Exhibit 10.1

THIS AMENDED AND RESTATED SUBORDINATED SECURED PROMISSORY NOTE (THIS “ NOTE ”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

PAYMENT AND ENFORCEMENT OF THIS NOTE, AND THE LIENS AND SECURITY INTERESTS SECURING THIS NOTE, ARE SUBORDINATED TO THE CLAIMS, LIENS AND SECURITY INTERESTS OF THE HOLDER OF SENIOR INDEBTEDNESS AS DEFINED IN, AND TO THE EXTENT PROVIDED IN, AND IS OTHERWISE SUBJECT TO THE TERMS OF, THE INTERCREDITOR AND DEBT SUBORDINATION AGREEMENT, DATED ON OR ABOUT MARCH 2, 2018, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, BY AND BETWEEN THE HOLDER OF THIS NOTE, AS JUNIOR CREDITOR, AND NORTH MILL CAPITAL LLC, AS SENIOR CREDITOR (THE “SUBORDINATION AGREEMENT”).

AMENDED AND RESTATED SUBORDINATED SECURED PROMISSORY NOTE

FOR VALUE RECEIVED, STANLEY FURNITURE COMPANY LLC (formerly known as Churchill Downs LLC), a Delaware limited liability company (“ Maker ”), hereby promises to pay to the order of HG HOLDINGS, INC. (formerly known as Stanley Furniture Company, Inc.), a Delaware corporation (“ Holder ”), on March 2, 2023 (the “ Maturity Date ”), the principal amount of Three Million Two Hundred Eight-Five Thousand Two Hundred Thirty and 74/100 Dollars ($3,285,230.74), as such principal amount may be adjusted after the date hereof pursuant to Section 2.7 of that certain Asset Purchase Agreement, dated as of November 20, 2017 (the “ Purchase Agreement ”), between Marker and Holder, to the extent not theretofore paid (such unpaid principal amount at any time, the “ Principal Amount ”), together with interest thereon calculated from the date hereof in accordance with the provisions of this Note (the unpaid amount of any such accrued interest at any time, the “ Interest Amount ” and the sum of the Principal Amount and the Interest Amount at any time, the “ Total Amount ”). Certain capitalized terms which are used and not otherwise defined in this Note are defined in Section 7 below.

1.      PAYMENT OF PRINCIPAL AND INTEREST . Subject, in each case, to the Subordination Agreement:

(a)     Subject to the imposition of the Default Rate (as defined below), interest on the Principal Amount shall accrue daily at a fixed rate of six percent (6.00%) per annum (computed on the basis of a 365 or 366 day year, as applicable, and the actual number of days elapsed), each such payment shall be due, in arrears, each such payment to be due on the last Business Day of each calendar month continuing through and including the Maturity Date.

(b)     Except as set forth otherwise herein, the Total Amount shall be payable in full on the Maturity Date; provided that the Total Amount is subject to acceleration upon the occurrence, and during the continuation, of an Event of Default as set forth below.

(c)     Maker may, at its option, prepay at any time and from time to time all or any part of the Total Amount, without premium or penalty.

(d)     No later than 30 days after delivery to Holder of the audited annual financial statements pursuant to Section 5(a) below, commencing with the delivery to Holder of the financial statements for Maker’s fiscal year ending December 31, 2018, Maker shall prepay the Principal Amount in an amount equal to Excess Cash Flow for such fiscal year.

(e)     Any amount paid to Holder by Maker in respect of this Note will be applied first , to reimburse or pay Holder for any costs and expenses relating to this Note, second , to reduce the Interest Amount and, third , to reduce the Principal Amount. All payments in cash in respect of this Note will be made by wire transfer of immediately available funds to an account designated in writing by Holder, and any payment so received after 1:00 p.m. New York time on any day will be deemed to have been received on the following Business Day. Any amount that (but for the application of this sentence) would become payable in respect of this Note on a day which is not a Business Day will instead become due and payable on the next succeeding Business Day, and interest accruing on the Principal Amount will reflect any such extension.

2.      SECURITY . As security for the payment of all the Obligations, Maker hereby grants to Holder a continuing security interest in and to all of its right, title and interest in and to the following property, whether now or hereafter owned, existing, acquired or arising and wherever now or hereafter located (collectively, the “ Collateral ”): (i) all Accounts and all Goods whose sale, lease or other disposition by Maker has given rise to Accounts and have been returned to, or repossessed or stopped in transit by, Maker; (ii) all Chattel Paper, Instruments, Documents and General Intangibles (including all patents, patent applications, trademarks, trademark applications, tradenames, trade secrets, goodwill, copyrights, copyright applications, registrations, licenses, software, franchises, customer lists, tax refund claims, claims against carriers and shippers, guarantee claims, contract rights and rights to payment of money, promissory notes, payment intangibles, security interests, security deposits and rights to indemnification); (iii) all Inventory; (iv) all Goods (other than Inventory), including Equipment and Fixtures; (v) all securities and other Investment Property; (vi) all Deposit Accounts, bank accounts and all deposits and cash; (vii) all Letter of Credit Rights; (viii) all Commercial Tort Claims; and (ix) all additions and accessions to, substitutions for, and replacements, products and Proceeds of the foregoing property, including proceeds of all insurance policies insuring the foregoing property, and all of Maker’s books and records relating to any of the foregoing. As used herein, each of “ Account ”, “ Account Debtor ”, “ Chattel Paper ”, “ Commercial Tort Claims ”, “ Deposit Accounts ”, “ Documents ”, “ Equipment ”, “ Fixtures ”, “ General Intangibles ”, “ Goods ”, “ Instruments ”, “ Inventory ”, “ Investment Property ”, “ Letter of Credit Rights ”, and “ Proceeds ” shall have the respective meanings assigned to such terms, as of the date of this Note, in the New York Uniform Commercial Code. Notwithstanding the foregoing, Collateral shall not include, and Maker shall not be deemed to have granted a security interest in, (i) any rights or interests in any license, lease, contract or agreement to which Maker is a party and all software or related goods and/or databases licensed or provided thereunder, to the extent, but only to the extent, that such a grant would, under the terms of such license, lease contract or agreement, result in a breach of the terms of, or constitute a default under, such license, lease, contract or agreement (other than to the extent that any such term would be rendered ineffective pursuant to 9-406, 9-407 or 9-408 of the Uniform Commercial Code or other applicable law), (ii) any Equipment or other assets subject to a purchase money security interest to the extent that the agreements governing the indebtedness secured by such purchase money security interest prohibits the granting of a security interest to Holder hereunder (other than to the extent that any such prohibition would be rendered ineffective pursuant to 9-406, 9-407 or 9-408 of the Uniform Commercial Code or other applicable law) or (iii) any rights or property, including any intent-to-use trademark applications, to the extent that any valid and enforceable law or regulation applicable to such rights or property prohibits the creation of a security interest in such rights or property or would otherwise result in a material loss of rights from the creation of such security interest therein (other than to the extent that any such term would be rendered ineffective pursuant to 9-406, 9-407 or 9-408 of the Uniform Commercial Code or other applicable law); provided , that, with respect to each of the foregoing clauses (i) - (iii), immediately upon the ineffectiveness, lapse or termination of any such restriction, the Collateral shall include, and Maker shall be deemed to have granted a security interest in, all such rights and interests or Equipment or other assets, as the case may be, as if such provision had never been in effect; and provided, further that, notwithstanding any such restriction, Collateral shall include the right to receive all proceeds derived from or in connection with the sale, assignment or transfer of such rights and interests. Notwithstanding the foregoing, subject to the Subordination Agreement, on and after the closing date of that certain Asset Purchase Agreement dated on or about September 6, 2018 (the “ Stone & Leigh APA ”), by and between the Maker and Stone & Leigh, LLC, a Tennessee limited liability company, pursuant to which certain Stone & Leigh and other assets will be sold, such assets transferred under the Stone & Leigh APA shall be released from the definition of “Collateral” hereunder.

By its signature hereto, Maker agrees that any time and from time to time, Maker will promptly execute and deliver all further instruments and documents, obtain such agreements from third parties, and take all further action that may be necessary or desirable, or that Holder may request, in order to create and/or maintain the validity, perfection or (subject to the Subordination Agreement) the priority of and protect any security interest granted or purported to be granted hereby. Without limiting the generality of the foregoing, Maker hereby (i) authorizes Holder to file against Maker, one or more financing, continuation or amendment statements pursuant to the Uniform Commercial Code in form and substance satisfactory to Holder, which statements will describe the Collateral as “all assets now owned or hereafter acquired”, (ii) agrees, from time to time to take such actions as may be requested by Holder to perfect the security interest of Holder with respect to that portion of the Collateral over which control may be obtained within the meaning of the Uniform Commercial Code, and (iii) agrees to execute and deliver to Holder customary short form intellectual property security agreements to be filed with the United States Patent and Trademark Office and the United States Copyright Office (and any successor office and any similar office in any state of the United State or in any other country). If Maker shall at any time hold or acquire any Commercial Tort Claim having a value in excess of $100,000, Maker shall promptly notify Holder in writing signed by Maker of the particulars thereof necessary to grant Holder a valid security interest therein and in the proceeds thereof pursuant to the Uniform Commercial Code. If Holder fails to execute and deliver any such release or other instrument promptly following such reasonable request of Maker or Senior Lender, Holder hereby irrevocably authorizes, empowers and appoints each of Maker and Senior Lender as its agent and attorney-in-fact to execute and deliver such release or other instrument.

On and after the date hereof, Maker will not, without providing at least 30 days’ prior written notice to Holder, change its legal name, identity, type of organization, jurisdiction of organization, corporate structure or location of its chief executive office.

This Note and the obligations of Maker hereunder are also guaranteed by Stanley Intermediate Holdings LLC, a Delaware limited liability company (“ Parent ”) and a wholly-owned subsidiary of Churchill Downs Holdings Ltd., a British Virgin Islands business company, and Stanley Furniture Company 2.0, LLC, a Virginia limited liability company (“ SFC 2.0 ” and together with Parent, each a “ Guarantor ” and collectively, the “ Guarantors ”), pursuant to a Guaranty, dated as of the date hereof (as amended, restated, supplemented or otherwise modified or replaced from time to time, the “ Guaranty ”), made by Parent and SFC 2.0, to Holder, and the Obligations and the Guaranty are further secured by (i) certain Membership Interests Pledge Agreements, dated as of the date hereof, between Holder and each of Parent and Maker, as applicable (as amended, restated, supplemented or otherwise modified or replaced from time to time, each, a “ Pledge ” and collectively, the “ Pledges ”), (ii) certain Security Agreements, dated as of the date hereof between Holder and each of Parent and SFC 2.0, as applicable (as amended, restated, supplemented or otherwise modified or replaced from time to time, each, a “ Security Agreement ” and collectively, the “ Security Agreements ”), and (iii) a Collateral Assignment (Security Agreement), dated as of the date hereof, between Holder and Maker (as amended, restated, supplemented or otherwise modified or replaced from time to time, the “IP Agreement”) and other collateral documents relating hereto or to any of the foregoing (such other documents, as amended, restated, supplemented or otherwise modified or replaced from time to time, together with this Note, the Pledges, the Guaranty, the Security Agreements, and the IP Agreement, each a “ Related Document ” and collectively the “ Related Documents ”).

