Document:

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                                 Exhibit 10.1

          LEASE OF SPACE IN INTERNATIONAL HOME FURNISHINGS CENTER(R)
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<S>                                                              <C>
IHFC(R):   International Home Furnishings Center(R), Inc.        LESSEE:  Hooker Furniture Corporation
           Post Office Box 828                                            PO Box 4708
           High Point, North Carolina 27261                               440 E Commonwealth Blvd
                                                                          Martinsville, Virginia 24115
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DESCRIPTION OF PREMISES:     Space No W1047 including bays C1003, G1062, G1067,
G1077, H1042, H1043, H1045 and W1041 in the International Home Furnishings
Center(R), High Point, North Carolina.

             TERM:  5 Years

COMMENCEMENT DATE:  November 1, 2000
  EXPIRATION DATE:  October 31, 2005

  ANNUAL RENTAL: 46,330.00 sq. ft. @ $10.25 per sq. ft. per year    $ 474,882.50

ADDITIONAL OR SUPPLEMENTAL TERMS AND PROVISIONS

Addendum A for Hamilton Wing Leases is attached hereto and made a part of this
lease.

This lease supersedes the present lease between the Lessor and Lessee for Space
#W1047, dated August 11, 1999, and such prior lease shall be deemed cancelled.

IHFC(R), by this Agreement, leases to Lessee and Lessee leases from IHFC(R), the
Premises described above, at the rental, for the term and upon the other terms
and conditions contained on this page and in IHFC's(R) Standard Terms and
Conditions of Lease (IHFC(R) Form No. 900103) which are incorporated by
reference in and made a part of this lease.

IHFC(R) and Lessee have caused this Lease to be executed by their duly
authorized officers, this the 3rd day of August, 2000.

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<CAPTION>
IHFC(R):                                                                            EXHIBITOR:
<S>                                                                   <C>
International Home Furnishings Center, Inc.                           Hooker Furniture Corporation
                                                                      -------------------------------------------------
                                                                      Complete Formal Business Name

By:     /s/  William S. DiPaolo                                       Virginia Corporation
        ---------------------------------------------------           -------------------------------------------------
                 VICE PRESIDENT                                       LEGAL FORM OF BUSINESS: CORPORATION, PARTNERSHIP
                                                                      OR INDIVIDUAL AND STATE OF PRINCIPAL OFFICE

                                                                      By:  /s/ Paul B. Toms, Jr.
                                                                           -------------------------------------------------
                                                                                          NAME                TITLE
                                                                            PRESIDENT, VICE PRESIDENT, GENERAL PARTNER, OWNER

Attest: /s/ Jane S. Lain
        -------------------------------------------------
                 SECRETARY
                                                                      Attest:  /s/ Edwin L. Ryder                    CORPORATE SEAL
                                                                               -------------------------------------
                                                                               ASST. SECRETARY IF LESSEE IS A CORPORATION
CORPORATE SEAL
</TABLE>
<PAGE>

                    STANDARD TERMS AND CONDITIONS OF LEASE
                            IHFC(R) FORM NO. 900103

                                                                     Page 1 of 5

1.0
PREMISES  (S)1.1.Description. Lessee acknowledges receipt of a drawing or floor
          plan showing the exact location of the Premises in the International
          Home Furnishings Center(R) showroom complex owned and operated by
          IHFC(R) (the "Home Furnishings Center"). The Home Furnishings Center
          is more particularly described on a map or plat prepared by Davis-
          Martin-Powell and Associates, Inc. and designated Job No. S-18512, a
          copy of which is on file at the office of IHFC(R) and is incorporated
          in this Lease by reference. The lease of the Premises includes the
          right of access to the Premises through the common areas of the Home
          Furnishings Center.

          (S)1.2. Relocation. Lessee acknowledges and agrees that it is
          essential to the orderly and efficient operation of the Home
          Furnishings Center by IHFC(R) that IHFC(R) have the right from time to
          time to relocate lessees in order to achieve optimum utilization of
          all space in the Home Furnishings Center. Consequently, IHFC(R) shall
          be entitled to relocate Lessee as provided in this section if IHFC(R)
          determines that relocation of Lessee is in the best interest of the
          Home Furnishings Center in the conduct of its business. IHFC(R) shall
          exercise its right to relocate Lessee in the following manner: (a) the
          premises to which Lessee is to be relocated (the "New Premises") shall
          be selected by IHFC(R) and shall be equivalent (as determined by
          IHFC(R) in its sole discretion) in size and value to the Premises; (b)
          IHFC(R) shall notify Lessee of its intent to relocate Lessee within a
          time period prior to the commencement of the next regularly scheduled
          Market such that the Lessee has a reasonable period of time (as
          determined by IHFC(R) in its sole discretion) to refixture,
          redecorate, and prepare to show at that Market and identify the
          proposed New Premises, (c) within ten (10) days after notice of
          relocation by IHFC(R), Lessee, at its option, may terminate this Lease
          by written notice to IHFC(R); (d) if Lessee fails to terminate this
          Lease as provided in (c) above, the New Premises shall be substituted
          for the original Premises.  This Lease shall continue in full force
          and effect without any other change, and IHFC(R), at its expense,
          shall move Lessee's property to the New Premises and shall pay the
          costs (less a reasonable allowance for depreciation) of replacing (as
          nearly as possible) all installations and improvements of Lessee which
          cannot be moved to the New Premises.
2.0
TERM      (S)2.1. Commencement and Expiration Date. The Commencement Date and
          Expiration Date of the Lease term are the dates set forth on the first
          page of this Lease.

          (S)2.2. Holding Over. If Lessee remains in possession of the Premises
          after the expiration or termination of this Lease, Lessee shall be
          only a tenant at will but its occupancy shall otherwise be subject to
          all of the terms and provisions of this Lease, except that Lessee
          shall pay per diem rent for each day Lessee occupies the premises, in
          an amount equal to one hundred fifty percent (150%) of the then
          prevailing annual rates for comparable space charged by IHFC(R) to new
          tenants, prorated on a daily basis.
3.0
RENT      (S)3.1. Annual Rental. Lessee shall pay to IHFC(R) without offset or
          deduction the Annual Rental for the Premises set forth on the first
          page of this Lease, in semiannual installments, each such semiannual
          installment being due and payable in advance on or before the first
          day of November and on or before the first day of May (the "Rental
          Payment Dates") of each calendar year during the Lease term, except as
          provided in (S)3.2.

          (S)3.2. No Reduction. If the Commencement Date is a day other than a
          Rental Payment Date, Lessee acknowledges and agrees that by receiving
          possession of the Premises on the Commencement Date, Lessee will be
          able to show its merchandise at the next ensuing Market and will
          receive the same benefits as would have been the case had the Lease
          term commenced on the Rental Payment Date next preceding the actual
          Commencement Date. Lessee therefore agrees to pay a full semiannual
          rental payment for the period of time beginning with the Commencement
          Date and ending on the day before the next Rental Payment Date.

          (S)3.3. Rent Adjustment. In addition to the Annual Rental provided for
          in (S)3.1, Lessee agrees to pay IHFC(R), for each Lease Year, an
          amount determined by multiplying the Annual Rental by a percentage
          equal to the cumulative percentage increase, if any, in the CPI,
          determined as follows:

          (a) "CPI" means the Consumer Price Index, All Urban Consumers - U.S.
          City Average - All items (1982-4=100) as published by the Bureau of
          Labor Statistics of the United States Department of Labor;

          (b) If the Commencement Date is a Rental Payment Date, A Lease Year is
          the annual period commencing on the Commencement Date and on each
          anniversary thereof. If the Lease Term commences on any other date, a
          Lease Year is the annual period commending on the Rental Payment Date
          next preceding the Commencement Date, and on each anniversary thereof;

          (c) The cumulative percentage increase in the CPI shall be the
          percentage increase, if any, in the CPI for the sixth month prior to
          the Lease Year in question over the CPI for the same month next
          preceding the Commencement Date;

          (d) If the CPI ceases to use the 1982-4 average equaling 100 as the
          basis of calculation, or if a change is made in the term or number of
          items contained in the CPI, or if the CPI is altered, modified,
          converted or revised in any other way, then the foregoing computations
          shall be made with the use of such conversion factor, formula or table
          for converting the CPI as may be published by the Bureau of Labor
          Statistics or, if the Bureau shall not publish the same, then with the
          use of a conversion factor which adjusts the modified CPI to the
          figure that would have been arrived at had the change in the manner of
          computing the CPI in effect on the date of this lease not been
          altered. If the Bureau shall cease publication of the CPI, then any
          substitute or successor index published by the Bureau or other
          governmental agency of the United States shall be used, similarly
          adjusted. If neither the CPI or a successor or substitute index
          similarly adjusted is available, then a reliable governmental or other
          reputable publication selected by IHFC(R) and evaluating the
          information theretofore used in determining the CPI shall be used;

          (e) IHFC(R) shall bill the Lessee for the cumulative increase in the
          Annual Rental at the same time as its normal invoices for Annual
          Rental are sent prior to each Lease Year, and, upon request by Lessee,
          shall furnish Lessee with a statement explaining the method of
          computation of the CPI increase; and

          (f) IHFC(R) shall not be obliged to make any adjustments or
          recomputations, retroactive or otherwise, by reason of any revision
          which may later be made in the amount of the CPI first published for
          any month.
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                                                                     Page 2 of 5

4.0         (S)4.1. Use. Lessee shall use the Premises for the display,
USE AND     exhibition, and sale of home furnishings, furniture, accessories,
OCCUPANCY   carpeting and wall coverings, and for office or clerical
BY LESSEE   purposes to the extent reasonably required for the conduct of such
            activities at the Premises, and for no other purpose.

            (S)4.2. Operation During Markets. Lessee shall open the Premises,
            exhibit its products and staff the Premises with employees for the
            entire period of each regularly scheduled Market.

            (S)4.3. Rules and Regulations. IHFC(R) has established rules,
            regulations guidelines and polices (the "Guidelines") regarding the
            operation of the Home Furnishings Center, and shall be entitled to
            establish Guidelines from time to time after the execution of this
            Lease. Lessee acknowledges receipt of a copy of the current
            Guidelines and agrees to comply, and to cause its employees,
            contractors, agents and others occupying the Premises to comply,
            with all current and future Guidelines, provided that (a) IHFC(R)
            notifies Lessee of any Guidelines established after the date of this
            Lease and (b) the Guidelines established by IHFC(R) do not
            unreasonably interfere with Lessee's use of the Premises for the
            purposes set forth in (S)4.1.

            (S)4.4. Restriction on Other Operations of Lessee. Lessee agrees
            (insofar as and to the extent Lessee may lawfully do so) that during
            all regularly scheduled Markets or other times at which the Home
            Furnishings Center is officially open to buyers during the term of
            this Lease, Lessee will not, within a five (5) mile radius of the
            Home Furnishings Center (a) operate any other showroom under the
            same trade name or names under which Lessee does business from the
            Premises or (b) exhibit in any other location the same merchandise
            which Lessee exhibits in the Premises. Lessee acknowledges and
            agrees that it is in the best interest of Lessee and other tenants
            in the Home Furnishings Center as exhibitors, and in the best
            interest of the successful operation of the Home Furnishings Center
            as a national market for home furnishings, to maximize buyer traffic
            in, and the duration of buyer visits to, the Home Furnishings
            Center. Lessee agrees that the foregoing provisions are reasonably
            necessary to accomplish these purposes, and that a breach of these
            provisions by Lessee will constitute a material breach of the Lease.

            (S)4.5. Property of Others. Lessee will not place or permit to be
            placed in the Premises property of any other person or entity,
            unless it has first secured the written consent of IHFC(R).

            (S)4.6. Market Dates; Admission. IHFC(R) shall have the sole right
            to prescribe the dates of regularly scheduled Markets applicable to
            Lessee's lines of merchandise, and qualifications, conditions and
            times of admission to the Home Furnishings Center. IHFC(R) may
            restrict admission to accredited buyers and condition admission upon
            the presentation of credentials prescribed or provided by IHFC(R).
            Without limiting the generality of the foregoing, Lessee agrees not
            to admit any buyers to the Premises during the seven-day period
            prior to each Market.

            (S)4.7. Compliance. Lessee agrees not to use or occupy the Premises,
            or permit them to be used or occupied, in any manner which violates
            applicable laws or regulations affecting the Premises or the Home
            Furnishings Center established by any governmental or public
            authority having jurisdiction to promulgate such laws or
            regulations, or by any insurance carrier insuring the Premises,
            property located therein, or the Home Furnishings Center.

            (S)4.8. Inspection by IHFC(R). IHFC(R) and its representatives shall
            be entitled to enter the Premises at any reasonable time for the
            purpose of inspecting the Premises, performing any work required or
            permitted to be performed by IHFC(R) under this Lease, and
            exhibiting the Premises to prospective mortgagees and tenants.
            IHFC(R) agrees that to the extent practical, it will not
            unreasonably interfere with the operation of Lessee's business in
            the exercise of its rights under this Section.

