Document:

EXHIBIT 10.37

                                      NOTE
Lexington, North Carolina
April 30, 2000

$110,000

     FOR VALUE RECEIVED,  the undersigned  promises to pay to the order of Ernst
B. Kemm,  on the  thirteenth  month from all current  dates,  the balance of the
principal  outstanding of up to the sum of One Hundred and Ten Thousand Dollars,
($110,000). with interest from date at the the rate of 1 1/2% above prime (prime
as used in this note shall be the prime as established by Lexington State Bank).
Interest shall be payable monthly beginning June 1, 2000.

     This note shall be secured by a pledge of the  inventory  and machinery and
equipment  of  Wellington  Hall,  Limited  (subject  to a  prior  pledge  of the
machinery  and  equipment  to  the  Lexington  State  Bank  and  subject  to and
subordinate  to any loans made by Wellington  Hall,  Limited,  with liens on the
inventory,  equipment,  and machinery  pledged by the undersigned to any outside
lender.)

     Upon default in the  performance  of any provision of this note, the holder
may elect to declare that all of the unpaid  principal and all accrued  interest
thereon to become due and collectible on the last day of the thirteen month from
the date of notice.

     The makers, sureties,  endorsers, or guarantors of this note and all others
that may become liable for all or any part thereof, jointly and severally:

          (1)  Waive presentment for payment, demand, protest, notice or protest
               and notice of dishonor:

          (2)  Agree that their respective  liabilities  shall not be diminished
               or  affected by any  extension  of time for payment of all or any
               part of the principal or interest  hereof or for the  performance
               of any  obligation  under this  note,  or by any change by way of
               release,  surrender or  substitution  of any collateral  securing
               this note.

          (3)  Waive  any  notice  of  consent  with  reference  to  any  of the
               foregoing.

     Signed  and sealed at  Lexington,  North  Carolina,  this 30th day of April
2000.

WELLINGTON HALL, LIMITED

ATTEST:                                 BY_______________________
                                                President

_____________________________
               SecretaryEXHIBIT 10.38

May 1, 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 ("WHI" 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 the Loan  Agreement,  (as  amended),  and  related  documents
executed  among and between  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") 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.

2.   Pursuant  to the Loan  Agreement,  the parties  hereto  agree that the Loan
disbursed  by OPIC has  matured and remains  unpaid and past due.  The  Company.
Sponsor and Guarantor each hereby acknowledge liability for the unpaid, matured,
and past due loan balance of $832,677.75, which unpaid balance consists of : (i)
an unpaid  principal  balance in the amount of $826,479.16;  and (ii) unpaid and
accrued default  interest in the amount of $6,198.59.  Each of WHCC, the Sponsor
and the  Guarantor  further  hereby  acknowledge  that  failure  to pay the loan
balance in full when due  constitutes  an Event of Default as defined  under the
Loan Agreement, and the OPIC has the right to proceed to protect and enforce its
rights  and  remedies  by  appropriate  proceedings  under the terms of the Loan
Agreement.  OPIC,  however,  as the Lender  proposed to undertake  the following
measure  in lieu of  foreclosure,  based  upon  certain  conditions  hereinafter
stipulated:

     From October 31, 1999 until October 31, 2000, (the  "Forbearance  Period"),
OPIC agrees to forbear from seeking to enforce its rights against the collateral
under the Loan  Agreement  due to the failure by the Company to make  payment of
principal in full,  and interest  thereon by October 31, 1999, as required under
the terms of the Loan Agreement.