3.      SUBORDINATION . HOLDER EXPRESSLY ACKNOWLEDGES AND AGREES THAT MAKER’S OBLIGATIONS HEREUNDER, INCLUDING THE PAYMENTS OF INTEREST, PRINCIPAL AND OTHER AMOUNTS TO BE MADE TO HOLDER PURSUANT TO THIS NOTE AND ALL OF HOLDER’S RIGHTS AND REMEDIES WITH RESPECT TO THE COLLATERAL, ARE IN EACH CASE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE SUBORDINATION AGREEMENT.

4.      REPRESENTATIONS AND WARRANTIES . Maker hereby makes the following representations and warranties:

(a)      Organization, Authority and Qualification . Maker is duly organized, validly existing and in good standing under the laws of Delaware and has all necessary power and authority to execute and deliver this Note and the other Related Documents to which Maker is a party and to perform its obligations hereunder and thereunder.

(b)      Due Authorization . The execution and delivery by Maker of this Note and the other Related Documents to which Maker is a party and the performance by Maker of its obligations hereunder and thereunder have been duly authorized by all requisite limited liability company action on the part of Maker. Each of this Note and the other Related Documents to which Maker is a party has been duly executed and delivered by Maker and constitutes a legal, valid and binding obligation of Maker, enforceable against Maker in accordance with its terms (subject to applicable law, bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors rights and remedies generally and subject, as to enforceability, to rules of law governing specific performance, injunctive relief and to general principles of equity).

(c)      No Conflict . The execution, delivery and performance by Maker of this Note and the other Related Documents to which Maker is a party does not and will not violate, conflict with or result in the breach of any provision of Maker’s organizational documents.

(d)      Purchase Agreement . Maker has made certain representations and warranties set forth in the Purchase Agreement, which are hereby incorporated by reference herein.

(e)      Solvency . The fair salable value of Maker’s assets exceeds the fair value of its liabilities. After giving effect to the transactions described in this Note, the Related Documents and the Purchase Agreement, the Maker would not be left with unreasonably small capital in relation to its business as presently conducted or as contemplated to be conducted after the transactions contemplated by the Purchase Agreement, and the Maker is not unable to pay its debts (including trade debts) as they mature.

(f)      Debt and Liens . Maker has no liabilities other than liabilities owed to Senior Lender or the Holder or other liabilities incurred in the ordinary course of business in connection with the transactions contemplated by the Purchase Agreement. Maker’s assets are not subject to liens and encumbrances other than liens in favor of Senior Lender or Holder.

5.      COVENANTS . Maker covenants and agrees that, until the Total Amount owing under this Note has been paid in full,

(a)     Maker will deliver to Holder a copy of Maker’s annual consolidated financial statements, including balance sheet, statement of income, and statement of cash flows, reviewed by independent certified public accountants acceptable to Holder no later than ninety (90) days after the end of each fiscal year of Maker,

(b)     Maker will deliver a copy of Maker’s unaudited (internally prepared) quarterly consolidated financial statements, including balance sheet, statement of income, and statement of cash flows, to Holder no later than sixty (60) days following each calendar quarter end,

(c)     Maker will not, without the prior written consent of Holder, pay, distribute or authorize any Restricted Payment, other than Restricted Payments constituting tax distributions permitted under the Senior Loan Documents (the “ Tax Distributions ”) so long as cash interest payments under this Note have been paid pursuant to the terms hereof for the shorter of the period this Note has been outstanding or the twelve-month period preceding the payment of such Tax Distributions,

(d)     Maker will not, without the prior written consent of Holder, issue any additional ownership interests in or other Equity Interests of or in Maker other than those that by their terms will be subject to the Parent Pledge,

(e)     Maker will give Holder (i) prompt written notice of any amendment, modification or waiver of the Senior Loan Documents or provisions thereof and (ii) prompt written notice following the maturity of the indebtedness under the Senior Loan Documents being accelerated for any reason, including as a result of occurrence of any event of default under the Senior Loan Documents,

(f)     Maker will maintain its legal existence and good standing in its respective jurisdiction of formation and maintain qualification in each jurisdiction in which it is required to be qualified,

(g)     Maker will incur no liabilities for borrowed money other than such liabilities owed to Senior Lender and the Holder,

(h)     Maker will grant no liens on its assets to any party other than Holder and Senior Lender,

(i)     Maker will not, without the prior written consent of Holder, (x) directly or indirectly enter into or permit to exist any transaction with any affiliate of Maker, except for transactions that are made in the ordinary course of business on fair and reasonable terms that are no less favorable to Maker than would be obtained in an arm’s length transaction with a non-affiliated person, or (y) pay, distribute or authorize any compensation or other payments to officers, directors or employees of Maker except for such amounts that are in the ordinary course of business and on fair and reasonable terms, and

(j)     Holder will have the right, while any Obligations remain outstanding hereunder, (i) to appoint a representative designated by Holder from time to time to attend all meetings of the Board of Directors of Parent as a non-voting observer; and (ii) to receive all information distributed by Parent to voting members of the Board of Directors of Parent.

6.      EVENTS OF DEFAULT AND REMEDIES . An “ Event of Default ” shall be deemed to have occurred under this Note if:

(i)     failure of Maker to make any payment when the same becomes due and payable in cash; or

(ii)     Maker shall default in the due performance or observance of any other term, covenant or agreement on its part contained in this Note and such default shall continue unremedied for fifteen (15) days from receipt by Maker of written notice thereof from Holder; or

(iii)   Maker shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code, or (vi) take any action for the purpose of effecting any of the foregoing; or

(iv)    a proceeding or case shall be commenced against Maker (other than by Holder), without its application or consent, in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of all or any substantial part of its assets, or (iii) similar relief under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and in each case such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days; or an order for relief against such Person shall be entered in an involuntary case under the Bankruptcy Code; or

(v)     a default or event of default (howsoever defined or denominated) shall occur under the Senior Loan Documents; or

(vi)    there shall occur a sale of all or substantially all of the assets of Maker or Maker shall cease to be a wholly owned subsidiary of Parent.

If any Event of Default occurs and is continuing, Holder may: (i) declare the Total Amount to be immediately due and payable; (ii) exercise all rights and remedies available to Holder under this Note, under applicable law or at equity; and (iii) exercise from time to time any default rights and remedies available to it under the Uniform Commercial Code and any other applicable law in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement; provided, however , that upon the occurrence of an actual or deemed entry of an order for relief with respect to Maker under the Bankruptcy Code, the unpaid Total Amount shall automatically become due and payable without further act of Holder. The failure of Holder at any time to exercise the foregoing rights shall not be deemed a waiver thereof. All of Holder’s rights and remedies shall be cumulative and non-exclusive to the extent permitted by applicable law. At any sale of the Collateral, if permitted by applicable law, Holder may be the purchaser of the Collateral or any part thereof and shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at such sale, to use and apply any of the Obligations as a credit on account of the purchase price of the Collateral or any part thereof payable at such sale.

Without limiting the foregoing remedies, subject to the Subordination Agreement, the portion of the Principal Amount not paid on or before the date when due hereunder and, to the extent permitted by law, accrued interest not paid or before the date when due hereunder, shall bear interest at a fixed rate of six percent (6.00%) per annum in excess of the otherwise applicable rate until the same shall be paid (the “ Default Rate ”).

7.      DEFINED TERMS . As used in this Note, the following capitalized terms have the following respective meanings:

“ Bankruptcy Code ” means the United States Bankruptcy Code of 1978, as amended from time to time, or any successor federal statute.

“ Business Day ” means a day (other than a Saturday or Sunday) on which banks generally are open in New York, New York for the conduct of substantially all of their activities.

“ EBITDA ” shall mean, on a consolidated basis for Maker, for a specified period, the sum of (a) net income (or loss) for such period (excluding extraordinary, unusual or nonrecurring gains and losses), plus (b) all interest expense for such period, plus (c) all charges against income for such period for federal, state and local taxes, plus (d) depreciation expenses for such period, plus (e) amortization expenses for such period.

“ Equity Interests ” means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, partnership or membership interests, limited liability company interests, or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person, whether voting or non-voting.

“ Excess Cash Flow ” means, for any fiscal year, on a consolidated basis for Maker, EBITDA, minus each of the following, to the extent actually paid in cash during such fiscal year, capital expenditures, taxes, dividends and distributions, interest, fees and principal payments and prepayments on this Note and other debt for borrowed money (including capitalized leases).

“ Obligations ” means the obligations of Maker with respect to the due and prompt payment of (i) the principal of and interest on this Note (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), when and as due, whether at maturity, by acceleration, or otherwise, and (ii) all other monetary obligations, including fees, costs, attorneys’ fees and disbursements (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceedings) payable pursuant to this Note or any of the other Related Documents.

“ Person ” means an individual, a partnership, a corporation, an association, a limited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

“ Restricted Payment ” means the declaration or payment by Maker of any dividend or other distribution on account of, or the repurchase, redemption or other acquisition for value of, any Equity Interests of Maker, now or hereafter outstanding.

“ Senior Lender ” means North Mill Capital LLC, a Delaware limited liability company.

“ Senior Loan Documents ” means the Loan Agreement (as defined in the Subordination Agreement) executed by Maker in favor of the Senior Lender on or about January 18, 2018, and all other “Loan Documents” (as defined in such Loan Agreement) executed in connection therewith.

“ Subordination Agreement ” has the meaning set forth in the legends on the first page of this Note.

8.      CANCELLATION . After the entire Total Amount of this Note has been paid in full, this Note will be surrendered to Maker for cancellation and will not be reissued.

9.      MISCELLANEOUS .

(a)      Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given, made or sent by delivery in person, by an internationally recognized overnight courier service, by facsimile, by registered or certified mail (postage prepaid, return receipt requested), or by electronic mail (at such e-mail addresses as a party may designate in accordance herewith) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9(a) ):

if to Holder:

HG HOLDINGS, INC.

2115 E. 7 ^th Street, Suite 101

Charlotte, North Carolina 28204

Attention: Bradley G. Garner

Email: brad@halepartnership.com

with a copy to:

MCGUIREWOODS LLP

Gateway Plaza

800 East Canal Street

Richmond, Virginia 23219

Attention: David W. Robertson

Fax: 804-698-2152

Email: drobertson@mcguirewoods.com

if to Maker:

STANLEY FURNITURE COMPANY LLC

200 North Hamilton Street, No. 200

High Point, North Carolina 27260

Attention: Walter A. Blocker

Email: walter.blocker@vntrade.vn

with a copy (which shall not constitute notice) to:

DEXTRA PARTNERS PTE. LTD.