5.0         (S)5.1. Transfers by Lessee. Lessee agrees not to assign this Lease
ASSIGNMENT  or sublet all or any part of the Premises without Lessor's prior
AND         written consent in each instance. In the event of an
SUBLETTING  assignment or sublease, Lessee shall remain primarily liable for
            payment and performance of all obligations under this Lease upon
            default by the assignee or subtenant, notwithstanding the acceptance
            of rent or performance directly from the assignee or
            subtenant by IHFC(R).

            (S)5.2. Subleasing Policy. All proposed subleases which IHFC(R) is
            requested to approve pursuant to (S)5.1 must conform to subleasing
            policies established by IHFC(R) from time to time, and Lessee
            acknowledges and agrees that IHFC's(R) subleasing policies, among
            other things, may provide for selection of sublessees from a
            priority waiting list, the use of standard forms, direct billing by
            IHFC(R), the imposition of subleasing fees by IHFC(R), and the
            retention by IHFC(R) of the excess of any amounts payable under the
            sublease over the rent and other charges payable under this Lease.
            Nothing in this section may be construed to create any inference
            that IHFC(R) is obligated to approve any sublease which complies
            with the provisions of this section.

            (S)5.3. Change of Ownership. For purposes of this Paragraph, an
            assignment includes: (1) one or more sales or transfers by operation
            of law or otherwise by which an aggregate of more than fifty percent
            (50%) of Lessee's shares or ownership shall be vested in a party or
            parties who are not shareholders or owners of Lessee as of the date
            of this Lease; (2) any transfer by operation of law; (3) any
            assignment among co-tenants; and (4) any assignment of a part
            interest in this lease.

6.0         (S)6.1. Acceptance. Lessee has examined the Premises and accepts
REPAIRS     them in their present conditions, without any representation on the
AND         part of IHFC(R) as to the present or future condition of the
MAINTENANCE Premises except as otherwise specifically provided in this Lease.

            (S)6.2. IHFC's(R) Repair Obligations. IHFC(R) shall at IHFC's(R)
            expense maintain the exterior walls, roof, structural supports and
            common areas of the Home Furnishings Center in good order and
            repair; provided, however, that (a) IHFC(R) is not an insuror and
            its responsibility to do so shall be confined to making the proper
            repairs within a reasonable time after it has received notice of the
            necessity, nature and location of the repairs and (b) Lessee shall
            repair any damage to the Home Furnishings Center caused by Lessee or
            its agents.

            (S)6.3. Lessee's Repair Obligations. Lessee agrees to maintain the
            Premises in a neat and clean condition, in good order and repair,
            and in full compliance with applicable laws, ordinances,
            regulations, and codes.

            (S)6.4. Surrender. At the expiration or termination of this Lease,
            Lessee agrees to quit and surrender the Premises to IHFC(R) in as
            good a condition as when received, reasonable wear and tear and
            damage by fire or other casualty excepted.
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                                                                     Page 3 of 5

7.0.           (S)7.1. Lessee's Property. Subject to the security interest
LESSEE'S       granted in (S)12.4 of this Lease, all merchandise, office
PROPERTY;      furniture and equipment, samples, inventory and other unattached
ALTERATIONS    movable property placed in the Premises by Lessee shall remain
AND            the property of Lessee, and Lessee, if it is not in default under
IMPROVEMENTS   this Lease, shall be entitled to remove such items from the
               Premises, provided Lessee repairs any damage to the Premises or
               the Home Furnishings Center caused by such removal.

               (S)7.2. Placing Property in or Removing Property From Premises.
               Except as otherwise specifically permitted by IHFC's(R)
               Guidelines, all property of Lessee shall be moved to or from the
               Premises by the employees or designated contractors of IHFC(R),
               at the expense and risk of Lessee, and Lessee agrees to pay
               IHFC(R) upon receipt of IHFC's(R) invoice IHFC's(R) standard
               charges for moving such items to and from the Premises. IHFC(R)
               shall not be liable for any loss or damage to property of Lessee,
               unless caused by the negligence of IHFC(R) or its employees.

               (S)7.3. Alterations and Improvements. Lessee shall be entitled to
               make alterations, additions, and improvements to the Premises,
               provided Lessee first obtains IHFC's(R) written consent, which
               IHFC(R) will not unreasonably withhold. Any alteration, addition,
               improvement or other property attached to the Premises by Lessee
               (including, without limitation electrical wiring, lighting
               fixtures, carpeting and track lighting) shall become the property
               of IHFC(R) upon the expiration or termination of this Lease,
               unless IHFC(R) elects to require Lessee to remove the same,
               repair any damages occasioned by such installation or removal,
               and restore the Premises to their original condition.

               (S)7.4. Performance of Work. All work in connection with
               alterations, additions, or improvements to the Premises (a) shall
               be performed in a first class, workmanlike manner with all
               required governmental and utility permits obtained in advance by
               Lessee; (b) shall not weaken or impair the structural integrity
               of the Home Furnishings Center; and (c) shall be in accordance
               with plans and specifications, and performed by contractors,
               approved by IHFC(R). All contractors performing such work shall
               carry insurance satisfactory to IHFC(R) and shall execute lien
               waivers, and indemnity agreements satisfactory to IHFC(R).
               IHFC(R) shall have no duty to Lessee or anyone else to enforce
               these requirements or inspect the work of Lessee's contractors.
8.0
TAXES          IHFC(R) agrees to pay all ad valorem taxes and assessments
               levied, assessed or charged against the Home Furnishings Center.
               Lessee agrees to list and pay all license, privilege, ad valorem
               or other taxes levied, assessed or charged against Lessee or
               IHFC(R) on account of the operation of Lessee's business in the
               Premises or on account of property owned by Lessee.

9.0
UTILITIES      IHFC(R) agrees to furnish heat, electricity, air conditioning,
               and elevator service to the Premises for a period beginning
               thirty (30) days prior to the commencement of each regularly
               scheduled Market, and ending fourteen (14) days following the
               close of each such Market; provided, however, that IHFC(R) shall
               not be liable for interruptions in service due to breakdowns or
               other causes beyond its control. If Lessee uses the Premises at
               any other times, Lessee agrees to pay such additional charges as
               may be imposed by IHFC(R) for such excess utility use.

10.0           (S)10.1. Insurance. Lessee agrees to keep its property located in
INSURANCE;     the Premises, including all alterations, additions and
INDEMNITY      improvements made by it, insured against loss or damage by fire
               or other casualty, under an "all risks" policy in an amount equal
               to full replacement cost value thereof. Lessee agrees to maintain
               in force comprehensive general liability insurance coverage on
               the Premises, with a minimum combined single limit of $500,000
               for death, personal injury or property damage, naming IHFC(R) as
               an additional insured. This general liability coverage may be
               either on an "occurrence" or a "claims made" basis. If on a
               "claims made" basis, Lessee must either:

                    (a) Agree to provide certificates of insurance evidencing
                    the above coverages for a period of three years after
                    expiration of the lease, which certificate shall evidence a
                    "retroactive date" no later than the Commencement Date; or

                    (b) Purchase the extended reporting period endorsement for
                    the policy or policies in force during the term of this
                    lease and evidence the purchase of this extended reporting
                    period endorsement by means of a certificate of insurance or
                    a copy of the endorsement itself.

               All policies shall provide that unless IHFC(R) is given ten (10)
               days written notice of any cancellation, failure to renew, or
               material change, the insurance shall remain in full force and
               effect, without change. On or before the Commencement Date,
               Lessee agrees to provide IHFC(R) with satisfactory evidence that
               all required insurance is in force. Lessee may provide any
               insurance required under this Article through its corporate or
               blanket policies.

               (S)10.2. Waiver of Subrogation. To the extent that any business
               interruption or loss or damage to property occurring in the
               Premises or in the Home Furnishings Center, or in any manner
               growing out of or connected with Lessee's occupation of the
               Premises or the condition thereof (whether or not caused by the
               negligence of IHFC(R) or Lessee or their respective agents,
               employees, contractors, tenants, licensees, or assigns) is
               covered by insurance (regardless of whether the insurance is
               payable to or protects IHFC(R) or Lessee, or both) neither
               IHFC(R) nor Lessee, nor their respective officers, directors,
               employees, agents, invitees, assignees, tenants, or subtenants,
               shall be liable to the other for such business interruption or
               loss or damage to property, it being understood and agreed that
               each party will look to its insuror for reimbursement. This
               release shall be effective only so long as the applicable
               insurance policies contain a clause to the effect that it shall
               not affect the right of the insured to recover under the
               policies. Such clauses shall be obtained by the parties wherever
               possible. Nothing in this Section may be construed to impose any
               other or greater liability upon either IHFC(R) or Lessee than
               would have existed in its absence.

               (S)10.3. Assumption of Risks, Release, and Indemnity. Lessee (1)
               assumes all risks with respect to, (2) releases IHFC(R) from
               liability for, and (3) agrees (except to the extent IHFC(R) is
               effectively protected by insurance) to protect indemnify and save
               harmless IHFC(R) from and to defend IHFC(R) (through counsel
               acceptable to IHFC(R)) against any claim liability, loss, or
               damage arising out of or connected with the following, however
               caused and wherever originating and regardless of whether the
               cause or means of repairing the same is accessible to or under
               the control of Lessee:

                    (a) Damage to property of Lessee, or its agents, employees
                    or subtenants occurring in or about the Home Furnishings
                    Center;
                    (b) Damage to property of anyone occurring in or about the
                    Premises;
                    (c) Any injury to or interruption of business or loss of
                    profits attributable to or connected with any damage to
                    property referred to in subparagra phs (a) or (b),
                    above.
<PAGE>

                                                                     Page 4 of 5

                    (d) Death or personal injury occurring in or about the
                    Premises (unless resulting from the negligence of IHFC(R) or
                    its employees); or(e) Any other risks with respect to which
                    Lessee is required to insure by the terms of this Lease
                    (whether or not such insurance is actually in force).

               In addition to and without limiting the generality of the
               foregoing, Lessee's assumption of risk, release, and indemnity
               obligations as set forth above shall apply to any claim,
               liability, loss or damage arising out of or in connection with
               (1) Lessee's occupancy of or conduct of business in the Premises
               (2) the condition of the Premises, (3) any default of Lessee
               under this Lease; and (4) mechanic's or materialmen's liens
               asserted by persons claiming to have dealt with Lessee or
               Lessee's contractors.

11.0           (S)11.1. Option to Terminate. If the Premises are damaged or
DAMAGE OR      by destroyed fire or other casualty to such extent that they are
DESTRUCTION    completely   untenantable, or if the area of the Home Furnishings
               Center in which the Premises are located is so severely damaged
               that IHFC(R) elects to demolish, or completely rebuild it,
               IHFC(R) may terminate this Lease by notifying Lessee within
               thirty (30) days following the damage or destruction, and rent
               and other charges payable by Lessee under this lease shall be
               apportioned to the date of the damage or destruction.

               (S)11.2. Obligation to Repair or Restore. If the Premises are
               damaged by fire or other casualty, unless IHFC(R) has exercised
               its right to terminate, if any, under (S)11.1, IHFC(R) shall with
               reasonable dispatch, and in any event within one hundred eighty
               (180) days, repair and restore the Premises to their condition
               existing at the date of the damage or destruction (except for
               alterations and improvements installed by Lessee and other
               property of Lessee, which Lessee shall repair and restore within
               that time) and this Lease shall remain in full force and effect
               except that rent shall abate as provided in (S)11.3.

               (S)11.3. Rent Abatement. If the Premises are damaged or destroyed
               by fire or other casualty and this Lease is not terminated, rent
               and other charges under this Lease shall abate in the same
               percentage as the rentable area of the Premises available for use
               bears to the entire rentable area of the Premises; provided,
               however, that if the Premises are damaged or destroyed to such
               extent that it is unreasonable to expect Lessee to continue to
               operate the Premises as a showroom, all rent shall abate from the
               date of the damage or destruction until the earlier of the date
               the Premises are repaired and restored, or the date Lessee
               reopens the Premises as a showroom. Notwithstanding the foregoing
               if IHFC(R) is able to repair and restore the Premises within such
               time as to permit Lessee (in the exercise of reasonable dispatch
               and considering the time required for Lessee to complete Lessee's
               restorations to the Premises and redecorate them) to use the
               Premises for a showroom at the next ensuing Market after the
               damage or destruction, there shall be no abatement of rent.

12.0           (S)12.1. Events of Default. Lessee shall be in default under this
DEFAULT        Lease if any one of the following Events of Default occurs:

                    (a) Lessee fails to pay when due any installment of rent or
                    other amount due under the terms of this Lease;

                    (b) Lessee fails to pay when due any other amount owed to
                    IHFC(R); or

                    (c) Lessee repudiates or fails to perform any obligation
                    under (S)1.2 (Relocation), (S)4.0 (Use), (S)5.0 (Assignment
                    and Subletting), (S)7.3 (Alterations), (S)13.0
                    (Subordination) or (S)14.0 (Estoppel Certificates).

