CREDIT AGREEMENT

                            among

                FURNITURE BRANDS INTERNATIONAL, INC.,

                BROYHILL FURNITURE INDUSTRIES, INC.,

                 THE LANE COMPANY, INCORPORATED,

              THOMASVILLE FURNITURE INDUSTRIES, INC.,

                         VARIOUS BANKS,

                CREDIT LYONNAIS NEW YORK BRANCH,
                   as DOCUMENTATION AGENT,

                       NATIONSBANK, N.A.,
                     as SYNDICATION AGENT,

                            and

                    BANKERS TRUST COMPANY,
                   as ADMINISTRATIVE AGENT
              ---------------------------------

               Dated as of November 17, 1994

                          and

       Amended and Restated as of December 29, 1995

                       and further 

       Amended and Restated as of September 6, 1996

                       and further

         Amended and Restated as of June 27, 1997<PAGE>



                           TABLE OF CONTENTS


     SECTION 1.   Amount and Terms of Credit   
     1.01   The Commitments   
     1.02   Minimum Amount of Each Borrowing   
     1.03   Notice of Borrowing   
     1.04   Disbursement of Funds 
     1.05   Notes   
     1.06   Conversions   
     1.07   Pro Rata Borrowings   
     1.08   Interest   
     1.09   Interest Periods   
     1.10   Increased Costs, Illegality, etc.    
     1.11   Compensation
     1.12   Change of Lending Office
     1.13   Replacement of Banks

     SECTION 2.   Letters of Credit
     2.01   Letters of Credit
     2.02   Minimum Stated Amount
     2.03   Letter of Credit Requests
     2.04   Letter of Credit Participations
     2.05   Agreement to Repay Letter of Credit Drawings and
             Acceptance Payments
     2.06   Increased Costs

     SECTION 3.   Commitment Commission; Fees; Reductions of
                    Commitment
     3.01   Fees
     3.02   Voluntary Termination of Unutilized Commitments    
     3.03   Mandatory Reduction of Commitments

     SECTION 4.   Prepayments; Payments; Taxes
     4.01   Voluntary Prepayments
     4.02   Mandatory Repayments, Cash Collateralizations and
             Commitment Reductions
     4.03   Method and Place of Payment
     4.04   Net Payments

     SECTION 5.   Conditions Precedent to Initial Credit Events
     5.01   Execution of Agreement; Notes
     5.02   Fees, etc.
     5.03   Opinions of Counsel
     5.04   Corporate Documents; Proceedings; etc.
     5.05   Shareholders' Agreements; Collective Bargaining
             Agreements; Permitted Debt Agreements; Tax Sharing
             Agreements
     5.06   Solvency; Environmental Analyses; Insurance Matters   
     5.07   Subsidiary Guaranty
     5.08   Pledge Agreement
     5.09   Security Agreement
     5.10   Mortgage Amendments; etc.
     5.11   Consent Letter
     5.12   Adverse Change; Governmental Approvals; etc.
     5.13   Litigation
     5.14   Pro Forma Balance Sheet; Financial Statements;
             Projections
     5.15   Refinancing; Existing Credit Agreement; etc.
     5.16   Consummation of the Stock Repurchase

     SECTION 6.   Conditions Precedent to All Credit Events    
     6.01   No Default; Representations and Warranties
     6.02   Notice of Borrowing; Letter of Credit Request

     SECTION 7.   Representations, Warranties and Agreements    
     7.01   Corporate Status
     7.02   Corporate Power and Authority
     7.03   No Violation
     7.04   Governmental Approvals
     7.05   Financial Statements; Financial Condition;
             Undisclosed Liabilities; Projections; etc.
     7.06   Litigation
     7.07   True and Complete Disclosure
     7.08   Use of Proceeds; Margin Regulations
     7.09   Tax Returns and Payments
     7.10   Compliance with ERISA
     7.11   The Security Documents
     7.12   Representations and Warranties in Other Documents    
     7.13   Properties
     7.14   Capitalization
     7.15   Subsidiaries
     7.16   Compliance with Statutes, etc.
     7.17   Investment Company Act
     7.18   Public Utility Holding Company Act
     7.19   Environmental Matters
     7.20   Labor Relations
     7.21   Patents, Licenses, Franchises and Formulas
     7.22   Indebtedness
     7.23   Transaction
     7.24   Special Purpose Corporation

     SECTION 8.   Affirmative Covenants
     8.01   Information Covenants
     8.02   Books, Records and Inspections
     8.03   Maintenance of Property; Insurance
     8.04   Corporate Franchises
     8.05   Compliance with Statutes, etc.
     8.06   Compliance with Environmental Laws
     8.07   ERISA
     8.08   End of Fiscal Years; Fiscal Quarters
     8.09   Performance of Obligations
     8.10   Payment of Taxes
     8.11   Additional Security; Further Assurances; Required
             Appraisals
     8.12   Interest Rate Protection
     8.13   Ownership of Subsidiaries<PAGE>

     8.14   Permitted Acquisitions
     8.15   Maintenance of Corporate Separateness
     8.16   Cash Management System
     8.17   Margin Stock

     SECTION 9.   Negative Covenants
     9.01   Liens
     9.02   Consolidation, Merger, Purchase or Sale of Assets,
             etc.
     9.03   Dividends
     9.04   Indebtedness
     9.05   Investments; etc.
     9.06   Transactions with Affiliates and Unrestricted
              Subsidiaries
     9.07   Capital Expenditures
     9.08   Consolidated Net Interest Coverage Ratio
     9.09   Maximum Leverage Ratio
     9.10   Limitation on Modifications of and Payments on
             Indebtedness and Qualified Preferred Stock;
             Modifications of Certificate of Incorporation,
             By-Laws and Certain Other Agreements; Surviving
             Guaranty Payments, etc.
     9.11   Limitation on Creation or Acquisition of 
             Subsidiaries and Restricted Subsidiaries
     9.12   Limitation on Issuance of Capital Stock
     9.13   Business
     9.14   Limitation on Certain Restrictions on Subsidiaries    
     9.15   Limitation on Receivables and Receivables Facility    

     SECTION 10.   Events of Default
     10.01   Payments
     10.02   Representations, etc.
     10.03   Covenants
     10.04   Default Under Other Agreements
     10.05   Bankruptcy, etc.
     10.06   ERISA
     10.07   Security Documents
     10.08   Subsidiary Guaranty
     10.09   Judgments
     10.10   Change of Control
     10.11   Tax Sharing Agreement
     10.12   Receivables Repurchases

     SECTION 11.   Definitions and Accounting Terms
     11.01   Defined Terms

     SECTION 12.   The Agents
     12.01   Appointment
     12.02   Nature of Duties
     12.03   Lack of Reliance on the Administrative Agent, the
             Documentation Agent and the Syndication Agent
     12.04   Certain Rights of the Administrative Agent, the
             Documentation Agent and the Syndication Agent
     12.05   Reliance<PAGE>

     12.06   Indemnification
     12.07   The Administrative Agent, the Documentation Agent
               and the Syndication Agent in its Individual
               Capacity
     12.08   Holders
     12.09   Resignation by the Agents

     SECTION 13.   Miscellaneous
     13.01   Payment of Expenses, etc.
     13.02   Right of Setoff
     13.03   Notices
     13.04   Benefit of Agreement
     13.05   No Waiver; Remedies Cumulative
     13.06   Payments Pro Rata
     13.07   Calculations; Computations
     13.08   GOVERNING LAW; SUBMISSION TO
             JURISDICTION; VENUE; WAIVER OF JURY TRIAL
     13.09   Counterparts
     13.10   Effectiveness
     13.11   Headings Descriptive
     13.12   Amendment or Waiver; etc.
     13.13   Survival
     13.14   Domicile of Loans
     13.15   Limitation on Additional Amounts, etc.
     13.16   Confidentiality
     13.17   Register
     13.18   Addition of New Banks; Termination of Commitments
              of Non-Continuing Banks; etc.<PAGE>

     SCHEDULE I      Commitments
     SCHEDULE II     Bank Addresses
     SCHEDULE III    Existing Mortgaged Properties
     SCHEDULE IV     Undisclosed Liabilities
     SCHEDULE V      Tax Matters
     SCHEDULE VI     Subsidiaries
     SCHEDULE VII    Existing Indebtedness
     SCHEDULE VIII   Insurance
     SCHEDULE IX     Existing Liens
     SCHEDULE X      Existing Investments
     SCHEDULE XI     Existing Transactions
     SCHEDULE XII    Existing Letters of Credit
     SCHEDULE XIII   Certain Restrictions on Subsidiaries
     SCHEDULE XIV    Excluded Assets
     SCHEDULE XV     Leases Guarantied Under Surviving
                     Guaranties
     SCHEDULE XVI    ERISA Matters

     EXHIBIT A       Notice of Borrowing
     EXHIBIT B-1     Term Note
     EXHIBIT B-2     Revolving Note
     EXHIBIT B-3     Swingline Note
     EXHIBIT C-1     Letter of Credit Service Agreement
     EXHIBIT C-2     Trade Letter of Credit Request
     EXHIBIT C-3     Standby Letter of Credit Request
     EXHIBIT D       Section 4.04(b)(ii) Certificate
     EXHIBIT E-1     Opinion of General Counsel of Credit
                       Parties
     EXHIBIT E-2     Opinion of Bryan Cave LLP, Special
                       Counsel to Credit Parties
     EXHIBIT F       Solvency Certificate
     EXHIBIT G       Third Amended and Restated Subsidiary
                       Guaranty
     EXHIBIT H       Third Amended and Restated Pledge Agreement
     EXHIBIT I       Third Amended and Restated Security
                       Agreement
     EXHIBIT J       Consent Letter
     EXHIBIT K       Assignment and Assumption Agreement<PAGE>



          CREDIT AGREEMENT, dated as of November 17, 1994, as amended and
     restated as of December 29, 1995, as further amended and restated as
     of September 6, 1996, and as further amended and restated as of June
     27, 1997, among FURNITURE BRANDS INTERNATIONAL, INC., a Delaware
     corporation ("Furniture Brands"), BROYHILL FURNITURE INDUSTRIES, INC.,
     a North Carolina corporation ("Broyhill"), THE LANE COMPANY,
     INCORPORATED, a Virginia corporation ("Lane"), THOMASVILLE FURNITURE
     INDUSTRIES, INC., a Delaware corporation ("Thomasville" and together
     with Furniture Brands, Broyhill and Lane, each a "Borrower," and,
     collectively, the "Borrowers"), the Banks party hereto from time to
     time, CREDIT LYONNAIS NEW YORK BRANCH ("Credit Lyonnais"), as
     Documentation Agent, NATIONSBANK, N.A. ("NationsBank"), as Syndication
     Agent, and BANKERS TRUST COMPANY, as Administrative Agent (all
     capitalized terms used herein and defined in Section 11 are used
     herein as therein defined).


                         W I T N E S S E T H :


          WHEREAS, the Borrowers, the Existing Banks, the Documentation
     Agent, the Syndication Agent and the Administrative Agent are party to
     a 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 (as in effect immediately prior to the Third
     Restatement Effective Date, the "Existing Credit Agreement");

          WHEREAS, parties hereto wish to amend and restate the Existing
     Credit Agreement in the form of this Agreement;


          NOW, THEREFORE, the parties hereto agree that the Existing Credit
     Agreement shall be and hereby is amended and restated in its entirety
     as follows:

          SECTION 1.     Amount and Terms of Credit.

          1.01     The Commitments.  (a)  Subject to and upon the terms and
     conditions set forth herein, each Bank with a Term Loan Commitment
     severally agrees to make, on the Third Restatement Effective Date, a
     term loan or term loans (each a "Term Loan" and collectively the "Term
     Loans") to the Borrower, which Term Loans (i) shall, at the option of
     the Borrowers, be Base Rate Loans or Eurodollar Loans, provided that
     (A) except as otherwise specifically provided in Section 1.10(b), all
     Term Loans comprising the same Borrowing shall at all times be of the
     same Type and (B) no more than one Borrowing of Term Loans to be
     maintained as Eurodollar Loans may be incurred or maintained prior to
     the 30th day after the Third Restatement Effective Date (which
     Borrowing of Eurodollar Loans may only have an Interest Period of one
     month, and may only be made on the Third Restatement Effective Date),
     (ii) shall equal for each Bank, in initial aggregate principal amount,
     an amount which equals the Term Loan Commitment of such Bank on the
     Third Restatement Effective Date (before giving effect to any
     reductions thereto on such date pursuant to Section 3.03(b)(i) but<PAGE>


     after giving effect to any reductions thereto on or prior to such date
     pursuant to Section 3.03(b)(ii)) and (iii) shall be joint and several
     obligations of each of the Borrowers.  Once repaid, Term Loans
     incurred hereunder may not be reborrowed.

          (b)  Subject to and upon the terms and conditions set forth
     herein, each Bank severally agrees, at any time and from time to time
     after the Third Restatement Effective Date and prior to the Revolving
     Loan Maturity Date, to make a revolving loan or revolving loans (each,
     a "Revolving Loan" and, collectively, the "Revolving Loans") to the
     Borrowers, which Revolving Loans (i) shall, at the option of the
     Borrowers, be Base Rate Loans or Eurodollar Loans, provided that (A)
     except as otherwise specifically provided in Section 1.10(b), all
     Revolving Loans comprising the same Borrowing shall at all times be of
     the same Type and (B) no more than five Borrowings of Revolving Loans
     to be maintained as Eurodollar Loans may be incurred or maintained
     prior to the 30th day after the Third Restatement Effective Date
     (which Borrowings of Eurodollar Loans, except as set forth in Section
     1.09(viii), may only have an Interest Period of one month, and may
     only be made on the Third Restatement Effective Date) and, in the case
     of any Existing Revolving Loans that continue as set forth in Section
     5.15(ii), on the date the Interest Periods applicable thereto shall
     end as set forth in Section 1.09(viii), (ii) may be repaid and rebor-
     rowed in accordance with the provisions hereof, (iii) shall not exceed
     for any Bank at any time outstanding that aggregate principal amount
     which, when added to the product of (x) such Bank's Adjusted
     Percentage and (y) the sum of (I) the aggregate amount of all Letter
     of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
     with the proceeds of, and simultaneously with the incurrence of, the
     respective incurrence of Revolving Loans) at such time and (II) the
     aggregate principal amount of all Swingline Loans (exclusive of
     Swingline Loans which are repaid with the proceeds of, and simultane-
     ously with the incurrence of, the respective incurrence of Revolving
     Loans) then outstanding, equals the Revolving Loan Commitment of such
     Bank at such time, (iv) shall not exceed for all Banks at any time
     outstanding that aggregate principal amount which, when added to
     (x) the aggregate amount of all Letter of Credit Outstandings (exclu-
     sive of Unpaid Drawings which are repaid with the proceeds of, and
     simultaneously with the incurrence of, the respective incurrence of
     Revolving Loans) at such time and (y) the aggregate principal amount
     of all Swingline Loans (exclusive of Swingline Loans which are repaid
     with the proceeds of, and simultaneously with the incurrence of, the
     respective incurrence of Revolving Loans) then outstanding, equals the
     Total Revolving Loan Commitment at such time, (v) shall not exceed in
     aggregate principal amount on the Third Restatement Effective Date,
     when added to the aggregate principal amount of Swingline Loans
     incurred on such date, an amount equal to $348,000,000 and (vi) shall
     be the joint and several obligations of each of the Borrowers.

          (c)  Subject to and upon the terms and conditions herein set
     forth, BTCo in its individual capacity agrees to make at any time and
     from time to time on and after the Third Restatement Effective Date
     and prior to the Swingline Expiry Date, a revolving loan or revolving
     loans (each, a "Swingline Loan" and, collectively, the "Swingline<PAGE>


     Loans") to the Borrowers, which Swingline Loans (i) shall be made and
     maintained as Base Rate Loans, (ii) may be repaid and reborrowed in
     accordance with the provisions hereof, (iii) shall not exceed in
     aggregate principal amount at any time outstanding, when combined with
     the aggregate principal amount of all Revolving Loans made by Non-
     Defaulting Banks then outstanding and the Letter of Credit Outstand-
     ings at such time, an amount equal to the Adjusted Total Revolving
     Loan Commitment at such time (after giving effect to any reductions to
     the Adjusted Total Revolving Loan Commitment on such date), (iv) shall
     not exceed at any time outstanding the Maximum Swingline Amount and
     (v) shall be the joint and several obligations of each of the
     Borrowers.

          (d)  On any Business Day, BTCo may, in its sole discretion, give
     notice to the Banks that its outstanding Swingline Loans shall be
     funded with a Borrowing of Revolving Loans (provided that such notice
     shall be deemed to have been automatically given upon the occurrence
     of a Default or an Event of Default under Section 10.05 or upon the
     exercise of any of the remedies provided in the last paragraph of Sec-
     tion 10), in which case a Borrowing of Revolving Loans constituting
     Base Rate Loans (each such Borrowing, a "Mandatory Borrowing") shall
     be made on the immediately succeeding Business Day by all Banks with a
     Revolving Loan Commitment (without giving effect to any reductions
     thereto pursuant to the last paragraph of Section 10) pro rata based
     on each Bank's Adjusted Percentage (determined before giving effect to
     any termination of the Revolving Loan Commitments pursuant to the last
     paragraph of Section 10) and the proceeds thereof shall be applied
     directly to BTCo to repay BTCo for such outstanding Swingline Loans. 
     Each such Bank hereby irrevocably agrees to make Revolving Loans upon
     one Business Day's notice pursuant to each Mandatory Borrowing in the
     amount and in the manner specified in the preceding sentence and on
     the date specified in writing by BTCo notwithstanding that (i) the
     amount of the Mandatory Borrowing may not comply with the minimum
     amount for Borrowings otherwise required hereunder, (ii) whether any
     conditions specified in Section 6 are then satisfied, (iii) whether a
     Default or an Event of Default then exists, (iv) the date of such
     Mandatory Borrowing and (v) the amount of the Total Revolving Loan
     Commitment or the Adjusted Total Revolving Loan Commitment at such
     time; provided that, in no event shall such Bank be required to make
     Revolving Loans in excess of such Bank's Revolving Loan Commitment. 
     In the event that any Mandatory Borrowing cannot for any reason be
     made on the date otherwise required above (including, without limita-
     tion, as a result of the commencement of a proceeding under the Bank-
     ruptcy Code with respect to any of the Borrowers), then each such Bank
     hereby agrees that it shall forthwith purchase (as of the date the
     Mandatory Borrowing would otherwise have occurred, but adjusted for
     any payments received from the Borrowers on or after such date and
     prior to such purchase) from BTCo such participations in the
     outstanding Swingline Loans as shall be necessary to cause such Banks
     to share in such Swingline Loans ratably based upon their respective
     Adjusted Percentages (determined before giving effect to any termina-
     tion of the Revolving Loan Commitments pursuant to the last paragraph
     of Section 10), provided that (x) all interest payable on the
     Swingline Loans shall be for the account of BTCo until the date as of<PAGE>

     which the respective participation is required to be purchased and, to
     the extent attributable to the purchased participation, shall be
     payable to the participant from and after such date and (y) at the
     time any purchase of participations pursuant to this sentence is
     actually made, the purchasing Bank shall be required to pay BTCo
     interest on the principal amount of participation purchased for each
     day from and including the day upon which the Mandatory Borrowing
     would otherwise have occurred to but excluding the date of payment for
     such participation, at the overnight Federal Funds Rate for the first
     three days and at the rate otherwise applicable to Revolving Loans
     maintained as Base Rate Loans hereunder for each day thereafter.

          1.02     Minimum Amount of Each Borrowing.  The aggregate princi-
     pal amount of each Borrowing under a Tranche shall be not less than
     the Minimum Borrowing Amount for such Tranche and, if greater, shall
     be in the applicable integral multiple set forth in the definition of
     Minimum Borrowing Amount, provided that Mandatory Borrowings shall be
     made in the amounts required by Section 1.01(d).  More than one Bor-
     rowing may occur on the same date, but at no time shall there be out-
     standing more than twelve Borrowings of Eurodollar Loans.

          1.03     Notice of Borrowing.  (a)  Whenever the Borrowers desire
     to incur Loans under any Tranche (excluding Borrowings of Swingline
     Loans and Revolving Loans incurred pursuant to Mandatory Borrowings),
     an Authorized Representative of the Borrowers shall give the
     Administrative Agent at its Notice Office at least one Business Day's
     prior written (or telephonic notice promptly confirmed in writing)
     notice of each Base Rate Loan and at least three Business Days' prior
     written (or telephonic notice promptly confirmed in writing) notice of
     each Eurodollar Loan to be made hereunder, provided that any such
     notice shall be deemed to have been given on a certain day only if
     given before 11:00 A.M. (New York time) (or before 12:00 Noon (New
     York time) in the case of a Borrowing of Base Rate Loans) on such day. 
     Each such written notice or written confirmation of telephonic notice
     (each a "Notice of Borrowing"), except as otherwise expressly provided
     in Section 1.10, shall be irrevocable and shall be given by the
     Borrowers in the form of Exhibit A, appropriately completed to specify
     the aggregate principal amount of the Loans to be made pursuant to
     such Borrowing, the date of such Borrowing (which shall be a Business
     Day) and whether the Loans being made pursuant to such Borrowing are
     to be initially maintained as Base Rate Loans or Eurodollar Loans and,
     if Eurodollar Loans, the initial Interest Period to be applicable
     thereto.  The Administrative Agent shall promptly give each Bank
     notice of such proposed Borrowing, of such Bank's proportionate share
     thereof and of the other matters required by the immediately preceding
     sentence to be specified in the Notice of Borrowing.

          (b)  (i)  Whenever the Borrowers desire to make a Borrowing of
     Swingline Loans hereunder, an Authorized Representative of the
     Borrowers shall give BTCo not later than 12:00 Noon (New York time) on
     the date that a Swingline Loan is to be made, written notice or
     telephonic notice promptly confirmed in writing of each Swingline Loan
     to be made hereunder.  Each such notice shall be irrevocable and
     specify in each case (A) the date of Borrowing (which shall be a<PAGE>


     Business Day) and (B) the aggregate principal amount of the Swingline
     Loans to be made pursuant to such Borrowing.

          (ii)    Mandatory Borrowings shall be made upon the notice
     specified in Section 1.01(d), with each Borrower irrevocably agreeing,
     by its incurrence of any Swingline Loan, to the making of the
     Mandatory Borrowings as set forth in Section 1.01(d).

          (c)    Without in any way limiting the obligation of the
     Borrowers to confirm in writing any telephonic notice of any
     Borrowing, the Administrative Agent may act without liability upon the
     basis of telephonic notice of such Borrowing, believed by the
     Administrative Agent in good faith to be from an Authorized Represen-
     tative of any Borrower prior to receipt of written confirmation.  In
     each such case, each Borrower hereby waives the right to dispute the
     Administrative Agent's record of the terms of such telephonic notice
     of such Borrowing.

          1.04     Disbursement of Funds.  Except as otherwise specifically
     provided in the immediately succeeding sentence, no later than 12:00
     Noon (New  York time) on the date specified in each Notice of Bor-
     rowing (or (x) in the case of Swingline Loans, not later than 2:00
     P.M. (New York time) on the date specified pursuant to Section
     1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than
     12:00 Noon (New  York time) on the date specified in Section 1.01(d)),
     each Bank will make available its pro rata portion of each such Bor-
     rowing requested to be made on such date (or in the case of Swingline
     Loans, BTCo shall make available the full amount thereof).  All such
     amounts shall be made available in Dollars and in immediately
     available funds at the Payment Office of the Administrative Agent, and
     the Administrative Agent will make available to the Borrowers at the
     Payment Office the aggregate of the amounts so made available by the
     Banks (prior to 1:00 P.M. (New York time)) on such day, to the extent
     of funds actually received by the Administrative Agent prior to 12:00
     Noon (New York time) on such day).  Unless the Administrative Agent
     shall have been notified by any Bank prior to the date of Borrowing
     that such Bank does not intend to make available to the Administrative
     Agent such Bank's portion of any Borrowing to be made on such date,
     the Administrative Agent may assume that such Bank has made such
     amount available to the Administrative Agent on such date of Borrowing
     and the Administrative Agent may, in reliance upon such assumption,
     make available to the Borrowers a corresponding amount.  If such
     corresponding amount is not in fact made available to the
     Administrative Agent by such Bank, the Administrative Agent shall be
     entitled to recover such corresponding amount on demand from such
     Bank.  If such Bank does not pay such corresponding amount forthwith
     upon the Administrative Agent's demand therefor, the Administrative
     Agent shall promptly notify the Borrowers to immediately pay such
     corresponding amount to the Administrative Agent.  The Administrative
     Agent shall also be entitled to recover on demand from such Bank or
     the Borrowers, as the case may be, interest on such corresponding
     amount in respect of each day from the date such corresponding amount
     was made available by the Administrative Agent to the Borrowers until
     the date such corresponding amount is recovered by the Administrative<PAGE>


     Agent, at a rate per annum equal to (i) if recovered from such Bank,
     the overnight Federal Funds Rate and (ii)  if recovered from the Bor-
     rowers, the rate of interest applicable to the respective Borrowing,
     as determined pursuant to Section 1.08.  Nothing in this Section 1.04
     shall be deemed to relieve any Bank from its obligation to make Loans
     hereunder or to prejudice any rights which the Borrowers may have
     against any Bank as a result of any failure by such Bank to make Loans
     hereunder.

          1.05     Notes.  (a)    The Borrowers' obligation to pay the
     principal of, and interest on, the Loans made by each Bank shall be
     evidenced (i)  if Term Loans, by a promissory note duly executed and
     delivered by the Borrowers substantially in the form of Exhibit B-1,
     with blanks appropriately completed in conformity herewith (each, a
     "Term Note" and, collectively, the "Term Notes"), (ii) if Revolving
     Loans, by a promissory note duly executed and delivered by the
     Borrowers substantially in the form of Exhibit B-2, with blanks
     appropriately completed in conformity herewith (each a "Revolving
     Note" and, collectively, the "Revolving Notes") and (iii) if Swingline
     Loans, by a promissory note duly executed and delivered by the
     Borrowers substantially in the form of Exhibit B-3, with blanks appro-
     priately completed in conformity herewith (the "Swingline Note").

          (b)    The Term Note issued to each Bank shall (i) be executed by
     the Borrowers, (ii) be payable to such Bank or its registered assigns
     and be dated the Third Restatement Effective Date, (iii) be in a
     stated principal amount equal to the Term Loan made by such Bank on
     such date and be payable in the principal amount of the Term Loans
     evidenced thereby, (iv) mature on the Term Loan Maturity Date, (v)
     bear interest as provided in the appropriate clause of Section 1.08 in
     respect of the Base Rate Loans and Eurodollar Loans, as the case may
     be, evidenced thereby, (vi) be subject to voluntary prepayment as
     provided in Section 4.01 and mandatory repayment as provided in
     Section 4.02 and (vii) be entitled to the benefits of this Agreement
     and the other Credit Documents.

          (c)    The Revolving Note issued to each Bank shall (i) be
     executed by the Borrowers, (ii) be payable to such Bank or its
     registered assigns and be dated the Third Restatement Effective Date,
     (iii) be in a stated principal amount equal to the Revolving Loan
     Commitment of such Bank and be payable in the principal amount of the
     Revolving Loans evidenced thereby, (iv) mature on the Revolving Loan
     Maturity Date, (v) bear interest as provided in the appropriate clause
     of Section 1.08 in respect of the Base Rate Loans and Eurodollar
     Loans, as the case may be, evidenced thereby, (vi) be subject to
     voluntary prepayment as provided in Section 4.01 and mandatory repay-
     ment as provided in Section 4.02 and (vii) be entitled to the benefits
     of this Agreement and the other Credit Documents.

          (d)    The Swingline Note issued to BTCo shall (i) be executed by
     the Borrowers, (ii) be payable to BTCo or its registered assigns and
     be dated the Third Restatement Effective Date, (iii) be in a stated
     principal amount equal to the Maximum Swingline Amount and be payable
     in the principal amount of the outstanding Swingline Loans evidenced<PAGE>


     thereby from time to time, (iv) mature on the Swingline Expiry Date,
     (v) bear interest as provided in the appropriate clause of Section
     1.08 in respect of the Base Rate Loans evidenced thereby and (vi) be
     entitled to the benefits of this Agreement and the other Credit Docu-
     ments.

          (e)    Each Bank will note on its internal records the amount of
     each Loan made by it and each payment in respect thereof and will
     prior to any transfer of any of its Notes endorse on the reverse side
     thereof the outstanding principal amount of Loans evidenced thereby. 
     Failure to make any such notation or any error in any such notation or
     endorsement shall not affect the Borrowers' obligations in respect of
     such Loans.

          1.06     Conversions.  The Borrowers shall have the option to
     convert, on any Business Day occurring after the Third Restatement
     Effective Date, all or a portion equal to at least the applicable
     Minimum Borrowing Amount of the outstanding principal amount of Loans
     made pursuant to one or more Borrowings (so long as of the same
     Tranche) of one or more Types of Loans into a Borrowing (of the same
     Tranche) of another Type of Loan, provided that (i) except as
     otherwise provided in Section 1.10(b), Eurodollar Loans may be con-
     verted into Base Rate Loans only on the last day of an Interest Period
     applicable thereto and no partial conversion of Eurodollar Loans shall
     reduce the outstanding principal amount of such Eurodollar Loans made
     pursuant to a single Borrowing to less than the Minimum Borrowing
     Amount applicable thereto, (ii) Base Rate Loans may only be converted
     into Eurodollar Loans if no Default or Event of Default is in
     existence on the date of the conversion, (iii) prior to the 30th day
     after the Third Restatement Effective Date, conversions of Base Rate
     Loans into Eurodollar Loans may only be made if the conversion is
     effective on the first day of an Interest Period referred to in clause
     (B) of the respective provisos to Sections 1.01(a)(i) and 1.01(b)(i)
     and so long as such conversion does not result in a greater number of
     Borrowings of Eurodollar Loans prior to the 30th day after the Third
     Restatement Effective Date, (iv) no conversion pursuant to this
     Section 1.06 shall result in a greater number of Borrowings of
     Eurodollar Loans than is permitted under Section 1.02 and (v)
     Swingline Loans may not be converted pursuant to this Section 1.06. 
     Each such conversion shall be effected by the Borrowers by giving the
     Administrative Agent at its Notice Office prior to 12:00 Noon (New
     York time) at least three Business Days' prior notice (each a "Notice
     of Conversion") specifying the Loans to be so converted, the Borrowing
     or Borrowings pursuant to which such Loans were made and, if to be
     converted into Eurodollar Loans, the Interest Period to be initially
     applicable thereto.  The Administrative Agent shall give each Bank
     prompt notice of any such proposed conversion affecting any of its
     Loans.

          1.07     Pro Rata Borrowings.  All Borrowings of Term Loans and
     Revolving Loans under this Agreement shall be incurred from the Banks
     pro rata on the basis of their Term Loan Commitments and Revolving
     Loan Commitments, as the case may be, provided that all Borrowings of
     Revolving Loans made pursuant to a Mandatory Borrowing shall be<PAGE>

     incurred from the Banks pro rata on the basis of their Adjusted
     Percentages.  It is understood that no Bank shall be responsible for
     any default by any other Bank of its obligation to make Loans
     hereunder and that each Bank shall be obligated to make the Loans
     provided to be made by it hereunder, regardless of the failure of any
     other Bank to make its Loans hereunder.

          1.08     Interest.  (a)    The Borrowers jointly and severally
     agree to pay interest in respect of the unpaid principal amount of
     each Base Rate Loan from the date the proceeds thereof are made
     available to the Borrowers until the earlier of (i) the maturity
     (whether by acceleration or otherwise) of such Base Rate Loan and (ii)
     the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to
     Section  1.06, at a rate per annum which shall be equal to the sum of
     the Applicable Margin plus the Base Rate in effect from time to time.

          (b)    The Borrowers jointly and severally agree to pay interest
     in respect of the unpaid principal amount of each Eurodollar Loan from
     the date the proceeds thereof are made available to the Borrowers
     until the earlier of (i) the maturity (whether by acceleration or
     otherwise) of such Eurodollar Loan and (ii) the conversion of such
     Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06 or 1.10,
     as applicable, at a rate per annum which shall, during each Interest
     Period applicable thereto, be equal to the sum of the Applicable
     Margin plus the Eurodollar Rate for such Interest Period.

          (c)    Overdue principal and, to the extent permitted by law,
     overdue interest in respect of each Loan and any other overdue amount
     payable hereunder shall, in each case, bear interest at a rate per
     annum equal to the greater of (x) 2% per annum in excess of the rate
     otherwise applicable to Base Rate Loans from time to time and (y) the
     rate which is 2% in excess of the rate then borne by such Loans, in
     each case with such interest to be payable on a joint and several
     basis by the Borrowers on demand.

          (d)    Accrued (and theretofore unpaid) interest shall be payable
     (i) in respect of each Base Rate Loan, quarterly in arrears on each
     Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on
     the last day of each Interest Period applicable thereto and, in the
     case of an Interest Period in excess of three months, on each date
     occurring at three month intervals after the first day of such
     Interest Period, (iii) in respect of each Eurodollar Loan, on any
     repayment or prepayment (on the amount repaid or prepaid) and (iv) in
     respect of each Loan, at maturity (whether by acceleration or
     otherwise) and, after such maturity, on demand.

          (e)    Upon each Interest Determination Date, the Administrative
     Agent shall determine the Eurodollar Rate for the respective Interest
     Period or Interest Periods and shall promptly notify the Borrowers and
     the Banks thereof.  Each such determination shall, absent manifest
     error, be final and conclusive and binding on all parties hereto.

          1.09     Interest Periods.  At the time the Borrowers give any
     Notice of Borrowing or Notice of Conversion in respect of the making<PAGE>

     of, or conversion into, any Eurodollar Loan (in the case of the
     initial Interest Period applicable thereto) or on the third Business
     Day prior to the expiration of an Interest Period applicable to such
     Eurodollar Loan (in the case of any subsequent Interest Period), the
     Borrowers shall have the right to elect, by having an Authorized
     Representative of the Borrowers give the Administrative Agent notice
     thereof, the interest period (each an "Interest Period") applicable to
     such Eurodollar Loan, which Interest Period shall, at the option of
     the Borrowers, be a one, two, three or six-month period, provided
     that:

          (i)  all Eurodollar Loans comprising a Borrowing shall at all
     times have the same Interest Period;

          (ii)  the initial Interest Period for any Eurodollar Loan shall
     commence on the date of Borrowing of such Eurodollar Loan (including
     the date of any conversion thereto from a Loan of a different Type)
     and each Interest Period occurring thereafter in respect of such Euro-
     dollar Loan shall commence on the day on which the next preceding
     Interest Period applicable thereto expires;

          (iii)  if any Interest Period relating to a Eurodollar Loan
     begins on a day for which there is no numerically corresponding day in
     the calendar month at the end of such Interest Period, such Interest
     Period shall end on the last Business Day of such calendar month;

          (iv)  if any Interest Period would otherwise expire on a day
     which is not a Business Day, such Interest Period shall expire on the
     next succeeding Business Day; provided, however, that if any Interest
     Period for a Eurodollar Loan would otherwise expire on a day which is
     not a Business Day but is a day of the month after which no further
     Business Day occurs in such month, such Interest Period shall expire
     on the next preceding Business Day;

          (v)  no Interest Period may be selected at any time when a
     Default or an Event of Default is then in existence;

          (vi)  no Interest Period in respect of any Borrowing of any
     Tranche of Loans shall be selected which extends beyond the respective
     Maturity Date for such Tranche of Loans; 

          (vii)  no Interest Period in respect of any Borrowing of
     Revolving Loans shall be selected which extends beyond any date upon
     which a Scheduled Commitment Reduction will be required to be made
     under Section 3.03(d) if, after giving effect to the selection of such
     Interest Period, the aggregate principal amount of Revolving Loans
     maintained as Eurodollar Loans which have Interest Periods expiring
     after such date would be in excess of the aggregate principal amount
     of Loans permitted to be outstanding after such Scheduled Commitment
     Reduction; and

          (viii)  it is understood that in respect of Existing Revolving
     Loans that remain outstanding immediately after giving effect to the
     Third Restatement Effective Date pursuant to Section 5.15(ii), the<PAGE>

     Interest Periods applicable thereto shall continue to apply thereto
     until the last day of such Interest Period.
      
          If upon the expiration of any Interest Period applicable to a
     Borrowing of Eurodollar Loans, the Borrowers have failed to elect, or
     are not permitted to elect, a new Interest Period to be applicable to
     such Eurodollar Loans as provided above, the Borrowers shall be deemed
     to have elected to convert such Eurodollar Loans into Base Rate Loans
     effective as of the expiration date of such current Interest Period.

          1.10     Increased Costs, Illegality, etc.  (a)    In the event
     that any Bank shall have determined (which determination shall, absent
     manifest error, be final and conclusive and binding upon all parties
     hereto but, with respect to clause (i) below, may be made only by the
     Administrative Agent):

          (i)  on any Interest Determination Date that, by reason of any
     changes arising after the date of this Agreement affecting the
     interbank Eurodollar market, adequate and fair means do not exist for
     ascertaining the applicable interest rate on the basis provided for in
     the definition of Eurodollar Rate; or

          (ii)  at any time, that such Bank shall incur increased costs or
     reductions in the amounts received or receivable hereunder with
     respect to any Eurodollar Loan because of (x) any change since the
     date of this Agreement in any applicable law or governmental rule,
     regulation, order, guideline or request (whether or not having the
     force of law) or in the interpretation or administration thereof and
     including the introduction of any new law or governmental rule, regu-
     lation, order, guideline or request, such as, for example, but not
     limited to:  (A)  a change in the basis of taxation of payment to any
     Bank of the principal of or interest on such Eurodollar Loan or any
     other amounts payable hereunder (except for changes in the rate of tax
     on, or determined by reference to, the net income or net profits of
     such Bank, or any franchise tax based on the net income or net profits
     of such Bank, in either case pursuant to the laws of the United States
     of America, the jurisdiction in which it is organized or in which its
     principal office or applicable lending office is located or any
     subdivision thereof or therein), but without duplication of any
     amounts payable in respect of Taxes pursuant to Section 4.04(a), or
     (B) a change in official reserve requirements, but, in all events,
     excluding reserves required under Regulation D to the extent included
     in the computation of the Eurodollar Rate and/or (y) other circum-
     stances since the date of this Agreement affecting such Bank or the
     interbank Eurodollar market or the position of such Bank in such
     market (except as a result of a deterioration in the creditworthiness
     of such Bank subsequent to the date hereof); or

          (iii)  at any time, that the making or continuance of any
     Eurodollar Loan has been made (x) unlawful by any law or governmental
     rule, regulation or order, (y) impossible by compliance by any Bank in
     good faith with any governmental request (whether or not having force
     of law) or (z) impracticable as a result of a contingency occurring<PAGE>


     after the date of this Agreement which materially and adversely
     affects the interbank Eurodollar market;

     then, and in any such event, such Bank (or the Administrative Agent,
     in the case of clause (i) above) shall promptly give notice (by
     telephone confirmed in writing) to the Borrowers and, except in the
     case of clause (i) above, to the Administrative Agent of such deter-
     mination (which notice the Administrative Agent shall promptly
     transmit to each of the other Banks).  Thereafter (x) in the case of
     clause (i) above, Eurodollar Loans shall no longer be available until
     such time as the Administrative Agent notifies the Borrowers and the
     Banks that the circumstances giving rise to such notice by the
     Administrative Agent no longer exist, and any Notice of Borrowing or
     Notice of Conversion given by the Borrowers with respect to Eurodollar
     Loans which have not yet been incurred (including by way of
     conversion) shall be deemed rescinded by the Borrowers, (y) in the
     case of clause (ii) above, the Borrowers jointly and severally agree
     to, subject to the provisions of Section 13.15 (to the extent
     applicable), pay to such Bank, upon written demand therefor, such
     additional amounts (in the form of an increased rate of, or a differ-
     ent method of calculating, interest or otherwise as such Bank in its
     sole discretion shall determine) as shall be required to compensate
     such Bank for such increased costs or reductions in amounts received
     or receivable hereunder (a written notice as to the additional amounts
     owed to such Bank, showing the basis for the calculation thereof, sub-
     mitted to the Borrowers by such Bank in good faith shall, absent
     manifest error, be final and conclusive and binding on all the parties
     hereto) and (z) in the case of clause (iii) above, the Borrowers shall
     take one of the actions specified in Section 1.10(b) as promptly as
     possible and, in any event, within the time period required by law. 
     Each of the Administrative Agent and each Bank agrees that if it gives
     notice to the Borrowers of any of the events described in clause (i)
     or (iii) above, it shall promptly notify the Borrowers and, in the
     case of any such Bank, the Administrative Agent, if such event ceases
     to exist.  If any such event described in clause (iii) above ceases to
     exist as to a Bank, the obligations of such Bank to make Eurodollar
     Loans and to convert Base Rate Loans into Eurodollar Loans on the
     terms and conditions contained herein shall be reinstated.

          (b)    At any time that any Eurodollar Loan is affected by the
     circumstances described in Section 1.10(a)(ii) or (iii), the Borrowers
     may (and in the case of a Eurodollar Loan affected by the
     circumstances described in Section 1.10(a)(iii) shall) either (x) if
     the affected Eurodollar Loan is then being made initially or pursuant
     to a conversion, cancel the respective Borrowing by giving the
     Administrative Agent telephonic notice (confirmed in writing) on the
     same date that the Borrowers were notified by the affected Bank or the
     Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y)
     if the affected Eurodollar Loan is then outstanding, upon at least
     three Business Days' written notice to the Administrative Agent,
     require the affected Bank to convert such Eurodollar Loan into a Base
     Rate Loan, provided that, if more than one Bank is affected at any
     time, then all affected Banks must be treated the same pursuant to
     this Section 1.10(b).<PAGE>

          (c)    If at any time after the date of this Agreement any Bank
     determines that the introduction of or any change in any applicable
     law or governmental rule, regulation, order, guideline, directive or
     request (whether or not having the force of law) concerning capital
     adequacy, or any change in interpretation or administration thereof by
     any governmental authority, central bank or comparable agency, will
     have the effect of increasing the amount of capital required or
     expected to be maintained by such Bank or any corporation controlling
     such Bank based on the existence of such Bank's Commitments hereunder
     or its obligations hereunder, then the Borrowers jointly and severally
     agree, subject to the provisions of Section 13.15 (to the extent
     applicable), to pay to such Bank, upon its written demand therefor,
     such additional amounts as shall be required to compensate such Bank
     or such other corporation for the increased cost to such Bank or such
     other corporation or the reduction in the rate of return to such Bank
     or such other corporation as a result of such increase of capital.  In
     determining such additional amounts, each Bank will act reasonably and
     in good faith and will use averaging and attribution methods which are
     reasonable, provided that such Bank's reasonable good faith deter-
     mination of compensation owing under this Section 1.10(c) shall,
     absent manifest error, be final and conclusive and binding on all the
     parties hereto.  Each Bank, upon determining that any additional
     amounts will be payable pursuant to this Section 1.10(c), will give
     written notice thereof to the Borrowers, which notice shall show the
     basis for calculation of such additional amounts.

          1.11     Compensation.  The Borrowers jointly and severally
     agree, subject to the provisions of Section 13.15 (to the extent
     applicable), to compensate each Bank, upon its written request (which
     request shall set forth the basis for requesting such compensation),
     for all reasonable losses, expenses and liabilities (including,
     without limitation, any loss, expense or liability incurred by reason
     of the liquidation or reemployment of deposits or other funds required
     by such Bank to fund its Eurodollar Loans but excluding any loss of
     anticipated profit) which such Bank may sustain:  (i) if for any rea-
     son (other than a default by such Bank or the Administrative Agent) a
     Borrowing of, or conversion from or into, Eurodollar Loans does not
     occur on a date specified therefor in a Notice of Borrowing or Notice
     of Conversion (whether or not withdrawn by the Borrowers or deemed
     withdrawn pursuant to Section 1.10(a)); (ii) if any repayment
     (including any repayment made pursuant to Section 4.02 or as a result
     of an acceleration of the Loans pursuant to Section 10) or conversion
     of any of its Eurodollar Loans occurs on a date which is not the last
     day of an Interest Period with respect thereto; (iii) if any
     prepayment of any of its Eurodollar Loans is not made on any date
     specified in a notice of prepayment given by the Borrowers; or (iv) as
     a consequence of (x) any other default by the Borrowers to repay its
     Loans when required by the terms of this Agreement or any Note held by
     such Bank or (y) any election made pursuant to Section 1.10(b).

          1.12     Change of Lending Office.  Each Bank agrees that upon
     the occurrence of any event giving rise to the operation of Section 
     1.10(a)(ii) or (iii), Section  1.10(c), Section  2.06 or Section  4.04
     with respect to such Bank, it will, if requested by the Borrowers, use<PAGE>


     reasonable efforts (subject to overall policy considerations of such
     Bank) to designate another lending office for any Loans or Letters of
     Credit affected by such event, provided that such designation is made
     on such terms that such Bank and its lending office suffer no
     economic, legal or regulatory disadvantage, with the object of
     avoiding the consequence of the event giving rise to the operation of
     such Section.  Nothing in this Section  1.12 shall affect or postpone
     any of the obligations of the Borrowers or the rights of any Bank
     provided in Sections  1.10, 2.06 and 4.04.

          1.13     Replacement of Banks.  (x)    If any Bank becomes a
     Defaulting Bank or otherwise defaults in its obligations to make Loans
     or fund Unpaid Drawings, (y) upon the occurrence of any event giving
     rise to the operation of Section 1.10(a)(ii) or (iii), Section
     1.10(c), Section 2.06 or Section 4.04 with respect to any Bank which
     results in such Bank charging to the Borrowers increased costs in
     excess of those being generally charged by the other Banks or (z) as
     provided in Section 13.12(b) in the case of certain refusals by a Bank
     to consent to certain proposed changes, waivers, discharges or
     terminations with respect to this Agreement which have been approved
     by the Required Banks, the Borrowers shall have the right, if no
     Default or Event of Default will exist immediately after giving effect
     to the respective replacement, to replace such Bank (the "Replaced
     Bank") with one or more other Eligible Transferee or Transferees, none
     of whom shall constitute a Defaulting Bank at the time of such
     replacement (collectively, the "Replacement Bank") reasonably
     acceptable to the Administrative Agent, provided that (i) at the time
     of any replacement pursuant to this Section 1.13, the Replacement Bank
     shall enter into one or more Assignment and Assumption Agreements
     pursuant to Section 13.04(b) (and with all fees payable pursuant to
     said Section 13.04(b) to be paid by the Replacement Bank) pursuant to
     which the Replacement Bank shall acquire all of the Commitments and
     outstanding Loans of, and participations in Letters of Credit by, the
     Replaced Bank and, in connection therewith, shall pay to (x) the
     Replaced Bank in respect thereof an amount equal to the sum of (A) an
     amount equal to the principal of, and all accrued interest on, all
     outstanding Loans of the Replaced Bank, (B) an amount equal to all
     Unpaid Drawings that have been funded by (and not reimbursed to) such
     Replaced Bank, together with all then unpaid interest with respect
     thereto at such time and (C) an amount equal to all accrued, but
     theretofore unpaid, Fees owing to the Replaced Bank pursuant to
     Section 3.01 and (y) BTCo an amount equal to such Replaced Bank's
     Adjusted Percentage (for this purpose, determined as if the adjustment
     described in clause (y) of the immediately succeeding sentence had
     been made with respect to such Replaced Bank) of (1) any Unpaid Draw-
     ing (which at such time remains an Unpaid Drawing) and (2) any portion
     of any Swingline Loan for which BTCo has given a notice of a Mandatory
     Borrowing pursuant to Section 1.01(d) and such Replaced Bank has not
     provided a Revolving Loan which it was obligated to provide to the ex-
     tent such amount was not theretofore funded by such Replaced Bank, and
     (ii) all obligations of the Borrowers owing to the Replaced Bank
     (other than those (a) specifically described in clause (i) above in
     respect of which the assignment purchase price has been, or is concur-
     rently being, paid or (b) relating to any Tranche of Loans and/or<PAGE>

     Commitments of the respective Replaced Bank which will remain out-
     standing after giving effect to the respective replacement) shall be
     paid in full to such Replaced Bank concurrently with such replacement. 
     Upon the execution of the respective Assignment and Assumption
     Agreements, the payment of amounts referred to in clauses (i) and (ii)
     above and, if so requested by the Replacement Bank, delivery to the
     Replacement Bank of the appropriate Notes executed by the Borrowers,
     (x) the Replacement Bank shall become a Bank hereunder and the
     Replaced Bank shall cease to constitute a Bank hereunder, except with
     respect to indemnification provisions under this Agreement (including,
     without limitation, Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06),
     which shall survive as to such Replaced Bank and (y) in the case of a
     replacement of a Defaulting Bank with a Non-Defaulting Bank, the
     Adjusted Percentages of the Banks shall be automatically adjusted at
     such time to give effect to such replacement (and to give effect to
     the replacement of a Defaulting Bank with one or more Non-Defaulting
     Banks).

          SECTION 2.     Letters of Credit.