269A South Bridge Road

Singapore 058818

Attention: Bernhard Weber

Fax: 65 6645 0470

Email: b.weber@dextrapartners.com

All notices hereunder shall be deemed to have been duly given: when received, if personally delivered or transmitted by facsimile or electronic mail; the day after it is sent; if sent for next day delivery to a domestic address by an internationally recognized overnight delivery service; and upon receipt, if sent by certified or registered mail, return receipt requested.

(b)      Assignment . This Note shall be binding upon Maker and its successors and assigns, and shall inure to the benefit of and be enforceable by any successor in interest to Holder.

(c)      Amendment . This Note may not be amended or modified except by an instrument in writing signed by, or on behalf of, Holder and Maker.

(d)      Replacement . Upon receipt of evidence reasonably satisfactory to Maker of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction of this Note, upon delivery of an unsecured indemnity agreement in such reasonable amount as Maker may determine or, in the case of any such mutilation, upon the surrender of this Note to Maker for cancellation, Maker at its expense will execute and deliver, in lieu thereof, a new Note of the same class and of like tenor, dated so that there will be no loss of interest on such lost, stolen, destroyed or mutilated Note.

(e)      Severability . Whenever possible, each provision of this Note will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Note is held to be prohibited by or invalid under applicable law, then such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Note.

(f)      Descriptive Headings; Interpretation . The descriptive headings of this Note are inserted for convenience only and do not constitute a substantive part of this Note, The use of the word “including” in this Note is by way of example rather than by limitation.

(g)      Waiver . Either Maker or Holder may (i) extend the time for the performance of any of the obligations or other acts of the other party or (ii) waive compliance with any of the agreements of the other party or conditions to such party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of either party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

(h)      Third Party Beneficiaries . This Note shall be binding upon and inure solely to the benefit of the parties hereto, their affiliates and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Note.

(i)      Currency . Unless otherwise specified in this Note, all references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder shall be made in United States dollars.

(j)      Governing Law . This Note shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed and performed entirely within the State of New York. Any judicial proceeding brought by or against Maker with respect to any of the Obligations or this Note may be brought in any court of competent jurisdiction in the State of New York, United States of America, and, by execution and delivery of this Note, Maker accepts for itself and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Note. Maker waives any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens .

(k)      Usury; Maximum Rate . Notwithstanding any other provision of this Note, Holder does not intend to charge, and Maker shall not be required to pay, any interest or other fees in excess of the maximum permitted by applicable law (the “ Maximum Rate ”). Notwithstanding any contrary provisions contained herein, (a) the Maximum Rate will be calculated on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, (b) in determining whether the interest hereunder exceeds interest at the Maximum Rate, the total amount of interest will be spread throughout the entire term of this Note until its payment in full, and (c) if Holder ever charges or receives anything of value that is deemed to be interest under applicable law, and if the occurrence of any event, including acceleration of maturity of obligations owing under this Note, should cause such interest to exceed the maximum lawful amount, any amount that exceeds interest at the Maximum Rate will be applied to the reduction of the unpaid principal balance under this Note, and if this Note is paid in full, any remaining excess will be paid to Maker.

(l)      Expenses . Maker shall reimburse Holder on demand for all costs, expenses and fees (including expenses and fees of its counsel) incurred by Holder in connection with the enforcement of Holder’s rights hereunder and under the other Transaction Documents.

(m)   Specific Waivers. Presentment and demand for payment, notice of dishonor, protest and notice of protest are hereby waived.

(n)    Repayments or Recovery . This Note shall continue to be effective or be reinstated, as the case may be, if at any time all or part of any payment of any of the Obligations is rescinded or must otherwise be returned by Holder upon the insolvency, bankruptcy or reorganization of Maker or any Guarantor or otherwise. Without limiting the generality of the foregoing, if the incurrence or payment of the Obligations by Maker or any Guarantor or the transfer to Holder of any property should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (each, a “ Voidable Transfer ”), and if Holder is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that Holder is required or elects to repay or restore, the liability of Maker automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made. The provisions of this section will be and remain effective notwithstanding the release of any of the Collateral by Holder in reliance upon such payment and any such release will be without prejudice to Holder’s rights hereunder and under any Guaranty and will be deemed to have been conditioned upon such payment having become final and irrevocable. This section shall survive the termination of this Note.

(o)     This NOTE constitutes an amendment and restatement in its entirety of the SUBORDINATED SECURED PROMISSORY NOTE, dated as of March 2, 2018, issued BY the Maker (then known as Churchill downs llc) in favor of the holder (then known as stanley furniture company, inc.) (the “prior note”), and this NOTE is in substitution and replacement of the prior Note. The execution and delivery of this NOTE and the consummation of the transactions contemplated hereby are not intended by the parties to be, and shall not constitute, a novation or an accord and satisfaction of the Prior Obligations or any other obligations owing UNDER the transaction documents. Each of the parties hereto hereby acknowledges and agrees that the promise to pay pursuant to this NOTE is not intended to, nor shall it be construed, as constituting a release of the Prior Note or any other Document relating thereto, but is intended to constitute a restatement and reconfirmation of the Prior Note. fROM AND AFTER THE DATE HEREOF, THIS NOTE SHALL BE THE “JUNIOR NOTE” REFERRED TO AND DEFINED IN THE SUBORDINATION AGREEMENT, WHICH SHALL REMAIN IN FULL FORCE AND EFFECT .

[Signature page follows]

IN WITNESS WHEREOF, Maker has caused this Note to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.

Accepted and agreed as of the date first above written:

HOLDER:

HG HOLDINGS, INC.,

formerly known as Stanley Furniture Company, Inc.,

a Delaware corporation

Signature Page to Amended and Restated Note

Exhibit 10.2

THIS SUBORDINATED SECURED PROMISSORY NOTE (THIS “ NOTE ”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

PAYMENT AND ENFORCEMENT OF THIS NOTE, AND THE LIENS AND SECURITY INTERESTS SECURING THIS NOTE, ARE SUBORDINATED TO THE CLAIMS, LIENS AND SECURITY INTERESTS OF THE HOLDER OF SENIOR INDEBTEDNESS AS DEFINED IN, AND TO THE EXTENT PROVIDED IN, AND IS OTHERWISE SUBJECT TO THE TERMS OF, THE INTERCREDITOR AND DEBT SUBORDINATION AGREEMENT, DATED ON OR ABOUT THE DATE OF THIS NOTE, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, BY AND BETWEEN THE HOLDER OF THIS NOTE, AS JUNIOR CREDITOR, AND HALE PARTNERSHIP FUND, L.P., AS SENIOR CREDITOR (THE “SUBORDINATION AGREEMENT”).

SUBORDINATED SECURED PROMISSORY NOTE

FOR VALUE RECEIVED, STONE & LEIGH, LLC, a Tennessee limited liability company (“ Maker ”), hereby promises to pay to the order of HG HOLDINGS, INC., a Delaware corporation (“ Holder ”), on March 2, 2023 (the “ Maturity Date ”), the principal amount of Four Million Four Hundred Thousand Dollars ($4,400,000), in connection with that certain Asset Purchase Agreement, dated as of September 6, 2018 (the “ Purchase Agreement ”), between Maker and Stanley Furniture Company LLC, to the extent not theretofore paid (such unpaid principal amount at any time, the “ Principal Amount ”), together with interest thereon calculated from the date hereof in accordance with the provisions of this Note (the unpaid amount of any such accrued interest at any time, the “ Interest Amount ” and the sum of the Principal Amount, the Interest Amount at any time and any other Obligations due to the Holder hereunder, the “ Total Amount ”). Certain capitalized terms which are used and not otherwise defined in this Note are defined in Section 7 below.

1.      PAYMENT OF PRINCIPAL AND INTEREST . Subject, in each case, to the Subordination Agreement:

(a)     Subject to the imposition of the Default Rate (as defined below), interest on the Principal Amount shall accrue daily at a fixed rate of ten percent (10.00%) per annum (computed on the basis of a 365 or 366 day year, as applicable, and the actual number of days elapsed), each such payment shall be due, in arrears, each such payment to be due on the last Business Day of each calendar month, commencing September 30, 2018 and continuing through and including the Maturity Date.

(b)     Except as set forth otherwise herein, the Total Amount shall be payable in full on the Maturity Date; provided that the Total Amount is subject to acceleration upon the occurrence, and during the continuation, of an Event of Default as set forth below.

(c)     Maker may, at its option, prepay at any time and from time to time all or any part of the Total Amount, without premium or penalty.

(d)     No later than 30 days after delivery to Holder of the reviewed or compiled annual financial statements pursuant to Section 5(a) below, commencing with the delivery to Holder of the financial statements for Maker’s fiscal year ending December 31, 2018, Maker shall prepay the Principal Amount in an amount equal to Excess Cash Flow for such fiscal year.

(e)     Subject to the prior payment in full of the indebtedness payable to the Senior Lender under the Senior Loan Documents, upon the consummation or occurrence of any of (i) any Asset Disposition, (ii) any Change of Control, (iii) any Casualty Event, (iv) an issuance by Maker of any Equity Interests, or (v) an issuance by Maker of any indebtedness, Maker shall immediately prepay: (A) in the case of a prepayment under clause (ii) above (a Change of Control), the Total Amount, or (B) in the case of a prepayment under clause (i), (iii), (iv) or (v) above, the amount of the net cash proceeds of such disposition or issuance, in each case in the manner set forth in Section 1(f) .

(f)     Any amount paid to Holder by Maker in respect of this Note will be applied first , to reimburse or pay Holder for any costs and expenses relating to this Note, second , to reduce the Interest Amount and, third , to reduce the Principal Amount. All payments in cash in respect of this Note will be made by wire transfer of immediately available funds to an account designated in writing by Holder, and any payment so received after 1:00 p.m. New York time on any day will be deemed to have been received on the following Business Day. Any amount that (but for the application of this sentence) would become payable in respect of this Note on a day which is not a Business Day will instead become due and payable on the next succeeding Business Day, and interest accruing on the Principal Amount will reflect any such extension.

