Document:

Exhibit 10.10

 

INDEMNIFICATION AGREEMENT

 

AGREEMENT, made this [·], between Foster Wheeler AG, Zug, Switzerland, (the “Company”) and [·]
(the “Indemnitee”).

 

BACKGROUND:

 

A.            The Indemnitee is a
[member of the Board][officer] of the Company.

 

B.            Highly competent
persons have become more reluctant to serve publicly-held companies as
directors or in other capacities unless they are provided with adequate
protection through insurance and indemnification against inordinate risks of
claims and actions against them arising out of their service to and activities
on behalf of such companies.

 

C.            Uncertainties
relating to indemnification increase the difficulty of attracting and retaining
such persons.

 

D.            The Board (as
defined in Section 13(d)) has determined that an inability to attract and
retain such persons is detrimental to the best interests of the Company and
that the Company should act to assure such persons that there will be increased
certainty of such protection in the future.

 

E.             In recognition of
Indemnitee’s need for protection against personal liability in order to secure
Indemnitee’s service to the Company and Indemnitee’s reliance on the indemnity
provisions of the Company’s Articles of Association (the “AoA”) contained in Article 26
of the AoA requiring indemnification of the Indemnitee to the fullest extent
permitted by law, and in part to provide Indemnitee with specific contractual
assurance that the protection promised by Article 26 of the AoA will be
available to Indemnitee (regardless of, among other things, any amendment to or
revocation of Article 26 of the AoA or any change in the composition of
the Company’s Board of Directors (the “Board”) or acquisition transaction
relating to the Company), the Company wishes to provide in this Agreement for
the indemnification of and the advancing of expenses to Indemnitee to the
fullest extent (whether partial or complete) permitted by law and as set forth
in this Agreement.

 

F.             It is reasonable,
prudent and necessary for the Company contractually to obligate itself to
indemnify, and to advance expenses on behalf of persons serving as [members of
the board][executive officers] of the Company to the fullest extent permitted
by applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

 

G.            Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that Indemnitee be so indemnified.

 

AGREEMENT:

Section 1.               Agreement to Serve.  Indemnitee
served as [director/officer] of the Foster Wheeler Ltd Bermuda and agrees to
serve as a [director/officer] of the Company. 
This Agreement does not create or otherwise establish any right on the
part of Indemnitee to be and 

 

 

continue to be elected or
appointed a [director/officer] of the Company or any other Group Company and
does not create an employment contract between the Company and Indemnitee.

 

Section 2.               Basic Indemnification
Agreement.  (a) Subject to section 12, the Company shall
indemnify and hold harmless Indemnitee if Indemnitee (in Indemnitee’s capacity
as a director/officer), was is or becomes a party to or other participant in,
or is threatened to be made a party to or other participant in, a Claim (as
defined in Section 13(d) herein) by reason of (or arising in part out
of) an Indemnifiable Event (as defined in Section 13(h) herein), such
indemnity to be to the fullest extent permitted by law as soon as practicable
and in accordance with the procedures set forth in Section 7, such
indemnity to include indemnity against any and all Expenses (as defined in Section 13(f) herein),
damages, judgments, fines, penalties and amounts paid in settlement (including
all interest, assessments and other charges paid or payable in connection
therewith) of such Claim actually and reasonably incurred by or on behalf of
Indemnitee in connection with such Claim and any federal, state, local or
foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt
of any payments under this Agreement. 
Notwithstanding the foregoing, the indemnification obligations of the
Company under Section 2(a) and the Company’s obligations to advance
Expenses under Section 6 shall be subject to the condition that the
Reviewing Party shall not have determined (in a written opinion, in any case in
which the special independent counsel referred to in Section 3 hereof is
involved) that Indemnitee would not be permitted to be indemnified or receive
an advancement of Expenses under applicable law.

 

(b) Notwithstanding anything in this
Agreement to the contrary, prior to a Change of Control (as defined in Section 13(c) herein),
and except as provided in Sections 2(b), 5 and 9, Indemnitee shall not be
entitled to indemnification pursuant to this Agreement in connection with any
Claim (i) initiated by Indemnitee against the Company or any director or
officer of the Company unless the Company has joined in or consented to the
initiation of such Claim; (ii) made on account of Indemnitee’s conduct
which constitutes a breach of Indemnitee’s duty of loyalty to the Company or
its shareholders or is an act or omission not in good faith or which involves
intentional misconduct or a knowing violation of the law; or (iii) arising
from the purchase and sale by Indemnitee of securities in violation of Section 17(b) of
the Securities Exchange Act of 1934, as amended.