          2.01     Letters of Credit.  (a)    Subject to and upon the terms
     and conditions herein set forth, the Borrowers may request that any
     Issuing Bank issue, at any time and from time to time on and after the
     Third Restatement Effective Date and prior to the Revolving Loan
     Maturity Date, for the joint and several account of the Borrowers, one
     or more irrevocable letters of credit denominated in Dollars or, in
     the case of Trade Letters of Credit, through the creation thereunder
     by the respective Issuing Bank of acceptances or any other customary
     agreement or method for providing for deferred payment under letters
     of credit ("Acceptances"), and otherwise in a form customarily used by
     such Issuing Bank or in such other form as has been approved by such
     Issuing Bank (each such letter of credit, a "Letter of Credit") in
     support of obligations described in the definitions of Standby Letter
     of Credit or Trade Letter of Credit and any other obligations of the
     Borrowers or any of their Restricted Subsidiaries that are reasonably
     acceptable to the Administrative Agent and otherwise permitted to
     exist pursuant to this Agreement.  On the Third Restatement Effective
     Date, all Existing Letters of Credit shall be deemed to have been
     issued under this Agreement and shall for all purposes constitute
     "Letters of Credit" hereunder.

          (b)    Each Issuing Bank may agree, in its sole discretion, and
     BTCo hereby agrees that in the event a requested Letter of Credit is
     not issued by one of the other Issuing Banks, it will (subject to the
     terms and conditions contained herein), at any time and from time to
     time on or after the Third Restatement Effective Date and prior to the
     Revolving Loan Maturity Date, following its receipt of the respective
     Letter of Credit Request, issue for the account of the Borrowers one
     or more Letters of Credit in support of such obligations described in
     the definitions of Standby Letter of Credit and Trade Letter of Credit
     of the Borrowers or any of their Restricted Subsidiaries as is
     permitted to exist pursuant to this Agreement without giving rise to a
     Default or Event of Default hereunder, provided that the respective<PAGE>


     Issuing Bank shall be under no obligation to issue any Letter of
     Credit of the types described above if at the time of such issuance:

          (i)  any order, judgment or decree of any governmental authority
     or arbitrator shall purport by its terms to enjoin or restrain such
     Issuing Bank from issuing such Letter of Credit or any requirement of
     law applicable to such Issuing Bank or any request or directive
     (whether or not having the force of law) from any governmental author-
     ity with jurisdiction over such Issuing Bank shall prohibit, or
     request that such Issuing Bank refrain from, the issuance of letters
     of credit generally or such Letter of Credit in particular or shall
     impose upon such Issuing Bank with respect to such Letter of Credit
     any restriction or reserve or capital requirement (for which such
     Issuing Bank is not otherwise compensated) not in effect on the date
     hereof, or any unreimbursed loss, cost or expense which was not
     applicable, in effect or known to such Issuing Bank as of the date
     hereof and which such Issuing Bank in good faith deems material to it;
     or

          (ii)  such Issuing Bank shall have received notice from any Bank
     prior to the issuance of such Letter of Credit of the type described
     in the penultimate sentence of Section 2.03(b).

          (c)    Notwithstanding the foregoing, (i) no Letter of Credit
     shall be issued the Stated Amount of which, when added to the Letter
     of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
     on the date of, and prior to the issuance of, the respective Letter of
     Credit) at such time would exceed either (x) $60,000,000 or (y) when
     added to the aggregate principal amount of all Revolving Loans made by
     Non-Defaulting Banks and then outstanding and Swingline Loans then
     outstanding, an amount equal to  the Adjusted Total Revolving Loan
     Commitment at such time, (ii) no Acceptance shall be created the
     Stated Amount of which, when added to the amount of all Acceptances
     outstanding at such time, would exceed $15,000,000 and (iii) each
     Letter of Credit shall by its terms terminate or be terminable by the
     Issuing Bank on such date that would result in all drawings
     thereunder, or any Acceptances created thereunder, being funded
     pursuant to the terms thereof prior to (x) (A) in the case of Standby
     Letters of Credit, the date which occurs 12 months after the date of
     the issuance thereof (although any such Letter of Credit may be
     extendable for successive periods of up to 12 months, but not beyond
     the Revolving Loan Maturity Date, on terms acceptable to the Issuing
     Bank thereof) and (B) in the case of Trade Letters of Credit, the date
     which occurs six months (or up to one year with the consent of the
     respective Issuing Bank) after the date of the issuance thereof or (y)
     (A) in the case of Standby Letters of Credit, the date which is five
     Business Days prior to the Revolving Loan Maturity Date and (B) in the
     case of Trade Letters of Credit, the date which is thirty Business
     Days prior to the Revolving Loan Maturity Date.

          2.02     Minimum Stated Amount.  The Stated Amount of each Letter
     of Credit shall be not less than $10,000 or such lesser amount as is
     acceptable to the respective Issuing Bank.<PAGE>


          2.03     Letter of Credit Requests.  (a)    Whenever any Borrower
     desires that a Letter of Credit be issued by the Administrative Agent
     as Issuing Bank for its account, it shall have (i) executed and
     delivered the Letter of Credit Service Agreement in the form of
     Exhibit C-1 attached hereto (as amended, modified or supplemented from
     time to time, the "Letter of Credit Service Agreement"), which Letter
     of Credit Service Agreement shall be in full force and effect and (ii)
     made a request for the issuance of such Letter of Credit in accordance
     with the terms of the Letter of Credit Service Agreement.  Whenever
     any Borrower desires that a Trade Letter of Credit be issued by an
     Issuing Bank other than the Administrative Agent for its account, it
     shall have (x) executed and delivered to the respective Issuing Bank
     (with copies having been sent to the Administrative Agent) at least
     five Business Days prior to the issuance thereof (or such shorter
     period as may be acceptable to the respective Issuing Bank), a Trade
     Letter of Credit Request in the form of Exhibit C-2 attached hereto
     (each a "Trade Letter of Credit Request") and (y) completed and exe-
     cuted a letter of credit application in the form customarily used by
     such Issuing Bank for Trade Letters of Credit or in such other form as
     the Administrative Agent and the Issuing Bank shall request.  Whenever
     any Borrower desires that a Standby Letter of Credit be issued by an
     Issuing Bank other than the Administrative Agent for its account it
     shall have executed and delivered to the respective Issuing Bank (with
     copies having been sent to the Administrative Agent) at least five
     Business Days prior to the issuance thereof (or such shorter period as
     may be acceptable to the respective Issuing Bank), a Standby Letter of
     Credit Request in the form of Exhibit C-3 attached hereto (each a
     "Standby Letter of Credit Request").  Letter of Credit Requests shall
     be given in writing, or in the case of requests of Trade Letters of
     Credit, by telephone, if promptly confirmed in writing, or, if the
     Administrative Agent is the Issuing Bank, as otherwise provided in the
     Letter of Credit Service Agreement, provided that (I)  if the express
     provisions of any letter of credit application conflict with the
     express provisions of this Agreement, the provisions of this Agreement
     shall control to the extent of such conflict and (II)  no event (other
     than the failure to reimburse Letter of Credit Drawings as provided
     for in Section 2.05) which constitutes a default under any application
     shall constitute an Event of Default hereunder solely by reason of any
     default provisions contained in such application.

          (b)    The making of each Letter of Credit Request shall be
     deemed to be a representation and warranty by the Borrowers that such
     Letter of Credit may be issued in accordance with, and will not
     violate the requirements of, Section 2.01(c).  Unless the respective
     Issuing Bank has received notice from any Bank before it issues a
     Letter of Credit that one or more of the conditions specified in
     Section 6 are not then satisfied, or that the issuance of such Letter
     of Credit would violate Section 2.01(c), then such Issuing Bank may
     issue the requested Letter of Credit for the account of the Borrowers
     in accordance with such Issuing Bank's usual and customary practices. 
     Upon its issuance of any Letter of Credit, such Issuing Bank shall
     promptly notify each Bank of such issuance.<PAGE>


          2.04     Letter of Credit Participations.  (a)    Immediately
     upon the issuance by any Issuing Bank of any Letter of Credit, such
     Issuing Bank shall be deemed to have sold and transferred to each
     Bank, other than such Issuing Bank (each such Bank, in its capacity
     under this Section 2.04, a "Participant"), and each such Participant
     shall be deemed irrevocably and unconditionally to have purchased and
     received from such Issuing Bank, without recourse or warranty, an
     undivided interest and participation, to the extent of such
     Participant's Adjusted Percentage in such Letter of Credit, each
     drawing made thereunder and Acceptances created thereunder and the
     obligations of the Borrowers under this Agreement with respect
     thereto, and any security therefor or guaranty pertaining thereto. 
     Upon any change in the Revolving Loan Commitments or Adjusted Percent-
     ages of the Banks pursuant to Section 1.13 or 13.04 or as a result of
     a Bank Default, it is hereby agreed that, with respect to all
     outstanding Letters of Credit, Acceptances and Unpaid Drawings, there
     shall be an automatic adjustment to the participations pursuant to
     this Section 2.04 to reflect the new Adjusted Percentages of the
     assignor and assignee Bank or of all Banks with Revolving Loan Commit-
     ments, as the case may be.

          (b)    In determining whether to pay or create an Acceptance
     under any Letter of Credit, such Issuing Bank shall have no obligation
     relative to the other Banks other than to confirm that any documents
     required to be delivered under such Letter of Credit appear to have
     been delivered and that they appear to substantially comply on their
     face with the requirements of such Letter of Credit.  Any action taken
     or omitted to be taken by any Issuing Bank under or in connection with
     any Letter of Credit if taken or omitted in the absence of gross
     negligence or willful misconduct, shall not create for such Issuing
     Bank any resulting liability to the Borrowers or any Bank.

          (c)    In the event that any Issuing Bank makes any payment under
     any Letter of Credit issued by it or any Acceptance created thereunder
     and the Borrowers shall not have reimbursed such amount in full to
     such Issuing Bank pursuant to Section 2.05(a), such Issuing Bank shall
     promptly notify the Administrative Agent, which shall promptly notify
     each Participant of such failure, and each Participant shall promptly
     and unconditionally pay to such Issuing Bank the amount of such
     Participant's Adjusted Percentage of such unreimbursed payment in
     Dollars and in same day funds.  If the Administrative Agent so noti-
     fies, prior to 11:00 A.M. (New  York time) on any Business Day, any
     Participant required to fund a payment under a Letter of Credit, such
     Participant shall make available to such Issuing Bank in Dollars such
     Participant's Adjusted Percentage of the amount of such payment on
     such Business Day in same day funds.  If and to the extent such
     Participant shall not have so made its Adjusted Percentage of the
     amount of such payment available to such Issuing Bank, such
     Participant agrees to pay to such Issuing Bank, forthwith on demand,
     such amount, together with interest thereon, for each day from such
     date until the date such amount is paid to such Issuing Bank at the
     overnight Federal Funds Rate.  The failure of any Participant to make
     available to such Issuing Bank its Adjusted Percentage of any payment
     under any Letter of Credit shall not relieve any other Participant of<PAGE>


     its obligation hereunder to make available to such Issuing Bank its
     Adjusted Percentage of any Letter of Credit or Acceptance created
     thereunder on the date required, as specified above, but no
     Participant shall be responsible for the failure of any other
     Participant to make available to such Issuing Bank such other
     Participant's Adjusted Percentage of any such payment.

          (d)    Whenever any Issuing Bank receives a payment of a reim-
     bursement obligation as to which it has received any payments from the
     Participants pursuant to clause (c)  above, such Issuing Bank shall
     pay to each Participant which has paid its Adjusted Percentage
     thereof, in Dollars and in same day funds, an amount equal to such
     Participant's share (based upon the proportionate aggregate amount
     originally funded by such Participant to the aggregate amount funded
     by all Participants) of the principal amount of such reimbursement
     obligation and interest thereon accruing after the purchase of the
     respective participations.

          (e)    (i) In the case of Standby Letters of Credit, the Agent
     shall deliver to each Participant copies of each Standby Letter of
     Credit upon issuance and any amendments thereto as they occur, as
     furnished to the Administrative Agent by the Issuing Bank.

          (ii)    In the case of Trade Letters of Credit, when the
     Administrative Agent is not the Issuing Bank, then the Issuing Bank is
     to send to the Agent, promptly on the first business day of each week,
     by telefax, their daily outstanding Trade Letters of Credit balances
     for the previous week.  The Administrative Agent shall deliver to each
     Bank upon each calendar month end and upon each Letter of Credit fee
     payment a report setting forth for such period the aggregate daily
     amount available to be drawn under Trade Letters of Credit issued by
     all Issuing Banks that were outstanding during such period.

          (f)    The obligations of the Participants to make payments to
     each Issuing Bank with respect to Letters of Credit and Acceptances
     issued thereunder shall be irrevocable and not subject to any qualifi-
     cation or exception whatsoever and shall be made in accordance with
     the terms and conditions of this Agreement under all circumstances,
     including, without limitation, any of the following circumstances:

          (i)  any lack of validity or enforceability of this Agreement or
     any of the other Credit Documents;

          (ii)  the existence of any claim, setoff, defense or other right
     which the Borrowers or any of their Subsidiaries may have at any time
     against a beneficiary named in a Letter of Credit, any transferee of
     any Letter of Credit (or any Person for whom any such transferee may
     be acting), any holder of an Acceptance, the Administrative Agent, any
     Participant, or any other Person, whether in connection with this
     Agreement, any Letter of Credit, any Acceptance, the transactions
     contemplated herein or any unrelated transactions (including any
     underlying transaction between any Borrower and the beneficiary named
     in any such Letter of Credit);<PAGE>


          (iii)  any draft, certificate or any other document presented
     under any Letter of Credit proving to be forged, fraudulent, invalid
     or insufficient in any respect or any statement therein being untrue
     or inaccurate in any respect;

          (iv)  the surrender or impairment of any security for the
     performance or observance of any of the terms of any of the Credit
     Documents; or

          (v)  the occurrence of any Default or Event of Default.

          2.05     Agreement to Repay Letter of Credit Drawings and
     Acceptance Payments.  (a)    The Borrowers hereby jointly and
     severally agree to reimburse the respective Issuing Bank, by making
     payment to the Administrative Agent in immediately available funds at
     the Payment Office, for any payment or disbursement made by such
     Issuing Bank under any Letter of Credit or Acceptance created
     thereunder (each such amount, so paid until reimbursed, an "Unpaid
     Drawing"), immediately after, and in any event on the date of such
     payment or disbursement, with interest on the amount so paid or dis-
     bursed by such Issuing Bank, to the extent not reimbursed prior to
     12:00 Noon (New  York time) on the date of such payment or disburse-
     ment, from and including the date paid or disbursed to but excluding
     the date such Issuing Bank was reimbursed by the Borrowers therefor at
     a rate per annum which shall be the Base Rate in effect from time to
     time plus the Applicable Margin for Base Rate Loans, provided,
     however, to the extent such amounts are not reimbursed prior to 12:00
     Noon (New  York time) on the second Business Day following such
     payment or disbursement, interest shall thereafter accrue on the
     amounts so paid or disbursed by such Issuing Bank (and until reim-
     bursed by the Borrowers) at a rate per annum which shall be the Base
     Rate in effect from time to time plus the Applicable Margin for Base
     Rate Loans plus 2%, in each such case, with interest to be payable by
     the Borrowers on demand.  The respective Issuing Bank shall give the
     Borrowers prompt notice of each Drawing under any Letter of Credit or
     payment under any Acceptance created thereunder, provided that the
     failure to give any such notice shall in no way affect, impair or
     diminish the Borrowers' obligations hereunder.

          (b)    The obligations of the Borrowers under this Section 2.05
     to reimburse the respective Issuing Bank with respect to drawings on
     Letters of Credit and payments under any Acceptance created thereunder
     (each, a "Drawing") (including interest thereon) shall be joint and
     several and shall be absolute and unconditional under any and all
     circumstances and irrespective of any setoff, counterclaim or defense
     to payment which any Borrower may have or have had against any Bank
     (including in its capacity as issuer of the Letter of Credit or as
     Participant), or any nonapplication or misapplication by the
     beneficiary of the proceeds of such Drawing, the respective Issuing
     Bank's only obligation to the Borrowers being to confirm that any
     documents required to be delivered under such Letter of Credit appear
     to have been delivered and that they appear to substantially comply on
     their face with the requirements of such Letter of Credit.  Any action
     taken or omitted to be taken by any Issuing Bank under or in<PAGE>


     connection with any Letter of Credit or any Acceptance created
     thereunder if taken or omitted in the absence of gross negligence or
     willful misconduct, shall not create for such Issuing Bank any
     resulting liability to the Borrowers.

          2.06     Increased Costs.  If at any time after the date of this
     Agreement, the introduction of or any change in any applicable law,
     rule, regulation, order, guideline or request or in the interpretation
     or administration thereof by any governmental authority charged with
     the interpretation or administration thereof, or compliance by any
     Issuing Bank or any Participant with any request or directive by any
     such authority (whether or not having the force of law), or any change
     in generally acceptable accounting principles, shall either (i) 
     impose, modify or make applicable any reserve, deposit, capital
     adequacy or similar requirement against Letters of Credit issued, or
     Acceptances created, by any Issuing Bank or participated in by any
     Participant, or (ii) impose on any Issuing Bank or any Participant any
     other conditions relating, directly or indirectly, to this Agreement,
     any Letter of Credit or any Acceptance created thereunder; and the
     result of any of the foregoing is to increase the cost to any Issuing
     Bank or any Participant of issuing, maintaining or participating in
     any Letter of Credit or any Acceptance created thereunder, or reduce
     the amount of any sum received or receivable by any Issuing Bank or
     any Participant hereunder or reduce the rate of return on its capital
     with respect to Letters of Credit and Acceptances created thereunder
     (except for changes in the rate of tax on, or determined by reference
     to, the net income or net profits of such Issuing Bank or such
     Participant, or any franchise tax based on the net income or net
     profits of such Bank or Participant, in either case pursuant to the
     laws of the United States of America, the jurisdiction in which it is
     organized or in which its principal office or applicable lending
     office is located or any subdivision thereof or therein), but without
     duplication of any amounts payable in respect of Taxes pursuant to
     Section 4.04(a), then, upon demand to the Borrowers by such Issuing
     Bank or any Participant (a copy of which demand shall be sent by such
     Issuing Bank or such Participant to the Administrative Agent) and
     subject to the provisions of Section 13.15 (to the extent applicable),
     the Borrowers jointly and severally agree to pay to such Issuing Bank
     or such Participant such additional amount or amounts as will compen-
     sate such Bank for such increased cost or reduction in the amount re-
     ceivable or reduction on the rate of return on its capital.  Any
     Issuing Bank or any Participant, upon determining that any additional
     amounts will be payable pursuant to this Section 2.06, will give
     prompt written notice thereof to the Borrowers, which notice shall
     include a certificate submitted to the Borrowers by such Issuing Bank
     or such Participant (a copy of which certificate shall be sent by such
     Issuing Bank or such Participant to the Administrative Agent), setting
     forth in reasonable detail the basis for the calculation of such
     additional amount or amounts necessary to compensate such Issuing Bank
     or such Participant.  The certificate required to be delivered
     pursuant to this Section 2.06 shall, if delivered in good faith and
     absent manifest error, be final and conclusive and binding on the
     Borrowers.<PAGE>


          SECTION 3.     Commitment Commission; Fees; Reductions of Commit-
     ment.

          3.01     Fees.  (a)    The Borrowers jointly and severally agree
     to pay to the Administrative Agent for distribution to each Non-
     Defaulting Bank with a Revolving Loan Commitment a commitment
     commission (the "Commitment Commission") for the period from the Third
     Restatement Effective Date to but excluding the Revolving Loan
     Maturity Date (or such earlier date as the Total Revolving Loan
     Commitment shall have been terminated), computed at a rate for each
     day equal to 1/2 of 1% (reduced by the then applicable Commitment
     Commission Reduction Percentage) per annum on the daily average
     Unutilized Revolving Loan Commitment of such Non-Defaulting Bank. 
     Accrued Commitment Commission shall be due and payable quarterly in
     arrears on each Quarterly Payment Date and on the Revolving Loan
     Maturity Date or such earlier date upon which the Total Revolving Loan
     Commitment is terminated.

          (b)    The Borrowers jointly and severally agree to pay to the
     Administrative Agent for pro rata distribution to each Non-Defaulting
     Bank a fee in respect of (x) each Letter of Credit issued hereunder
     (the "Letter of Credit Fee"), for the period from and including the
     date of issuance of such Letter of Credit to the termination of such
     Letter of Credit, computed at a rate per annum equal to the Applicable
     Margin for Revolving Loans maintained as Eurodollar Loans as in effect
     from time to time on the daily Stated Amount of such Letter of Credit
     and (y) each Acceptance (the "Acceptance Fee") for the period from and
     including the date of creation of such Acceptance to and including the
     maturity of such Acceptance, computed at a rate per annum equal to the
     Applicable Margin for Revolving Loans maintained as Eurodollar Loans
     as in effect from time to time on the daily Stated Amount of such
     Acceptance.  Accrued Letter of Credit Fees and Acceptance Fees shall
     be due and payable quarterly in arrears on each Quarterly Payment Date
     and upon the first day on or after the termination of the Total
     Revolving Loan Commitment upon which no Letters of Credit or
     Acceptances remain outstanding.

          (c)    The Borrowers jointly and severally agree to pay to the
     respective Issuing Bank, for its own account, a facing fee in respect
     of (x) each Standby Letter of Credit issued for its account hereunder
     (the "Letter of Credit Facing Fee") for the period from and including
     the date of issuance of such Standby Letter of Credit to and including
     the termination of such Standby Letter of Credit, computed at a rate
     equal to 1/8 of 1% per annum of the daily Stated Amount of such
     Standby Letter of Credit, provided that in any event the minimum
     amount of the Letter of Credit Facing Fee payable in any 12 month
     period for any Standby Letter of Credit shall be $500 (it being agreed
     that, on each anniversary of the issuance of any Standby Letter of
     Credit or upon any earlier termination or expiration of a Standby
     Letter of Credit, if $500 exceeds the amount of Letter of Credit
     Facing Fees theretofore paid or then accrued with respect to such
     Standby Letter of Credit, in either case after the date of the
     issuance thereof or, if later, after the date of the last anniversary
     of the issuance thereof (but excluding any amounts paid after such<PAGE>


     anniversary with respect to periods ending on or prior to such
     anniversary, including, without limitation, as a result of the
     operation of this parenthetical), the amount of such excess shall be
     payable on the next date upon which accrued Letter of Credit Facing
     Fees are otherwise payable with respect to Standby Letters of Credit
     as provided in the following sentence) and (y) each Acceptance created
     by it (the "Acceptance Facing Fee," and together with the Letter of
     Credit Facing Fees, the "Facing Fees") for the period from and
     including the date of creation of such Acceptance to and including the
     maturity of such Acceptance, computed at a rate equal to 1/8 of 1% per
     annum of the daily Stated Amount of such Acceptance.  Accrued Facing
     Fees shall be due and payable quarterly in arrears on each Quarterly
     Payment Date and on the date upon which the Total Revolving Loan
     Commitment has been terminated and all Letters of Credit and
     Acceptances have been terminated in accordance with their terms.

          (d)    The Borrowers jointly and severally agree to pay, upon
     each drawing under, issuance of, or amendment to any Letter of Credit,
     such amount as shall at the time of such event be the administrative
     charge and out-of-pocket expenses which the respective Issuing Bank is
     generally imposing in connection with such occurrence with respect to
     letters of credit.

          (e)    The Borrowers jointly and severally agree to pay to the
     Agents, for their own account, such other fees as have been agreed to
     in writing by the Borrowers and the Agents.

          3.02     Voluntary Termination of Unutilized Commitments.  (a)   
     Upon at least two Business Days' prior notice from an Authorized
     Representative of the Borrowers to the Administrative Agent at its
     Notice Office (which notice the Administrative Agent shall promptly
     transmit to each of the Banks), the Borrowers shall have the right, at
     any time or from time to time, without premium or penalty, to termi-
     nate the Total Unutilized Revolving Loan Commitment, in whole or in
     part, in integral multiples of $1,000,000, provided that (i)  each
     such reduction shall apply proportionately to permanently reduce the
     Revolving Loan Commitment of each Bank with such a Commitment, (ii)
     the reduction to the Total Unutilized Revolving Loan Commitment shall
     in no case be in an amount which would cause the Revolving Loan Com-
     mitment of any Bank to be reduced (as required by preceding clause
     (i)) by an amount which exceeds the remainder of (x) the Unutilized
     Revolving Loan Commitment of such Bank as in effect immediately before
     giving effect to such reduction minus (y) such Bank's Adjusted
     Percentage of the aggregate principal amount of Swingline Loans then
     outstanding and (iii) such reduction shall be applied to reduce the
     then remaining Scheduled Commitment Reductions in the direct order of
     maturity after giving effect to all prior reductions thereto.

          (b)    In the event of certain refusals by a Bank as provided in
     Section 13.12(b) to consent to certain proposed changes, waivers,
     discharges or terminations with respect to this Agreement which have
     been approved by the Required Banks, the Borrowers may, subject to
     their compliance with the requirements of said Section 13.12(b), upon
     five Business Days' written notice to the Administrative Agent at its<PAGE>


     Notice Office (which notice the Administrative Agent shall promptly
     transmit to each of the Banks) terminate all of the Revolving Loan
     Commitment of such Bank so long as all Loans, together with accrued
     and unpaid interest, Fees and all other amounts, owing to such Bank
     (other than amounts owing in respect of any Term Loans maintained by
     such Bank, if such Term Loans are not being repaid pursuant to Section
     13.12(b)) are repaid concurrently with the effectiveness of such
     termination (at which time Schedule I shall be deemed modified to
     reflect such changed amounts), and at such time, such Bank shall no
     longer constitute a "Bank" for purposes of this Agreement, except with
     respect to indemnifications under this Agreement (including, without
     limitation, Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06), which
     shall survive as to such repaid Bank.

          3.03     Mandatory Reduction of Commitments.  (a)   The Total
     Commitment (and the Term Loan Commitment and Revolving Loan Commitment
     of each Bank) shall terminate in its entirety on July 7, 1997 unless
     the Third Restatement Effective Date shall have occurred on or prior
     to such date.

          (b)    In addition to any other mandatory commitment reductions
     pursuant to this Section 3.03, the Total Term Loan Commitment (and the
     Term Loan Commitment of each Bank) shall (i) terminate in its entirety
     on the Third Restatement Effective Date (after giving effect to the
     making of the Term Loans on such date) and (ii) prior to the
     termination of the Total Term Loan Commitment as provided in clause
     (i) above, be reduced from time to time to the extent required by
     Section 4.02.

          (c)    In addition to any other mandatory commitment reductions
     pursuant to this Section 3.03, the Total Revolving Loan Commitment
     (and the Revolving Loan Commitment of each Bank) shall terminate in
     its entirety on the Revolving Loan Maturity Date.

          (d)    In addition to any other mandatory commitment reductions
     pursuant to this Section 3.03, on each date set forth below, the Total
     Revolving Loan Commitment shall be permanently reduced by the amount
     set forth opposite such date (each such reduction, as same may be
     further reduced in accordance with Sections 3.02 and 3.03(f), a
     "Scheduled Commitment Reduction"):

       Scheduled Commitment Reduction Date           Amount

          Last Business Day in September, 1999     $  75,000,000
          Last Business Day in September, 2000     $ 100,000,000
          Revolving Loan Maturity Date             $ 300,000,000

          (e)  In addition to any other mandatory commitment reductions
     pursuant to this Section 3.03, on each date after the Third
     Restatement Effective Date upon which a mandatory prepayment of Term
     Loans pursuant to Section 4.02(A)(b), (c) or (d) is required (and
     exceeds in amount the aggregate principal amount of Term Loans then
     outstanding) or would be required if Term Loans were then outstanding,
     the Total Revolving Loan Commitment shall be permanently reduced by<PAGE>


     the amount, if any, by which the amount required to be applied
     pursuant to said Section (determined as if an unlimited amount of Term
     Loans were actually outstanding) exceeds the aggregate principal
     amount of Term Loans then outstanding.

          (f)    Any amount required to be applied to reduce the Total
     Revolving Loan Commitment pursuant to this Section 3.03 (other than
     Scheduled Commitment Reductions pursuant to Section 3.03(d)) shall be
     applied to reduce the then remaining Scheduled Commitment Reductions
     on a pro rata basis (based upon the then remaining principal amounts
     of Scheduled Commitment Reductions after giving effect to all prior
     reductions thereto).

          (g)    Each reduction to the Total Revolving Loan Commitment
     pursuant to this Section 3.03 shall be applied proportionately to
     reduce the Revolving Loan Commitment of each Bank.

          SECTION 4.     Prepayments; Payments; Taxes.
      
          4.01     Voluntary Prepayments.  (a)    The Borrowers shall have
     the right to prepay the Loans, without premium or penalty, in whole or
     in part at any time and from time to time on the following terms and
     conditions:  (i) an Authorized Representative of the Borrowers shall
     give the Administrative Agent prior to 12:00 Noon (New York time) at
     its Notice Office (x) at least one Business Day's prior written notice
     (or telephonic notice promptly confirmed in writing) of the Borrowers'
     intent to prepay Base Rate Loans (or same day notice in the case of
     Swingline Loans provided such notice is given prior to 11:00 A.M. (New
     York time)) and (y) at least three Business Days' prior written notice
     (or telephonic notice promptly confirmed in writing) of their intent
     to prepay Eurodollar Loans, whether Term Loans, Revolving Loans or
     Swingline Loans shall be prepaid, the amount of such prepayment and
     the Types of Loans to be prepaid and, in the case of Eurodollar Loans,
     the specific Borrowing or Borrowings pursuant to which made, which
     notice the Administrative Agent shall promptly transmit to each of the
     Banks; (ii) each prepayment shall be in an aggregate principal amount
     of at least $1,000,000 (or $500,000 in the case of Swingline Loans),
     provided that if any partial prepayment of Eurodollar Loans made
     pursuant to any Borrowing shall reduce the outstanding Eurodollar
     Loans made pursuant to such Borrowing to an amount less than the
     Minimum Borrowing Amount applicable thereto, then such Borrowing may
     not be continued as a Borrowing of Eurodollar Loans and any election
     of an Interest Period with respect thereto given by the Borrowers
     shall have no force or effect; (iii) at the time of any prepayment of
     Eurodollar Loans pursuant to this Section 4.01 on any date other than
     the last day of the Interest Period applicable thereto, the Borrowers
     shall pay the amounts required pursuant to Section 1.11; and (iv) each
     prepayment in respect of any Loans made pursuant to a Borrowing shall
     be applied pro rata among such Loans, provided that at the Borrowers'
     election in connection with any prepayment of Loans, such prepayment
     shall not be applied to the prepayment of Loans of a Defaulting Bank.

          (b)    In the event of certain refusals by a Bank as provided in
     Section  13.12(b) to consent to certain proposed changes, waivers,<PAGE>


     discharges or terminations with respect to this Agreement which have
     been approved by the Required Banks, the Borrowers may, upon five
     Business Days' written notice by an Authorized Representative of the
     Borrowers to the Administrative Agent at its Notice Office (which
     notice the Administrative Agent shall promptly transmit to each of the
     Banks) repay all Loans, together with accrued and unpaid interest,
     Fees, and other amounts owing to such Bank in accordance with, and
     subject to the requirements of, said Section  13.12(b) so long as (A)
     the Commitments of such Bank is terminated concurrently with such
     repayment (at which time Schedule I shall be deemed modified to
     reflect the changed Commitments) and (B) the consents required by Sec-
     tion  13.12(b) in connection with the repayment pursuant to this
     clause (b) have been obtained.

          4.02     Mandatory Repayments, Cash Collateralizations and
     Commitment Reductions.

          (A)  Requirements:

          (a)  (i)    On any day on which the sum of the aggregate out-
     standing principal amount of the Revolving Loans made by Non-
     Defaulting Banks, Swingline Loans and the Letter of Credit
     Outstandings exceeds the Adjusted Total Revolving Loan Commitment as
     then in effect, the Borrowers jointly and severally agree to prepay
     principal of Swingline Loans and, after the Swingline Loans have been
     repaid in full, Revolving Loans of Non-Defaulting Banks in an amount
     equal to such excess.  If, after giving effect to the prepayment of
     all outstanding Swingline Loans and Revolving Loans of Non-Defaulting
     Banks, the aggregate amount of the Letter of Credit Outstandings
     exceeds the Adjusted Total Revolving Loan Commitment as then in
     effect, the Borrowers jointly and severally agree to pay to the
     Administrative Agent at the Payment Office on such date an amount of
     cash or Cash Equivalents equal to the amount of such excess (up to a
     maximum amount equal to the Letter of Credit Outstandings at such
     time), such cash or Cash Equivalents to be held as security for all
     obligations of the Borrowers to Non-Defaulting Banks hereunder in a
     cash collateral account to be established by the Administrative Agent.

          (ii)    On any day on which the aggregate outstanding principal
     amount of the Revolving Loans made by any Defaulting Bank exceeds the
     Revolving Loan Commitment of such Defaulting Bank, the Borrowers
     jointly and severally shall prepay principal of Revolving Loans of
     such Defaulting Bank in an amount equal to such excess.

          (b)    (i) In addition to any other mandatory repayments or
     commitment reductions pursuant to this Section 4.02, on each date
     after the Third Restatement Effective Date upon which Furniture Brands
     or any of its Restricted Subsidiaries receives any cash proceeds from
     any incurrence by Furniture Brands or any of its Restricted Subsidi-
     aries of Indebtedness for borrowed money ((w) including Permitted
     Subordinated Indebtedness, but excluding, so long as no Default or
     Event of Default then exists (I) an amount of Permitted Subordinated
     Indebtedness incurred and simultaneously used to repay, refinance or
     otherwise replace the Receivables Facility in accordance with the<PAGE>


     terms hereof and (II) subject to compliance with the proviso to
     Section 9.04(ii) on the date of the incurrence of such Indebtedness,
     up to $50,000,000 of Permitted Subordinated Indebtedness issued
     pursuant to Section 9.04(ii)(x), less the sum of the aggregate
     principal amount of Permitted Subordinated Indebtedness issued after
     the Second Restatement Effective Date as consideration in connection
     with Permitted Acquisitions and the aggregate amount of Disqualified
     Preferred Stock issued on or prior to the date of the incurrence of
     such Permitted Subordinated Indebtedness pursuant to Section
     9.12(b)(i) and issued as consideration in connection with one or more
     Permitted Acquisitions, to the extent such proceeds of the incurrence
     of Permitted Subordinated Indebtedness are or were used to effect
     Permitted Acquisitions or so long as an Authorized Representative of
     the Borrowers has delivered a certificate to the Administrative Agent
     on or prior to such date stating that such proceeds shall be committed
     to be used to make such Permitted Acquisitions within six months
     following the date of such incurrence of Permitted Subordinated
     Indebtedness, and so long as such proceeds are so used within such
     time frame, it being understood and agreed that any amount of proceeds
     not so used within such time frame shall at the end of such six month
     period be required to be applied as otherwise provided in this clause
     (b), (x) subject to compliance with the proviso to Section 9.04(iii)
     on the date of the incurrence of such Indebtedness, excluding up to
     $25,000,000 of proceeds of Permitted Unsecured Indebtedness incurred
     pursuant to Section 9.04(iii), minus the aggregate amount of
     Disqualified Preferred Stock issued on or prior to the date of the
     incurrence of such Permitted Unsecured Indebtedness pursuant to
     Section 9.12(b)(ii), (y) including Attributed Receivables Facility
     Indebtedness incurred pursuant to the Receivables Facility which in
     aggregate principal amount exceeds $240,000,000 outstanding at any
     time (but excluding other Attributed Receivables Facility
     Indebtedness) and (z) excluding any other Indebtedness for borrowed
     money permitted to be incurred pursuant to Section 9.04 (excluding,
     however, clauses (ii), (iii) and (xi) thereof) as such Section is in
     effect on the Third Restatement Effective Date), an amount equal to
     100% (or (x) 50% if the Leverage Ratio, after giving effect to the
     respective debt incurrence, is less than 4.0:1.0 but greater than or
     equal to 2.75:1.0 or (y) 0% if the Leverage Ratio, after giving effect
     to the respective debt incurrence, is less than 2.75:1.0, in each case
     so long as no Default or Event of Default exists on the date of the
     respective incurrence of debt) of the Net Cash Proceeds of the
     respective incurrence of Indebtedness shall be applied as a mandatory
     repayment of principal of the then outstanding Term Loans.

          (ii)    In addition to any other mandatory repayments or
     commitment reductions pursuant to this Section 4.02, on each date
     after the Third Restatement Effective Date upon which Furniture Brands
     or any of its Restricted Subsidiaries receives any cash proceeds from
     any issuance of Disqualified Preferred Stock ((y) excluding any amount
     of equity proceeds actually used, at the time of the receipt thereof,
     to make Guaranty Payments pursuant to Section 9.10(b)(ii)(y)(C) and
     (z) excluding, so long as no Default or Event of Default then exists
     (I) proceeds of Disqualified Preferred Stock issued pursuant to
     Section 9.12(b)(iii) which are used to repay or otherwise replace the<PAGE>


     Receivables Facility in accordance with the terms hereof, (II) subject
     to compliance with the proviso to Section 9.12(b) on the date of the
     respective issuance of Disqualified Preferred Stock, up to $50,000,000
     of proceeds received from the issuance of Disqualified Preferred Stock
     pursuant to Section  9.12(b)(i), minus the sum of the aggregate
     liquidation preference or amount of Disqualified Preferred Stock
     directly issued after the Second Restatement Effective Date as
     consideration in connection with Permitted Acquisitions and the
     aggregate principal amount of Permitted Subordinated Indebtedness
     incurred on or prior to the date of the issuance of such Disqualified
     Preferred Stock pursuant to Section 9.04(ii)(x) and issued as
     consideration in connection with one or more Permitted Acquisitions or
     otherwise not required to be used to reduce commitments as a result of
     clause (b)(i)(w)(II) above, to the extent all such proceeds from the
     issuance of Disqualified Preferred Stock are or were used to effect
     Permitted Acquisitions or so long as an Authorized Representative of
     the Borrowers has delivered a certificate to the Administrative Agent
     on or prior to such date stating that such proceeds shall be committed
     to be used to make Permitted Acquisitions within six months following
     the date of such issuance of Disqualified Preferred Stock, and so long
     as such proceeds are so used in such time frame, it being understood
     and agreed that any amount of proceeds not so used within such time
     frame shall at the end of such six month period be required to be
     applied as otherwise provided in this clause (d) and (III) subject to
     compliance with the proviso to Section 9.12(b) on the date of the
     respective issuance of Disqualified Preferred Stock, up to $25,000,000
     of proceeds of Disqualified Preferred Stock issued pursuant to Section
     9.12(b)(ii), minus the aggregate principal amount of Permitted
     Unsecured Indebtedness incurred on or prior to such date of issuance
     pursuant to Section 9.04(iii)), an amount equal to 100% (or (x) 50% if
     the Leverage Ratio, on the date of the respective issuance, is less
     than 4.0:1.0 but greater than or equal to 2.75:1.0 or (y) 0% if the
     Leverage Ratio, on the date of the respective issuance, is less than
     2.75:1.0, in each case so long as no Default or Event of Default
     exists on the date of the respective issuance) of the Net Cash Pro-
     ceeds of the respective issuance shall be applied as a mandatory
     repayment of principal of the then outstanding Term Loans.

          (c)    In addition to any other mandatory repayments or
     commitment reductions pursuant to this Section 4.02, on each date
     after the Third Restatement Effective Date upon which Furniture Brands
     or any of its Restricted Subsidiaries (other than the Receivables
     Subsidiary) receives proceeds from any sale or other disposition of
     assets (including capital stock and securities held thereby, but ex-
     cluding (i) sales or transfers of inventory in the ordinary course of
     business, (ii) sales or transfers of assets with a fair market value
     less than (A) $100,000 per such sale or disposition (or in a series of
     related sales or dispositions) and (B) with respect to any sale or
     transfer in an amount in excess of the amount referred to in clause
     (A) above, $1,000,000 in the aggregate for all such transfers in any
     Fiscal Year, (iii) sales or transfers of assets permitted pursuant to
     Sections 9.02 (v) and (vi), and (iv) sales of Excluded Assets, the Net
     Sale Proceeds of which do not exceed $7,000,000), an amount equal to<PAGE>


     75% of the Net Sale Proceeds therefrom shall be applied as a mandatory
     repayment of principal of the then outstanding Term Loans.

          (d)    In addition to any other mandatory repayments or
     commitment reductions pursuant to this Section 4.02, within 10 days
     following each date after the Third Restatement Effective Date on
     which Furniture Brands or any of its Restricted Subsidiaries receives
     any proceeds from any Recovery Event (other than proceeds from
     Recovery Events in an amount less than (A) $100,000 per each Recovery
     Event and (B) with respect to any Recovery Event with proceeds in
     excess of the amount referred to in clause (A) above, $1,000,000 in
     the aggregate for all such Recovery Events in any Fiscal Year), an
     amount equal to 100% of the proceeds of such Recovery Event (net of
     reasonable costs including, without limitation, legal costs and ex-
     penses, and taxes incurred in connection with such Recovery Event)
     shall be applied as a mandatory repayment of principal of the then
     outstanding Term Loans, provided that (x) so long as no Default or
     Event of Default then exists and such proceeds do not exceed
     $5,000,000, such proceeds shall not be required to be so applied on
     such date to the extent that an Authorized Representative of the
     Borrowers has delivered a certificate to the Administrative Agent on
     or prior to such date stating that such proceeds shall be used or
     shall be committed to be used to replace or restore any properties or
     assets in respect of which such proceeds were paid within one year
     following the date of such Recovery Event (which certificate shall set
     forth the estimates of the proceeds to be so expended) and (y) so long
     as no Default or Event of Default then exists and to the extent that
     (a) the amount of such proceeds exceeds $5,000,000, (b) the amount of
     such proceeds, together with other cash available to the Borrowers and
     permitted to be spent by them or their Restricted Subsidiaries on
     Capital Expenditures during the relevant period pursuant to Section 
     9.07, equals at least 100% of the cost of replacement or restoration
     of the properties or assets in respect of which such proceeds were
     paid as determined by the Borrowers and as supported by such estimates
     or bids from contractors or subcontractors or such other supporting
     information as the Administrative Agent may reasonably request, (c) an
     Authorized Representative of the Borrower has delivered to the
     Administrative Agent a certificate on or prior to the date the
     application would otherwise be required pursuant to this Section
     4.02(A)(d) in the form described in clause (x) above and also
     certifying its determination as required by preceding clause (b) and
     certifying the sufficiency of business interruption insurance as
     required by succeeding clause (d), and (d) an Authorized
     Representative of the Borrower has delivered to the Administrative
     Agent such evidence as the Administrative Agent may reasonably request
     in form and substance reasonably satisfactory to the Administrative
     Agent establishing that the Borrowers have sufficient business
     interruption insurance and that the Borrowers will receive payment
     thereunder in such amounts and at such times as are necessary to
     satisfy all obligations and expenses of the Borrowers (including,
     without limitation, all debt service requirements, including pursuant
     to this Agreement) without any delay or extension thereof, for the
     period from the date of the respective casualty, condemnation or other
     event giving rise to the Recovery Event and continuing through the<PAGE>


     completion of the replacement or restoration of respective properties
     or assets, then the entire amount of the proceeds of such Recovery
     Event and not just the portion in excess of $5,000,000 shall be
     deposited with the Administrative Agent pursuant to a cash collateral
     arrangement reasonably satisfactory to the Administrative Agent
     whereby such proceeds shall be disbursed to the Borrowers from time to
     time as needed to pay actual costs incurred by them in connection with
     the replacement or restoration of the respective properties or assets
     (pursuant to such certification requirements as may be established by
     the Administrative Agent), provided further, that at any time while an
     Event of Default has occurred and is continuing, the Required Banks
     may direct the Administrative Agent (in which case the Administrative
     Agent shall, and is hereby authorized by the Borrowers to, follow said
     directions) to apply any or all proceeds then on deposit in such
     collateral account to the repayment of Obligations hereunder in the
     same manner as proceeds would be applied pursuant to the Security
     Agreement, and provided further, that if all or any portion of such
     proceeds not required to be applied as a mandatory repayment pursuant
     to the second preceding proviso (whether pursuant to clause (x) or (y)
     thereof) are either (A) not so used or committed to be so used within
     one year after the date of the respective Recovery Event or (B) if
     committed to be used within one year after the date of receipt of such
     Net Sale Proceeds and not so used within 18 months after the date of
     respective Recovery Event then, in either such case, such remaining
     portion not used or committed to be used in the case of preceding
     clause (A) and not used in the case of preceding clause (B) shall be
     applied on the date which is the first anniversary of the date of the
     respective Recovery Event in the case of clause (A) above or the date
     occurring 18 months after the date of the respective Recovery Event in
     the case of clause (B) above as a mandatory repayment of principal of
     the then outstanding Term Loans.

          (B)     Application:

          (a)  With respect to each repayment of Loans required by this
     Section 4.02, the Borrowers may designate the Types of Loans which are
     to be repaid and, in the case of Eurodollar Loans, the specific
     Borrowing or Borrowings pursuant to which made, provided that: (i)
     repayments of Eurodollar Loans pursuant to this Section 4.02 may only
     be made on the last day of an Interest Period applicable thereto
     unless all Eurodollar Loans with Interest Periods ending on such date
     of required repayment and all Base Rate Loans have been paid in full;
     (ii) if any repayment of Eurodollar Loans made pursuant to a single
     Borrowing shall reduce the outstanding Eurodollar Loans made pursuant
     to such Borrowing to an amount less than the Minimum Borrowing Amount
     applicable thereto, then such Borrowing shall be converted at the end
     of the then current Interest Period into a Borrowing of Base Rate
     Loans; and (iii) each repayment of Loans required by this Section 4.02
     shall, except as otherwise expressly set forth in Section 4.02(A)(a),
     be applied pro rata among such Loans.  In the absence of a designation
     by the Borrowers as described in the preceding sentence, the
     Administrative Agent shall, subject to the above, make such
     designation in its sole discretion with a view, but no obligation, to
     minimize breakage costs owing under Section 1.11.<PAGE>


          (b)    Notwithstanding anything to the contrary contained
     elsewhere in this Agreement, (i) all the outstanding Term Loans shall
     be repaid in full on the Term Loan Maturity Date, (ii) all then
     outstanding Revolving Loans shall be repaid in full on the Revolving
     Loan Maturity Date and (iii) all then outstanding Swingline Loans
     shall be repaid on the Swingline Expiry Date.

          4.03     Method and Place of Payment.  Except as otherwise
     specifically provided herein, all payments under this Agreement or any
     Note shall be made to the Administrative Agent for the account of the
     Bank or Banks entitled thereto not later than 12:00 Noon (New York
     time) on the date when due and shall be made in Dollars in immediately
     available funds at the Payment Office of the Administrative Agent. 
     Any payments received by the Administrative Agent after such time
     shall be deemed to have been received on the next Business Day. 
     Whenever any payment to be made hereunder or under any Note shall be
     stated to be due on a day which is not a Business Day, the due date
     thereof shall be extended to the next succeeding Business Day and,
     with respect to payments of principal, interest shall be payable at
     the applicable rate during such extension.

          4.04     Net Payments.  (a)    All payments made by the Borrowers
     hereunder or under any Note will be made without setoff, counterclaim
     or other defense.  Except as provided in Section 4.04(b), all such
     payments will be made free and clear of, and without deduction or
     withholding for, any present or future taxes, levies, imposts, duties,
     fees, assessments or other charges of whatever nature now or hereafter
     imposed by any jurisdiction or by any political subdivision or taxing
     authority thereof or therein with respect to such payments (but
     excluding, except as provided in the second succeeding sentence, any
     tax imposed on or measured by the net income or net profits of a Bank
     pursuant to the laws of the jurisdiction in which it is organized or
     the jurisdiction in which the principal office or applicable lending
     office of such Bank is located or any subdivision thereof or therein)
     and all interest, penalties or similar liabilities with respect
     thereto (all such non-excluded taxes, levies, imports, duties, fees,
     assessments or other charges being referred to collectively as
     "Taxes").  If any Taxes are so levied or imposed, the Borrowers
     jointly and severally agree to pay the full amount of such Taxes, and
     such additional amounts as may be necessary so that every payment of
     all amounts due under this Agreement or under any Note, after
     withholding or deduction for or on account of any Taxes, will not be
     less than the amount provided for herein or in such Note.  If any
     amounts are payable in respect of Taxes pursuant to the preceding sen-
     tence, the Borrowers agree to reimburse each Bank, upon the written
     request of such Bank, for taxes imposed on or measured by the net
     income or net profits of such Bank pursuant to the laws of the
     jurisdiction in which the principal office or applicable lending
     office of such Bank is located or under the laws of any political
     subdivision or taxing authority of any such jurisdiction in which the
     principal office or applicable lending office of such Bank is located
     and for any withholding of income or similar taxes imposed by the
     United States of America as such Bank shall determine are payable by,
     or withheld from, such Bank in respect of such amounts so paid to or<PAGE>


     on behalf of such Bank pursuant to the preceding sentence and in
     respect of any amounts paid to or on behalf of such Bank pursuant to
     this sentence.  The Borrowers will furnish to the Administrative Agent
     within 45 days after the date the payment of any Taxes is due pursuant
     to applicable law certified copies of tax receipts evidencing such
     payment by the Borrowers.  The Borrowers jointly and severally agree
     to indemnify and hold harmless each Bank, and reimburse such Bank upon
     its written request, for the amount of any Taxes so levied or imposed
     and paid by such Bank.

