Exhibit 10(e)-3

 

ETHAN ALLEN INTERIORS INC. HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS OF
THIS DOCUMENT IN ACCORDANCE WITH RULE 24-B UNDER THE SECURITIES EXCHANGE ACT OF
1934

 

THIRD AMENDMENT TO

SECOND AMENDED AND RESTATED
PRIVATE LABEL CONSUMER CREDIT CARD PROGRAM AGREEMENT

 

This THIRD AMENDMENT TO SECOND AMENDED AND RESTATED PRIVATE LABEL CONSUMER
CREDIT CARD PROGRAM AGREEMENT dated as of June 30, 2010 (“Amendment”), amends
that certain Second Amended and Restated Private Label Consumer Credit Card
Program Agreement dated as of July 23, 2007 (as amended, modified and
supplemented from time to time, the “Agreement”), by and between Ethan Allen
Global, Inc., a Delaware corporation (“Ethan Allen Global”), and Ethan Allen
Retail, Inc., a Delaware corporation (“Ethan Allen Retail”, and together with
Ethan Allen Global, “Retailer”), and GE Money Bank (“Bank”).  Capitalized terms
used herein and not otherwise defined have the meanings given them in the
Agreement.

 

WHEREAS, Retailer and Bank previously amended the Agreement as of July 25, 2008,
and February 16, 2010; and

 

WHEREAS, Retailer and Bank now wish to further amend the Agreement in accordance
with the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual promises and subject to the terms
and conditions hereinafter set forth, the parties hereby agree as follows:

 

I.                                         AMENDMENT TO THE AGREEMENT

 

1.1                               Amendment to Section 4.1(b). 
Section 4.1(b) is hereby amended by deleting it in its entirety and replacing it
with the following:

 

*

 

1.2                               Amendment to Section 4.4.  Section 4.4 is
hereby amended by deleting it in its entirety and replacing it with the
following:

 

Section 4.4                                   Letter of Credit.

 

(a)                                  At any time during any Collateral Period,
Bank may require that Retailer deliver to Bank, within fifteen (15) days of
Bank’s written request, either: (i) an Eligible Letter of Credit, or
(ii) substitute collateral in the form of cash and securities (the “Substitute
Collateral”) which shall be held in a deposit account subject to Bank’s control
in accordance with the Substitute Collateral Documentation.  Retailer may, at
the time it receives Bank’s

 

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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
COMMISSION

 

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ETHAN ALLEN INTERIORS INC. HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS OF
THIS DOCUMENT IN ACCORDANCE WITH RULE 24-B UNDER THE SECURITIES EXCHANGE ACT OF
1934

 

written request or at any time during any Collateral Period, elect in its
discretion to provide to Bank pursuant to the terms of this Section 4.4 either
the Eligible Letter of Credit or the Substitute Collateral.  The amount of any
Eligible Letter of Credit or Substitute Collateral requested by Bank (such
requested amount being referred to herein as the “Collateral Amount”) shall not
exceed (i)                 *                           in the event of a Level 1
Collateral Event; or (ii)              * in the event of a Level 2 Collateral
Event.  Retailer acknowledges that the Collateral Amount may be increased from
time to time pursuant to Section 6.21.

 

(b)                                 If, at any time, an event shall occur which
would cause any Letter of Credit previously delivered to Bank to cease to be an
Eligible Letter of Credit, within ten (10) days of the earlier of (i) the date
on which Retailer first learns of the occurrence of such event; or (ii) the date
on which Retailer first receives notice thereof from Bank, Retailer shall cause
a substitute Eligible Letter of Credit to be issued and delivered to Bank in a
face amount equal to the Collateral Amount or Substitute Collateral in
accordance with the Substitute Collateral Documentation.  On or before
forty-five (45) days prior to the expiration of each Letter of Credit provided
to Bank, Retailer shall cause a substitute Eligible Letter of Credit to be
issued and delivered to Bank in a face amount equal to the Collateral Amount or
Substitute Collateral in accordance with the Substitute Collateral
Documentation.

 

(c)                                  If, at any time, an event shall occur which
would cause the Substitute Collateral Documentation to no longer be valid or in
full force and effect, Bank shall have the applicable rights and remedies set
forth in the Substitute Collateral Documentation.

