EXHIBIT 10.39

May 31, 2000

Mr. Hoyt Hackney, President
Wellington Hall Caribbean Corporation ("WHCC" or "Company")
P.O. Box 1354
Lexington, North Carolina  27293-1354

Mr. Hoyt Hackney, President
Wellington Hall, Limited ("WH" or "Sponsor")
Route 17, U.S. Highway No 29. and No. 70
P.O. Box 1354
Lexington, North Carolina  27293-1354

Mr. Hoyt Hackney, President
Muebles Wellington Hall, S.A. ("Muebles" or "Guarantor")
P.O. Box 1371
San Pedro Sula, Honduras, C. A.

Re:  Wellington Hall Caribbean Corporation's
     Financing for Operations in Honduras

Ladies and Gentlemen:

1.   We refer to that  certain  letter  agreement  dated as of May 1,  2000 (the
"Forbearance  Agreement") among Wellington Hall Caribbean Corporation ("WHCC' or
"Company"),  Wellington Hall, Limited ("WH" or "Sponsor") and Muebles Wellington
Hall ("Muebles" or "Guarantor") and the Overseas Private Investment  Corporation
("OPIC" or "Lender"),  the Loan  Agreement,  as amended,  and related  documents
executed  among and between  WHCC,  WH, and  Muebles,  and OPIC with  respect to
WHCC's furniture  manufacturing  operations in Honduras (the "Project")  through
its  wholly  owned  subsidiary,  Muebles.  All  capitalized  terms  used and not
otherwise  defined herein shall have the meaning set forth for such terms in the
Loan Agreement and Forbearance Agreement.

2.   The Forbearance  Agreement is hereby amended at paragraph  3(ii),  which is
hereby amended and restated in its entirety as follows:

     "Make  quarterly  interest  payments  in the manner  specified  in the Loan
Agreement on the full,  unpaid balance of the loan,  effective as of October 31,
1999; and in lieu of making penalty interest  payments on each quarterly payment
date  specified in the Loan  Agreement,  the Company  shall pay a total  penalty
charge of $25,138.70 on October 31, 2000,  which represents the penalty interest
that will accrue during the Forbearance Period, computed on the basis of 360-day
years of twelve 30-day months; and"

3.   Except as expressly  provided herein, all other terms and conditions of the
Forbearance  Agreement  shall remain in full force and effect,  and the Company,
the Sponsor, and the Guarantor each hereby reaffirms its respective  obligations
under the Financing  Documents and the  Forbearance  Agreement and confirms that
such obligations remain in full force and effect, without any claims,  set-offs,
or defenses.

4.   Each  Signatory for WHCC,  the Sponsor and the Guarantor has full power and
authority to enter into this Agreement and to incur and perform all  obligations
and covenants  contained  herein,  all of which have been duly authorized by all
proper and necessary corporate action.

5.   This  Agreement  shall be  binding  upon and  inure to the  benefit  of the
Company, Sponsor,  Guarantor, OPIC, and each of their respective heirs, personal
representatives,   successors,  and  assigns.  None  of  the  Company,  Sponsor,
Guarantor shall assign any of their respective  rights or obligations under this
Agreement without the express written consent of OPIC.

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6.   In case  one or  more  provisions  contained  in this  Agreement  shall  be
invalid,  illegal,  or unenforceable in any respect under any law, the validity,
legality,  and enforceability of the remaining  provision contained herein shall
remain effective and binding and shall not be affected or impaired thereby.

7.   This  Agreement  shall be governed by the laws of the  District of Columbia
without regard to the conflict of laws principles thereof.

     Please  sign  and  return  a  copy  of  this  Agreement   confirming   your
acknowledgment  and agreement  with the terms hereof,  whereupon  this Agreement
shall constitute a legally binding document.

Yours truly,


John R. Aldonas
Manager, Special Assets

                                   SIGNATURES

Wellington Hall Caribbean Corporation

By: ___________________________         Date: ___________________________

    Hoyt Hackney
    President

Wellington Hall, Limited

By: _____________________________       Date: __________________________

    Hoyt Hackney
    President

Muebles Wellington Hall, S.A.

By: ______________________________      Date: __________________________

    Hoyt Hackney
    President