          (b)    Each Bank that is not a United States person (as such term
     is defined in Section 7701(a)(30) of the Code) agrees to deliver to
     the Borrowers and the Administrative Agent on or prior to the Third
     Restatement Effective Date, or in the case of a Bank that is an
     assignee or transferee of an interest under this Agreement pursuant to
     Section 1.13 or 13.04 (unless the respective Bank was already a Bank
     hereunder immediately prior to such assignment or transfer), on the
     date of such assignment or transfer to such Bank, (i)  two accurate
     and complete original signed copies of Internal Revenue Service Form
     4224 or 1001 (or successor forms) certifying to such Bank's
     entitlement to a complete exemption from United States withholding tax
     with respect to payments to be made under this Agreement and under any
     Note, or (ii)  if the Bank is not a "bank" within the meaning of
     Section 881(c)(3)(A) of the Code and cannot deliver either Internal
     Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x)  a
     certificate substantially in the form of Exhibit D (any such
     certificate, a "Section 4.04(b)(ii) Certificate") and (y)  two
     accurate and complete original signed copies of Internal Revenue
     Service Form W-8 (or successor form) certifying to such Bank's
     entitlement to a complete exemption from United States withholding tax
     with respect to payments of interest to be made under this Agreement
     and under any Note.  In addition, each Bank agrees that from time to
     time after the Third Restatement Effective Date, when a lapse in time
     or change in circumstances renders the previous certification obsolete
     or inaccurate in any material respect, it will deliver to the
     Borrowers and the Administrative Agent two new accurate and complete
     original signed copies of Internal Revenue Service Form 4224 or 1001,
     or Form W-8 and a Section 4.04(b)(ii) Certificate, as the case may be,
     and such other forms as may be required in order to confirm or
     establish the entitlement of such Bank to a continued exemption from
     or reduction in United States withholding tax with respect to payments
     under this Agreement and any Note, or it shall immediately notify the
     Borrowers and the Administrative Agent of its inability to deliver any
     such Form or Certificate. Notwithstanding anything to the contrary
     contained in Section 4.04(a), but subject to Section 13.04(b) and the
     immediately succeeding sentence, (x)  the Borrowers shall be entitled,
     to the extent they are required to do so by law, to deduct or withhold
     income or similar taxes imposed by the United States (or any political
     subdivision or taxing authority thereof or therein) from interest,
     fees or other amounts payable hereunder for the account of any Bank
     which is not a United States person (as such term is defined in Sec-
     tion 7701(a)(30) of the Code) for U.S. Federal income tax purposes to
     the extent that such Bank has not provided to the Borrowers U.S.
     Internal Revenue Service Forms that establish a complete exemption<PAGE>


     from such deduction or withholding and (y)  the Borrowers shall not be
     obligated pursuant to Section 4.04(a) hereof to gross-up payments to
     be made to a Bank in respect of income or similar taxes imposed by the
     United States if (I) such Bank has not provided to the Borrowers the
     Internal Revenue Service Forms required to be provided to the
     Borrowers pursuant to this Section 4.04(b) or (II) in the case of a
     payment, other than interest, to a Bank described in clause (ii)
     above, to the extent that such forms do not establish a complete
     exemption from with-holding of such taxes.  Notwithstanding anything
     to the contrary contained in the preceding sentence or elsewhere in
     this Section 4.04 and except as set forth in Section 13.04(b), the
     Borrowers agree to pay additional amounts and to indemnify each Bank
     in the manner set forth in Section 4.04(a) (without regard to the
     identity of the jurisdiction requiring the deduction or withholding)
     in respect of any amounts deducted or withheld by it as described in
     the immediately preceding sentence as a result of any changes after
     the Effective Date in any applicable law, treaty, governmental rule,
     regulation, guideline or order, or in the interpretation thereof,
     relating to the deducting or withholding of income or similar Taxes.

          (c)    The provisions of this Section 4.04 are subject to the
     provisions of Section 13.15 (to the extent applicable).

          SECTION 5.     Conditions Precedent to Initial Credit Events. 
     The obligation of each Bank to make Loans, and the obligation of each
     Issuing Bank to issue Letters of Credit, on the Third Restatement
     Effective Date, is subject at the time of the making of such Loans or
     the issuance of such Letters of Credit to the satisfaction of the
     following conditions:

          5.01     Execution of Agreement; Notes.  On or prior to the Third
     Restatement Effective Date (i) this Agreement shall have been executed
     and delivered as provided in Section 13.10 and (ii) there shall have
     been delivered to the Administrative Agent for the account of each of
     the Banks the appropriate Term Note and/or Revolving Note executed by
     the Borrowers, and to BTCo the Swingline Note executed by the Bor-
     rowers, in each case in the amount, maturity and as otherwise provided
     herein.

          5.02     Fees, etc.  On the Third Restatement Effective Date, all
     costs, fees and expenses (including, without limitation, legal fees
     and expenses) payable to the Agents and the Banks shall have been paid
     to the extent then due.

          5.03     Opinions of Counsel.  On the Third Restatement Effective
     Date, the Administrative Agent shall have received (i) from the
     General Counsel to Furniture Brands and its Restricted Subsidiaries,
     an opinion addressed to the Agents and each of the Banks and dated the
     Third Restatement Effective Date covering the matters set forth in
     Exhibit E-1 and (ii) from Bryan Cave LLP, special counsel to Furniture
     Brands and its Restricted Subsidiaries, an opinion addressed to the
     Agents and each of the Banks and dated the Third Restatement Effective
     Date covering the matters set forth in Exhibit E-2.<PAGE>



          5.04     Corporate Documents; Proceedings; etc.  (a)    On the
     Third Restatement Effective Date, the Administrative Agent shall have
     received bring-down certificates of all Credit Parties (x) certifying
     that there were no changes, or providing the text of any changes, to
     the Certificate of Incorporation and By-Laws of such Credit Parties as
     delivered pursuant to Section 5.04 of the Original Credit Agreement,
     Section 5.04 of the First Restated Credit Agreement or Section 5.04 of
     the Existing Credit Agreement, as the case may be and (y) to the
     effect that each such Credit Party is in good standing in its
     respective state of incorporation and in those states where each such
     Credit Party conducts business.  

          (b)    All corporate and legal proceedings and all instruments
     and agreements in connection with the transactions contemplated by
     this Agreement and the other Documents shall be reasonably
     satisfactory in form and substance to the Administrative Agent and the
     Administrative Agent shall have received all information and copies of
     all documents and papers, including records of corporate proceedings,
     governmental approvals, good standing certificates and bring-down
     telegrams, if any, which the Administrative Agent reasonably may have
     requested in connection therewith, such documents and papers where
     appropriate to be certified by proper corporate or governmental
     authorities.

          5.05     Shareholders' Agreements; Collective Bargaining Agree-
     ments; Permitted Debt Agreements; Tax Sharing Agreements.  On or prior
     to the Third Restatement Effective Date, the Administrative Agent
     shall have received (i) a certification from an Authorized
     Representative of Furniture Brands that all agreements and plans
     referenced in Section 5.05(a) of the Original Credit Agreement,
     Section 5.05(a) of the First Restated Credit Agreement and Section
     5.05(a) of the Existing Credit Agreement, as the case may be,
     previously delivered to the Administrative Agent by each Credit Party,
     remain in full force and effect (or specifying which of such
     agreements and plans do not remain in full force and effect) and (ii)
     any amendments thereto or additional such agreements.

          5.06     Solvency; Environmental Analyses; Insurance Matters.  On
     or prior to the Third Restatement Effective Date, the Borrowers shall
     cause to be delivered to the Administrative Agent (i)  a solvency
     certificate from the Chief Financial Officer of Furniture Brands, in
     the form of Exhibit F hereto, setting forth his conclusions that,
     after giving effect to the Transaction and the incurrence of all the
     financings contemplated herein, Furniture Brands and its Subsidiaries
     (on a consolidated basis), is not insolvent, and has not been rendered
     insolvent by the Indebtedness in connection therewith, will not be
     left with unreasonably small capital with which to engage in its
     and/or their businesses and will not have incurred debts beyond its
     and/or their ability to pay such debts as they mature, (ii) such 
     environmental updates as may have been requested by the Administrative
     Agent, the results of which will be in scope, form and substance
     acceptable to the Agents, and (iii)  evidence of insurance complying
     with the requirements of Section 8.03 for the business and properties
     of Furniture Brands and its Restricted Subsidiaries, in scope, form<PAGE>



     and substance reasonably satisfactory to the Agents and naming the
     Collateral Agent as an additional insured and/or loss payee, and stat-
     ing that such insurance shall not be cancelled or revised without 30
     days' prior written notice by the insurer to the Administrative Agent.

          5.07     Subsidiary Guaranty.  On or prior to the Third
     Restatement Effective Date, each Subsidiary Guarantor shall have duly
     authorized, executed and delivered the Third Amended and Restated
     Subsidiary Guaranty in the form of Exhibit G hereto (as modified,
     supplemented or amended from time to time, the "Subsidiary Guaranty").

          5.08     Pledge Agreement.  On or prior to the Third Restatement
     Effective Date, each Credit Party shall have duly authorized, executed
     and delivered the Third Amended and Restated Pledge Agreement in the
     form of Exhibit H (as modified, supplemented or amended from time to
     time, the "Pledge Agreement") and shall have delivered to the Collat-
     eral Agent, as Pledgee, all the Pledged Securities referred to therein
     then owned by such Credit Party, (x) endorsed in blank in the case of
     promissory notes constituting Pledged Securities and (y) together with
     executed and undated stock powers, in the case of capital stock
     constituting Pledged Securities.

          5.09     Security Agreement.  On or prior to the Third
     Restatement Effective Date, each Credit Party shall have duly
     authorized, executed and delivered the Third Amended and Restated
     Security Agreement in the form of Exhibit I (as modified, supplemented
     or amended from time to time, the "Security Agreement") covering all
     of such Credit Party's present and future Security Agreement Collat-
     eral, together with:

          (a)    proper Financing Statements or amendments thereto (Form
     UCC-1 or UCC-3, respectively) fully executed for filing under the UCC
     or other appropriate filing offices of each jurisdiction as may be
     necessary or, in the reasonable opinion of the Collateral Agent,
     desirable to perfect (or maintain the perfection of) the security
     interests purported to be created (or maintained) by the Security
     Agreement and evidence satisfactory to the Collateral Agent that such
     Financing Statements shall be filed prior to any UCC-1 Financing
     Statements filed pursuant to the Receivables Facility;

          (b)    certified copies of Requests for Information or Copies
     (Form UCC-11), or equivalent reports, listing all effective financing
     statements that name any Credit Party as debtor and that are filed in
     the jurisdictions referred to in clause (a) above, together with
     copies of such other financing statements (none of which shall cover
     the Collateral except to the extent evidencing Permitted Liens or in
     respect of which the Collateral Agent shall have received termination
     statements (Form UCC-3) or such other termination statements as shall
     be required by local law) fully executed for filing;

          (c)    evidence of the completion of all other recordings and
     filings of, or with respect to, the Security Agreement as may be
     necessary or, in the reasonable opinion of the Collateral Agent,
     desirable to perfect (or maintain the perfection of) the security<PAGE>


     interests intended to be created (or maintained) by the Security
     Agreement;

          (d)    lockbox agreements and other agreements from deposit banks
     utilized pursuant to the Cash Management System, recognizing the
     security interests granted pursuant thereto and directing payments
     from deposit accounts to be made to the Concentration Account; and

          (e)    evidence that all other actions necessary or, in the
     reasonable opinion of the Collateral Agent, desirable to perfect and
     protect (or maintain the perfection of) the security interests
     purported to be created (or maintained) by the Security Agreement have
     been taken.

          5.10     Mortgage Amendments; etc.  On or prior to the Third
     Restatement Effective Date, the Collateral Agent shall have received:

          (i)  fully executed counterparts of amendments (the "Mortgage
     Amendments"), in form and substance satisfactory to the Administrative
     Agent and the Required Banks, to each of the Existing Mortgages,
     together with evidence that counterparts of each of the Mortgage
     Amendments have been delivered to the title company insuring the Lien
     of the Existing Mortgages for recording in all places to the extent
     necessary or desirable, in the judgment of the Collateral Agent,
     effectively to maintain a valid and enforceable first priority mort-
     gage lien (subject to Permitted Encumbrances relating thereto) on the
     Existing Mortgaged Properties in favor of the Collateral Agent (or
     such other trustee as may be required or desired under local law) for
     the benefit of the Secured Creditors; and

          (ii)  endorsements reasonably satisfactory to the Collateral
     Agent to each Existing Mortgage Policy assuring the Collateral Agent
     that each Existing Mortgage is a valid and enforceable first priority
     mortgage lien on the respective Existing Mortgaged Properties, free
     and clear of all defects and encumbrances except Permitted Encum-
     brances.

          5.11     Consent Letter.  On or prior to the Third Restatement
     Effective Date, the Administrative Agent shall have received a letter
     from CT Corporation System, presently located at 1633 Broadway, New
     York, New York 10019, substantially in the form of Exhibit J, indi-
     cating its consent to its appointment by each Credit Party as its
     agent to receive service of process as specified in Section 13.08 or
     in the respective Security Document.

          5.12     Adverse Change; Governmental Approvals; etc.  (a)  On
     the Third Restatement Effective Date, nothing shall have occurred (and
     the Banks shall have become aware of no facts, conditions or other
     information not previously known) which the Agents reasonably believe
     could have a material adverse effect on the rights or remedies of the
     Administrative Agent or the Banks, or on the ability of the Credit
     Parties to perform their respective obligations to the Administrative
     Agent and the Banks or which the Agents reasonably believe would have
     a material adverse effect on the operations, property, assets,<PAGE>


     liabilities, condition (financial or otherwise) or prospects of the
     Borrowers taken as a whole or the Borrowers and their Restricted
     Subsidiaries taken as a whole.

          (b)    On the Third Restatement Effective Date, there shall not
     have occurred and be continuing material adverse change to the
     syndication market for credit facilities similar in nature to this
     Agreement and there shall not have occurred and be continuing a
     material disruption of or a material adverse change in financial,
     banking or capital markets that would have a material adverse effect
     on the syndication, in each case as determined by the Administrative
     Agent in its sole discretion.

          (c)    On or prior to the Third Restatement Effective Date, all
     necessary and material governmental (domestic and foreign) and third
     party approvals in connection with the Transaction shall have been
     obtained and remain in effect, and all applicable waiting periods
     shall have expired without any action being taken by any competent
     authority which restrains, prevents or imposes materially adverse
     conditions upon the consummation of the Transaction.  Additionally,
     there shall not exist any judgment, order, injunction or other
     restraint issued or filed or a hearing seeking injunctive relief or
     other restraint pending or notified prohibiting or imposing materially
     adverse conditions upon the making of any Loan, issuance of any Letter
     of Credit or the consummation of the Transaction.

          5.13     Litigation.  On the Third Restatement Effective Date, no
     litigation by any entity (private or governmental) shall be pending or
     threatened with respect to the Transaction or any documentation
     executed in connection therewith (including any Credit Document), or
     which the Administrative Agent or the Required Banks shall reasonably
     believe could have a materially adverse effect on the Transaction or
     the business, property, assets, nature of assets, liabilities, con-
     dition (financial or otherwise) or prospects of the Borrowers taken as
     a whole or the Borrowers and their Restricted Subsidiaries taken as a
     whole.

          5.14     Pro Forma Balance Sheet; Financial Statements;
     Projections.  (a) On or prior to the Third Restatement Effective Date,
     there shall have been delivered to the Administrative Agent an un-
     audited pro forma consolidated and consolidating balance sheet of
     Furniture Brands and its Subsidiaries as of March 31, 1997 and after
     giving effect to the Transaction and prepared in accordance with
     generally accepted accounting principles, together with (x) historical
     consolidated and consolidating statements of income and consolidated
     statements of cash flow of Furniture Brands and its Subsidiaries, in
     each case, for the three-month period ended March 31, 1997 and (y)
     historical consolidated and consolidating statements of income and
     consolidated statements of cash flow of Furniture Brands and its
     Subsidiaries for the five Fiscal Years ended December 31, 1996, which
     historical statements shall (i) be audited, in the case of the income
     and cash flow statements for the three most recent Fiscal Years and in
     the case of the balance sheets for the two most recent Fiscal Years
     and (ii) be certified by an officer of either Furniture Brands or the<PAGE>


     other Borrowers, as the case may be, in the case of the five most
     recent Fiscal Years.

          (b)    On or prior to the Third Restatement Effective Date there
     shall have been delivered to the Administrative Agent "management
     case" projected financial statements of Furniture Brands and its
     Restricted Subsidiaries after giving effect to the Transaction, as set
     forth in the Confidential Memorandum dated June 1997, for the period
     from January 1, 1997 to December 31, 2001 (the "Projections"), which
     Projections (x)  shall reflect the forecasted financial conditions and
     income and expenses of Furniture Brands and its Restricted
     Subsidiaries after giving effect to the Transaction and the related
     financing thereof and the other transactions contemplated hereby and
     (y)  shall be satisfactory in form and substance to the Administrative
     Agent.

          5.15     Refinancing; Existing Credit Agreement; etc.  On the
     Third Restatement Effective Date, (i) unless otherwise agreed by the
     Administrative Agent and Furniture Brands, each Existing Bank shall
     have surrendered to the Administrative Agent for cancellation the
     promissory notes issued to it pursuant to the Existing Credit
     Agreement in respect of its Existing Revolving Loans and Existing
     Swingline Loans, (ii) all Existing Swingline Loans shall be repaid in
     full and all outstanding Existing Revolving Loans shall continue to be
     outstanding on, and immediately after giving effect to, the Third
     Restatement Effective Date, (iii) each Existing Bank shall have
     received payment in full of all amounts then due and owing to it under
     the Existing Credit Agreement, (iv) the Borrowers shall have paid all
     accrued and unpaid interest and fees owing under the Existing Credit
     Agreement through the Third Restatement Effective Date, and (v) the
     Administrative Agent shall have received evidence in form, scope and
     substance satisfactory to it that the matters set forth in this
     Section 5.15 have been satisfied on such date.

          5.16     Consummation of the Stock Repurchase.  (a)  On or prior
     to the Third Restatement Effective Date, there shall have been
     delivered to the Banks true and correct copies of the Stock Repurchase
     Agreement, and all terms of the Stock Repurchase Agreement and the
     other Stock Repurchase Documents shall be satisfactory in form and
     substance to the Administrative Agent and the Required Banks.  The
     Stock Repurchase Agreement (and the transactions contemplated thereby)
     shall have been duly approved by the board of directors and (if
     required by applicable law) the stockholders of Furniture Brands, and
     all Stock Repurchase Documents shall have been duly executed and
     delivered by the parties thereto and shall be in full force and
     effect.  Each of the conditions precedent to the obligation of the
     parties to consummate the Stock Repurchase as set forth in the Stock
     Repurchase Documents shall have been satisfied, or waived, all to the
     satisfaction of the Administrative Agent, and concurrently with the
     making of the Term Loans on the Third Restatement Effective Date, the
     Stock Repurchase shall have been consummated in accordance with the
     Stock Repurchase Documents delivered to and as approved by the
     Administrative Agent and the Required Lenders and all applicable laws,
     rules and regulations.<PAGE>


          (b)    On or prior to the Third Restatement Effective Date the
     Borrower shall have purchased 10,842,299 shares of Furniture Brands
     Common Stock and warrants to purchase 290,821 shares of Furniture
     Brands Common Stock for an aggregate purchase price of $173,300,000 in
     accordance with the terms and conditions of the Stock Repurchase
     Agreement and the other Stock Repurchase Documents delivered to and as
     approved by the Administrative Agent and the Required Lenders executed
     in connection therewith (collectively, the "Stock Repurchase").

          SECTION 6.     Conditions Precedent to All Credit Events.  The
     obligation of each Bank to make Loans (including Loans made on the
     Third Restatement Effective Date but excluding Mandatory Borrowings
     made thereafter, which shall be made as provided in Section 1.01(d)),
     and the obligation of an Issuing Bank to issue any Letter of Credit,
     is subject, at the time of each such Credit Event (except as
     hereinafter indicated), to the satisfaction of the following
     conditions:

          6.01     No Default; Representations and Warranties.  At the time
     of each such Credit Event and also after giving effect thereto (i)
     there shall exist no Default or Event of Default and (ii) all
     representations and warranties contained herein or in any other Credit
     Document shall be true and correct in all material respects with the
     same effect as though such representations and warranties had been
     made on the date of the making of such Credit Event (it being under-
     stood and agreed that any representation or warranty which by its
     terms is made as of a specified date shall be required to be true and
     correct in all material respects only as of such specified date).

          6.02     Notice of Borrowing; Letter of Credit Request.  (a) 
     Prior to the making of each Loan (excluding Swingline Loans), the
     Administrative Agent shall have received the notice required by
     Section 1.03(a).  Prior to the making of each Swingline Loan, BTCo
     shall have received the notice required by Section 1.03(b)(i).

          (b)    Prior to the issuance of each Letter of Credit, the
     Administrative Agent and the respective Issuing Bank shall have
     received a Letter of Credit Request meeting the requirements of
     Section 2.03.

          The acceptance of the benefit of each Credit Event shall
     constitute a representation and warranty by the Borrowers to the
     Agents and each of the Banks that all the conditions specified in
     Section 5 and in this Section 6 and applicable to such Credit Event
     exist as of that time (except to the extent that any of the conditions
     specified in Section 5 are required to be satisfactory to or
     determined by any Bank, the Required Banks and/or the Administrative
     Agent).  All of the Notes, certificates, legal opinions and other
     documents and papers referred to in Section 5 and in this Section  6,
     unless otherwise specified, shall be delivered to the Administrative
     Agent at the Notice Office for the account of each of the Banks and,
     except for the Notes, in sufficient counterparts or copies for each of
     the Banks and shall be in form and substance reasonably satisfactory
     to the Banks.<PAGE>


          SECTION 7.     Representations, Warranties and Agreements.  In
     order to induce the Banks to enter into this Agreement and to make the
     Loans, and issue (or participate in) the Letters of Credit as provided
     herein, each of the Borrowers makes the following representations,
     warranties and agreements, in each case after giving effect to the
     Transaction consummated on the Third Restatement Effective Date, all
     of which shall survive the execution and delivery of this Agreement
     and the Notes and the making of the Loans and issuance of the Letters
     of Credit, with the occurrence of each Credit Event on or after the
     Third Restatement Effective Date being deemed to constitute a repre-
     sentation and warranty that the matters specified in this Section 7
     are true and correct in all material respects on and as of the Third
     Restatement Effective Date and on the date of each such Credit Event
     (it being understood and agreed that any representation or warranty
     which by its terms is made as of a specified date shall be required to
     be true and correct in all material respects only as of such specified
     date).

          7.01     Corporate Status.  Furniture Brands and each of its
     Restricted Subsidiaries (i) is a duly organized and validly existing
     corporation in good standing under the laws of the jurisdiction of its
     incorporation, (ii) has the corporate power and authority to own its
     property and assets and to transact the business in which it is
     engaged and presently proposes to engage and (iii) is duly qualified
     and is authorized to do business and is in good standing in each
     jurisdiction where the conduct of its business requires such qualifi-
     cations, except for failures to be so qualified which, individually or
     in the aggregate, could not reasonably be expected to have a Material
     Adverse Effect.

          7.02     Corporate Power and Authority.  Each Credit Party has
     the corporate power and authority to execute, deliver and perform the
     terms and provisions of each of the Documents to which it is party and
     has taken all necessary corporate action to authorize the execution,
     delivery and performance by it of each of such Documents.  Each Credit
     Party has duly executed and delivered each of the Documents to which
     it is party, and each of such Documents constitutes the legal, valid
     and binding obligation of such Credit Party enforceable in accordance
     with its terms, except to the extent that the enforceability thereof
     may be limited by applicable bankruptcy, insolvency, reorganization,
     moratorium or other similar laws generally affecting creditors' rights
     and by equitable principles (regardless of whether enforcement is
     sought in equity or at law).

          7.03     No Violation.  Neither the execution, delivery or
     performance by any Credit Party of the Documents to which it is a
     party, nor compliance by it with the terms and provisions thereof, (i)
     will contravene any provision of any applicable law, statute, rule or
     regulation or any applicable order, writ, injunction or decree of any
     court or governmental instrumentality, (ii) will conflict with or
     result in any breach of any of the terms, covenants, conditions or
     provisions of, or constitute a default under, or result in the crea-
     tion or imposition of (or the obligation to create or impose) any Lien
     (except pursuant to the Security Documents) upon any of the material<PAGE>

     properties or assets of Furniture Brands or any of its Restricted
     Subsidiaries pursuant to the terms of any indenture, mortgage, deed of
     trust, credit agreement or loan agreement, or any other material
     agreement, contract or instrument, to which Furniture Brands or any of
     its Restricted Subsidiaries is a party or by which it or any of its
     property or assets is bound or to which it may be subject or (iii)
     will violate any provision of the Certificate of Incorporation or By-
     Laws of Furniture Brands or any of its Restricted Subsidiaries.

          7.04     Governmental Approvals.  No order, consent, approval,
     license, authorization or validation of, or filing, recording or
     registration with (except (i) as have been obtained or made prior to
     the Third Restatement Effective Date and (ii) other than UCC-1 or UCC-
     3 filings and recordings of Assignments of Security Interests in U.S.
     Patents and Trademarks, in each case, performed pursuant to Section
     5.09, which filings and/or recordings, as the case may be, if this
     representation is being made on a date which is more than ten days
     after the Third Restatement Effective Date, have been made), or exemp-
     tion by, any governmental or public body or authority, or any sub-
     division thereof, is required to authorize, or is required in
     connection with, (i) the execution, delivery and performance of any
     Document or (ii) the legality, validity, binding effect or enforce-
     ability of any such Document.

          7.05     Financial Statements; Financial Condition; Undisclosed
     Liabilities; Projections; etc.  (a) (i)    The consolidated and
     consolidating statements of financial condition of Furniture Brands
     and its Subsidiaries at December 31, 1996 and the related consolidated
     and consolidating statements of income and consolidated statements of
     cash flow and changes in shareholders' equity of Furniture Brands and
     its Subsidiaries for the Fiscal Year ended on such date, and furnished
     to the Banks prior to the Third Restatement Effective Date and (ii)
     the consolidated and consolidating statements of financial condition
     of Furniture Brands and its Subsidiaries as of the end of each fiscal
     quarter of Furniture Brands ended after December 31, 1996, and the
     related consolidated and consolidating statements of income and
     consolidated statements of cash flow of Furniture Brands and its
     Subsidiaries for such quarterly periods, and furnished to the Banks
     prior to the Third Restatement Effective Date, in each case, present
     fairly the financial condition of Furniture Brands and its Subsi-
     diaries (or Furniture Brands and its Restricted Subsidiaries, as the
     case may be) at the date of such statements of financial condition and
     the results of the operations of Furniture Brands and its Subsidiaries
     (or Furniture Brands and its Restricted Subsidiaries as the case may
     be) for the respective Fiscal Year or fiscal quarter, as the case may
     be (subject, in the case of unaudited financial statements, to normal
     year-end adjustments).  All such financial statements have been pre-
     pared in accordance with generally accepted accounting principles and
     practices consistently applied, except, in the case of the quarterly
     financial statements, for the omission of footnotes, and certain
     reclassifications and ordinary end of period adjustments and accruals
     (all of which are of a recurring nature and none of which
     individually, or in the aggregate, would be material).  <PAGE>



          (b)    Since December 31, 1996, there has been no material
     adverse change in the business, operations, property, assets, liabil-
     ities, condition (financial or otherwise) or prospects of the
     Borrowers taken as a whole or of the Borrowers and their Restricted
     Subsidiaries taken as a whole, it being understood that any
     determination of whether such material adverse change has occurred
     shall take into account, inter alia, (x) any available indemnities and
     (y) the timing and likelihood of payment thereunder.

          (c)    (i)  On and as of the Third Restatement Effective Date,
     after giving effect to the Transaction and to all Indebtedness
     (including the Loans) being incurred or assumed and Liens created (or
     maintained) by the Credit Parties in connection therewith (assuming
     the full utilization of all Revolving Loan Commitments on the Third
     Restatement Effective Date), (a) the sum of the assets, at a fair
     valuation, of each Borrower, individually, each Borrower and its
     Subsidiaries, (each of the foregoing, as to itself or as to itself and
     its Subsidiaries, a "Solvent Entity") will exceed its or their debts;
     (b) each Solvent Entity has not incurred and does not intend to incur,
     and does not believe that it will incur, debts beyond its ability to
     pay such debts as such debts mature; and (c) each Solvent Entity will
     have sufficient capital with which to conduct its businesses.  For
     purposes of this Section 7.05(c), "debt" means any liability on a
     claim, and "claim" means (i) right to payment, whether or not such a
     right is reduced to judgment, liquidated, unliquidated, fixed, contin-
     gent, matured, unmatured, disputed, undisputed, legal, equitable,
     secured, or unsecured or (ii) right to an equitable remedy for breach
     of performance if such breach gives rise to a right to payment, whe-
     ther or not such right to an equitable remedy is reduced to judgment,
     fixed, contingent, matured, unmatured, disputed, undisputed, secured
     or unsecured.

          (d)    Except as fully disclosed in the financial statements
     delivered pursuant to Section 7.05(a) or (b) or in Schedule IV, there
     were as of the Third Restatement Effective Date no liabilities or
     obligations with respect to Furniture Brands or any of its
     Subsidiaries of any nature whatsoever (whether absolute, accrued,
     contingent or otherwise and whether or not due) which, either in-
     dividually or in aggregate, is reasonably likely to have a Material
     Adverse Effect.  As of the Third Restatement Effective Date, none of
     the Borrowers knows of any basis for the assertion against it of any
     liability or obligation of any nature whatsoever that is not fully
     disclosed in the financial statements delivered pursuant to Section
     7.05(a) or (b) or as disclosed in Schedule IV hereto which, either in-
     dividually or in the aggregate, could reasonably be expected to have a
     Material Adverse Effect.

          (e)    On and as of the Third Restatement Effective Date, the
     Projections previously delivered to the Administrative Agent and the
     Banks have been prepared on a basis consistent with the financial
     statements referred to in Section 7.05(a) (other than as set forth or
     presented in such Projections), and there are no statements or conclu-
     sions in any of the Projections which are based upon or include
     information known to the Borrowers to be misleading in any material<PAGE>

     respect or which fail to take into account material information
     regarding the matters reported therein.  On the Third Restatement
     Effective Date, the Borrowers believed that the Projections were
     reasonable and attainable.

          7.06     Litigation.  There are no actions, suits or proceedings
     pending or, to the best knowledge of the Borrowers, threatened (i)
     with respect to any Document or (ii) that could reasonably be expected
     to have a Material Adverse Effect.

          7.07     True and Complete Disclosure.  All factual information
     (taken as a whole) furnished by or on behalf of Furniture Brands or
     any of its Subsidiaries in writing to the Administrative Agent or any
     Bank (including, without limitation, all factual information contained
     in the Documents) for purposes of or in connection with this
     Agreement, the other Credit Documents or any transaction contemplated
     herein or therein is, and all other such factual information (taken as
     a whole) hereafter furnished by or on behalf of Furniture Brands or
     any of its Subsidiaries in writing to the Administrative Agent or any
     Bank will be, true and accurate in all material respects on the date
     as of which such information is dated or certified and not incomplete
     by omitting to state any fact necessary to make such information
     (taken as a whole) not misleading in any material respect at such time
     in light of the circumstances under which such information was
     provided.

          7.08     Use of Proceeds; Margin Regulations.  (a)  All proceeds
     of the Term Loans shall be used by the Borrowers to (x) consummate the
     Transaction and (y) pay fees and expenses related thereto.  

          (b)    All proceeds of the Revolving Loans and  Swingline Loans
     shall be used for the Borrowers' and their Subsidiaries' ongoing
     general corporate purposes; provided that not more than $348,000,000
     in aggregate principal amount of Revolving Loans and Swingline Loans
     shall be outstanding on the Third Restatement Effective Date.

          (c)    The value of the Margin Stock at any time owned by the
     Borrowers and their respective Subsidiaries does not, and will not,
     exceed 25% of the value of the assets of the Borrowers and their
     Subsidiaries taken as a whole.  Neither the making of any Loan nor the
     use of the proceeds thereof nor the occurrence of any other Credit
     Event will violate or be inconsistent with the provisions of Regula-
     tion G, T, U or X of the Board of Governors of the Federal Reserve
     System.

          7.09     Tax Returns and Payments.    (a)    Each of Furniture
     Brands and its Restricted Subsidiaries have timely filed or caused to
     be timely filed, on the due dates thereof or within applicable grace
     periods (inclusive of any permitted extensions), with the appropriate
     taxing authority, all Federal, state and other material returns,
     statements, forms and reports for taxes (the "Returns") required to be
     filed by or with respect to the income, properties or operations of
     Furniture Brands and its Restricted Subsidiaries.  The Returns accur-
     ately reflect in all material respects all liability for taxes of<PAGE>


     Furniture Brands and its Restricted Subsidiaries for the periods
     covered thereby other than Taxes for which adequate reserves have been
     established in accordance with generally accepted accounting
     principles.  Each of Furniture Brands and its Restricted Subsidiaries
     have paid all material taxes payable by them other than taxes which
     are not delinquent, and other than those contested in good faith and
     for which adequate reserves have been established in accordance with
     generally accepted accounting principles.  Except as disclosed in the
     financial statements referred to in Section  7.05(a) or (b) and except
     as disclosed on Schedule V, there is, as of the Third Restatement Ef-
     fective Date, no material action, suit, proceeding, investigation,
     audit, or claim now pending or, to the best knowledge of the
     Borrowers, threatened by any authority regarding any taxes relating to
     Furniture Brands or its Restricted Subsidiaries.  As of the Third
     Restatement Effective Date, except as set forth on Schedule V, none of
     Furniture Brands or its Restricted Subsidiaries has entered into an
     agreement or waiver or been requested to enter into an agreement or
     waiver extending any statute of limitations relating to the payment or
     collection of taxes of Furniture Brands or its Restricted Subsi-
     diaries, or is aware of any circumstances that would cause the taxable
     years or other taxable periods of Furniture Brands or its Restricted
     Subsidiaries not to be subject to the normally applicable statute of
     limitations.  As of the Third Restatement Effective Date, none of
     Furniture Brands or its Restricted Subsidiaries has provided, with
     respect to themselves or property held by them, any consent under
     Section 341 of the Code.  Except for amounts specifically set forth in
     Schedule V, none of Furniture Brands or its Restricted Subsidiaries
     has incurred, or will incur, any material tax liability in connection
     with the Transaction and the other transactions contemplated hereby. 
     Additionally, all of the foregoing representations are true and
     correct as to all Unrestricted Subsidiaries of Furniture Brands (to
     the same extent they were Restricted Subsidiaries) except to the
     extent any and all failures to be true and correct could not
     reasonably be expected to have a Material Adverse Effect. 
     Notwithstanding anything to the contrary contained above, to the
     extent the foregoing representations contained in this Section 7.09
     relate to Thomasville and its Subsidiaries for periods prior to the
     First Restatement Effective Date, such representations shall be deemed
     untrue only if the aggregate effect of all such failures and
     noncompliances of the types described above with respect to
     Thomasville and its Subsidiaries for periods prior to the First
     Restatement Effective Date would reasonably be expected to have a
     Material Adverse Effect.

          (b)    Furniture Brands' tax basis in the shares of capital stock
     of (x) Converse spun-off in connection with the Converse Disposition
     was an amount not less than $165,000,000 at the time of the
     consummation thereof and (y) Florsheim spun-off in connection with the
     Florsheim Disposition was an amount not less than $50,000,000.

          7.10     Compliance with ERISA.  (a)    Each Plan is in sub-
     stantial compliance with ERISA and the Code; no Reportable Event has
     occurred with respect to a Plan; to the best knowledge of the
     Borrowers, no Multiemployer Plan is insolvent or in reorganization; no<PAGE>



     Plan has an Unfunded Current Liability; no Plan, and to the best
     knowledge of the Borrowers, no Spunoff Plan, has an accumulated or
     waived funding deficiency, or has applied for an extension of any
     amortization period within the meaning of Section 412 of the Code; all
     contributions required to be made by the Borrowers, any of their
     respective Restricted Subsidiaries or any ERISA Affiliate with respect
     to a Plan, a Spunoff Plan, a Multiemployer Plan, and/or a Foreign
     Pension Plan have been timely made; none of the Borrowers or any of
     their respective Restricted Subsidiaries nor any ERISA Affiliate has
     incurred any liability to or on account of a Plan, a Spunoff Plan,
     and/or a Multiemployer Plan pursuant to Section 409, 502(i), 502(1),
     515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
     401(a)(29), 4971, 4975 or 4980 of the Code or reasonably expects to
     incur any liability (including any indirect, contingent or secondary
     liability) under any of the foregoing Sections with respect to any
     Plan, a Spunoff Plan, and/or a Multiemployer Plan; no proceedings have
     been instituted to terminate or appoint a trustee to administer any
     Plan and, to the best knowledge of the Borrowers, any Spunoff Plan; no
     condition exists which presents a risk to the Borrowers or any of
     their respective Restricted Subsidiaries or any ERISA Affiliate of
     incurring a liability to or on account of a Plan, or to the best
     knowledge of the Borrowers a Spunoff Plan, and/or a Multiemployer Plan
     pursuant to the foregoing provisions of ERISA and the Code; using
     actuarial assumptions and computation methods consistent with Part 1
     of subtitle E of Title IV of ERISA, the aggregate liabilities of the
     Borrowers, their respective Restricted Subsidiaries and their ERISA
     Affiliates to all Multiemployer Plans in the event of a complete with-
     drawal therefrom, as of the close of the most recent fiscal year of
     each such Multiemployer Plan ended prior to the date of the most
     recent Credit Event, would not exceed $50,000; no lien imposed under
     the Code or ERISA on the assets of the Borrowers or any of their
     respective Restricted Subsidiaries or any ERISA Affiliate exists on
     account of any Plan, a Spunoff Plan, and/or a Multiemployer Plan or is
     likely to arise on account of any Plan, or to the best knowledge of
     the Borrowers, is likely to arise on account of any Spunoff Plan
     and/or Multiemployer Plan; and the Borrowers and their respective
     Restricted Subsidiaries do not maintain or contribute to any employee
     welfare benefit plan (as defined in Section 3(1) of ERISA) which
     provides benefits to retired employees or other former employees
     (other than as required by Section 601 of ERISA) or any employee pen-
     sion benefit plan (as defined in Section 3(2) of ERISA) the
     obligations with respect to which could reasonably be expected to have
     a Material Adverse Effect.  For purposes of this Section 7.10(a) "to
     the best knowledge of the Borrowers" with respect to any Spunoff Plan
     means (x) actual knowledge or (y) knowledge acquired through written
     or oral notice provided directly to a Borrower by any governmental
     agency, court, or Spunoff Plan administrator.

          (b)    Each Foreign Pension Plan has been maintained in
     substantial compliance with its terms and with the requirements of any
     and all applicable laws, statutes, rules, regulations and orders and
     has been maintained, where required, in good standing with applicable
     regulatory authorities.  None of the Borrowers nor any of their
     respective Restricted Subsidiaries has incurred any obligation in<PAGE>



     connection with the termination of or withdrawal from any Foreign
     Pension Plan.  The present value of the accrued benefit liabilities
     (whether or not vested) under each Foreign Pension Plan, determined as
     of the end of each Borrower's most recently  ended fiscal year on the
     basis of actuarial assumptions, each of which is reasonable, did not
     exceed the current value of the assets of such Foreign Pension Plan
     allocable to such benefit liabilities.

          (c)    Notwithstanding anything to the contrary in this Section
     7.10, the representations made in this Section 7.10 shall only be
     untrue if the aggregate effect of all failures and noncompliances of
     the types described above could reasonably be expected to have a
     Material Adverse Effect.

          7.11     The Security Documents.  (a)    The provisions of the
     Security Agreement are effective to create (or maintain) in favor of
     the Collateral Agent for the benefit of the Secured Creditors a legal,
     valid and enforceable security interest in all right, title and
     interest of the Credit Parties in the Security Agreement Collateral
     described therein, and the Security Agreement, upon the filing of Form
     UCC-1 or UCC-3 financing statements or the appropriate equivalent
     (which filings, if this representation is being made more than 10 days
     after the Third Restatement Effective Date, have been made), create
     (or maintain) a fully perfected first lien on, and security interest
     in, all right, title and interest in all of the Security Agreement
     Collateral described therein, to the extent that a security interest
     may be perfected therein by filing a financing statement under the
     UCC, subject to no other Liens other than Permitted Liens.  The
     recordation of the Assignment of Security Interest in U.S. Patents and
     Trademarks in the form attached to the Security Agreement in the
     United States Patent and Trademark Office together with filings on
     Form UCC-1 or UCC-3 made pursuant to the Security Agreement will be
     effective, under applicable law, to perfect the security interest
     granted to the Collateral Agent in the trademarks and patents covered
     by the Security Agreement.  Each of the Credit Parties party to the
     Security Agreement has good and valid title to all Security Agreement
     Collateral owned by such Credit Party described therein, free and
     clear of all Liens except those described above in this clause (a).

          (b)    The security interests created in favor of the Collateral
     Agent, as Pledgee, for the benefit of the Secured Creditors under the
     Pledge Agreement constitute first priority perfected security
     interests in the Pledged Securities described in the Pledge Agreement,
     subject to no security interests of any other Person.  No filings or
     recordings are required in order to perfect (or maintain the
     perfection or priority of) the security interests created in the
     Pledged Securities and the proceeds thereof under the Pledge Agree-
     ment.

          (c)    The Mortgages create, as security for the obligations
     purported to be secured thereby, a valid and enforceable perfected
     security interest in and mortgage lien on all of the Mortgaged
     Properties in favor of the Collateral Agent (or such other trustee as
     may be required or desired under local law) for the benefit of the<PAGE>


     Secured Creditors, superior to and prior to the rights of all third
     persons (except that the security interest and mortgage lien created
     in the Mortgaged Properties may be subject to the Permitted
     Encumbrances related thereto) and subject to no other Liens (other
     than Permitted Liens).  Schedule III contains a true and complete list
     of each parcel of Real Property owned or leased by Furniture Brands
     and its Restricted Subsidiaries on the Third Restatement Effective
     Date, and the type of interest therein held by Furniture Brands or
     such Restricted Subsidiary.  Furniture Brands and each of its
     Restricted Subsidiaries have good and indefeasible title to all fee-
     owned Mortgaged Properties and valid leasehold title to all Leaseholds
     material to its business, in each case free and clear of all Liens
     except those described in the first sentence of this subsection (c).

          7.12     Representations and Warranties in Other Documents.  All
     representations and warranties set forth in the Documents other than
     this Agreement were true and correct in all material respects at the
     time as of which such representations and warranties were made (or
     deemed made) and shall be true and correct in all material respects as
     of the Third Restatement Effective Date as if such representations and
     warranties were made on and as of such date, unless stated to relate
     to a specific earlier date, in which case such representations and
     warranties shall be true and correct in all material respects as of
     such earlier date.  Notwithstanding anything to the contrary contained
     above, to the extent that the representations and warranties set forth
     in the Documents other than this Agreement were made by parties other
     than Furniture Brands and its Subsidiaries, such representations and
     warranties shall be deemed untrue only if the aggregate effect of all
     inaccuracies in such representations and warranties would reasonably
     be expected to have a Material Adverse Effect.

          7.13     Properties.  Furniture Brands and each of its Restricted
     Subsidiaries have good and valid title to all material properties
     owned by them, including all property reflected in the balance sheets
     referred to in Sections 7.05(a) and (b) and in the pro forma balance
     sheet referred to in Section 5.14 (except as sold or otherwise
     disposed of since the date of such balance sheet in the ordinary
     course of business or otherwise as permitted hereunder), free and
     clear of all Liens, other than (i) as referred to in the balance sheet
     or in the notes thereto or in the pro forma balance sheet or (ii)
     Permitted Liens otherwise permitted by Section 9.01.

          7.14     Capitalization.  (a)    On the Third Restatement Ef-
     fective Date, the authorized capital stock of Furniture Brands
     consists of 100,000,000 shares of Furniture Brands Common Stock, $1.00
     stated value per share, 61,517,707 shares of which are issued and
     outstanding as of May 31, 1997.  As of the Third Restatement Effective
     Date, Furniture Brands does not have outstanding any securities con-
     vertible into or exchangeable for its capital stock or outstanding any
     rights to subscribe for or to purchase, or any options for the
     purchase of, or any agreement providing for the issuance (contingent
     or otherwise) of, or any calls, commitments or claims of any character
     relating to, its capital stock, in each case other than the options<PAGE>



     outstanding pursuant to the Employee Stock Option Plan and the
     Furniture Brands Warrants.

          (b)    On the Third Restatement Effective Date, the authorized
     capital stock of Broyhill consists of 5,296,178 shares of common
     stock, no par value per share, 100 shares of which are issued and
     outstanding and have been delivered for pledge pursuant to the Pledge
     Agreement.  All such outstanding shares of common stock have been duly
     and validly issued, are fully paid and nonassessable.  As of the Third
     Restatement Effective Date, Broyhill does not have outstanding any
     securities convertible into or exchangeable for its capital stock or
     outstanding any rights to subscribe for or to purchase, or any options
     for the purchase of, or any agreements providing for the issuance
     (contingent or otherwise) of, or any calls, commitments or claims of
     any character relating to, its capital stock.

          (c)    On the Third Restatement Effective Date, the authorized
     capital stock of Lane consists of 1,000 shares of common stock, no par
     value per share, all of which are issued and outstanding and have been
     delivered for pledge pursuant to the Pledge Agreement.  All such
     outstanding shares of common stock have been duly and validly issued,
     are fully paid and nonassessable.  As of the Third Restatement
     Effective Date, Lane does not have outstanding any securities convert-
     ible into or exchangeable for its capital stock or outstanding any
     rights to subscribe for or to purchase, or any options for the
     purchase of, or any agreements providing for the issuance (contingent
     or otherwise) of, or any calls, commitments or claims of any character
     relating to, its capital stock.

          (d)    On the Third Restatement Effective Date, the authorized
     capital stock of Thomasville consists of 50,000,000 shares of common
     stock, $1.00 par value per share, 7,500,000 shares of which are issued
     and outstanding and have been delivered for pledge pursuant to the
     Pledge Agreement.  All such outstanding shares of common stock have
     been duly and validly issued, are fully paid and nonassessable.  As of
     the Third Restatement Effective Date, Thomasville does not have out-
     standing any securities convertible into or exchangeable for its
     capital stock or outstanding any rights to subscribe for or to pur-
     chase, or any options for the purchase of, or any agreements providing
     for the issuance (contingent or otherwise) of, or any calls, commit-
     ments or claims of any character relating to, its capital stock.

          7.15     Subsidiaries.    (a)  On the Third Restatement Effective
     Date,  Furniture Brands has no Subsidiaries other than the other
     Borrowers, their respective Subsidiaries and the Receivables
     Subsidiary (which is owned by Broyhill, Lane, Action and Thomasville).

          (b)    After the Third Restatement Effective Date, Furniture
     Brands will have no Subsidiaries other than (i) those Subsidiaries
     listed on Schedule VI and (ii) new Subsidiaries created in compliance
     with this Agreement.

          7.16     Compliance with Statutes, etc.  Furniture Brands and
     each of its Subsidiaries are in compliance with all applicable<PAGE>


     statutes, regulations and orders of, and all applicable restrictions
     imposed by, all governmental bodies, domestic or foreign, in respect
     of the conduct of their business and the ownership of their property
     (including applicable statutes, regulations, orders and restrictions
     relating to environmental standards and controls), except such
     noncompliances as could not, individually or in the aggregate,
     reasonably be expected to have a Material Adverse Effect.

          7.17     Investment Company Act.  None of Furniture Brands nor
     any of its Subsidiaries is an "investment company" or a company
     "controlled" by an "investment company," within the meaning of the
     Investment Company Act of 1940, as amended.

          7.18     Public Utility Holding Company Act.  None of Furniture
     Brands nor any of its Subsidiaries is a "holding company," or a
     "subsidiary company" of a "holding company," or an "affiliate" of a
     "holding company" or of a "subsidiary company" of a "holding company"
     within the meaning of the Public Utility Holding Company Act of 1935,
     as amended.

          7.19     Environmental Matters.    (a)    Furniture Brands and
     each of its Subsidiaries have complied with all applicable Environ-
     mental Laws and the requirements of any permits issued under such
     Environmental Laws.  There are no pending or, to the best knowledge of
     the Borrowers after due inquiry, threatened Environmental Claims
     against Furniture Brands, or any of its Subsidiaries or any Real
     Property owned or operated by Furniture Brands or any of its
     Subsidiaries.  There are no facts, circumstances, conditions or
     occurrences on any Real Property owned or operated by Furniture Brands
     or any of its Subsidiaries or, to the best knowledge of Furniture
     Brands or the Borrowers after due inquiry, on any property adjoining
     or in the vicinity of any such Real Property that, to the best knowl-
     edge of the Borrowers after due inquiry, could reasonably be expected
     (i) to form the basis of an Environmental Claim against Furniture
     Brands or any of its Subsidiaries or any such Real Property or (ii) to
     cause any such Real Property to be subject to any restrictions on the
     ownership, occupancy, use or transferability of such Real Property by
     Furniture Brands or any of its Subsidiaries under any applicable
     Environmental Law.

