**Exhibit 10(e)-3**

 

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

 

**THIRD AMENDMENT TO**

**SECOND AMENDED AND RESTATED PRIVATE LABEL CONSUMER CREDIT CARD PROGRAM AGREEMENT**

 

ThisTHIRD AMENDMENT TO SECOND AMENDED AND RESTATED PRIVATE LABEL CONSUMER CREDITCARD PROGRAM AGREEMENT dated as of June 30, 2010 (“Amendment”),amends that certain Second Amended and Restated Private Label Consumer CreditCard Program Agreement dated as of July 23, 2007 (as amended, modified andsupplemented from time to time, the “Agreement”), by and between EthanAllen Global, Inc., a Delaware corporation (“Ethan Allen Global”),and Ethan Allen Retail, Inc., a Delaware corporation (“Ethan AllenRetail”, and together with Ethan Allen Global, “Retailer”), and GEMoney Bank (“Bank”).  Capitalizedterms used herein and not otherwise defined have the meanings given them in theAgreement.

 

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 withthe terms and conditions set forth herein.

 

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

 

**I.****                                        ****AMENDMENTTO THE AGREEMENT**

 

**1.1****                              ****Amendmentto Section 4.1(b). **Section 4.1(b) ishereby 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 bydeleting it in its entirety and replacing it with the following:

 

**Section 4.4****                                  ****Letter of Credit.**

 

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

 

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

 

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

 

(b)                                 If, at anytime, an event shall occur which would cause any Letter of Credit previouslydelivered to Bank to cease to be an Eligible Letter of Credit, within ten (10) daysof the earlier of (i) the date on which Retailer first learns of theoccurrence of such event; or (ii) the date on which Retailer firstreceives notice thereof from Bank, Retailer shall cause a substitute EligibleLetter of Credit to be issued and delivered to Bank in a face amount equal tothe Collateral Amount or Substitute Collateral in accordance with theSubstitute Collateral Documentation.  Onor before forty-five (45) days prior to the expiration of each Letter of Creditprovided to Bank, Retailer shall cause a substitute Eligible Letter of Creditto be issued and delivered to Bank in a face amount equal to the CollateralAmount or Substitute Collateral in accordance with the Substitute CollateralDocumentation.

 

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

 

(d)                                 Any amountsdrawn under a Letter of Credit or transferred to Bank under the SubstituteCollateral Documentation hereunder in excess of the Delivery Obligations thendue to Bank shall be held by Bank in a non-interest bearing account on Bank’sbooks (the “Collateral Account”) and shall secure Retailer’s full andprompt payment of the Delivery Obligations then or thereafter owing.  If Retailer fails to pay any DeliveryObligation when due, Bank may immediately, and without prior notice toRetailer, debit such unpaid amount from the amounts then remaining in theCollateral Account.  Bank’s securityinterest in the Collateral Account shall be in addition to any right of setoffor recoupment that Bank may otherwise have under this Agreement or ApplicableLaw.  If Retailer purchases or arrangesfor the purchase of all of the Accounts and related Indebtedness from Bank inaccordance with Section 10.1 hereof, and if as of the date of suchpurchase, Retailer has paid all Delivery Obligations, Bank shall simultaneouslypay to Retailer, an amount equal to the amount remaining in the CollateralAccount on the date of such purchase.  IfRetailer does not purchase or arrange for the purchase of all of the Accountsand related Indebtedness in accordance with Section 10.2 hereof, and if asof the Final Liquidation Date, Retailer has paid all Delivery Obligations, Bankshall pay to

 

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

 

Retaileran amount equal to the amounts remaining in the Collateral Account on the FinalLiquidation Date.

 

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

 

**1.3****                              ****Amendmentto Section 6.21.**  Section 6.21is hereby amended by deleting it in its entirety and replacing it with thefollowing:

 

*

 

**1.4****                              ****Amendmentto Section 9.1. **The referenceto “the fifth (5th) anniversaryof the Effective Date” in the first sentence of Section 9.1 is herebydeleted and replaced with “July 31, 2014”.