2.      SECURITY . As security for the payment of all the Obligations, Maker hereby grants to Holder a continuing security interest in and to all of its right, title and interest in and to the following property, whether now or hereafter owned, existing, acquired or arising and wherever now or hereafter located (collectively, the “ Collateral ”): (i) all Accounts and all Goods whose sale, lease or other disposition by Maker has given rise to Accounts and have been returned to, or repossessed or stopped in transit by, Maker; (ii) all Chattel Paper, Instruments, Documents and General Intangibles (including all patents, patent applications, patent licenses, trademarks, trademark applications, trademark licenses, tradenames, trade secrets, goodwill, copyrights, copyright applications, copyright licenses, domain names, registrations, licenses, Software, franchises, customer lists, tax refund claims, claims against carriers and shippers, guarantee claims, contract rights and rights to payment of money, promissory notes, payment intangibles, security interests, security deposits and rights to indemnification); (iii) all Inventory; (iv) all Goods (other than Inventory), including Equipment and Fixtures; (v) all securities and other Investment Property; (vi) all Deposit Accounts, bank accounts and all deposits and cash and currency; (vii) all Letter of Credit Rights and Supporting Obligations; (viii) all Commercial Tort Claims set forth on Exhibit A ; (ix) all additions and accessions to, substitutions for, and replacements, products and Proceeds of the foregoing property, including proceeds of all insurance policies insuring the foregoing property, and all of Maker’s books and records relating to any of the foregoing. As used herein, each of “ Account ”, “ Account Debtor ”, “ Chattel Paper ”, “ Commercial Tort Claims ”, “ Deposit Accounts ”, “ Documents ”, “ Equipment ”, “ Fixtures ”, “ General Intangibles ”, “ Goods ”, “ Instruments ”, “ Inventory ”, “ Investment Property ”, “ Letter of Credit Rights ”, “ Proceeds ”, “ Software ” and “ Supporting Obligations ” shall have the respective meanings assigned to such terms, as of the date of this Note, in the New York Uniform Commercial Code in effect from time to time. Notwithstanding the foregoing, Collateral shall not include, and Maker shall not be deemed to have granted a security interest in, (i) any rights or interests in any license, lease, contract or agreement to which Maker is a party and all software or related goods and/or databases licensed or provided thereunder, to the extent, but only to the extent, that such a grant would, under the terms of such license, lease contract or agreement, result in a breach of the terms of, or constitute a default under, such license, lease, contract or agreement (other than to the extent that any such term would be rendered ineffective pursuant to 9-406, 9-407 or 9-408 of the Uniform Commercial Code or other applicable law), (ii) any Equipment or other assets subject to a purchase money security interest to the extent that the agreements governing the indebtedness secured by such purchase money security interest prohibits the granting of a security interest to Holder hereunder (other than to the extent that any such prohibition would be rendered ineffective pursuant to 9-406, 9-407 or 9-408 of the Uniform Commercial Code or other applicable law) or (iii) any rights or property, including any intent-to-use trademark applications, to the extent that any valid and enforceable law or regulation applicable to such rights or property prohibits the creation of a security interest in such rights or property or would otherwise result in a material loss of rights from the creation of such security interest therein (other than to the extent that any such term would be rendered ineffective pursuant to 9-406, 9-407 or 9-408 of the Uniform Commercial Code or other applicable law); provided , that, with respect to each of the foregoing clauses (i) - (iii), immediately upon the ineffectiveness, lapse or termination of any such restriction, the Collateral shall include, and Maker shall be deemed to have granted a security interest in, all such rights and interests or Equipment or other assets, as the case may be, as if such provision had never been in effect; and provided, further that, notwithstanding any such restriction, Collateral shall include the right to receive all proceeds derived from or in connection with the sale, assignment or transfer of such rights and interests.

By its signature hereto, Maker agrees that any time and from time to time, Maker will promptly execute and deliver all further instruments and documents, obtain such agreements from third parties, and take all further action that may be necessary or desirable, or that Holder may request, in order to create and/or maintain the validity, perfection or (subject to the Subordination Agreement) the priority of and protect any security interest granted or purported to be granted hereby. Without limiting the generality of the foregoing, Maker hereby (i) authorizes Holder to file against Maker, one or more financing, continuation or amendment statements pursuant to the Uniform Commercial Code in form and substance satisfactory to Holder, which statements will describe the Collateral as “all assets now owned or hereafter acquired”, (ii) agrees, from time to time to take such actions as may be requested by Holder to perfect the security interest of Holder with respect to that portion of the Collateral over which control may be obtained within the meaning of the Uniform Commercial Code, and (iii) agrees to execute and deliver to Holder customary short form intellectual property security agreements to be filed with the United States Patent and Trademark Office and the United States Copyright Office (and any successor office and any similar office in any state of the United State or in any other country). If Maker shall at any time hold or acquire any Commercial Tort Claim having a value in excess of $100,000, Maker shall promptly notify Holder in writing signed by Maker and supplement Exhibit A attached hereto, detailing the particulars thereof necessary to grant Holder a valid security interest therein and in the proceeds thereof pursuant to the Uniform Commercial Code. If Holder fails to execute and deliver any such release or other instrument promptly following such reasonable request of Maker or Senior Lender, Holder hereby irrevocably authorizes, empowers and appoints each of Maker and Senior Lender as its agent and attorney-in-fact to execute and deliver such release or other instrument.

Maker will not, without providing at least 30 days’ prior written notice to Holder, change its legal name, identity, type of organization, jurisdiction of organization, corporate structure or location of its chief executive office.

This Note and the Obligations of Maker hereunder are also secured by certain Membership Interests Pledge Agreement, dated as of the date hereof, between Holder and each holder of Equity Interests of the Maker as of the date hereof, as applicable (as amended, restated, supplemented or otherwise modified or replaced from time to time, the “ Pledge ”) and other collateral documents relating hereto or to any of the foregoing (such other documents, as amended, restated, supplemented or otherwise modified or replaced from time to time, together with this Note and the Pledge, each a “ Related Document ” and collectively the “ Related Documents ”).

3.      SUBORDINATION . HOLDER EXPRESSLY ACKNOWLEDGES AND AGREES THAT MAKER’S OBLIGATIONS HEREUNDER, INCLUDING THE PAYMENTS OF INTEREST, PRINCIPAL AND OTHER AMOUNTS TO BE MADE TO HOLDER PURSUANT TO THIS NOTE AND ALL OF HOLDER’S RIGHTS AND REMEDIES WITH RESPECT TO THE COLLATERAL, ARE IN EACH CASE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE SUBORDINATION AGREEMENT.

4.      REPRESENTATIONS AND WARRANTIES . Maker hereby makes the following representations and warranties:

(a)      Organization, Authority and Qualification . Maker is duly organized, validly existing and in good standing under the laws of Tennessee and has all necessary power and authority to execute and deliver this Note and the Related Documents to which Maker is a party and to perform its obligations hereunder and thereunder.

(b)      Due Authorization . The execution and delivery by Maker of this Note and the other Related Documents to which Maker is a party and the performance by Maker of its obligations hereunder and thereunder have been duly authorized by all requisite limited liability company action on the part of Maker. Each of this Note and the other Related Documents to which Maker is a party has been duly executed and delivered by Maker and constitutes a legal, valid and binding obligation of Maker, enforceable against Maker in accordance with its terms (subject to applicable law, bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors rights and remedies generally and subject, as to enforceability, to rules of law governing specific performance, injunctive relief and to general principles of equity).

(c)      No Conflict . The execution, delivery and performance by Maker of this Note and the other Related Documents to which Maker is a party does not and will not (i) violate, conflict with or result in the breach of any provision of Maker’s organizational documents (ii) violate any Law or Order applicable to Maker or by which any of its properties or assets may be bound; or (iii) constitute a default under any material agreement or contract by which Maker may be bound.

(d)      Purchase Agreement . Maker has made certain representations and warranties set forth in the Purchase Agreement, which are hereby incorporated by reference herein.

(e)      Solvency . The fair salable value of Maker’s assets exceeds the fair value of its liabilities. After giving effect to the transactions described in this Note, the Related Documents and the Purchase Agreement, the Maker would not be left with unreasonably small capital in relation to its business as presently conducted or as contemplated to be conducted after the transactions contemplated by the Purchase Agreement, and the Maker is not unable to pay its debts (including trade debts) as they mature.

(f)      Debt and Liens . Maker has no liabilities other than liabilities owed to Senior Lender or Holder or other liabilities incurred in the ordinary course of business in connection with the transactions contemplated by the Purchase Agreement. Maker’s assets are not subject to liens and encumbrances other than liens in favor of Senior Lender or Holder.

(g)      No Approvals . No consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other Person is required in order for the Maker to execute, deliver, or perform any of its obligations under this Note.

(h)      No Litigation . No action, suit, litigation, investigation or proceeding of, or before, any arbitrator or Governmental Authority is pending or threatened by or against Maker or any of its property or assets (i) with respect to the Note or any of the transactions contemplated hereby or (ii) that could be expected to materially adversely affect Maker’s financial condition or the ability of Maker to perform its obligations under the Note.

5.      COVENANTS . Maker covenants and agrees that, until the Total Amount owing under this Note has been paid in full,

(a)     Maker will deliver to Holder a copy of Maker’s annual consolidated financial statements, including balance sheet, statement of income, and statement of cash flows, reviewed by independent certified public accountants acceptable to Holder no later than ninety (90) days after the end of each fiscal year of Maker,

(b)     Maker will deliver a copy of Maker’s unaudited (internally prepared) quarterly consolidated financial statements, including balance sheet, statement of income, and statement of cash flows, to Holder no later than sixty (60) days following each calendar quarter end,

(c)     Each Monday, Maker will deliver to Holder weekly reports detailing the Asset Dispositions of Maker for the preceding week,

(d)      Maker will not, without the prior written consent of Holder, pay, distribute or authorize any Restricted Payment, other than Restricted Payments constituting tax distributions permitted under the Senior Loan Documents (the “ Tax Distributions ”) so long as cash interest payments under this Note have been paid pursuant to the terms hereof for the shorter of the period this Note has been outstanding or the twelve-month period preceding the payment of such Tax Distributions,

(e)     Maker will not, without the prior written consent of Holder, issue any additional ownership interests in or other Equity Interests of or in Maker other than those subject to the Pledge Agreement,

(f)     Maker will give Holder (i) prompt written notice of any amendment, modification or waiver of the Senior Loan Documents or provisions thereof and (ii) prompt written notice following the maturity of the indebtedness under the Senior Loan Documents being accelerated for any reason, including as a result of occurrence of any event of default under the Senior Loan Documents,

(g)     Maker will maintain its legal existence and good standing in its respective jurisdiction of formation and maintain qualification in each jurisdiction in which it is required to be qualified,

(h)     Maker will incur no liabilities for borrowed money other than such liabilities owed to Senior Lender and Holder,

(i)     Maker will grant no liens on its assets to any party other than Holder and Senior Lender,

(j)     Maker will not, without the prior written consent of Holder, (x) directly or indirectly enter into or permit to exist any transaction with any affiliate of Maker, except for transactions that are made in the ordinary course of business on fair and reasonable terms that are no less favorable to Maker than would be obtained in an arm’s length transaction with a non-affiliated person, or (y) pay, distribute or authorize any compensation or other payments to members, officers, directors or employees of Maker except for such amounts that are in the ordinary course of business and on fair and reasonable terms,

(k)     Holder will have the right, while any Obligations remain outstanding hereunder, (i) to appoint a representative designated by Holder from time to time to attend all meetings of the managers (or equivalent governing body) of Maker as a non-voting observer; and (ii) to receive all information distributed by Maker to voting members of the managers (or equivalent governing body) of Maker,

(l)      Maker will comply with (i) all of the terms and provisions of its organizational documents; (ii) its obligations under its material contracts and agreements; and (iii) all Laws and Orders applicable to it and its business, except where the failure to do so could be expected to materially adversely affect Maker’s financial condition or the ability of Maker to perform its obligations under the Note, and

(m)      Maker will not enter into any business, directly or indirectly, except for those businesses in which Maker is engaged on the date of this Note or that are reasonably related thereto.