          (b)    Hazardous Materials have not at any time been generated,
     used, treated or stored on, or transported to or from, any Real
     Property owned or operated by Furniture Brands or any of its
     Subsidiaries except in compliance with all applicable Environmental
     Laws and so as not to give rise to an Environmental Claim.  Hazardous
     Materials have not at any time been Released on or from any Real
     Property owned or operated by Furniture Brands or any of its
     Subsidiaries except in compliance with all applicable Environmental
     Laws and so as not to give rise to an Environmental Claim.

          (c)    Notwithstanding anything to the contrary in this Section
     7.19, the representations made in this Section 7.19 shall only be
     untrue if the aggregate effect of all failures and noncompliances of<PAGE>


     the types described above could reasonably be expected to have a
     Material Adverse Effect.

          7.20     Labor Relations.  None of Furniture Brands nor any of
     its Subsidiaries is engaged in any unfair labor practice that could
     reasonably be expected to have a Material Adverse Effect.  There is
     (i) no unfair labor practice complaint pending against Furniture
     Brands or any of its Subsidiaries or, to the best knowledge of the
     Borrowers, threatened against any of them, before the National Labor
     Relations Board, and no material grievance or material arbitration
     proceeding arising out of or under any collective bargaining agreement
     is so pending against Furniture Brands or any of its Subsidiaries or,
     to the best knowledge of the Borrowers, threatened against any of
     them, (ii) no strike, labor dispute, slowdown or stoppage pending
     against Furniture Brands or any of its Subsidiaries or, to the best
     knowledge of the Borrowers, threatened against Furniture Brands or any
     of its Subsidiaries and (iii) to the best knowledge of the Borrowers,
     no union representation proceeding pending with respect to the
     employees of Furniture Brands or any of its Subsidiaries, except (with
     respect to any matter specified in clause (i), (ii) or (iii) above,
     either individually or in the aggregate) such as could not reasonably
     be expected to have a Material Adverse Effect.

          7.21     Patents, Licenses, Franchises and Formulas.  Furniture
     Brands and its Subsidiaries own all material patents, trademarks,
     permits, service marks, trade names, copyrights, licenses, franchises
     and formulas, or rights with respect to the foregoing, and have
     obtained assignments of all leases and other rights of whatever
     nature, reasonably necessary for the present conduct of their
     business, without any known conflict with the rights of others which,
     or the failure to obtain which, as the case may be, could reasonably
     be expected to result in a Material Adverse Effect.

          7.22     Indebtedness.  Schedule  VII sets forth a true and
     complete list of all Indebtedness for borrowed money of Furniture
     Brands and its Restricted Subsidiaries as of the Third Restatement
     Effective Date and which is to remain outstanding after giving effect
     to the Transaction (excluding the Loans and the Letters of Credit and
     the Attributed Receivables Facility Indebtedness, the "Existing
     Indebtedness"), in each case showing the aggregate principal amount
     thereof and the name of the respective borrower and any other entity
     which directly or indirectly guaranteed such debt all of which
     Existing Indebtedness is or shall be evidenced by the Permitted Debt
     Agreements.

          7.23     Transaction.    At the time of consummation thereof, the
     Transaction shall have been consummated in all respects in accordance
     with the terms of the respective Documents and all applicable laws. 
     At the time of consummation of the Transaction, all consents and
     approvals of, and filings and registrations with, and all other
     actions in respect of, all governmental agencies, authorities or
     instrumentalities required in order to make or consummate the
     Transaction will have been obtained, given, filed or taken and are or
     will be in full force and effect (or effective judicial relief with<PAGE>



     respect thereto has been obtained), except where the failure to so
     obtain, give, file or take would not have a material adverse effect on
     the business, operations, property, assets, liabilities, condition
     (financial or otherwise) or prospects of the Borrowers taken as a
     whole or of the Borrowers and their Restricted Subsidiaries taken as a
     whole.  All applicable waiting periods with respect thereto have or,
     prior to the time when required, will have, expired without, in all
     such cases, any action being taken by any competent authority which
     restrains, prevents, or imposes material adverse conditions upon the
     Transaction.  Additionally, there does not exist any judgment, order
     or injunction prohibiting or imposing material adverse conditions upon
     the Transaction or the occurrence of any Credit Event or the
     performance by the Credit Parties of their obligations under the
     respective Documents.  All actions taken by the Credit Parties
     pursuant to or in furtherance of the Transaction have been taken in
     material compliance with the respective Documents and all applicable
     laws.

          7.24     Special Purpose Corporation.  The Receivables Subsidiary
     was formed for the purpose of purchasing, and receiving contributions
     of, receivables from each of the Borrowers (other than Furniture
     Brands) and their respective Restricted Subsidiaries, and selling such
     receivables to, or obtaining secured loans from, the Receivables
     Purchasers, pursuant to the Receivables Facility and except in
     connection with the foregoing (and activities reasonably incidental
     thereto), the Receivables Subsidiary engages in no business activities
     and has no significant assets or liabilities and shall in no event
     purchase receivables from any Unrestricted Subsidiary.

          SECTION 8.     Affirmative Covenants.  Each of the Borrowers
     hereby covenants and agrees that on and after the Third Restatement
     Effective Date and until the Total Commitment and all Letters of
     Credit and Acceptances have terminated and the Loans, Notes and Unpaid
     Drawings, together with interest, Fees and all other Obligations
     incurred hereunder and thereunder, are paid in full:

          8.01     Information Covenants.  The Borrowers will furnish to
     the Administrative Agent, and the Administrative Agent will promptly
     forward to each Bank:

          (a)     Monthly Reports.  Within 30 days after the end of each
     calendar month of Furniture Brands (within 45 days after the end of
     the last month of each Fiscal Year), the consolidated and
     consolidating balance sheets of Furniture Brands and its Subsidiaries,
     in each case, as at the end of such month, and the related con-
     solidated and consolidating statements of income and the consolidated
     statement of cash flow for such month and for the elapsed portion of
     the calendar year ended with the last day of such month, in each case
     setting forth comparative figures for the corresponding month in the
     prior calendar year and the budgeted figures for such month as set
     forth in the respective budget delivered pursuant to Section 8.01(e).

          (b)     Quarterly Financial Statements.  As soon as available and
     in any event within 45 days after the close of each of the first three<PAGE>



     quarterly accounting periods in each Fiscal Year, (i) the consolidated
     and consolidating balance sheets of Furniture Brands and its
     Subsidiaries, in each case, as at the end of such quarterly period and
     the related consolidated and consolidating statements of income and
     the consolidated statement of cash flow for such quarterly period and
     for the elapsed portion of the Fiscal Year ended with the last day of
     such quarterly period and (ii) management's discussion and analysis of
     the important operational and financial developments during such
     quarterly period.

          (c)     Annual Financial Statements.  Within 95 days after the
     close of each Fiscal Year, (i) the consolidated and consolidating
     balance sheets of Furniture Brands and its Subsidiaries, in each case,
     as at the end of such Fiscal Year and the related consolidated and
     consolidating statements of income and consolidated statements of
     shareholders' equity and cash flow for such Fiscal Year setting forth
     comparative figures for the preceding Fiscal Year and (A) certified,
     in the case of such consolidated financial statements and (B)
     confirmed by a letter, in the case of the consolidating statements,
     delivered in substantially the form of the auditor's letter delivered
     to Furniture Brands on January 28, 1997, in each case by KPMG Peat
     Marwick or such other independent certified public accountants of
     recognized national standing reasonably acceptable to the
     Administrative Agent, together with a report of such accounting firm
     stating that in the course of its regular audit of the financial
     statements of Furniture Brands and its Subsidiaries, which audit was
     conducted in accordance with generally accepted auditing standards,
     such accounting firm obtained no knowledge of any Default or Event of
     Default which has occurred and is continuing or, if in the opinion of
     such accounting firm such a Default or Event of Default with respect
     to the covenants set forth in Sections 9.02 through 9.15, inclusive,
     has occurred and is continuing, a statement as to the nature thereof
     and (ii) management's discussion and analysis of the important opera-
     tional and financial developments during such Fiscal Year.

          (d)     Management Letters.  Promptly after the receipt thereof
     by Furniture Brands or any of its Restricted Subsidiaries, a copy of
     any "management letter" received by such Person from their certified
     public accountants and the management's responses thereto.

          (e)     Budgets.  No later than 30 days following the
     commencement of the first day of each Fiscal Year, a budget in form
     satisfactory to the Administrative Agent (including budgeted
     statements of income and sources and uses of cash and balance sheets)
     prepared by Furniture Brands for (x) each of the twelve months of such
     Fiscal Year prepared in detail and (y) each of the four Fiscal Years
     immediately following such Fiscal Year prepared in summary form, in
     each case, of Furniture Brands and its Restricted Subsidiaries, accom-
     panied by the statement of an Authorized Representative of Furniture
     Brands to the effect that, to the best of his knowledge, the budget is
     a reasonable estimate for the period covered thereby.

          (f)     Officer's Certificates.  At the time of the delivery of
     the financial statements provided for in Section 8.01(a), (b) and (c),<PAGE>


     a certificate of an Authorized Representative of Furniture Brands to
     the effect that, to the best of such Authorized Representative's
     knowledge, no Default or Event of Default has occurred and is
     continuing or, if any Default or Event of Default has occurred and is
     continuing, specifying the nature and extent thereof, which
     certificate shall, in the case of any such financial statements
     delivered in respect of a period ending on the last day of a fiscal
     quarter or year of Furniture Brands, (x) set forth the calculations
     required to establish whether the Borrowers were in compliance with
     the provisions of Sections 4.02(A) (excluding Section  4.02(A)(d),
     9.02, 9.03, 9.04, 9.05 and 9.07 through 9.09, inclusive, and 9.15 at
     the end of such fiscal quarter or year, as the case may be, and (y)
     set forth the calculation of the Leverage Ratio and Senior Debt
     Leverage Ratio and the amount of the Available $25 Million Dividend
     Basket Amount, Available $10 Million Acquisition/Investment Basket
     Amount, Available Debt Proceeds Amount, Available Unrestricted
     Proceeds Amount, Available Net Income Amount, Consolidated Cumulative
     25% Net Income Amount, Available Permitted Acquisition Amount,
     Returned Investment Amount and Available Returned Investment Amount at
     the end of the period covered by such financial statements, and all
     sources and uses of proceeds relating to the calculation thereof
     changing during the period covered by such statements.

          (g)     Notice of Default or Litigation.  Promptly, and in any
     event within three Business Days after an executive officer of any
     Borrower obtains knowledge thereof, notice of (i) the occurrence of
     any event which constitutes a Default or Event of Default and (ii) any
     litigation or governmental investigation or proceeding pending (x)
     against Furniture Brands or any of its Subsidiaries which could
     reasonably be expected to materially and adversely affect the busi-
     ness, operations, property, assets, liabilities, condition (financial
     or otherwise) or prospects of the Borrowers taken as a whole or the
     Borrowers and their Restricted Subsidiaries taken as a whole, (y) with
     respect to any material Indebtedness of Furniture Brands and its
     Restricted Subsidiaries taken as a whole or (z) with respect to any
     Document.

          (h)     Other Reports and Filings.  Promptly, copies of all
     financial information, proxy materials and other information and
     reports, if any, which Furniture Brands or any of its Restricted
     Subsidiaries shall file with the Securities and Exchange Commission or
     any successor thereto (the "SEC") or deliver to holders of its
     Indebtedness pursuant to the terms of the documentation governing such
     Indebtedness (or any trustee, agent or other representative therefor).

          (i)     Environmental Matters.    Promptly upon, and in any event
     within ten Business Days after, an executive officer of Furniture
     Brands or any of its Restricted Subsidiaries obtains knowledge
     thereof, notice of one or more of the following environmental matters,
     unless such environmental matters could not, individually or when
     aggregated with all other such environmental matters, be reasonably
     expected to materially and adversely affect the business, operations,
     property, assets, liabilities, condition (financial or otherwise) or<PAGE>


     prospects of the Borrowers taken as a whole or of the Borrowers and
     their Restricted Subsidiaries taken as a whole:

          (i)  any pending or threatened Environmental Claim against
     Furniture Brands or any of its Subsidiaries or any Real Property owned
     or operated by Furniture Brands or any of its Subsidiaries;

          (ii)  any condition or occurrence on or arising from any Real
     Property owned or operated by Furniture Brands or any of its Subsidi-
     aries that (a) results in noncompliance by Furniture Brands or any of
     its Subsidiaries with any applicable Environmental Law or (b) could
     reasonably be expected to form the basis of an Environmental Claim
     against Furniture Brands or any of its Subsidiaries or any such Real
     Property;

          (iii)  any condition or occurrence on any Real Property owned or
     operated by Furniture Brands or any of its Subsidiaries that could
     reasonably be expected to cause such Real Property to be subject to
     any restrictions on the ownership, occupancy, use or transferability
     by Furniture Brands or any of its Subsidiaries of such Real Property
     under any Environmental Law; and

          (iv)  the taking of any removal or remedial action in response to
     the actual or alleged presence of any Hazardous Material on any Real
     Property owned or operated by Furniture Brands or any of its Subsidi-
     aries as required by any Environmental Law or any governmental or
     other administrative agency; provided that in any event the Borrowers
     shall deliver to each Bank all notices received by them or any of
     their respective Subsidiaries from any government or governmental
     agency under, or pursuant to, CERCLA.

     All such notices shall describe in reasonable detail the nature of the
     claim, investigation, condition, occurrence or removal or remedial
     action, and the Borrowers' or such Subsidiary's response thereto.  In
     addition, the Borrowers will provide the Banks with copies of all
     material communications with any government or governmental agency
     relating to Environmental Laws, all communications with any Person
     (other than its attorneys) relating to any Environmental Claim of
     which notice is required to be given pursuant to this Section 
     8.01(i), and such detailed reports of any such Environmental Claim as
     may reasonably be requested by the Banks.

          (j)     Annual Meetings with Banks.  At the request of the
     Administrative Agent, Furniture Brands shall within 120 days after the
     close of each Fiscal Year hold a meeting at a time and place selected
     by Furniture Brands and reasonably acceptable to the Administrative
     Agent with all of the Banks at which meeting shall be reviewed the
     financial results of the previous Fiscal Year and the financial condi-
     tion of Furniture Brands and the budgets presented for the current
     Fiscal Year.

          (k)     Other Information.  From time to time, such other
     information or documents (financial or otherwise) with respect to<PAGE>


     Furniture Brands or any of its Subsidiaries as any Bank may reasonably
     request in writing.

          8.02     Books, Records and Inspections.  The Borrowers will, and
     will cause each of their respective Restricted Subsidiaries to, keep
     proper books of record and account in which full, true and correct
     entries in conformity with generally accepted accounting principles
     and all requirements of law shall be made of all dealings and transac-
     tions in relation to its business and activities.  The Borrowers will,
     and will cause each of their respective Restricted Subsidiaries to,
     permit officers and designated representatives of the Agents or the
     Required Banks to visit and inspect, after reasonable notice during
     regular business hours and under guidance of officers of the Borrowers
     or such Restricted Subsidiary, any of the properties of the Borrowers
     or such Restricted Subsidiary, and to examine the books of account of
     the Borrowers or such Restricted Subsidiary and discuss the affairs,
     finances and accounts of the Borrowers or such Restricted Subsidiary
     with, and be advised as to the same by, its and their officers and
     independent accountants, all at such reasonable times and intervals
     and to such reasonable extent as such Agent or such Bank may request.

          8.03     Maintenance of Property; Insurance.  (a)  Schedule VIII
     sets forth a true and complete listing of all insurance (including
     self-insurance programs) maintained by Furniture Brands and its
     Restricted Subsidiaries as of the Third Restatement Effective Date. 
     The Borrowers will, and will cause each of their respective Restricted
     Subsidiaries to, (i) keep all property necessary in its business in
     good working order and condition (ordinary wear and tear excepted),
     (ii) maintain insurance on all its property in at least such amounts
     and against at least such risks as is consistent and in accordance
     with industry practice and (iii) furnish to the Administrative Agent,
     upon written request, full information as to the insurance carried. 
     In addition to the requirements of the immediately preceding sentence,
     the Borrowers will at all times cause insurance of the types described
     in Schedule VIII to be maintained (with the same scope of coverage as
     that described in Schedule VIII) at levels which are at least as great
     as the respective amount described opposite the respective type of
     insurance on Schedule VIII under the column headed "Minimum Amount
     Required to be Maintained."

          (b)    Except with respect to self-insurance programs listed on
     Schedule VIII, the Borrowers will, and will cause their respective
     Restricted Subsidiaries to, at all times keep their respective prop-
     erty insured in favor of the Collateral Agent, and all policies
     (including Mortgage Policies) or certificates (or certified copies
     thereof) with respect to such insurance (and any other insurance
     maintained by the Borrowers or any of their respective Restricted Sub-
     sidiaries) (i) shall be endorsed to the Collateral Agent's
     satisfaction for the benefit of the Collateral Agent (including,
     without limitation, by naming the Collateral Agent as loss payee or as
     an additional insured (provided that Furniture Brands and its
     Restricted Subsidiaries shall be permitted to settle claims in an
     amount less than $10,000,000 per claim, so long as the proceeds from
     such claims are applied in accordance with Section 4.02(A)(d)), (ii)<PAGE>


     shall state that such insurance policies shall not be cancelled
     without 30 days' prior written notice thereof by the respective
     insurer to the Collateral Agent, (iii) shall provide that the
     respective insurers irrevocably waive any and all rights of
     subrogation with respect to the Collateral Agent and the Secured
     Creditors, (iv) shall contain the standard non-contributory mortgagee
     clause endorsement in favor of the Collateral Agent with respect to
     hazard insurance coverage, (v) shall, except in the case of public
     liability insurance and workers' compensation insurance, provide that
     any losses shall be payable notwithstanding (A) any act or neglect of
     the Borrowers or any of their respective Restricted Subsidiaries, (B)
     the occupation or use of the properties for purposes more hazardous
     than those permitted by the terms of the respective policy if such
     coverage is obtainable at commercially reasonable rates and is of the
     kind from time to time customarily insured against by Persons owning
     or using similar property and in such amounts as are customary, (C)
     any foreclosure or other proceeding relating to the insured properties
     if such coverage is available at commercially reasonable rates or (D)
     any change in the title to or ownership or possession of the insured
     properties and (vi) shall be deposited with the Collateral Agent if
     such coverage is available at commercially reasonable rates.

          (c)    If the Borrowers or any of their respective Restricted
     Subsidiaries shall fail to maintain all insurance in accordance with
     this Section 8.03, or if the Borrowers or any of their respective
     Restricted Subsidiaries shall fail to so endorse and deposit all
     policies or certificates with respect thereto, the Administrative
     Agent and/or the Collateral Agent shall have the right (but shall be
     under no obligation) after giving notice to Furniture Brands (but not
     requiring any consent from Furniture Brands) to procure such insurance
     and the Borrowers agree to jointly and severally reimburse the
     Administrative Agent or the Collateral Agent, as the case may be, for
     all costs and expenses of procuring such insurance.

          8.04     Corporate Franchises.  The Borrowers will, and will
     cause each of their respective Restricted Subsidiaries to, do or cause
     to be done, all things necessary to preserve and keep in full force
     and effect its existence and its material rights, franchises, licenses
     and patents; provided, however, that nothing in this Section 8.04
     shall prevent (i) sales of assets, mergers or other transactions by or
     among Furniture Brands or any of its Restricted Subsidiaries in
     accordance with Section 9.02 or (ii) (x) the withdrawal by Furniture
     Brands or any of the Restricted Subsidiaries of its qualification as a
     foreign corporation or the failure to qualify as a foreign corporation
     in any jurisdiction or (y) the amendment of the Certificate of
     Incorporation or By-Laws of Furniture Brands or any of its
     Subsidiaries, in each case which would not in any way materially and
     adversely affect the Banks, and where such withdrawal or failure or
     amendment, as the case may be, could not reasonably be expected to
     have a Material Adverse Effect.

          8.05     Compliance with Statutes, etc.  The Borrowers will, and
     will cause each of their respective Subsidiaries to, comply with all
     applicable statutes, regulations and orders of, and all applicable<PAGE>
     restrictions imposed by, all governmental bodies, domestic or foreign,
     in respect of the conduct of its business and the ownership of its
     property, except such noncompliances as could not, individually or in
     the aggregate, reasonably be expected to have a Material Adverse
     Effect.

          8.06     Compliance with Environmental Laws.    (a)    The
     Borrowers will comply, and will cause each of their respective Subsid-
     iaries to comply, in all material respects with all Environmental Laws
     applicable to the ownership or use of its Real Property now or
     hereafter owned or operated by Furniture Brands or any of its
     Subsidiaries, will within a reasonable time period pay or cause to be
     paid all costs and expenses incurred in connection with such compli-
     ance, and will keep or cause to be kept all such Real Property free
     and clear of any Liens on such Real Property imposed pursuant to such
     Environmental Laws; provided that, none of Furniture Brands nor any of
     its Subsidiaries shall be required to remove any such Liens, so long
     as the aggregate amount of obligations purported to be secured by such
     Liens does not exceed $1,000,000, and such Liens are being contested
     in good faith and by proper proceedings if it has maintained adequate
     reserves with respect thereto in accordance with generally accepted
     accounting principles.  None of Furniture Brands nor any of its
     Subsidiaries will generate, use, treat, store, release or dispose of,
     or permit the generation, use, treatment, storage, release or disposal
     of Hazardous Materials on any Real Property now or hereafter owned or
     operated by Furniture Brands or any of its Subsidiaries, or transport
     or permit the transportation of Hazardous Materials to or from any
     such Real Property except for Hazardous Materials used or stored at
     any such Real Properties in material compliance with all applicable
     Environmental Laws and reasonably required in connection with the
     operation, use and maintenance of any such Real Property.

          (b)    At the written request of the Administrative Agent or the
     Required Banks, which request shall specify in reasonable detail the
     basis therefor, at any time and from time to time, the Borrowers will
     provide, at the Borrowers' joint and several cost and expense, an
     environmental site assessment report concerning any Real Property now
     or hereafter owned or operated by Furniture Brands or any of its
     Subsidiaries, prepared by an environmental consulting firm approved by
     the Administrative Agent, indicating the presence or absence of
     Hazardous Materials and the potential cost of any removal or remedial
     action in connection with any Hazardous Materials on such Real
     Property; provided, that such request may be made only if (i) there
     has occurred and is continuing an Event of Default, (ii) the
     Administrative Agent reasonably believes that Furniture Brands, any of
     its Subsidiaries or any such Real Property is not in material com-
     pliance with Environmental Law, or (iii) circumstances exist that
     reasonably could be expected to form the basis of a material Environ-
     mental Claim against Furniture Brands, any of its Subsidiaries or any
     such Real Property.  If the Borrowers fail to provide the same within
     90 days after such request was made, the Administrative Agent may
     order the same, and the Borrowers shall grant and hereby grant to the
     Administrative Agent and the Banks and their agents access to such
     Real Property and specifically grant the Administrative Agent and the<PAGE>


     Banks an irrevocable non-exclusive license, subject to the rights of
     tenants, to undertake such an assessment, all at the Borrowers' joint
     and several expense.

          8.07     ERISA.    As soon as possible and, in any event, within
     20 days after the Borrowers or any of  their respective Restricted
     Subsidiaries or any ERISA Affiliate knows or has reason to know of the
     occurrence of any of the following, the Borrowers will deliver to the
     Administrative Agent, and the Administrative Agent shall promptly
     forward to each Bank a certificate of an Authorized Representative of
     the Borrowers setting forth details as to such occurrence and the
     action, if any, that the Borrowers, such Restricted Subsidiary or such
     ERISA Affiliate is required or proposes to take, together with any
     notices required or proposed to be given to or filed with or by the
     Borrowers, such Restricted Subsidiary, the ERISA Affiliate, the PBGC,
     or a Plan participant or the Plan administrator with respect thereto: 
     that a Reportable Event has occurred; that an accumulated funding
     deficiency has been incurred or an application is likely to be or has
     been made to the Secretary of the Treasury for a waiver or modi-
     fication of the minimum funding standard (including any required in-
     stallment payments) or an extension of any amortization period under
     Section 412 of the Code with respect to a Plan, Multiemployer Plan
     and/or a Spunoff Plan; that a contribution required to be made to a
     Plan, Multiemployer Plan and/or Foreign Pension Plan has not been
     timely made; that a Plan, Multiemployer Plan and/or a Spunoff Plan has
     been or is reasonably expected to be terminated, reorganized, parti-
     tioned or declared insolvent under Title IV of ERISA; that a Plan,
     Multiemployer Plan and/or a Spunoff Plan has an Unfunded Current
     Liability giving rise to a lien under ERISA or the Code; that proceed-
     ings are likely to be or have been instituted or notice has been given
     to terminate or appoint a trustee to administer a Plan, Multiemployer
     Plan and/or a Spunoff Plan; that a proceeding has been instituted
     pursuant to Section 515 of ERISA to collect a delinquent contribution
     to a Multiemployer Plan if material in amount; that the Borrowers, any
     of their respective Restricted Subsidiaries or any ERISA Affiliate
     will or is reasonably expected to incur any material liability
     (including any indirect, contingent or secondary liability) to or on
     account of the termination of or withdrawal from a Plan, Multiemployer
     Plan and/or a Spunoff Plan under Section 4062, 4063, 4064, 4069, 4201,
     4204 or 4212 of ERISA or with respect to a Plan, Multiemployer Plan
     and/or a Spunoff Plan under Section 401(a)(29), 4971, 4975 or 4980 of
     the Code or Section 409 or 502(i) or 502(l) of ERISA; or except as
     disclosed on Schedule XVI, that the Borrowers or any Restricted
     Subsidiary is reasonably expected to incur any liability pursuant to
     any employee welfare benefit plan (as defined in Section 3(1) of
     ERISA) that provides benefits to retired employees or other former
     employees (other than as required by Section 601 of ERISA) or any
     employee pension benefit plan (as defined in Section 3(2) of ERISA)
     which liability, individually or in the aggregate, could reasonably be
     expected to have a Material Adverse Effect.  Upon request, the
     Borrowers will deliver to each of the Banks a complete copy of the
     annual report (Form 5500) of each Plan (including, to the extent
     required to be filed with the Internal Revenue Service in connection
     with such annual report, the related financial and actuarial state-<PAGE>

     ments and opinions and other supporting statements, certifications,
     schedules and information) required to be filed with the Internal
     Revenue Service.  In addition to any certificates or notices delivered
     to the Banks pursuant to the first sentence hereof, copies of such
     annual reports and any material notices received by the Borrowers or
     any of their respective Restricted Subsidiaries or any ERISA Affiliate
     with respect to any Plan, Multiemployer Plan, Spunoff Plan and/or
     Foreign Pension Plan shall be delivered to the Banks no later than 20
     days after the date such report has been requested or such notice has
     been received by the Borrowers, the Restricted Subsidiary or the ERISA
     Affiliate, as applicable.  For purposes of this Section 8.07 "knows or
     has reason to know" with respect to any Spunoff Plan means knowledge
     acquired through written or oral notice provided directly to a
     Borrower by any governmental agency, court, or Spunoff Plan
     administrator.

          8.08     End of Fiscal Years; Fiscal Quarters.  Furniture Brands
     shall cause (i) each of its Fiscal Years to end on December 31, and
     each of its fiscal quarters to end on the last day of each March,
     June, September and December and (ii) each of its Restricted
     Subsidiaries' (x) fiscal years to end on the closest Saturday to
     December 31 and (y) fiscal quarters to end on the closest Saturday to
     the last day of each March, June, September and December.

          8.09     Performance of Obligations.  Each of the Borrowers will,
     and will cause each of its Subsidiaries to, perform all of its
     obligations under the terms of each mortgage, indenture, security
     agreement and other debt instrument by which it is bound, except such
     non-performances as could not, individually or in the aggregate, rea-
     sonably be expected to have a material adverse effect on the business,
     operations, property, assets, liabilities, condition (financial or
     otherwise) or prospects of the Borrowers taken as a whole or of the
     Borrowers and the Restricted Subsidiaries taken as a whole.

          8.10     Payment of Taxes.  Each of the Borrowers will pay and
     discharge or cause to be paid and discharged, and will cause each of
     their respective Subsidiaries to pay and discharge, all material
     taxes, assessments and governmental charges or levies imposed upon it
     or upon its income or profits, or upon any material properties belong-
     ing to it, in each case on a timely basis, and all lawful claims
     which, if unpaid, might become a lien or charge upon any properties of
     Furniture Brands or any of its Restricted Subsidiaries; provided that
     none of Furniture Brands nor any of its Subsidiaries shall be required
     to pay any such tax, assessment, charge, levy or claim which is being
     contested in good faith and by proper proceedings if it has maintained
     adequate reserves with respect thereto in accordance with generally
     accepted accounting principles.

          8.11     Additional Security; Further Assurances; Required
     Appraisals.  (a)    The Borrowers will, and will cause each of their
     respective Restricted Subsidiaries to, grant to the Collateral Agent
     security interests and mortgages (an "Additional Mortgage") in such
     Real Property (other than Real Property encumbered by (i) liens
     incurred by a Restricted Subsidiary at a time when it was an<PAGE>

     Unrestricted Subsidiary, to the extent such Liens are otherwise
     permitted by this Agreement and (ii) Liens securing Indebtedness
     permitted pursuant to Section 9.04 (vii), but only until such time as
     such Indebtedness is repaid) of the Borrowers or any of their
     respective Restricted Subsidiaries as are not covered by the original
     Mortgages, to the extent such Real Property is acquired after the
     Third Restatement Effective Date and either (x)  the cost (including
     assumed Indebtedness) of such Real Property is in excess of $2,500,000
     or (y) the respective Additional Mortgage has been requested by the
     Required Banks (each such Real Property, an "Additional Mortgaged
     Property").  All such Additional Mortgages shall be granted pursuant
     to documentation substantially in the form of the Mortgages delivered
     to the Administrative Agent on the Original Effective Date or the
     First Restatement Effective Date or in such other form as is rea-
     sonably satisfactory to the Administrative Agent and shall constitute
     valid and enforceable perfected Liens superior to and prior to the
     rights of all third Persons and subject to no other Liens except as
     are permitted by Section 9.01 at the time of perfection thereof.  The
     Additional Mortgages or instruments related thereto shall have been
     duly recorded or filed in such manner and in such places as are
     required by law to establish, perfect, preserve and protect the Liens
     in favor of the Collateral Agent required to be granted pursuant to
     the Additional Mortgages and all taxes, fees and other charges payable
     in connection therewith shall have been paid in full.

          (b)    The Borrowers will, and will cause each of their
     respective Restricted Subsidiaries to, at the joint and several
     expense of the Borrowers, make, execute, endorse, acknowledge, file
     and/or deliver to the Collateral Agent from time to time such
     vouchers, invoices, schedules, confirmatory assignments, conveyances,
     financing statements, transfer endorsements, powers of attorney,
     certificates, real property surveys, reports and other assurances or
     instruments and take such further steps relating to the Collateral
     covered by any of the Security Documents as the Collateral Agent may
     reasonably require pursuant to this Section 8.11.  Furthermore, the
     Borrowers shall cause to be delivered to the Collateral Agent such
     opinions of counsel, title insurance and other related documents as
     may be requested by the Collateral Agent to assure itself that this
     Section 8.11 has been complied with.

          (c)    Each Borrower agrees to cause each Restricted Subsidiary
     established or created in accordance with Section 9.11 to execute and
     deliver a guaranty of all Obligations and all obligations under
     Interest Rate Protection Agreements in substantially the form of the
     Subsidiary Guaranty, or by becoming a party to the Subsidiary
     Guaranty.

          (d)    Each Borrower agrees to pledge all of the capital stock of
     each new Subsidiary (other than any Subsidiary of an Unrestricted
     Subsidiary) created in accordance with Section 9.11 to the Collateral
     Agent for the benefit of the Secured Creditors pursuant to the Pledge
     Agreement.<PAGE>


          (e)    Each Borrower will cause each Restricted Subsidiary
     established or created in accordance with Section 9.11 to grant to the
     Collateral Agent a first priority Lien on all property (tangible and
     intangible) of such Subsidiary upon terms similar to those set forth
     in the Security Documents as appropriate, and satisfactory in form and
     substance to the Administrative Agent and Required Banks.  Each
     Borrower shall cause each of its respective Restricted Subsidiaries,
     at its own expense, to execute, acknowledge and deliver, or cause the
     execution, acknowledgement and delivery of, and thereafter register,
     file or record in any appropriate governmental office, any document or
     instrument reasonably deemed by the Collateral Agent to be necessary
     or desirable for the creation and perfection of the foregoing Liens. 
     Each Borrower will cause each of its respective Restricted
     Subsidiaries to take all actions requested by the Administrative Agent
     (including, without limitation, the filing of UCC-1s) in connection
     with the granting of such security interests.

          (f)    The security interests required to be granted pursuant to
     this Section 8.11 shall be granted pursuant to security documentation
     (which shall be substantially similar to the Security Documents
     already executed and delivered by Furniture Brands and its Restricted
     Subsidiaries, as applicable) or otherwise satisfactory in form and
     substance to the Administrative Agent and shall constitute valid and
     enforceable perfected security interests prior to the rights of all
     third Persons and subject to no other Liens except such Liens as are
     permitted by Section 9.01.  The Additional Security Documents and
     other instruments related thereto shall be duly recorded or filed in
     such manner and in such places and at such times as are required by
     law to establish, perfect, preserve and protect the Liens, in favor of
     the Collateral Agent for the benefit of the respective Secured
     Creditors, required to be granted pursuant to the Additional Security
     Documents and all taxes, fees and other charges payable in connection
     therewith shall be paid, jointly and severally, in full by the
     Borrowers.  At the time of the execution and delivery of the
     Additional Security Documents, the Borrowers shall cause to be deliv-
     ered to the Collateral Agent such opinions of counsel, Mortgage
     Policies, title surveys, real estate appraisals and other related
     documents as may be reasonably requested by the Administrative Agent
     or the Required Banks to assure themselves that this Section 8.11 has
     been complied with.

          (g)    In the event that the Administrative Agent or the Required
     Banks at any time after the Effective Date determine in its or their
     good faith discretion that real estate appraisals satisfying the
     requirements of FIRREA (any such appraisal a "Required Appraisal") are
     or were required to be obtained, or should be obtained, in connection
     with any Mortgaged Property or Mortgaged Properties, then, within 120
     days after receiving written notice thereof from the Administrative
     Agent or the Required Banks, as the case may be, such Required
     Appraisal shall be delivered, at the expense of the Borrowers, to the
     Administrative Agent which Required Appraisal, and the respective
     appraiser, shall be satisfactory to the Administrative Agent.<PAGE>


          (h)    Each of the Borrowers agrees that each action required
     above by Section 8.11 (a) or (b) shall be completed as soon as
     possible, but in no event later than 60 days after such action is
     requested to be taken by the Administrative Agent or the Required
     Banks.  Each of the Borrowers further agrees that each action required
     by Section 8.11(c), (d), (e) and (f) with respect to the Additional
     Collateral shall be completed contemporaneously with the creation of
     such new Subsidiary.

          8.12     Interest Rate Protection.    The Borrowers shall
     maintain, for a period of at least three years after the Third
     Restatement Effective Date, interest rate protection pursuant to one
     or more Interest Rate Protection Agreements which establish a fixed or
     maximum interest rate (whether through swaps, caps, collars, or
     otherwise) acceptable to the Administrative Agent in respect of at
     least (i) $300,000,000 notional principal amount of Indebtedness
     through February 22, 1999, and (ii) $100,000,000 notional principal
     amount of Indebtedness during the period from February 22, 1999
     through the third anniversary of the Third Restatement Effective Date. 
     The Administrative Agent has approved the Interest Rate Protection
     Agreements which are in effect on the Third Restatement Effective
     Date, one of which established a fixed or maximum interest rate in
     respect of $170,000,000 notional principal amount of Indebtedness
     through December 31, 1997, and the others of which established fixed
     or maximum interest rates in respect of $300,000,000 notional
     principal amount of Indebtedness through February 22, 1999,
     respectively.

          8.13     Ownership of Subsidiaries.  Furniture Brands shall at
     all times own 100% of the outstanding capital stock of the other
     Borrowers.  Except to the extent otherwise expressly consented in
     writing by the Required Banks and except as set forth in Schedule VI,
     the Borrowers shall directly or indirectly own 100% of the capital
     stock of each of their Subsidiaries (other than as permitted pursuant
     to the definition of Permitted Acquisition).

          8.14     Permitted Acquisitions.  Subject to the provisions of
     this Section 8.14, Section 9.02(vii) and the requirements contained in
     the definition of Permitted Acquisition, the Borrowers and their
     Restricted Subsidiaries may from time to time after the Third
     Restatement Effective Date effect Permitted Acquisitions, so long as
     (i) the Borrowers shall have given the Administrative Agent and the
     Banks at least 10 Business Days' prior written notice of any Permitted
     Acquisition, (ii) based on calculations made by the Borrowers on a Pro
     Forma Basis after giving effect to the respective Permitted
     Acquisition and any Indebtedness (including without limitation
     Permitted Acquired Debt) or Disqualified Preferred Stock incurred,
     issued or assumed in connection with the respective Permitted
     Acquisition or to finance same, (x) no Default or Event of Default
     will exist under, or would have existed during the periods covered by,
     the financial covenants contained in Sections 9.08 and 9.09 of this
     Agreement and (y) if any Indebtedness or Disqualified Preferred Stock
     is being incurred, issued or assumed in connection with the respective
     Permitted Acquisition or to finance same (excluding, however,<PAGE>


     Permitted Acquired Debt in connection with any Permitted Acquisition
     where the only Indebtedness or Disqualified Preferred Stock being
     incurred, issued or assumed in connection therewith or to finance same
     is Permitted Acquired Debt), the Senior Debt Leverage Ratio shall not
     exceed 3.5:1.0, (iii) based on good faith projections prepared by the
     Borrowers for the period from the date of the consummation of the
     Permitted Acquisition to the date which is one year thereafter, the
     level of financial performance measured by the covenants set forth in
     Sections 9.08 and 9.09 shall be better than or equal to such level as
     would be required to provide that no Default or Event of Default would
     exist under the financial covenants contained in Sections 9.08 and
     9.09 of this Agreement as compliance with such covenants would be
     required through the date which is one year from the date of the
     consummation of the respective Permitted Acquisition, (iv) the
     Administrative Agent shall have been satisfied in its reasonable dis-
     cretion that the proposed Permitted Acquisition could not reasonably
     be expected to result in materially increased tax, ERISA or
     environmental liabilities with respect to Furniture Brands or any of
     its Restricted Subsidiaries, it being understood that any deter-
     mination of whether the proposed Permitted Acquisition could
     reasonably be expected to result in such materially increased tax,
     ERISA or environmental liabilities shall take into account, inter
     alia, (x) any available indemnities and (y) the timing and likelihood
     of payment thereunder and (v) the Borrowers shall have delivered to
     the Administrative Agent an officer's certificate executed by an
     Authorized Representative of the Borrowers, certifying (A) to the best
     of his knowledge, compliance with the requirements of preceding
     clauses (i), (ii) and (iii) and containing the calculations required
     by the preceding clauses (ii) and (iii) and (B) compliance with the
     requirements of Section 9.02(vii).

          8.15     Maintenance of Corporate Separateness.  Furniture Brands
     will, and will cause each of its Subsidiaries to, satisfy customary
     corporate formalities, including the holding of regular board of
     directors' and shareholders' meetings or action by directors or
     shareholders without a meeting and the maintenance of corporate
     offices and records.  None of the Borrowers nor any of their
     respective Restricted Subsidiaries shall make any payment to a
     creditor of any Unrestricted Subsidiaries in respect of any liability
     of any Unrestricted Subsidiaries, and no bank account of any
     Unrestricted Subsidiary shall be commingled with any bank account of
     any of the Borrowers or any of their respective Restricted Subsidi-
     aries.  Any financial statements distributed to any creditors of any
     Unrestricted Subsidiaries shall clearly establish or indicate the
     corporate separateness of such Unrestricted Subsidiary from the Bor-
     rowers and their respective Restricted Subsidiaries.  Finally, neither
     Furniture Brands nor any of its Subsidiaries shall take any action, or
     conduct its affairs in a manner, which is likely to result in the cor-
     porate existence of Furniture Brands or any of its Subsidiaries being
     ignored, or in the assets and liabilities of the Borrowers or any of
     their respective Restricted Subsidiaries being substantively consoli-
     dated with those of any Unrestricted Subsidiaries in a bankruptcy,
     reorganization or other insolvency proceeding.<PAGE>


          8.16     Cash Management System.  The Borrowers will, and will
     cause each of their respective Restricted Subsidiaries to, utilize and
     maintain the Cash Management System for all deposits made by any of
     them (including the concentration of all such deposits in the
     Concentration Account).  The Cash Management System shall be operated
     solely for the business of the Borrowers and their respective
     Restricted Subsidiaries.

          8.17     Margin Stock.  The Borrowers will, and will cause each
     of their respective Subsidiaries to, take any and all actions as may
     be required to ensure that no capital stock pledged, or required to be
     pledged, pursuant to any Security Document shall constitute Margin
     Stock.

          SECTION 9.     Negative Covenants.  The Borrowers covenant and
     agree that on and after the Third Restatement Effective Date and until
     the Commitments and all Letters of Credit and Acceptances have termi-
     nated and the Loans, Notes and Unpaid Drawings, together with
     interest, Fees and all other Obligations incurred hereunder and there-
     under, are paid in full:

          9.01     Liens.  The Borrowers will not, and will not permit any
     of their respective Restricted Subsidiaries to, create, incur, assume
     or suffer to exist any Lien upon or with respect to any property or
     assets (real or personal, tangible or intangible) of Furniture Brands
     or any of its Restricted Subsidiaries, whether now owned or hereafter
     acquired, or sell any such property or assets subject to an
     understanding or agreement, contingent or otherwise, to repurchase
     such property or assets (including sales of accounts receivable with
     recourse to Furniture Brands or any of its Restricted Subsidiaries),
     or assign any right to receive income or permit the filing of any
     financing statement under the UCC or any other similar notice of Lien
     under any similar recording or notice statute; provided that the
     provisions of this Section 9.01 shall not prevent the creation, in-
     currence, filing, assumption or existence of the following (Liens
     described below are herein referred to as "Permitted Liens"):

          (i)  incipient Liens for taxes, assessments or governmental
     charges or levies not yet due and payable or Liens for taxes,
     assessments or governmental charges or levies being contested in good
     faith and by appropriate proceedings for which adequate reserves have
     been established in accordance with generally accepted accounting
     principles in the United States (or the equivalent thereof in any
     country in which a Foreign Sales Corporation or a Foreign Subsidiary
     is doing business, as applicable);

          (ii)  Liens in respect of property or assets of the Borrowers or
     any of their Restricted Subsidiaries imposed by law, which were
     incurred in the ordinary course of business and do not secure
     Indebtedness for borrowed money, such as carriers', warehousemen's,
     materialmen's and mechanics' liens and other similar Liens arising in
     the ordinary course of business, and (x)  which do not in the aggre-
     gate materially detract from the value of the Borrowers' or such
     Restricted Subsidiary's property or assets or materially impair the<PAGE>


     use thereof in the operation of the business of the Borrowers or such
     Restricted Subsidiary or (y)  which are being contested in good faith
     by appropriate proceedings, which proceedings have the effect of pre-
     venting the forfeiture or sale of the property or assets subject to
     any such Lien;

          (iii)  Liens in existence on the Third Restatement Effective Date
     which are listed, and the property subject thereto described, in
     Schedule IX, but only to the respective date, if any, set forth in
     such Schedule IX for the removal and termination of any such Liens,
     plus renewals and extensions of such Liens to the extent set forth on
     Schedule IX, provided that (x) the aggregate principal amount of the
     Indebtedness, if any, secured by such Liens does not increase from
     that amount outstanding at the time of any such renewal or extension
     and (y) any such renewal or extension does not encumber any additional
     assets or properties of Furniture Brands or any of its Restricted
     Subsidiaries;

          (iv)  Permitted Encumbrances;

          (v)  Liens created pursuant to the Security Documents;

          (vi)  licenses, leases or subleases granted to other Persons in
     the ordinary course of business not materially interfering with the
     conduct of the business of Furniture Brands and its Restricted
     Subsidiaries taken as a whole;

          (vii)  Liens upon assets subject to Capitalized Lease Obligations
     of the Borrowers and their Restricted Subsidiaries to the extent
     permitted by Section 9.04(vii), provided that (x) such Liens only
     serve to secure the payment of Indebtedness arising under such
     Capitalized Lease Obligation and (y) the Lien encumbering the asset
     giving rise to the Capitalized Lease Obligation does not encumber any
     other asset of the Borrowers or any Restricted Subsidiary of the
     Borrowers;

          (viii)  Liens placed upon assets used in the ordinary course of
     business of the Borrowers or any of their Restricted Subsidiaries at
     the time of acquisition or new construction thereof by the Borrowers
     or any such Restricted Subsidiary or within 180 days thereafter to
     secure Indebtedness incurred to pay all or a portion of the purchase
     price and/or construction costs thereof, plus renewals or extensions
     of such Liens, or Liens securing Permitted Acquired Debt, plus
     renewals or extensions of such Liens, provided that (x) the aggregate
     outstanding principal amount of all Indebtedness secured by Liens
     permitted by this clause (viii) shall not at any time exceed the
     amount permitted by Section 9.04(vii) and (y) in all events, the Lien
     encumbering the assets so acquired or newly constructed does not
     encumber any other asset of the Borrowers or such Restricted
     Subsidiary;

          (ix)  easements, rights-of-way, restrictions (including zoning
     restrictions), encroachments, protrusions and other similar charges or
     encumbrances, and minor title deficiencies, in each case whether now<PAGE>


     or hereafter in existence, not securing Indebtedness and not
     materially interfering with the conduct of the business of the
     Borrowers or any of their respective Restricted Subsidiaries;

          (x)  Liens arising from precautionary UCC financing statement
     filings regarding operating leases entered into by the Borrowers or
     any of their Restricted Subsidiaries in the ordinary course of
     business;

          (xi)  Liens arising out of the existence of judgments or awards
     not constituting an Event of Default under Section 10.09, provided
     that no cash or property is deposited or delivered to secure the
     respective judgment or award (or any appeal bond in respect thereof,
     except as permitted by following clause (xiv));

          (xii)  Liens, and the filing of financing statements in
     connection therewith, created by, and as set forth in, the Receivables
     Documents;

          (xiii)  statutory and contractual landlords' liens under leases
     to which the Borrowers or any of their Restricted Subsidiaries are a
     party;

          (xiv)  Liens (other than any Lien imposed by ERISA) (x) incurred
     or deposits made in the ordinary course of business of the Borrowers
     and their respective Restricted Subsidiaries in connection with
     workers' compensation, unemployment insurance and other types of
     social security, (y) to secure the performance by the Borrowers and
     their respective Restricted Subsidiaries of tenders, statutory obliga-
     tions (other than excise taxes), surety, stay, customs and appeal
     bonds, statutory bonds, bids, leases, government contracts, trade con-
     tracts, performance and return of money bonds and other similar
     obligations (exclusive of obligations for the payment of borrowed
     money) or (z) to secure the performance by the Borrowers and their
     respective Restricted Subsidiaries of leases of Real Property, to the
     extent incurred or made in the ordinary course of business consistent
     with past practices, provided that the aggregate amount of deposits at
     any time pursuant to sub-clause (y) and sub-clause (z) shall not
     exceed $5,000,000 in the aggregate;

          (xv)  any interest or title of a lessor, sublessor, licensee or
     licensor under any lease or license agreement permitted by this
     Agreement;

          (xvi)  Liens (x) in favor of customs and revenue authorities
     arising as a matter of law to secure the payment of customs duties in
     connection with the importation of goods and deposits made to secure
     statutory obligations in the form of excise taxes or (y) in respect of
     property or assets of Thomasville or any of its Subsidiaries imposed
     by law or governmental action which arise out of actual or potential
     claims under any Environmental Law disclosed in the environmental
     report furnished to the Administrative Agent prior to the First
     Restatement Effective Date, in each case so long as the Liens
     described in this clause (y) are being contested in good faith (or<PAGE>


     Furniture Brands or its respective Subsidiaries are in good faith
     pursuing indemnities in respect thereof pursuant to the Armstrong
     Stock Purchase Agreement) pursuant to appropriate proceedings, which
     proceedings have the effect of preventing the forfeiture or sale of
     the property subject to any such Lien and so long as adequate reserves
     (if necessary) have been established in accordance with generally
     accepted accounting principles with respect to the liability or
     liabilities secured by such Liens; 

          (xvii)  Liens arising out of conditional sale, title retention,
     consignment or similar arrangements for the sale of goods entered into
     by the Borrowers or any of their Restricted Subsidiaries in the
     ordinary course of business in accordance with the past practices of
     the Borrowers and their Restricted Subsidiaries prior to the Effective
     Date; and

          (xviii)  Liens not otherwise permitted by the foregoing clauses
     (i) through (xvii) to the extent attaching to properties and assets
     with an aggregate fair value not in excess of, and securing
     liabilities not in excess of, $10,000,000 in the aggregate at any time
     outstanding.