                    (d) Lessee vacates or abandons the Premises;

                    (e) Lessee becomes insolvent, executes an assignment for the
                    benefit of creditors, is adjudicated a bankrupt, files for
                    relief under the reorganization provisions of any Federal
                    bankruptcy law or state insolvency law, or a permanent
                    receiver of the property of Lessee is appointed by any court
                    of competent jurisdiction.

                    (f) Lessee repudiates or, within ten (10) days after notice
                    of nonperformance by IHFC(R), fails to perform any other
                    obligation which it is required to perform under the terms
                    of this Lease or, if performance cannot reasonably be had
                    within ten (10) days after notice from IHFC(R), Lessee fails
                    to commence performance within that period and diligently
                    proceed to completion of performance.

               (S)12.2. Remedies. If an Event of Default occurs, IHFC(R), at its
               option and without further notice to Lessee, may pursue any
               remedy now or hereafter available to IHFC(R) under the laws of
               the State of North Carolina. Without limiting the generality of
               the foregoing, IHFC(R) shall be entitled to reenter the Premises
               by force, summary proceedings or otherwise, expelling Lessee and
               removing all property from the Premises, all without liability to
               Lessee or anyone else and either:

                    (a) attempt to relet the Premises for such term and rental
                    and upon such other terms and conditions as IHFC(R) in its
                    sole discretion deems advisable. All rentals received by
                    IHFC(R) from such reletting shall be applied, first, to
                    payment of any indebtedness other than rent due from Lessee
                    to IHFC(R); second, to payment of any expenses of reletting,
                    including, without limitation, the costs of recovering the
                    Premises, such alterations or repairs as may be necessary to
                    relet the Premises, brokerage fees, and reasonable
                    attorney's fees; third to payment of any rent unpaid under
                    the terms of this Lease; and the residue, if any, to the
                    payment of rent as the same becomes due and payable under
                    this Lease. If the amount received from such reletting and
                    applied to rent during any semiannual period is less than
                    the rent reserved under this Lease, Lessee agrees to pay the
                    deficiency to IH FC(R). The deficiency shall be calculated
                    and paid semiannually. No reentry or taking possession of
                    the Premises by IHFC(R) shall be construed as an election
                    upon its part to terminate this Lease unless IHFC(R) so
                    notifies Lessee or this Lease is terminated by order of a
                    court of competent jurisdiction; or

                    (b) notwithstanding any reletting without termination, at
                    any time after an Event of Default occurs, elect to
                    terminate this Lease, and, in addition to IHFC's(R) other
                    remedies, recover from Lessee all damages incurred by reason
                    of Lessee's default, including, without limitation, the
                    costs of recovering the Premises, reasonable attorney's
                    fees, and the worth, at the time of the termination, of the
                    excess, if any, of the amount of rent reserved under this
                    Lease over the then reasonable rental value of the Premises
                    for the remainder of the term of the Lease, all of which
                    amounts shall be immediately due and payable from Lessee to
                    IHFC(R).

               (S)12.3. Late Charges. If any installment of rent or any other
               amount due under this Lease is not received by IHFC(R) within ten
               (10) days after the date such payment was due, then Lessee shall
               be obligated to pay, in addition to the amount due, a late charge
               equal to five percent (5%) of the overdue amount. Lessee agrees
               that this late charge represents a fair and reasonable estimate
               of the additional processing, accounting and other costs IHFC(R)
               will incur by reason of late payment by Lessee, the exact amount
               of which would be difficult to ascertain. Notification by IHFC(R)
               to Lessee that a late payment charge has been added to the amount
               of overdue rent or other charges shall not constitute a waiver of
               Lessee's default, nor preclude IHFC(R) from exercising any other
               remedy.
<PAGE>

                                                                     Page 5 of 5

               (S)12.4. Security Interest. As security for performance and
               payment of all present and future rents and other obligations
               required to be paid or performed by Lessee under the terms of
               this Lease, and for any other amounts owed IHFC(R) by Lessee,
               Lessee hereby grants unto IHFC(R) a security interest in all
               installations, samples, goods, merchandise, furniture, fixtures,
               and other property of Lessee, now owned or hereafter acquired,
               located in the Premises or the Home Furnishings Center. If an
               Event of Default occurs, IHFC(R) at any time thereafter may
               exercise, in addition to its other remedies, the rights of a
               secured party under Chapter 25 of the North Carolina General
               Statutes. The proceeds from any sale of the collateral pursuant
               to such remedies shall be applied in the following order: (a) the
               expense of taking, removing, holding for sale, and preparing for
               sale, specifically including IHFC's(R) reasonable attorney's
               fees; (b) the expense of liquidating any liens, security
               interests or other encumbrances superior to this security
               interest; and (c) amounts owed by Lessee to IHFC(R) under the
               terms of this Lease or otherwise, in the order herein provided
               for. Lessee agrees to execute such financing statements and other
               documents as may be required to perfect the security interest
               granted to IHFC(R) under this Section.

               (S)12.5. Partial Payment. IHFC(R) shall not be obligated to
               accept partial payments of rent or other charges due under this
               Lease. If IHFC(R) accepts any such payment, IHFC(R) shall not be
               deemed to have waived the default of Lessee by reason of non-
               payment of such charges in full, nor to have waived its right to
               collect late charges. IHFC(R) will hold any partial payment so
               received as a deposit against full payment of such amounts. At
               any time prior to full payment by Lessee of such amounts, IHFC(R)
               may exercise any one or more of its remedies on default, and
               apply the deposit to any amounts or damages owed IHFC(R) as of
               the date IHFC(R) elects to exercise such remedies, including,
               without limitation, pro rata rent and other charges payable under
               this Lease for the current lease period up through the date of
               the exercise by IHFC(R) of its remedies upon default. The
               acceptance of such deposit by IHFC(R) shall be entirely without
               prejudice to IHFC's(R) right thereafter, at any time prior to
               payment in full, to assert such default, apply the deposit as
               provided in this section, and pursue all remedies available to
               IHFC(R) under this Lease or applicable law.

               (S)12.6. Default Under Prior Lease. If this Lease is to take
               effect at the expiration of an earlier lease between IHFC(R) and
               Lessee for space in the Home Furnishings Center (the "Prior
               Lease"), then this Lease is subject to Lessee's performing its
               obligations under the Prior Lease up through the date of its
               expiration. If an Event of Default occurs under the Prior Lease
               and IHFC(R), pursuant to its rights under the Prior Lease, either
               (a) terminates Lessee's right to possession of the Premises or
               (b) terminates the Prior Lease, then this Lease shall be
               automatically terminated, whether or not such termination is
               expressly stated in any notice from IHFC(R) to Lessee.

13.0           At the election of IHFC(R), this Lease shall be subordinate to a
SUBORDINATION  first mortgage or deed of trust held by a lending institution and
               secured by the Home Furnishings Center; provided, however, that
               IHFC(R) agrees to use reasonable efforts to secure from the
               mortgagee a nondisturbance agreement providing that in the event
               of foreclosure the mortgagee will recognize the validity of this
               Lease, and, provided Lessee is not in default, will not disturb
               Lessee's possession hereunder.

14.0           Upon ten (10) days prior written notice from IHFC(R), Lessee
ESTOPPEL       agrees to execute, acknowledge and deliver to IHFC(R),
CERTIFICATES   Lessee's .certificate: (a) stating whether this Lease is in full
               force and effect; (b) stating whether this Lease has been
               modified, and if so, the nature of such modification; (c) stating
               the date through which rent and other charges are paid in
               advance; (d) stating whether, to Lessee's knowledge, there are
               any uncured defaults of IHFC(R) under this Lease, specifying the
               nature of any claimed default; and (e) providing such other
               information as IHFC(R) may reasonably request with respect to the
               status of the Lease. Any such certificate may be conclusively
               relied upon by IHFC(R) or any prospective purchaser or mortgagee
               of the Home Furnishings Center.

15.0           All notices required or permitted by the terms of this Lease
NOTICES        shall be deemed given when deposited in the United States
               Registered or Certified Mail, Postage Prepaid, or with
               verification of delivery by telegram, cable, telex, commercial
               courier or any other generally accepted means of business
               communication, to either party, at the address set forth for such
               party on the first page of this Lease. Either party may change
               the address to which notices must be sent by giving notice to the
               other party in accordance with this Section.

16.0           (a) This Lease shall be governed, construed, and enforced under
MISCELLANEOUS  the laws of North Carolina and the parties submit to the
               jurisdiction of the courts of North Carolina and stipulate that
               Guilford County, North Carolina, is proper venue for the purpose
               of all controversies which may arise under this Lease;
               (b) This Lease contains the entire understanding of the parties
               and there are no conditions precedent to its effectiveness or
               collateral understandings with respect to its subject matter;
               (c) It may not be modified except by writing signed by both
               parties;
               (d) It shall not be construed strictly against either party, but
               fairly in accordance with their intent as expressed herein;
               (e) Lessor's remedies are cumulative and not exclusive of other
               remedies to which Lessor may be legally entitled;
               (f) No waiver of any breach of a provision of this Lease may be
               construed to be a waiver of any succeeding breach of the same or
               any other provision, nor shall any endorsement or statement on
               any check or letter accompanying payment be deemed an accord and
               satisfaction, and IHFC(R) may accept payment without prejudice to
               its rights to pursue any remedy provided for in this Lease;
               (g) Time is of the essence in every particular, especially where
               the obligation to pay money is involved;
               (h) Amounts not paid IHFC(R) when due will bear interest on the
               unpaid balance at the lower of one and one-half percent (1-1/2%)
               per month or the maximum lawful rate; and
               (i) This Lease binds the parties, their respective heirs,
               personal representatives, successors and assigns.
<PAGE>

     ====================================================================

                                  ADDENDUM A

     ====================================================================

This Addendum contains provisions which modify and supplement the provisions
contained in the standard IHFC Lease and in IHFC's Standard Terms and conditions
of Lease.  If there is any conflict between the terms of this Addendum and the
terms of IHFC's standard Lease or Standard Terms and Conditions of Lease, this
Addendum controls.

1.   SIGNAGE

          Lessee agrees to pay for and maintain the standard exterior signage in
          accordance with signing specification on all fascias.  (Signs are
          required on all fascias.)  Lessee agrees not to place any other signs,
          banners, or other material of any kind on the exterior of the
          premises.

2.   DESIGN STATEMENT

          This Lease is contingent upon Lessee making a professionally designed
          showroom statement both interiorly and exteriorly.

3.   WINDOWS

          Lessee agrees that draperies, blinds, paper, curtains, or any other
          device that limits vision in the Premises will not be installed upon
          or near any window or door of the Premises.

<PAGE>

     [Graphic of Tenth Floor Plan - Wrenn, Green, Commerce and Hamilton Wings
     Space No. W1047 plus bays W1041, C1003, G1062, G1067, G1077, H1042, H1043,
     H1045  -  46,300 Sq. Ft. appears here.]<PAGE>

                                 EXHIBIT 10.7

                                                                [EXECUTION COPY]

                                  $22,500,000

                                CREDIT AGREEMENT

                         dated as of September 18, 2000

                                    between

                         HOOKER FURNITURE CORPORATION
                      EMPLOYEE STOCK OWNERSHIP PLAN TRUST

                                      and

                          HOOKER FURNITURE CORPORATION
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
                                   ARTICLE I
                                  DEFINITIONS

<S>                                                                                                <C>
Section 1.1.  Definitions...........................................................................3
Section 1.2.  Accounting Terms and Determinations...................................................6

                                  ARTICLE II
                                  THE CREDIT

Section 2.1.  Commitment to Make ESOP Loan..........................................................6
Section 2.2.  The ESOP Note.........................................................................6
Section 2.3.  Optional Prepayments..................................................................6
Section 2.4.  Mandatory Prepayments.................................................................7
Section 2.5.  General Provisions as to Payments.....................................................7
Section 2.6.  Computation of Interest...............................................................8
Section 2.7.  Non-Recourse Liability................................................................8

                                  ARTICLE III
                            CONDITIONS TO eSOP LOAN

Section 3.1.  Conditions to ESOP Loan...............................................................8

                                  ARTICLE IV
                        REPRESENTATIONS AND WARRANTIES

Section 4.1.  Qualified Plan........................................................................10
Section 4.2.  Authorization and Contravention.......................................................10
Section 4.3.  Binding Effect........................................................................10
Section 4.4.  Litigation............................................................................10
Section 4.5.  Filings...............................................................................11
Section 4.6.  Use of Proceeds.......................................................................11

                                   ARTICLE V
                             COVENANTS OF BORROWER

Section 5.1.  Operation and Administration..........................................................11
Section 5.2.  Reports...............................................................................11
Section 5.3.  Notices...............................................................................12
Section 5.4.  Use of Proceeds.......................................................................12
Section 5.5.  Compliance with Laws..................................................................12
Section 5.6.  Exempt Loan...........................................................................12
Section 5.7.  Independence of Covenants.............................................................12

