AMENDMENT NO. 2 OF
                PURCHASE AND CONTRIBUTION AGREEMENT 



          AMENDMENT NO. 2, dated as of September 6, 1996, to the
     Purchase and Contribution Agreement, dated as of November 15,
     1994, as amended and restated as of December 29, 1995 and further
     amended as of June 27, 1996 (the "   Agreement"), among THE LANE
     COMPANY, INCORPORATED, ACTION INDUSTRIES, INC., BROYHILL
     FURNITURE INDUSTRIES, INC. and THOMASVILLE FURNITURE INDUSTRIES,
     INC., as sellers (the "   Sellers"), and INTERCO RECEIVABLES
     CORP., as purchaser (the "   Purchaser") (the "   Amendment").

                              RECITALS

          WHEREAS, the Sellers and the Purchaser have agreed subject
     to the terms and conditions of this Amendment, to amend the
     Agreement as hereinafter set forth.

          Terms used herein but not defined herein shall have the
     meaning assigned thereto in the Agreement.  

          NOW, THEREFORE, the parties agree as follows: 

          1.  Amendment of Agreement.  The Agreement shall be and is
     hereby amended, as of the date hereof (subject to satisfaction of
     the conditions precedent set forth in Section 2 hereof), as
     follows:

           (a)  The definition of "Bank Credit Agreement" in Section
     1.01 shall be amended to provide in its entirety as follows:

               ""Bank Credit Agreement" means the Credit Agreement
          dated as of November 17, 1994, as amended and restated as of
          December 29, 1995 and as further amended and restated as of
          September 6, 1996, among Furniture Brands International,
          Inc. (f/k/a Interco), Broyhill, Lane, Thomasville, the banks
          named therein and Bankers Trust Company, as agent."

           (b)  The definition of "Cumulative Consolidated EBITDA" in
     Section 1.01 shall be deleted in its entirety.

           (c)  The definition of "Daily Settlement Trigger" in
     Section 1.01 shall be changed to "Weekly Settlement Trigger" and
     amended to provide in its entirety as follows: 

               ""Weekly Settlement Trigger" means the occurrence of
           any of the following:

               (a)  The Consolidated Net Interest Coverage Ratio for
          any period of four consecutive fiscal quarters, in each case
          taken as one accounting period, ended on the last day of a
          fiscal quarter set forth below, shall be less than the<PAGE>





          amount set forth opposite such period below:
      

             Fiscal Quarter               Ratio
             --------------               -----
           December 31, 1996            3.00: 1.0

           March 31, 1997               3.00: 1.0
           June 30, 1997                3.00: 1.0
           September 30, 1997           3.25: 1.0
           December 31, 1997            3.25: 1.0

           March 31, 1998               3.25: 1.0
           June 30, 1998                3.25: 1.0
           September 30, 1998           3.50: 1.0
           December 31, 1998            3.50: 1.0

           Thereafter                   3.50: 1.0

               (b)  The Leverage Ratio at any time shall be greater
          than the ratio set forth opposite the fiscal quarter most
          recently ended as set forth below:

              Fiscal Quarter               Ratio
              --------------               -----

           December 31, 1996             4.25: 1.0

           March 31, 1997                4.25: 1.0
           June 30, 1997                 4.25: 1.0
           September 30, 1997            4.25: 1.0
           December 31, 1997             4.25: 1.0

           March 31, 1998                4.25: 1.0
           June 30, 1998                 4.25: 1.0
           September 30, 1998            4.00: 1.0
           December 31, 1998             4.00: 1.0

           Thereafter                    4.00: 1.0

               (c)  The Net Dilution Ratio shall be greater than 7%;
      
               (d)  The Default Ratio shall be greater than 7%;

               (e)  Any Event of Termination shall occur under Section
          7.01(e) or (g) of this Agreement; or

               (f)  The Sellers shall have repurchased Receivables
          (pursuant to indemnity provisions or otherwise) from the
          Purchaser and/or the Purchaser s assignees in an aggregate
          amount exceeding $17,500,000 in any Fiscal Year."<PAGE>





          (d)  All references in the Agreement to "Daily Settlement
     Trigger" shall be amended to refer to "Weekly Settlement
     Trigger".

          (e)  The definition of "Interco" in Section 1.01 shall be
     amended to refer to "Furniture Brands International, Inc., a
     Delaware corporation, formerly known as INTERCO INCORPORATED".

          (f)  In Section 1.02 (i) the reference to "Term Loans" shall
     be deleted in its entirety and (ii) the reference to "Interco
     Warrants" shall be amended to refer to "Furniture Brands
     Warrants".