          9.02     Consolidation, Merger, Purchase or Sale of Assets, etc. 
     The Borrowers will not, and will not permit any of their respective
     Restricted Subsidiaries to, wind up, liquidate or dissolve its affairs
     or enter into any transaction of merger or consolidation, or convey,
     sell, lease or otherwise dispose of (or agree to do any of the fore-
     going at any future time) all or any part of its property or assets
     (other than the liquidation of Cash Equivalents in the ordinary course
     of business), or enter into any sale-leaseback transactions, or
     purchase or otherwise acquire (in one or a series of related trans-
     actions) any part of the property or assets (other than purchases or
     other acquisitions of inventory, materials, equipment, furniture,
     fixtures, and intangible assets in the ordinary course of business) of
     any Person, except that:

          (i)  Capital Expenditures by the Borrowers and their Restricted
     Subsidiaries shall be permitted to the extent not in violation of
     Section 9.07;

          (ii)  each of the Borrowers and their Restricted Subsidiaries may
     (x) in the ordinary course of business, sell, lease or otherwise
     dispose of any assets which, in the reasonable judgment of such
     Person, are obsolete, worn out or otherwise no longer useful in the
     conduct of such Person's business, (y) sell, lease or otherwise
     dispose of any other assets, provided that each such sale, lease or
     disposition shall be for fair market value (other than with respect to
     sales, leases or dispositions in an aggregate amount not to exceed
     $100,000 per calendar year) and at least 75% of the consideration
     therefor shall be in the form of cash, and provided further, that (A)
     except as provided in following clause (B), the aggregate Net Sale
     Proceeds of all assets subject to sales or other dispositions pursuant
     to clauses (x) and (y) shall not exceed $15,000,000 in the aggregate
     in any Fiscal Year and (B) in addition to sales effected pursuant to<PAGE>


     preceding clause (A), additional assets may be sold pursuant to this
     Section 9.02(ii) so long as at least 90% of the aggregate
     consideration for any such asset sale shall be in the form of cash and
     so long as the aggregate Net Sale Proceeds of all assets sold pursuant
     to this clause (B) after the Second Restatement Effective Date do not
     exceed $75,000,000, and (z) enter into transactions permitted under
     Section 9.01(vi);

           (iii)  Investments may be made to the extent permitted by
     Section 9.05;

          (iv)  each of the Borrowers and their Restricted Subsidiaries may
     lease (as lessee) real or personal property (so long as any such lease
     does not create a Capitalized Lease Obligation except to the extent
     permitted by Section 9.04);

          (v)  each of the Borrowers and their Restricted Subsidiaries may
     make sales or transfers of inventory (x) in the ordinary course of
     business or (y) to any other Borrower or any Domestic Wholly-Owned
     Subsidiary of Furniture Brands which is a Subsidiary Guarantor;

          (vi)  sales and contributions of accounts receivable to the
     Receivables Subsidiary and sales of accounts receivable by the
     Receivables Subsidiary to the Receivables Purchasers, and purchases
     and acquisitions of accounts receivable by the Receivables Subsidiary,
     in each case pursuant to the Receivables Facility shall be permitted;

          (vii)  the Borrowers and their respective Restricted Subsidiaries
     shall be permitted to make Permitted Acquisitions so long as (A) such
     Permitted Acquisitions are effected in accordance with the
     requirements of Section 8.14, (B)  after giving effect to any
     Permitted Acquisition, the aggregate amount paid (including for the
     purpose of this clause (vii) all cash consideration paid, the amount
     of all Indebtedness and/or Disqualified Preferred Stock directly
     issued as consideration, the face amount of all Permitted Acquired
     Debt incurred or assumed and the fair market value of any merger con-
     sideration, but excluding the fair market value of all Furniture
     Brands Common Stock and/or Qualified Preferred Stock issued as
     consideration therefor, in each case in connection with such Permitted
     Acquisition) by the Borrowers and their Restricted Subsidiaries in
     connection with such Permitted Acquisition shall not exceed the
     Available Permitted Acquisition Amount at such time (after giving
     effect to all prior and contemporaneous adjustments thereto, except as
     a result of such Permitted Acquisition); provided that in no event
     shall such aggregate amount paid in connection with Permitted
     Acquisitions effected after the Second Restatement Effective Date
     (calculated in accordance with the first parenthetical contained in
     preceding clause (B)), when added to the amount of Investments made
     after the Second Restatement Effective Date pursuant to Section
     9.05(vii), exceed $75,000,000 plus the Returned Investment Amount as
     calculated on the date any determination is being made pursuant to
     this proviso, and (C) with respect to each Permitted Acquisition, no
     Default or Event of Default is in existence at the time of the<PAGE>


     consummation of such Permitted Acquisition or would exist after giving
     effect thereto;

          (viii)  Furniture Brands may sell or otherwise dispose of any
     shares of capital stock of any Unrestricted Subsidiaries owned by it;

          (ix)  so long as no Default or Event of Default then exists or
     would result therefrom, the Borrowers or any Domestic Wholly-Owned
     Subsidiary which is a Restricted Subsidiary (other than the
     Receivables Subsidiary) of Furniture Brands may be merged into or
     consolidated with any Borrower (so long as such Borrower is the
     surviving corporation of such merger) or any other Domestic Wholly-
     Owned Subsidiary which is a Restricted Subsidiary (other than the
     Receivables Subsidiary) of the Borrowers;

          (x)  the Borrowers and their respective Restricted Subsidiaries
     (other than the Receivables Subsidiary) shall be permitted to merge
     with another Person (so long as such Borrower or Restricted Subsidiary
     is the surviving corporation), so long as such merger is used to
     effect a Permitted Acquisition in compliance with Section 9.02(vii);
     and

          (xi)  the Borrowers may sell or otherwise dispose of Excluded
     Assets.

     To the extent the Required Banks (or, the Required Supermajority Banks
     to the extent required by Section 13.12(a)) waive the provisions of
     this Section 9.02 with respect to the sale of any Collateral, or any
     Collateral is sold as permitted by this Section 9.02, such Collateral
     (unless sold to Furniture Brands or a Subsidiary of Furniture Brands)
     shall be sold free and clear of the Liens created by the Security
     Documents, and the Administrative Agent and Collateral Agent shall be
     authorized to take any actions deemed appropriate in order to effect
     the foregoing.

          9.03     Dividends.  Furniture Brands shall not, and shall not
     permit any of its Restricted Subsidiaries to, authorize, declare or
     pay any Dividends with respect to Furniture Brands or any of its
     Restricted Subsidiaries, except that:

          (i)  any Restricted Subsidiary of any Borrower may pay Dividends
     to such Borrower or any Wholly-Owned Subsidiary which is a Restricted
     Subsidiary of the Borrowers;

          (ii)  so long as no Default or Event of Default exists or would
     result therefrom, Furniture Brands shall be permitted to pay Dividends
     (including, without limitation, Dividends on Qualified Preferred Stock
     and payments made to repurchase or redeem Furniture Brands Warrants or
     outstanding capital stock of Furniture Brands) in an amount not to
     exceed (A) the Available $25 Million Dividend Basket Amount on such
     date (after giving effect to all prior and contemporaneous reductions
     thereto, except as a result of such Dividend), plus (B) the Available
     Net Income Amount on such date (after giving effect to all prior and
     contemporaneous adjustments thereto, except as a result of such<PAGE>


     Dividend) plus (C) the then Available Unrestricted Proceeds Amount
     (after giving effect to all prior and contemporaneous adjustments
     thereto, except as a result of such Dividend), minus (D) all Guaranty
     Payments made by Furniture Brands pursuant to Section
     9.10(b)(ii)(y)(A) and (B);

          (iii)  so long as no Default or Event of Default exists or would
     result therefrom, Furniture Brands may pay regularly accruing cash
     Dividends on Disqualified Preferred Stock in accordance with the terms
     of the certificate of designation therefor; and

          (iv)  the Stock Repurchase may be consummated within 5 Business
     Days after the Third Restatement Effective Date.

          9.04     Indebtedness.  Furniture Brands will not, and will not
     permit any of its Restricted Subsidiaries to, contract, create, incur,
     assume or suffer to exist any Indebtedness, except:

          (i)  Indebtedness incurred pursuant to this Agreement and the
     other Credit Documents;

          (ii)  Permitted Subordinated Indebtedness not to exceed (x) in an
     aggregate principal amount of $150,000,000 at any time outstanding,
     minus the aggregate liquidation preference or amount of all
     Disqualified Preferred Stock issued on or prior to the date of the
     incurrence of such Permitted Subordinated Indebtedness pursuant to
     Section 9.12(b)(i), provided that to the extent Permitted Subordinated
     Indebtedness is incurred under this clause (ii)(x) and (1) any portion
     of such Permitted Subordinated Indebtedness is being issued as con-
     sideration in connection with a Permitted Acquisition or (2) there is
     not a mandatory repayment pursuant to Section 4.02(A)(b) in an amount
     equal to 100% of the Net Cash Proceeds thereof, such incurrence shall
     only be permitted if the Administrative Agent has received a certi-
     ficate from, and signed by an Authorized Representative of, Furniture
     Brands showing that immediately after the incurrence of such Permitted
     Subordinated Indebtedness, the Senior Debt Leverage Ratio, calculated
     on a Pro Forma Basis after giving effect to the incurrence of such
     Indebtedness, shall not exceed 3.5:1.0, plus (y) an amount of
     Permitted Subordinated Indebtedness incurred and simultaneously used
     to repay, refinance or otherwise replace the Receivables Facility in
     accordance with the terms hereof, in each case shall be permitted on
     terms and conditions set forth in the definition of Permitted
     Subordinated Indebtedness and on other terms and conditions reasonably
     satisfactory to the Administrative Agent and the Required Banks
     (provided that such other terms and conditions shall be deemed satis-
     factory to the Required Banks unless objected to by the Required Banks
     in writing on or prior to the date which is twenty Business Days after
     the documentation therefor is delivered to the Banks);

          (iii)  Permitted Unsecured Indebtedness not to exceed in
     aggregate principal amount $25,000,000 at any time outstanding minus
     the aggregate liquidation preference or amount of all Disqualified
     Preferred Stock issued on or prior to the date of the incurrence of
     such Permitted Unsecured Indebtedness pursuant to Section 9.12(b)(ii),<PAGE>


     shall be permitted on terms and conditions set forth in the definition
     of Permitted Unsecured Indebtedness and on other terms and conditions
     reasonably satisfactory to the Administrative Agent; provided that to
     the extent Permitted Unsecured Indebtedness is incurred under this
     clause (iii) and (1) any portion of such Permitted Unsecured
     Indebtedness is being issued as consideration in connection with a
     Permitted Acquisition or (2) there is not a mandatory repayment
     pursuant to Section 4.02(A)(b) in an amount equal to 100% of the Net
     Cash Proceeds thereof, such incurrence shall only be permitted if the
     Administrative Agent has received a certificate from, and signed by an
     Authorized Representative of, Furniture Brands showing that
     immediately after the incurrence of such Permitted Unsecured
     Indebtedness, the Senior Debt Leverage Ratio, calculated on a Pro
     Forma Basis after giving effect to the incurrence of such Indebted-
     ness, shall not exceed 3.5:1.0;

          (iv)  Existing Indebtedness shall be permitted to the extent the
     same is listed on Schedule VII, but no refinancings or renewals
     thereof, except as expressly permitted on such Schedule VII;

          (v)  accrued expenses and current trade accounts payable incurred
     in the ordinary course of business;

          (vi) Indebtedness under Interest Rate Protection Agreements
     entered into in compliance with Section 8.12;

          (vii) Indebtedness of the Borrowers and their Restricted
     Subsidiaries evidenced by Capitalized Lease Obligations to the extent
     permitted pursuant to Section 9.01(vii), and Indebtedness secured by
     Liens permitted under Section 9.01(viii) and Permitted Acquired Debt;
     provided that in no event shall the aggregate principal amount of
     Capitalized Lease Obligations and Indebtedness permitted by this
     clause (vii) exceed $20,000,000;

          (viii)  Indebtedness under Currency Hedging Agreements entered
     into in compliance with Section 9.05(ix);

          (ix)  Contingent Obligations (a)  of the Borrowers or any
     Restricted Subsidiary as a guarantor of the lessee under any lease pur-
     suant to which the Borrowers or a Restricted Subsidiary is the lessee
     so long as such lease is otherwise permitted hereunder, (b) of
     Furniture Brands constituting guarantees by Furniture Brands of trade
     payables owing in the ordinary course of business by its Restricted
     Subsidiaries and (c) of Furniture Brands and/or Thomasville consisting
     of guarantees (with the maximum amount guaranteed at any time pursuant
     to this clause (c) not to exceed $7,500,000 in the aggregate) of
     actual or potential claims under Environmental Laws as referenced in
     Section  9.01(xvi)(y);

          (x)  Contingent Obligations of Furniture Brands pursuant to (x)
     the Surviving Guaranties; provided that the making of any payments
     thereunder, and any renewals or extensions of such Surviving
     Guaranties, shall be subject to restrictions set forth in Section
     9.10(b) and (y) the Tax Sharing Agreements;<PAGE>


          (xi)  Indebtedness (a) consisting of Attributed Receivables
     Facility Indebtedness of the Receivables Subsidiary so long as the Net
     Cash Proceeds of Attributed Receivables Facility Indebtedness in
     excess of $240,000,000 shall be applied to make mandatory repayments
     in accordance with Section 4.02(A)(b) and (b) consisting of the
     Contingent Obligations of Furniture Brands in respect of certain of
     its Restricted Subsidiaries (other than the Receivables Subsidiary)
     with respect to certain limited obligations under the Receivables
     Facility as set forth in the Receivables Documents; and

          (xii)  Indebtedness among the Borrowers and their Restricted
     Subsidiaries to the extent permitted pursuant to Section 9.05(v).

          In furtherance of the foregoing and in no way in limitation
     thereof, Furniture Brands shall not permit any Unrestricted Subsidiary
     to incur any Indebtedness having any element of recourse to Furniture
     Brands or its Restricted Subsidiaries or to any of their assets or
     property.

          9.05     Investments; etc.  The Borrowers will not, and will not
     permit any of their respective Restricted Subsidiaries to, directly or
     indirectly, lend money or credit or make advances to any Person, or
     purchase or acquire any stock, obligations or securities of, or any
     other interest in, or make any capital contribution to, any other
     Person, or purchase or own a futures contract or otherwise become
     liable for the purchase or sale of currency or other commodities at a
     future date in the nature of a futures contract, or hold any cash or
     Cash Equivalents (any of the foregoing, an "Investment"), except that
     the following shall be permitted:

          (i)  the Borrowers and their Restricted Subsidiaries may acquire
     and hold accounts receivables owing to any of them, if created or
     acquired in the ordinary course of business and payable or discharge-
     able in accordance with customary terms;

          (ii) the Borrowers and their Restricted Subsidiaries may acquire
     and hold cash and Cash Equivalents (including cash and Cash
     Equivalents held by Furniture Brands on behalf of its Restricted
     Subsidiaries pursuant to the Cash Management System);

          (iii) Furniture Brands and its Restricted Subsidiaries may make
     loans and advances in the ordinary course of business to their
     respective employees so long as the aggregate principal amount thereof
     at any time outstanding (determined without regard to any write-downs
     or write-offs of such loans and advances) shall not exceed $1,000,000;

          (iv) the Borrowers may enter into Interest Rate Protection
     Agreements to the extent permitted in Section 9.04(vi);

          (v) any Credit Party or the Receivables Subsidiary may make
     intercompany loans and advances to any other Credit Party;<PAGE>


          (vi)  the Borrowers may (x) establish Subsidiaries in compliance
     with Section 9.11 and (y) make Investments therein as otherwise
     provided in this Section  9.05;

          (vii)  so long as no Default or Event of Default exists, or would
     result therefrom, the Borrowers and their Restricted Subsidiaries may
     make Investments at any time in an amount not to exceed the sum of (A)
     the Available $10 Million Acquisition/Investment Basket Amount at such
     time (after giving effect to all prior and contemporaneous reductions
     thereto, except as a result of such Investment), plus (B) the then
     Available Unrestricted Proceeds Amount at such time (after giving
     effect to all prior and contemporaneous adjustments thereto, except as
     a result of such Investment), plus (C) the Available Net Income Amount
     (after giving effect to all prior and contemporaneous adjustments
     thereto, except as a result of such Investment), plus (D) the
     Available Returned Investment Amount (after giving effect to all prior
     and contemporaneous adjustments thereto, except as a result of such
     Investment); provided that in no event shall the aggregate amount of
     Investments made pursuant to this clause (vii) after the Second
     Restatement Effective Date, when added to the aggregate amount paid in
     connection with Permitted Acquisitions effected after the Second
     Restatement Effective Date (calculated in accordance with the first
     parenthetical contained in Section 9.02(vii)(B)), exceed $75,000,000
     plus the Returned Investment Amount as calculated on the date any
     determination is being made pursuant to this clause (vii);

          (viii)  the Borrowers and their Restricted Subsidiaries may
     retain cash consideration plus purchase money notes derived from asset
     sales permitted pursuant to Section 9.02(ii);

          (ix)  the Borrowers may enter into and perform their obligations
     under Currency Hedging Agreements entered into in the ordinary course
     of business and consistent with past practices so long as (i) any such
     Currency Hedging Agreement is related to income derived from foreign
     operations of the Borrowers or any Restricted Subsidiary (or any
     Foreign Sales Corporation which is a Restricted Subsidiary) or
     otherwise related to purchases permitted hereunder from foreign
     suppliers and (ii) such Currency Hedging Agreements do not exceed a
     notional amount equal to $15,000,000 in the aggregate at any one time;

          (x)  the Borrowers and their Restricted Subsidiaries may acquire
     and own investments (including notes or other debt obligations or
     securities) received in connection with the bankruptcy or
     reorganization of their suppliers and customers and in settlement of
     delinquent obligations of, or disputes with, their customers or
     suppliers in the ordinary course of business;

          (xi)  existing Investments by the Borrowers and their Restricted
     Subsidiaries shall be permitted to the extent listed on Schedule X;

          (xii)  the Restricted Subsidiaries of Furniture Brands may
     contribute accounts receivable to the Receivables Subsidiary in
     accordance with the provisions of the Receivables Documents;<PAGE>


          (xiii)  Furniture Brands shall be permitted to make capital
     contributions to Foreign Sales Corporations in an amount not to exceed
     $100,000 in the aggregate; and

          (xiv)  Permitted Acquisitions shall be permitted in compliance
     with Sections 8.14 and 9.02(vii).

          9.06     Transactions with Affiliates and Unrestricted
     Subsidiaries.  The Borrowers will not, and will not permit any of
     their respective Restricted Subsidiaries to, enter into any
     transaction or series of related transactions with any Affiliate of
     Furniture Brands or any of its Subsidiaries or any of its Unrestricted
     Subsidiaries, other than in the ordinary course of business and on
     terms and conditions substantially as favorable to the Borrowers or
     such Restricted Subsidiary as would reasonably be obtained by the
     Borrowers or such Restricted Subsidiary at that time in a comparable
     arm's-length transaction with a Person other than an Affiliate, except
     that:

          (i)  Dividends may be paid to the extent provided in Section
     9.03;

          (ii)  Investments may be made to the extent permitted by Section
     9.05;

          (iii)  the transactions entered into between the Borrowers and
     their Subsidiaries shall be permitted to the extent expressly
     permitted by Section 9.02;

          (iv)  customary fees may be paid to non-officer directors of the
     Borrowers and their Restricted Subsidiaries;

          (v)  Furniture Brands and its Restricted Subsidiaries may enter
     into employment arrangements with respect to the procurement of
     services with their respective officers and employees in the ordinary
     course of business;

          (vi)  the Borrowers and their respective Restricted Subsidiaries
     may make (x) capital contributions to any of their respective
     Restricted Subsidiaries which is a Credit Party or (y) capital
     contributions of accounts receivable to the Receivables Subsidiary in
     accordance with the Receivables Documents;

          (vii)  existing transactions between Furniture Brands and its
     Subsidiaries and their Affiliates shall be permitted to the extent
     listed on Schedule XI; 

          (viii)  Furniture Brands may sell or issue Furniture Brands
     Common Stock and Qualified Preferred Stock to its Affiliates (other
     than its Subsidiaries);

          (ix)  Furniture Brands may modify the Tax Sharing Agreement as
     provided in Section 9.10(c); and<PAGE>



          (x)  the Stock Repurchase may be consummated within 5 Business
     Days after the Third Restatement Effective Date.

          Except as specifically provided above, no management or similar
     fees shall be paid or payable by Furniture Brands or any of its
     Restricted Subsidiaries to any Affiliate (other than Furniture
     Brands).

          Notwithstanding anything contained in the foregoing to the
     contrary, any transactions between and among Furniture Brands and/or
     Restricted Subsidiaries on the one hand and any of their respective
     Affiliates (excluding Furniture Brands and its Restricted
     Subsidiaries) on the other hand, shall be arm's-length transactions
     and on terms and conditions at least as favorable to Furniture Brands
     and/or such Restricted Subsidiaries as the terms and conditions which
     would apply to a similar transaction on an arm's-length basis with a
     Person that is not an Affiliate; provided, that, any transaction
     (other than as described in clauses (i), (ii), (iii) and (vi) above)
     between and among the aforementioned parties with a value in excess of
     $1,000,000 shall only be permitted if a majority of the disinterested
     directors of Furniture Brands approve the transaction.

          9.07     Capital Expenditures.  (a)  The Borrowers will not, and
     will not permit any of their respective Restricted Subsidiaries to,
     make any Capital Expenditures, except that the Borrowers and their
     Restricted Subsidiaries may make Capital Expenditures so long as the
     aggregate amount of such Capital Expenditures made pursuant to this
     clause (a) does not exceed $60,000,000 in any Fiscal Year (beginning
     with the Fiscal Year ended in 1997). 

          (b)  Notwithstanding anything to the contrary contained above, to
     the extent that $60,000,000 exceeds the aggregate amount of Capital
     Expenditures made by the Borrowers, and their Restricted Subsidiaries
     pursuant to Section 9.07(a) during any Fiscal Year (beginning with the
     Fiscal Year ended in 1997), such excess may be carried forward and
     used by the Borrowers and their respective Restricted Subsidiaries to
     make additional Capital Expenditures during subsequent Fiscal Years;
     provided that the maximum amount carried forward pursuant to this
     clause (b) into any Fiscal Year shall be $20 million, with any amounts
     otherwise permitted to be carried forward to lapse and terminate at
     such time, if any, as they are not permitted to be carried forward
     into a subsequent Fiscal Year by virtue of this proviso.

          (c)  In addition to the Capital Expenditures permitted pursuant
     to preceding clauses (a) and (b), the Borrowers and their respective
     Restricted Subsidiaries shall be permitted to make additional Capital
     Expenditures to the extent consisting of the reinvestment of proceeds
     of Recovery Events not required to be applied as a mandatory repayment
     pursuant to the provisions of Section 4.02(A)(d).

          9.08     Consolidated Net Interest Coverage Ratio.  The Borrowers
     will not permit the Consolidated Net Interest Coverage Ratio for any
     period of four consecutive fiscal quarters, in each case taken as one<PAGE>


     accounting period, ended on the last day of a fiscal quarter set forth
     below to be less than the amount set forth opposite such period below:

          Fiscal Quarter
          Ended Closest to          Ratio

          June 30, 1997          3.00:1.00
          September 30, 1997     3.00:1.00

          December 31, 1997      3.00:1.00
          March 31, 1998         3.00:1.00
          June 30, 1998          3.00:1.00
          September 30, 1998     3.25:1.00
          December 31, 1998      3.25:1.00
          March 31, 1999         3.50:1.00
              and the last day of 
              each fiscal quarter thereafter 

          9.09     Maximum Leverage Ratio.  The Borrowers will not permit
     the Leverage Ratio at any time to be greater than the ratio set forth
     opposite the fiscal quarter most recently ended as set forth below:

          Fiscal Quarter
          Ended Closest to       Ratio

          June 30, 1997          4.65:1.00
          September 30, 1997     4.65:1.00

          December 31, 1997      4.65:1.00
          March 31, 1998         4.50:1.00
          June 30, 1998          4.50:1.00
          September 30, 1998     4.35:1.00
          December 31, 1998      4.25:1.00
          March 31, 1999         4:00:1.00
              and the last day of each
              fiscal quarter thereafter

          9.10     Limitation on Modifications of and Payments on
     Indebtedness and Qualified Preferred Stock; Modifications of
     Certificate of Incorporation, By-Laws and Certain Other Agreements;
     Surviving Guaranty Payments, etc.   (a)    The Borrowers will not, and
     will not permit any of their respective Restricted Subsidiaries to,
     (i) make (or give any notice in respect of) any voluntary or optional
     payment or prepayment on or redemption, repurchase or acquisition for
     value of any of the Existing Indebtedness, or after the incurrence
     thereof, any Permitted Unsecured Indebtedness, Permitted Subordinated
     Indebtedness or Disqualified Preferred Stock (any such payment,
     prepayment, redemption or acquisition, a "Restricted Junior Payment"),
     if at such time (x) a Default or Event of Default then exists or
     arises therefrom or (y) such Restricted Junior Payment shall exceed an
     amount equal to the sum of (A) the then Available Unrestricted
     Proceeds Amount (after giving effect to all prior or contemporaneous
     adjustments thereto, except as a result of such Restricted Junior
     Payment) and (B) the then Available Net Income Amount (after giving<PAGE>


     effect to all prior and contemporaneous adjustments thereto, except as
     a result of such Restricted Junior Payment), (ii) amend or modify, or
     permit the amendment or modification of, any provision of the Existing
     Indebtedness or the Receivables Documents or, after the incurrence or
     issuance thereof, any Permitted Unsecured Indebtedness, Permitted
     Subordinated Indebtedness, Qualified Preferred Stock or Disqualified
     Preferred Stock or of any agreement (including, without limitation,
     any purchase agreement, indenture, loan agreement, security agreement
     or certificate of designation) relating thereto, other than any amend-
     ments or modifications to the Existing Indebtedness, the Receivables
     Documents, any Permitted Unsecured Indebtedness, any Permitted
     Subordinated Indebtedness, any Qualified Preferred Stock and any
     Disqualified Preferred Stock which (A) do not make any term or
     condition thereof more restrictive than the previously existing terms
     and conditions with respect thereto, (B) do not in any way materially
     adversely affect the interests of the Banks and (C) do not increase
     the interest or dividend rates applicable thereunder, reduce the
     maturity date thereunder or change any pay-in-kind mechanics or
     requirements or any subordination provision thereof or (iii) amend or
     modify its Certificate of Incorporation (including, without
     limitation, by the filing or modification of any certificate of
     designation, other than any certificate of designation relating to
     Qualified Preferred Stock or Disqualified Preferred Stock) or By-Laws,
     or any agreement entered into by it, with respect to its capital stock
     (including any Shareholders' Agreement), or enter into any new
     agreement with respect to its capital stock if the foregoing would in
     any way materially and adversely affect the Banks.

          (b)    Furniture Brands will not (i) amend, extend, renew or
     modify, or permit the amendment, extension, renewal or modification
     of, any provision of the Surviving Guaranties (or any lease obligation
     guarantied thereby) or any agreement relating thereto, other than any
     renewal or extension of a lease obligation guarantied by any Surviving
     Guaranty pursuant to the renewal and/or extension provisions contained
     therein as in effect on the Original Effective Date which (a) creates
     a continuing guaranty obligation with respect to such existing lease
     (without any amendments thereto which would increase the lessee's
     obligations thereunder), (b) is exercised (x) not more than 30 days
     prior to the last day on which such extension or renewal may be
     exercised in accordance with the terms of the lease relating thereto
     and (y) at a time when no Default or Event of Default then exists or
     arises therefrom and (c) creates future fixed payment obligations with
     respect thereto which, when combined with all future fixed payment
     obligations under renewals and/or extensions made in compliance with
     this Section 9.10(b)(i), would not exceed $10,000,000 or (ii) make any
     payment whatsoever, whether voluntary, mandatory or otherwise, in
     respect of the Surviving Guaranties (any such payment, a "Guaranty
     Payment") if at such time (x) a Default or Event of Default then
     exists or arises therefrom or (y) such payment shall exceed an amount
     equal to the sum of (A) $5,000,000 less the amount of all Guaranty
     Payments theretofore made after the Second Restatement Effective Date
     pursuant to this clause (A), plus (B) at any time, the aggregate
     amount of Dividends which could be made pursuant to (1) Section
     9.03(ii)(A), (2) Section 9.03(ii)(B) and (3) Section 9.03(ii)(C), in<PAGE>


     each case at such time (without including the amount of such Guaranty
     Payment contemplated to be included in the calculation pursuant to
     Section 9.03(ii)(D) at such time), plus (C) the amount of any such
     Guaranty Payment made with the cash proceeds of issuance of equity by
     Furniture Brands after the Second Restatement Effective Date.

          (c)    The Borrowers will not, and will not permit any of their
     respective Restricted Subsidiaries to, amend, modify or change any
     provision of any Tax Sharing Agreement other than any amendment,
     modification or change deemed immaterial by the Administrative Agent
     or as otherwise consented to by the Required Banks.

          9.11     Limitation on Creation or Acquisition of Subsidiaries
     and Restricted Subsidiaries.  The Borrowers will not, and will not
     permit any of their respective Restricted Subsidiaries to, establish,
     create or acquire after the Third Restatement Effective Date any
     Subsidiary, unless (x) if such Subsidiary is an Unrestricted
     Subsidiary (other than a Foreign Sales Corporation), (i) it is
     established, created or acquired by Furniture Brands or another
     Unrestricted Subsidiary, (ii) if owned by Furniture Brands, 100% of
     the capital stock of such new Unrestricted Subsidiary owned by
     Furniture Brands shall be pledged pursuant to the Pledge Agreement and
     the certificates representing such stock, together with stock powers
     duly executed in blank, shall be delivered to the Collateral Agent and
     (iii) such Unrestricted Subsidiary shall, at the request of the
     Administrative Agent, become a party to a Tax Sharing Agreement, (y)
     if such Subsidiary is a Restricted Subsidiary (other than a Foreign
     Sales Corporation), (i) at least 10 Business Days' prior written
     notice thereof is given to the Administrative Agent and the Banks,
     (ii) 100% of the capital stock of such new Subsidiary is pledged
     pursuant to the Pledge Agreement and the certificates representing
     such stock, together with stock powers duly executed in blank, are
     delivered to the Collateral Agent and (iii) such new Restricted
     Subsidiary executes a counterpart of the Subsidiary Guaranty, the
     Security Agreement and the Pledge Agreement or (z) if such Subsidiary
     is a Foreign Sales Corporation, any Investment therein is made in
     accordance with Section 9.05(xiii).  In addition, each new Restricted
     Subsidiary shall execute and deliver, or cause to be executed and
     delivered, all other relevant documentation of the type described in
     Section  5 as such new Restricted Subsidiary would have had to deliver
     if such new Restricted Subsidiary were a Restricted Subsidiary and/or
     a Subsidiary Guarantor on the Third Restatement Effective Date.

          9.12     Limitation on Issuance of Capital Stock.  (a)   
     Furniture Brands shall not issue (i) any Preferred Stock (other than
     Qualified Preferred Stock and Disqualified Preferred Stock issued
     pursuant to clause (b) below) or (ii) any redeemable common stock
     unless, in either case, all terms thereof are satisfactory to the
     Required Banks in their sole discretion.

          (b)    Furniture Brands may issue Disqualified Preferred Stock
     not to exceed in aggregate liquidation preference or amount (i)
     $150,000,000 minus the aggregate principal amount of all Permitted
     Subordinated Indebtedness issued pursuant to Section 9.04(ii)(x), plus<PAGE>


     (ii) $25,000,000 minus the aggregate principal amount of all Permitted
     Unsecured Indebtedness issued pursuant to Section 9.04(iii), plus
     (iii) any amount of Disqualified Preferred Stock the proceeds of which
     are used to repay, refinance or otherwise replace the Receivables
     Facility in accordance with the terms hereof, on terms and conditions
     set forth in the definition of Disqualified Preferred Stock and on
     other terms and conditions reasonably satisfactory to the
     Administrative Agent; provided that to the extent Disqualified
     Preferred Stock is issued pursuant to preceding clauses (i) and/or
     (ii) and (1) any portion of such Disqualified Preferred Stock is being
     issued as consideration in connection with a Permitted Acquisition or
     (2) 100% of the Net Cash Proceeds therefrom are not immediately used
     to repay Loans pursuant to Section 4.02(A)(b), such issuance shall
     only be permitted if the Administrative Agent has received a
     certificate from, and signed by an Authorized Representative of,
     Furniture Brands showing that immediately after the issuance of such
     Disqualified Preferred Stock, the Senior Debt Leverage Ratio,
     calculated on a Pro Forma Basis after giving effect to such issuance,
     shall not exceed 3.5:1.0.  Notwithstanding anything to the contrary
     contained above, all Disqualified Preferred Stock issued pursuant to
     Section 9.12(b) shall be issued only where 100% of the consideration
     received for the issuance of such Disqualified Preferred Stock is
     cash, except that Disqualified Preferred Stock may be issued in
     accordance with Section 9.12(b)(i) and (ii) directly as consideration
     in connection with Permitted Acquisitions; provided that to the extent
     Disqualified Preferred Stock is issued pursuant to Section 9.12(b)(i)
     directly as consideration in connection with a Permitted Acquisition,
     the aggregate liquidation preference or amount of all Disqualified
     Preferred Stock issued after the Second Restatement Effective Date
     pursuant to said Section 9.12(b)(i) as consideration in connection
     with Permitted Acquisitions, when added to the sum of (x) the
     aggregate principal amount of all Permitted Subordinated Indebtedness
     so issued after the Second Restatement Effective Date as consideration
     in connection with Permitted Acquisitions pursuant to Section
     9.04(ii), (y) the aggregate principal amount of all Permitted
     Subordinated Indebtedness issued or incurred after the Second
     Restatement Effective Date but not issued as consideration in
     connection with Permitted Acquisitions and (z) the aggregate
     liquidation preference or amount of all Disqualified Preferred Stock
     issued after the Second Restatement Effective Date pursuant to Section
     9.12(b)(i) but not issued in consideration with Permitted
     Acquisitions, shall not exceed $50,000,000.

          (c)    No Restricted Subsidiary of Furniture Brands shall issue,
     or permit any of their Restricted Subsidiaries to issue, any capital
     stock (including by way of sales of treasury stock) or any options or
     warrants to purchase, or securities convertible into, capital stock,
     except (i) for transfers and replacements of then outstanding shares
     of capital stock, (ii) for stock splits, stock dividends and
     additional issuances which do not decrease the percentage ownership of
     Furniture Brands or any of its Restricted Subsidiaries in any class of
     the capital stock of such Restricted Subsidiaries, (iii) to qualify
     directors to the extent required by applicable law, and (iv)
     Restricted Subsidiaries formed after the Third Restatement Effective<PAGE>


     Date pursuant to Section 9.11 may issue capital stock to the Borrowers
     or the respective Restricted Subsidiary of the Borrowers which is to
     own such stock in accordance with the requirements of Section 9.11. 
     All capital stock issued in accordance with this Section 9.12(c)
     shall, to the extent required by the Pledge Agreement, be delivered to
     the Collateral Agent for pledge pursuant to the Pledge Agreement.

          9.13     Business.  The Borrowers will not, and will not permit
     any of their Restricted Subsidiaries to, engage (directly or
     indirectly) in any business other than substantially the same lines of
     business in which they are engaged on the Third Restatement Effective
     Date and reasonable extensions thereof.  No Restricted Subsidiary of
     Furniture Brands will, or will permit any of their Restricted
     Subsidiaries to, create or own any Unrestricted Subsidiaries.  The
     Foreign Sales Corporation will not engage in any business other than
     the sale of goods and/or services outside of the United States and any
     business reasonably incidental to the foregoing.

          9.14     Limitation on Certain Restrictions on Subsidiaries.  (a)
     The Borrowers will not, and will not permit any of their respective
     Restricted Subsidiaries to, directly or indirectly, create or other-
     wise cause or suffer to exist or become effective, except as set forth
     on Schedule XIII, any encumbrance or restriction on the ability of any
     such Restricted Subsidiary to (x) pay dividends or make any other dis-
     tributions on its capital stock or any other interest or participation
     in its profits owned by Furniture Brands or any Restricted Subsidiary
     of Furniture Brands, or pay any Indebtedness owed to Furniture Brands
     or a Restricted Subsidiary of Furniture Brands, (y) make loans or
     advances to Furniture Brands or any of Furniture Brands's Restricted
     Subsidiaries or (z) transfer any of its properties or assets to
     Furniture Brands, except for such encumbrances or restrictions exist-
     ing under or by reason of (i) applicable law, (ii) this Agreement and
     the other Credit Documents, (iii) customary provisions restricting
     subletting or assignment of any lease governing a leasehold interest
     of the Borrowers or a Restricted Subsidiary of the Borrowers, (iv)
     customary provisions restricting assignment of any licensing agreement
     entered into by the Borrowers or any Restricted Subsidiary of the
     Borrowers in the ordinary course of business and (v) restrictions on
     the Receivables Subsidiary set forth in the Receivables Documents.

          (b)    Furniture Brands will not permit any of its Unrestricted
     Subsidiaries to, directly or indirectly, create or otherwise cause or
     suffer to exist or become effective any restriction whatsoever on the
     operations of Furniture Brands and/or its Restricted Subsidiaries.

          9.15     Limitation on Receivables and Receivables Facility.  

    (a) The Receivables Subsidiary shall engage in no business activities
     other than the purchase, acquisition, sale and pledge of receivables
     (or interests therein) pursuant to the Receivables Facility and
     borrowings thereunder and any business activities reasonably
     incidental thereto, all in accordance with the Receivables Facility,
     and shall have no assets or liabilities, other than receivables
     purchased from each of the Borrowers and their Restricted
     Subsidiaries, cash collections therefrom, any investments of such cash<PAGE>


     collections and other assets and liabilities reasonably incidental to
     the foregoing activities, and shall in no event purchase any
     receivables from an Unrestricted Subsidiary.

          (b)    Furniture Brands and its Restricted Subsidiaries shall not
     cause, permit, or suffer to exist (including as a result of actions
     taken by the Receivables Purchasers) (i) unless the Receivables
     Facility has been terminated, refinanced or replaced as otherwise
     permitted under the provisions of this Agreement, the Receivables
     Subsidiary to cease selling receivables pursuant to the Receivables
     Facility for a period in excess of five consecutive Business Days
     (excluding any Business Day on which (x) none of Broyhill, Lane,
     Thomasville or Action generate any receivables or (y) no Term Loans,
     Swingline Loans and no Revolving Loans of Non-Defaulting Banks are
     outstanding), (ii)    the Receivables Facility to be terminated on any
     date prior to the date which is five years after the Third Restatement
     Effective Date except, in the event the Receivables Facility is
     repaid, refinanced or otherwise replaced in accordance with the terms
     hereof by Permitted Subordinated Indebtedness and/or Disqualified
     Preferred Stock and/or a replacement facility, (iii) an Event of
     Termination (as defined in either Receivables Purchase Agreement) to
     have occurred and be continuing and which shall not have been cured or
     waived for a period in excess of five consecutive Business Days or
     (iv) the sum of the Yield Reserve, the Loss Reserve, the Service Fee
     Reserve and the Dilution Reserve (each as defined in the Receivables
     Documents) to exceed 30% at any time.

          SECTION 10.     Events of Default.  Upon the occurrence of any of
     the following specified events (each an "Event of Default"):

          10.01     Payments.  The Borrowers shall (i) default in the
     payment when due of any principal of any Loan or any Note or (ii)
     default, and such default shall continue unremedied for three or more
     Business Days, in the payment when due of any Unpaid Drawings or
     interest on any Loan or Note, or any Fees or any other amounts owing
     hereunder or thereunder; or

          10.02     Representations, etc.  Any representation, warranty or
     statement made by any Credit Party herein or in any other Credit
     Document or in any certificate (including, without limitation, the
     certificates delivered pursuant to Section 5.21 of the Original Credit
     Agreement) delivered pursuant hereto or thereto shall prove to be
     untrue in any material respect on the date as of which made or deemed
     made; or

          10.03     Covenants.  The Borrowers shall (i) default in the due
     performance or observance by it of any term, covenant or agreement
     contained in Section 8.01(g)(i), 8.08, 8.11, 8.15, 8.16 or Section 9
     or (ii) default in the due performance or observance by it of any
     other term, covenant or agreement contained in this Agreement and such
     default shall continue unremedied for a period of 30 days after
     written notice to the Borrowers by the Administrative Agent or any
     Bank; or<PAGE>


          10.04     Default Under Other Agreements.  The Borrowers or any
     of their respective Restricted Subsidiaries shall (i) default in any
     payment of any Indebtedness (other than the Obligations) beyond the
     period of grace, if any, provided in the instrument or agreement under
     which such Indebtedness was created or (ii) default in the observance
     or performance of any agreement or condition relating to any
     Indebtedness (other than the Obligations) or contained in any
     instrument or agreement evidencing, securing or relating thereto, or
     any other event shall occur or condition exist, the effect of which
     default or other event or condition is to cause, or to permit the
     holder or holders of such Indebtedness (or a trustee or agent on
     behalf of such holder or holders) to cause (determined without regard
     to whether any notice is required), any such Indebtedness to become
     due prior to its stated maturity, or (iii) any Indebtedness (other
     than the Obligations) of the Borrowers or any of their respective
     Restricted Subsidiaries shall be declared to be due and payable, or
     required to be prepaid other than by a regularly scheduled required
     prepayment, prior to the stated maturity thereof, provided that (x) it
     shall not be a Default or Event of Default under this Section 10.04
     unless the aggregate principal amount of all Indebtedness as described
     in preceding clauses (i) through (iii), inclusive, is at least
     $5,000,000; or

          10.05     Bankruptcy, etc.  The Borrowers or any of their
     respective Subsidiaries shall commence a voluntary case concerning
     itself under Title 11 of the United States Code entitled "Bankruptcy,"
     as now or hereafter in effect, or any successor thereto (the
     "Bankruptcy Code"); or an involuntary case is commenced against the
     Borrowers or any of their respective Subsidiaries and the petition is
     not controverted within 30 days, or is not dismissed within 60 days,
     after commencement of the case; or a custodian (as defined in the
     Bankruptcy Code) is appointed for, or takes charge of, all or
     substantially all of the property of the Borrowers or any of their
     respective Subsidiaries, or the Borrowers or any of their respective
     Subsidiaries commences any other proceeding under any reorganization,
     arrangement, adjustment of debt, relief of debtors, dissolution,
     insolvency or liquidation or similar law of any jurisdiction whether
     now or hereafter in effect relating to the Borrowers or any of their
     respective Subsidiaries, or there is commenced against the Borrowers
     or any of their respective Subsidiaries any such proceeding which re-
     mains undismissed for a period of 60 days, or the Borrowers or any of
     their respective Subsidiaries is adjudicated insolvent or bankrupt; or
     any order of relief or other order approving any such case or proceed-
     ing is entered; or the Borrowers or any of their respective Subsidi-
     aries suffers any appointment of any custodian or the like for it or
     any substantial part of its property to continue undischarged or
     unstayed for a period of 60 days; or the Borrowers or any of their
     respective Subsidiaries makes a general assignment for the benefit of
     creditors; or any corporate action is taken by the Borrowers or any of
     their respective Subsidiaries for the purpose of effecting any of the
     foregoing; or

          10.06     ERISA.  (a)    Any Plan, Multiemployer Plan, and/or
     Spunoff Plan shall fail to satisfy the minimum funding standard<PAGE>


     required for any plan year or part thereof or a waiver of such
     standard or extension of any amortization period is sought or granted
     under Section 412 of the Code, any Plan, Multiemployer Plan and/or
     Spunoff Plan shall have had or is likely to have a trustee appointed
     to administer such Plan, Multiemployer Plan and/or Spunoff Plan
     pursuant to Section 4042 of ERISA, any Plan, Multiemployer Plan and/or
     Spunoff Plan shall have been or is reasonably expected to be
     terminated or to be the subject of termination proceedings under
     Section 4042 of ERISA, any Plan, Multiemployer Plan and/or Spunoff
     Plan shall have an Unfunded Current Liability, a contribution required
     to be made to a Plan, Multiemployer Plan, Spunoff Plan and/or Foreign
     Pension Plan has not been timely made, the Borrowers or any their
     respective Restricted Subsidiaries or any ERISA Affiliate has incurred
     or is reasonably expected to incur a liability to or on account of a
     Plan, Multiemployer Plan and/or Spunoff Plan under Section 409,
     502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
     ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code, the Bor-
     rowers or any of their respective Restricted Subsidiaries has incurred
     or is reasonably expected to incur liabilities pursuant to one or more
     employee welfare benefit plans (as defined in Section 3(1) of ERISA)
     which provide benefits to retired employees or other former employees
     (other than as required by Section 601 of ERISA) or employee pension
     benefit plans (as defined in Section 3(2) of ERISA) or Foreign Pension
     Plans, (b) there shall result from any such event or events the
     imposition of a lien, the granting of a security interest, or a
     liability or a material risk of incurring a liability; (c) and in each
     case in clauses (a) and (b) above, such lien, security interest or
     liability, individually, and/or in the aggregate, in the opinion of
     the Required Banks, will have a Material Adverse Effect; or

          10.07     Security Documents.  At any time after the execution
     and delivery thereof, any of the Security Documents shall cease to be
     in full force and effect, or shall cease in any material respect to
     give the Collateral Agent for the benefit of the Secured Creditors the
     Liens, rights, powers and privileges purported to be created thereby
     (including, without limitation, a perfected security interest in, and
     Lien on, all of the Collateral), in favor of the Collateral Agent,
     superior to and prior to the rights of all third Persons (except as
     permitted by Section 9.01), and subject to no other Liens (except as
     permitted by Section 9.01), or any Credit Party shall default in the
     due performance or observance of any term, covenant or agreement on
     its part to be performed or observed pursuant to any of the Security
     Documents and such default shall continue beyond any grace period
     specifically applicable thereto pursuant to the terms of such Security
     Document; or

          10.08     Subsidiary Guaranty.  The Subsidiary Guaranty or any
     provision thereof shall cease to be in full force or effect as to any
     Subsidiary Guarantor, or any Subsidiary Guarantor or Person acting by
     or on behalf of such Subsidiary Guarantor shall deny or disaffirm such
     Subsidiary Guarantor's obligations under the Subsidiary Guaranty, or
     any Subsidiary Guarantor shall default in the due performance or
     observance of any term, covenant or agreement on its part to be
     performed or observed pursuant to the Subsidiary Guaranty; or<PAGE>


          10.09     Judgments.  One or more judgments or decrees shall be
     entered against the Borrowers or any of their respective Restricted
     Subsidiaries involving in the aggregate for the Borrowers and their
     respective Restricted Subsidiaries a liability (not paid or fully
     covered by a reputable and solvent insurance company) and such judg-
     ments and decrees either shall be final and non-appealable or shall
     not be vacated, discharged or stayed or bonded pending appeal for any
     period of 60 consecutive days, and the aggregate amount of all such
     judgments exceeds $5,000,000; or

          10.10     Change of Control.  A Change of Control shall occur; or

          10.11     Tax Sharing Agreement.  One or more parties to a Tax
     Sharing Agreement (other than Borrowers or any of their respective
     Restricted Subsidiaries) shall have defaulted in its or their payment
     obligations (other than reimbursement obligations in respect of
     payments made under the Surviving Guaranties) in an aggregate amount
     equal to or greater than $2,500,000 thereunder and such default or
     defaults shall remain unremedied for a period in excess of ten
     consecutive Business Days; or

          10.12     Receivables Repurchases.  The Borrowers and/or their
     respective Restricted Subsidiaries shall have repurchased accounts
     receivables (pursuant to indemnity provisions or otherwise) from the
     Receivables Subsidiary and/or the Receivables Purchasers in an
     aggregate amount exceeding $20,000,000 in any Fiscal Year;

     then, and in any such event, and at any time thereafter, if any Event
     of Default shall then be continuing, the Administrative Agent, upon
     the written request of the Required Banks, shall by written notice to
     the Borrowers, take any or all of the following actions, without
     prejudice to the rights of any Agent, any Bank or the holder of any
     Note to enforce its claims against any Credit Party (provided that, if
     an Event of Default specified in Section 10.05 shall occur with re-
     spect to the Borrowers, the result of which would occur upon the giv-
     ing of written notice by the Administrative Agent to the Borrowers as
     specified in clauses (i) and (ii) below shall occur automatically
     without the giving of any such notice):  (i) declare the Total
     Commitment terminated, whereupon the Commitment of each Bank shall
     forthwith terminate immediately and any Commitment Commission and
     other Fees shall forthwith become due and payable without any other
     notice of any kind; (ii) declare the principal of and any accrued
     interest in respect of all Loans and the Notes and all Obligations
     owing hereunder and thereunder to be, whereupon the same shall become,
     forthwith due and payable without presentment, demand, protest or
     other notice of any kind, all of which are hereby waived by each
     Credit Party; (iii) terminate any Letter of Credit which may be
     terminated in accordance with its terms; (iv) direct the Borrowers to
     pay (and the Borrowers agree that upon receipt of such notice, or upon
     the occurrence of an Event of Default specified in Section 10.05 with
     respect to the Borrowers, they will pay) to the Collateral Agent at
     the Payment Office such additional amount of cash, to be held as
     security by the Collateral Agent, as is equal to the aggregate Stated
     Amount of all Letters of Credit issued for the account of the<PAGE>


     Borrowers and all Acceptances then outstanding; (v) enforce, as
     Collateral Agent, all of the Liens and security interests created
     pursuant to the Security Documents; and (vi) apply any cash collateral
     held for the benefit of the Banks pursuant to Section 4.02 to repay
     outstanding Obligations.

          SECTION 11.     Definitions and Accounting Terms.

          11.01     Defined Terms.  As used in this Agreement, the
     following terms shall have the following meanings (such meanings to be
     equally applicable to both the singular and plural forms of the terms
     defined):

          "Acceptance" shall have the meaning provided in Section 2.01(a).