                                ARTICLE VI
                            COVENANTS OF LENDER

Section 6.1.  Operation and Administration..........................................................12
Section 6.2.  Reports...............................................................................12
Section 6.3.  Compliance with Laws..................................................................13
Section 6.4.  Exempt Loan...........................................................................13
Section 6.5.  Determination Letter..................................................................13
</TABLE>

                                       i
<PAGE>

<TABLE>
                                  ARTICLE VII
                                   DEFAULTS
<S>                                                                                                <C>
Section 7.1.  Events of Default....................................................................13
Section 7.2.  Limitation on Default................................................................15

                                 ARTICLE VIII
                                 MISCELLANEOUS

Section 8.1.  Notices..............................................................................15
Section 8.2.  No Waivers...........................................................................15
Section 8.3.  Amendments and Waivers...............................................................15
Section 8.4.  Successors and Assigns...............................................................15
Section 8.5.  Governing Law........................................................................16
Section 8.6.  Counterparts; Effectiveness..........................................................16
Section 8.7.  Entire Agreement.....................................................................16
</TABLE>

Exhibit A - Form of ESOP Note
Exhibit B - Form of ESOP Pledge Agreement
Exhibit C - Form of Opinion of Counsel

                                       ii
<PAGE>

                               CREDIT AGREEMENT

          THIS CREDIT AGREEMENT (as amended, supplemented or modified from time
to time, this "Agreement") is dated as of September 18, 2000 and is between the
               ---------
HOOKER FURNITURE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN TRUST, a trust
established under the Hooker Furniture Corporation Employee Stock Ownership Plan
(the "Borrower"), acting through U.S. TRUST COMPANY, N.A., as trustee of the
      --------
Borrower, and HOOKER FURNITURE CORPORATION, a Virginia corporation (the

"Lender").
 ------

          The Borrower proposes to purchase up to 1,800,000 shares of the common
stock of the Lender and desires to borrow $22,500,000 to finance such purchase.
The Lender is willing to lend $22,500,000 to the Borrower on the terms and
conditions set forth herein.  Accordingly, the parties hereto agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

          Section 1.1.  Definitions. The following terms, as used herein, have
                        -----------
the following meanings:

          "Affiliate" means, with respect to any specified Person, any other
           ---------
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the specified Person
(the term "control" meaning possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise).

          "Business Day" means any day except a Saturday, Sunday or other day on
           ------------
which commercial banks in Martinsville, Virginia are authorized by law to close.

          "Capital Lease" means a lease that should be capitalized on the
           -------------
balance sheet of the lessee prepared in accordance with GAAP.

          "Code" means the Internal Revenue Code of 1986, as amended or any
           ----
similar successor law.

          "Common Shares" means the shares of common stock of the Lender
           -------------
identified on Schedule 1 to the ESOP Pledge Agreement.

          "Debt" means, with respect to any Person at any date, without
           ----
duplication, (i) all indebtedness for borrowed money, (ii) all obligations,
liabilities and indebtedness secured by any Lien on a Person's property, even
though such Person shall not have assumed or become liable for the payment
thereof (limited, in the case of any such obligation not assumed by such Person,
to the value of such property); (iii) all obligations or liabilities created or
arising under any Capital Lease, conditional sale or

                                      -1-
<PAGE>

other title retention agreement; (iv) all accrued pension fund and other
employee benefit plan obligations and liabilities; (v) any liabilities under, or
associated with, interest rate protection agreements; and (v) all deferred
Taxes.

          "Default" means any condition or event which constitutes an Event of
           -------
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.

          "Effective Date" means the date on which this Agreement becomes
           --------------
effective in accordance with Section 8.6.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
           -----
amended or any similar successor law.

          "ESOP Loan" has the meaning set forth in Section 2.1.
           ---------

          "ESOP Note" has the meaning set forth in Section 2.2.
           ---------

          "ESOP Pledge Agreement" means the Stock Pledge Agreement dated as of
           ---------------------
September 18, 2000 between the Borrower and the Lender, substantially in the
form of Exhibit B hereto, as such Agreement may be amended, supplemented or
modified from time to time.

          "Event of Default" has the meaning set forth in Section 7.1.
           ----------------

          "GAAP" means generally accepted accounting principles in the United
           ----
States.

          "Government" means any Federal, state or local government, authority,
           ----------
agency, court or other body, officer or entity, and any arbitrator with
authority to bind a party.

          "Lien" means, with respect to any asset, any mortgage, lien, pledge,
           ----
charge, security interest or encumbrance of any kind in respect of such asset.

          "Obligations" means (i) all amounts now or hereafter payable by the
           -----------
Borrower to the Lender under the ESOP Note, (ii) all other obligations or
liabilities now or hereafter payable by the Borrower pursuant to this Credit
Agreement or the ESOP Pledge Agreement, (iii) all obligations and liabilities
now or hereafter payable by the Borrower under, arising out of or in connection
with any documents securing the payment of the obligations referred to in
clauses (i) and (ii) above and (iv) all amounts payable under any renewals or
extensions of any of the foregoing.

          "Person" means an individual, a corporation, a partnership, a limited
           ------
liability company, a limited liability partnership, an association, a trust or
any other entity or

                                      -2-
<PAGE>

organization, including a government or political subdivision or an agency or
instrumentality thereof.

          "Plan" means the Hooker Furniture Corporation Employee Stock Ownership
           ----
Plan, as established by the Plan Document.

          "Plan Document" means the Hooker Furniture Corporation Employee Stock
           -------------
Ownership Plan, as amended and restated effective as of January 1, 2000, and as
may be amended, supplemented or modified from time to time.

          "Plan Year" means the calendar year on which the records of the Plan
           ---------
and the Borrower are kept.

          "Pledged Collateral" shall have the meaning set forth in the ESOP
           ------------------
Pledge Agreement.

          "Pledged Shares" means, at any date, those Pledged Shares (as defined
           --------------
in the ESOP Pledge Agreement) that have not been theretofore released by the
Lender to the Borrower.

          "Taxes" means any fee (including any license, filing or registration
           -----
fees), tax (including any income, gross receipts, franchise, sales, use or real,
personal, tangible or intangible property tax), interest equalization or stamp
tax, assessment, levy, impost, duty, charge or withholding of any kind or nature
whatsoever, imposed or assessed by any Government, together with any penalty,
fine or interest thereon.

          "Trust Agreement" means the Trust Agreement for the Hooker Furniture
           ---------------
Corporation Employee Stock Ownership Plan, effective as of August 1, 2000, and
as may be amended, supplemented or modified from time to time.

          "Trustee" means U.S. Trust Company, N.A., and any successor trustee or
           -------
trustees of the Borrower.

          "UCC" means at any time the Uniform Commercial Code as in effect in
           ---
the Commonwealth of Virginia; provided, however, that if the validity or
                              --------  -------
perfection of any security interest granted herein is governed by a jurisdiction
other than the Commonwealth of Virginia then, as to the validity or perfection
of such security interest, it shall mean the Uniform Commercial Code in effect
in such other jurisdiction.

          Section 1.2.  Accounting Terms and Determinations. Unless otherwise
                        -----------------------------------
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations required hereunder shall be made and all financial
statements delivered hereunder shall be prepared in accordance with GAAP as in
effect from time to time, applied on a basis consistent (except for changes
concurred in by the Borrowers' independent public accountants) with the most
recent financial statements of the Borrowers delivered to the Lender.

                                      -3-
<PAGE>

                                  ARTICLE II
                                  THE CREDIT

          Section 2.1.  Commitment to Make ESOP Loan. The Lender agrees, on the
                        ----------------------------
terms and conditions set forth in this Agreement, to make a non-recourse term
loan (the "ESOP Loan") to the Borrower on the Effective Date in the principal
amount of $22,500,000.

          Section 2.2.  The ESOP Note. The ESOP Loan shall be evidenced by, and
                        -------------
shall be repayable with interest in accordance with, a single non-recourse
promissory note substantially in the form of Exhibit A hereto and appropriately
completed (the "ESOP Note"). The Lender shall record, and prior to any transfer
of the Note shall make on the schedule forming a part thereof appropriate
notations to evidence, the date and amount of the ESOP Loan and the date and
amount of each payment of principal made by the Borrower with respect thereto;
provided, however, that any failure of the Lender to make such a notation or any
--------  -------
error therein shall not in any manner affect the obligation of the Borrower to
repay the ESOP Loan in accordance with the terms of the ESOP Note. The Borrower
hereby irrevocably authorizes the Lender to record such information and to make
such notations. Any recordation by the Lender shall constitute prima facie
                                                               ----- -----
evidence of the accuracy of the information so recorded.

          Section 2.3.  Optional Prepayments. The Borrower may prepay the ESOP
                        --------------------
Loan in whole at any time or from time to time in part on any Business Day by
paying the principal amount to be prepaid together with accrued interest thereon
to the date of prepayment. In the event that aggregate prepayments of principal
of the ESOP Loan during any calendar year exceed $600,000, the amount of such
prepayments exceeding $600,000 shall be applied to the principal installments of
the ESOP Loan in the inverse order of their maturities.

          Section 2.4.  Mandatory Prepayments. On September 30 of each year,
                        ---------------------
commencing with September 30, 2001, the Borrower shall repay, and there shall
become immediately due and payable, a principal amount of the ESOP Loan
(together with accrued but unpaid interest thereon) equal to the amount, if any,
by which $600,000 exceeds the aggregate amount of any prepayments of principal
of the ESOP Loan made by the Borrower during the 12 calendar months immediately
preceding such September 30. Furthermore, the Borrower shall repay, and there
shall become immediately due and payable, on each date set forth below, a
principal amount of the ESOP Loan (together with accrued but unpaid interest
thereon) equal to the amount, if any, by which the outstanding principal amount
of the ESOP Loan on such date exceeds the amount set forth below opposite such
date:

                                      -4-
<PAGE>

          Date             Maximum Principal Outstanding
          ----             -----------------------------

    January 1, 2004                 $18,900,000

    January 1, 2008                 $15,300,000

    January 1, 2012                 $11,700,000

    January 1, 2016                 $ 8,100,000

    January 1, 2020                 $ 4,500,000

    January 1, 2024                 $   900,000

  September 1, 2025                 $         0

          Section 2.5.  General Provisions as to Payments. The Borrower shall
                        ---------------------------------
make each payment of principal of, and interest on, the ESOP Loan not later than
11:00 A.M. (Eastern Time) on the date when due, in Federal or other funds
immediately available in Martinsville, Virginia, to the Lender at the Lender's
address specified in Section 8.1. Whenever any payment of principal of, or
interest on, the ESOP Loan shall be due on a day which is not a Business Day,
the date for payment thereof shall be extended to the next succeeding Business
Day. If the date for any payment of principal is extended by reason of this
Agreement, by operation of law or otherwise, interest thereon shall be payable
for such extended time.

          Section 2.6.  Computation of Interest. Interest on the ESOP Loan
                        -----------------------
shall be computed on the basis of a year of 360 days consisting of 12 months of
30 days each.

          Section 2.7.  Non-Recourse Liability.  The Lender shall have no
                        ----------------------
recourse against the Trustee on account of the ESOP Loan, and the Trustee shall
have no personal liability with respect to any obligation hereunder or with
respect to the representations and warranties or covenants contained herein. The
Lender shall have no recourse to the Borrower except to the extent of the
Pledged Collateral and shall have no right to any assets of the Borrower other
than the Pledged Collateral.

