This CREDIT AGREEMENT (as amended, supplemented or modified from time to time, this "Agreement") is
dated as of August 29, 2003 and is between STANLEY FURNITURE COMPANY, INC. and
The parties hereto agree as follows:
Section 1.1. Definitions. The following terms, as used herein, have the following meanings:
"Adjusted London Interbank Offered Rate" has the meaning set forth in Section 2.3(b)(i).
"Advance" means a Loan other than a Letter of Credit Loan.
"Affiliate" means (i) any Person that directly, or indirectly through one or more intermediaries, controls the
Borrower (a "Controlling Person") or (ii) any Person (other than the Borrower or a Subsidiary) which is
controlled by or is under common control with a Controlling Person. As used herein, the term "control" means
possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract, or otherwise.
"Application" means any Application and Agreement for Standby Letter of Credit executed and delivered by the
Borrower to the Bank in accordance with the terms and conditions of this Agreement, substantially in the form of
the Bank's standard Application and Agreement for Standby Letter of Credit and appropriately completed; or
such other form, containing such relevant revisions as to which the Bank and the Borrower shall mutually agree in
order to conform such form to the terms and conditions of this Agreement, as shall be appropriately completed,
executed and delivered by the Borrower to the Bank; and all extensions, supplements and modifications thereto,
and renewals thereof; and "Applications" means all of said applications.
"Auto-Borrow Documents" has the meaning set forth in Section 2.2(c).
"Bank" means SouthTrust Bank, an Alabama banking corporation, and its successors and assigns.
"Borrower" means Stanley Furniture Company, Inc.