to protect Lessor's interest in the Equipment and in this Lease including,
without limitation, financing statements. All financial statements proposed to
be filed by Lessor shall accurately reflect Lessor's interest in the Lease
and/or the equipment. Lessor will pay all costs and expenses incurred by Lessor
in the preparation of this Lease including the cost and expense of Lessor's
counsel, and thereafter Lessee will pay, or reimburse Lessor on demand, for any
filing fees or expenses incurred by Lessor in connection with this Master Lease
Agreement, any Master Lease schedule, and all equipment. Lessee hereby
designates Lessor its attorney-in-fact and authorizes and empowers Lessor to
execute, endorse and complete in Lessee's name and on Lessee's behalf all
instruments representing the proceeds of any security or insurance for the Lease
or Equipment thereunder, all financing statements and other documents including
Schedules and Riders and to insert thereon all dates, amounts and serial numbers
as necessary or appropriate to provide to Lessor the benefits anticipated by any
Schedule. Lessor agrees that it will file Financing Statements with the
description of collateral substantially matching that of the Description of
Equipment Rider from each Schedule. Filings will only be for the specific
equipment to be leased including all attachments, parts, accessories and
proceeds and filings will only be ordered for the Headquarter location of Lessee
and the physical location of the equipment. Filings may also be made at any
location the equipment is moved to during the term.

25.      MISCELLANEOUS:

  The Lease will not be binding on Lessor until executed by an authorized
officer of Lessor. Lessor and Lessee waive all rights to trial by jury in any
litigation arising herefrom or in relation hereto. Lessee will, at Lessee's sole
expense, obtain from each owner, landlord, mortgagee or other person having an
encumbrance, lien or other interest on or in the premises in which the Equipment
is or will be located, all necessary consents to the installment and use of the
Equipment therein and the removal thereof in accordance with the terms of the
Lease, together with waivers of claim with respect to the Equipment, and record
the same when and where necessary. In the event that Lessee consists of more
than one person or entity, the obligations of each such person or entity shall
be joint and several and the word "Lessee" shall mean each of them, any of them
and/or all of them. LESSOR AND LESSEE WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY
LITIGATION ARISING HEREFROM OR IN RELATION HERETO.

26.      ENTIRE AGREEMENT:

  This Lease and any instrument referred to herein together with any
Schedule(s), Attachment(s), or Rider(s) signed by the parties or delivered in
connection herewith constitute the entire agreement of the parties with respect
to the subject matter hereof and will collectively constitute the Lease with
respect to an Item of Equipment and supersede any prior written or oral
agreement of the parties with respect to such Equipment. No agent or employee of
the Supplier is authorized to bind Lessor to the Lease, to waive or alter any
term or condition herein or add any provision hereto. No variation or
modification of the Lease and no waiver of any of its provisions or conditions
will be valid unless in writing and signed by Lessor and Lessee.

27.      ACQUISITION AND PAYMENT FOR THE EQUIPMENT.
  Upon execution by Lessee and Lessor of a Schedule for any Equipment, Lessee,
or any wholly owned subsidiary that Lessee may appoint as its agent ("Agent"),
shall: (i) select and order the Equipment pursuant to a purchase order and enter
into a purchase order assignment with Supplier assigning Lessor the right to
take title to the Equipment from the Supplier and the obligation to pay for the
Equipment upon its acceptances by Lessee under the Lease, all other rights and
obligations under the purchase order shall remain with lessee, (ii) if the
Supplier requires payments prior to the execution by Lessee of a Certificate of
Acceptance for such Equipment the Lessor appoints Lessee or its Agent as
lessor's agent to make any such required payments. Lessor shall reimburse Lessee
or its Agent, as applicable, for any payments made on such Equipment upon
execution of the Certificate of Acceptance for such Equipment by Lessee. If
Lessee rejects the Equipment or does not execute the Certificate of Acceptance
for the Equipment within one hundred eighty (180) days of the execution of the
Schedule for such Equipment then the assignment of the purchase order for such
Equipment shall be terminated; Lessor's obligation to reimburse Lessee or its
Agent for any payments made on such



                                       8
<PAGE>
                                                                    EXHIBIT 10.3



Equipment shall terminate; and Lessee will hold harmless, defend and indemnify
Lessor against any claims F.O.B. the Supplier or Agent as further provided in
Section 4 hereof.

28.      QUIET ENJOYMENT

  Lessor warrants so long as no default exists hereunder, Lessor will allow
Lessee to quietly possess the Equipment.

  IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease on the dates
set forth below.