                                  ARTICLE III
                            CONDITIONS TO ESOP LOAN

          Section 3.1.  Conditions to ESOP Loan.  The obligation of the Lender
                        -----------------------
to make the ESOP Loan is subject to the satisfaction of the following
conditions:

            (i)   the fact that no Default has occurred and is continuing or
     would result from the ESOP Loan;

                                      -5-
<PAGE>

          (ii)   the fact that the representations and warranties of the
     Borrower set forth in this Agreement and the ESOP Pledge Agreement are true
     and correct on and as of the date of the ESOP Loan, and that the Trustee
     has duly authorized the execution, delivery and performance of this
     Agreement, the ESOP Note and the ESOP Pledge Agreement;

          (iii)  the receipt by the Lender of a duly executed ESOP Note, dated
     on or before the date of the ESOP Loan, complying with the provisions of
     Section 2.2;

          (iv)   the receipt by the Lender of a duly executed copy of the ESOP
     Pledge Agreement, together with certificates representing the Pledged
     Shares, duly endorsed in blank;

          (v)    the receipt by the Lender of a certificate of the Trustee,
     dated the Effective Date, certifying that attached thereto is a true,
     correct and complete copy of the Trust Agreement as in effect on the
     Effective Date;

          (vi)   the receipt by the Lender of an opinion of Ludwig, Goldberg &
     Krenzel, counsel for the Borrower, dated the Effective Date, substantially
     in the form of Exhibit C hereto and covering such matters relating to the
     transactions contemplated hereby as the Lender may reasonably request;

          (vii)  the receipt by the Lender of certificates signed by the
     Trustee, dated the Effective Date, to the effect set forth in clauses (i)
     and (ii) of this Section 3.1;

          (viii) each document (including, without limitation, any UCC financing
     statements) required by law or reasonably requested by the Lender to be
     filed, registered or recorded in order to create in favor of the Lender a
     perfected first priority security interest in the Pledged Collateral shall
     have been properly filed, registered or recorded in each jurisdiction in
     which the filing, registration or recordation thereof is so required or
     requested, and the Lender shall have received an acknowledgment copy, or
     other evidence satisfactory to it, of each such filing, registration or
     recordation;

          (ix)   the receipt by the Lender of a certificate signed by the
     Trustee to the effect that the ESOP Loan is in the interests of, and is
     being made for the exclusive purpose of providing benefits to participants
     and beneficiaries in the Plan;

          (x)    the receipt by the Lender of all documents it may reasonably
     request relating to the existence of the Borrower and the Trustee's
     authority to execute, deliver and

                                      -6-
<PAGE>

     perform, as applicable, this Agreement, the ESOP Note and the ESOP Pledge
     Agreement and the validity of this Agreement, the ESOP Note and the ESOP
     Pledge Agreement and any other matters relevant hereto or thereto, all in
     form and substance satisfactory to the Lender.

The documents and opinions referred to in this Section 3.1 shall be in form and
substance satisfactory to the Lender.

                                  ARTICLE IV
                        REPRESENTATIONS AND WARRANTIES

          The Borrower represents and warrants that:

          Section 4.1.  Qualified Plan. The Plan is intended to be a qualified
                        --------------
plan under section 401(a) of the Code and, to the extent applicable, sections
409 and 4975(e)(7) of the Code. The Borrower is not aware of any fact or
circumstance that will adversely affect the qualification of the Plan under
sections 401(a), 409 and 4975(e)(7) of the Code or the qualification of the
Borrower under section 501(a) of the Code.

          Section 4.2.  Authorization and Contravention. The execution, delivery
                        -------------------------------
and performance by the Borrower of this Agreement, the ESOP Note and the ESOP
Pledge Agreement are within its power, have been duly authorized by all
necessary action, require no action by or in respect of, or filing with, any
Government (other than the filing of a request for a determination letter from
the Internal Revenue Service to the effect that the Plan is a qualified plan
under sections 401(a), 409 and 4975(e)(7) of the Code and that the Borrower is a
tax-exempt trust under section 501(a) of the Code) and do not contravene, or
constitute (with or without the giving of notice or lapse of time or both) a
default under, any provision of ERISA or the Code (or any regulations or rulings
thereunder), the Plan Document or the Trust Agreement or of any agreement,
judgment, injunction, order, decree or other instrument binding upon or
affecting the Borrower or result in the creation or imposition of any lien
(other than the lien of the ESOP Pledge Agreement) on any of its assets.

          Section 4.3.  Binding Effect. This Agreement and the ESOP Pledge
                        --------------
Agreement constitute valid and binding agreements of the Borrower, and the ESOP
Note, when executed and delivered in accordance with this Agreement, will
constitute a valid and binding obligation of the Borrower, in each case
enforceable against the Borrower in accordance with its terms, except as (i) the
enforceability hereof and thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by ERISA
and the Code and by equitable principles of general applicability.

                                      -7-
<PAGE>

          Section 4.4.  Litigation. The Borrower is not aware of any action,
                        ----------
suit or proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, the Borrower before any Government in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the Borrower or which in any manner draws into question the
validity of this Agreement, the ESOP Note or the ESOP Pledge Agreement.

          Section 4.5.  Filings. All actions by or in respect of, and all
                        -------
filings with, any Government required in connection with the execution, delivery
and performance of this Agreement, the ESOP Note and the ESOP Pledge Agreement,
or necessary for the validity or enforceability hereof and thereof or for the
protection or perfection of the rights and interests of the Lender hereunder and
thereunder, other than the filing of a request for a determination letter from
the Internal Revenue Service to the effect that the Plan is a qualified plan
under sections 401(a), 409 and 4975(e)(7) of the Code and that the Borrower is a
tax-exempt trust under section 501(a) of the Code, will, prior to the date of
delivery hereof or thereof, have been duly taken or made, as the case may be,
and will at all times thereafter remain in full force and effect.

          Section 4.6.  Use of Proceeds. The Borrower intends to use the
                        ---------------
proceeds of the ESOP Loan exclusively to acquire the Common Shares. The proceeds
of the ESOP Loan will not be used by the Borrower, directly or indirectly, for
the purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any indebtedness that was originally incurred to purchase
or carry margin stock or for any other purpose that might constitute the ESOP
Loan a "purpose credit" within the meaning of Regulation U or Regulation X of
the Board of Governors of the Federal Reserve System. The ESOP Loan will qualify
as an exempt loan under section 4975(d) of the Code (or any successor section
thereto), Section 54.4975-7 of the United States Treasury Regulations (or any
successor section thereto) and Section 408(e) of ERISA (or any successor section
thereto) upon the purchase by the Borrower of the Common Shares with the
proceeds of the ESOP Loan.

                                   ARTICLE V
                             COVENANTS OF BORROWER

          The Borrower agrees that so long as any amount payable hereunder or
under the ESOP Note remains unpaid:

          Section 5.1.  Operation and Administration. The Plan will at all times
                        ----------------------------
operate and be administered as a qualified plan under section 401(a) of the Code
and, to the extent applicable, sections 409 and 4975(e)(7) of the Code, and in
material compliance with all applicable requirements of ERISA (including Titles
I and II) and the Code, and all applicable regulations thereunder, as may from
time to time be in effect.

                                      -8-
<PAGE>

          Section 5.2.  Reports. The Borrower will deliver or cause to be
                        -------
delivered to the Lender copies of (i) the Trustee's annual return (Form 5500
Series) and (ii) such other information as the Lender may from time to time
reasonably request.

          Section 5.3.  Notices. The Borrower will promptly notify the Lender if
                        -------
a Default or an Event of Default shall occur.

          Section 5.4.  Use of Proceeds. The Borrower will use the proceeds of
                        ---------------
the ESOP Loan exclusively to acquire the Common Shares.

          Section 5.5.  Compliance with Laws. The Borrower will comply in all
                        --------------------
material respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation, ERISA,
the Code and the rules and regulations thereunder) with respect to its operation
and administration.

          Section 5.6.  Exempt Loan. The Borrower will take all reasonable steps
                        -----------
necessary to insure that the ESOP Loan qualifies as an "exempt loan" under
section 4975(d) of the Code, Section 54.4975-7 of the United States Treasury
Regulations and Section 408(e) of ERISA.

          Section 5.7.  Independence of Covenants. All covenants contained
                        -------------------------
herein shall be given independent effect. If a particular action or condition is
not permitted by any of such covenants, the fact that such action or condition
would be permitted by an exception to, or otherwise be within the limitations
of, another covenant shall not avoid the occurrence of a Default if such action
is taken or such condition exists.

                                  ARTICLE VI
                              COVENANTS OF LENDER

          The Lender agrees that so long as any amount payable hereunder or
under the ESOP Note remains unpaid:

          Section 6.1.  Operation and Administration. The Lender will at all
                        ----------------------------
times operate and administer the ESOP as a qualified plan under section 401(a)
of the Code and, to the extent applicable, sections 409 and 4975(e)(7) of the
Code, and in material compliance with all applicable requirements of ERISA
(including Titles I and II) and the Code, and all applicable regulations
thereunder, as may from time to time be in effect.

          Section 6.2.  Reports. The Lender will file the annual report (Form
                        -------
5500 Series) for the Plan.

          Section 6.3.  Compliance with Laws. In connection with the Plan, the
                        --------------------
Lender will comply in all material respects with all applicable laws,
ordinances, rules, regulations, and

                                      -9-
<PAGE>

requirements of governmental authorities (including, without limitation, ERISA
and the rules and regulations thereunder) with respect to its operation and
administration.

          Section 6.4.  Exempt Loan.  The Lender will take all reasonable steps
                        -----------
necessary to insure that the ESOP Loan qualifies as an exempt loan under section
4975(d) of the Code (or any successor section thereto), Section 54.4975-7 of the
United States Treasury Regulations (or any successor section thereto) and
Section 408(e) of ERISA (or any successor section thereto).

          Section 6.5.  Determination Letter. The Lender will take all
                        --------------------
reasonable steps necessary to obtain a determination letter from the Internal
Revenue Service to the effect that the Plan is a qualified plan under sections
401(a) and 4975(e)(7) of the Code and that the Borrower is a tax-exempt trust
under section 501(a) of the Code (or any successor sections thereto), including
the filing of retroactive amendments under section 401(b) of the Code (or any
successor section thereto) or Section 54.4975-11(a)(4) of the United States
Treasury Regulations (or any successor section thereto.

                                  ARTICLE VII
                                   DEFAULTS

          Section 7.1.  Events of Default. If one or more of the following
                        -----------------
events ("Events of Default") shall have occurred and be continuing:

           (i)   the Borrower shall fail to pay when due or within five Business
     Days thereafter any principal of or interest on the ESOP Loan or any other
     amount payable hereunder or under the ESOP Note after amounts have been
     contributed to the Borrower by the Lender pursuant to the Plan or dividends
     have been paid on common stock of the Lender held by the Borrower that are
     eligible under the Plan for payment hereunder or under the ESOP Note;

           (ii)  the Borrower shall fail to observe or perform any covenant or
     agreement contained in this Agreement (other than those covered in clause
     (i) above) for 30 days after written notice thereof has been given to the
     Borrower by the Lender (or for such longer period as may be agreed to by
     the Lender in writing);

           (iii) any representation, warranty, certification or statement made
     by the Borrower in this Agreement or the ESOP Pledge Agreement or in any
     certificate, financial statement or other document delivered pursuant
     hereto or thereto (collectively, the "Documents") shall prove to have been
     incorrect in any material respect at the time such documents were
     delivered;

                                      -10-
<PAGE>

           (iv)  the Borrower shall fail to make any payment in respect of any
     Debt (other than the ESOP Note) when due or within any applicable grace
     period; provided, however, that any failure to make any payment in respect
             --------  -------
     of any such Debt as to which no grace period is provided shall not
     constitute an Event of Default until seven days after such payment was due;

           (v)   (A) the ESOP Pledge Agreement shall cease for any reason to be
     in full force and effect or shall cease to be effective to grant a
     perfected security interest in the Pledged Collateral with the priority
     stated to be created thereby or such security interest shall cease to be in
     full force and effect or shall be declared null and void, or the validity
     or enforceability of such security interest or the ESOP Pledge Agreement
     shall be contested by the Borrower, or the Borrower shall deny that it has
     any further liability or obligation under the ESOP Pledge Agreement, or the
     Borrower shall fail to perform any of its obligations under the ESOP Pledge
     Agreement, or (B) any creditor of the Borrower shall obtain possession of
     any of the Pledged Collateral by any means, including, without limitation,
     levy, distraint, replevin or self-help, or any such creditor shall
     establish or obtain any right in the Pledged Collateral which is equal to
     or senior to the security interest of the Lender in the Pledged Collateral;
     or

           (vi)  the Lender shall allege in writing that one or more Events of
     Default have occurred and the Borrower shall have failed, after 30 days'
     notice thereof from the Lender, to provide reasonably satisfactory evidence
     to the Lender that such Events of Default have not in fact occurred;

then, and in every such event, the Lender may, at its option, by notice to the
Borrower, declare the ESOP Note (together with accrued interest thereon) to be
immediately due and payable (and the ESOP Note shall thereupon become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower).

          Section 7.2.  Limitation on Default. Notwithstanding Section 7.1, upon
                        ---------------------
the occurrence of an Event of Default, the value of the Borrower's assets
transferred in satisfaction of the ESOP Loan may not exceed the amount due by
reason of the Default, and if the holder of the ESOP Note is a "disqualified
person" (within the meaning of section 4975(e)(2) of the Code or any successor
section thereto) there shall be no acceleration of payments not yet due from the
Borrower and a transfer of the Borrower's assets in such event shall be
permitted only upon and to the extent of the failure of the Borrower to meet the
payment schedule of the ESOP Loan and only to the extent permitted under Section
2.7.

                                      -11-
<PAGE>

                                 ARTICLE VIII
                                 MISCELLANEOUS

          Section 8.1.  Notices. All notices, requests and other communications
                        -------
to a party hereunder shall be in writing and shall be given to such party at its
address set forth on the signature page hereof or such other address as such
party may hereafter specify for that purpose by notice to the other. Each such
notice, request or other communication shall be effective (i) if given by mail,
48 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (ii) if given by any other means,
when delivered at the address specified in this Section 8.1.