          "Acceptance Facing Fee" shall having the meaning provided in
     Section 3.01(c).

          "Acceptance Fee" shall have the meaning provided in Section
     3.01(b).

          "Action" shall mean Action Industries, Inc., a Virginia
     corporation.

          "Additional Collateral" shall mean all property (whether real or
     personal) in which security interests are granted (or have been
     purported to be granted) (and continue to be in effect at the time of
     determination) pursuant to Section 8.11.

          "Additional Mortgage" shall have the meaning provided in Section
     8.11(a).

          "Additional Mortgaged Property" shall have the meaning provided
     in Section 8.11(a).

          "Additional Security Documents" shall mean all mortgages, pledge
     agreements, security agreements and other security documents entered
     into pursuant to Section 8.11 with respect to Additional Collateral.

          "Adjusted Certificate of Deposit Rate" shall mean, on any day,
     the sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained
     by dividing (x) the most recent weekly average dealer offering rate
     for negotiable certificates of deposit with a three-month maturity in
     the secondary market as published in the most recent Federal Reserve
     System publication entitled "Select Interest Rates," published weekly
     on Form H.15 as of the date hereof, or if such publication or a
     substitute containing the foregoing rate information shall not be
     published by the Federal Reserve System for any week, the weekly
     average offering rate determined by the Administrative Agent on the
     basis of quotations for such certificates received by it from three
     certificate of deposit dealers in New York of recognized standing or,
     if such quotations are unavailable, then on the basis of other sources
     reasonably selected by the Administrative Agent, by (y) a percentage
     equal to 100% minus the stated maximum rate of all reserve require-<PAGE>

     ments as specified in Regulation D applicable on such day to a three-
     month certificate of deposit of a member bank of the Federal Reserve
     System in excess of $100,000 (including, without limitation, any
     marginal, emergency, supplemental, special or other reserves), plus
     (2) the then daily net annual assessment rate as estimated by the
     Administrative Agent for determining the current annual assessment
     payable by the Administrative Agent to the Federal Deposit Insurance
     Corporation for insuring three-month certificates of deposit.

          "Adjusted Percentage" shall mean (x) at a time when no Bank
     Default exists, for each Bank, such Bank's Percentage and (y) at a
     time when a Bank Default exists (i) for each Bank that is a Defaulting
     Bank, zero and (ii) for each Bank that is a Non-Defaulting Bank, the
     percentage determined by dividing such Bank's Revolving Loan
     Commitment at such time by the Adjusted Total Revolving Loan
     Commitment at such time, it being understood that all references
     herein to Revolving Loan Commitments and the Adjusted Total Revolving
     Loan Commitment at a time when the Total Revolving Loan Commitment or
     Adjusted Total Revolving Loan Commitment, as the case may be, has been
     terminated shall be references to the Revolving Loan Commitments or
     Adjusted Total Revolving Loan Commitment, as the case may be, in
     effect immediately prior to such termination, provided that (A) no
     Bank's Adjusted Percentage shall change upon the occurrence of a Bank
     Default from that in effect immediately prior to such Bank Default, to
     the extent such change after giving effect to such Bank Default, and
     any repayment of Revolving Loans and Swingline Loans at such time
     pursuant to Section 4.02(a) or otherwise, would cause the sum of (i)
     the aggregate outstanding principal amount of Revolving Loans of all
     Non-Defaulting Banks plus (ii) the aggregate outstanding principal
     amount of Swingline Loans plus (iii) the Letter of Credit
     Outstandings, to exceed the Adjusted Total Revolving Loan Commitment;
     (B) any changes to the Adjusted Percentage that would have become
     effective upon the occurrence of a Bank Default but that did not
     become effective as a result of the preceding clause (A) shall become
     effective on the first date after the occurrence of the relevant Bank
     Default on which the sum of (i) the aggregate outstanding principal
     amount of the Revolving Loans of all Non-Defaulting Banks plus (ii)
     the aggregate outstanding principal amount of Swingline Loans plus
     (iii) the Letter of Credit Outstandings is equal to or less than the
     Adjusted Total Revolving Loan Commitment; and (C) if (i) a Non-
     Defaulting Bank's Adjusted Percentage is changed pursuant to the
     preceding clause (B) and (ii) any repayment of such Bank's Revolving
     Loans, or of Unpaid Drawings with respect to Letters of Credit or of
     Swingline Loans, that were made during the period commencing after the
     date of the relevant Bank Default and ending on the date of such
     change to its Adjusted Percentage must be returned to the Borrowers as
     a preferential or similar payment in any bankruptcy or similar
     proceeding of the Borrowers, then the change to such Non-Defaulting
     Bank's Adjusted Percentage effected pursuant to said clause (B) shall
     be reduced to that positive change, if any, as would have been made to
     its Adjusted Percentage if (x) such repayments had not been made and
     (y) the maximum change to its Adjusted Percentage would have resulted
     in the sum of the outstanding principal of Revolving Loans made by
     such Bank plus such Bank's new Adjusted Percentage of the outstanding<PAGE>


     principal amount of Swingline Loans and of Letter of Credit
     Outstandings equalling such Bank's Revolving Loan Commitment at such
     time.

          "Adjusted Total Revolving Loan Commitment" shall mean at any time
     the Total Revolving Loan Commitment less the aggregate Revolving Loan
     Commitments of all Defaulting Banks.

          "Administrative Agent" shall mean Bankers Trust Company, in its
     capacity as Administrative Agent for the Banks hereunder, and shall
     include any successor to the Administrative Agent appointed pursuant
     to Section 12.09.

          "Affiliate" shall mean, with respect to any Person, any other
     Person (including, for purposes of Section 9.06 only, all directors,
     officers and partners of such Person) directly or indirectly
     controlling, controlled by, or under direct or indirect common control
     with, such Person; provided, however, that for purposes of Section
     9.06, an Affiliate of Furniture Brands shall include any Person that
     directly or indirectly owns more than 5% of any class of the capital
     stock of Furniture Brands and any officer or director of Furniture
     Brands or any such Person.  A Person shall be deemed to control
     another Person if such Person possesses, directly or indirectly, the
     power to direct or cause the direction of the management and policies
     of such other Person, whether through the ownership of voting securi-
     ties, by contract or otherwise.

          "Agents" shall mean any of the Administrative Agent, the
     Collateral Agent, the Documentation Agent and the Syndication Agent. 

          "Agreement" shall mean this Credit Agreement, as modified,
     supplemented, amended, restated, extended, renewed or replaced from
     time to time.

          "Alternate Receivables Purchase Agreement" shall mean that
     Receivables Purchase Agreement, dated as of November 15, 1994, among
     the Receivables Subsidiary, as Seller, and Credit Lyonnais, as
     Purchaser and Agent, as amended and restated as of December 29, 1995,
     as same may be further amended, modified or supplemented from time to
     time in compliance with Section 9.10, or as replaced in compliance
     with the definition of Receivables Facility.

          "Apollo Group" shall mean Apollo Advisors, L.P., Lion Advisors,
     L.P., Apollo Investment Fund, L.P. and Apollo Advisors II, L.P., all
     Delaware limited partnerships.

          "Apollo Management Agreement" shall mean the consulting
     agreement, dated September 23, 1992, between Apollo Advisors, L.P. and
     Furniture Brands.

          "Applicable Margin" shall mean (A) in the case of Revolving
     Loans, a percentage per annum equal to (i) in the case of Base Rate
     Loans, 0.125% and (ii) in the case of Eurodollar Loans, 1.125%, in
     each case reduced (but not below zero) by the then applicable<PAGE>


     Reduction Percentage, if any, and (B) in the case of Term Loans, a
     percentage per annum equal to (i) in the case of Base Rate Loans,
     0.75% and (ii) in the case of Eurodollar Loans, 1.75%.

          "Armstrong Stock Purchase Agreement" shall mean the Stock
     Purchase Agreement, dated as of November 18, 1995, by and among
     Armstrong World Industries, Inc., Armstrong Enterprises, Inc. and
     Furniture Brands.

          "Assignment and Assumption Agreement" shall mean the Assignment
     and Assumption Agreement substantially in the form of Exhibit K
     (appropriately completed).

          "Atlantic" shall mean Atlantic Asset Securitization Corp., a
     Delaware corporation.

          "Atlantic Receivables Purchase Agreement" shall mean the
     Receivables Purchase Agreement, dated as of November 15, 1994, among
     the Receivables Subsidiary, Atlantic, as Purchaser, and Credit
     Lyonnais, as Agent, as amended and restated as of December 29, 1995 as
     same may be further amended, modified or supplemented from time to
     time in compliance with Section 9.10, or as replaced in compliance
     with the definition of Receivables Facility.

          "Attributed Receivables Facility Indebtedness" at any time shall
     mean the sum of (i)  the aggregate Invested Amount of Receivables
     Interests (as defined in the Receivables Documents) under the
     Receivables Purchase Agreements (it being the intent of the parties
     that the amount of Attributed Receivables Facility Indebtedness at any
     time outstanding approximate as closely as possible the principal
     amount of indebtedness which would be outstanding at such time under
     the Receivables Facility if same were structured as a secured lending
     agreement rather than a purchase agreement) plus (ii) the outstanding
     principal amount of Indebtedness under the Subordinated Loan
     Agreement.

          "Authorized Representative" shall mean, with respect to (i)
     delivering Notices of Borrowing, Notices of Conversion, Letter of
     Credit Requests and similar notices, any person or persons that has or
     have been authorized by the respective boards of the Borrowers to
     deliver such notices pursuant to this Agreement and that has or have
     appropriate signature cards on file with the Administrative Agent,
     BTCo and each Issuing Bank; (ii) delivering financial information and
     officer's certificates pursuant to this Agreement, any financial
     officer of Furniture Brands and (iii) any other matter in connection
     with this Agreement or any other Credit Document, any officer (or a
     person or persons so designated by any two officers) of Furniture
     Brands.

          "Available Debt Proceeds Amount" shall mean, on any date of
     determination, an amount equal to zero, plus (i) all Net Cash Proceeds
     received by the Borrowers after the Second Restatement Effective Date
     from the issuance of Permitted Subordinated Indebtedness pursuant to
     Section 9.04(ii)(x) and/or Permitted Unsecured Indebtedness pursuant<PAGE>


     to Section 9.04(iii) retained by any of the Borrowers on or prior to
     such date and not required to be used to repay Loans on or prior to
     such date pursuant to Section 4.02(A)(b), minus (ii) any amounts used
     to effect Permitted Acquisitions pursuant to clause (C) of the
     definition of Available Permitted Acquisition Amount on or prior to
     such date; provided that, at the time of the consummation of any
     Permitted Acquisition, the Available Debt Proceeds Amount shall be
     increased by the face amount of Permitted Acquired Debt (not being
     issued in return for Net Cash Proceeds) being incurred pursuant
     thereto and by the aggregate principal amount of Permitted
     Subordinated Indebtedness and/or Permitted Unsecured Indebtedness
     being directly issued as consideration in respect of such Permitted
     Acquisition (so long as no Net Cash Proceeds are received in
     connection therewith) (with the resultant increase in the Available
     Permitted Acquisition Amount, as provided in clause (C) of the
     definition thereof, for purposes of the consummation of the respective
     Permitted Acquisition), which increase in the Available Debt Proceeds
     Amount (and resultant increase in the Available Permitted Acquisition
     Amount) shall be reduced to zero immediately upon the consummation of
     the respective Permitted Acquisition.

          "Available Net Income Amount" shall mean on any date of
     determination an amount equal to zero, plus or minus (i) an amount
     equal to the Consolidated Cumulative 25% Net Income Amount on such
     date, minus (ii) any Dividend payments made by Furniture Brands
     pursuant to Section  9.03(ii)(B) on or prior to such date, minus (iii)
     any Investments made by the Borrowers or their Restricted Subsidiaries
     pursuant to Section 9.05(vii)(C), minus (iv) any Restricted Junior
     Payments made by Furniture Brands or its Restricted Subsidiaries
     pursuant to Section 9.10(a)(i)(y)(B), minus (v) any amount paid in
     connection with a Permitted Acquisition pursuant to clause (D) of the
     definition of Available Permitted Acquisition Amount, minus (vi) any
     Guaranty Payment made by Furniture Brands pursuant to Section 
     9.10(b)(ii)(y)(B)(2) on or prior to such date.

          "Available Permitted Acquisition Amount" shall mean, at the time
     of determination thereof, an amount equal to the sum of (A) the
     Available $10 Million Acquisition/Investment Basket Amount on such
     date (after giving effect to all prior and contemporaneous reductions
     thereto), plus (B) the Available Unrestricted Proceeds Amount on such
     date (after giving effect to all prior and contemporaneous reductions
     thereto), plus (C) the Available Debt Proceeds Amount on such date
     (after giving effect to all prior and contemporaneous reductions
     thereto), plus (D) the Available Net Income Amount on such date (after
     giving effect to all prior and contemporaneous reductions thereto).

          "Available Returned Investment Amount" shall mean on any date of
     determination an amount equal to (i) the Returned Investment Amount as
     calculated on such date, minus (ii) any amounts used to make
     Investments pursuant to Section 9.05(vii)(D) after the Second
     Restatement Effective Date and on or prior to such date.

          "Available $10 Million Acquisition/Investment Basket Amount"
     shall mean on any date of determination an amount equal to (i) <PAGE>


     $10,000,000, minus (ii) any amounts used to make Investments pursuant
     to Section 9.05(vii)(A) after the Second Restatement Effective Date
     and on or prior to such date, minus (iii) any amounts used to make
     Permitted Acquisitions pursuant to clause (A) of the definition of
     Available Permitted Acquisition Amount after the Second Restatement
     Effective Date and on or prior to such date.

          "Available $25 Million Dividend Basket Amount" shall mean on any
     date of determination an amount equal to (i)  $25,000,000, minus (ii) 
     any amounts used to pay Dividends pursuant to Section 9.03(ii)(A)
     after the Second Restatement Effective Date and on or prior to such
     date.

          "Available Unrestricted Proceeds Amount" shall mean, on any date
     of determination, an amount equal to zero, plus (i) all Net Cash
     Proceeds received by Furniture Brands from issuances of equity by
     Furniture Brands (including pursuant to any exercise of the Furniture
     Brands Warrants any exercise of stock options and the issuance of any
     Qualified Preferred Stock or Disqualified Preferred Stock of Furniture
     Brands) after the Second Restatement Effective Date and on or prior to
     such date, minus (ii) any amounts used to effect Permitted Acquisi-
     tions pursuant to clause (B) of the definition of Available Permitted
     Acquisition Amount after the Second Restatement Effective Date and on
     or prior to such date, minus (iii) any Dividend payments made by
     Furniture Brands pursuant to Section 9.03(ii)(C) after the Second
     Restatement Effective Date and on or prior to such date, minus (iv)
     any Investments by the Borrowers or their Restricted Subsidiaries pur-
     suant to Section 9.05(vii)(B) after the Second Restatement Effective
     Date and on or prior to such date, minus (v) any Restricted Junior
     Payments made by Furniture Brands or its Restricted Subsidiaries after
     the Second Restatement Effective Date and on or prior to such date
     pursuant to Section 9.10(a)(i)(y)(A), minus (vi) Guaranty Payments
     made by the Borrowers or their Restricted Subsidiaries after the
     Second Restatement Effective Date and on or prior to such date
     pursuant to Section 9.10(b)(ii)(y)(B)(3); provided that, at the time
     of the consummation of any Permitted Acquisition, the Available
     Unrestricted Proceeds Amount shall be increased by the aggregate
     liquidation preference or amount of Disqualified Preferred Stock being
     directly issued as consideration in connection with such Permitted
     Acquisition (where no Net Cash Proceeds are received in connection
     therewith) (with the resultant increase in the Available Permitted
     Acquisition Amount, as provided in clause (B) of the definition
     thereof, for purposes of a consummation of the respective Permitted
     Acquisition), which increase in the Available Unrestricted Proceeds
     Amount (and resultant increase in the Available Permitted Acquisition
     Amount) shall be reduced to zero immediately upon the consummation of
     the respective Permitted Acquisition.

          "Bank" shall mean each financial institution listed on Schedule
     I, as well as any Person which becomes a "Bank" hereunder pursuant to
     13.04(b).

          "Bank Default" shall mean (i)  the refusal (which has not been
     retracted) of a Bank, in violation of this Agreement, to make<PAGE>


     available its portion of any Borrowing (including any Mandatory
     Borrowing) or to fund its portion of any unreimbursed payment under
     Section 2.03(c) or (ii)  a Bank having notified in writing the
     Borrowers and/or the Administrative Agent that it does not intend to
     comply with its obligations under Section 1.01 or Section 2 in the
     case of either clause (i) or (ii), as a result of any takeover of such
     bank by any regulatory authority or agency.

          "Bankruptcy Code" shall have the meaning provided in Section
     10.05.

          "Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in
     excess of the Adjusted Certificate of Deposit Rate and (ii) the Prime
     Lending Rate.

          "Base Rate Loan" shall mean each Loan designated or deemed desig-
     nated as such by the Borrowers at the time of the incurrence thereof
     or conversion thereto.

          "Borrowers" shall have the meaning provided in the first
     paragraph of this Agreement.

          "Borrowing" shall mean the incurrence of (i)  Swingline Loans by
     the Borrower from BTCo on a given date or (ii)  one Type of Loan of a
     single Tranche by the Borrower from all of the Banks having
     Commitments of the respective Tranche on a pro rata basis on a given
     date (or resulting from conversions on a given date), having in the
     case of Eurodollar Loans the same Interest Period; provided that Base
     Rate Loans incurred pursuant to Section 1.10(b) shall be considered
     part of any related Borrowing of Eurodollar Loans.

          "Broyhill" shall have the meaning provided in the first paragraph
     of this Agreement.

          "BTCo" shall mean Bankers Trust Company in its individual
     capacity.

          "Business Day" shall mean (i) for all purposes other than as
     covered by clause (ii) below, any day except Saturday, Sunday and any
     day which shall be in New  York City a legal holiday or a day on which
     banking institutions are authorized or required by law or other
     government action to close and (ii) with respect to all notices and
     determinations in connection with, and payments of principal and
     interest on, Eurodollar Loans, any day which is a Business Day
     described in clause (i) above and which is also a day for trading by
     and between banks in the New York interbank Eurodollar market.

          "Capital Expenditures" shall mean, with respect to any Person,
     all expenditures by such Person which should be capitalized in
     accordance with generally accepted accounting principles, including
     all such expenditures with respect to fixed or capital assets (in-
     cluding, without limitation, expenditures for maintenance and repairs
     which should be capitalized in accordance with generally accepted<PAGE>


     accounting principles) and the amount of Capitalized Lease Obligations
     incurred by such Person.

          "Capitalized Lease Obligations" of any Person shall mean all
     rental obligations which, under generally accepted accounting
     principles, are or will be required to be capitalized on the books of
     such Person, in each case taken at the amount thereof accounted for as
     indebtedness in accordance with such principles.

          "Cash Equivalents" shall mean, as to any Person, (i) securities
     issued or directly and fully guaranteed or insured by the United
     States or any agency or instrumentality thereof (provided that the
     full faith and credit of the United States is pledged in support
     thereof) having maturities of not more than one year from the date of
     acquisition, (ii) time deposits and certificates of deposit of any
     commercial bank having, or which is the principal banking subsidiary
     of a bank holding company organized under the laws of the United
     States, any State thereof, the District of Columbia or any foreign
     jurisdiction having capital, surplus and undivided profits aggregating
     in excess of $200,000,000, with maturities of not more than one year
     from the date of acquisition by such Person, (iii) repurchase
     obligations with a term of not more than 90 days for underlying
     securities of the types described in clause (i) above entered into
     with any bank meeting the qualifications specified in clause (ii)
     above, (iv) commercial paper issued by any Person incorporated in the
     United States rated at least A-1 or the equivalent thereof by Standard
     & Poor's Rating Services or at least P-1 or the equivalent thereof by
     Moody's Investors Service, Inc. and in each case maturing not more
     than one year after the date of acquisition by such Person, (v)
     investments in money market funds substantially all of whose assets
     are comprised of securities of the types described in clauses (i)
     through (iv) above and (vi) demand deposit accounts maintained in the
     ordinary course of business not in excess of $100,000 in the
     aggregate.

          "Cash Management System" shall mean the "Cash Management System"
     as defined in the Original Credit Agreement.

          "CERCLA" shall mean the Comprehensive Environmental Response,
     Compensation, and Liability Act of 1980, as the same may be amended
     from time to time, 42 U.S.C. Subsection  9601 et seq.

          "Change of Control" shall mean (i) Furniture Brands shall at any
     time cease to own 100% of the capital stock of any of Broyhill, Lane
     or Thomasville, (ii) the board of directors of Furniture Brands shall
     cease to consist of a majority of Continuing Directors and (iii) any
     Person, entity or "group" (as such term is defined in Section 13(d)(3)
     of the Securities Exchange Act of 1934, as amended) is or becomes the
     beneficial owner of an amount of outstanding Voting Stock of Furniture
     Brands in excess of 25% of the total amount of fully diluted shares of
     outstanding Voting Stock of Furniture Brands.

          "Code" shall mean the Internal Revenue Code of 1986, as amended
     from time to time, and the regulations promulgated and the rulings<PAGE>

     issued thereunder.  Section references to the Code are to the Code, as
     in effect at the date of this Agreement, and to any subsequent
     provision of the Code, amendatory thereof, supplemental thereto or
     substituted therefor.

          "Collateral" shall mean all property (whether real or personal)
     with respect to which any security interests have been granted (or
     purported to be granted) pursuant to any Security Document, including,
     without limitation, all Pledge Agreement Collateral (which shall
     include all capital stock of, and promissory notes issued by, the
     Receivables Subsidiary, to the extent held by any Credit Party), all
     Security Agreement Collateral (which shall exclude all assets of the
     Receivables Subsidiary), all Mortgaged Properties, all cash and Cash
     Equivalents delivered as collateral pursuant to Section 4.02 or 10
     hereof and all Additional Collateral, if any.

          "Collateral Agent" shall mean the Administrative Agent acting as
     collateral agent for the Secured Creditors pursuant to the Security
     Documents.

          "Collective Bargaining Agreements" shall have the meaning
     provided in the Existing Credit Agreement.

          "Commitment" shall mean any of the commitments of any Bank, i.e.,
     whether the Term Loan Commitment or the Revolving Loan Commitment.

          "Commitment Commission" shall have the meaning provided in
     Section 3.01(a).

          "Commitment Commission End Date" shall have the meaning provided
     in the definition of  Commitment Commission Reduction Percentage'.

          "Commitment Commission Reduction Percentage" shall mean .125% on
     and from the Third Restatement Effective Date through July 30, 1997
     (or such earlier date on which the Borrowers deliver to the
     Administrative Agent a certificate containing the calculations of
     Leverage Ratio for the fiscal quarter ended June 30, 1997, and
     thereafter shall mean, from and after each day of delivery of any
     certificate delivered in accordance with the following sentence
     indicating an entitlement to a Commitment Commission Reduction
     Percentage other than zero (each, a "Commitment Commission Start
     Date") to and including the applicable Commitment Commission End Date
     described below, the percentage set forth below opposite the Leverage
     Ratio indicated to have been achieved in any certificate delivered in
     accordance with the following sentence:

             Leverage          Commitment Commission
              Ratio             Reduction Percentage  
            ----------        -----------------------

            Equal to or                  0%
            greater than 4.00:1

            Equal to or                .125%
            greater than
            3.50:1 but less
            than 4.00:1

            Equal to or                .250%
            greater than
            2.50:1 but less
            than 3.50:1

            Less than 2.50:1           .375%

     From and after the date of the delivery of the certificate referenced
     above for the fiscal quarter ended June 30, 1997, the Leverage Ratio
     shall be determined based on the delivery of a certificate of the
     Borrowers by an Authorized Representative of the Borrowers to the
     Administrative Agent, within 30 days of the last day of any fiscal
     quarter of Furniture Brands (beginning after the fiscal quarter ended
     on June 30, 1997, based on calculations made at the end of each fiscal
     quarter commencing with the fiscal quarter ended June 30, 1997), which
     certificate shall set forth the calculation of the Leverage Ratio for
     the fiscal quarter ended immediately prior to the relevant Commitment
     Commission Start Date and the Commitment Commission Reduction
     Percentage which shall be thereafter applicable (until same is changed
     or ceases to apply in accordance with the following sentences).  The
     Commitment Commission Reduction Percentage so determined shall apply,
     except as set forth in the succeeding sentence, from the Commitment
     Commission Start Date to the earlier of (x) the date on which the next
     certificate is delivered to the Administrative Agent and (y) the date
     which is 30 days following the last day of the fiscal quarter in which
     the previous Commitment Commission Start Date occurred (the
     "Commitment Commission End Date"), at which time, if no certificate
     has been delivered to the Administrative Agent indicating an entitle-
     ment to a Commitment Commission Reduction Percentage other than zero
     (and thus commencing a new Commitment Commission Start Date), the
     Commitment Commission Reduction Percentage shall be reduced to zero. 
     Notwithstanding anything to the contrary contained above in this
     definition, the Commitment Commission Reduction Percentage shall be
     reduced to zero at all times during which there shall exist an Event
     of Default.

          "Commitment Commission Start Date" shall have the meaning
     provided in the definition of `Commitment Commission Reduction
     Percentage'.

          "Concentration Account" shall have the meaning provided in the
     Security Agreement.

          "Consolidated Cumulative Net Income Period" shall mean each
     period consisting of a fiscal quarter of Furniture Brands ending after
     the Second Restatement Effective Date and for which the related
     financial statements required to be delivered pursuant to Section
     8.01(b) or (c) of this Agreement or of the Existing Credit Agreement,
     as the case may be, have theretofore been delivered.<PAGE>


          "Consolidated Cumulative 25% Net Income Amount" shall mean, at
     any date an amount determined on a cumulative basis equal to (i) the
     sum of 25% of Consolidated Net Income for all Consolidated Cumulative
     Net Income Periods ending after the Second Restatement Effective Date
     and prior to such date of determination for which Consolidated Net
     Income was a positive number, minus (ii) 100% of Consolidated Net
     Income for all Consolidated Cumulative Net Income Periods ending after
     the last day of the Second Restatement Effective Date and prior to
     such date of determination for which Consolidated Net Income was a
     negative number.

          "Consolidated Debt" shall mean all Indebtedness of Furniture
     Brands and its Restricted Subsidiaries (including, without limitation,
     the amount of Attributed Receivables Facility Indebtedness) determined
     on a combined basis with respect to borrowed money or other
     obligations of such Persons which would appear on the balance sheet of
     such Persons as indebtedness (including unreimbursed drawings under
     Letters of Credit and unreimbursed payments under Acceptances, but ex-
     cluding Consolidated Current Liabilities and deferred tax and pension
     liabilities), plus (i) all Contingent Obligations of such Persons
     incurred after the Third Restatement Effective Date (excluding obliga-
     tions resulting from extensions or renewals of the leases guaranteed
     by the Surviving Guarantees made in compliance with this Agreement),
     plus (ii) all Contingent Obligations with respect to any Surviving
     Guaranty on and after the date on which Furniture Brands made any
     payment in respect of such Surviving Guaranty, plus (iii) an amount
     equal to the greater of the liquidation preference and the maximum
     fixed repurchase price (excluding accrued Dividends) of any
     outstanding Disqualified Preferred Stock, minus (iv) the cash in
     excess of $10,000,000 as shown on the consolidated balance sheet of
     Furniture Brands and its Restricted Subsidiaries as of the date of
     determination.

          "Consolidated EBIT" shall mean, for any period, the Consolidated
     Net Income of Furniture Brands and its Restricted Subsidiaries,
     determined on a consolidated basis, before Consolidated Net Interest
     Expense (to the extent deducted in arriving at Consolidated Net
     Income) and provision for taxes or gains or losses from sales of
     assets other than inventory sold in the ordinary course of business,
     in each case that were included in arriving at Consolidated Net
     Income.

          "Consolidated EBITDA" shall mean, for any period, Consolidated
     EBIT, adjusted by adding thereto the amount of all amortization of
     intangibles and depreciation, in each case that were deducted in
     arriving at Consolidated EBIT for such period.

          "Consolidated Net Income" shall mean, for any period, the net
     after tax income of Furniture Brands and its Restricted Subsidiaries
     determined on a consolidated basis, minus cash Dividends paid in
     respect of Disqualified Preferred Stock, without giving effect to any
     extraordinary gains or losses.<PAGE>


          "Consolidated Net Interest Coverage Ratio" for any period shall
     mean the ratio of Consolidated EBITDA to Consolidated Net Interest
     Expense for such period.

          "Consolidated Net Interest Expense" shall mean, for any period,
     the total consolidated interest expense of Furniture Brands and its
     Restricted Subsidiaries for such period (calculated without regard to
     any limitations on the payment thereof) plus, without duplication,
     that portion of Capitalized Lease Obligations of Furniture Brands and
     its Restricted Subsidiaries representing the interest factor for such
     period, and capitalized interest expense, plus, (i) all cash fees,
     service charges and other costs, as well as all collections or other
     amounts retained by the Receivables Purchasers which are in excess of
     amounts paid to Furniture Brands and its Restricted Subsidiaries under
     the Receivables Facility by it for the purchase of receivables
     pursuant to the Receivables Facility and (ii) the product of (x) the
     amount of all cash Dividend requirements (whether or not declared or
     paid) on Disqualified Preferred Stock paid, accrued or scheduled to be
     paid or accrued during such period times (y) a fraction, the numerator
     of which is one and the denominator of which is one minus the then
     current effective consolidated Federal, state, local and foreign tax
     rate (expressed as a decimal number between one and zero) of Furniture
     Brands as reflected in the audited consolidated financial statements
     of Furniture Brands for its most recently completed Fiscal Year, which
     amounts described in the preceding clauses (i) and (ii) shall be
     treated as interest expense of Furniture Brands and its Restricted
     Subsidiaries for purposes of this definition regardless of the
     treatment of such amounts under generally accepted accounting princi-
     ples, in each case net of the total consolidated cash interest income
     of Furniture Brands and its Restricted Subsidiaries for such period,
     but excluding the amortization of any deferred financing costs and all
     amounts in respect of the Interest Rate Protection Agreements, all
     determined on a consolidated basis.

          "Consolidated Senior Debt" at any time shall mean Consolidated
     Debt on such date, adjusted by excluding therefrom the amount of
     Permitted Subordinated Indebtedness and Disqualified Preferred Stock
     reflected in Consolidated Debt on such date.

          "Contingent Obligation" shall mean, as to any Person, any
     obligation of such Person guaranteeing or intended to guarantee any
     Indebtedness, leases, dividends or other obligations ("primary
     obligations") of any other Person (the "primary obligor") in any
     manner, whether directly or indirectly, including, without limitation,
     any obligation of such Person, whether or not contingent, (i) to pur-
     chase any such primary obligation or any property constituting direct
     or indirect security therefor, (ii) to advance or supply funds (x) for
     the purchase or payment of any such primary obligation or (y) to
     maintain working capital or equity capital of the primary obligor or
     otherwise to maintain the net worth or solvency of the primary
     obligor, (iii) to purchase property, securities or services primarily
     for the purpose of assuring the owner of any such primary obligation
     of the ability of the primary obligor to make payment of such primary
     obligation or (iv)  otherwise to assure or hold harmless the holder of<PAGE>


     such primary obligation against loss in respect thereof; provided,
     however, that the term Contingent Obligation shall not include en-
     dorsements of instruments for deposit or collection in the ordinary
     course of business.  The amount of any Contingent Obligation shall be
     deemed to be an amount equal to the stated or determinable amount of
     the primary obligation in respect of which such Contingent Obligation
     is made (or, if less, the maximum amount of such primary obligation
     for which such Person may be liable pursuant to the terms of the
     instrument evidencing such Contingent Obligation) or, if not stated or
     determinable, the maximum reasonably anticipated liability in respect
     thereof (assuming such Person is required to perform thereunder) as
     determined by such Person in good faith.

          "Continuing Bank" shall mean each Existing Bank with a Commitment
     under this Agreement (immediately upon giving effect to the Third
     Restatement Effective Date).

          "Continuing Directors" shall mean the Directors of Furniture
     Brands on the Third Restatement Effective Date (and immediately after
     giving effect to the Transaction) and each other Director if such
     Director's nomination for election to the Board of Directors of
     Furniture Brands is recommended by a majority of the then Continuing
     Directors.

          "Controlled Account" shall mean any account managed by the Apollo
     Group for so long as the Apollo Group exercises sole power of
     disposition and voting with respect thereto.

          "Converse" shall mean Converse Inc., a Delaware corporation.

          "Converse Disposition" shall mean the "Converse Disposition" as
     such term is defined in the Original Credit Agreement.

          "Credit Documents" shall mean this Agreement and, after the
     execution and delivery thereof pursuant to the terms of this
     Agreement, each Note, each Security Document and the Subsidiary
     Guaranty and, after the execution and delivery thereof, each
     additional guaranty or security document executed pursuant to Section
     8.11.

          "Credit Event" shall mean the making of any Loan or the issuance
     of any Letter of Credit.

          "Credit Lyonnais" shall have the meaning provided in the first
     paragraph of this Agreement.

          "Credit Party" shall mean the Borrowers and each Subsidiary
     Guarantor.

          "Currency Hedging Agreements" shall mean any foreign exchange
     contracts, currency swap agreements or other similar agreements or
     arrangements designed to protect against the fluctuations in currency
     values.<PAGE>


          "Default" shall mean any event, act or condition which with
     notice or lapse of time, or both, would constitute an Event of
     Default.

          "Defaulting Bank" shall mean any Bank with respect to which a
     Bank Default is in effect.

          "Disqualified Preferred Stock" means any Preferred Stock of
     Furniture Brands which would be Qualified Preferred Stock except that
     regular accruing dividends thereon are required to be paid in cash,
     and so long as, (i) based on calculations made by Furniture Brands on
     a Pro Forma Basis after giving effect to the issuance of such Disqual-
     ified Preferred Stock, no Default or Event of Default will exist
     under, or would have existed under the periods covered by, the
     financial covenants contained in Sections 9.08 and 9.09 of this
     Agreement, (ii) based on good faith projections prepared by Furniture
     Brands for the period from the date of the issuance of such
     Disqualified Preferred Stock to the date which is one year thereafter,
     the level of financial performance measured by the covenants set forth
     in Sections 9.08 and 9.09 shall be better than or equal to such level
     as would be required to provide that no Default or Event of Default
     would exist under the financial covenants contained in Sections 9.08
     and 9.09 of this Agreement as compliance with such covenants would be
     required through the date which is one year from the date of the
     issuance of such Disqualified Preferred Stock, (iii) Furniture Brands
     shall furnish to the Administrative Agent for distribution to each of
     the Banks an officer's certificate by the chief financial officer or
     treasurer of Furniture Brands certifying to the best of his knowledge
     as to compliance with the requirements of the preceding clauses (i)
     and (ii) and containing the pro forma calculations and projections
     required by the preceding clauses (i) and (ii), and (iv) such
     Disqualified Preferred Stock shall not contain any provision in the
     documents governing or evidencing the same which, in the opinion of
     the Administrative Agent, are more restrictive than the provisions in
     the Credit Documents.

          "Dividend" with respect to any Person shall mean that such Person
     has declared or paid a dividend or returned any equity capital to its
     stockholders or authorized or made any other distribution, payment or
     delivery of property (other than common stock of such Person or
     Qualified Preferred Stock of Furniture Brands paid as a pay-in-kind
     Dividend on any Qualified Preferred Stock of Furniture Brands) or cash
     to its stockholders as such, or redeemed, retired, purchased or other-
     wise acquired, directly or indirectly, for a consideration any shares
     of any class of its capital stock outstanding on or after the Third
     Restatement Effective Date (or any options or warrants issued by such
     Person with respect to its capital stock), or set aside any funds for
     any of the foregoing purposes, or shall have permitted any of its Sub-
     sidiaries to purchase or otherwise acquire for a consideration any
     shares of any class of the capital stock of such Person outstanding on
     or after the Third Restatement Effective Date (or any options or war-
     rants issued by such Person with respect to its capital stock). 
     Without limiting the foregoing, "Dividends" with respect to any Person
     shall also include all payments made or required to be made during any<PAGE>


     period by such Person with respect to any stock appreciation rights,
     plans, equity incentive or achievement plans or any similar plans or
     setting aside of any funds for the foregoing purposes, except to the
     extent such payments have reduced Consolidated EBITDA during the
     respective period.

          "Documentation Agent" shall mean Credit Lyonnais, in its capacity
     as Documentation Agent for the Banks hereunder.

          "Documents" shall mean the Credit Documents, the Receivables
     Documents and the Stock Repurchase Documents.

          "Dollars" and the sign "$" shall each mean freely transferable
     lawful money of the United States.

          "Domestic Subsidiary" with respect to any Person shall mean a
     Subsidiary thereof other than a Foreign Subsidiary thereof.

          "Domestic Wholly-Owned Subsidiary" of any Person shall mean each
     Wholly-Owned Subsidiary of such Person which is also a Domestic
     Subsidiary.

          "Drawing" shall have the meaning provided in Section 2.05(b).

          "Eligible Transferee" shall mean and include a commercial bank,
     mutual fund, financial institution or other "accredited investor" (as
     defined in Regulation D of the Securities Act).

          "Employee Stock Option Plan" shall mean the Furniture Brands
     Incorporated 1992 Stock Option Plan.

          "End Date" shall have the meaning provided in the definition of
     Reduction Percentage.

          "Environmental Claims" means any and all administrative,
     regulatory or judicial actions, suits, demands, demand letters,
     directives, claims, liens, notices of noncompliance or violation,
     investigations or proceedings relating in any way to any Environmental
     Law or any permit issued, or any approval given, under any such
     Environmental Law (hereafter, "Claims"), including, without
     limitation, (a) any and all Claims by governmental or regulatory
     authorities for enforcement, cleanup, removal, response, remedial or
     other actions or damages pursuant to any applicable Environmental Law,
     and (b)  any and all Claims by any third party seeking damages,
     contribution, indemnification, cost recovery, compensation or
     injunctive relief in connection with alleged injury or threat of
     injury to health, safety or the environment due to the presence of
     Hazardous Materials.

          "Environmental Law" means any applicable Federal, state, foreign
     or local statute, law, rule, regulation, ordinance, code, binding and
     enforceable guideline, binding and enforceable written policy and rule
     of common law now or hereafter in effect and in each case as amended,
     and any judicial or administrative interpretation thereof, including<PAGE>


     any judicial or administrative order, consent decree or judgment, to
     the extent binding on the Borrowers or any of their respective
     Subsidiaries, relating to the environment, employee health and safety
     or Hazardous Materials, including, without limitation, CERCLA; RCRA;
     the Federal Water Pollution Control Act, 33 U.S.C. Section  1251 et seq.;
     the Toxic Substances Control Act, 15 U.S.C. Section  2601 et seq.; the
     Clean Air Act, 42 U.S.C. Section  7401 et seq.; the Safe Drinking Water
     Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of 1990, 33 
     U.S.C. Section 2701 et seq.; the Emergency Planning and the Community
     Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq., the Hazardous
     Material Transportation Act, 49 U.S.C. Section 1801 et seq. and the 
     Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq. (to 
     the extent it regulates occupational exposure to Hazardous Materials); 
     and any state and local or foreign counterparts or equivalents, in each 
     case as amended from time to time.

          "ERISA" shall mean the Employee Retirement Income Security Act of
     1974, as amended from time to time, and the regulations promulgated
     and rulings issued thereunder.  Section references to ERISA are to
     ERISA, as in effect at the date of this Agreement and any subsequent
     provisions of ERISA, amendatory thereof, supplemental thereto or
     substituted therefor.

          "ERISA Affiliate" shall mean each person (as defined in Section
     3(9) of ERISA) which together with the Borrowers or any Subsidiary of
     the Borrowers would be deemed to be a "single employer" (i) within the
     meaning of Section 414(b), (c), (m) or (o) of the Code or (ii) as a
     result of the Borrowers or any Subsidiary of the Borrowers being or
     having been a general partner of such person.

          "Eurodollar Loan" shall mean each Loan designated as such by the
     Borrowers at the time of the incurrence thereof or conversion thereto.

          "Eurodollar Rate" shall mean (a) the offered quotation to first-
     class banks in the New York interbank Eurodollar market by BTCo for
     Dollar deposits of amounts in immediately available funds comparable
     to the outstanding principal amount of the Eurodollar Loan of BTCo
     with maturities comparable to the Interest Period applicable to such
     Eurodollar Loan commencing two Business Days thereafter as of 10:00
     A.M. (New York time) on the date which is two Business Days prior to
     the commencement of such Interest Period, divided (and rounded off to
     the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus the
     then stated maximum rate of all reserve requirements (including,
     without limitation, any marginal, emergency, supplemental, special or
     other reserves required by applicable law) applicable to any member
     bank of the Federal Reserve System in respect of Eurocurrency funding
     or liabilities as defined in Regulation D (or any successor category
     of liabilities under Regulation D).

          "Event of Default" shall have the meaning provided in Section 10.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
     amended.<PAGE>


          "Excluded Assets" shall mean each of the assets listed on
     Schedule XIV.

          "Existing Banks" shall mean each Person which was a Bank under,
     and as defined in, the Existing Credit Agreement.

          "Existing Credit Agreement" shall have the meaning provided in
     the recitals to this Agreement.

          "Existing Indebtedness" shall have the meaning provided in
     Section 7.22.

          "Existing IRBs" shall mean $8,000,000 Industrial Development
     Authority of Fluvanna County, Virginia Floating Rate Demand Industrial
     Development Revenue Bonds (Thomasville Furniture Industries, Inc.
     Project) Series 1986.

          "Existing Letters of Credit" shall mean the letters of credit
     listed on Schedule XII and previously issued under the Existing Credit
     Agreement.

          "Existing Loans" shall mean the Existing Revolving Loans and the
     Existing Swingline Loans.

          "Existing Mortgage Policies" shall mean each mortgage insurance
     policy issued with respect to an Existing Mortgage under the Original
     Credit Agreement, the First Restated Credit Agreement or the Existing
     Credit Agreement.

          "Existing Mortgaged Properties" shall mean all Real Property of
     the Borrowers and their respective Subsidiaries listed on Schedule
     III.

          "Existing Mortgages" shall mean all Mortgages granted by the
     Borrowers pursuant to the Original Credit Agreement, the First
     Restated Credit Agreement or the Existing Credit Agreement and which
     have not been released by the lenders thereunder prior to the Third
     Restatement Effective Date.

          "Existing Receivables Facility" shall mean the Receivables
     Facility as defined in the Existing Credit Agreement.

          "Existing Revolving Loans" shall mean the "Revolving Loans"
     under, and as defined in, the Existing Credit Agreement.

          "Existing Swingline Loans" shall mean the "Swingline Loans"
     under, and as defined in, the Existing Credit Agreement.

          "Facing Fee" shall have the meaning provided in Section 3.01(c).

          "Federal Funds Rate" shall mean for any period, a fluctuating
     interest rate equal for each day during such period to the weighted
     average of the rates on overnight Federal Funds transactions with
     members of the Federal Reserve System arranged by Federal Funds<PAGE>

     brokers, as published for such day (or, if such day is not a Business
     Day, for the next preceding Business Day) by the Federal Reserve Bank
     of New York, or, if such rate is not so published for any day which is
     a Business Day, the average of the quotations for such day on such
     transactions received by the Administrative Agent from three Federal
     Funds brokers of recognized standing selected by the Administrative
     Agent.

          "Fees" shall mean all amounts payable pursuant to or referred to
     in Section 3.01.

          "FIRREA" shall mean Financial Institution Reform, Recovery and
     Enforcement Act of 1989.

          "First Restated Credit Agreement" shall mean the "Existing Credit
     Agreement" under, and as defined in, the Existing Credit Agreement.

          "First Restatement Effective Date" shall mean the "Restatement
     Effective Date" as defined in the First Restated Credit Agreement.

          "Fiscal Year" shall mean each fiscal year of Furniture Brands
     ending on December 31 of each calendar year.

          "Florsheim" shall mean The Florsheim Shoe Company, a Delaware
     corporation.

          "Florsheim Disposition" shall mean the "Florsheim Disposition" as
     such term is defined in the Original Credit Agreement.

          "Fluvanna Letter of Credit" shall mean a letter of credit issued
     by NationsBank pursuant to the Existing Agreement on or after the
     First Restatement Effective Date in support of the Existing IRBs.

          "Foreign Pension Plan" means any plan, fund (including, without
     limitation, any superannuation fund) or other similar program
     established or maintained outside the United States of America by any
     Borrower or any one or more of their respective Subsidiaries primarily
     for the benefit of employees of such Borrower or such Subsidiary
     residing outside the United States of America, which plan, fund or
     other similar program provides, or results in, retirement income, a
     deferral of income in contemplation of retirement or payments to be
     made upon termination of employment, and which plan is not subject to
     ERISA or the Code.

          "Foreign Sales Corporation" shall mean a Wholly-Owned Foreign
     Subsidiary of Furniture Brands and/or its Restricted Subsidiaries
     created for the purpose of effecting sales of goods and/or services in
     foreign countries.

          "Foreign Subsidiary" with respect to any Person shall mean each
     Subsidiary thereof that is incorporated under the laws of any juris-
     diction other than the United States of America, any State thereof,
     the United States Virgin Islands or Puerto  Rico.<PAGE>


          "Furniture Brands" shall have the meaning provided in the first
     paragraph of this Agreement.

          "Furniture Brands Common Stock" shall mean the common stock of
     Furniture Brands.

          "Furniture Brands Warrants" shall mean warrants to purchase
     shares of Furniture Brands Common Stock pursuant to the Warrant
     Agreement, dated August 3, 1992, between Furniture Brands and The Bank
     of New York, as Warrant Agent.

          "Guaranty Payments" shall have the meaning provided in Section
     9.10(b).

          "Hazardous Materials" means (a)  any petroleum or petroleum
     products, radioactive materials, asbestos in any form that is or could
     become friable, urea formaldehyde foam insulation, transformers or
     other equipment that contain dielectric fluid containing any level of
     polychlorinated biphenyls, and radon gas; (b)  any chemicals,
     materials or substances defined as or included in the definition of
     "hazardous substances," "hazardous waste," "hazardous materials,"
     "extremely hazardous substances," "restricted hazardous waste," "toxic
     substances," "toxic pollutants," "contaminants," or "pollutants," or
     words of similar import, under any applicable Environmental Law; and
     (c)  any other chemical, material or substance, exposure to which is
     prohibited, limited or regulated by any governmental authority under
     Environmental Laws.

          "Indebtedness" shall mean, as to any Person, without duplication,
     (i) all indebtedness (including principal, interest, fees and charges)
     of such Person for borrowed money or for the deferred purchase price
     of property or services, (ii) the maximum amount available to be drawn
     under all letters of credit issued for the account of such Person and
     all unpaid drawings in respect of such letters of credit, (iii) all
     Indebtedness of the types described in clause (i), (ii), (iv), (v),
     (vi) or (vii) of this definition secured by any Lien on any property
     owned by such Person, whether or not such Indebtedness has been
     assumed by such Person (to the extent of the value of the respective
     property), (iv) the aggregate amount required to be capitalized under
     leases under which such Person is the lessee, (v) all obligations of
     such person to pay a specified purchase price for goods or services,
     whether or not delivered or accepted, i.e., take-or-pay and similar
     obligations, (vi) all Contingent Obligations of such Person and (vii)
     all obligations under any Interest Rate Protection Agreement or under
     any similar type of agreement.  In addition to the foregoing, all
     Attributed Receivables Facility Indebtedness shall constitute
     Indebtedness.

          "Interest Determination Date" shall mean, with respect to any
     Eurodollar Loan, the second Business Day prior to the commencement of
     any Interest Period relating to such Eurodollar Loan.

          "Interest Period" shall have the meaning provided in Section
     1.09.<PAGE>


          "Interest Rate Protection Agreement" shall mean any interest rate
     swap agreement, interest rate cap agreement, interest collar
     agreement, interest rate hedging agreement, interest rate floor
     agreement or other similar agreement or arrangement.

          "Investments" shall have the meaning provided in Section 9.05.

          "Issuing Bank" shall mean BTCo and any Bank which at the request
     of the Borrowers and with the consent of the Administrative Agent
     (which shall not be unreasonably withheld or delayed) agrees, in such
     Bank's sole discretion, to become an Issuing Bank for the purpose of
     issuing Letters of Credit pursuant to Section 2.  On the Third
     Restatement Effective Date the sole Issuing Banks are (x) BTCo and (y)
     NationsBank with respect to the Fluvanna Letter of Credit.

          "Lane" shall have the meaning provided in the first paragraph of
     this Agreement.

          "L/C Supportable Obligations" shall mean obligations of Furniture
     Brands or its Restricted Subsidiaries incurred in the ordinary course
     of business with respect to insurance obligations and workers'
     compensation, surety bonds and other similar statutory obligations,
     and all obligations customarily supported by Standby Letters of Credit
     and satisfactory to the Administrative Agent.

          "Leaseholds" of any Person means all the right, title and
     interest of such Person as lessee or licensee in, to and under leases
     or licenses of land, improvements and/or fixtures.

          "Letter of Credit" shall have the meaning provided in Section
     2.01(a) and shall include Trade Letters of Credit and Standby Letters
     of Credit.

          "Letter of Credit Facing Fee" shall have the meaning provided in
     Section 3.01(c).