CORESTATES LEASING, INC.              LADD FURNITURE, INC.
(Lessor)                              (Lessee)

By:_______________________________    By:_______________________________________
Edward R. Bruner

Title:    President                   Title:____________________________________
      ____________________________

Date:_____________________________    Date:_____________________________________



                            (Lessee if more than one)

                            By:_______________________________________________
                            (Signature)                                 (Title)



  THE UNDERSIGNED LESSEE HEREBY ACKNOWLEDGES AND AGREES THAT ANY MODIFICATION OR
AMENDMENT OF THIS LEASE MUST BE IN WRITING AND THAT NO MODIFICATION OR AMENDMENT
SHALL BE ENFORCEABLE UNLESS SUCH MODIFICATION OR AMENDMENT IS IN WRITING DULY
SIGNED BY LESSEE AND LESSOR.


-----------------------------------------
LADD FURNITURE, INC.       (Lessee)



CORESTATES LEASING, INC.                                    RIDER TO LEASE

                                                        RIDER NUMBER 2  TO
                                           LEASE AGREEMENT NUMBER 02037 OR
                                        MASTER LEASE AGREEMENT NUMBER   OR
                                    MASTER LEASE PURCHASE AGREEMENT NUMBER
                             (AS INDICATED ABOVE, HEREINAFTER THE "LEASE")


CORESTATES LEASING, INC.
ONE MERIDIAN BOULEVARD
WYOMISSING, PA  19610

This Rider is incorporated by reference into the above referenced Lease as if
set forth at length and Lessee and Lessor confirm all the terms and provisions
thereof except as specifically set forth herein to the contrary.

Lessee agrees to comply with each of the following additional covenants and the
failure of Lessee to comply with any such covenant shall constitute a default
under of the Lease:

NEGATIVE COVENANTS


         Until the Leasing Line Credit Facility has been terminated and all the
Secured Obligations have been paid in full, unless CoreStates Leasing, Inc.
(CLI) otherwise consents, LADD will not directly or indirectly permit:

         (a)      Consolidated Net Worth of LADD and its Consolidated
Subsidiaries on a consolidated basis,

                  (i)      as of the last day of Fiscal Year 1996 be less than
$120,000,000 or

                  (ii)     as of the last day of any Fiscal Year ending
thereafter, to be less than the sum of

                  (A) consolidated Net Worth of LADD and its Consolidated
         Subsidiaries on a consolidated basis as of the last day of the
         immediately preceding Fiscal Year, plus

                  (B) an amount equal to the greater of (1) 25% of consolidated
         Net Income (without deduction for any loss) of LADD and the
         Consolidated Subsidiaries on a consolidated basis for the Fiscal Year
         then ended and (2) $2,000,000 as to Fiscal Year 1997 or $4,000,000 as
         to each Fiscal Year thereafter (prorated for any period less than a
         full Fiscal Year).

         (b) The Fixed Charge Coverage Ratio for any period of four consecutive
         Fiscal Quarters ending on a date or during a period specified below to
         be less than the ratio indicated opposite such date or period:

                           Period Ending                               Ratio

                  Last day of Fiscal Year 1997                         1.30 to 1

<PAGE>


                  Last day of first Fiscal
                  Quarter, Fiscal Year 1998                            1.35 to 1

                  On or after the last day of
                  second Fiscal Quarter, Fiscal
                  Year 1998                                            1.50 to 1

         (c) The Adjusted Total Debt Coverage Ratio as of the last day of any
         Fiscal Quarter ending on a date or during a period specified below to
         be greater than the ratio indicated opposite such date or period:

                           Period Ending                               Ratio

                  Last day of third Fiscal Quarter
                  or final Fiscal Quarter, Fiscal
                  Year 1997                                            4.50 to 1

                  Last day of first Fiscal
                  Quarter, Fiscal Year 1998 and
                  thereafter                                           4.00 to 1

All of the above financial ratios will be tested using Forms 10-Q and 10-K filed
with the Securities and Exchange Commission.

                                   DEFINITIONS


         "Adjusted Total Debt Coverage Ratio" means, as of the last day of any
Fiscal Quarter after the Effective Date, the result obtained by dividing the
principal amount of consolidated Debt of LADD and its Consolidated Subsidiaries
as of such date, by consolidated EBITDA of LADD and its Consolidated
Subsidiaries (i) for the period of four consecutive Fiscal Quarters ended on
such date or (ii) for any shorter period beginning on June 30, 1996 and ending
on the last day of such Fiscal Quarter, multiplied by a fraction, the numerator
of which is four and the denominator of which is the number of whole Fiscal
Quarters in such shorter period.