6.      EVENTS OF DEFAULT AND REMEDIES . An “ Event of Default ” shall be deemed to have occurred under this Note if:

(a)      failure of Maker to make any payment on this Note when the same becomes due and payable in cash; or

(b)      any representation or warranty made or deemed made by Maker to Holder herein is incorrect on the date as of which such representation or warranty was made or deemed made, or

(c)      Maker shall default in the due performance or observance of any other term, covenant or agreement on its part contained in this Note and such default shall continue unremedied for fifteen (15) days from receipt by Maker of written notice thereof from Holder; or

(d)      Maker shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code, or (vi) take any action for the purpose of effecting any of the foregoing; or

(e)      a proceeding or case shall be commenced against Maker (other than by Holder), without its application or consent, in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of all or any substantial part of its assets, or (iii) similar relief under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and in each case such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days; or an order for relief against such Person shall be entered in an involuntary case under the Bankruptcy Code; or

(f)      a default or event of default (howsoever defined or denominated) shall occur under the Senior Loan Documents; or

(g)      one or more judgments or decrees shall be entered against Maker and all of such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within sixty (60) days from the entry thereof, or

(h)      there shall occur a Change of Control.

If any Event of Default occurs and is continuing, Holder may: (i) declare the Total Amount to be immediately due and payable; (ii) exercise all rights and remedies available to Holder under this Note, under applicable law or at equity; and (iii) exercise from time to time any default rights and remedies available to it under the Uniform Commercial Code and any other applicable law in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement; provided, however , that upon the occurrence of an actual or deemed entry of an order for relief with respect to Maker under the Bankruptcy Code, the unpaid Total Amount shall automatically become due and payable without further act of Holder. The failure of Holder at any time to exercise the foregoing rights shall not be deemed a waiver thereof. All of Holder’s rights and remedies shall be cumulative and non-exclusive to the extent permitted by applicable law. At any sale of the Collateral, if permitted by applicable law, Holder may be the purchaser of the Collateral or any part thereof and shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at such sale, to use and apply any of the Obligations as a credit on account of the purchase price of the Collateral or any part thereof payable at such sale.

Without limiting the foregoing remedies, subject to the Subordination Agreement, the portion of the Principal Amount not paid on or before the date when due hereunder and, to the extent permitted by law, accrued interest not paid or before the date when due hereunder, shall bear interest at a fixed rate of two percent (2.00%) per annum in excess of the otherwise applicable rate until the same shall be paid (the “ Default Rate ”).

7.      DEFINED TERMS . As used in this Note, the following capitalized terms have the following respective meanings:

“ Asset Disposition ” means any sale, lease, license, transfer or other disposition of any property, including, without limitation any inventory of Maker, other than property disposed of in the ordinary course or as otherwise expressly permitted in this Note.

“ Bankruptcy Code ” means the United States Bankruptcy Code of 1978, as amended from time to time, or any successor federal statute.

“ Business Day ” means a day (other than a Saturday or Sunday) on which banks generally are open in New York, New York for the conduct of substantially all of their activities.

“ Casualty Event ” means any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any property of Maker.

“ Change of Control ” means (a) Volunteer Capital Group, LLC, a Tennessee limited liability company fails to own at least 50.1% of the issued and outstanding voting and economic Equity Interests of Maker, (b) Matt Smith and/or Blake Hauk fail to own at least 50.1% of the issued and outstanding voting and economic Equity Interests of Volunteer Capital Group, LLC, a Tennessee limited liability company, (c) the consummation of a transaction or a series of related transactions, in which a “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the holders of Equity Interests of Maker as of the date hereof has become the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of Maker’s Equity Interests representing more than 50% of the total voting power of all shares of Equity Interests of Maker then outstanding and constituting voting shares of Equity Interests, or (d) the consummation of (i) any consolidation or merger of Maker pursuant to which Maker’s Equity Interests will be converted into the right to obtain cash, securities of a Person other than Maker, or other property or (ii) any sale, lease or other transfer in one transaction or a series of related transactions of all or substantially all of the consolidated assets of Maker to any other Person; provided, however, that a transaction described in clause (i) or (ii) in which the holders of Maker’s Equity Interests immediately prior to such transaction own or hold, directly or indirectly, more than 50% of the voting power of all shares of Equity Interests of the continuing or surviving corporation or the transferee, or the parent thereof, outstanding immediately after such transaction and constituting voting shares of Equity Interests shall not constitute a Change of Control.

“ EBITDA ” shall mean, on a consolidated basis for Maker, for a specified period, the sum of (a) net income (or loss) for such period (excluding extraordinary, unusual or nonrecurring gains and losses), plus (b) all interest expense for such period, plus (c) all charges against income for such period for federal, state and local taxes, plus (d) depreciation expenses for such period, plus (e) amortization expenses for such period.

“ Equity Interests ” means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, partnership or membership interests, limited liability company interests, or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person, whether voting or non-voting.

“ Excess Cash Flow ” means, for any fiscal year, on a consolidated basis for Maker, EBITDA, minus each of the following, to the extent actually paid in cash during such fiscal year, capital expenditures, taxes, dividends and distributions, interest, fees and principal payments and prepayments on this Note and other debt for borrowed money (including capitalized leases).

“ Governmental Authority ” means the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, municipal or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of, or pertaining to, government.

“ Law ” as to any Person, means any law (including common law), statute, ordinance, treaty, rule, regulation, policy or requirement of any Governmental Authority and authoritative interpretations thereon, whether now or hereafter in effect, in each case, applicable to or binding on such Person or any of its properties or to which such Person or any of its properties is subject.

“ Obligations ” means the obligations of Maker with respect to the due and prompt payment of (i) the principal of and interest on this Note (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), when and as due, whether at maturity, by acceleration, or otherwise, and (ii) all other monetary obligations, including fees, costs, attorneys’ fees and disbursements (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceedings) payable pursuant to this Note or any of the other Related Documents.

“ Order ” as to any Person, means any order, decree, judgment, writ, injunction, settlement agreement, requirement or determination of an arbitrator or a court or other Governmental Authority, in each case, applicable to or binding on such Person or any of its properties or to which such Person or any of its properties is subject.

“ Person ” means an individual, a partnership, a corporation, an association, a limited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

“ Restricted Payment ” means the declaration or payment by Maker of any dividend or other distribution on account of, or the repurchase, redemption or other acquisition for value of, any Equity Interests of Maker, now or hereafter outstanding.

“ Senior Lender ” means Hale Partnership Fund, L.P., a Delaware limited partnership, acting in its capacity as agent for certain lenders.

“ Senior Loan Documents ” means the Loan Agreement (as defined in the Subordination Agreement) executed by Maker in favor of the Senior Lender on or about the date hereof, and all other “Loan Documents” (as defined in such Loan Agreement) executed in connection therewith.

“ Subordination Agreement ” has the meaning set forth in the legends on the first page of this Note.

8.      CANCELLATION . After the entire Total Amount of this Note has been paid in full, this Note will be surrendered to Maker for cancellation and will not be reissued.

9.      MISCELLANEOUS .

(a)      Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given, made or sent by delivery in person, by an internationally recognized overnight courier service, by facsimile, by registered or certified mail (postage prepaid, return receipt requested), or by electronic mail (at such e-mail addresses as a party may designate in accordance herewith) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9(a) ):

if to Holder:

HG HOLDINGS, INC.

2115 E. 7 ^th Street, Suite 101

Charlotte, North Carolina 28204

Attention: Bradley G. Garner

Email: brad@halepartnership.com

with a copy to:

MCGUIREWOODS LLP

Gateway Plaza

800 East Canal Street

Richmond, Virginia 23219

Attention: David W. Robertson

Fax: 804-698-2152

Email: drobertson@mcguirewoods.com

if to Maker:

STONE & LEIGH, LLC

212 S. Tryon Street, Suite 1050

Charlotte, North Carolina 28202

Attention: Matt Smith

Email: matt@finleygroup.com

with a copy (which shall not constitute notice) to:

BAKER DONELSON

633 Chestnut Street, Suite 1900

Chattanooga, TN 37450

Attention: Richard B. Gossett

Email: dgossett@bakerdonelson.com

All notices hereunder shall be deemed to have been duly given: when received, if personally delivered or transmitted by facsimile or electronic mail; the day after it is sent; if sent for next day delivery to a domestic address by an internationally recognized overnight delivery service; and upon receipt, if sent by certified or registered mail, return receipt requested.

(b)      Assignment . This Note shall be binding upon Maker and its successors and assigns, and shall inure to the benefit of and be enforceable by any successor in interest to Holder.

(c)      Amendment . This Note may not be amended or modified except by an instrument in writing signed by, or on behalf of, Holder and Maker.

(d)      Replacement . Upon receipt of evidence reasonably satisfactory to Maker of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction of this Note, upon delivery of an unsecured indemnity agreement in such reasonable amount as Maker may determine or, in the case of any such mutilation, upon the surrender of this Note to Maker for cancellation, Maker at its expense will execute and deliver, in lieu thereof, a new Note of the same class and of like tenor, dated so that there will be no loss of interest on such lost, stolen, destroyed or mutilated Note.

(e)      Severability . Whenever possible, each provision of this Note will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Note is held to be prohibited by or invalid under applicable law, then such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Note.

(f)      Descriptive Headings; Interpretation . The descriptive headings of this Note are inserted for convenience only and do not constitute a substantive part of this Note, The use of the word “including” in this Note is by way of example rather than by limitation.

(g)     Waiver. Either Maker or Holder may (i) extend the time for the performance of any of the obligations or other acts of the other party or (ii) waive compliance with any of the agreements of the other party or conditions to such party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of either party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

(h)      Third Party Beneficiaries . This Note shall be binding upon and inure solely to the benefit of the parties hereto, their affiliates and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Note.

(i)      Currency . Unless otherwise specified in this Note, all references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder shall be made in United States dollars.

(j)      Governing Law . This Note shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed and performed entirely within the State of New York. Any judicial proceeding brought by or against Maker with respect to any of the Obligations or this Note may be brought in any court of competent jurisdiction in the State of New York, United States of America, and, by execution and delivery of this Note, Maker accepts for itself and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Note. Maker waives any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens .

