Exhibit 4

Execution Version

SECOND AMENDMENT AND WAIVER TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND OMNIBUS AMENDMENT

TO GUARANTY AND NOTE PURCHASE AGREEMENTS

THIS SECOND AMENDMENT AND WAIVER TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND OMNIBUS AMENDMENT TO GUARANTY AND NOTE PURCHASE AGREEMENTS (this “Amendment”) is made as of the 6 ^th day of October, 2009, by and among BASSETT FURNITURE INDUSTRIES, INCORPORATED, a Virginia corporation (the “Borrower”), BRANCH BANKING AND TRUST COMPANY (“BB&T”), as agent (in such capacity, the “Agent”) and Licensee Lender (as defined in the Credit Agreement identified below), the banks listed on the signature pages hereof (collectively referred to herein as the “Banks”) and BASSETT FURNITURE INDUSTRIES OF NORTH CAROLINA, LLC (formerly Bassett Furniture Industries of North Carolina, Inc.), THE E.B. MALONE CORPORATION (“Malone Corporation”), BASSETT DIRECT STORES, LLC (formerly Bassett Direct Stores, Inc.), BASSETT DIRECT NC, LLC, and BASSETT DIRECT SC, LLC (collectively referred to herein as the “Guarantors”).

R E C I T A L S :

The Borrower, the Agent, the Guarantors and the Banks (including the Licensee Lender) have entered into that certain Third Amended and Restated Credit Agreement dated October 31, 2007, as amended by the First Amendment thereto dated as of August 7, 2008 (as so amended, the “Credit Agreement”; capitalized terms used in this Amendment which are not otherwise defined shall have the respective meanings assigned to them in the Credit Agreement). Pursuant to the terms of the Credit Agreement, the Borrower and BB&T, as Licensee Lender, have entered into each of the Guaranty and Note Purchase Agreements identified on Schedule 1 hereto (collectively, together with any other such Guaranty and Note Purchase Agreement executed and delivered in connection with the Credit Agreement, the “Licensee Loan Guarantees”).

The Borrower and Guarantors have requested that the Agent and the Banks (i) amend the Credit Agreement to modify certain provisions of the Credit Agreement as more fully set forth herein and (ii) waive the Event of Default in existence under Section 5.35 of the Credit Agreement arising as a result of the Borrower’s failure to comply with the minimum Consolidated Tangible Net Worth covenant for the Fiscal Quarters ended February 28, 2009, May 30, 2009 and August 29, 2009 (the “Existing Events of Default”). Subject to the terms and conditions in this Amendment, the Banks and the Agent have agreed to such waiver and amendments.

NOW, THEREFORE, in consideration of the Recitals and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Guarantors, the Agent and the Banks (including the Licensee Lender), intending to be legally bound hereby, agree as follows:

SECTION 1. Recitals . The Recitals are incorporated herein by reference and shall be deemed to be a part of this Amendment.

SECTION 2. Amendments to Credit Agreement . The Credit Agreement is hereby amended as set forth in this Section 2 .

SECTION 2.01. Amendments to Section 1.01 . Section 1.01 of the Credit Agreement is hereby amended to:

(a) include the following new definition:

“Second Amendment Effective Date” shall have the meaning assigned to such term in the Second Amendment and Waiver to Third Amended and Restated Credit Agreement and Omnibus Amendment to Guaranty and Note Purchase Agreements dated October 6, 2009, by and among the Banks, the Agent, the Licensee Lender, the Borrower and the Guarantors.

(b) amend and restate the following definition to read as follows:

“Borrowing Base” shall mean, based on the most recent Borrowing Base Certification Report which as of the date of a determination of the Borrowing Base has been received by the Agent, an amount equal to: (A) Adjusted Debt, as of the date of determination, subtracted from (B) the sum of (i) an amount equal to 75% (or such lesser percentage as shall be mutually agreed upon by the Agent and Borrower from time to time) of the face dollar amount of Eligible Accounts as at the date of determination; and (ii) an amount equal to: (a) 5% of the LIFO Reserve, as of the date of the determination of the Borrowing Base, subtracted from (b) 40% (or such lesser percentage as shall be mutually agreed upon by the Agent and Borrower from time to time) of the dollar amount of the Eligible Inventory, valued at the lower of its cost or market value (as determined by the Agent in its sole discretion), as at the date of determination. The Agent shall also (x) hold and subtract from the Borrowing Base a reserve in an amount equal to 125% of the amount, if any, by which the fair market value of the Marketable Investments in the Borrower’s Securities Account (as such terms are defined in Section 5.37) is less than $16,000,000 and (y) be entitled to hold and subtract any other reserve against the Borrowing Base it deems necessary as security for payment of the Notes, the obligations of the Guarantors under Article X of this Agreement, and the obligations of the Borrower under the Letter of Credit Agreements and the Licensee Loan Guarantees.

(c) delete the following definitions appearing therein: “Consolidated Comprehensive EBITDA”; “Consolidated Interest Expense”; and “EBITDA”.

