Exhibit 10(g)-3

 

EXECUTION COPY

 

AMENDMENT NO. 2

 

Dated as of March 25, 2011

 

to

 

CREDIT AGREEMENT

 

Dated as of May 29, 2009

 

THIS AMENDMENT NO. 2 (“Amendment”) is made as of March 25, 2011 by and among
Ethan Allen Global, Inc. (the “Borrower”), Ethan Allen Interiors Inc.
(“Holdings”), the financial institutions (other than the Departing Lender (as
defined below)) listed on the signature pages hereof (the “Lenders”), the
financial institution listed on the signature pages hereof as the Departing
Lender and JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity,
the “Administrative Agent”) under that certain Credit Agreement dated as of
May 29, 2009 by and among the Borrower, Holdings, the Lenders, the Departing
Lender and the Administrative Agent (as previously amended, supplemented or
otherwise modified, the “Credit Agreement”).  Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings given to them in
the Credit Agreement.

 

WHEREAS, the Borrower has requested that the Lenders, the Departing Lender and
the Administrative Agent agree to certain amendments to the Credit Agreement and
the Security Agreement and that the Departing Lender cease to be a party to the
Credit Agreement;

 

WHEREAS, the Lenders, the Departing Lender and the Administrative Agent have
agreed to such amendments and the termination of the Departing Lender’s
Commitment on the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the premises set forth above, the terms and
conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Borrower,
Holdings, the Lenders, the Departing Lender and the Administrative Agent have
agreed to enter into this Amendment.

 

1.             Amendments to Credit Agreement and Security Agreement.  Effective
as of the date of satisfaction of the conditions precedent set forth in
Section 3 below (the “Amendment No. 2 Effective Date”), the Credit Agreement and
the Security Agreement are hereby amended as follows:

 

(a)           The definition of “Applicable Rate” appearing in Section 1.01 of
the Credit Agreement is amended to delete the pricing grid appearing therein and
to replace such pricing grid with the following pricing grid:

 

 

 

Average Quarterly
Availability

 

Commitment Fee
Rate

 

Eurodollar Spread

 

ABR Spread

 

Category 1

 

Greater than $40,000,000

 

0.25

%

2.00

%

1.00

%

Category 2

 

Less than or equal to $40,000,000 but greater than $20,000,000

 

0.25

%

2.25

%

1.25

%

Category 3

 

Less than or equal to $20,000,000

 

0.25

%

2.50

%

1.50

%

 

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(b)           The definition of “Documentation Agent” appearing in Section 1.01
of the Credit Agreement is amended and restated to read as follows:

 

“Documentation Agent” means Wells Fargo Capital Finance, LLC, in its capacity as
documentation agent for the credit facility evidenced by this Agreement.

 

(c)           The definition of “Maturity Date” appearing in Section 1.01 of the
Credit Agreement is amended and restated to read as follows:

 

“Maturity Date” means the earlier of (i) June 26, 2015, if any Senior Note
Obligations are outstanding as of such date, or (ii) March 25, 2016 in all other
circumstances, in each case, or any earlier date on which the Commitments are
reduced to zero or otherwise terminated pursuant to the terms hereof.

 

(d)           Section 1.01 of the Credit Agreement is amended to replace the
corresponding previously existing definition as follows:

 

“Negative Covenant Permission Trigger” means (a) no Default or Event of Default
has occurred and is continuing prior to making such acquisition (in the case of
a Permitted Acquisition), Restricted Payment (in the case of Section 6.08(a)) or
payment (in the case of Section 6.08(b)) or would arise after giving effect
(including pro forma effect) thereto, (b) Availability equals or exceeds an
amount equal to the greater of (i) 20% of the Aggregate Commitment at such time
and (ii) $10,000,000, prior thereto as well as after giving effect (including
pro forma effect at the time thereof and for the six (6) month period following
such acquisition or payment as determined based on the updated Projections most
recently delivered to the Lenders, which Projections (x) shall have been
delivered no earlier than the date that is thirty (30) days prior to such
acquisition or payment and (y) must be reasonably satisfactory to the
Administrative Agent) thereto and (c) Holdings and the Borrower are in
compliance, on a pro forma basis after giving effect thereto (excluding
synergies or cost savings in the case of an acquisition), with the covenant
contained in Section 6.12 recomputed as of the last day of the most recently
ended fiscal quarter of Holdings for which financial statements are available.