(k)      Usury; Maximum Rate . Notwithstanding any other provision of this Note, Holder does not intend to charge, and Maker shall not be required to pay, any interest or other fees in excess of the maximum permitted by applicable law (the “ Maximum Rate ”). Notwithstanding any contrary provisions contained herein, (a) the Maximum Rate will be calculated on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, (b) in determining whether the interest hereunder exceeds interest at the Maximum Rate, the total amount of interest will be spread throughout the entire term of this Note until its payment in full, and (c) if Holder ever charges or receives anything of value that is deemed to be interest under applicable law, and if the occurrence of any event, including acceleration of maturity of obligations owing under this Note, should cause such interest to exceed the maximum lawful amount, any amount that exceeds interest at the Maximum Rate will be applied to the reduction of the unpaid principal balance under this Note, and if this Note is paid in full, any remaining excess will be paid to Maker.

(l)      Expenses . Maker shall reimburse Holder on demand for all costs, expenses and fees (including expenses and fees of its counsel) incurred by Holder in connection with the enforcement of Holder’s rights hereunder and under the other Transaction Documents.

(m)      Specific Waivers . Presentment and demand for payment, notice of dishonor, protest and notice of protest are hereby waived.

(n)      Repayments or Recovery . This Note shall continue to be effective or be reinstated, as the case may be, if at any time all or part of any payment of any of the Obligations is rescinded or must otherwise be returned by Holder upon the insolvency, bankruptcy or reorganization of Maker or any guarantor (if any) or otherwise. Without limiting the generality of the foregoing, if the incurrence or payment of the Obligations by Maker or any guarantor (if any) or the transfer to Holder of any property should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (each, a “ Voidable Transfer ”), and if Holder is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that Holder is required or elects to repay or restore, the liability of Maker automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made. The provisions of this section will be and remain effective notwithstanding the release of any of the Collateral by Holder in reliance upon such payment and any such release will be without prejudice to Holder’s rights hereunder and under any Related Document and will be deemed to have been conditioned upon such payment having become final and irrevocable. This section shall survive the termination of this Note.

[Signature page follows]

IN WITNESS WHEREOF, Maker has caused this Note to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.

Accepted and agreed as of the date first above written:

HOLDER:

HG HOLDINGS, INC.,

a Delaware corporation

S&L Note Signature Page

Exhibit 10.3

Inter Creditor and Debt Subordination Agreement

THIS INTERCREDITOR AND DEBT SUBORDINATION AGREEMENT (this “ Subordination Agreement ” ), dated September 6, 2018, between HG HOLDINGS , INC ., a Delaware corporation ( “ Junior Creditor ” ), having an address of 2115 E. 7 ^th Street, Suite 101, Charlotte, North Carolina 28204, and HALE PARTNERSHIP FUND, L.P. , a Delaware limited partnership, in its capacity as agent (in such capacity, “Fund” ) having an office at 6100 Fairview Road, Charlotte, North Carolina 28210.

RECITALS

WHEREAS , pursuant to an Asset Purchase Agreement, dated as of September 6, 2018 (as amended from time to time, the “ Purchase Agreement ”), between Stanley Furniture Company LLC, as seller (the “ Seller ”), and Stone & Leigh, LLC, a Tennessee limited liability company (the “ Borrower ” or “ Debtor ”), as buyer, Seller has sold to the Borrower certain of Seller’s assets and properties, including the Stone & Leigh tradename and inventory;

WHEREAS , as a portion of the consideration paid by the Borrower for Seller’s assets and properties sold pursuant to the Purchase Agreement, the Borrower has executed and delivered to Junior Creditor a Subordinated Secured Promissory Note, dated of even date herewith (as amended, restated or otherwise modified from time to time, the “ Junior Note ”), in the original principal amount of $4,400,000;

WHEREAS , payment of the Junior Note and the other Junior Indebtedness (as defined below) is secured by liens and security interests granted by the Debtor in substantially all of its assets and properties, including, without limitation, all of Debtor’s accounts, inventory, documents, instruments, chattel paper, general intangibles, equipment and all proceeds thereof;

WHEREAS , the Borrower has executed and delivered to Fund and other Noteholders (as defined in the Senior Note) (the “ Senior Lenders ”) party thereto a Senior Secured Promissory Note, dated as of even date herewith (as amended, restated or otherwise modified from time to time, the “ Senior Note ”), in the original principal amount of $1,702,000, which is secured by first priority senior and superior liens and security interests granted by the Debtor in favor of Fund as agent for itself and the Senior Lenders, in substantially all of its assets and properties, including, without limitation, all of Debtor’s accounts, inventory, documents, instruments, chattel paper, general intangibles, equipment and all proceeds thereof; and

WHEREAS , the Senior Lenders and Fund are unwilling to enter into the Senior Note with the Borrower and to make available the term loan credit facility thereunder to the Borrower unless (a) Junior Creditor agrees that (i) any interest of any kind Junior Creditor has in any of Debtor’s assets and properties shall be junior and subordinate to the security interests and liens to be granted to Fund for the benefit of itself and the Senior Lenders and (ii) the indebtedness of Debtor to Junior Creditor under or with respect to the Junior Note and the other Junior Indebtedness is subordinate to the indebtedness of Debtor to Senior Lenders, and (b) Junior Creditor and Fund have entered into this Subordination Agreement so as to set forth said priorities of their respective liens on assets and properties of Debtor and the indebtedness of Debtor to each of Junior Creditor and Senior Lender.

Stone & Leigh, LLC - Intercreditor and Debt Subordination Agreement

NOW THEREFORE , Junior Creditor and Fund agree as follows:

1.           Definitions . All capitalized terms used in this Subordination Agreement without definition shall have the meanings ascribed to such terms in the Senior Note. In addition to the defined terms set forth above or in the Senior Note or as otherwise provided for herein: (A) each of Junior Creditor and the Senior Lenders is sometimes referred to as a "Lender" and collectively the "Lenders" ; (B) each of Junior Creditor and the Fund is sometimes referred to as a " Party " and collectively the " Parties " ; (C) "Obligations" means the present and future liabilities of Debtor to each Lender, including, without limitation, all principal, interest, fees and expenses, whether incurred or accruing prior to or after a bankruptcy or similar insolvency proceeding of Debtor; (D) "Security Agreement" means and collectively refers to the Junior Note, Senior Note, Related Document (as defined in each of the Junior Note and Senior Note) or any loan and security agreement, security agreement, notes, instruments and all other documents executed or delivered by Debtor granting a security interest or lien in favor of Junior Creditor and Fund and any amendments, restatements, modifications or supplements thereto; (E) "Enforcement Action" means taking any action, judicial or otherwise, to collect payment on any Obligations or pursuing any other remedy with respect to the Obligations, including commencing or joining with any other junior creditor in commencing any proceeding under any bankruptcy or similar insolvency proceeding, further including, without limitation, enforcement of or foreclosure of any lien on any Collateral; (F) "Senior Indebtedness" means and include all present and future principal of and interest (including, without limitation, any post-petition interest) on all Obligations owing to the Senior Lenders evidenced by or arising under or related to the Senior Note, accruing whether or not granted or permitted in any bankruptcy or similar insolvency proceeding, and all fees, costs and expenses, including attorneys' fees, on all Obligations of Debtor to the Senior Lenders evidenced by or arising under or related to the Senior Note, whether direct or indirect, absolute or contingent, joint, several or independent, now or hereafter existing, due or to become due to, or held or to be held by the Senior Lenders, whether created directly or acquired by assignment or otherwise; (G) "Junior Indebtedness" means and includes the principal of and interest on the Junior Note and all other present and future principal of and interest and all fees, costs and expenses, including attorneys' fees, on all Obligations of Debtor to Junior Creditor evidenced by or arising under or related to the Junior Note or any of the other Purchase Documents, whether direct or indirect, absolute or contingent, joint, several or independent, now or hereafter existing, due or to become due, or held or to be held by Junior Creditor whether created directly or acquired by assignment or otherwise; and (H) “ Collateral ” means all of the assets and properties of Debtor in which Junior Creditor or Fund has or claims a security interest or lien pursuant to any Security Agreement with Debtor.

2.           Representations . Junior Creditor represents that:

(A)     As of the date hereof the total principal amount of the Junior Indebtedness is $4,600,000 which is evidenced by the Junior Note.

(B)     Junior Creditor is the unconditional owner of the Junior Indebtedness, free and clear of all liens, claims and encumbrances, and the Junior Indebtedness has not been subordinated in favor of any other party.

(C)     Junior Creditor holds no security for the Junior Indebtedness, or any guarantees of any third parties of such Junior Indebtedness, except as disclosed on Exhibit A annexed hereto.

(D)     This Subordination Agreement constitutes the valid and binding obligation of Junior Creditor and is enforceable against Junior Creditor in accordance with its terms.

3.           Subordination .

(A)     Upon the terms and subject to the provisions of this Subordination Agreement, Junior Creditor hereby subordinates the payment of the Junior Indebtedness to payment in full in cash of the Senior Indebtedness.

(B)     Upon any distribution of the assets or readjustment of indebtedness of Debtor, whether by reason of liquidation, dissolution, bankruptcy, reorganization, receivership or any other action or proceeding involving the readjustment of all or any of the Junior Indebtedness, or the application of assets of Debtor to the payment or liquidation thereof, the Senior Lenders shall be entitled to receive payment in full in cash of the Senior Indebtedness prior to the payment of all or any part of the Junior Indebtedness hereby subordinated.

(C)     In order to enable Fund to enforce its rights hereunder for the benefit of the Senior Lenders in any action or proceeding referred to in (B) above, Fund is hereby irrevocably authorized and empowered in Fund's discretion to make and present for, and on behalf of Junior Creditor, such proofs or claims against Debtor on account of the Junior Indebtedness as Fund may deem expedient or proper, and to vote such proofs or claims in any such proceedings, and to receive and collect any and all dividends or other payments or disbursements made thereon in whatever form the same may be paid or issued, and to apply same on account of the Senior Indebtedness. Further, in order to enable Fund to enforce its rights hereunder in any action or proceeding referred to in (B) above, Junior Creditor hereby appoints Fund, or its designee, attorney to take the above mentioned with full power of substitution in the premises. Junior Creditor further agrees to execute and deliver any further documents or other instruments which may be necessary or expedient to enable Fund to collect any and all dividends or other payments or disbursements which may be made at any time on account of all or any of the Junior Indebtedness or otherwise enforce its rights under this Subordination Agreement.

Stone & Leigh, LLC - Intercreditor and Debt Subordination Agreement

(D)     Junior Creditor agrees that Junior Creditor will make proper notations on the Junior Note and in Junior Creditor's books and records indicating that the Junior Indebtedness is subject to this Subordination Agreement. The Junior Note and all other evidences of indebtedness accepted by the Junior Creditor from Debtor shall contain a specific statement that the indebtedness thereby evidenced is subject to the provisions of this Subordination Agreement.