          Section 8.2.  No Waivers. No failure or delay by the Lender in
                        ----------
exercising any right, power or privilege hereunder or under the ESOP Note shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.

          Section 8.3.  Amendments and Waivers. Any provision of this Agreement
                        ----------------------
or of the ESOP Note may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Lender.

          Section 8.4.  Successors and Assigns. The provisions of this Agreement
                        ----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of the Lender. The Lender may at any time sell, assign,
transfer, grant participations in or otherwise dispose of all or any portion of
the indebtedness incurred by the Borrower under this Agreement and evidenced by
the ESOP Note. The Lender may furnish any information concerning the Borrower in
its possession from time to time to assignees and participants (including
prospective assignees and participants).

          Section 8.5.  Governing Law. This Agreement and the ESOP Note shall be
                        -------------
deemed to be contracts made under seal and shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia, except as otherwise
provided herein.

          Section 8.6.  Counterparts; Effectiveness. This Agreement may be
                        ---------------------------
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when the Lender shall have
received counterparts hereof signed by all of the parties.

                                      -12-
<PAGE>

          Section 8.7.  Entire Agreement. This Agreement, the ESOP Note and the
                        ----------------
ESOP Pledge Agreement set forth the entire agreement of the parties with respect
to the subject matter hereof and thereof and supersede all previous
understandings, written or oral, in respect thereof.

                           [SIGNATURE PAGE FOLLOWS]

                                      -13-
<PAGE>

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

                                          HOOKER FURNITURE CORPORATION
                                          EMPLOYEE STOCK OWNERSHIP PLAN TRUST

                                          By: U.S. TRUST COMPANY, N.A.,
                                              as Trustee

                                          By: /s/ Michael E. Shea
                                              ------------------------
                                              Name: Michael E. Shea
                                              Title: Sr. Vice President

                                          600 Fourteenth Street, N.W.
                                          Suite 400
                                          Washington, D.C. 20005

                                          HOOKER FURNITURE CORPORATION

                                          By: /S/ Paul B. Toms, Jr.
                                              --------------------------
                                              Paul B. Toms, Jr.
                                              President

                                          440 East Commonwealth Boulevard
                                          Martinsville, Virginia 24112

                                      -14-
<PAGE>

                         NON-RECOURSE PROMISSORY NOTE

                                                              September 18, 2000

          For value received, the HOOKER FURNITURE CORPORATION EMPLOYEE STOCK
OWNERSHIP PLAN TRUST, a trust established under the Hooker Furniture Corporation
Employee Stock Ownership Plan (the "Borrower"), promises to pay to the order of
HOOKER FURNITURE CORPORATION, a Virginia corporation (the "Lender"), the
principal sum of $22,500,000 (the "Loan") in installments as hereinafter
provided.  The Borrower promises to pay interest on the aggregate unpaid
principal amount of the Loan for each day from the date hereof until paid,
quarterly on each January 1, April 1, July 1 and October 1, commencing on
January 1, 2001, at 8.00% per annum; provided, however, that any principal and,
                                     --------  -------
to the extent permitted by law, any interest on the Loan not paid when due or
within 5 days thereafter shall thereafter bear interest for each day until paid
at 9.00% per annum. Interest on the Loan shall be computed on the basis of a
year of 360 days consisting of 12 months of 30 days each. All payments of
principal and interest shall be made in lawful money of the United States not
later than 11:00 A.M. (Eastern Time) on the date when due, in Federal or other
funds immediately available in Martinsville, Virginia, to the Lender at 440 East
Commonwealth Boulevard, Martinsville, Virginia 24112.

          The Lender shall record, and prior to any transfer of this promissory
note shall indorse on the schedule forming a part hereof appropriate notations
to evidence, the date and amount of the Loan and the date and amount of each
payment of principal made by the Borrower with respect thereto.  The Borrower
hereby irrevocably authorizes the Lender so to indorse this promissory note and
to attach to and make a part of this promissory note a continuation of such
schedule as and when required; provided, however, that the failure of the Lender
                               --------  -------
to make such a notation or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loan in accordance with the terms
hereof.  Any recordation by the Lender shall constitute prima facie evidence of
                                                        ----- -----
the accuracy of the information so recorded.

          This promissory note and the obligations evidenced hereby are without
recourse to the Borrower and the Trustee of the Borrower, and the Trustee of the
Borrower shall have no personal liability with respect hereto and no holder
hereof
<PAGE>

shall have any right to assets of the Borrower except as provided in the Credit
Agreement dated as of September 18, 2000 between the Borrower and the Lender
(the "Credit Agreement"). The Borrower shall have no obligation to make any
payment hereunder except as provided in Section 2.7 of the Credit Agreement.

          The Borrower hereby waives diligence, presentment, protest, notice of
default, dishonor or nonpayment and any other notice and all demands whatsoever
as set forth in the Credit Agreement.

          This promissory note is the ESOP Note referred to in, and is entitled
to the benefits of, the Credit Agreement. Terms defined in the Credit Agreement
are used herein with the same meanings. Reference is made to the Credit
Agreement for provisions for the repayment and prepayment hereof and the
acceleration of the maturity hereof.

                                            HOOKER FURNITURE CORPORATION
                                            EMPLOYEE STOCK OWNERSHIP TRUST

                                            By: U.S. TRUST COMPANY, N.A.,
                                                as Trustee

                                            By: /s/ Michael E. Shea
                                                ----------------------------
                                                Name: Michael E. Shea
                                                Title: Sr. Vice President
<PAGE>

                                                                [EXECUTION COPY]

                             STOCK PLEDGE AGREEMENT

                         dated as of September 18, 2000

                                       by

                          HOOKER FURNITURE CORPORATION
                      EMPLOYEE STOCK OWNERSHIP PLAN TRUST

                                  in favor of

                          HOOKER FURNITURE CORPORATION
<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                   ARTICLE I
                                  DEFINITIONS

<S>                                                                         <C>
Section 1.1.    Definitions..............................................    1
Section 1.2.    UCC Definitions..........................................    1

                                  ARTICLE II
                             THE SECURITY INTERESTS

Section 2.1.    The Security Inerests....................................    1
Section 2.2.    Security for Obigations..................................    2
Section 2.3.    Delivery of Pleged Collateral............................    2
Section 2.4.    Scheduled Release of Collateral..........................    2
Section 2.5.    Termination of Security Interests; Release
                of Collateral............................................    2

                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

Section 3.1.    Authorization and Contravention..........................    3
Section 3.2.    Binding Effect...........................................    3
Section 3.3.    Title to Pledged Shares..................................    3
Section 3.4.    Pledged Shares...........................................    3
Section 3.5.    Validity, Perfection and Priority of Security Interests..    3

                                   ARTICLE IV
                                   COVENANTS

Section 4.1.    Filing; Further Assurances...............................    4
Section 4.2.    Liens on Pledged Collateral..............................    4
Section 4.3.    Change in Law............................................    4

                                   ARTICLE V
                       DISTRIBUTION ON COLLATERAL; VOTING
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                     <C>
Section 5.1.     Right to Receive Distributions on Pledged
                 Collateral; Voting..................................    4

                                   ARTICLE VI
                          GENERAL AUTHORITY; REMEDIES

Section 6.1.    General Authority....................................    6
Section 6.2.    UCC Rights...........................................    7
Section 6.3.    Application of Cash, Sale of Pledged
                Collateral...........................................    7
Section 6.4.    Rights of Purchasers.................................    9
Section 6.5.    Federal Securities Laws..............................    9
Section 6.6.    Other Rights of the Lender...........................   10
Section 6.7.    Waiver and Estoppel..................................   11
Section 6.8.    Application of Moneys................................   12
Section 6.9.    Limitation on Remedies...............................   12

                                  ARTICLE VII
                                 MISCELLANEOUS

Section 7.1.    Notices..............................................   12
Section 7.2.    No Waivers; Remedies Not Exclusive...................   12
Section 7.3.    Amendments and Waivers...............................   13
Section 7.4.    Successors and Assigns...............................   13
Section 7.5.    Governing Law........................................   13
Section 7.6.    Limitation by Law; Severability......................   13
Section 7.7.    Counterparts; Effectiveness..........................   14

Schedule 1    -    List of Pledged Shares
</TABLE>

                                      ii
<PAGE>

                            STOCK PLEDGE AGREEMENT

          THIS STOCK PLEDGE AGREEMENT (as amended, supplemented or modified from
time to time, this "Pledge Agreement") is dated as of September 18, 2000 and is
by the HOOKER FURNITURE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN TRUST, a trust
established under the Hooker Furniture Corporation Employee Stock Ownership Plan
(the "Pledgor"), in favor of HOOKER FURNITURE CORPORATION, a Virginia
corporation (the "Lender").

          The Pledgor proposes to enter into a Credit Agreement dated as of
September 18, 2000 (as amended, supplemented or modified from time to time and
including the agreement extending the maturity of, refinancing or otherwise
restructuring all or any portion of the obligations thereunder or under any
successor agreement, the "Credit "Agreement") with the Lender.  The Pledgor is
willing to provide collateral security for its obligations under the Credit
Agreement to induce the Lender to enter into the Credit Agreement.  Accordingly,
the parties hereto agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

          Section 1.1.  Definitions.  Terms used herein and not defined which
                        -----------
are defined in the Credit Agreement shall have for the purposes hereof the
meanings set forth therein.

          Section 1.2.  UCC Definitions.  Unless otherwise specified herein, or
                        ---------------
unless the context otherwise requires, all terms used in this Pledge Agreement
which are defined in the Uniform Commercial Code as in effect in the
Commonwealth of Virginia shall have the meanings set forth therein.

                                  ARTICLE II
                             THE SECURITY INTERESTS

          Section 2.1.  The Security Interests.  The Pledgor hereby pledges to
                        ----------------------
the Lender, and grants to the Lender a security interest in, the following (the
"Pledged Collateral"):

           (i)  the shares of the common stock of the Pledgor described on
     Schedule 1 hereto (the "Pledged Shares"), and all dividends, distributions,
     cash, instruments and other property and proceeds from time to time
     received, receivable or otherwise made upon or distributed in respect of or
     in exchange for any or all of the Pledged Shares;

          (ii)   the contributions to the Pledgor made by the Lender to enable
     the Pledgor to meet its obligations under the ESOP Note, and all earnings
     attributable to such contributions; and

<PAGE>

           (iii)  to the extent not otherwise included in the foregoing, all
     cash and non-cash proceeds thereof.

          Section 2.2.  Security for Obligations.  This Pledge Agreement secures
                        ------------------------
the payment of all of the Obligations. The security interests granted by this
Pledge Agreement are granted as security only and shall not subject the Lender
to, or transfer or in any way affect or modify, any obligation or liability of
the Pledgor with respect to any of the Pledged Collateral or any transaction in
connection therewith. Notwithstanding any other provision of this Pledge
Agreement, the Lender's rights with respect to the Pledged Collateral shall be
subject to the applicable limitations of ERISA and the Code and the rules and
regulations issued thereunder.

          Section 2.3.  Delivery of Pledged Collateral.  All certificates or
                        ------------------------------
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of the Lender pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, with signatures appropriately
guaranteed, and accompanied in each case by any required transfer tax stamps,
all in form and substance satisfactory to the Lender. The Lender shall have the
right, upon the occurrence of an Event of Default, to cause any or all of the
Pledged Shares or other Pledged Collateral to be transferred of record into the
name of the Lender or its nominee, subject to the limitations set forth in
Section 7.2 of the Credit Agreement.

          Section 2.4.  Scheduled Release of Collateral. At the end of each Plan
                        -------------------------------
Year quarter, the Lender shall reassign and deliver to the Pledgor a portion of
the Pledged Shares, and the certificates representing such portion of the
Pledged Shares, and all dividends, distributions, cash, instruments and other
property and proceeds received by the Lender with respect to such portion of the
Pledged Shares. The number of Pledged Shares to be released at the end of a
particular Plan Year quarter shall equal: (i) the number of Pledged Shares held
at the end of such Plan Year quarter (immediately before the release of Pledged
Shares for such Plan Year quarter) multiplied by (ii) the amount of principal
and interest paid by the Pledgor on the ESOP Note during such Plan Year quarter
divided by (iii) the sum of the principal and interest to be paid by the Pledgor
on the ESOP Note for all future Plan Year quarters through September 1, 2025.

          Section 2.5.  Termination of Security Interests; Release of
                        ---------------------------------------------
Collateral. Upon the full, final and irrevocable payment and performance of all
----------
the Obligations and the termination of the Lender's commitment to make the ESOP
Loan to the Pledgor under the Credit Agreement, the security interest in the
Pledged Collateral shall terminate and all rights to the Pledged Collateral
shall revert to the Pledgor. Upon any such termination of the security interests
or any release of the

                                      -2-
<PAGE>

Pledged Collateral, the Lender will, at the Pledgor's expense, execute and
deliver to the Pledgor such documents as the Pledgor shall reasonably request to
evidence the termination of the security interests or the release of the Pledged
Collateral. Any such documents shall be without recourse to or warranty by the
Lender.