SECTION 2.02. Amendments to Section 2.06 . Section 2.06 of the Credit Agreement is hereby amended as follows:

(a) by amending and restating Section 2.06(a) to read in its entirety as follows:

(a) “Applicable Margin” shall mean 2.75%.

2

(b) by amending and restating the first sentence of Section 2.06(b) to read in its entirety as follows:

During each Interest Period in which the Loan (excluding Swing Line Advances) is a Prime Rate Loan, such Prime Rate Loan shall bear interest on the outstanding principal amount thereof, for each day during the applicable Interest Period, at a rate per annum equal to the Prime Rate for such day plus the Applicable Margin; provided , however , that in no event shall the interest rate applicable to any such Prime Rate Loan be less than 4.25% per annum.

(c) by amending and restating the first sentence of Section 2.06(c) to read in its entirety as follows:

During each Interest Period in which the Loan is a Euro-Dollar Loan, such Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of: (1) the Applicable Margin, plus (2) the applicable Adjusted Monthly Libor Index for such Interest Period; provided , however , that in no event shall the interest rate applicable to any Euro-Dollar Loan be less than 4.25% per annum.

(d) by amending and restating Section 2.06(e) to read in its entirety as follows:

(e) Each Letter of Credit Advance shall bear interest on the outstanding principal amount thereof, payable on demand, for each day from the date such Letter of Credit Advance is made until paid in full at a rate per annum equal to the Default Rate applicable to Euro-Dollar Loans.

SECTION 2.03. Amendment to Section 2.07(a) . Section 2.07(a) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

(a) The Borrower shall pay to the Agent for the ratable account of each Bank a facility fee equal to the product of: (i) the aggregate of such Bank’s Commitment (whether or not utilized) as then in effect (or, if the Commitments are no longer in effect, the aggregate outstanding principal amount of the Notes, Letter of Credit Advances, Licensee Loans and Undrawn Amounts) times (ii) 0.50%. Facility fees shall be payable in advance on the Second Amendment Effective Date and thereafter on each anniversary of the Second Amendment Effective Date until the Commitments have been terminated and the Obligations have been paid in full; provided ; however , that such facility fee shall be pro rated for the year in which the Termination Date is scheduled to occur. The Borrower agrees that all such facility fees shall be fully earned and paid in immediately available funds when due and payable and shall be non-refundable under any circumstance.

SECTION 2.04. Amendment to Section 2.15(a) . Section 2.15(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(a) The Borrower may, prior to the Termination Date, as set forth in this Section, request the Swing Line Lender to make, and the Swing Line Lender may in its sole and absolute discretion prior to the Termination Date make, Swing Line Advances to the Borrower, in an aggregate principal amount at any one time outstanding, not exceeding (i) prior to the Second Amendment Effective Date, Five Million Dollars ($5,000,000) and (ii) thereafter, Zero Dollars ($0); provided that the aggregate principal

3

amount of all Swing Line Advances, together with the aggregate principal amount of all outstanding Advances, Undrawn Amounts, Licensee Loans and Letter of Credit Advances, at any one time outstanding shall not exceed the aggregate amount of the Commitments of all of the Banks at such time.

SECTION 2.05. Amendment to Section 2.16 . Section 2.16 of the Credit Agreement is hereby amended by adding the following clause (j) to the end of such Section:

(j) Notwithstanding any other provision of this Section 2.16, the Licensee Lender shall not, and shall have no obligation to, disburse any Licensee Loans at any time on or after the Second Amendment Effective Date. The Loan Parties acknowledge and agree that the termination of the Licensee Lender’s commitment to make Licensee Loans shall not alter, modify or amend or otherwise affect in any way the Loan Parties’ respective obligations set forth in this Agreement, any Licensee Loan Document or any other Loan Document.

SECTION 2.06. Amendment to Section 5.35 . Section 5.35 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

SECTION 5.35. Minimum Consolidated Tangible Net Worth . Consolidated Tangible Net Worth will at no time be less than: (a) (i) for each Fiscal Quarter ending in Fiscal Year 2009, $95,000,000.00, and (ii) for each Fiscal Quarter ending in Fiscal Year 2010, $90,000,000.00; plus (b) 100% of the cumulative Net Proceeds of Capital Stock/Conversion of Debt received during any period after the Fiscal Year ended November 30, 2007, calculated quarterly.

SECTION 2.07. Amendment to Agent Commitment Amount . The Commitment amount of the Agent as set forth on the signature page of the Credit Agreement is hereby decreased from $45,000,000.00 to $30,000,000.00.

SECTION 2.08. Amendment to Exhibit A . Exhibit A to the Credit Agreement is hereby amended and restated to read as set forth on Exhibit A attached hereto.

SECTION 3. Amendment to Licensee Loan Guarantees . Each Licensee Loan Guarantee is hereby amended by amending and restating clauses (a) and (b) of the definition of “ Guaranty Trigger Event ” therei