3.   In consideration for OPIC's above-stated  agreement to forbear from seeking
to enforce rights against the collateral, WHCC shall:

(i)  No later than July 31, 2000,  pledge, or cause to be pledged,  to OPIC in a
     manner and with documentation (including legal opinions) acceptable to OPIC
     in form and substance (once executed,  such documentation  shall constitute
     "Financing Documents") all of the shares of Muebles; and

(ii) Make  quarterly  interest  payments in the manner and at the  default  rate
     specified in the Loan  Agreement on the full,  unpaid  balance of the loan,
     effective as of October 31, 1999; and

(iii)Exercise  its best  efforts to sell  Muebles at a net value  sufficient  to
     repay  OPIC's debt in full,  and to cover  OPIC's cost of  collection,  and
     commencing May 1, 2000, provide a written report to OPIC on a monthly basis
     regarding the Company's efforts to sell Muebles.  The terms of any proposed
     sale are subject to OPIC's prior  approval,  and all of the proceeds of any
     sale shall be payable to OPIC,  in the manner OPIC may  specify,  up to the
     amount owing to OPIC under the Financing Documents; and

<PAGE>
                                      -50-

(iv) As may be requested  by OPIC,  WHCC shall  cooperate  fully to provide OPIC
     with a written appraisal,  or to work with such broker as OPIC may identify
     to  expeditiously  sell  Muebles,  subject  to the  provisions  of the last
     sentence of subparagraph (iii) above;

4.   OPIC's  agreement  to  forbear  as stated  herein is  subject  to the prior
fulfillment, to OPIC's satisfaction of the following conditions precedent:

(i)  OPIC's  shall  have  received   corporate   resolutions   authorizing   the
     transactions  specified herein,  including a copy of the resolutions of the
     Board of Directors of WHCC, the Sponsor and the Guarantor,  authorizing the
     execution,  delivery  and  performance  of this  Agreement,  and any  other
     authorizations  or documents  that OPIC may, in its  reasonable  discretion
     request; and

(ii) OPIC's  shall have  received a duly  executed  original of this  Agreement,
     signed  by an  Authorized  Officer  of each of WHCC,  the  Sponsor  and the
     Guarantor,  together with all documents,  certificates,  security interest,
     legal   opinions  and  other  items  required  as   preconditions   to  the
     effectiveness  of such  agreements,  each of  which  is in full  force  and
     effect; and

(iii)WHCC shall have delivered legal opinions from law firms  acceptable to OPIC
     in  form  and  substance  as to the  validity  and  enforceability  of this
     Agreement,  the documents  delivered  pursuant to this Agreement,  and such
     other related matters as OPIC may reasonably request.

     Upon  satisfaction  of all of the  above  conditions,  OPIC  will  agree to
forbear on  proceeding  to protect  and  enforce  its  rights  and  remedies  by
appropriate proceedings under the terms of the Loan Agreement.

5.   Noncompliance  with the  Agreement  will be  treated as an Event of Default
under the Financing  Documents.  OPIC is under no obligation to forbear upon the
occurrence of any Event of Default under the Financing Documents other than that
described  in  paragraph  2 hereof.  Upon the  occurrence  of any such  Event of
Default   under  the  Financing   Documents,   the   Forbearance   Period  shall
automatically terminate and OPIC may exercise any of its rights and remedies.

6.   All principal  payments deferred during the Forbearance Period shall be due
and payable in full on October 31, 2000, or, if earlier, upon termination of the
Forbearance Period.

7.   Except for the  forbearance  granted  hereunder,  no waiver of any  default
under  any of the  Financing  Documents  has been  granted  by OPIC,  nor  shall
anything  contained in this Agreement  constitute or be construed as a waiver of
any existing or future default or a  modification  or limitation of any existing
rights  or  remedies  available  to the  OPIC  against  WHCC or the  Sponsor  of
Guarantor.  Further, OPIC has no obligation to extend the expiration date of the
Forbearance  Period (and the execution of this Agreement  shall not be construed
to require  any such  extension),  to enter  into any  further  forbearances  or
waivers  with respect to the  Financing  Documents.  Subject to the  forbearance
granted  hereunder,  OPIC  specifically  reserves  the right to insist on strict
compliance  with the terms of the Financing  Documents,  this Agreement and each
document  executed in  connection  herewith.  Each of WHCC,  the Sponsor and the
Guarantor hereby expressly acknowledge such reservation of rights.

8.   The Company, the Sponsor and the Guarantor hereby reaffirms its obligations
under the Financing  Documents  with each of the  undersigned  and confirms that
such obligation remain in full force and effect, without any claims, set-offs or
defenses.