          "Letter of Credit Fee" shall have the meaning provided in Section
     3.01(b).

          "Letter of Credit Outstandings" shall mean, at any time, the sum
     of (i) the aggregate Stated Amount of all outstanding Letters of
     Credit which have not terminated and Acceptances which have not
     matured or been prepaid and (ii) the amount of all Unpaid Drawings.

          "Letter of Credit Request" shall mean any request for the
     issuance of a Letter of Credit made by the Borrowers pursuant to
     Section 2.03(a), including Trade Letter of Credit Requests and Standby
     Letter of Credit Requests.

          "Letter of Credit Service Agreement" shall have the meaning
     provided in Section 2.03(a).

          "Leverage Ratio" shall mean on any date the ratio of (i)
     Consolidated Debt on such date to (ii) Consolidated EBITDA for the<PAGE>


     period of four consecutive fiscal quarters most recently ended on or
     prior to such date.

          "Lien" shall mean any mortgage, pledge, hypothecation,
     assignment, deposit arrangement, encumbrance, lien (statutory or
     other), preference, priority or other security agreement of any kind
     or nature whatsoever (including, without limitation, any conditional
     sale or other title retention agreement, any financing or similar
     statement or notice filed under the UCC or any other similar recording
     or notice statute, and any lease having substantially the same effect
     as any of the foregoing).

          "Loan" shall mean each Term Loan, each Revolving Loan and each
     Swingline Loan.

          "Majority Banks" of any Tranche shall mean those Non-Defaulting
     Banks which would constitute the Required Banks under, and as defined
     in, this Agreement if all outstanding Obligations of the other
     Tranches under this Agreement were repaid in full and all Commitments
     with respect thereto were terminated.

          "Mandatory Borrowing" shall have the meaning provided in Section
     1.01(d).

          "Margin Stock" shall have the meaning provided in Regulation U.

          "Material Adverse Effect" shall mean a material adverse effect on
     the business, operations, property, assets, liabilities, condition
     (financial or otherwise) or prospects of the Borrowers taken as a
     whole or the Borrowers and their Restricted Subsidiaries taken as a
     whole, it being understood that any determination of whether a
     Material Adverse Effect has occurred shall take into account, inter
     alia, (x) any available indemnities and (y) the timing and likelihood
     of payments thereunder.

          "Maturity Date" shall mean, with respect to any Tranche of Loans,
     the Term Loan Maturity Date, the Revolving Loan Maturity Date or the
     Swingline Expiry Date, as the case may be.

          "Maximum Swingline Amount" shall mean $15,000,000.

          "Minimum Borrowing Amount" shall mean (i) for Revolving Loans
     $1,000,000 and, if greater, in an integral multiple of $500,000; (ii)
     for Term Loans  $1,000,000 and, if greater, in an integral multiple of
     $1,000,000; and (iii) for Swingline Loans, $500,000 and, if greater,
     in an integral multiple of $100,000.

          "Mortgage" shall mean and include each Existing Mortgage, as
     amended pursuant to the respective Mortgage Amendment, and, after the
     execution and delivery thereof, each Additional Mortgage, in each case
     as same may be amended, modified or supplemented from time to  time.

          "Mortgage Amendments" shall have the meaning provided in Section
     5.10.<PAGE>


          "Mortgage Policies" shall mean and include each Existing Mortgage
     Policy and, after the execution and delivery thereof, each mortgage
     insurance policy issued with respect to an Additional Mortgaged
     Property.

          "Mortgaged Property" shall mean each Existing Mortgaged Property
     and, after the execution and delivery of any Additional Mortgage,
     shall include the respective Additional Mortgaged Property.

          "Multiemployer Plan" shall mean a multiemployer plan as defined
     in Section 4001(a)(3) of ERISA, which is maintained or contributed to
     by (or to which there is an obligation to contribute of) the Borrowers
     or a Subsidiary of the Borrowers or an ERISA Affiliate and, except for
     a Spunoff Plan, each such plan for the five year period immediately
     following the latest date on which the Borrowers, any Subsidiaries of
     the Borrowers or any ERISA Affiliates maintained, contributed to or
     had an obligation to contribute to such plan.

          "NationsBank" shall have the meaning provided in the first
     paragraph of this Agreement.

          "Net Cash Proceeds" shall mean for any event requiring a
     mandatory repayment pursuant to Section 4.02, the gross cash proceeds
     (including any cash received by way of deferred payment pursuant to a
     promissory note, receivable or otherwise, but only as and when
     received) received from such event, net of reasonable transaction
     costs (including, as applicable, any underwriting, brokerage or other
     customary commissions and reasonable legal, advisory and other fees
     and expenses associated therewith) received from any such event.

          "Net Sale Proceeds" shall mean for any sale of assets, the gross
     cash proceeds (including any cash received by way of deferred payment
     pursuant to a promissory note, receivable or otherwise, but only as
     and when received) received from any sale of assets, net of reasonable
     transaction costs (including, without limitation, any underwriting,
     brokerage or other customary selling commissions and reasonable legal,
     advisory and other fees and expenses, including title and recording
     expenses, associated therewith) and payments of unassumed liabilities
     relating to the assets sold at the time of, or within 30 days after,
     the date of such sale, the amount of such gross cash proceeds required
     to be used to repay any Indebtedness (other than Indebtedness of the
     Banks pursuant to this Agreement) which is secured by the respective
     assets which were sold, and the estimated marginal increase in income
     taxes which will be payable by Furniture Brands's consolidated group
     with respect to the fiscal year in which the sale occurs as a result
     of such sale; but excluding any portion of any such gross cash pro-
     ceeds which Furniture Brands determines in good faith should be
     reserved for post-closing adjustments (to the extent Furniture Brands
     delivers to the Banks a certificate signed by its chief financial
     officer, controller or chief accounting officer as to such determina-
     tion), it being understood and agreed that on the day that all such
     post-closing adjustments have been determined, (which shall not be
     later than six months following the date of the respective asset
     sale), the amount (if any) by which the reserved amount in respect of<PAGE>


     such sale or disposition exceeds the actual post-closing adjustments
     payable by Furniture Brands or any of its Restricted Subsidiaries
     shall constitute Net Sale Proceeds on such date received by Furniture
     Brands and/or any of its Restricted Subsidiaries from such sale,
     lease, transfer or other disposition.

          "New Bank" shall mean each of the Persons listed on Schedule I
     that is not a Continuing Bank.

          "Non-Continuing Bank" shall have the meaning provided in Section
     13.18(b).

          "Non-Defaulting Bank" shall mean and include each Bank other than
     a Defaulting Bank.

          "Note" shall mean each Revolving Note and the Swingline Note.

          "Notice of Borrowing" shall have the meaning provided in Section
     1.03.

          "Notice of Conversion" shall have the meaning provided in Section
     1.06.

          "Notice Office" shall mean the office of the Administrative Agent
     located at 130 Liberty Street, New York, New York 10006, Attention: 
     Anthony Logrippo or such other office as the Administrative Agent may
     hereafter designate in writing as such to the other parties hereto.

          "Obligations" shall mean all amounts owing to the Administrative
     Agent, the Collateral Agent, any Issuing Bank or any Bank pursuant to
     the terms of this Agreement or any other Credit Document.

          "Original Credit Agreement" shall mean the "Original Credit
     Agreement" as defined in the First Restated Credit Agreement.

          "Original Effective Date" shall mean the Effective Date as
     defined in, the Original Credit Agreement.

          "Participant" shall have the meaning provided in Section 2.04(a).

          "Pay-In-Kind Preferred Stock" means any Preferred Stock where all
     dividends with respect thereto may, at the option of the issuer
     thereof, be paid through the issuance of additional shares of
     preferred stock of the same series.

          "Payment Office" shall mean the office of the Administrative
     Agent located at One Bankers Trust Plaza, New York, New York 10006, or
     such other office as the Administrative Agent may hereafter designate
     in writing as such to the other parties hereto.

          "PBGC" shall mean the Pension Benefit Guaranty Corporation
     established pursuant to Section 4002 of ERISA, or any successor
     thereto.<PAGE>


          "Percentage" of any Bank at any time shall mean a fraction
     (expressed as a percentage) the numerator of which is the Revolving
     Loan Commitment of such Bank at such time and the denominator of which
     is the Total Revolving Loan Commitment at such time, provided that if
     the Percentage of any Bank is to be determined after the Total
     Revolving Loan Commitment has been terminated, then the Percentages of
     the Banks shall be determined immediately prior (and without giving
     effect) to such termination.

          "Permitted Acquired Debt" shall mean Indebtedness (other than
     Permitted Subordinated Indebtedness and Permitted Unsecured
     Indebtedness incurred pursuant to Sections 9.04(ii) and (iii)) assumed
     or acquired in connection with a Permitted Acquisition as permitted
     under this Agreement.

          "Permitted Acquisition" shall mean the acquisition by the
     Borrowers or any of their Restricted Subsidiaries of assets
     constituting part of or an entire business or division of any Person
     not already a Subsidiary of the Borrowers or of 100% of the capital
     stock of any such Person which Person shall, as a result of such
     acquisition, become a Restricted Subsidiary, provided that (A) the
     consideration paid by the Borrowers and/or their Restricted
     Subsidiaries consists solely of cash or Furniture Brands Common Stock
     or Qualified Preferred Stock or Disqualified Preferred Stock permitted
     pursuant to Section 9.12(b), the issuance of Indebtedness otherwise
     permitted in Section 9.04 and the assumption/acquisition of any
     Permitted Acquired Debt (calculated at face value) relating to such
     business, division or Person, (B) the assets acquired, or the business
     of the Person whose stock is acquired, shall be in the same line of
     business in which the Borrowers and their Restricted Subsidiaries are
     already engaged, and (C) in the case of the acquisition of 100% of the
     capital stock of any Person, such Person shall own no capital stock of
     any other Person unless either (x) such Person owns 100% of the
     capital stock of such other Person or (y) (1) such Person and/or its
     Wholly-Owned Subsidiaries own 80% of the consolidated assets or
     capital stock of such Person and its Subsidiaries and (2) any non-
     Wholly Owned Subsidiary of such Person was non-Wholly Owned prior to
     the date of such Permitted Acquisition of such Person (it being under-
     stood and agreed that investments by Subsidiaries shall be permitted
     in accordance with the provisions of Section 9.05).  Notwithstanding
     anything to the contrary contained in the immediately preceding
     sentence, any acquisition shall be a Permitted Acquisition only if all
     requirements of Sections 8.14 and 9.02(vii) applicable to Permitted
     Acquisitions are met with respect thereto.

          "Permitted Debt Agreements" shall have the meaning provided in
     the Existing Credit Agreement.

          "Permitted Encumbrance" shall mean, with respect to any Mortgaged
     Property, such exceptions to title as are set forth in the title
     insurance policy or title commitment delivered with respect thereto,
     all of which exceptions must be acceptable to the Administrative Agent
     in its reasonable discretion.<PAGE>


          "Permitted Liens" shall have the meaning provided in Section

     9.01.

          "Permitted Subordinated Indebtedness" shall mean any Indebtedness
     (including, without limitation, any Permitted Subordinated
     Indebtedness incurred in connection with the creation of a replacement
     Receivables Facility) which is subordinated on terms reasonably
     satisfactory to the Administrative Agent and the Required Banks to all
     Obligations hereunder and any other obligations secured pursuant to
     the Security Documents and incurred by the Borrowers, so long as (i)
     based on calculations made by the Borrowers on a Pro Forma Basis after
     giving effect to the incurrence of such Indebtedness, no Default or
     Event of Default will exist under, or would have existed under the
     periods covered by, the financial covenants contained in Sections 9.08
     and 9.09 of this Agreement, (ii) based on good faith projections pre-
     pared by the Borrowers for the period from the date of the incurrence
     of such Indebtedness to the date which is one year thereafter, the
     level of financial performance measured by the covenants set forth in
     Sections 9.08 and 9.09 shall be better than or equal to such level as
     would be required to provide that no Default or Event of Default would
     exist under the financial covenants contained in Sections 9.08 and
     9.09 of this Agreement as compliance with such covenants would be
     required through the date which is one year from the date of the
     incurrence of such Indebtedness, (iii) Furniture Brands shall furnish
     to the Administrative Agent for distribution to each of the Banks an
     officer's certificate by the chief financial officer or treasurer of
     Furniture Brands certifying to the best of his knowledge as to
     compliance with the requirements of the preceding clauses (i) and (ii)
     and containing the pro forma calculations and projections required by
     the preceding clauses (i) and (ii), (iv) such Indebtedness shall
     require no amortization, sinking fund payment or any other scheduled
     maturity of the principal amount thereof on any date which is earlier
     than the date occurring one year after the Term Loan Maturity Date and
     (v) all other provisions of such Indebtedness (including, without
     limitation, covenants, defaults and remedies) in the documents
     governing or evidencing the same are reasonably satisfactory to the
     Administrative Agent and the Required Banks.  To the extent the
     preceding sentence requires terms of Permitted Subordinated
     Indebtedness to be satisfactory to the Required Banks, such terms
     shall be deemed satisfactory to the Required Banks unless objected to
     by the Required Banks in writing on or prior to the date which is 20
     Business Days after the documentation therefor is delivered to the
     Banks.  Notwithstanding anything to the contrary contained above in
     the definition of "Permitted Subordinated Indebtedness", all Permitted
     Subordinated Indebtedness shall be required to constitute Indebtedness
     for borrowed money (where 100% of the consideration received for the
     issuance of such Indebtedness is cash), except that Permitted
     Subordinated Indebtedness may be issued directly as consideration in
     connection with a Permitted Acquisition so long as (i) the proviso to
     Section 9.04(ii)(x) has been complied with and (ii) the aggregate
     principal amount of all Permitted Subordinated Indebtedness issued
     after the Second Restatement Effective Date as consideration in con-
     nection with Permitted Acquisitions, when added to the sum of (x) the
     aggregate liquidation preference or amount of all Disqualified<PAGE>


     Preferred Stock so issued after the Second Restatement Effective Date
     as consideration in connection with Permitted Acquisitions pursuant to
     Section 9.12(b)(i), (y) the aggregate principal amount of all
     Permitted Subordinated Indebtedness issued or incurred after the
     Second Restatement Effective Date but not issued as consideration in
     connection with Permitted Acquisitions to the extent an amount equal
     to the Net Cash Proceeds therefrom has not been required to be applied
     to repay Loans as a result of clause (u)(ii) of the parenthetical
     contained in Section 4.02(A)(b), and (z) the aggregate liquidation
     preference or amount of all Disqualified Preferred Stock issued after
     the Second Restatement Effective Date pursuant to Section 9.12(b)(i)
     but not issued as consideration in connection with Permitted
     Acquisitions, to the extent an amount equal to the Net Cash Proceeds
     therefrom has not been required to be used to repay Loans as a result
     of clause (z)(ii) of the parenthetical to Section 4.02(A)(b), does not
     exceed $50,000,000. 

          "Permitted Unsecured Indebtedness" shall mean any general
     unsecured Indebtedness incurred by the Borrowers, so long as (i) based
     on calculations made by the Borrowers on a Pro Forma Basis after
     giving effect to the incurrence of such Indebtedness, no Default or
     Event of Default will exist under, or would have existed under the
     periods covered by, the financial covenants contained in Sections 9.08
     and 9.09 of this Agreement, (ii) based on good faith projections pre-
     pared by the Borrowers for the period from the date of the incurrence
     of such Indebtedness to the date which is one year thereafter, the
     level of financial performance measured by the covenants set forth in
     Sections 9.08 and 9.09 shall be better than or equal to such level as
     would be required to provide that no Default or Event of Default would
     exist under the financial covenants contained in Sections 9.08 and
     9.09 of this Agreement as compliance with such covenants would be
     required through the date which is one year from the date of the
     incurrence of such Indebtedness, (iii) Furniture Brands shall furnish
     to the Administrative Agent for distribution to each of the Banks an
     officer's certificate by the chief financial officer or treasurer of
     Furniture Brands certifying to the best of his knowledge as to
     compliance with the requirements of the preceding clauses (i) and (ii)
     and containing the pro forma calculations required by the preceding
     clauses (i) and (ii), (iv) the average life of such Indebtedness at
     the time of the incurrence thereof shall be at least one year beyond
     the Term Loan Maturity Date (assuming maximum utilization thereof) and
     (v) such Indebtedness shall not contain any provision (including,
     without limitation, covenants, defaults and remedies) in the documents
     governing or evidencing the same which, in the opinion of the
     Administrative Agent, are more restrictive than the provisions in the
     Credit Documents.  Notwithstanding anything to the contrary contained
     above in the definition of "Permitted Unsecured Indebtedness", all
     Permitted Unsecured Indebtedness shall be required to constitute
     indebtedness for borrowed money where 100% of the consideration
     received for the issuance for such Indebtedness is cash, except that
     Permitted Unsecured Indebtedness may be issued directly as
     consideration in connection with Permitted Acquisitions so long as the
     proviso to Section 9.04(iii) has been complied with.<PAGE>


          "Person" shall mean any individual, partnership, joint venture,
     firm, corporation, association, trust or other enterprise or any
     government or political subdivision or any agency, department or
     instrumentality thereof.

          "Plan" shall mean any single-employer plan, as defined in Section
     4001 of ERISA, which is maintained or contributed to by (or to which
     there is an obligation to contribute of), the Borrowers or a
     Subsidiary of the Borrowers or an ERISA Affiliate, and except for a
     Spunoff Plan, each such plan for the five year period immediately
     following the latest date on which the Borrowers, a Subsidiary of the
     Borrowers or an ERISA Affiliate maintained, contributed or had an
     obligation to contribute to such plan.

          "Pledge Agreement" shall have the meaning provided in Section
     5.08.

          "Pledge Agreement Collateral" shall mean all "Collateral" as
     defined in the Pledge Agreement.

          "Pledged Securities" shall mean "Pledged Securities" as defined
     in the Pledge Agreement.

          "Preferred Stock," as applied to the capital stock of any Person,
     means capital stock of such Person (other than common stock of such
     Person) of any class or classes (however designed) that ranks prior,
     as to the payment of dividends or as to the distribution of assets
     upon any voluntary or involuntary liquidation, dissolution or winding
     up of such Person, to shares of capital stock of any other class of
     such Person, and shall include any Qualified Preferred Stock and
     Disqualified Preferred Stock.

          "Prime Lending Rate" shall mean the rate which BTCo announces
     from time to time as its prime lending rate, the Prime Lending Rate to
     change when and as such prime lending rate changes.  The Prime Lending
     Rate is a reference rate and does not necessarily represent the lowest
     or best rate actually charged to any customer.  BTCo may make com-
     mercial loans or other loans at rates of interest at, above or below
     the Prime Lending Rate.

          "Pro Forma Basis" shall mean, as to any Person, for any of the
     following events which occur subsequent to the commencement of a
     period for which the financial effect of such event is being
     calculated, and giving effect to the event for which such calculation
     is being made, such calculation as will give pro forma effect to such
     event as if same had occurred at the beginning of such period of
     calculation, and

          (i)  for purposes of the foregoing calculation, the transaction
     giving rise to the need to calculate the pro forma effect to any of
     the following events shall be assumed to have occurred on the first
     day of the four fiscal quarter period last ended before the occurrence
     of the respective event for which such pro forma effect is being
     determined (the "Reference Period"), and<PAGE>


          (ii)  in making any determination with respect to the incurrence
     or assumption of any Indebtedness or issuance of any Disqualified
     Preferred Stock during the Reference Period or subsequent to the
     Reference Period and on or prior to the date of the transaction refer-
     enced in clause (i) above (the "Transaction Date"), (w) all
     Indebtedness or Disqualified Preferred Stock (including the
     Indebtedness or Disqualified Preferred Stock incurred or assumed and
     for which the financial effect is being calculated) incurred or
     permanently repaid during the Reference Period shall be deemed to have
     been incurred or repaid at the beginning of such period, (x) 
     Consolidated Net Interest Expense of such Person attributable to
     interest or dividends on any Indebtedness or Disqualified Preferred
     Stock, as the case may be, bearing floating interest rates should be
     computed on a pro forma basis as if the rate in effect on the
     Transaction Date had been the applicable rate for the entire period,
     (y) Consolidated Net Interest Expense of such Person attributable to
     interest on any Indebtedness under any revolving credit facility which
     was in effect during the respective Reference Period shall be computed
     on a pro forma basis based upon the average daily balance of such
     Indebtedness outstanding during the applicable period (or, if shorter,
     the portion of the period during which the revolving credit facility
     was in effect) and (z) Consolidated Net Interest Expense will be
     increased or reduced by the net cost (including amortization of
     discount) or benefit (after giving effect to amortization of discount)
     associated with the Interest Rate Protection Agreements, which will
     remain in effect for the twelve-month period after the Transaction
     Date and which shall have the effect of fixing the interest rate on
     the date of computation, and

          (iii)  in making any determination of Consolidated EBITDA, pro
     forma effect shall be given to any Permitted Acquisition or
     Significant Divestiture which occurred during the Reference Period or
     subsequent to the Reference Period and prior to the Transaction Date,
     Consolidated EBITDA shall be determined as if such Permitted
     Acquisition or Significant Divestiture occurred on the first day of
     the Reference Period, taking into account cost savings and expenses
     which would otherwise be accounted for as an adjustment pursuant to
     Article 11 of Regulation S-X under the Securities Act, as if such cost
     savings or expenses were realized on the first day of the Reference
     Period.

          "Projections" shall have the meaning provided in Section 5.14(b).

          "Purchase and Contribution Agreement" shall mean the Purchase and
     Contribution Agreement, dated as of November 15, 1994 as amended and
     restated as of December 29, 1995, among Broyhill, Lane, Action and
     Thomasville and the Receivables Subsidiary, as same may be further
     amended, modified or supplemented from time to time in compliance with
     Section 9.10, or as replaced in compliance with the definition of
     Receivables Facility.

          "Qualified Preferred Stock" means any Pay-In-Kind Preferred Stock
     of Furniture Brands, or any other Preferred Stock of Furniture Brands,
     the express terms of which shall provide that Dividends thereon shall<PAGE>


     not be required to be paid in cash at any time that such cash payment
     would be prohibited by the terms of this Agreement (and any
     refinancings, replacements or extensions hereof) and in either case
     which, by its terms (or by the terms of any security into which it is
     convertible or for which it is exchangeable), or upon the happening of
     any event (including an event which would constitute a Change of
     Control), cannot mature (excluding any maturity as the result of an
     optional redemption by the issuer thereof) and is not mandatorily
     redeemable, pursuant to a sinking fund obligation or otherwise, and is
     not redeemable, or required to be repurchased, at the sole option of
     the holder thereof (including, without limitation, upon the occurrence
     of an event which would constitute a Change of Control), in whole or
     in part, on or prior to the first anniversary of the Term Loan
     Maturity Date.

          "Quarterly Payment Date" shall mean the last Business Day of each
     June, September, December and March, occurring after the Third
     Restatement Effective Date.

          "RCRA" shall mean the Resource Conservation and Recovery Act, as
     the same may be amended from time to time, 42 U.S.C. Section 6901 et seq.

          "Real Property" of any Person shall mean all the right, title and
     interest of such Person in and to land, improvements and fixtures,
     including Leaseholds.

          "Receivables Documents" shall mean the Receivables Purchase
     Agreements, the Purchase and Contribution Agreement and any related
     documentation entered into by the Borrowers and their Restricted
     Subsidiaries, the Receivables Subsidiary and/or the Receivables
     Purchasers in connection with the Receivables Facility.

          "Receivables Facility" shall mean the arrangement pursuant to
     which (x) each of Broyhill, Lane, Action and Thomasville and its
     respective Subsidiaries will from time to time sell accounts
     receivable to the Receivables Subsidiary and (y) the Receivables
     Subsidiary shall sell interests in the receivables to the Receivables
     Purchasers, or obtain subordinated loans secured by the receivables
     from the Receivables Purchasers, as more fully set forth in the
     Receivables Documents; provided, that the Receivables Facility may be
     replaced after the date hereof so long as the Administrative Agent is
     reasonably satisfied that the terms and conditions of any replacement
     facility are as favorable or more favorable to Furniture Brands and
     its Restricted Subsidiaries and to the Banks (and in any event
     contains no greater degree of recourse to Furniture Brands and its
     Restricted Subsidiaries (other than the Receivables Subsidiary)) than
     the terms and conditions of the current Receivables Facility (in which
     event such replacement facility shall be deemed to be the Receivables
     Facility hereunder).

          "Receivables Purchase Agreements" shall mean and include the
     Atlantic Receivables Purchase Agreement, the Alternate Receivables
     Purchase Agreement and the Subordinated Loan Agreement.<PAGE>


          "Receivables Purchaser" shall mean and include (i) with respect
     to the Alternate Receivables Purchase Agreement, Credit Lyonnais and
     (ii) with respect to the Atlantic Receivables Purchase Agreement,
     Atlantic and Credit Lyonnais and (iii)  with respect to the
     Subordinated Loan Agreement, Credit Lyonnais and their respective
     successors and assigns (in the event that the Receivables Facility is
     replaced, any replacement receivables purchasers shall be deemed to be
     the Receivables Purchasers hereunder).

          "Receivables Subsidiary" shall mean Interco Receivables Corp.,
     the special purpose subsidiary formed by Broyhill, Lane and Action and
     owned by Broyhill, Lane, Action and Thomasville to purchase and
     receive contributions of receivables from each of Broyhill, Lane,
     Action and Thomasville and their respective other Restricted
     Subsidiaries pursuant to the Receivables Facility.

          "Recovery Event" shall mean the receipt by Furniture Brands or
     any of its Restricted Subsidiaries of any cash insurance proceeds or
     condemnation award payable (i) by reason of theft, loss, physical
     destruction or damage or any other similar event with respect to any
     property or assets of the Borrowers or any of its Subsidiaries and
     (ii) under any policy of insurance required to be maintained under
     Section 8.03.

          "Reduction Percentage" shall mean .125% on and from the Third
     Restatement Effective Date through July 30, 1997 (or such earlier date
     on which the Borrowers deliver to the Administrative Agent a
     certificate containing the calculations of Leverage Ratio for the
     fiscal quarter ended June 30, 1997), and thereafter shall mean, from
     and after each day of delivery of any certificate delivered in
     accordance with the following sentence indicating an entitlement to a
     Reduction Percentage other than zero (each, a "Start Date") to and in-
     cluding the applicable End Date described below, the percentage set
     forth below opposite the Leverage Ratio indicated to have been
     achieved in any certificate delivered in accordance with the following
     sentence:

                    Leverage               Interest
                     Ratio            Reduction Discount
                  -----------         ------------------
                  Equal to or
                  greater than 4.00:1         0%

                  Equal to or              .125%
                  greater than
                  3.50:1 but less
                  than 4.00:1

                  Equal to or              .250%
                  greater than
                  3.00:1 but less
                  than 3.50:1

                  Equal to or              .375%
                  greater than
                  2.50:1 but less
                  than 3.00:1

                  Less than 2.50:1         .625%

     From and after the date of the delivery of the certificate referenced
     above for the fiscal quarter ended June 30, 1997, the Leverage Ratio
     shall be determined based on the delivery of a certificate of the
     Borrowers by an Authorized Representative of the Borrowers to the
     Administrative Agent, within 30 days of the last day of any fiscal
     quarter of Furniture Brands (beginning after the fiscal quarter ended
     on June 30, 1997, based on calculations made at the end of each fiscal
     quarter commencing with the fiscal quarter ended June 30, 1997, which
     certificate shall set forth the calculation of the Leverage Ratio for
     the fiscal quarter ended immediately prior to the relevant Start Date
     and the Reduction Percentage which shall be thereafter applicable
     (until same is changed or ceases to apply in accordance with the
     following sentences).  The Reduction Percentage so determined shall
     apply, except as set forth in the succeeding sentence, from the Start
     Date to the earlier of (x) the date on which the next certificate is
     delivered to the Administrative Agent and (y) the date which is 30
     days following the last day of the fiscal quarter in which the
     previous Start Date occurred (the "End Date"), at which time, if no
     certificate has been delivered to the Administrative Agent indicating
     an entitlement to a Reduction Percentage other than zero (and thus
     commencing a new Start Date), the Reduction Percentage shall be
     reduced to zero.  Notwithstanding anything to the contrary contained
     above in this definition, the Reduction Percentage shall be reduced to
     zero at all times during which there shall exist an Event of Default.

          "Refinancing" shall mean all repayments and refinancings of
     Indebtedness under the Existing Credit Agreement in connection with
     the Transaction.

          "Register" shall have the meaning provided in Section 13.17.

          "Regulation D" shall mean Regulation D of the Board of Governors
     of the Federal Reserve System as from time to time in effect and any
     successor to all or a portion thereof establishing reserve
     requirements.

          "Regulation G" shall mean Regulation G of the Board of Governors
     of the Federal Reserve System as from time to time in effect and any
     successor to all or a portion thereof.

          "Regulation T" shall mean Regulation T of the Board of Governors
     of the Federal Reserve System as from time to time in effect and any
     successor to all or a portion thereof.

          "Regulation U" shall mean Regulation U of the Board of Governors
     of the Federal Reserve System as from time to time in effect and any
     successor to all or a portion thereof.<PAGE>


          "Regulation X" shall mean Regulation X of the Board of Governors
     of the Federal Reserve System as from time to time in effect and any
     successor to all or a portion thereof.

          "Release" means any spilling, leaking, pumping, pouring,
     emitting, emptying, discharging, injecting, escaping, leaching,
     dumping, disposing or migration into the environment.

          "Replaced Bank" shall have the meaning provided in Section  1.13.

          "Replacement Bank" shall have the meaning provided in Section 
     1.13.

          "Reportable Event" shall mean an event described in Section
     4043(c) of ERISA with respect to a Plan other than those events as to
     which the 30-day notice period is waived under subsection .13, .14,
     .16, .18, .19 or .20 of PBGC Regulation Section 2615.

          "Required Appraisal" shall have the meaning provided in Section
     8.11(g).

          "Required Banks" shall mean Non-Defaulting Banks, the sum of
     whose outstanding Term Loans (or, if prior to the Third Restatement
     Effective Date, Term Loan Commitments) and Revolving Loan Commitments
     (or after the termination thereof, outstanding Revolving Loans and
     Adjusted Percentage of Swingline Loans and Letter of Credit Outstand-
     ings) represent greater than 50% of the sum of all outstanding Term
     Loans (or, if prior to the Third Restatement Effective Date, Term Loan
     Commitments) and the Adjusted Total Revolving Loan Commitment (or
     after the termination thereof, the sum of the then total outstanding
     Revolving Loans of Non-Defaulting Banks and the aggregate Adjusted
     Percentages of all Non-Defaulting Banks of the total outstanding
     Swingline Loans and Letter of Credit Outstandings at such time).

          "Required Supermajority Banks" shall mean those Non-Defaulting
     Banks which would constitute the Required Banks under, and as defined
     in, this Agreement if the term "50%" contained therein were changed to
     "66-2/3%."

          "Restricted Junior Payment" shall have the meaning provided in
     Section 9.10.

          "Restricted Subsidiaries" shall mean, (x) all of the Subsidiaries
     of the Borrowers and their respective Subsidiaries in existence on the
     Third Restatement Effective Date and (y) any Subsidiary (other than an
     Unrestricted Subsidiary) that is created, established or acquired
     after the Third Restatement Effective Date.

          "Returned Investment Amount" shall mean, with respect to all
     Investments made pursuant to Section 9.05(vii) after the Second
     Restatement Effective Date in Persons which are Unrestricted
     Subsidiaries or are not Restricted Subsidiaries, the aggregate amount
     of cash received by Furniture Brands and its Restricted Subsidiaries
     which are Wholly-Owned Subsidiaries of Furniture Brands representing a<PAGE>

     return of capital of such Investment, in each case to the extent the
     amount of capital so returned is not, and will not be, included in
     Consolidated Net Income.

          "Returns" shall have the meaning provided in Section 7.09.

          "Revolving Loan" shall have the meaning provided in Section
     1.01(b).

          "Revolving Loan Commitment" shall mean, for each Bank, the amount
     set forth opposite such Bank's name in Schedule  I hereto directly
     below the column entitled "Revolving Loan Commitment," as same may be
     (x) reduced from time to time pursuant to Sections 3.02, 3.03, 4.02
     and/or 10 or (y)  adjusted from time to time as a result of assign-
     ments to or from such Bank pursuant to Section 1.13 or 13.04(b).

          "Revolving Loan Maturity Date" shall mean September 15, 2001.

          "Revolving Note" shall have the meaning provided in Section
     1.05(a).

          "Scheduled Commitment Reduction" shall have the meaning provided
     in Section 3.03(d).

          "Scheduled Commitment Reduction Date" shall mean each date upon
     which any Scheduled Commitment Reduction is to occur.

          "SEC" shall have the meaning provided in Section 8.01(h).

          "Second Restatement Effective Date" shall mean the Second
     Restatement Effective Date under and as defined in the Existing Credit
     Agreement.

          "Section 4.04(b)(ii) Certificate" shall have the meaning provided
     in Section 4.04(b)(ii).

          "Secured Creditors" shall have the meaning assigned that term in
     the Security Documents.

          "Securities Act" shall mean the Securities Act of 1933, as
     amended.

          "Security Agreement" shall have the meaning provided in Section
     5.09.

          "Security Agreement Collateral" shall mean all "Collateral" as
     defined in the Security Agreement (which shall exclude all assets of
     the Receivables Subsidiary).

          "Security Document" shall mean the Pledge Agreement, the Security
     Agreement, each Mortgage and, after the execution and delivery
     thereof, each Additional Mortgage and each Additional Security
     Document.<PAGE>


          "Senior Debt Leverage Ratio" shall mean on any date a ratio
     calculated as provided in the definition of Leverage Ratio contained
     herein; provided that the term "Consolidated Senior Debt" shall be
     deemed inserted in lieu of the term "Consolidated Debt" in clause (i)
     of the definition of Leverage Ratio.

          "Shareholders' Agreements" shall have the meaning provided in the
     Existing Credit Agreement.

          "Significant Divestiture" shall mean any sale or other
     disposition of assets by Furniture Brands and/or its Restricted
     Subsidiaries, the fair market value of which exceeds $500,000 for any
     transaction (or series of related transactions).

          "Solvent Entity" shall have the meaning provided in Section
     7.05(c). 

          "Spunoff Plan" shall mean any employee benefit plan as defined in
     Section 3(3) of ERISA which Furniture Brands ceased to maintain or
     contribute to pursuant to the Distribution and Services Agreement
     dated as of November 17, 1994.

          "Standby Letter of Credit" shall mean any Standby Letter of
     Credit or similar instrument issued or deemed issued for the account
     of any Borrower pursuant to Section 2.01 for the purpose of supporting
     L/C Supportable Obligations.

          "Standby Letter of Credit Request" shall have the meaning
     provided in Section 2.03(a).

          "Start Date" shall have the meaning provided in the definition of
     `Reduction Percentage.'

          "Stated Amount" of (x) each Letter of Credit shall, at any time,
     mean the maximum amount available to be drawn thereunder (in each case
     determined without regard to whether any conditions to drawing could
     then be met) and (y) each Acceptance shall mean the amount of each
     such Acceptance.

          "Stock Repurchase" shall have the meaning provided in Section
     5.16(b).

          "Stock Repurchase Agreement" shall mean the Stock Repurchase
     Agreement dated as of May 27, 1997 by and among Furniture Brands and
     Apollo Group.

          "Stock Repurchase Documents" shall mean the Stock Repurchase
     Agreement and all other documents entered into or delivered in
     connection with the Stock Repurchase Agreement.

          "Subordinated Loan Agreement" shall mean the Subordinated Loan
     Agreement in the form annexed to the Atlantic Receivables Purchase
     Agreement on the First Restatement Effective Date.<PAGE>


          "Subsidiary" shall mean, as to any Person, (i) any corporation
     more than 50% of whose stock of any class or classes having by the
     terms thereof ordinary voting power to elect a majority of the
     directors of such corporation (irrespective of whether or not at the
     time stock of any class or classes of such corporation shall have or
     might have voting power by reason of the happening of any contingency)
     is at the time owned by such Person and/or one or more Subsidiaries of
     such Person and (ii) any partnership, association, joint venture or
     other entity in which such Person and/or one or more Subsidiaries of
     such Person has more than a 50% equity interest at the time.  As used
     in this Agreement, the term "Subsidiary" shall include or apply to any
     Restricted Subsidiary and any Unrestricted Subsidiary.

          "Subsidiary Guarantor" shall mean Broyhill Transport, Inc., a
     North Carolina corporation, Lane Advertising, Inc., a Virginia
     corporation, Action Industries, Inc., a Virginia corporation, Action
     Transport, Inc., a Delaware corporation, Fayette Enterprises, Inc., a
     Mississippi corporation, Gordon's, Inc., a Delaware corporation,
     Thomasville Chair Company, a North Carolina corporation, Thomasville
     Home Furnishings, Inc., a Delaware corporation, Thomasville
     Upholstery, Inc., a Delaware corporation, and Action U.K., Inc., a
     Delaware corporation, and any Restricted Subsidiary of any Borrower
     which executes a guarantee after the Third Restatement Effective Date
     pursuant to Section 8.11, but shall in any event exclude the
     Receivables Subsidiary and Thomasville Furniture Latin America, S.A.

          "Subsidiary Guaranty" shall have the meaning provided in Section
     5.07.

          "Supermajority Banks" of any Tranche shall mean those Non-
     Defaulting Banks which would constitute the Required Banks under, and
     as defined in, this Agreement if (x) all outstanding Obligations of
     the other Tranches under this Agreement were repaid in full and all
     Commitments with respect thereto were terminated and (y) the term
     "50%" contained therein were changed to "66-2/3%."

          "Surviving Guaranties" shall mean the guarantee obligations of
     Furniture Brands with respect to the leases described in Schedule XV
     hereto.

          "Swingline Expiry Date" shall mean the date which is two Business
     Days prior to the Revolving Loan Maturity Date.

          "Swingline Loan" shall have the meaning provided in Section
     1.01(c).

          "Swingline Note" shall have the meaning provided in Section
     1.05(a).

          "Syndication Agent" shall mean NationsBank, in its capacity as
     Syndication Agent for the Banks hereunder.<PAGE>



          "Tax Sharing Agreement" shall mean any tax sharing,
     disaffiliation or tax allocation agreement entered into among the
     Borrowers, Converse and Florsheim, as amended.

          "Taxes" shall have the meaning provided in Section 4.04(a).

          "Term Loan" shall have the meaning provided in Section 1.01(a).

          "Term Loan Commitment" shall mean for each Bank, the amount set
     forth opposite such Bank's name in Schedule I hereto directly below
     the column entitled "Term Loan Commitment," as same may be (x) reduced
     from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y)
     adjusted from time to time as a result of assignments to or from such
     Bank pursuant to Sections 1.13 and 13.04(b).

          "Term Loan Maturity Date" shall mean June 27, 2007.

          "Term Note" shall have the meaning provided in Section 1.05(a).

          "Third Restatement Effective Date" shall have the meaning
     provided in Section 13.10.

          "Thomasville" shall have the meaning provided in the first
     paragraph of this Agreement.

          "Total Commitment" shall mean, at any time, the sum of the
     Commitments of each of the Banks.

          "Total Revolving Loan Commitment" shall mean, at any time, the
     sum of the Revolving Loan Commitments of each of the Banks.

          "Total Term Loan Commitment" shall mean, at any time, the sum of
     the Term Loan Commitments of each of the Banks.

          "Total Unutilized Revolving Loan Commitment" shall mean, at any
     time, an amount equal to the remainder of (x) the then Total Revolving
     Loan Commitment, less (y) the sum of the aggregate principal amount of
     Revolving Loans and Swingline Loans outstanding plus the then
     aggregate amount of Letter of Credit Outstandings.

          "Trade Letter of Credit" shall mean any Letter of Credit or
     similar instrument issued for the account of any Borrower pursuant to
     Section 2.01 for the purpose of providing the primary payment
     mechanism in connection with the purchase of any materials, goods or
     services by the Borrowers or their Restricted Subsidiaries in the
     ordinary course of business of the Borrowers or their Restricted
     Subsidiaries.

          "Trade Letter of Credit Request" shall have the meaning provided
     in Section 2.03(a).

          "Tranche" shall mean the respective facility and commitments
     utilized in making Loans hereunder, with there being three separate
     Tranches, i.e., Term Loans, Revolving Loans and Swingline Loans.<PAGE>





          "Transaction" shall mean (i) the amendment and restatement of the
     Existing Credit Agreement in the form of this Agreement as provided
     herein, (ii) the incurrence of the Loans hereunder on the Third
     Restatement Effective Date, (iii) the consummation of the Stock
     Repurchase and (iv) the consummation of the Refinancing.

          "Type" shall mean the type of Loan determined with regard to the
     interest option applicable thereto, i.e., whether a Base Rate Loan or
     a Eurodollar Loan.

          "UCC" shall mean the Uniform Commercial Code as from time to time
     in effect in the relevant jurisdiction.

          "Unfunded Current Liability" of any Plan means the amount, if
     any, by which the actuarial present value of the accumulated benefits
     under the Plan as of the close of its most recent plan year each
     exceeds the fair market value of the assets allocable thereto, each
     determined in accordance with Statement of Financial Accounting
     Standards No. 87, based upon the actuarial assumptions used by the
     Plan's actuary in the most recent annual valuation of the Plan.

          "United States" and "U.S." shall each mean the United States of
     America.

          "Unpaid Drawing" shall have the meaning provided for in Section
     2.05(a).

          "Unrestricted Subsidiary" shall mean any Wholly-Owned Subsidiary
     of Furniture Brands that is acquired or created after the Third
     Restatement Effective Date and designated by Furniture Brands as an
     Unrestricted Subsidiary hereunder by written notice to the
     Administrative Agent; provided that Furniture Brands shall only be
     permitted to so designate a new Unrestricted Subsidiary after the
     Third Restatement Effective Date and so long as (i) no Default or
     Event of Default exists or would result therefrom and (ii) 100% of the
     capital stock of such newly-designated Unrestricted Subsidiary is
     owned by Furniture Brands or another Unrestricted Subsidiary and all
     of the provisions of Section 9.11 shall have been complied with in
     respect of such newly-designated Unrestricted Subsidiary and such
     Unrestricted Subsidiary is capitalized (to the extent capitalized by
     Furniture Brands or any of its Restricted Subsidiaries) through
     Investments as permitted by, and in compliance with, Section
     9.05(vii), with any assets owned by such Unrestricted Subsidiary at
     the time of the initial designation thereof to be treated as
     Investments made pursuant to Section 9.05(vii), provided that at the
     time of the initial Investments by Furniture Brands in such Subsidiary
     (x) Furniture Brands shall designate such entity as an Unrestricted
     Subsidiary in a written notice to the Administrative Agent and (y)
     such entity and the Borrowers shall have entered into tax sharing and
     management services agreements on a basis reasonably satisfactory to
     the Administrative Agent.  Additionally, Furniture Brands may not
     designate any Credit Party, the Receivables Subsidiary or any
     Subsidiary created or acquired pursuant to a Permitted Acquisition as
     an Unrestricted Subsidiary.<PAGE>

          "Unutilized Revolving Loan Commitment" with respect to any Bank,
     at any time, shall mean such Bank's Revolving Loan Commitment at such
     time less the sum of (i) the aggregate outstanding principal amount of
     Revolving Loans made by such Bank and (ii) such Bank's Adjusted
     Percentage of the Letter of Credit Outstandings at such time.

          "Voting Stock" shall mean, as to any Person, any class or classes
     of capital stock of such Person pursuant to which the holders thereof
     have the general voting power under ordinary circumstances to elect at
     least a majority of the Board of Directors of such Person.

          "Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
     corporation 100% of whose capital stock (other than director's
     qualifying shares) is at the time owned by such Person and/or one or
     more Wholly-Owned Subsidiaries of such Person and (ii) any
     partnership, association, joint venture or other entity in which such
     Person and/or one or more Wholly-Owned Subsidiaries of such Person has
     a 100% equity interest at such time.

          SECTION 12.     The Agents.

          12.01     Appointment.  The Banks hereby designate BTCo as
     Administrative Agent (for purposes of this Section 12, the term
     "Administrative Agent" shall include BTCo in its capacity as
     Collateral Agent pursuant to the Security Documents), Credit Lyonnais
     as Documentation Agent and NationsBank as Syndication Agent, in each
     case to act as specified herein and in the other Credit Documents. 
     Each Bank hereby irrevocably authorizes, and each holder of any Note
     by the acceptance of such Note shall be deemed irrevocably to author-
     ize, the Administrative Agent, the Documentation Agent and the
     Syndication Agent to take such action on its behalf under the provi-
     sions of this Agreement, the other Credit Documents and any other
     instruments and agreements referred to herein or therein and to
     exercise such powers and to perform such duties hereunder and
     thereunder as are specifically delegated to or required of the
     Administrative Agent, the Documentation Agent or the Syndication Agent
     by the terms hereof and thereof and such other powers as are
     reasonably incidental thereto.  Each of the Administrative Agent, the
     Documentation Agent and the Syndication Agent  may perform any of its
     duties hereunder by or through its respective officers, directors,
     agents, employees or affiliates.

          12.02     Nature of Duties.  The Administrative Agent shall not
     have any duties or responsibilities except those expressly set forth
     in this Agreement and the Security Documents.  The Documentation Agent
     and the Syndication Agent, as such, shall not have any duties or
     responsibilities under this Agreement or any Security Document or any
     other document or matter related thereto.  None of the Administrative
     Agent, the Documentation Agent or the Syndication Agent nor any of its
     respective officers, directors, agents, employees or affiliates shall
     be liable for any action taken or omitted by it or them hereunder or
     under any other Credit Document or in connection herewith or
     therewith, unless caused by its or their gross negligence or willful
     misconduct.  The duties of the Administrative Agent, the Documentation<PAGE>


     Agent and the Syndication Agent shall be mechanical and administrative
     in nature; the Administrative Agent, the Documentation Agent and the
     Syndication Agent shall not have by reason of this Agreement or any
     other Credit Document a fiduciary relationship in respect of any Bank
     or the holder of any Note; and nothing in this Agreement or any other
     Credit Document, expressed or implied, is intended to or shall be so
     construed as to impose upon the Administrative Agent, the
     Documentation Agent and the Syndication Agent any obligations in
     respect of this Agreement or any other Credit Document except as
     expressly set forth herein or therein.

          12.03     Lack of Reliance on the Administrative Agent, the
     Documentation Agent and the Syndication Agent.  Independently and
     without reliance upon the Administrative Agent, the Documentation
     Agent and the Syndication  Agent, each Bank and the holder of each
     Note, to the extent it deems appropriate, has made and shall continue
     to make (i) its own independent investigation of the financial
     condition and affairs of Furniture Brands and its Subsidiaries in
     connection with the making and the continuance of the Loans and the
     taking or not taking of any action in connection herewith and (ii) its
     own appraisal of the creditworthiness of Furniture Brands and its Sub-
     sidiaries and, except as expressly provided in this Agreement, the
     Administrative Agent, the Documentation Agent and the Syndication
     Agent shall not have any duty or responsibility, either initially or
     on a continuing basis, to provide any Bank or the holder of any Note
     with any credit or other information with respect thereto, whether
     coming into its possession before the making of the Loans or at any
     time or times thereafter.  None of the Administrative Agent, the
     Documentation Agent or the Syndication Agent or any of their
     respective affiliates nor any of their respective officers, directors,
     agents, or employees shall be responsible to any Bank or the holder of
     any Note for any recitals, statements, information, representations or
     warranties herein or in any document, certificate or other writing
     delivered in connection herewith or for the execution, effectiveness,
     genuineness, validity, enforceability, perfection, collectibility,
     priority or sufficiency of this Agreement or any other Credit Document
     or the financial condition of Furniture Brands and its Subsidiaries or
     be required to make any inquiry concerning either the performance or
     observance of any of the terms, provisions or conditions of this
     Agreement or any other Credit Document, or the financial condition of
     Furniture Brands and its Subsidiaries or the existence or possible
     existence of any Default or Event of Default.

          12.04     Certain Rights of the Administrative Agent, the
     Documentation Agent and the Syndication Agent.  If the Administrative
     Agent, the Documentation Agent or the Syndication Agent shall request
     instructions from the Required Banks  with respect to any act or
     action (including failure to act) in connection with this Agreement or
     any other Credit Document, such Administrative Agent, Documentation
     Agent or Syndication Agent shall be entitled to refrain from such act
     or taking such action unless and until the Administrative Agent shall
     have received instructions from the Required Banks; and such
     Administrative Agent, Documentation Agent or Syndication Agent shall
     not incur liability to any Person by reason of so refraining.  Without<PAGE>


     limiting the foregoing, no Bank or holder of any Note shall have any
     right of action whatsoever against the Administrative Agent, the
     Documentation Agent or the Syndication Agent as a result of the
     Administrative Agent acting or refraining from acting hereunder or
     under any other Credit Document in accordance with the instructions of
     the Required Banks.

          12.05     Reliance.  The Administrative Agent, the Documentation
     Agent and the Syndication Agent shall be entitled to rely, and shall
     be fully protected in relying, upon any note, writing, resolution,
     notice, statement, certificate, telex, teletype or telecopier message,
     cablegram, radiogram, order or other document or telephone message
     signed, sent or made by any Person that such Administrative Agent,
     Documentation Agent or Syndication Agent believed to be the proper
     Person, and, with respect to all legal matters pertaining to this
     Agreement and any other Credit Document and its duties hereunder and
     thereunder, upon advice of counsel selected by such Administrative
     Agent, Documentation Agent or Syndication Agent (which may be counsel
     for the Credit Parties).