(E)     Junior Creditor hereby waives any and all notice of the creation, renewal, modification or extension of the Senior Indebtedness and acknowledges that Fund, for the benefit of itself and the Senior Lenders, shall be deemed to have relied on this Subordination Agreement when extending any credit, loaning any monies or providing any financial accommodation to Debtor or otherwise acting with respect to the occurrence of the Senior Indebtedness, now or at any time in the future, and Junior Creditor expressly waives proof of reliance by Fund upon this Subordination Agreement and waives all notice of any actions that Fund or any Senior Lender may take with respect to the Senior Indebtedness, or the acceptance by Fund of this Subordination Agreement or the extension of credit by Fund and the Senior Lenders to Debtor.

4.           Payments and Other Acts With Regard to Junior Ind ebt edness . Until satisfaction in full in cash of the Senior Indebtedness and termination of this Subordination Agreement in accordance with its terms, Junior Creditor agrees that:

(A)     Junior Creditor will not ask, demand, sue for, take or receive from Debtor any payment or distribution on account of the Junior Indebtedness (whether in cash, property or securities), including, but not limited to, by setoff or any other manner or accelerate the maturity thereof; provided , however , if and only to the extent that, immediately before and after giving pro forma effect to any payment on the Junior Indebtedness, no Event of Default shall exist or would result from the making of such payment, Debtor may pay and Junior Creditor may receive payments on the Junior Indebtedness on the due dates thereof.

(B)     Junior Creditor will not obtain, ask for or require any additional security for or any additional guaranty of the Junior Indebtedness (other than as set forth on Exhibit A annexed hereto); and

(C)     If, notwithstanding any terms of this Subordination Agreement to the contrary, Junior Creditor receives any payment or distribution on account of the Junior Indebtedness not permitted to be received under (A) above, and/or Junior Creditor receives any payment or proceeds on any accounts of Debtor or other Collateral, Junior Creditor will hold same in trust for Fund and immediately deliver same in the form received, except for the addition of any endorsement or assignment necessary to effect a transfer, to Fund for the benefit of itself and the Senior Lenders for application on account of the Senior Indebtedness. If Junior Creditor fails to endorse any instrument for the payment of money payable to it or its order, which has been turned over to Fund, Fund is hereby irrevocably constituted and appointed attorney-in-fact for the Junior Creditor with full power to make any such endorsement, and with full power of substitution. All actions taken by such attorney-in-fact as permitted by the terms of this Subordination Agreement or applicable law are hereby ratified and approved.

(D)     After all of the Senior Indebtedness has been paid in full in cash and until all of the Junior Indebtedness has been paid in full in cash, Junior Creditor shall be subrogated to the rights of Fund and the Senior Lenders to receive payments and distributions of assets with respect to the Senior Indebtedness, to the extent that distributions otherwise payable to Junior Creditor have been applied to the payment of Senior Indebtedness in accordance with the provisions of this Subordination Agreement.  As between Debtor and Junior Creditor, a distribution applied to the payment of Senior Indebtedness in accordance with the provisions of this Subordination Agreement which would otherwise have been made to Junior Creditor shall not be deemed a payment by Debtor on the Junior Indebtedness, it being understood that the subordination and other intercreditor provisions of this Subordination Agreement are intended solely for the purpose of defining the relative rights of Junior Creditor, on the one hand, and Fund, on the other hand, and nothing contained in this Subordination Agreement shall impair the obligations of Debtor, which are absolute and unconditional, to pay to Junior Creditor the Junior Indebtedness as and when the same shall become due and payable in accordance with its terms, except as such obligation is modified by the rights confirmed hereunder in favor of Fund, or affect the relative rights of Junior Creditor and the creditors of Debtor other than Fund.

5.           Priorities . Notwithstanding the terms of any Security Agreement heretofore or hereafter entered into between either Party and Debtor, or the date of the filing of any financing statements heretofore or hereafter filed by Junior Creditor or Fund against Debtor, or any other action by either Party with regard to perfection of a security interest or lien, Junior Creditor agrees that any security interest, lien, claim or right now or hereafter asserted by Junior Creditor with respect to the Collateral, shall be subject, junior and subordinate to any security interest, lien, claim or right now or hereafter asserted by Fund with respect thereto.

6.           Exercise of Rights Under Security Agreements, Notes and Other Agreements.

(A)     Junior Creditor will not take any action which interferes with the exercise of Fund's or any Senior Lender’s rights and remedies with respect to the Senior Indebtedness, or interfere with Fund's exercise of Fund's superior security interest in, or lien on, the Collateral, and specifically and without limitation, Junior Creditor will not, without the prior written consent of Fund, notify any account debtors of Debtor of Junior Creditor's security interest in the accounts of Debtor and will not notify any such account debtor to remit any payments on accounts to Junior Creditor.

(B)     If an event of default exists under the Obligations of Debtor to Junior Creditor that permits Junior Creditor to exercise any of its rights or remedies to collect the Junior Indebtedness, Junior Creditor will not take any Enforcement Action until the date the Obligations of Debtor to Fund and the Senior Lenders are indefeasibly paid and satisfied in full in cash; provided that following the acceleration of the Senior Indebtedness, Junior Creditor may accelerate the Junior Indebtedness. Any Enforcement Action by Junior Creditor shall be subject to the terms of this Subordination Agreement.

(C)     ()Each of the Lenders waives the right to require a marshalling of assets.

(D)     Each Party hereto agrees to endeavor to promptly notify the other Party if such Party declares an event of default under the Obligations of Debtor to such Party or other applicable Lenders, however the failure of any Party to so notify the other Party shall not impose any liability on the Party failing to give such notice or in any manner restrict or limit the rights and remedies of such Party.

(E)     Junior Creditor hereby agrees that, until the Obligations of Debtor to Fund and the Senior Lenders are indefeasibly paid and satisfied in full in cash, Fund may dispose of, and exercise any other rights with respect to, any or all of the Collateral, free of the lien of Junior Creditor (except to the extent of Junior Creditor’s right to any surplus over the amount necessary to pay the Obligations owing to Fund and the Senior Lenders as provided in the following proviso clause), provided that the proceeds thereof, net of disposition costs and expenses, are applied to the payment of the Senior Indebtedness and Junior Creditor retains any rights Junior Creditor may have as a junior secured creditor with respect to the surplus (if any) over the amount necessary to pay the Obligations owing to Fund and the Senior Lenders in full in cash arising from any such disposition or enforcement. Upon any disposition of any of the Collateral by Fund, or by Debtor with the consent of Fund, any and all liens of Junior Creditor in such Collateral (except to the extent of Junior Creditor’s right to any surplus over the amount necessary to pay the Obligations owing to Fund and the Senior Lenders as provided in the following proviso clause), shall be deemed to be released without further action on the part of Junior Creditor provided the proceeds of such disposition, net of disposition costs and expenses, are applied to the payment of the Senior Indebtedness, and Junior Creditor retains any rights Junior Creditor may have as a junior secured creditor with respect to the surplus (if any) over the amount necessary to pay the Obligations owing to Fund and the Senior Lenders in full in cash arising from any such disposition or enforcement. Junior Creditor agrees, if requested, to execute and/or immediately deliver any and all financing statement amendments and other documents with respect to such releases which Fund deems necessary in its discretion.

(F)      Each Party hereto agrees to give to the other Party notice of default, termination, demand, acceleration, exercise of remedies and any other notice which is of a like nature or required to be given under its respective Security Agreement with Debtor, or by law, in each case concurrently with the giving of such notice to Debtor; provided , however , that no failure of Junior Creditor or Fund to give such notice to the other Party shall affect the validity or enforcement of the subordination and other provisions of this Subordination Agreement or the relative priorities of the respective liens and security interests of Junior Creditor and Fund in the Collateral established in Section 5 hereof.

Stone & Leigh, LLC - Intercreditor and Debt Subordination Agreement

(G)      Inter c reditor Arrangements in Bankruptcy .

(i)     This Subordination Agreement shall remain in full force and effect and enforceable pursuant to its terms in accordance with Section 510(a) of the Bankruptcy Code, and all references herein to Debtor shall be deemed to apply to Debtor as debtor in possession and to any trustee in bankruptcy for the estate of Debtor.

(ii)     Except as otherwise specifically permitted in Section 6(F) or this Section 6(G), until the Obligations of Debtor to Fund and the Senior Lenders are indefeasibly paid and satisfied in full in cash, Junior Creditor shall not assert, without the written consent of Fund, any claim, motion objection, or argument in respect of any of the Collateral in connection with any insolvency or liquidation proceeding which could otherwise be asserted or raised in connection with such insolvency or liquidation proceeding by Junior Creditor as a secured creditor of Debtor, including, without limitation, any claim, motion, objection or argument seeking adequate protection or relief from the automatic stay in respect of the Collateral.

(iii)     Without limiting the generality of the foregoing, Junior Creditor agrees that, if an insolvency or liquidation proceeding occurs, (1) Fund may consent to the use of cash collateral on such terms and conditions and in such amounts as Fund and Senior Lenders, in their sole discretion, may decide without seeking or obtaining the consent of Junior Creditor as holder of a subordinate interest in the Collateral; (2) the Senior Lenders may, upon notice to Junior Creditor, (A) provide financing to Debtor, or (B) consent to the granting of a priming lien to secure postpetition financing, in each case pursuant to Section 364 of the Bankruptcy Code or other applicable law and on such terms and conditions and in such amounts as Fund and the Senior Lenders, in their sole discretion, may decide without seeking or obtaining the consent of Junior Creditor as holder of an interest in the Collateral; (3) Junior Creditor shall not oppose Debtor's use of cash collateral on the basis that Junior Creditor's interest in the Collateral is impaired by such use or inadequately protected by such use to the extent such use has been approved by Fund; (4) Junior Creditor shall not oppose any sale or other disposition of any assets comprising part of the Collateral free and clear of liens or other claims of any party, including Junior Creditor, under Section 363 of the Bankruptcy Code on the basis that Junior Creditor's interest in the Collateral is impaired by such sale or inadequately protected as a result of such sale if Fund has consented to such sale or disposition of such assets; and (5) Junior Creditor shall not vote in favor of, nor sponsor or support any plan of reorganization of Debtor, that does not propose to pay the Senior Indebtedness in full on the effective date of such plan or that is not consistent with this Subordination Agreement, absent Fund's consent to a plan that does not pay in full the Senior Indebtedness on the effective date of such plan.