 

(d)                                 Any amounts drawn under a Letter of Credit
or transferred to Bank under the Substitute Collateral Documentation hereunder
in excess of the Delivery Obligations then due to Bank shall be held by Bank in
a non-interest bearing account on Bank’s books (the “Collateral Account”) and
shall secure Retailer’s full and prompt payment of the Delivery Obligations then
or thereafter owing.  If Retailer fails to pay any Delivery Obligation when due,
Bank may immediately, and without prior notice to Retailer, debit such unpaid
amount from the amounts then remaining in the Collateral Account.  Bank’s
security interest in the Collateral Account shall be in addition to any right of
setoff or recoupment that Bank may otherwise have under this Agreement or
Applicable Law.  If Retailer purchases or arranges for the purchase of all of
the Accounts and related Indebtedness from Bank in accordance with Section 10.1
hereof, and if as of the date of such purchase, Retailer has paid all Delivery
Obligations, Bank shall simultaneously pay to Retailer, an amount equal to the
amount remaining in the Collateral Account on the date of such purchase.  If
Retailer does not purchase or arrange for the purchase of all of the Accounts
and related Indebtedness in accordance with Section 10.2 hereof, and if as of
the Final Liquidation Date, Retailer has paid all Delivery Obligations, Bank
shall pay to

 

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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
COMMISSION

 

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ETHAN ALLEN INTERIORS INC. HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS OF
THIS DOCUMENT IN ACCORDANCE WITH RULE 24-B UNDER THE SECURITIES EXCHANGE ACT OF
1934

 

Retailer an amount equal to the amounts remaining in the Collateral Account on
the Final Liquidation Date.

 

(e)                                  The obligations under this Section 4.4
shall apply at all times until the end of the Collateral Period, at which time,
Bank shall (x) surrender any outstanding Letter of Credit or Substitute
Collateral to Retailer, and (y) pay to Retailer an amount equal to the amount
remaining in the Collateral Account, if any.  The foregoing notwithstanding, if
after Bank shall have surrendered any Letter of Credit or Substitute Collateral
hereunder following the successful completion by Retailer of a Remediation
Period, a Level 1 Collateral Event or a Level 2 Collateral Event shall again
occur, the provisions of this Section 4.4 shall again apply.

 

1.3                               Amendment to Section 6.21.  Section 6.21 is
hereby amended by deleting it in its entirety and replacing it with the
following:

 

*

 

1.4                               Amendment to Section 9.1.  The reference to
“the fifth (5th) anniversary of the Effective Date” in the first sentence of
Section 9.1 is hereby deleted and replaced with “July 31, 2014”.

 

1.5                               Amendment to Section 9.2(k).  The first
sentence of Section 9.2(k) is hereby amended by deleting it in its entirety and
replacing it with the following:

 

(k)                                  Bank shall have the right to terminate the
Agreement if (i) Retailer shall fail to deliver or amend an Eligible Letter of
Credit or Substitute Collateral as required pursuant to Section 4.4(a);
(ii) Retailer shall fail to deliver a substitute Eligible Letter of Credit or
Substitute Collateral pursuant to Section 4.4(b) in the event any Letter of
Credit previously delivered to Bank ceases to be an Eligible Letter of Credit;
or (iii) the Substitute Collateral Documentation ceases to be a valid, binding
and/or enforceable obligation of any of the parties thereto (including pursuant
to a permitted termination by any party thereto) or Bank’s security interest set
forth therein ceases to be a first priority perfected security interest.

 

1.6                               Amendment to Appendix A.  The definitions of
“Letter of Credit Event” and “Letter of Credit Period” are hereby deleted in
their entirety, and the definitions of “Collateral Period,”
“GAAP,”                *                , “Level 1 Collateral Event,” “Level 2
Collateral Event,            *               , “Remediation Period,” “Substitute
Collateral Documentation,”                *              , and            *
                  , set forth below are hereby added to Appendix A:

 

“Collateral Period” means the period of time between the occurrence of either a
Level 1 Collateral Event or a Level 2 Collateral Event and the earlier of
(i) the end of any

 

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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
COMMISSION

 

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ETHAN ALLEN INTERIORS INC. HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS OF
THIS DOCUMENT IN ACCORDANCE WITH RULE 24-B UNDER THE SECURITIES EXCHANGE ACT OF
1934

 

Remediation Period, and (ii) ninety (90) days after the expiration or earlier
termination of this Agreement.