 

(c) Notwithstanding the foregoing, the
Company shall not indemnify the Indemnitee in respect of any Claim as to which
the Indemnitee shall have been adjudged in a final and non-appealable judgment
or decree of a court, arbitral tribunal or governmental or administrative
authority of competent jurisdiction to have committed an intentional or grossly
negligent breach of his duties as [a member of the Board][an executive officer]
of the Company under applicable law, provided however, that to the extent
applicable law changes after the date of this Agreement and permits greater
indemnification by agreement than would be afforded currently under this
section 2(c), it is the intent of the parties hereto that the Company shall
indemnify the Indemnitee without regard to the restrictions contained in this
section 2(c) to the fullest extent permitted under applicable law at such
time.

 

(d) To the fullest extent permitted
under applicable law, the Company waives, and undertakes to cause its
Subsidiaries to waive, any claim it may have against the Indemnitee for 

 

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loss, damage
or costs howsoever caused to the Company and/or any of its Subsidiaries in
connection with a Indemnifiable Event, unless any such loss, damage or cost is
attributable to conduct (including omissions) constituting an intentional or
grossly negligent breach of Indemnitees’s duties as [a member of the Board][an
officer] of the Company under applicable law provided however, that to the
extent applicable law changes after the date of this Agreement and permits
greater indemnification by agreement than would be afforded currently under
this section 2(d), it is the intent of the parties hereto that the Company
shall indemnify the Indemnitee without regard to the restrictions contained in
this section 2(d) to the fullest extent permitted under applicable law at
such time.

 

Section 3.               Change in Control.  The
Company agrees that if there is a Change in Control of the Company (other than
a Change in Control which has been approved by two- thirds or more of the Board
who were directors immediately prior to such Change in Control) then with
respect to all matters thereafter arising concerning the rights of Indemnitee
to indemnity payments and Expense Advances under this Agreement or any other
agreement, or the Articles of Association now or hereafter in effect relating
to Claims for Indemnifiable Events, the Company shall seek legal advice only
from special independent counsel selected by Indemnitee and approved by the
Company (which approval shall not be unreasonably withheld or delayed) and who
has not otherwise performed services for the Company within the last five years
(other than in connection with such matters) or for Indemnitee or any other
party to the claim.  In the event that
Indemnitee and the Company are unable to agree on the selection of the special
independent counsel, such special independent counsel shall be selected by lot
from among at least three law firms with offices in Zurich, Switzerland having
more than 50 attorneys, and having attorneys who specialize in corporate
law.  Such selection shall be made in the
presence of Indemnitee (and his legal counsel or either of them, as Indemnitee
may elect).  Such counsel, among other
things, shall, within 90 days of its retention, render its written opinion to
the Company and Indemnitee as to whether and to what extent Indemnitee would be
permitted to be indemnified under applicable law.  The Company agrees to pay the reasonable fees
of the special independent counsel referred to above and to fully indemnify
such counsel against any and all expenses (including attorneys’ fees), claims,
liabilities, and damages arising out of or relating to this Agreement or its
engagement pursuant hereto to the fullest extent permitted under applicable
law.

 

Section 4.               Notwithstanding any provisions
herein to the contrary, to the extent that the Indemnitee is, by reason of (or
arising out of) an Indemnifiable Event, a witness in any Claim (other than
proceeding instituted by or against Indemnitee), he shall be indemnified by the
Company against all Expenses actually and reasonably incurred by him or on his
behalf in connection therewith.

 

Section 5.               Partial Indemnity, Etc.  Subject
to Section 12, if Indemnitee is entitled under any provisions of this
Agreement to indemnification by the Company of some or a portion of the
Expenses, liabilities, judgments, fines, penalties and amounts paid in
settlement of a Claim but not, however, for all of the total amount thereof,
the Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled.  Moreover,
notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been 

 

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successful on the merits or otherwise in defense of any or all Claims
relating in whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein. Indemnitee shall be indemnified against all Expenses
incurred in connection therewith.  In
connection with any determination by the Reviewing Party or otherwise as to
whether Indemnitee is entitled to be indemnified hereunder the burden of proof
shall be on the Company to establish that Indemnitee is not so entitled.