                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

          The Pledgor represents and warrants as follows:

          Section 3.1.  Authorization and Contravention.  The execution,
                        -------------------------------
delivery and performance by the Pledgor of this Pledge Agreement are within its
power, have been duly authorized by all necessary action, require no action by
or in respect of, or filing with, any Government and do not contravene, or
constitute (with or without the giving of notice or lapse of time or both) a
default under, any provision of applicable law or the Plan Document or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
or affecting the Pledgor.

          Section 3.2.   Binding Effect.  This Pledge Agreement constitutes a
                         --------------
valid and binding agreement of the Pledgor, enforceable against the Pledgor in
accordance with its terms, except as (i) the enforceability hereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.

          Section 3.3.  Title to Pledged Shares.  Upon the purchase by the
                        -----------------------
Pledgor of the Common Shares with the proceeds of the ESOP Loan, the Pledgor
will own the Pledged Shares free and clear of any Liens other than the security
interests granted hereby.

          Section 3.4.  Pledged Shares.  The Pledged Shares have been duly
                        --------------
authorized and validly issued, are fully paid and non-assessable and are not
subject to any options to purchase or similar rights of any Person. The Pledgor
is not and will not become a party to or otherwise bound by any agreement, other
than this Pledge Agreement, which restricts in any manner the rights of any
present or future holder of any of the Pledged Shares with respect thereto.

          Section 3.5.  Validity, Perfection and Priority of Security
                        ---------------------------------------------
Interests. Upon delivery to the Lender of all certificates or instruments
---------
representing or evidencing the Pledged Shares, the Lender will have a valid and
perfected security interest in the Pledged Collateral subject to no prior Lien.
No registration, recordation or filing with any Government is required in
connection with the execution or delivery of this Pledge Agreement, or necessary
for the validity or enforceability hereof or for the perfection of the security
interests of the

                                      -3-

<PAGE>

Lender granted hereby. The Pledgor has not performed any acts which might
prevent the Lender from enforcing any of the terms and conditions of this Pledge
Agreement or which would limit the Lender in any such enforcement.

                                  ARTICLE IV
                                   COVENANTS

          The Pledgor agrees that so long as the Lender is committed to make the
ESOP Loan to the Pledgor under the Credit Agreement or any Obligation remains
unpaid:

          Section 4.1.  Filing; Further Assurances.  The Pledgor will, at its
                        --------------------------
expense and in such manner and form as the Lender may require, execute, deliver,
file and record any financing statement, specific assignment or other paper and
take any other action that may be reasonably necessary or desirable, or that the
Lender may request, in order to create, preserve, perfect or validate the
security interests granted hereby or to enable the Lender to exercise and
enforce its rights hereunder with respect to any of the Pledged Collateral. To
the extent permitted by applicable law, the Pledgor hereby authorizes the Lender
to execute and file, in the name of the Pledgor or otherwise, UCC financing
statements which the Lender in its sole discretion may deem reasonably necessary
or appropriate to further perfect the security interests.

          Section 4.2.  Liens on Pledged Collateral.  The Pledgor will not sell
                        ---------------------------
or otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral or create or suffer to exist any Lien (other than security interests
in favor of the Lender) on any Pledged Collateral. The Pledgor will defend the
Pledged Collateral and the Pledgor's rights with respect thereto against, and
take such action as is necessary to remove, any Lien with respect to the Pledged
Collateral other than the security interests granted to the Lender hereunder.

          Section 4.3.  Change in Law.  The Pledgor will promptly notify the
                        -------------
Lender in writing of any change in law known to it (and will use its best
efforts to become aware of any such change in law) which (i) adversely affects
or will adversely affect the validity, perfection or priority of the security
interests in any material respect or (ii) requires or will require a material
change in the procedures to be followed in order to maintain and protect the
validity, perfection and priority of the security interests.

                                   ARTICLE V
                      DISTRIBUTIONS ON COLLATERAL; VOTING

          Section 5.1.  Right to Receive Distributions on Pledged Collateral;
                        ----------------------------------------------------
Voting.
------

                                      -4-

<PAGE>

          (a)  So long as no Event of Default shall have occurred and be
continuing:

              (i)  the Pledgor shall be entitled to exercise any and all voting
          and other consensual rights pertaining to the Pledged Collateral or
          any part thereof for any purpose not inconsistent with the terms of
          this Pledge Agreement or the Credit Agreement; provided, however,
                                                         --------  -------
          that, unless otherwise prohibited by applicable law, the Pledgor shall
          not exercise or refrain from exercising any such right if, in the
          Lender's reasonable judgment, such action would have
          a material adverse effect on the value of the Pledged Collateral or
          any part thereof, and, provided further, that, with respect to
                                 -------- -------
          extraordinary corporate matters, the Pledgor shall give the Lender at
          least five days' written notice of the manner in which it intends to
          exercise, or the reasons for refraining from exercising, any such
          right.

                    (ii) The Pledgor shall be entitled to receive and retain any
          and all dividends and other payments and distributions made upon or
          with respect to the Pledged Collateral; provided, however, that any
                                                  --------  -------
          and all

                         (1)   dividends and other distributions paid or payable
                         other than in cash in respect of, and instruments and
                         other property received, receivable or otherwise
                         distributed in respect of, or in exchange for, any
                         Pledged Collateral,

                         (2)   dividends and other distributions paid or payable
                         in cash in respect of any Pledged Collateral in
                         connection with a partial or total liquidation or
                         dissolution or in connection with a reduction or
                         capital, capital surplus or paid-in-surplus, and

                         (3)  cash paid, payable or otherwise distributed in
                         respect of principal of, in redemption of, or in
                         exchange for, any Pledged Collateral, shall be, and
                         shall be forthwith delivered to the Lender to hold as
                         Pledged Collateral or to pay amounts owing under the
                         ESOP Note and shall, if received by the Pledgor, be
                         received in trust for the benefit of the Lender, be
                         segregated from the other property or funds of the
                         Pledgor and be forthwith delivered to the Lender as
                         Pledged Collateral in the same form as so received
                         (with any necessary endorsement).

               (iii)     The Lender shall execute and deliver (or cause to be
          executed and delivered) to the Pledgor all such proxies, powers of
          attorney, consents, ratifications, waivers and other instruments as
          the Pledgor may reasonably request to enable the Pledgor to exercise
          the voting and

                                      -5-

<PAGE>

other rights which it is entitled to exercise pursuant to paragraph (i) above
and to receive the dividends which it is authorized to receive and retain
pursuant to paragraph (ii) above.

               (b)  Upon the occurrence and during the continuance of an Event
  of Default:

                    (i)  Unless otherwise prohibited by applicable law, all
          rights of the Pledgor to exercise the voting and other consensual
          rights which it would otherwise be entitled to exercise pursuant to
          paragraph 5.1(a)(i) and to receive the dividends which it would
          otherwise be authorized to receive and retain pursuant to paragraph
          5.1(a)(ii) shall cease, and all such rights shall thereupon become
          vested in the Lender which shall thereupon have the sole right to
          exercise such voting and other consensual rights and to receive and
          hold as Pledged Collateral such dividends and interest payments.

                    (ii) All dividends which are received by the Pledgor
          contrary to the provisions of paragraph 5.1(a)(i) shall be received in
          trust for the benefit of the Lender, shall be segregated from other
          funds of the Pledgor and shall be forthwith delivered to the Lender as
          Pledged Collateral in the same form as so received (with any necessary
          endorsement).

                                  ARTICLE VI
                          GENERAL AUTHORITY; REMEDIES

                    Section 6.1.  General Authority. The Pledgor hereby
                                  -----------------
irrevocably appoints the Lender and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact, in the name of
the Pledgor or its own name, for the sole use and benefit of the Lender, but at
the Pledgor's expense, at any time and from time to time, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to carry out the terms of this Pledge Agreement.
The Pledgor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.

                    Without limiting the foregoing, the Pledgor hereby gives the
Lender the power and right on its behalf, without notice to or further assent by
the Pledgor, to do the following:

          (i)    to receive, take, endorse, assign and deliver any and all
     checks, notes, drafts, acceptances, documents and other negotiable and non-
     negotiable instruments taken or received by the Pledgor as, or in
     connection with, the Pledged Collateral; and

                                      -6-

<PAGE>

          (ii)   to do, at its option, but at the expense of the Pledgor, at any
     time or from time to time, all acts and things which the Lender deems
     necessary to protect or preserve the Pledged Collateral and, upon the
     occurrence of an Event of Default, to realize upon the Pledged Collateral.

          Without limiting the foregoing, the Pledgor hereby gives the Lender
the power and right on its behalf, with the written approval of the Trustee of
the Pledgor or, upon the occurrence of an Event of Default, without notice to or
further assent by the Pledgor, to do the following:

          (i)    to demand, sue for, collect, receive and give acquittance for
     any and all monies due or to become due upon or in connection with the
     Pledged Collateral;

          (ii)   to commence, settle, compromise, compound, prosecute, defend or
     adjust any claim, suit, action or proceeding with respect to, or in
     connection with, the Pledged Collateral; and

          (iii)  to sell, transfer, assign or otherwise deal in or with the
     Pledged Collateral or any part thereof, as fully and effectually as if the
     Lender were the absolute owner thereof.

          Section 6.2.  UCC Rights.  If an Event of Default shall have occurred,
                        ----------
the Lender may in addition to all other rights and remedies granted to it in
this Pledge Agreement and in any other agreement securing, evidencing or
relating to the Obligations, exercise (i) all rights and remedies of a secured
party under the UCC (whether or not in effect in the jurisdiction where such
rights are exercised) and (ii) all other rights available to the Lender at law
or equity.

          Section 6.3.  Application of Cash; Sale of Pledged Collateral.
                        -----------------------------------------------
          (a)  The Pledgor expressly agrees that if any Event of Default shall
occur and be continuing, the Lender, without demand of performance or other
demand or notice of any kind (except the notice specified below of the time and
place of any public or private sale) to or upon the Pledgor or any other Person
(all of which demands and/or notices are hereby waived by the Pledgor), may
forthwith (i) apply the cash, if any, then held by it as collateral as specified
in Section 6.8 and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay Obligations in full, to collect, receive, appropriate and
realize upon the Pledged Collateral, and/or sell, assign, give an option or
options to purchase or otherwise dispose of an deliver the Pledged Collateral
(or contract to do so) or any part thereof in one or more parcels (which need
not be in round lots) at public or private sale, at any exchange, broker's board
or at any office of the Lender or elsewhere in such manner as is commercially

                                      -7-
<PAGE>

reasonable and, as the Lender may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Lender shall have the right
upon any such public sale, and, if the Pledged Collateral is of a type
customarily sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations, upon any such private sale or
sales, to purchase the whole or an part of the Pledged Collateral so sold, and
thereafter to hold the same, absolutely and free from any right or claim of any
kind. To the extent permitted by applicable law, the Pledgor waives all claims,
damages and demands against the Lender arising out of the foreclosure,
repossession, retention or sale of the Pledged Collateral. The Trustee shall
cooperate as necessary in any such actions as determined by the Lender.

     (b) Unless the Pledged Collateral threatens to decline speedily in value or
is a type customarily sold on a recognized market, the Lender shall give the
Pledgor five days' written notice of its intention to make any such public or
private sale or sale at a broker's board or on a securities exchange. Such
notice shall (i) in the case of a public sale, state the time and place fixed
for such sale, (ii) in the case of sale at a broker's board or on a securities
exchange, state the board or exchange at which such sale is to be made and the
day on which the Pledged Collateral, or any portion thereof being sold, will
first be offered for sale and (iii) in the case of a private sale, state the day
after which such sale may be consummated. The Lender shall not be required or
obligated to make any such sale pursuant to any such notice. The Lender may
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the same may be so adjourned. In the
case of any sale of all or any part of the Pledged Collateral on credit or for
future delivery, the Pledged Collateral so sold may be retained by the Lender
until the selling price is paid by the purchaser thereof, but the Lender shall
not incur any liability in case of the failure of such purchaser to take up and
pay for the Pledged Collateral so sold and, in the case of such failure, such
Pledged Collateral may again be sold upon like notice. The Trustee will
cooperate as necessary in any such actions as determined by the Lender.

     (c) Notwithstanding anything in this Section 6.3 to the contrary, upon the
occurrence of an Event of Default, the value of the Borrower's assets
transferred in satisfaction of the ESOP Loan may not exceed the amount due by
reason of the Default, and if the holder of the ESOP Note is a "disqualified
person" (within the meaning of section 4975(e)(2) of the Code or any successor
section thereto) there shall be no acceleration of payments not yet due from the
Borrower and a transfer of the Borrower's assets in such event shall be
permitted only upon and to the extent of the failure of the Borrower to meet the
payment schedule of the ESOP Loan.