          12.06     Indemnification.  To the extent each of the
     Administrative Agent, the Documentation Agent or the Syndication Agent
     is not reimbursed and indemnified by the Borrowers, the Banks will
     reimburse and indemnify such Administrative Agent, Documentation Agent
     or Syndication Agent, in proportion to their respective "percentages"
     as used in determining the Required Banks (determined as if there were
     no Defaulting Banks), for and against any and all liabilities, obli-
     gations, losses, damages, penalties, claims, actions, judgments,
     costs, expenses or disbursements of whatsoever kind or nature which
     may be imposed on, asserted against or incurred by such Administrative
     Agent, Documentation Agent or Syndication Agent in performing its
     respective duties hereunder or under any other Credit Document, in any
     way relating to or arising out of this Agreement or any other Credit
     Document; provided that no Bank shall be liable for any portion of
     such liabilities, obligations, losses, damages, penalties, actions,
     judgments, suits, costs, expenses or disbursements resulting from such
     Administrative Agent's, Documentation Agent's or Syndication Agent's
     gross negligence or willful misconduct.

          12.07     The Administrative Agent, the Documentation Agent and
     the Syndication Agent in its Individual Capacity.  With respect to its
     obligation to make Loans and participate in Letters of Credit under
     this Agreement, each of the Administrative Agent, the Documentation
     Agent and the Syndication Agent shall have the rights and powers
     specified herein for a "Bank" and may exercise the same rights and
     powers as though it were not performing the duties specified herein;
     and the term "Banks," "Required Banks," "holders of Notes" or any
     similar terms shall, unless the context clearly otherwise indicates,
     include the Administrative Agent, the Documentation Agent and the
     Syndication Agent in their individual capacity.  Each of the
     Administrative Agent, the Documentation Agent and the Syndication
     Agent may accept deposits from, lend money to, and generally engage in
     any kind of banking, trust or other business with any Credit Party or
     any Affiliate of any Credit Party as if they were not performing the<PAGE>


     duties specified herein, and may accept fees and other consideration
     from the Borrowers or any other Credit Party for services in
     connection with this Agreement and otherwise without having to account
     for the same to the Banks.

          12.08     Holders.  The Administrative Agent may deem and treat
     the payee of any Note as the owner thereof for all purposes hereof
     unless and until a written notice of the assignment, transfer or
     endorsement thereof, as the case may be, shall have been filed with
     the Administrative Agent.  Any request, authority or consent of any
     Person who, at the time of making such request or giving such
     authority or consent, is the holder of any Note shall be conclusive
     and binding on any subsequent holder, transferee, assignee or
     indorsee, as the case may be, of such Note or of any Note or Notes
     issued in exchange therefor.

          12.09     Resignation by the Agents.  (a)  The Administrative
     Agent may resign from the performance of all its functions and duties
     hereunder and/or under the other Credit Documents at any time by
     giving 15 Business Days' prior written notice to the Borrowers and the
     Banks.  Such resignation shall take effect upon the appointment of a
     successor Administrative Agent pursuant to clauses (b) and (c) below
     or as otherwise provided below.

          (b)    Upon any such notice of resignation, the Required Banks
     shall appoint a successor Administrative Agent hereunder or thereunder
     who shall be a commercial bank or trust company reasonably acceptable
     to the Borrowers.

          (c)    If a successor Administrative Agent shall not have been so
     appointed within such 15 Business Day period, the Administrative
     Agent, with the consent of the Borrowers, shall then appoint a
     commercial bank or trust company with capital and surplus of not less
     than $500 million as successor Administrative Agent who shall serve as
     Administrative Agent hereunder or thereunder until such time, if any,
     as the Required Banks appoint a successor Administrative Agent as
     provided above.

          (d)    If no successor Administrative Agent has been appointed
     pursuant to clause (b) or (c) above by the 20th Business Day after the
     date such notice of resignation was given by the Administrative Agent,
     the Administrative Agent's resignation shall become effective and the
     Banks shall thereafter perform all the duties of the Administrative
     Agent hereunder and/or under any other Credit Document until such
     time, if any, as the Required Banks appoint a successor Administrative
     Agent as provided above.

          (e)    The Documentation Agent, as such, may resign at any time
     by giving 5 Business Days' prior written notice to the Banks.  Such
     resignation shall take effect at the end of such five Business Day
     period.

          (f)    The Syndication Agent, as such, may resign at any time by
     giving 5 Business Days' prior written notice to the Banks.  Such<PAGE>


     resignation shall take effect at the end of such five Business Day
     period.

          SECTION 13.     Miscellaneous.

          13.01     Payment of Expenses, etc.  The Borrowers jointly and
     severally shall:    (i) whether or not the transactions herein contem-
     plated are consummated, pay all reasonable out-of-pocket costs and
     expenses of the Administrative Agent (including, without limitation,
     the reasonable fees and disbursements of White & Case and local
     counsel) in connection with the preparation, execution and delivery of
     this Agreement and the other Credit Documents and the documents and
     instruments referred to herein and therein and any amendment, waiver
     or consent relating hereto or thereto, of the Agents in connection
     with their respective syndication efforts with respect to this
     Agreement and of the Administrative Agent and, following and during
     the continuation of an Event of Default, each of the Banks in
     connection with the enforcement of this Agreement and the other Credit
     Documents and the documents and instruments referred to herein and
     therein (including, without limitation, the reasonable fees and
     disbursements of counsel for the Administrative Agent and, following
     and during the continuation of an Event of Default, for each of the
     Banks); (ii) pay and hold each of the Banks harmless from and against
     any and all present and future stamp, excise and other similar taxes
     with respect to the foregoing matters and hold each of the Banks
     harmless from and against any and all liabilities with respect to or
     resulting from any delay or omission (other than to the extent
     attributable to such Bank) to pay such taxes; and (iii) indemnify the
     Agents and each Bank (including in its capacity as an Issuing Bank),
     and each of their respective officers, directors, employees, represen-
     tatives, affiliates and agents from and hold each of them harmless
     against any and all liabilities, obligations (including removal or
     remedial actions), losses, damages, penalties, claims, actions, judg-
     ments, suits, costs, expenses and disbursements (including reasonable
     attorneys' and consultants' fees and disbursements) incurred by,
     imposed on or assessed against any of them as a result of, or arising
     out of, or in any way related to, or by reason of, (a) any
     investigation, litigation or other proceeding (whether or not any
     Agent or any Bank is a party thereto) related to the entering into
     and/or performance of this Agreement or any other Credit Document or
     the use of any Letter of Credit or the proceeds of any Loans hereunder
     or the consummation of any transactions contemplated herein
     (including, without limitation, the Transaction) or in any other
     Credit Document or the exercise of any of their rights or remedies
     provided herein or in the other Credit Documents, or (b) the actual or
     alleged presence of Hazardous Materials in the air, surface water or
     groundwater or on the surface or subsurface of any Real Property owned
     or at any time operated by Furniture Brands or any of its
     Subsidiaries, the generation, storage, transportation, handling or
     disposal of Hazardous Materials at any location, whether or not owned
     or operated by Furniture Brands or any of its Subsidiaries, the non-
     compliance of any Real Property with foreign, federal, state and local
     laws, regulations, and ordinances (including applicable permits
     thereunder) applicable to any Real Property, or any Environmental<PAGE>

     Claim asserted against Furniture Brands, any of its Subsidiaries, or
     any Real Property owned or at any time operated by Furniture Brands or
     any of its Subsidiaries, including, in each case, without limitation,
     the reasonable fees and disbursements of counsel and other consultants
     incurred in connection with any such investigation, litigation or
     other proceeding (but excluding any losses, liabilities, claims, dam-
     ages or expenses to the extent incurred by reason of the gross
     negligence or willful misconduct of the Person to be indemnified).  To
     the extent that the undertaking to indemnify, pay or hold harmless any
     Agent or any Bank set forth in the preceding sentence may be
     unenforceable because it is violative of any law or public policy, the
     Borrowers shall make the maximum contribution to the payment and
     satisfaction of each of the indemnified liabilities which is
     permissible under applicable law.

          13.02     Right of Setoff.  In addition to any rights now or
     hereafter granted under applicable law or otherwise, and not by way of
     limitation of any such rights, upon the occurrence of an Event of
     Default, each Bank is hereby authorized at any time or from time to
     time, without presentment, demand, protest or other notice of any kind
     to the Borrowers or to any other Person, any such notice being hereby
     expressly waived, to set off and to appropriate and apply any and all
     deposits (general or special) and any other Indebtedness at any time
     held or owing by such Bank (including, without limitation, by branches
     and agencies of such Bank wherever located) to or for the credit or
     the account of any Credit Party against and on account of the
     Obligations and liabilities of all Credit Parties to such Bank under
     this Agreement or under any of the other Credit Documents, including,
     without limitation, all interests in Obligations purchased by such
     Bank pursuant to Section 13.06(b), and all other claims of any nature
     or description arising out of or connected with this Agreement or any
     other Credit Document, irrespective of whether or not such Bank shall
     have made any demand hereunder and although said Obligations,
     liabilities or claims, or any of them, shall be contingent or
     unmatured.

          13.03     Notices.  Except as otherwise expressly provided
     herein, all notices and other communications provided for hereunder
     shall be in writing (including telegraphic, telex, telecopier or cable
     communication) and mailed, telegraphed, telexed, telecopied, cabled or
     delivered:  if to the Borrowers, at the Borrowers' address specified
     opposite its signature below; if to any other Credit Party, at such
     Credit Party's address set forth in any Credit Document; if to any
     Bank, at its address specified opposite its name on Schedule II below;
     and if to the Administrative Agent, at its Notice Office; or, as to
     any Credit Party or the Administrative Agent, at such other address as
     shall be designated by such party in a written notice to the other
     parties hereto and, as to each Bank, at such other address as shall be
     designated by such Bank in a written notice to the Borrowers and the
     Administrative Agent.  All such notices and communications shall, when
     mailed, telegraphed, telexed, telecopied, or cabled or sent by
     overnight courier, be effective when deposited in the mails, delivered
     to the telegraph company, cable company or overnight courier, as the
     case may be, or sent by telex or telecopier, except that notices and<PAGE>


     communications to the Administrative Agent and the Borrowers shall not
     be effective until received by the Administrative Agent or the
     Borrowers, as the case may be.

          13.04     Benefit of Agreement.  (a)  This Agreement shall be
     binding upon and inure to the benefit of and be enforceable by the
     respective successors and assigns of the parties hereto; provided,
     however, no Borrower may assign or transfer any of its rights,
     obligations or interest hereunder or under any other Credit Document
     without the prior written consent of all of the Banks and, provided
     further, that although any Bank may transfer, assign or grant partici-
     pations in its rights hereunder, such Bank shall remain a "Bank" for
     all purposes hereunder (and may not transfer or assign all or any
     portion of its Commitment hereunder except as provided in Section
     13.04(b)) and the transferee, assignee or participant, as the case may
     be, shall not constitute a "Bank" hereunder and, provided further,
     that no Bank shall transfer or grant any participation under which the
     participant shall have rights to approve any amendment to or waiver of
     this Agreement or any other Credit Document except to the extent such
     amendment or waiver would (i) extend the final scheduled maturity of
     any Loan or Note or extend the expiry date of any Letter of Credit in
     which such participant is participating beyond the Revolving Loan
     Maturity Date, or reduce the rate or extend the time of payment of
     interest or Fees thereon (except in connection with a waiver of
     applicability of any post-default increase in interest rates) or
     reduce the principal amount thereof, or increase the amount of the
     participant's participation over the amount thereof then in effect (it
     being understood that waivers or modifications of conditions
     precedent, covenants, Defaults or Events of Default or of a mandatory
     reduction in the Total Revolving Loan Commitment shall not constitute
     a change in the terms of such participation, and that an increase in
     any Commitment or Loan shall be permitted without the consent of any
     participant if the participant's participation is not increased as a
     result thereof), (ii) consent to the assignment or transfer by the
     Borrowers of any of their rights and obligations under this Agreement
     or (iii) release all or substantially all of the Collateral under all
     of the Security Documents (except as expressly provided in the Credit
     Documents) supporting the Loans and/or Letters of Credit hereunder in
     which such participant is participating.  In the case of any such
     participation, the participant shall not have any rights under this
     Agreement or any of the other Credit Documents (the participant's
     rights against such Bank in respect of such participation to be those
     set forth in the agreement executed by such Bank in favor of the
     participant relating thereto) and all amounts payable by the Borrowers
     hereunder shall be determined as if such Bank had not sold such
     participation.

          (b)    Notwithstanding the foregoing, any Bank (or any Bank
     together with one or more other Banks) may (x) assign all or a portion
     of its Revolving Loan Commitment (and related outstanding Obligations
     hereunder) and/or its outstanding Term Loans (or if prior to the Third
     Restatement Effective Date, Term Loan Commitment) to (i) its parent
     company and/or any affiliate of such Bank which is at least 50% owned
     by such Bank or its parent company or to one or more Banks or (ii) in<PAGE>


     the case of any Bank that is a fund that invests in bank loans, any
     other fund that invests in bank loans and is managed by the same
     investment advisor of such Bank or by an Affiliate of such investment
     advisor or (y) after providing at least two Business Days prior notice
     to (but without requiring the consent of) Furniture Brands, assign
     all, or if less than all, a portion equal to at least $10,000,000 in
     the aggregate for the assigning Bank or assigning Banks, of such
     Revolving Loan Commitments (or, if the Revolving Loan Commitments have
     terminated, its outstanding obligations) and/or its outstanding Term
     Loans (or if prior to the Third Restatement Effective Date, Term Loan
     Commitment) hereunder to one or more Eligible Transferees, each of
     which assignees shall become a party to this Agreement as a Bank by
     execution of an Assignment and Assumption Agreement, provided that,
     (i) at such time Schedule I shall be deemed modified to reflect the
     Commitment and/or outstanding Term Loans, as the case may be, of such
     new Bank and of the existing Banks, (ii) upon surrender of the old
     Notes, new Notes will be issued, at the Borrowers' expense, to such
     new Bank and to the assigning Bank, such new Notes to be in conformity
     with the requirements of Section 1.05 (with appropriate modifications)
     to the extent needed to reflect the revised Commitments and/or
     outstanding Term Loans, as the case may be, (iii) the consent of the
     Administrative Agent and any Issuing Bank shall be required in connec-
     tion with any such assignment of a Bank's Commitment and/or
     outstanding Term Loans, as the case may be (which consent shall not be
     unreasonably withheld or delayed), and (iv) the Administrative Agent
     shall receive at the time of each such assignment (other than in
     connection with an assignment by a Bank to an affiliate of such Bank),
     from the assigning or assignee Bank, the payment of a non-refundable
     fee of $3,500 and, provided further, that such transfer or assignment
     will not be effective until recorded by the Administrative Agent on
     the Register pursuant to Section 13.17 hereof.  To the extent of any
     assignment pursuant to this Section 13.04(b), the assigning Bank shall
     be relieved of its obligations hereunder with respect to its assigned
     Commitments.  At the time of each assignment pursuant to this Section
     13.04(b) to a Person which is not already a Bank hereunder and which
     is not a United States person (as such term is defined in Section
     7701(a)(30) of the Code) for Federal income tax purposes, the
     respective assignee Bank shall provide to the Borrowers and the
     Administrative Agent the appropriate Internal Revenue Service Forms
     (and, if applicable a Section 4.04(b)(ii) Certificate) described in
     Section 4.04(b).  To the extent that an assignment of all or any
     portion of a Bank's Commitments and related outstanding Obligations
     pursuant to Section 1.13 or this Section 13.04(b) would, at the time
     of such assignment, result in increased costs under Section 1.10 or
     1.11 greater than those being charged by the respective assigning Bank
     prior to such assignment, then the Borrowers shall not be obligated to
     pay such greater increased costs (although the Borrowers shall be
     obligated to pay any other increased costs of the type described above
     resulting from changes after the date of the respective assignment).

          (c)    Nothing in this Agreement shall prevent or prohibit any
     Bank from pledging its Loans and Notes hereunder to a Federal Reserve
     Bank in support of borrowings made by such Bank from such Federal
     Reserve Bank.<PAGE>



          13.05     No Waiver; Remedies Cumulative.  No failure or delay on
     the part of the Administrative Agent or any Bank or any holder of any
     Note in exercising any right, power or privilege hereunder or under
     any other Credit Document and no course of dealing between the
     Borrowers or any other Credit Party and the Administrative Agent or
     any Bank or the holder of any Note shall operate as a waiver thereof;
     nor shall any single or partial exercise of any right, power or
     privilege hereunder or under any other Credit Document preclude any
     other or further exercise thereof or the exercise of any other right,
     power or privilege hereunder or thereunder.  The rights, powers and
     remedies herein or in any other Credit Document expressly provided are
     cumulative and not exclusive of any rights, powers or remedies which
     the Administrative Agent or any Bank or the holder of any Note would
     otherwise have.  No notice to or demand on any Credit Party in any
     case shall entitle any Credit Party to any other or further notice or
     demand in similar or other circumstances or constitute a waiver of the
     rights of the Administrative Agent or any Bank or the holder of any
     Note to any other or further action in any circumstances without
     notice or demand.

          13.06     Payments Pro Rata.  (a)  Except as otherwise provided
     in this Agreement, the Administrative Agent agrees that promptly after
     its receipt of each payment from or on behalf of the Borrowers in
     respect of any Obligations hereunder, it shall distribute such payment
     to the Banks (other than any Bank that has consented in writing to
     waive its pro rata share of any such payment) pro rata based upon
     their respective shares, if any, of the Obligations with respect to
     which such payment was received.

          (b)    Each of the Banks agrees that, if it should receive any
     amount hereunder (whether by voluntary payment, by realization upon
     security, by the exercise of the right of setoff or banker's lien, by
     counterclaim or cross action, by the enforcement of any right under
     the Credit Documents, or otherwise), which is applicable to the pay-
     ment of the principal of, or interest on, the Loans, Unpaid Drawings,
     Commitment Commission or other Fees, of a sum which with respect to
     the related sum or sums received by other Banks is in a greater
     proportion than the total of such Obligation then owed and due to such
     Bank bears to the total of such Obligation then owed and due to all of
     the Banks immediately prior to such receipt, then such Bank receiving
     such excess payment shall purchase for cash without recourse or
     warranty from the other Banks an interest in the Obligations of the
     respective Credit Party to such Banks in such amount as shall result
     in a proportional participation by all the Banks in such amount;
     provided that if all or any portion of such excess amount is there-
     after recovered from such Bank, such purchase shall be rescinded and
     the purchase price restored to the extent of such recovery, but
     without interest.

          (c)    Notwithstanding anything to the contrary contained herein,
     the provisions of the preceding Sections 13.06(a) and (b) shall be
     subject to the express provisions of this Agreement which require, or
     permit, differing payments to be made to Non-Defaulting Banks as
     opposed to Defaulting Banks.<PAGE>


          13.07     Calculations; Computations.  (a)    The financial
     statements to be furnished to the Banks pursuant hereto shall be made
     and prepared in accordance with generally accepted accounting
     principles in the United States (or the equivalent thereof in any
     country in which a Foreign Sales Corporation is doing business, as
     applicable) consistently applied throughout the periods involved,
     provided that, (i) except as otherwise specifically provided herein,
     all computations of Available $25 Million Dividend Basket Amount,
     Available $10 Million Acquisition/Investment Basket Amount, Available
     Debt Proceeds Amount, Available Unrestricted Proceeds Amount,
     Available Net Income Amount, Consolidated Cumulative 25% Net Income
     Amount, Returned Investment Amount and Available Returned Investment
     Amount and all computations determining compliance with Sections 9.02
     through 9.09, inclusive, shall utilize accounting principles and
     policies in conformity with those used to prepare the historical
     financial statements delivered to the Banks pursuant to Sections
     7.05(a), (ii) for all purposes of this Agreement, all Attributed
     Receivables Facility Indebtedness of the Receivables Subsidiary shall
     be included in the consolidated financial statements of Furniture
     Brands and its Restricted Subsidiaries, and shall be considered
     Indebtedness of a Restricted Subsidiary of Furniture Brands hereunder,
     regardless of any differing treatment pursuant to generally acceptable
     accounting principles and (iii) for purposes of calculating financial
     terms, all covenants and related definitions, all such calculations
     based on the operations of Furniture Brands and its Restricted
     Subsidiaries on a consolidated basis shall be made without giving
     effect to the operations of any Unrestricted Subsidiaries.

          (b)    All computations of interest, Commitment Commission and
     other Fees hereunder shall be made on the basis of a year of 360 days
     for the actual number of days (including the first day but excluding
     the last day) occurring in the period for which such interest,
     Commitment Commission or other Fees are payable.

          13.08     GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
     WAIVER OF JURY TRIAL.  (a)    THIS AGREEMENT AND THE OTHER CREDIT
     DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
     THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN CERTAIN OF THE
     MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
     OF THE STATE OF NEW YORK.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
     TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE
     COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
     SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
     AGREEMENT, EACH OF THE BORROWERS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF
     AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
     JURISDICTION OF THE AFORESAID COURTS.  EACH OF THE BORROWERS HEREBY
     IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM,
     WITH OFFICES ON THE DATE HEREOF AT 1633 BROADWAY, NEW  YORK, NEW  YORK
     10019 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE AND ACCEPT FOR
     AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND
     ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED
     IN ANY SUCH ACTION OR PROCEEDING.  IF FOR ANY REASON SUCH DESIGNEE,
     APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH
     CREDIT PARTY AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT<PAGE>


     IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION
     SATISFACTORY TO THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT.  EACH
     OF THE BORROWERS FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS
     OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
     PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
     MAIL, POSTAGE PREPAID, TO ANY CREDIT PARTY AT ITS ADDRESS SET FORTH
     OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
     AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
     ADMINISTRATIVE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF
     ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
     COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT
     PARTY IN ANY OTHER JURISDICTION.

          (b)    EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES ANY
     OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
     ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN
     CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN
     THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRRE-
     VOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT
     ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
     BROUGHT IN AN INCONVENIENT FORUM.

          (c)    EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
     WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
     COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER
     CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

          13.09     Counterparts.  This Agreement may be executed in any
     number of counterparts and by the different parties hereto on separate
     counterparts, each of which when so executed and delivered shall be an
     original, but all of which shall together constitute one and the same
     instrument.  A set of counterparts executed by all the parties hereto
     shall be lodged with the Borrowers and the Administrative Agent.

          13.10     Effectiveness.  (a)    This Agreement shall become
     effective on the date (the "Third Restatement Effective Date") on
     which (i) each Borrower, each Continuing Bank, each New Bank, the
     Required Banks (determined immediately before the occurrence of the
     Third Restatement Effective Date) and each Agent shall have signed a
     counterpart hereof (whether the same or different counterparts) and
     shall have delivered (including by way of facsimile device) the same
     to the Administrative Agent at its Notice Office and (ii) the
     conditions contained in Sections 5, 6 and 13.10(b) are met to the
     satisfaction of the Administrative Agent and the Required Banks
     (determined immediately after the occurrence of the Third Restatement
     Effective Date).  Unless the Administrative Agent has received actual
     notice from any Bank that the conditions contained in Sections 5 and 6
     have not been met to its satisfaction, upon the satisfaction of the
     condition described in clause (i) of the immediately preceding
     sentence and upon the Administrative Agent's good faith determination
     that the conditions described in clause (ii) of the immediately
     preceding sentence have been met, then the Third Restatement Effective
     Date shall have been deemed to have occurred, regardless of any
     subsequent determination that one or more of the conditions thereto<PAGE>


     had not been met (although the occurrence of the Third Restatement
     Effective Date shall not release the Borrowers from any liability for
     failure to satisfy one or more of the applicable conditions contained
     in Section 5 or 6).  The Administrative Agent will give the Borrowers
     and each Bank prompt written notice of the occurrence of the Third
     Restatement Effective Date.

          (b)    On the Third Restatement Effective Date, each Bank shall
     have delivered to the Administrative Agent for the account of the
     Borrowers an amount equal to the Revolving Loans and Term Loans to be
     made by such Bank on the Third Restatement Effective Date. 
     Notwithstanding anything to the contrary contained in this Section
     13.10(b), in satisfying the foregoing condition, unless the
     Administrative Agent shall have been notified by any Bank prior to the
     occurrence of the Third Restatement Effective Date that such Bank does
     not intend to make available to the Administrative Agent such Bank's
     Revolving Loans and/or Term Loans required to be made by it on such
     date, then the Administrative Agent may, in reliance on such
     assumption, make available to the Borrower the corresponding amounts
     in accordance with the provisions of Section 1.04 of this Agreement,
     and the making available by the Administrative Agent of such amounts
     shall satisfy the condition contained in this Section 13.10(b).

          13.11     Headings Descriptive.  The headings of the several
     sections and subsections of this Agreement are inserted for
     convenience only and shall not in any way affect the meaning or
     construction of any provision of this Agreement.

          13.12     Amendment or Waiver; etc.  (a)  Neither this Agreement
     nor any other Credit Document nor any terms hereof or thereof may be
     changed, waived, discharged or terminated unless such change, waiver,
     discharge or termination is in writing signed by the respective Credit
     Parties party thereto and the Required Banks, provided that no such
     change, waiver, discharge or termination shall, without the consent of
     each Bank (other than a Defaulting Bank) (with Obligations being
     directly affected thereby in the case of following clause (i)), (i)
     extend the final scheduled maturity of any Loan or Note, or extend the
     stated maturity of any Letter of Credit beyond the Revolving Loan
     Maturity Date, or reduce the rate or extend the time of payment of
     interest or Fees thereon, or reduce the principal amount thereof
     (except to the extent repaid in cash), (ii) release all or substanti-
     ally all of the Collateral under all the Security Documents (except as
     expressly provided in the Credit Documents), (iii) amend, modify or
     waive any provision of this Section 13.12, (iv) reduce the percentage
     specified in the definition of Required Banks (it being understood
     that, with the consent of the Required Banks, additional extensions of
     credit pursuant to this Agreement may be included in the determination
     of the Required Banks on substantially the same basis as the exten-
     sions of Term Loans and Revolving Loan Commitments are included on the
     Third Restatement Effective Date) or (v) consent to the assignment or
     transfer by the Borrowers of any of their rights and obligations under
     this Agreement; provided further, that no such change, waiver,
     discharge or termination shall (s) increase the Commitment of any Bank
     over the amount thereof then in effect without the consent of such<PAGE>


     Bank (it being understood that waivers or modifications of conditions
     precedent, covenants, Defaults or Events of Default or of a mandatory
     reduction in the Total Commitments shall not constitute an increase of
     the Commitment of any Bank, and that an increase in the available
     portion of any Commitment of any Bank shall not constitute an increase
     in the Commitment of such Bank), (t) without the consent of the
     respective Issuing Bank or Issuing Banks, amend, modify or waive any
     provision of Section 2 with respect to Letters of Credit issued by it
     or alter its rights or obligations with respect to Letters of Credit
     or Acceptances, (u) without the consent of BTCo, amend, modify or
     waive any provision of Sections 1.01(c) and (d) or alter its rights
     and obligations with respect to Swingline Loans, (v) without the
     consent of each Agent affected thereby, amend, modify or waive any
     provision of Section 12 as same applies to such Agent or any other
     provision as same relates to the rights or obligations of such Agent,
     (w) without the consent of the Collateral Agent, amend, modify or
     waive any provision relating to the rights or obligations of the
     Collateral Agent, (x) without the consent of the Majority Banks of
     Term Loans, amend the definition of Majority Banks or reallocate any
     amounts that would otherwise be applied as a mandatory repayment of
     Term Loans hereunder to the permanent reduction of the Total Revolving
     Loan Commitment or as a mandatory repayment of Revolving Loans or
     Swingline Loans, (y) without the consent of the Supermajority Banks of
     the respective Tranche of Revolving Loans (1) amend, modify or waive
     any Scheduled Commitment Reduction, or (2) reduce the percentage
     specified in the definition of Supermajority Banks with respect to
     such Tranche, and (z) without the consent of the Required
     Supermajority Banks, (1) release any significant portion of the
     Collateral under the Security Documents (except as expressly provided
     in the Credit Documents) or release any significant Subsidiary
     Guarantor from its obligations under the Subsidiary Guaranty (other
     than in connection with a transaction permitted pursuant to Section
     9.02); provided that no Collateral shall constitute a significant
     portion of the Collateral and no Subsidiary Guarantor shall constitute
     a significant Subsidiary Guarantor if the fair market value of the
     Collateral to be released plus the fair market value of the assets
     owned or held by such Subsidiary Guarantor is $20 million or less in
     the aggregate (based on a certificate of the chief financial officer
     of Furniture Brands taking into account all prior releases) or (2)
     reduce the percentage specified in the definition of Required
     Supermajority Banks.

          (b)    If, in connection with any proposed change, waiver,
     discharge or termination to any of the provisions of this Agreement as
     contemplated by clauses (i) through (v), inclusive, of the first
     proviso to Section 13.12(a), the consent of the Required Banks is
     obtained but the consent of one or more of such other Banks whose
     consent is required is not obtained, then the Borrowers shall have the
     right, so long as all non-consenting Banks whose individual consent is
     required are treated as described in either clauses (A) or (B) below,
     to either (A) replace each such non-consenting Bank or Banks with one
     or more Replacement Banks pursuant to Section 1.13 so long as at the
     time of such replacement, each such Replacement Bank consents to the
     proposed  change, waiver, discharge or termination or (B) terminate<PAGE>


     such non-consenting Bank's Commitment in accordance with Sections 
     3.02(b) and/or 4.01(b), provided that, unless the Commitments are
     terminated, and Loans repaid, pursuant to the preceding clause  (B)
     are immediately replaced in full at such time through the addition of
     new Banks or the increase of the Commitments and/or outstanding Loans
     of existing Banks (who in each case must specifically consent
     thereto), then in the case of any action pursuant to preceding clause 
     (B) the Required Banks (determined before giving effect to the
     proposed action) shall specifically consent thereto, provided further,
     that in any event the Borrowers shall not have the right to replace a
     Bank, terminate its Commitment or repay its Loans solely as a result
     of the exercise of such Bank's rights (and the withholding of any
     required consent by such Bank) pursuant to the second proviso to
     Section 13.12(a).

          13.13     Survival.  All indemnities set forth herein including,
     without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.01 and
     13.06 shall, subject to Section 13.15 (to the extent applicable),
     survive the execution, delivery and termination of this Agreement and
     the Notes and the making and repayment of the Loans.

          13.14     Domicile of Loans.  Each Bank may transfer and carry
     its Loans at, to or for the account of any office, Subsidiary or
     Affiliate of such Bank.  Notwithstanding anything to the contrary
     contained herein, to the extent that a transfer of Loans pursuant to
     this Section  13.14 would, at the time of such transfer, result in
     increased costs under Section  1.10, 1.11, 2.06 or 4.04 from those
     being charged by the respective Bank prior to such transfer, then the
     Borrowers shall not be obligated to pay such increased costs (although
     the Borrowers shall be obligated to pay any other increased costs of
     the type described above resulting from changes after the date of the
     respective transfer).

          13.15     Limitation on Additional Amounts, etc.  
     Notwithstanding anything to the contrary contained in Sections 1.10,
     1.11, 2.06 or 4.04 of this Agreement, unless a Bank gives notice to
     the Borrowers that it is obligated to pay an amount under any such
     Section within one year after the later of (x) the date the Bank
     incurs the respective increased costs, Taxes, loss, expense or
     liability, reduction in amounts received or receivable or reduction in
     return on capital or (y) the date such Bank has actual knowledge of
     its incurrence of the respective increased costs, Taxes, loss, expense
     or liability, reductions in amounts received or receivable or
     reduction in return on capital, then such Bank shall only be entitled
     to be compensated for such amount jointly and severally by the
     Borrowers pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the
     case may be, to the extent the costs, Taxes, loss, expense or
     liability, reduction in amounts received or receivable or reduction in
     return on capital are incurred or suffered on or after the date which
     occurs one year prior to such Bank giving notice to the Borrowers that
     it is obligated to pay the respective amounts pursuant to said Section
     1.10, 1.11, 2.06 or 4.04, as the case may be.  This Section 13.15
     shall have no applicability to any Section of this Agreement other
     than said Sections 1.10, 1.11, 2.06 and 4.04.<PAGE>


          13.16     Confidentiality.  (a)  Subject to the provisions of
     clause (b) of this Section 13.16, each Bank agrees that it will use
     its best efforts not to disclose without the prior consent of the
     Borrowers (other than to its employees, auditors, advisors or counsel
     or to another Bank if the Bank or such Bank's holding or parent
     company in its sole discretion determines that any such party should
     have access to such information, provided such Persons shall be
     subject to the provisions of this Section 13.16 to the same extent as
     such Bank) any information with respect to Furniture Brands or any of
     its Subsidiaries which is now or in the future furnished pursuant to
     this Agreement or any other Credit Document and which is designated by
     Furniture Brands to the Banks in writing as confidential, provided
     that any Bank may disclose any such information (a) as has become
     generally available to the public, (b) as may be required or appro-
     priate in any report, statement or testimony submitted to any
     municipal, state or Federal regulatory body having or claiming to have
     jurisdiction over such Bank or to the Federal Reserve Board or the
     Federal Deposit Insurance Corporation or similar organizations
     (whether in the United States or elsewhere) or their successors, (c)
     as may be required or appropriate in respect to any summons or
     subpoena or in connection with any litigation, (d) in order to comply
     with any law, order, regulation or ruling applicable to such Bank, (e)
     to any Agent or the Collateral Agent, (f) to any prospective or actual
     transferee or participant in connection with any contemplated transfer
     or participation of any of the Notes or Commitments or any interest
     therein by such Bank, provided, that such prospective transferee
     agrees to maintain the confidentiality contained in this Section and
     (g) to the National Association of Insurance Commissioners or any
     similar organization or any nationally recognized rating agency that
     requires access to information about such Bank's investment portfolio
     in connection with ratings issued to such Bank.

          (b)    Each of the Borrowers hereby acknowledges and agrees that
     each Bank may share with any of its Affiliates any information related
     to Furniture Brands or any of its Subsidiaries (including, without
     limitation, any nonpublic customer information regarding the
     creditworthiness of Furniture Brands and its Subsidiaries), provided
     such Persons shall be subject to the provisions of this Section 13.16
     to the same extent as such Bank.

          13.17     Register.  The Borrowers hereby designate the
     Administrative Agent to serve as the Borrowers' agent, solely for pur-
     poses of this Section 13.17, to maintain a register (the "Register")
     on which it will record the Commitments from time to time of each of
     the Banks, the Loans made by each of the Banks and each repayment in
     respect of the principal amount of the Loans of each Bank.  Failure to
     make any such recordation, or any error in such recordation shall not
     affect the Borrowers' obligations in respect of such Loans.  With re-
     spect to any Bank, the transfer of the Commitments of such Bank and
     the rights to the principal of, and interest on, any Loan made
     pursuant to such Commitments shall not be effective until such
     transfer is recorded on the Register maintained by the Administrative
     Agent with respect to ownership of such Commitments and Loans and
     prior to such recordation all amounts owing to the transferor with<PAGE>


     respect to such Commitments and Loans shall remain owing to the
     transferor.  The registration of assignment or transfer of all or part
     of any Commitments and Loans shall be recorded by the Administrative
     Agent on the Register only upon the acceptance by the Administrative
     Agent of a properly executed and delivered Assignment and Assumption
     Agreement pursuant to Section 13.04(b).  Coincident with the delivery
     of such an Assignment and Assumption Agreement to the Administrative
     Agent for acceptance and registration of assignment or transfer of all
     or part of a Loan, or as soon thereafter as practicable, the assigning
     or transferor Bank shall surrender the Note evidencing such Loan, and
     thereupon one or more new Notes in the same aggregate principal amount
     shall be issued to the assigning or transferor Bank and/or the new
     Bank.  The Borrowers jointly and severally agree to indemnify the
     Administrative Agent from and against any and all losses, claims,
     damages and liabilities of whatsoever nature which may be imposed on,
     asserted against or incurred by the Administrative Agent in performing
     its duties under this Section 13.17, provided that the Borrowers shall
     have no obligation to indemnify the Administrative Agent for any loss,
     claim, damage, liability or expense which resulted primarily from the
     gross negligence or wilful misconduct of the Administrative Agent.

          13.18     Addition of New Banks; Termination of Commitments of
     Non-Continuing Banks; etc.  (a)  On and as of the occurrence of the
     Third Restatement Effective Date in accordance with Section 13.10,
     each New Bank shall become a "Bank" under, and for all purposes of,
     this Agreement and the other Credit Documents.

          (b)    The parties hereto acknowledge that each Existing Bank has
     been offered the opportunity to participate in this Agreement, after
     the occurrence of the Third Restatement Effective Date, as a
     Continuing Bank hereunder, but that no Existing Bank is obligated to
     be a Continuing Bank.  By their execution and delivery hereof, the
     Borrower and the Required Banks (determined immediately before the
     occurrence of the Third Restatement Effective Date) consent to the
     voluntary repayment by the Borrower of all outstanding Existing Loans
     and other Obligations owing to each Existing Bank which has not
     elected to become a Continuing Bank (each such Bank, a "Non-Continuing
     Bank") and to the voluntary termination by the Borrower of the
     Revolving Loan Commitment (under, and as defined in, the Existing
     Credit Agreement) of each Non-Continuing Bank, in each case to be
     effective on, and contemporaneously with the occurrence of, the Third
     Restatement Effective Date, in each case in accordance with the provi-
     sions of Section 13.18(c).

          (c)    Notwithstanding anything to the contrary contained in the
     Existing Credit Agreement or any Credit Document, the Borrower and
     each of the Banks hereby agrees that on the Third Restatement
     Effective Date, (i) each Bank with a Commitment as set forth on
     Schedule I (after giving effect to the Third Restatement Effective
     Date) shall make that principal amount of Term Loans and/or Revolving
     Loans to the Borrower as is required by Section 1.01, and (ii) in the
     case of each Non-Continuing Bank, all of such Non-Continuing Bank's
     Existing Loans outstanding on the Third Restatement Effective Date
     shall be repaid in full on such date, together with interest thereon<PAGE>

     and all accrued Fees (and any other amounts) owing to such Non-
     Continuing Bank, and the Revolving Loan Commitment (under, and as
     defined in, the Existing Credit Agreement) of such Non-Continuing
     Bank, if any, shall be terminated, effective upon the occurrence of
     the Third Restatement Effective Date.  Notwithstanding anything to the
     contrary contained in the Existing Credit Agreement, this Agreement or
     any other Credit Document, the parties hereto hereby consent to the
     repayments and reductions required above, and agree that in the event
     that any Existing Bank shall fail to execute a counterpart of this
     Agreement prior to the occurrence of the Third Restatement Effective
     Date, such Existing Bank shall be deemed to be a Non-Continuing Bank
     and, concurrently with the occurrence of the Third Restatement
     Effective Date, the Revolving Loan Commitment (under, and as defined
     in, the Existing Credit Agreement) of such Existing Bank, if any,
     shall be terminated, all Existing Loans of such Existing Bank out-
     standing on the Third Restatement Effective Date shall be repaid in
     full, together with interest thereon and all accrued Fees (and any
     other amounts) owing to such Existing Bank, and concurrently with the
     occurrence of the Third Restatement Effective Date, such Existing Bank
     shall no longer constitute a "Bank" under this Agreement and the other
     Credit Documents, provided that all indemnities of the Credit Parties
     under the Existing Credit Agreement and the other Credit Documents (as
     in effect prior to the Third Restatement Effective Date) for the
     benefit of such Existing Bank shall survive in accordance with the
     terms thereof.

          13.19     Post Closing Actions.  Notwithstanding anything to the
     contrary contained in this Agreement or the other Credit Documents,
     the parties hereto acknowledge and agree that:

          (a)  Corporate Documents.  The Borrowers will deliver, or cause
     to be delivered, (i) within thirty (30) Business Days after the Third
     Restatement Effective Date, a certified copy of the Certificate of
     Incorporation of each of Lane, Lane Advertising, Inc. and Action and
     (ii) within sixty (60) Business Days after the Third Restatement
     Effective Date, a good standing certificate issued by the Secretary of
     State of Tennessee in respect of Gordon's, Inc.;

          (b)     Insurance Certificates.  The Borrowers will deliver, or
     cause to be delivered, within thirty (30) Business Days after the
     Third Restatement Effective Date, evidence of insurance complying with
     the requirements of Section 8.03 for the business and properties of
     Furniture Brands and its Restricted Subsidiaries, in scope, form and
     substance reasonably satisfactory to the Agents and naming the
     Collateral Agent as an additional insured and/or loss payee, and
     stating that such insurance shall not be cancelled or revised without
     30 days' prior written notice by the insurer to the Administrative
     Agent;

          (c)     Title Endorsements.  The Borrowers will deliver, or cause
     to be delivered, within thirty (30) Business Days after the Third
     Restatement Effective Date, endorsements reasonably satisfactory to
     the Collateral Agent to each Existing Mortgage Policy assuring the
     Collateral Agent that each Existing Mortgage is a valid and<PAGE>


     enforceable first priority mortgage lien on the respective Existing
     Mortgaged Properties, free and clear of all defects and encumbrances
     except Permitted Encumbrances; and

          (d)     Confirmatory UCC Searches.  The Borrowers will deliver,
     or cause to be delivered, within thirty (30) Business Days after the
     Third Restatement Effective Date, certified copies of Requests for
     Information or Copies (Form UCC-11), or equivalent reports, listing
     all effective financing statements that name any Credit Party as
     debtor and that are filed in the jurisdictions referred to in Section
     5.09(a), together with copies of such other financing statements (none
     of which shall cover the Collateral except to the extent evidencing
     Permitted Liens or in respect of which the Collateral Agent shall have
     received termination statements (Form UCC-3) or such other termination
     statements as shall be required by local law) fully executed for
     filing.

          All conditions precedent and representations contained in this
     Agreement and the other Credit Documents shall be deemed modified to
     the extent necessary to effect the foregoing (and to permit the taking
     of the actions described above within the time periods required above,
     rather than as elsewhere provided in the Credit Documents); provided,
     that (x) to the extent any representation and warranty would not be
     true because the foregoing actions were not taken on the Third
     Restatement Effective Date, the respective representation and warranty
     shall be required to be true and correct in all material respects at
     the time the respective action is taken (or was required to be taken)
     in accordance with the foregoing provisions of Section 13.19 and (y)
     all representations and warranties relating to the Security Documents
     shall be required to be true immediately after the actions required to
     be taken by Section 13.19 have been taken (or were required to be
     taken).  The acceptance of the benefits of each Credit Event shall
     constitute a representation, warranty and covenant by the Borrowers to
     each of the Banks that the actions required pursuant to this Section
     13.19 will be taken within the relevant time periods referred to in
     this Section 13.19 and that, at such time, all representations and
     warranties contained in this Agreement and the other Credit Documents
     shall then be true and correct without any modification pursuant to
     this Section 13.19.<PAGE>




               IN WITNESS WHEREOF, the parties hereto have caused their
          duly authorized officers to execute and deliver this Agreement as
          of the date first above written.

          Address:

          c/o Furniture Brands International, Inc.       FURNITURE BRANDS
          101 South Hanley Road                        INTERNATIONAL, INC.
          St. Louis, MO  63105         BROYHILL FURNITURE INDUSTRIES, INC.
          Tel:  (314) 863-1100       THE LANE COMPANY, INCORPORATED
          Fax:  (314) 863-5306       THOMASVILLE FURNITURE INDUSTRIES, INC.
          Fax: (314) 863-5306
          Attention:  David P. Howard
          Vice President, Treasurer
          and Chief Financial Officer
                                    By  David P. Howard
                                      ------------------------------------
                                        David P. Howard
                                   Title:  Vice President
                                         On behalf of each of the above
                                         Borrowers



          One Bankers Trust Plaza       BANKERS TRUST COMPANY,
          130 Liberty Street             Individually and as 
          New York, NY  10006              Administrative Agent
          Tel:  (212) 250-4886
          Fax:  (212) 250-7218
          Attention:  Anthony Logrippo
                                     By  Anthony LoGRIPPO
                                       ------------------------------
                                          Title: Vice President
           


                                      NATIONSBANK, N.A.,
                                      Individually and as Syndication Agent



                                    By  Valerie C. Mills
                                      ------------------------------------
                                         Title:  Sr. Vice President



                                      CREDIT LYONNAIS CHICAGO BRANCH,
                                      Individually and as Documentation
                                        Agent


                                    By  Matthew Kirst
                                      ------------------------------------- 
                                         Title: Vice President



                                        ALLIED IRISH BANK PLC, 
                                          acting through its 
                                          CAYMAN ISLAND BRANCH



                                    By  Marcia Mecker
                                      -----------------------------------
                                       Title:  Vice President



                                    BANK OF MONTREAL



                                    By  Leon H. Sinclair
                                      ------------------------------------
                                        Title:  Director



                                    THE BANK OF NEW YORK



                                    By  John M. Lokay, Jr.
                                      ------------------------------------ 
                                        Title: Vice President



                                    THE BANK OF NOVA SCOTIA



                                    By  F.C.H. Ashby
                                      -----------------------------------
                                       Title: Senior Manager Loan
                                              Opeartions



                                    BANK OF SCOTLAND



                                    By  Annie Chin Tat
                                      -----------------------------------
                                       Title:  Vice President



                                    THE BANK OF TOKYO - MITSUBISHI,  
                                    LIMITED



                                    By  Hajime Watanabe
                                      -----------------------------------
                                       Title:  Deputy General Manager



                                    BANQUE PARIBAS



                                    By  Karen E. Coons
                                      ----------------------------------
                                       Title:  Vice President



                                    By  Nicholas C. Mast
                                      ----------------------------------
                                       Title:  Vice President



                                    CAISSE NATIONALE DE CREDIT
                                      AGRICOLE



                                    By  David Bouhl, F.V.P.
                                      ----------------------------------
                                       Title: Head of Corporate 
                                                Banking Chicago



                                    CHIAO TUNG BANK



                                    By  Peter L.Y. Tseng
                                      ----------------------------------
                                       Title: SVP & GM



                                    CIBC, INC<PAGE>


                                    By  Elizabeth Fischer
                                      ----------------------------------
                                       Title: Director


                                    CITIBANK, N.A.



                                    By  Hans L. Christensen
                                      ---------------------------------
                                        Title:  Vice President



                                    CITY NATIONAL BANK



                                    By  George Hyrapetian
                                      ---------------------------------
                                        Title:  Vice President



                                    FIRST AMERICAN NATIONAL BANK



                                    By  Kathryn A. Brothers
                                      ----------------------------------
                                        Title: Vice President



                                    FIRST UNION NATIONAL BANK
                                    (F/K/A FIRST UNION NATIONAL BANK OF
                                    NORTH CAROLINA)



                                    By  Jane W. Workman
                                      ----------------------------------
                                        Title:  Sr. Vice President



                                    THE FUJI BANK LIMITED



                                    By  Peter L. Chinnici
                                      ----------------------------------
                                        Title:  Joint General Manager



                                    THE INDUSTRIAL BANK OF JAPAN,
                                      LIMITED



                                    By  Hiroaki Nakamura
                                      -----------------------------------
                                        Title: Joint General Manager



                                    KZH-ING-I CORPORATION



                                    By  Robert Goodwin
                                      -----------------------------------
                                       Title: 



                                    THE LONG TERM CREDIT BANK OF
                                       JAPAN, LTD



                                    By  Armund J. Schoen, Jr.
                                      -----------------------------------
                                        Title: Senior Vice President
                                                and Joint General Manager




                                    MERCANTILE BANK NATIONAL
                                      ASSOCIATION



                                    By  Edward Chaney
                                      -----------------------------------
                                        Title:  Vice President



                                    MERRILL LYNCH SENIOR FLOATING
                                      RATE FUND, INC.


                                    By  Anne McCarthy
                                      -----------------------------------
                                        Title:  Authorized Signatory



                                    DEBT STATEGIES FUND, INC.



                                    By  Anne McCarthy
                                      -----------------------------------
                                        Title:  Authorized Signatory



                                    THE MITSUBISHI TRUST AND BANKING
                                      CORPORATION



                                    By  Masaaki Yamagishi
                                      -----------------------------------
                                        Title: Chief Manager



                                    OCTAGON CREDIT INVESTORS LOAN
                                      PORTFOLIO (a unit of The Chase
                                      Manhattan Bank)



                                    By  Richard W. Stewart
                                      -----------------------------------
                                        Title: Managing Director



                                    THE SANWA BANK, LTD., 
                                      CHICAGO BRANCH



                                    By  Kenneth C. Eichwald
                                      ----------------------------------
                                        Title: First Vice President and
                                                Assistant General Manager



                                    THE SUMITOMO BANK, LIMITED,
                                      CHICAGO BRANCH

                                    By  John H. Kerger
                                      ------------------------------------
                                        Title: Senior Vice President



                                    UNITED STATES NATIONAL BANK
                                      OF OREGON



                                    By  David Wynde
                                      -----------------------------------
                                        Title: Senior Vice President



                                    VAN KAMPEN AMERICAN CAPITAL
                                      PRIME RATE INCOME TRUST



                                    By  Kathleen A. Zarn
                                      -----------------------------------
                                        Title: Vice President



                                    THE YASUDA TRUST AND BANKING
                                        CO., LTD., CHICAGO BRANCH



                                    By  Joseph C. Meek
                                      ----------------------------------
                                        Title: Deputy General Manager<PAGE>