          (g)  Clause (j) of Section 5.01 shall be amended to provide
     in its entirety as follows:
      
               "(j)  Weekly Settlement Trigger.  From and after the
          fifth day after the occurrence of a Weekly Settlement
          Trigger, and so long as a Weekly Settlement Trigger is
          continuing, on the same day of each week thereafter (or if
          any such day is not a Business Day, on the immediately
          following Business Day), (a) cause the Servicer to submit
          weekly reports in form and substance satisfactory to the
          Purchaser listing the aggregate Outstanding Balance of all
          Receivables generated by each Seller on each Business Day
          during the preceding week, (b) use its best efforts to cause
          each Lock-Box Bank to submit weekly reports to the Purchaser
          listing the aggregate amount of Collections received in the
          Lock-Box Account(s) at such Lock-Box Bank on each Business
          Day during the preceding week, and (c) cause all Collections
          (and only Collections) to be deposited daily, from the Lock
          -Box Accounts or other locations in which Collections are
          received, into an account (the "   Concentration Account")
          maintained in a bank acceptable to the Purchaser in the name
          of both the Purchaser and/or the Purchaser s assignee.  No
          funds in the Concentration Account shall be distributed to
          or for the benefit of any Seller until the Purchaser and the
          Purchaser s assignee (if any) each notifies the bank in
          which the Concentration Account is located to release funds
          therein to such persons.  The funds in the Concentration
          Account shall be invested in a manner acceptable to the
          Purchaser and/or the Purchaser s assignee.  If all events
          constituting a Weekly Settlement Trigger shall have been
          cured or shall no longer be continuing, and no Event of
          Termination shall then exist, the Sellers and Servicer may
          resume processing Collections and delivering reports as they
          did immediately prior to the occurrence of a Weekly
          Settlement Trigger."


           2.  Conditions Precedent.  The effectiveness of this
     Amendment is subject to the conditions precedent that the Agent
     shall have received, on or before the date hereof, (i) a
     certificate of the Secretary or Assistant Secretary of Lane,<PAGE>





     Broyhill and Thomasville certifying that attached thereto is a
     true and complete copy of the Bank Credit Agreement and the
     Security Agreement referred to therein, each in form and
     substance satisfactory to the Agent and each as amended and
     restated as of September 6, 1996, (ii) the Intercreditor
     Agreement as amended and restated as of September 6, 1996, in
     form and substance satisfactory to the Agent, duly executed by
     the parties thereto, and (iii) a confirmation as of September 6,
     1996, in form and substance satisfactory to the Agent, of the
     continued effectiveness of the Interco Agreement, duly executed
     by Furniture Brands International, Inc. (f/k/a INTERCO
     INCORPORATED).

          3.  Amendment of Bank Credit Agreement.  Pursuant to clause
     (f) of Section 5.03, the Purchaser hereby consents to the
     amendment and restatement, as of the date hereof, of the Bank
     Credit Agreement, in the form previously delivered to the
     Purchaser.  The reference in such clause (f) to clauses (a), (b),
     (c) and (d) of the definition of Daily Settlement Trigger (now
     Weekly Settlement Trigger) shall be amended to refer only to
     clauses (a) and (b) of such definition.  

          4.  Execution in Counterparts, Etc. This Amendment may be
     executed in any number of counterparts, each of which when so
     executed shall be deemed to be an original and all of which when
     taken together shall constitute one and the same amendment.  The
     delivery of a signed signature page to this Amendment by telecopy
     transmission shall constitute due execution and delivery of this
     Amendment for all purposes.

          5.  Agreement in Full Force and Effect. Except as amended by
     this Amendment, all of the provisions of the Agreement and all of
     the provisions of all other documentation required to be
     delivered with respect thereto shall remain in full force and
     effect from and after the date hereof.  

          6.  References to Agreement.  From and after the date
     hereof, (a) all references in the Agreement to "this Agreement",
     "hereof", "herein", or similar terms and (b) all references to
     the Agreement in each agreement, instrument and other document
     executed or delivered in connection with the Agreement, shall
     mean and refer to the Agreement, as amended by this Amendment.

          7.  Further Assurances.  The parties hereto agree to execute
     and deliver any and all further agreements, certificates and
     other documents reasonably necessary to implement the provisions
     of this Amendment.

          8.  Governing Law.  This Amendment shall be governed by, and
     construed in accordance with, the law of the State of New York
     without giving effect to the conflict of laws principles thereof.

          IN WITNESS WHEREOF, the Sellers and the Purchaser have
     caused this Amendment to be duly executed by their respective<PAGE>





     officers thereunto duly authorized as of the day and year first
     above written. 



     SELLERS:             THE LANE COMPANY, INCORPORATED


                          By:  David P. Howard
                          Name:  David P. Howard
                          Title:  Vice President


                          ACTION INDUSTRIES, INC.


                          By:  David P. Howard
                          Name:  David P. Howard
                          Title:  Vice President


                          BROYHILL FURNITURE INDUSTRIES, INC.


                          By:  David P. Howard
                          Name:  David P. Howard
                          Title:  Vice President


                         THOMASVILLE FURNITURE INDUSTRIES, INC.


                         By:  David P. Howard
                         Name:  David P. Howard
                         Title:  Vice President


     PURCHASER:          INTERCO RECEIVABLES CORP.


                         By:  David P. Howard
                         Name:  David P. Howard
                         Title:  President<PAGE>