 

(e)           Section 1.01 of the Credit Agreement is amended to add the
following new definition thereto in the appropriate alphabetical order:

 

“Senior Note Obligations” means the Indebtedness and other obligations of the
Borrowers and their Subsidiaries under that certain Indenture, dated as of
September 27, 2005, by and among the Borrower, Holdings, the guarantors party
thereto and U.S. Bank National Association, relating to the issuance of 5.375%
Senior Notes due 2015, in the aggregate principal amount of $200,000,000, and
all other agreements, instruments, documents and certificates executed and/or
delivered in connection therewith.

 

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(f)            Section 2.09(e) of the Credit Agreement is amended to delete the
amount “$60,000,000” appearing in clause (iii) thereof and to replace such
amount with the amount “$100,000,000”.

 

(g)           Section 5.11 of the Credit Agreement is amended to amend and
restate the proviso appearing in the first sentence thereof as follows:

 

; provided that (i) no less than one (1) appraisal per year will be conducted
and, if the Administrative Agent elects to conduct a second appraisal in its
sole discretion, no more than two (2) appraisals per year will be conducted and
(ii) there shall be no limitation on the number or frequency of appraisals if an
Event of Default shall have occurred and be continuing

 

(h)           Section 5.12 of the Credit Agreement is amended to amend and
restate the proviso appearing in the first sentence thereof as follows:

 

; provided that (i) no less than one (1) field examination per year will be
conducted and, if the Administrative Agent elects to conduct a second field
examination in its sole discretion, no more than two (2) field examinations per
year will be conducted and (ii) there shall be no limitation on the number or
frequency of field examinations if an Event of Default shall have occurred and
be continuing

 

(i)            Section 6.12 of the Credit Agreement is amended to (i) delete the
percentage “15%” appearing in clause (i) thereof and to replace such percentage
with the percentage “12.5%” and (ii) delete the amount “$9,000,000” appearing in
clause (ii) thereof and to replace such amount with the amount “$6,250,000”.

 

(j)            Schedule 2.01 to the Credit Agreement is replaced in its entirety
with Schedule 2.01 attached hereto.

 

(k)           Section 7.3 of the Security Agreement is amended to (i) delete the
percentage “20%” appearing therein and to replace such percentage with the
percentage “17.5%” and (ii) delete the amount “$10,000,000” appearing therein
and to replace such amount with the amount “$8,500,000”.

 

2.             Departing Lender.  (a) Capital One Leverage Finance Corp. (the
“Departing Lender”) shall cease to be a Lender under the Credit Agreement on the
Amendment No. 2 Effective Date.

 

(b)           As of the Amendment No. 2 Effective Date, the Loans of the
Departing Lender made to the Borrower prior to the Amendment No. 2 Effective
Date, if any, shall be repaid in full (accompanied by any accrued and unpaid
interest and fees thereon, and any amounts payable under Section 2.16 of the
Credit Agreement), the Departing Lender’s Commitment under the Credit Agreement
shall be terminated and the Departing Lender shall cease to be a Lender under
the Credit Agreement.

 

3.             Conditions of Effectiveness.  The effectiveness of this Amendment
is subject to the conditions precedent that (a) the Administrative Agent shall
have received counterparts of (i) this Amendment duly executed by the Borrower,
Holdings, the Lenders, the Departing Lender and the Administrative Agent and the
Consent and Reaffirmation attached hereto duly executed by the Subsidiary
Guarantors, (ii) the fee letter relating to this Amendment, dated as of the date
hereof, by and between the Borrower and JPMorgan Chase Bank, N.A., duly executed
by each of the parties thereto and (iii) the fee letter relating to this
Amendment, dated as of the date hereof, by and between the Borrower and Wells
Fargo Bank, National Association (successor by merger to Wells Fargo Retail
Finance, LLC), duly

 

3

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executed by each of the parties thereto and (b) the Borrower shall have paid, to
the extent invoiced on or prior to the date hereof, (i) the amendment upfront
fees payable to the Lenders (excluding, for the avoidance of doubt, the
Departing Lender) as separately agreed upon by the Borrower, and (ii) all fees
and expenses of the Administrative Agent (including attorneys’ fees and
expenses) in connection with this Amendment and the other Loan Documents.

 

4.             Representations and Warranties of Holdings and the Borrower. 
Each of Holdings and the Borrower hereby represents and warrants as follows:

 

(a)           This Amendment and the Credit Agreement, as amended hereby,
constitute legal, valid and binding obligations of such Loan Party and are
enforceable against such Loan Party in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

 

(b)           As of the date hereof and giving effect to the terms of this
Amendment, (i) no Default shall have occurred and be continuing and (ii) the
representations and warranties of such Loan Party set forth in the Credit
Agreement, as amended hereby, are true and correct as of the date hereof.