9.   Upon termination of the Forbearance  Period, all principal amounts deferred
hereunder  shall  be  immediately  due and  payable,  and OPIC  may  pursue  all
available  rights  and  remedies  pursuant  to the  Financing  Documents  or the
documents signed pursuant to this Agreement, at law or in equity.

10.  No other person and no creditor of WHCC,  the Sponsor,  or Guarantor  other
than the undersigned may rely on this Agreement.

11.  Each  signatory of 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.

12.  This Agreement embodies the entire understanding of the parties hereto, and
supersedes  all prior  negotiations,  understandings,  promises  and  agreements
between them with respect to the subject matter hereof.  This Agreement -51- may
not be modified in any manner, except by written agreement signed by all parties
hereto.  This  Agreement may be executed in any number of  counterparts,  all of
which taken together shall constitute one and the same instrument and any of the
parties  hereto may execute this Agreement by signing any such  counterpart.  In
addition,  each of the Company,  Sponsor and Guarantor  hereby  acknowledge  and
agree that neither the execution  and delivery of this  Agreement nor any of the
terms, provisions, covenants or agreements contained in these Agreement shall in
any manner release,  impair,  lessen,  modify,  waive,  or otherwise  affect the
liability and obligations of the Company,  Sponsor and Guarantor under the terms
of the Financing Documents, except provided in this Forbearance Agreement.

13.  THE COMPANY,  SPONSOR, AND GUARANTOR EACH HEREBY ACKNOWLEDGE THAT THEY HAVE
FREELY AND VOLUNTARILY ENTERED INTO THIS AGREEMENT AFTER AN ADEQUATE OPPORTUNITY
AND  SUFFICIENT  PERIOD OF TIME TO REVIEW,  ANALYZE,  AND  DISCUSS ALL TERMS AND
CONDITIONS OF THIS AGREEMENT WITH COUNSEL FREELY AND  INDEPENDENTLY  SELECTED BY
THE COMPANY,  SPONSOR, AND GUARANTOR. EACH OF THE COMPANY, SPONSOR AND GUARANTOR
FURTHER   ACKNOWLEDGE   AND  AGREE  THAT  THEY  HAVE   ACTIVELY  AND  WITH  FULL
UNDERSTANDING  PARTICIPATED  IN THE  NEGOTIATION  OF THIS  AGREEMENT  WITH THEIR
COUNSEL;  THAT ALL OF THE TERMS AND  CONDITIONS OF THIS  AGREEMENT AND THE OTHER
DOCUMENTS  EXECUTED AND DELIVERED IN CONNECTION  WITH THIS  AGREEMENT  HAVE BEEN
NEGOTIATED AT  ARMS-LENGTH,  AND THAT THIS  AGREEMENT AND ANY AND ALL SUCH OTHER
DOCUMENTS HAVE BEEN  NEGOTIATED,  PREPARED,  AND EXECUTED  WITHOUT  FRAUD,  BEEN
EXERTED BY OR IMPOSED UPON ANY PARTY TO THIS  AGREEMENT OR UPON ANY OTHER PARTY.
NO  PROVISION  OF THIS  AGREEMENT  OR OTHER SUCH  DOCUMENTS  SHALL BE  CONSTRUED
AGAINST OR INTERPRETED TO THE DISADVANTAGE OF ANY PARTY TO THIS AGREEMENT BY ANY
COURT OR OTHER GOVERNMENTAL OR JUDICIAL AUTHORITY BY REASON OF SUCH PARTY HAVING
OR BEEN DEEMED TO HAVE STRUCTURED, DICTATED, OR DRAFTED SUCH PROVISION.

14.  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,  or
Guarantor shall assign any of their respective  rights or obligations under this
Agreement without the express written consent of OPIC.

16.  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 provisions contained herein shall
remain effective and binding shall not be affected or impaired thereby.

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

18.  Time is of the essence with respect to each provision of this Agreement.

     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

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