(iv)     Junior Creditor agrees that it will not initiate, prosecute, encourage, or assist with any other person or entity to initiate or prosecute any claim, action or other proceeding (1) challenging the validity or enforceability of this Subordination Agreement, (2) challenging the validity or enforceability of Fund's or any Senior Lender’s claim, (3) challenging the perfection or enforceability of any liens of Fund, or (4) asserting any claims, if any, which Debtor may hold with respect to Fund or the Senior Lenders or any of the Obligations of Debtor to Fund or the Senior Lenders.

(v)     To the extent that Fund or any Senior Lender receives payments or transfers on the Obligations of Debtor to Fund or the Senior Lenders or Fund receives proceeds of the Collateral which are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver of any other party under any bankruptcy law, state or federal law, common law, or equitable cause, then, to the extent of such payment or proceeds received, the Obligations of Debtor to Fund and the Senior Lenders, or part thereof, intended to be satisfied shall be revived and continued in full force and effect as if such payments or proceeds had not been received by Fund and/or Senior Lenders.

(vi)     Subject to the provisions of this Section 6(G) above, (1) Junior Creditor shall be entitled to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of Junior Creditor, including, without limitation, any claims secured by the Collateral, if any, and (2) Junior Creditor shall be entitled to file any pleadings, objections, motions or subordination agreements which assert rights or interests available to unsecured creditors of Debtor arising under either the Bankruptcy Code or applicable non-bankruptcy law.

Stone & Leigh, LLC - Intercreditor and Debt Subordination Agreement

(vii)     Fund agrees that Fund and/or Senior Lenders will not initiate, prosecute, encourage, or assist with any other person or entity to initiate or prosecute any claim, action or other proceeding (1) challenging the validity of enforceability of this Subordination Agreement, (2) challenging the validity or enforceability of Junior Creditor's claims, (3) challenging the perfection of enforceability of any liens of Junior Creditor, or (4) asserting any claims, if any, which Debtor may hold with respect to Junior Creditor or any of the Obligations of Debtor to Junior Creditor.

7.           No Warranties . Junior Creditor and Fund have not made to each other nor do they hereby or otherwise make to each other any warranties, express or implied, nor do they assume any liability to the other Lenders with respect to: (a) Debtor or any other obligors under any instruments of guaranty; (b) the enforceability, validity, value or collectability of the Collateral held by Junior Creditor or Fund, as applicable, or any of the notes, guaranties, security agreements or subordination agreements evidencing or entered into with respect to any of the Obligations; or (c) Debtor's title or right to transfer the Collateral (or any portion thereof). Neither Junior Creditor nor Fund shall be liable to any other Lenders for any action or failure to act or any error of judgment, negligence, or mistake or oversight whatsoever on the part of such Party or such Party’s agents, officers, employees or attorneys with respect to any transaction relating to any of the notes or subordination agreements evidencing or entered into with respect to any of the Obligations or any security or guaranties therefor, provided such Party has acted in good faith and has not been guilty of gross negligence or willful misconduct.

8.           Actions b y Fund . Without impairing or releasing this Subordination Agreement, Fund and/or the Senior Lenders may at any time and from time to time, without the consent of, or notice to Junior Creditor, upon any terms or conditions and in whole or in part:

(A)     Change the manner, place or terms of payment, and/or change or extend from time to time the time of payment or renew or alter, the Senior Indebtedness or any security therefor, and this Subordination Agreement shall apply to the Senior Indebtedness as so changed, extended, renewed or altered;

(B)     Sell, exchange, release, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged, mortgaged or in which a security interest is given to secure, or howsoever securing, the Senior Indebtedness;

(C)     Exercise or refrain from exercising any rights against Debtor or any surety, endorser or guarantor or subordinator (including Junior Creditor) (each an "Obligor" ) or against security, or otherwise act or refrain from acting;

(D)     Settle or compromise the Senior Indebtedness, or any liability of any Obligor, or dispose of any security therefor, with or without consideration, or any liability incurred directly or indirectly in respect thereof;

(E)     Apply any sum by whomsoever paid or howsoever realized to the Senior Indebtedness; and

(F)     Take or refrain from taking any or all actions against Debtor, any Obligor, or any of the Collateral, whether similar or dissimilar to the foregoing.

9.          Assignment and Transfer . Each Party hereto may, from time to time, without affecting any of such Party's rights hereunder, assign or transfer any or all of the Obligations owing to such Party or any interest therein, provided that prompt written notice thereof is given to the other Party hereto, and the assignment or transfer is made expressly subject to the terms of this Subordination Agreement and the assignee or transferee of such Party agrees in writing to be bound by the provisions of this Subordination Agreement.

10.         Amendment; Waiver . No amendment, modification or waiver of any provision of this Subordination Agreement, or of Junior Creditor’s or Fund’s rights hereunder, shall be effective or deemed to be made by either Junior Creditor or Fund unless the same shall be in writing and signed by such Party (and Debtor shall be bound by this Subordination Agreement as so amended), and any such waiver shall be effective only in the specific instance and for the specific purpose for which given, and shall in no way impair the rights of such Party or the obligations of the other Party hereto in any other respect at any other time. No delay on the part of Junior Creditor or Fund in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by such Party of any right, power or remedy preclude any other for further exercise thereof, or the exercise of any other right, power or remedy.

Stone & Leigh, LLC - Intercreditor and Debt Subordination Agreement

11.         Notices . Notices and communications under this Subordination Agreement shall be in writing and shall be given by (i) hand-delivery, (ii) first class mail (postage prepaid), (iii) reliable overnight commercial courier (charges prepaid); or (iv) facsimile or other electronic transmission, to the addresses and facsimile numbers listed below the signature of Junior Creditor and Fund below. Notice given by facsimile or other electronic transmission shall be deemed to have been given and received when sent. Notice by overnight courier shall be deemed to have been given and received on the date scheduled for delivery. Notice by mail shall be deemed to have been given and received three (3) calendar days after the date first deposited in the United States mail. Notice by hand-delivery shall be deemed to have been given and received upon delivery. Junior Creditor and Fund may change its address and/or facsimile number by giving written notice to the other Lender as specified herein.

12.         Entire Agreement . This Subordination Agreement embodies the entire agreement and understanding of the parties hereto and supersedes all prior understandings of the parties hereto relating to the subject matter herein contained.

13.         Captions . Section captions used in this Subordination Agreement are for convenience only and shall not affect the interpretation of the provisions of this Subordination Agreement.

14.         Counterparts; Effectiveness . This Subordination Agreement may be executed by the parties hereto on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Subordination Agreement shall become effective as of the date hereof when one or more counterparts has been executed and delivered by each of the parties hereto.

15.         Termination . This Subordination Agreement shall remain in full force and effect until such time as all of the Obligations owing to Fund and the Senior Lenders are indefeasibly paid and satisfied in full in cash.

16.         Governing Law . This Subordination Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in such state. All terms used herein which are not defined herein and are defined in the New York Uniform Commercial Code in effect from time to time (the "UCC" ) shall have the meanings therein stated, unless the context otherwise requires. Except as otherwise provided in this Subordination Agreement, the rights and priorities of Junior Creditor and Fund shall be determined in accordance with applicable law.

17.         Successors and Assigns; Benefit of Subordination Agreement . This Subordination Agreement is solely for the benefit of Junior Creditor and Fund, for the benefit of itself and the Senior Lenders, and their respective successors, designees or assigns, as the case may be, and no other persons, including, without limitation, Debtor, shall have any right, benefit, priority or interest under, or because of the existence of, this Subordination Agreement.

18.         Miscellaneous .

(A)     All rights, powers and remedies of Junior Creditor and Fund hereunder and under any agreement between Debtor or any other Obligor and Junior Creditor or Fund (as applicable), now, or at any time hereafter in force, shall be cumulative and not alternative, and shall be in addition to all rights, powers and remedies given to the parties hereto by law.

(B)     Whenever used herein, the singular shall include the plural, the plural the singular, and the use of the masculine, feminine or neuter gender shall include all genders.

(C)     The terms " Debtor " , "Junior Creditor" and " Fund " as used in this Subordination Agreement shall include the individuals, firms, corporations or limited liability companies named herein as Debtor, or Junior Creditor or Fund as applicable, and (i) any successor, individual or individuals, firms or corporations to which all or substantially all of the business or assets of any of them shall have been transferred; (ii) in the case of a partnership, any new partnership which shall have been created by reason of the admission of any new partner or partners therein or the dissolution of the then existing partnership or the death, resignation or withdrawal of a partner; and (ii) in the case of a corporation or limited liability company, any other corporation or limited liability company into or with which such corporate or limited liability company party shall have been merged, consolidated, reorganized or absorbed.

Stone & Leigh, LLC - Intercreditor and Debt Subordination Agreement

19.         Controlling Contract . In the case of any conflict between this Subordination Agreement and any Security Agreement with either Fund or Junior Creditor, this Subordination Agreement shall control.

20.         Further Action . Each Party shall take such further actions as the other Party shall reasonably request to effectuate the priorities and other matters set forth in this Subordination Agreement, including without limitation, in the case of UCC financing statements filed by Junior Creditor, the filing of UCC amendment statements giving record notice that the liens and security interests of Junior Creditor in the Collateral are junior and subordinate to the senior liens and security interests of Fund. Junior Creditor further agrees the Junior Indebtedness shall also be subordinate to the indebtedness owing by Debtor to a third party lender whose loans to Debtor are used to refinance the Senior Indebtedness, and that Junior Creditor's lien on assets of Debtor shall also be subordinate to the lien in favor of such future lender, and that Junior Creditor shall execute and deliver to any such future lender a Subordination Agreement in the same form as this Subordination Agreement or such other form as the future working capital lender and Junior Creditor shall reasonably agree to.

21.         WAIVER OF TRIAL BY JURY . EACH PARTY HERETO WAIVES TRIAL BY JURY IN ANY ACTION UNDER OR RELATING TO THIS SUBORDINATION AGREEMENT .

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Stone & Leigh, LLC - Intercreditor and Debt Subordination Agreement

IN WITNESS WHEREOF , each party hereto has caused this Subordination Agreement to be duly executed by its authorized officer(s), as applicable, as of the day and year first above written

Stone & Leigh, LLC - Intercreditor and Debt Subordination Agreement

ACKNOWLEDGEMENT AND AGREEMENT OF DEBTOR

The undersigned, the Debtor referred to in the foregoing Subordination Agreement, hereby accepts notice of, and consents to the execution and delivery thereof, and of the terms and provisions thereof, and, in consideration of the granting or continuing of the Senior Indebtedness, as therein described, agrees to do and perform any and all acts and things which may be required on the Debtor’s part to enable Junior Creditor under the Subordination Agreement to perform the obligations of Junior Creditor as therein expressed, and to refrain from doing any act or thing which would cause or contribute to a violation by Junior Creditor of the Subordination Agreement or of any of Junior Creditor’s obligations thereunder.

Dated: September 6, 2018

Stone & Leigh, LLC - Intercreditor and Debt Subordination Agreement

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