 

**1.5****                              ****Amendmentto Section 9.2(k). **The firstsentence of Section 9.2(k) is hereby amended by deleting it in itsentirety and replacing it with the following:

 

(k)                                  Bank shall havethe right to terminate the Agreement if (i) Retailer shall fail to deliveror amend an Eligible Letter of Credit or Substitute Collateral as requiredpursuant to Section 4.4(a); (ii) Retailer shall fail to deliver asubstitute Eligible Letter of Credit or Substitute Collateral pursuant to Section 4.4(b) inthe event any Letter of Credit previously delivered to Bank ceases to be anEligible Letter of Credit; or (iii) the Substitute CollateralDocumentation ceases to be a valid, binding and/or enforceable obligation ofany of the parties thereto (including pursuant to a permitted termination byany party thereto) or Bank’s security interest set forth therein ceases to be afirst priority perfected security interest.

 

**1.6****                              ****Amendment to Appendix A. **The definitionsof “Letter of Credit Event” and “Letter of Credit Period” are hereby deleted intheir entirety, and the definitions of “Collateral Period,” “GAAP,”                *                , “Level 1 Collateral Event,” “Level2 Collateral Event,            *               , “Remediation Period,” “SubstituteCollateral Documentation,”               *              ,and            *                   ,set forth below are hereby added to Appendix A:

 

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

 

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

 

RemediationPeriod, and (ii) ninety (90) days after the expiration or earliertermination of this Agreement.

 

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

 

*

 

“Level1 Collateral Event” means Ethan Allen Interiors Inc.’s failure to maintain,as of the end of each fiscal quarter of Ethan Allen Interiors Inc.,                       *                        .

 

“Level2 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 fullcalendar quarter period beginning after the occurrence of either a Level 1Collateral Event or a Level 2 Collateral Event throughout which Ethan AllenInteriors Inc.’s                    *                   .

 

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

 

*

 

*

 

**1.7****                              ****Amendment to Schedule 3.5.**  Schedule 3.5 of the Agreement is herebydeleted in its entirety and replaced with the revised Schedule 3.5 attachedhereto as Exhibit A.

 

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**ETHANALLEN INTERIORS INC. HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS OF THISDOCUMENT IN ACCORDANCE WITH RULE 24-B UNDER THE SECURITIES EXCHANGE ACT OF 1934**

 

**II.   GENERAL**

 

**2.1****                              ****Authorityfor Amendment.**  Retailerrepresents and warrants to Bank that the execution, delivery and performance ofthis Amendment has been duly authorized by all requisite corporate action onthe part of Retailer and upon execution by all parties, will constitute alegal, binding obligation of Retailer.

 

**2.2****                              ****Effectof Amendment.**  Except asspecifically amended hereby, the Agreement, and all terms contained therein,remains in full force and effect.  TheAgreement, as amended by this Amendment, constitutes the entire understandingof the parties with respect to the subject matter hereof.

 

**2.3****                              ****BindingEffect; Severability.**  Eachreference herein to a party hereto shall be deemed to include its successorsand assigns, all of whom shall be bound by this Amendment and in whose favorthe provisions of this Amendment shall inure. In case any one or more of the provisions contained in this Amendmentshall be invalid, illegal or unenforceable in any respect, the validity,legality and enforceability of the remaining provisions contained herein shallnot in any way be affected or impaired thereby.

 

**2.4****                              ****FurtherAssurances.**  The partieshereto agree to execute such other documents and instruments and to do suchother and further things as may be necessary or desirable for the execution andimplementation of this Amendment and the consummation of the transactionscontemplated hereby and thereby.

 

**2.5****                              ****GoverningLaw. **This Amendment shall begoverned 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 beexecuted in counterparts, each of which shall constitute an original, but allof which, when taken together, shall constitute but one agreement.

 

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**ETHANALLEN INTERIORS INC. HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS OF THISDOCUMENT IN ACCORDANCE WITH RULE 24-B UNDER THE SECURITIES EXCHANGE ACT OF 1934**

 

**IN WITNESS WHEREOF**, Retailer and Bank havecaused this Amendment to be executed by their respective officers thereuntoduly 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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**ETHANALLEN INTERIORS INC. HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS OF THISDOCUMENT IN ACCORDANCE WITH RULE 24-B UNDER THE SECURITIES EXCHANGE ACT OF 1934**

 

**EXHIBIT A**

**TO AMENDMENT**

 

**SCHEDULE 3.5ToCredit Card Program Agreement**

 

**Initial Program Fee Percentages**

 

*

 

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