                                      -8-
<PAGE>

          Section 6.4.  Rights of Purchasers.  Upon any sale of the Pledged
                        --------------------
Collateral (whether public or private), the Lender shall have the right to
deliver, assign and transfer to the purchaser thereof the Pledged Collateral so
sold. Each purchaser (including the Lender) at any such sale shall hold the
Pledged Collateral so sold absolutely, free from any claim or right of whatever
kind, including any equity or right of redemption of the Pledgor who, to the
extent permitted by law, hereby specifically waives all rights of redemption,
including, without limitation, any right to redeem the Pledged Collateral under
Section 9-506 of the UCC, and any right to a judicial or other stay or approval
which it has or may have under any law now existing or hereafter adopted.

          Section 6.5.  Federal Securities Laws. In view of the position of the
                        -----------------------
Pledgor in relation to the Pledged Shares, or because of other present or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time in
effect being herein called the "Federal Securities Laws") with respect to any
disposition of the Pledged Collateral permitted hereunder. The Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Lender if the Lender were to attempt to
dispose of all or any part of the Pledged Collateral, and might also limit the
extent to which or the manner in which any subsequent transferee of any Pledged
Collateral could dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting the Lender in any attempt to dispose of
all or part of the Pledged Collateral under applicable Blue Sky or other state
securities laws or similar laws analogous in purpose or effect. Under applicable
law, in the absence or an agreement to the contrary, the Lender might be held to
have certain general duties and obligations to the Pledgor to make some effort
toward obtaining a fair price even though the obligations of the Pledgor may be
discharged or reduced by the proceeds of a sale at a lesser price. The Pledgor
clearly understands that the Lender is not to have any such general duty or
obligation to the Pledgor, and the Pledgor will not attempt to hold the Lender
responsible for selling any part of the Pledged Collateral at an inadequate
price even if the Lender shall accept the first offer received or does not
approach more than one possible purchaser. Without limiting the generality of
the foregoing, the provisions of this section would apply if, for example, the
Lender were to place all or any part of the Pledged Collateral for its own
account, or if the Lender placed all or any part of the Pledged Collateral
privately with a purchaser or purchasers. Accordingly, the Pledgor expressly
agrees that the Lender is authorized, in connection with any sale of the Pledged
Collateral, if it deems it advisable so to do, (i) to restrict the prospective
bidders on or purchasers of any of the Pledged Collateral to a limited number of
sophisticated investors who will represent and agree that they are purchasing
for their own account for investment and

                                     -9-
<PAGE>

not with a view to the distribution or sale of any such Pledged Collateral, (ii)
to cause to be placed on certificates for any or all of the Pledged Collateral
or on any other securities pledged hereunder a legend to the effect that such
security has not been registered under the Federal Securities Laws and may not
be disposed of in violation of the provisions of said laws and (iii) to impose
such other limitations or conditions in connection with any such sale as the
Lender deems necessary or advisable in order to comply with the Federal
Securities Laws or any other law. The Pledgor covenants and agrees that it will
execute and deliver such documents and take such other action as the Lender
deems necessary or advisable in order to comply with the Federal Securities Laws
or any other law. The Pledgor acknowledges and agrees that such limitations may
result in prices and other terms less favorable to the seller than if such
limitations were not imposed, and, notwithstanding such limitations, agrees that
any such sale shall be deemed to have been made in a commercially reasonable
manner, it being the agreement of the Pledgor and the Lender that the provisions
of this section will apply notwithstanding the existence of a public or private
market upon which the quotations or sales prices may exceed substantially the
price at which the Lender sells. The Lender shall be under no obligation to
delay a sale of any Pledged Collateral for a period of time necessary to permit
the issuer of any securities contained therein to register such securities under
the Securities Act of 1933, or under applicable state securities laws, even if
the issuer would agree to do so.

          Section 6.6.  Other Rights of the Lender.
                        --------------------------

          (a)  The Lender (i) shall have the right and power to institute and
maintain such suits and proceedings as it may deem appropriate to protect and
enforce the rights vested in it by this Pledge Agreement and (ii) may proceed by
suit or suits at law or in equity to enforce such rights and to foreclose upon
the Pledged Collateral and to sell all or, from time to time, any of the Pledged
Collateral under the judgment or decree of a court of competent jurisdiction.

          (b)  The Lender shall, to the extent permitted by applicable law,
without notice to the Pledgor or any party claiming through the Pledgor, without
regard to the solvency or insolvency at such time of any Person then liable for
the payment of any of the Obligations, without regard to the then value of the
Pledged Collateral or any part thereof, and of the profits, revenues and other
income thereof, pending such proceedings, with such powers as the court making
such appointment shall confer, and to the entry of an order directing that the
profits, revenues and other income of the property constituting the whole or any
part of the Pledged Collateral be segregated, sequestered and impounded for the
benefit of the Lender, and the Pledgor irrevocably consents to the appointment
of such receiver or receivers and to the entry of such order.

                                     -10-
<PAGE>

          (c)  In no event shall the Lender have any duty to exercise any rights
or take any steps to preserve the rights of the Lender in the Pledged
Collateral, nor shall the Lender be liable to the Pledgor or any other Person
for any loss caused by the Lender's failure to meet any obligation imposed by
Section 9-207 of the UCC or any successor provision. Without limiting the
foregoing, the Lender shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment substantially equal to that which the
Lender accords its own property, it being understood that the Lender shall not
have any duty or responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Collateral, whether or not the Lender has or is deemed
to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Pledged Collateral.

          Section 6.7.  Waiver and Estoppel.
                        -------------------

          (a)  The Pledgor agrees, to the extent it may lawfully do so, that it
will not at any time in any manner whatsoever claim or take the benefit or
advantage of any appraisal, valuation, stay, extension, moratorium, turnover or
redemption law, or any law permitting it to direct the order in which the
Pledged Collateral shall be sold, now or at any time hereafter in force which
may delay, prevent or otherwise affect the performance or enforcement of this
Pledge Agreement, and hereby waives all benefit or advantage of all such laws.
The Pledgor covenants that it will not hinder, delay or impede the execution of
any power granted to the Lender in the Credit Agreement, the ESOP Note or this
Pledge Agreement.

          (b)  The Pledgor, to the extent it may lawfully do so, on behalf of
itself and all who claim through or under it, including without limitation any
and all subsequent creditors, vendees, assignees and lienors, waives and
releases all rights to demand or to have any marshalling of the Pledged
Collateral upon any sale, whether made under any power of sale granted herein or
pursuant to judicial proceedings or under any foreclosure or any enforcement of
this Pledge Agreement, and consents and agrees that all of the Pledged
Collateral may at any such sale be offered and sold as an entirety.

          (c)  The Pledgor waives, to the extent permitted by law, presentment,
demand, protest and any notice of any kind (except the notices expressly
required hereunder) in connection with this Pledge Agreement and any action
taken by the Lender with respect to the Pledged Collateral. The Pledgor waives
and agrees not to assert any privileges which it may acquire under Section 9-112
of the UCC.

                                     -11-
<PAGE>

          Section 6.8.  Application of Moneys.  The proceeds of any sale of, or
                        ---------------------
other realization upon, all or any part of the Pledged Collateral shall be
applied by the Lender in the following order of priority:

          first, to payment of the expenses of such sale or other realization,
          -----
     including reasonable compensation to the Lender and its agents and counsel,
     and all expenses, liabilities and advances incurred or made by the Lender,
     its agents and counsel in connection therewith or in connection with the
     care, safekeeping or otherwise of any or all of the Pledged Collateral, and
     any other unreimbursed expenses for which the Lender is to be reimbursed
     pursuant to Section 6.3;

          second, to payment of the Obligations; and
          ------

          third, any surplus then remaining shall be paid to the Pledgor, or its
          -----
     successors or assigns, or to whomsoever may be lawfully entitled to receive
     the same or as a court of competent jurisdiction may direct.

          Section 6.9.  Limitation on Remedies.  Notwithstanding any other
                        ----------------------
provisions of this Pledge Agreement to the contrary, the Lender may not take any
action with respect to the Pledged Collateral in violation of ERISA or the Code,
or the rules and regulations thereunder.

                                  ARTICLE VII
                                 MISCELLANEOUS

          Section 7.1.  Notices.  All notices, requests and other communications
                        -------
to a party hereunder shall be in writing and shall be given to such party at its
address set forth on the signature page hereof or such other address as such
party may hereafter specify for that purpose by notice to the other. Each such
notice, request or other communication shall be effective (i) if given by mail,
48 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (ii) if given by any other means,
when delivered at the address specified in this section. Rejection or refusal to
accept, or the inability to deliver because of a changed address or which no
notice was given, shall not affect the validity of notice given in accordance
with this section. Any party giving a notice, request or other communication
hereunder shall send a copy of such communication to Thomas S. Word, Jr.,
Esquire, McGuireWoods LLP, 901 East Cary Street, Richmond, Virginia 23219.

          Section 7.2.  No Waivers; Remedies Not Exclusive.
                        ----------------------------------

          (a)  No failure to delay by the Lender in exercising any right, power
or privilege under this Pledge Agreement shall operate as a waiver thereof nor
shall any single or partial

                                      -12-
<PAGE>

exercise thereof preclude any other or future exercise thereof or the exercise
of any other right, power or privilege.

          (b)  No remedy conferred upon or reserved to the Lender in this Pledge
Agreement is intended to be exclusive of any other remedy or remedies, but every
such remedy shall be cumulative and shall be in addition to every other remedy
conferred herein or now or hereafter existing at law, in equity or by statute.

          (c)  If the Lender shall have proceeded to enforce any right, remedy
or power under this Pledge Agreement and the proceeding for the enforcement
thereof shall have been discontinued or abandoned for any reason or shall have
been determined adversely to the Lender, the Pledgor and the Lender shall,
subject to any determination in such proceeding, severally and respectively be
restored to their former positions and rights under this Pledge Agreement, and
thereafter all rights, remedies and powers of the Lender shall continue as
though no such proceedings had been taken.

          (d)  All rights of action under this Pledge Agreement may be enforced
by the Lender without the possession of any instrument evidencing any Obligation
or the production thereof at any trial or other proceeding relative thereto.

          Section 7.3.  Amendments and Waivers.  Any provision of this Pledge
                        ----------------------
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Pledgor and the Lender.

          Section 7.4.  Successors and Assigns.  The provisions of this Pledge
                        ----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.

          Section 7.5.  Governing Law.  This Pledge Agreement shall be governed
                        -------------
by and construed in accordance with the laws of the Commonwealth of Virginia.

          Section 7.6.  Limitation by Law; Severability.
                        -------------------------------

          (a)  All rights, remedies and powers provided in this Pledge Agreement
may be exercised only to the extent that the exercise thereof does not violate
any applicable provision of law, and all the provisions of this Pledge Agreement
are intended to be subject to all applicable mandatory provisions of law which
may be controlling and to be limited to the extent necessary so that they will
not render this Pledge Agreement invalid, unenforceable in whole or in part, or
not entitled to be recorded, registered or filed under the provisions of any
applicable law.

          (b)  If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent

                                      -13-
<PAGE>

permitted by law, (i) the other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in favor of the
Lender in order to carry out the intentions of the parties hereto as nearly as
may be possible and (ii) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provisions in any other jurisdiction.

         Section 7.7  Counterparts; Effectiveness.  This Pledge Agreement may
                      ---------------------------
be signed in any number of Counterparts, each of which shall be an original,
with he same effect as if the signatures thereto and hereto were upon the
same instrument. This Pledge Agreement shall become effective when the Lender
shall have received counterparts hereof signed by both parties.

                            [SIGNATURE PAGE FOLLOWS]

                                      -14-
<PAGE>

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

                                   HOOKER FURNITURE CORPORATION
                                   EMPLOYEE STOCK OWNERSHIP PLAN TRUST

                                   By: U.S. TRUST COMPANY, N.A.,
                                       as Trustee

                                   By: /s/ Michael E. Shea
                                      ------------------------
                                   Name: Michael E. Shea
                                   Title: Sr. Vice President

                                   600 Fourteenth Street, N.W.
                                   Suite 400
                                   Washington, D.C. 20005

                                   HOOKER FURNITURE CORPORATION

                                   By: /s/ Paul B. Toms, Jr.
                                       ----------------------------
                                       Paul B. Toms, Jr.
                                       President

                                   440 East Commonwealth Boulevard
                                   Martinsville, Virginia  24112

                                     -15-
<PAGE>

                                   Schedule 1
                             List of Pledged Shares
                             ----------------------

Name of Issuer              Class of Stock        Certificate #      # of Shares
--------------              --------------        -------------      -----------

Hooker Furniture
 Corporation                 Common Stock           HFC 2117          1,799,894

Hooker
Furniture                    Common Stock           HFC 2134                106
Corporation

                                     -16-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00020-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00020-of-00352.parquet"}]]