Exhibit 10
EXECUTION COPY

FORBEARANCE AGREEMENT

             This Forbearance Agreement (this “Agreement”) is made this 12th day
of August, 2005, by and among O’Sullivan Industries, Inc. (“O’Sullivan”), a
Delaware corporation, O’Sullivan Industries Holdings, Inc. (“Holdings”), a
Delaware corporation, O’Sullivan Industries — Virginia, Inc. (“OIV”), a Virginia
corporation, O’Sullivan Furniture Factory Outlet, Inc., a Missouri Corporation
(“OFFO” and, collectively with O’Sullivan, Holdings, and OIV, the “Company”),
The Bank of New York, in its capacity as indenture trustee (the “Trustee”),
GoldenTree Asset Management L.P., as investment advisor for the Senior Secured
Noteholders listed on Exhibit “A” (“GoldenTree”), and Mast Credit Opportunities
I, (Master) Ltd. (“Mast”).

BACKGROUND

                 A.        The Company and the Trustee are parties to that
certain indenture (the “Indenture”), dated September 29, 2003, pursuant to which
O’Sullivan issued $100 million in 10.63% senior secured notes due 2008 (the
“Senior Secured Notes”).

                 B.        GoldenTree currently holds $70,190,000 in principal
amount, and Mast holds $13,160,000 in principal amount, of the Senior Secured
Notes.

                 C.        Interest payments on the Senior Secured Notes of
approximately $5.3 million are due biannually on January 15th and July 15th,
with a thirty-day grace period.

                 D.        To date, the Company has not made the interest
payment originally due on July 15, 2005, and will not do so within the grace
period, thereby causing an event of default to occur under the Indenture.

                 E.        The Company has requested that the Trustee,
GoldenTree, and Mast forbear from the exercise of their rights and remedies
under the Indenture and otherwise with respect to the Senior Secured Notes
relating to such non-payment during the period commencing on August 15, 2005 and
ending on September 15, 2005 (the “Forbearance Period”), and those parties have
agreed to such forbearance upon the terms contained in this Agreement.

                     NOW, THEREFORE, with the foregoing Background incorporated
by reference, and in consideration of the mutual covenants set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:

                 1.     Forbearance. During the Forbearance Period, and except
as provided in section 6 below, the Trustee, GoldenTree and Mast will not
exercise any enforcement rights or remedies under the Indenture, the Senior
Secured Notes, or otherwise with respect to the Senior Secured Notes, including
any rights or remedies (a) to take any action under section 6 of the Indenture
(including acceleration of the Senior Secured Notes), (b) to bring suit to
enforce payment under the Senior Secured Notes, or (c) to seek to foreclose or
otherwise realize on the collateral securing the Company’s obligations under the
Senior Secured Notes. With no binding obligation, the parties hereto agree to
work together in good faith to consider further extensions of the Forbearance
Period.

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                 2.     Rescission of Acceleration. In the event that, during
the Forbearance Period, the Senior Secured Notes are somehow accelerated,
GoldenTree and Mast shall, pursuant to section 6.02 of the Indenture (and except
as set forth in section 6 below), give written notice to the Trustee to rescind
such acceleration within three business days of having received notice from the
Company of such acceleration, and the Trustee shall comply with such
instructions.

                 3.        Conditions Precedent to Effectiveness of Agreement.
This Agreement shall not become effective until the following events occur:

         (a)        GoldenTree and Mast shall have received a copy of the
Company’s FY 2006 budget approved by the Board of Directors, together with any
reforecast, update, or statement of variances with respect thereto.

         (b)        GoldenTree and Mast shall have received all significant and
material information compiled since March 30, 2005, and related to the Company’s
current borrowing base calculation under its revolving credit agreement and
working capital assets, along with a detailed schedule of projected cash
receipts and cash disbursements by the Company during the Forbearance Period
(the “Cash Flow Schedule”), and all other relevant financial due diligence
information reasonably requested by GoldenTree and Mast.

         (c)        The Company’s flash results for July, 2005, shall have been
delivered to GoldenTree and Mast, and the Company’s management shall have
discussed with GoldenTree and Mast its views of the Company’s performance over
the next three months.

         (d)        Funding by the Company of the Advance Payment (as defined
below).

                 4.        Acknowledgement of Liens and Obligations. The Company
hereby acknowledges and confirms for the benefit of the Trustee, GoldenTree and
Mast that (i) the liens granted to the Trustee under the Indenture and related
documents for the benefit of the holders of Senior Secured Notes are valid,
perfected, and enforceable in accordance with their terms, and (ii) each of the
Company’s obligations under the Indenture and the Senior Secured Notes, are
valid and enforceable in accordance with their terms without defense, offset, or
counterclaim.

                 5.        Additional Obligations. During the Forbearance
Period, the Company covenants and agrees to the following:

         (a)        Information. The Company shall provide GoldenTree and Mast
with such additional information relating to the Company as either reasonably
shall request as promptly as practicable and shall provide (i) weekly statements
of gross sales, cash receipts, and cash disbursements, (ii) actual unaudited
results for July, 2005, no later than August 31, 2005, and (iii) flash results
for August, 2005, no later than September 10, 2005.

         (b)        Payment of Professional Fees. The Company shall pay when due
the reasonable professional fees of the Trustee, GoldenTree and Mast in
connection with those parties preserving and enforcing their rights, claims and
interests under the Indenture, the Senior Secured Notes and related documents.
In this regard, the Company immediately shall make an advance payment (the
“Advance Payment”) to Kasowitz, Benson, Torres & Friedman LLP (“KBTF”), counsel
for GoldenTree and Mast, in the amount of $150,000, against which KBTF shall
render bills for its services. KBTF shall provide the Company with copies of
such bills promptly after being rendered (redacted to exclude descriptions of
time entries).