 

“GAAP” means generally accepted accounting principles applicable in the United
States, consistently applied.

 

*

 

“Level 1 Collateral Event” means Ethan Allen Interiors Inc.’s failure to
maintain, as of the end of each fiscal quarter of Ethan Allen Interiors
Inc.,                       *                        .

 

“Level 2 Collateral Event” means Ethan Allen Interiors Inc.’s failure to
maintain, as of the end of each fiscal quarter of Ethan Allen Interiors
Inc.,                        *                        .

 

*

 

“Remediation Period” means a two (2) successive full calendar quarter period
beginning after the occurrence of either a Level 1 Collateral Event or a Level 2
Collateral Event throughout which Ethan Allen Interiors Inc.’s
                   *                    .

 

“Substitute Collateral Documentation” means (i) that certain Master Pledge and
Security Agreement between GE Money Bank, Ethan Allen Global, Inc. and Ethan
Allen Retail, Inc., dated as of May 21, 2010; (ii) that certain Control
Agreement between GE Money Bank, Ethan Allen Global, Inc., Morgan Stanley Smith
Barney LLC, and Citigroup Global Markets Inc., dated as of May 21, 2010;
(iii) any amendment, modification, and/or supplement to the foregoing
agreements; and (iv) any replacement agreement(s) concerning the subject matter
of the foregoing agreements.

 

*

 

*

 

1.7                               Amendment to Schedule 3.5.  Schedule 3.5 of
the Agreement is hereby deleted in its entirety and replaced with the revised
Schedule 3.5 attached hereto as Exhibit A.

 

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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
COMMISSION

 

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ETHAN ALLEN INTERIORS INC. HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS OF
THIS DOCUMENT IN ACCORDANCE WITH RULE 24-B UNDER THE SECURITIES EXCHANGE ACT OF
1934

 

II.   GENERAL

 

2.1                               Authority for Amendment.  Retailer represents
and warrants to Bank that the execution, delivery and performance of this
Amendment has been duly authorized by all requisite corporate action on the part
of Retailer and upon execution by all parties, will constitute a legal, binding
obligation of Retailer.

 

2.2                               Effect of Amendment.  Except as specifically
amended hereby, the Agreement, and all terms contained therein, remains in full
force and effect.  The Agreement, as amended by this Amendment, constitutes the
entire understanding of the parties with respect to the subject matter hereof.

 

2.3                               Binding Effect; Severability.  Each reference
herein to a party hereto shall be deemed to include its successors and assigns,
all of whom shall be bound by this Amendment and in whose favor the provisions
of this Amendment shall inure.  In case any one or more of the provisions
contained in this Amendment shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.

 

2.4                               Further Assurances.  The parties hereto agree
to execute such other documents and instruments and to do such other and further
things as may be necessary or desirable for the execution and implementation of
this Amendment and the consummation of the transactions contemplated hereby and
thereby.

 

2.5                               Governing Law.  This Amendment shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to principles of conflicts of laws.

 

2.6                               Counterparts.  This Amendment may be executed
in counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one agreement.

 

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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
COMMISSION

 

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ETHAN ALLEN INTERIORS INC. HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS OF
THIS DOCUMENT IN ACCORDANCE WITH RULE 24-B UNDER THE SECURITIES EXCHANGE ACT OF
1934

 

IN WITNESS WHEREOF, Retailer and Bank have caused this Amendment to be executed
by their respective officers thereunto duly authorized as of the date first
above written.

 

RETAILER:

 

BANK:

 

 

 

 

 

 

ETHAN ALLEN GLOBAL, INC.

 

GE MONEY BANK

 

 

 

 

 

 

By:

 

 

By:

 

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

 

ETHAN ALLEN RETAIL, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
COMMISSION

 

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ETHAN ALLEN INTERIORS INC. HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS OF
THIS DOCUMENT IN ACCORDANCE WITH RULE 24-B UNDER THE SECURITIES EXCHANGE ACT OF
1934

 

EXHIBIT A

TO AMENDMENT

 

SCHEDULE 3.5
To
Credit Card Program Agreement

 

Initial Program Fee Percentages

 

*

 

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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
COMMISSION

 

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