 

5.             Reference to and Effect on the Credit Agreement and Security
Agreement.

 

(a)           Upon the effectiveness hereof, each reference to the Credit
Agreement and the Security Agreement in any Loan Document shall mean and be a
reference to such agreement as amended hereby.

 

(b)           Except as specifically amended above, the Credit Agreement, the
Security Agreement and all other documents, instruments and agreements executed
and/or delivered in connection therewith shall remain in full force and effect
and are hereby ratified and confirmed.

 

(c)           The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of the Administrative
Agent or the Lenders, nor constitute a waiver of any provision of the Credit
Agreement, the Security Agreement or any other documents, instruments and
agreements executed and/or delivered in connection therewith.

 

6.             Governing Law.  This Amendment shall be construed in accordance
with and governed by the law of the State of New York.

 

7.             Headings.  Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.

 

8.             Counterparts.  This Amendment may be executed by one or more of
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.  Signatures delivered by facsimile or PDF shall have the same force
and effect as manual signatures delivered in person.

 

[Signature Pages Follow]

 

4

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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year
first above written.

 

 

 

 

ETHAN ALLEN GLOBAL, INC.,

 

 

as the Borrower

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

ETHAN ALLEN INTERIORS INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

Signature Page to Amendment No. 2

Ethan Allen Global, Inc.

Credit Agreement dated as of May 29, 2009

 

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JPMORGAN CHASE BANK, N.A.,

 

 

as Administrative Agent and individually as a Lender

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

Signature Page to Amendment No. 2

Ethan Allen Global, Inc.

Credit Agreement dated as of May 29, 2009

 

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WELLS FARGO BANK, NATIONAL ASSOCIATION (successor by merger to Wells Fargo
Retail Finance, LLC),

as a Lender

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

Signature Page to Amendment No. 2

Ethan Allen Global, Inc.

Credit Agreement dated as of May 29, 2009

 

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Departing Lender:

 

 

 

 

 

CAPITAL ONE LEVERAGE FINANCE CORP.,

 

 

as Departing Lender

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

Signature Page to Amendment No. 2

Ethan Allen Global, Inc.

Credit Agreement dated as of May 29, 2009

 

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CONSENT AND REAFFIRMATION

 

Each of the undersigned hereby acknowledges receipt of a copy of the foregoing
Amendment No. 2 to the Credit Agreement dated as of May 29, 2009 (as amended,
restated, supplemented or otherwise modified, the “Credit Agreement”) by and
among Ethan Allen Global, Inc., Ethan Allen Interiors Inc., the financial
institutions from time to time party thereto (the “Lenders”) and JPMorgan Chase
Bank, N.A., as Administrative Agent (the “Administrative Agent”), which
Amendment No. 2 is dated as of March 25, 2011 (the “Amendment”).  Capitalized
terms used in this Consent and Reaffirmation and not defined herein shall have
the meanings given to them in the Credit Agreement.   Without in any way
establishing a course of dealing by the Administrative Agent or any Lender, each
of the undersigned consents to the Amendment and reaffirms the terms and
conditions of the Guarantee Agreement and any other Loan Document executed by it
and acknowledges and agrees that such agreements and each and every such Loan
Document executed by the undersigned in connection with the Credit Agreement
remains in full force and effect and is hereby reaffirmed, ratified and
confirmed.  All references to the Credit Agreement contained in the
above-referenced documents shall be a reference to the Credit Agreement as so
modified by the Amendment.

 

Dated:  March 25, 2011

 

[Signature Page Follows]

 

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ETHAN ALLEN OPERATIONS, INC

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

LAKE AVENUE ASSOCIATES, INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

MANOR HOUSE, INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ETHAN ALLEN REALTY, LLC

 

 

 

 

 

 

By Ethan Allen Operations, Inc., its Sole Member

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ETHAN ALLEN RETAIL, INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Signature Page to Consent and Reaffirmation to Amendment No. 2

Ethan Allen Global, Inc.

Credit Agreement dated as of May 29, 2009

 

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SCHEDULE 2.01

 

COMMITMENTS

 

Lender

 

Commitment

 

 

 

 

 

JPMorgan Chase Bank, N.A

 

$

30,000,000

 

Wells Fargo Bank, National Association

 

$

20,000,000

 

 

 

 

 

Aggregate Commitment:

 

$

50,000,000

 

 

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