 

Section 6.               Expense
Advances.  (a) Subject to Article 12 below the Company
shall advance all reasonable Expenses incurred by or on behalf of the
Indemnitee in connection with any Claim by reason of an Indemnifiable Event
within 10 Business Days after the receipt by the Company of a written statement
from the Indemnitee requesting such an advance or advances from time to time,
whether prior to or after the final disposition of such Claim provided, however that the Reviewing Party has not
determined in accordance with the procedures set forth in section 7 that the
Indemnitee would not be permitted to be indemnified under applicable law and
the terms and conditions of this Agreement.

 

(b) The obligation of the Company to make Expense Advances
pursuant to Section 6(a) shall be subject to the further condition
that the Company receives an undertaking from the Indemnitee that, if, when and
to the extent that the Reviewing Party or, in case the Indemnitee has commenced
legal proceedings in a court as specified in Section 20 herein, the
respective court in a final and not appealable decision determines that
Indemnitee would not be permitted to be so indemnified under applicable law and
the terms and conditions of this Agreement, the Company shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid. Indemnitee’s obligation to reimburse the Company
for Expense Advances shall be unsecured and no interest shall be charged
thereon.

 

Section 7.               Procedure for Determination of Entitlement to
Indemnification or Expense Advances.  (a) To obtain
indemnification or Expense Advances in accordance with this Agreement, the
Indemnitee shall submit to the Secretary a written request, including such
documentation and information as is reasonably available to the Indemnitee and
is reasonably necessary to determine whether and to what extent the Indemnitee
is entitled to such indemnification or Expense Advances. The Secretary shall
promptly advise the Board in writing of such a request.

 

(b) The Reviewing Party shall determine within 30 calendar days
after the Company receives such request whether the Indemnitee is entitled to
such indemnification and/or Expense Advances. In case the Reviewing Party
determines that the Indemnitee is not entitled to indemnification or Expense
Advances, the Company shall give, or cause to give, to the Indemnitee written
notice thereof specifying the reason therefore. The indemnification shall by
paid within 10 Business Days after the Reviewing Party determines that the
Indemnitee is entitled to indemnification and/or Expense Advances.

 

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(c) The Indemnitee shall cooperate with
the Reviewing Party with respect to its request for indemnification and/or
Expense Advances, including providing the Reviewing Party upon reasonable
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to the Indemnitee
and reasonably necessary to such determination. Upon Indemnitee’s request for
indemnification or Expense Advance, Indemnitee shall be presumed to be entitled
to indemnification/Expense Advance hereunder and the Company shall have the
burden of proof in the making of any determination contrary to such
presumption. The Company shall pay any and all reasonable fees, cost and
expenses incurred by the Reviewing Party acting pursuant to this Agreement.
Cost and expenses incurred by the Indemnitee (including reasonable attorney’s
fees) for cooperating with the Reviewing Party shall be borne by the Company
unless and until a final and non appealable decision of a competent arbitral
tribunal determines that Indemnitee would not be entitled to indemnification.

 

(d) In the event that (i) the
Reviewing Party determines that the Indemnitee is not entitled to
indemnification or Expense Advances or if such determination is not made by the
Reviewing Party within the period of 30 calendar days pursuant to section 6(b) above,
or (ii) the Expense Advance or the indemnity pursuant to section 7(b) above
is not timely made, the Indemnitee shall be entitled to commence legal
proceedings in a court as specified in Section 20 herein to secure a
determination that Indemnitee should be indemnified and/or entitled to Expense
Advances under applicable laws or the terms and conditions of this Agreement.
Any determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law or the terms and conditions of
this Agreement shall not be binding and Indemnitee shall not be required to
reimburse the Company for any Expense Advance until a final judicial
determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). Any determination by the Reviewing
Party otherwise shall be conclusive and binding on the Company and Indemnitee.
In case of court proceedings in accordance with Section 20 the Indemnitee
shall be presumed to be entitled to indemnification/Expense Advance hereunder
and the Company shall have the burden of proof to overcome this presumption.

 

(e) The Company shall indemnify
Indemnitee for Expenses incurred by Indemnitee in connection with the
successful establishment or enforcement, in whole or in part, by Indemnitee of
Indemnitee’s right to indemnification or Expense Advances.

 

Section 8.               No Presumption.  For
purposes of this Agreement, the termination of any action, suit or proceeding
by judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief.