         "Administrative Agent" means NationsBank and any successor
administrative agent appointed pursuant to Section 15.9 of the Agreement.

         "Agreement" means and includes the $190,000,000 Loan and Security
Agreement Dated as of July 12, 1996 between the Borrowers, the Lenders, the
Co-Agents and the Administrative Agent, including all Schedules, Exhibits and
other attachments hereto, and all amendments, modifications and supplements
hereto and thereto.

         "Agreement Date" means July 12, 1996.

         "Borrower" means "Borrower" as defined in the Agreement.


<PAGE>


         "Capital Expenditures" means, with respect to any Person, all capital
expenditures that are not, in accordance with GAAP, treated as expense items for
such Person in the year made or incurred.

         "Capitalized Lease Obligation" means Indebtedness represented by
obligations under a Capitalized Lease, and the amount of such Indebtedness shall
be the capitalized amount of such obligations determined in accordance with
GAAP.

         "Commitment Percentage" means, as to any Lender at the time of
determination, the percentage of the Total Commitment at such time obtained by
dividing such Lenders Commitment at such time by the Total Commitment at such
time.

         "Consolidated Subsidiaries" means, as to LADD, each other Borrower and
other Subsidiary of LADD listed on Schedule 7.1 (c) of the Agreement and any
additional Subsidiary of LADD whose accounts are at the time in question, in
accordance with GAAP and pursuant to the written consent of the Required
Lenders, which consent may be withheld in their absolute discretion or
conditioned upon, inter alia, the execution and delivery of guaranties, security
agreements, mortgages and other documents required by the Required Lenders in
their absolute discretion, consolidated with those of LADD.

         "Debt" means

         (a)      Indebtedness for money borrowed,

         (b)      Indebtedness, whether or not in any such case the same was
for money borrowed,

                  (i) represented by notes payable, drafts accepted and
reimbursement obligations under standby letters of credit and similar
instruments that represent extensions of credit,

                  (ii) constituting obligations evidenced by bonds, debentures,
notes or similar instruments, or

                  (iii) upon which interest charges are customarily paid or that
was issued or assumed as full or partial payment for property (other than trade
credit that is incurred in the ordinary course of business),

         (c) Indebtedness that constitutes a Capitalized Lease Obligation

         (d) Indebtedness under Interest Rate Protection Agreements, and

         (e) Indebtedness that is such by virtue of clause (c) of the definition
thereof, but only to the extent that the obligations Guaranteed are obligations
that would otherwise constitute "Debt".

         "EBITDA" for a specified period means consolidated Net Income of LADD
and its Consolidated Subsidiaries for such period, before provision for interest
expense, income taxes, depreciation expense and amortization.

         "Effective Date" means the later of:

         (a)      the Agreement Date, and


<PAGE>

         (b)      the first date on which all of the conditions set forth in
Article 6 of the Agreement shall have been fulfilled.

         "Financed Capital Expenditures" means Capital Expenditures funded with
the proceeds of Permitted Money Debt (excluding Loans) and those represented by
Capitalized Lease Obligations

         "Fiscal Quarter" means each consecutive period of 13 weeks beginning on
the first day of a Fiscal Year (and, in the case of any Fiscal Year of 53 weeks,
the 14-week period occurring at the end thereof).

         "Fiscal Year" means each period of 52 or 53 weeks beginning on the
Sunday after the Saturday nearest December 31 in one calendar year and ending on
the Saturday nearest December 31 of the next succeeding calendar year and when
preceded by the designation of a calendar year (e.g., 1997 Fiscal Year) means
the 52 or 53 week period ended or ending on the Saturday nearest December 31 of
such designated calendar year.

         "Fixed Charge Coverage Ratio" means, as of the last day of any Fiscal
Quarter, the result obtained by dividing (i) the sum of EBITDA minus cash income
taxes paid minus Maintenance Capex for the specified measurement period minus
Restricted Distributions of LADD and its Consolidated Subsidiaries on a
consolidated basis made during the specified measurement period, by (ii) the sum
of interest expense, plus scheduled principal payments on Debt of LADD and its
Consolidated Subsidiaries on a consolidated basis for the same period.

         "GAAP" means generally accepted accounting principles consistently
applied and maintained throughout the period indicated and, when used with
reference to the Borrowers or any Subsidiary, consistent with the prior
financial practice of the Borrowers, as reflected on the financial statements,
provided however, that, in the event that changes shall be mandated by the
Financial Accounting Standards Board or any similar accounting authority of
comparable standing, or shall be recommended by the Borrowers' independent
public accountants, such changes shall be included in GAAP as applicable to the
Borrowers only from and after such date as the Borrowers, the Required Lenders
and Administrative Agent shall have amended this Agreement to the extent
necessary to reflect any such changes in the financial covenants set forth in
Article 12 of the Agreement.

