AMENDMENT NO. 3 OF PURCHASE AND CONTRIBUTION AGREEMENT 



               AMENDMENT NO. 3, dated as of June 27, 1997, to the Purchase
          and Contribution Agreement, dated as of November 15, 1994, as
          amended and restated as of December 29, 1995, and as further
          amended as of June 27, 1996 and as of September 6, 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, as follows:

                    A.     In the definition of "Weekly Settlement Trigger"
          in Section 1.01, Consolidated Net Interest Coverage Ratio and
          Leverage Ratio are hereby amended to read as follows:

               "(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 amount set forth
          opposite such period below:

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

               June 1997                         3.00 : 1.00
               September 1997                    3.00 : 1.00
               December 1997                     3.00 : 1.00

               March 1998                        3.00 : 1.00
               June 1998                         3.00 : 1.00
               September 1998                    3.25 : 1.00
               December 1998                     3.25 : 1.00

               March 1999 and thereafter         3.50 : 1.00<PAGE>


               (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
               --------------                    -----

               June 1997                         4.65 : 1.00
               September 1997                    4.65 : 1.00
               December 1997                     4.65 : 1.00
               
               March 1998                        4.50 : 1.00
               June 1998                         4.50 : 1.00
               September 1998                    4:35 : 1.00
               December 1998                     4.25 : 1.00

               March 1999 and thereafter         4.00 : 1.00"

                    B.     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
          and as of June 27, 1997, among Furniture Brands International,
          Inc. (f/k/a Interco), Broyhill, Lane, Thomasville, the banks
          named therein and Bankers Trust Company, as agent."

                    2.     Consent to Amendment of Bank Credit Agreement. 
          Pursuant to the first sentence of Section 1.02 to the Agreement,
          and for the purpose of giving effect to certain terms defined in
          the Bank Credit Agreement (as amended and restated as set forth
          above) which are referenced in the Agreement, the Purchaser
          hereby consents to the amendment and restatement of the Bank
          Credit Agreement as of June 27, 1997.

                    3.     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.

                    4.     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.  

                    5.     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<PAGE>


          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.

                    6.      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.

                    7.     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 Puruchaser have
          caused this Amendment to be duly executed by their respective
          officers thereunto duly authorized as of the day and year first
          above written. 



          SELLERS:                    THE LANE COMPANY, INCORPORATED


                                      By:  Lynn Chipperfield       
                                         ----------------------
                                      Name:  Lynn Chipperfield
                                      Title:  Vice President


                                      ACTION INDUSTRIES, INC.


                                      By:  Lynn Chipperfield
                                         -----------------------
                                      Name:  Lynn Chipperfield
                                      Title:  Vice President




                                      BROYHILL FURNITURE INDUSTRIES, INC.


                                      By:  Lynn Chipperfield
                                         ------------------------
                                      Name:  Lynn Chipperfield
                                      Title:  Vice President




                                      THOMASVILLE FURNITURE INDUSTRIES,
                                         INC.


                                      By:  Lynn Chipperfield
                                         ------------------------
                                      Name:  Lynn Chipperfield
                                      Title:  Vice President




          PURCHASER:                  INTERCO RECEIVABLES CORP.


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