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         (c)        Restructuring Efforts. The Company and its financial adviser
shall undertake an analysis of the Company’s enterprise value and debt capacity,
and, by September 2, 2005, shall deliver to GoldenTree and Mast a term sheet for
a restructuring proposal reflecting such analysis as of that date. The Company
shall endeavor in good faith to retain a restructuring officer on terms
reasonably acceptable to GoldenTree and Mast.

         (d)        Expense Schedule. The Company shall not permit, without the
consent of GoldenTree or Mast, cash disbursements to exceed by more than
$300,000 the amount of such cash disbursements as projected in the Cash Flow
Schedule for each calendar week, determined on average over any two-week period.

         (e)        Payments to Subordinated Creditors. During the Forbearance
Period, the Company shall make no payments to or for the benefit of the
Indenture Trustee or any holder of the Company’s 13.375% Senior Subordinated
Notes or any professionals retained by them.

         (f)        Working Capital Loan. The Company shall not refinance its
working capital credit facility with GECC, or pay any commitment fees in
connection with such a refinancing, without the consent of GoldenTree and Mast,
unless (i) GoldenTree and Mast receive 5 business days’ notice of the terms of
such refinancing (the “Proposed Refinancing”), and (ii) GoldenTree and Mast do
not agree, by the conclusion of the foregoing notice period, to provide the
refinancing on terms more favorable to the Company than the Proposed
Refinancing, with such financing to close in a commercially reasonable manner.
Funded debt under the Company’s working capital credit facility with GECC or
under any facility that refinances the GECC facility may not exceed $12.5
million, without the consent of GoldenTree and Mast.

                 6.        Early Termination. This Agreement shall automatically
terminate prior to the conclusion of the Forbearance Period immediately upon the
occurrence of any of the following events:

         (a)        A filing under any chapter of the Bankruptcy Code or other
insolvency law is made by or against the Company.

         (b)        GECC accelerates its indebtedness or ceases to provide
financing to the Company.

         (c)        Indebtedness of the Company in excess of $1,000,000 is
accelerated and not paid.

         (d)        The Company breaches any of its obligations under this
Agreement.

         (e)        The Company’s business or financial performance suffers a
material adverse change (a “MAC”), as reasonably determined by GoldenTree and
Mast.

         (f)        Any additional Event of Default occurs under the Indenture
or the Senior Secured Notes.

         (g)        The aggregate of the Company’s unrestricted cash on hand and
borrowing availability drops below $2 million at any time, or its EBITDA for
August 2005 (as reflected on the Company’s unaudited August results referred to
in section 5(a) hereof) is less than $0.

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         (h)        The failure of the Company to timely deliver the
certification referred to in section 8 below.

                 7.     Reservation of Rights and Remedies. The parties hereto
agree that nothing contained in this Agreement or otherwise shall be deemed to
have waived or modified any of their rights or remedies under or in connection
with the Indenture or otherwise other than as set forth herein, and they hereby
expressly reserve all such rights and remedies.

                 8.     Representations and Warranties. Each party hereto
represents and warrants that it has full power and authority to execute and
deliver this Agreement, which shall be valid and binding. The Company’s CEO or
CFO shall certify to GoldenTree and Mast on a weekly basis beginning on August
15, 2005, (i) that he is not aware of the occurrence of any of the early
termination events set forth in section 6 above, other than section 6(e), and
(ii) that, to the best of his knowledge, he does not believe that a MAC has
occurred or is likely to occur, other than as previously disclosed to GoldenTree
and Mast..

                 9.     Binding Effect; Severability. This Agreement shall be
binding upon, and shall inure to the benefit of, each party hereto. In the event
that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be unenforceable or void, this Agreement shall
continue in full force and effect without such provision to the maximum extent
permitted by law.

                 10.     Counterparts. This Agreement may be executed by the
parties hereto individually or in any combination, in one or more counterparts,
each of which shall be an original and all of which shall constitute one and the
same Agreement.

                 11.        The Trustee. The parties hereto shall use
commercially reasonable efforts to cause the Trustee to execute this Agreement.
In the event the Trustee does not execute this Agreement, each of the other
parties hereto shall be bound and will take no action to cause the Trustee to
act in a manner inconsistent with the terms of this Agreement, including the
forbearance provided hereunder.

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             IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.

      The Bank of New York         By:                                       
                                                Name:                 
                                                                      Title:
                                                                       
          

      GOLDENTREE ASSET MANAGEMENT L.P.,
as investment advisor for the Senior Secured
Noteholders listed on Exhibit "A"         By:                           /s/
Thomas A. Shandell                        Name:                           
Thomas A. Shandell                           Title:                             
         Partner                                

      MAST CREDIT OPPORTUNITIES I,
(Master) Ltd.         By:                           /s/ David M. Friedman
                       Name:                              David M. Friedman
                         Title:                                       Counsel
                              

      O'SULLIVAN INDUSTRIES, INC.         By:                             /s/
Robert S. Parker                          Name:                               
Robert S. Parker                            Title:                              
President & CEO                       

      O'SULLIVAN INDUSTRIES HOLDINGS, INC.         By:                 
           /s/ Robert S. Parker                          Name:      
                         Robert S. Parker                            Title:
                              President & CEO                       

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      O'SULLIVAN INDUSTRIES - VIRGINIA, INC.         By:                 
           /s/ Robert S. Parker                          Name:      
                         Robert S. Parker                            Title:
                              President & CEO                       

      O'SULLIVAN FURNITURE FACTORY OUTLET, INC.         By:                 
           /s/ Robert S. Parker                          Name:      
                         Robert S. Parker                            Title:
                              President & CEO                       

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