         "Lender" means at any time any financial institution party to this
Agreement at such time, including any such Person becoming a party hereto
pursuant tot he Provisions of Article 14 of the Agreement, and "Lenders" means
at any time all of the financial institutions party to this Agreement at such
time, including any such Persons becoming parties hereto pursuant to the
provisions of Article 14.

         "Loan" means any Revolving Credit Loan or Term Loan, as well as all
such loans collectively, as the context requires.

         "Maintenance Capex" for any specified period means the lesser of
consolidated Capital Expenditures of LADD and the Consolidated Subsidiaries
(other than Financed Capital Expenditures) for such period and $8,000,000 per
year or the ratable portion thereof attributable to a specified period less than
a full year.

         "Net Income" means, as applied to any Person for any accounting period,
the net income or net loss, as the case may be, of such Person for the period in
question after giving effect to deduction of or provision for all operating
expenses, all taxes and reserves (including reserves for deferred taxes) and all
other proper deductions, all determined in accordance with GAAP, but excluding
in any case,

<PAGE>


         (a) any net gains or losses on the sale or other disposition, not in
         the ordinary course of business, of Investments, Business Units and
         other capital assets, provided that there shall also be excluded any
         related charges for taxes thereon, and

         (b) any other "extraordinary item" as determined in accordance with
GAAP.

         "Net Worth" means, with respect to any Person, such Person's total
shareholder's equity which would appear as such on a balance sheet of such
Person prepared in accordance with GAAP.

         "Permitted Purchase Money Debt" means Purchase Money Debt of the
Borrowers (or any of them) incurred after the Agreement Date

         (a)      which is secured by a Purchase Money Lien,

         (b)      the aggregate principal amount of which does not exceed an
amount equal to 100% of the lesser of

                  (i) the cost (including the principal amount of such Debt,
whether or not assumed) of the tangible personal property (other than Inventory)
subject to such Lien, and

                  (ii) the fair value of such tangible personal property (other
than Inventory) at the time of its acquisition, and

         (c) which, when aggregated with the principal amount of all other such
Debt and Capitalized Lease Obligations of the Borrowers at the time outstanding,
does not exceed $10,000,000.

         "Person" means an individual, corporation, limited liability
corporation, partnership, association, trust or unincorporated organization, or
a government or any agency or political subdivision thereof.

         "Purchase Money Debt" means Debt issued or incurred to finance the
payment of all or any part of the purchase price (not in excess of the fair
market value thereof) of any tangible personal property (other than Inventory)
and incurred at the time of or within 10 days prior to or after the acquisition
of such tangible asset.

         "Purchase Money Lien" means any Lien securing Purchase Money Debt, but
only if such Lien shall at all times be confined solely to the property (other
than Inventory) the purchase price of which was financed through the incurrence
of the Purchase Money Debt secured by such Lien.

         "Required Lenders" means, at any time, any combination of Lenders whose
Commitment Percentages at such time aggregate in excess of 51%.

         "Restricted Distribution" by any Person means (a) its retirement,
redemption, purchase, or other acquisition or retirement for value of any
capital stock or other equity securities (except equity securities acquired on
the conversion thereof into other equity securities of such Person) or
partnership interests issued by such Person, (b) the declaration or payment of
any dividend or distribution in cash or property on or with respect to any such
securities (other than dividends payable solely in shares of its capital stock)
or partnership interests, excluding, however, any such dividend, distribution or
payment to any Borrower by any other Borrower or by any Subsidiary of such
Borrower, (c) any loan or advance by such Person to, or other investment by such
Person in, the holder of any such securities or partnership interests, and (d)
any


<PAGE>

other payment by such Person in respect of such securities or partnership
interests.

Except as expressly modified hereby, all terms and provisions of the Lease shall
remain in full force and effect. The parties hereto have caused their duly
authorized officers to execute this Rider on the dates set forth below and,
unless otherwise specifically provided herein, this Rider shall operate to amend
the Lease only as it is incorporated by reference into Schedules executed on or
after the dates set forth below and not otherwise.

CORESTATES LEASING, INC.                    LADD FURNITURE, INC.
(LESSOR)                                    (LESSEE)

By:________________________________         By:_________________________________

Title:_____________________________         Title: _____________________________

Dated:_____________________________         Dated: _____________________________




                                       9