 

Section 9.               Notification and Defense of
Claim.  Within 30 days after receipt by Indemnitee of notice of
the commencement of a Claim which may involve an Indemnifiable Event,
Indemnitee will, if a claim in respect thereof is to be made against the
Company under 

 

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this Agreement, submit to the Company a written notice identifying the
proceeding, but the omission so to notify the Company will not relieve it from
any liability which it may have to Indemnitee under this Agreement unless the
Company is materially prejudiced by such lack of notice.  With respect to any such Claim as to which
Indemnitee notifies the Company of the commencement thereof:

 

(a) the Company will be entitled to
participate therein at its own expense;

 

(b) except as otherwise provided below,
to the extent that it may wish, the Company jointly with any other indemnifying
party similarly notified will be entitled to assume the defense thereof, with
counsel selected by the Board and reasonably satisfactory to Indemnitee.  After notice from the Company to Indemnitee
of its election to assume the defense thereof, the Company will not be liable
to Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense thereof other than
reasonable costs of investigation or as otherwise provided below.  Indemnitee shall have the right to employ
counsel in such action, suit or proceeding, but the fees and expenses of such
counsel incurred after notice from the Company of its assumption of the defense
thereof shall be at the expense of Indemnitee unless (i) the employment of
counsel by Indemnitee has been authorized by the Company, (ii) in the
reasonable opinion of counsel to the Indemnitee there may be a conflict of
interest between the Company and the Indemnitee in the conduct of the defense
of such action, or (iii) the Company shall not in fact have employed
counsel to assume the defense of such action, in each of which cases (subject
to Section 12) the fees and expenses of counsel shall be at the expense of
the Company.  The Company shall not be
entitled to assume the defense of any claim brought by or on behalf of the
Company or as to which Indemnitee shall have made the conclusion provided for
in clause (ii) above; and

 

(c) the Company shall not be liable to
indemnify Indemnitee under this Agreement for any amounts paid in settlement of
any action or claim effected without its written consent.  The Company shall not settle any action or
claim the defense of which is assumed by the Company in accordance with this Section 9
in any manner which would impose any penalty or limitation on Indemnitee
without Indemnitee’s written consent. 
Neither the Company nor Indemnitee will unreasonably withhold or delay
their consent to any proposed settlement.

 

Section 10.             Non-exclusivity, Etc.  The
rights of Indemnitee hereunder shall be in addition to any other rights
Indemnitee may have under the Articles of Association, any agreement, a vote of
the Company shareholders, including a vote of the Company shareholders granting
discharge (“décharge”) under article 698 section 2 para 5 of the Swiss code of
obligations (the “SCO”), a resolution of the Board or otherwise.  No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee acting on behalf of the Company and at the request of the Company
prior to such amendment, alteration or repeal. 
To the extent that a change in the SCO (whether by statute or judicial
decision) or the Articles of Association permits greater indemnification by
agreement than would be afforded currently under the Articles of Associations
and this Agreement, it is the intent of the parties hereto that Indemnitee
shall enjoy by this Agreement the greater benefits so afforded by such
change.  No right or remedy herein
conferred is intended to be exclusive of any other right or 

 

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remedy, and every other right and remedy shall be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. 
The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other right or remedy.

 

Section 11.             Liability Insurance.  To
the extent the Company maintains an insurance policy or policies providing
directors’ and officers’ liability insurance, Indemnitee shall be covered by
such policy or policies in accordance with its or their terms to the maximum
extent of the coverage available for any Company director or officer.  If, at the time the Company receives notice
from any source of a Claim as to which Indemnitee is a party or a participant
(as a witness or otherwise), the Company has director and officer liability
insurance in effect, the Company shall give prompt notice of such proceeding to
the insurers in accordance with the procedures set forth in the respective
policies.  The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such Claim in accordance
with the terms of such policies.  In the
event of a Potential Change in Control (as defined in Section 13(c) herein),
the Company shall maintain in force any and all insurance policies then
maintained by the Company providing directors’ and officers’ liability
insurance, in respect of Indemnitee, for a period of six years thereafter.  The Company shall indemnify Indemnitee for
Expenses incurred by Indemnitee in connection with any successful action
brought by Indemnitee for recovery under any insurance policy referred to in
this Section 11 and shall advance to Indemnitee the Expenses of such
action in the manner provided in Section 6 above.

 

Section 12.             Limitation of Indemnification.  Notwithstanding any other terms of this
Agreement, nothing herein shall indemnify the Indemnitee against, or exempt
Indemnitee from, any liability in respect of the Indemnitee’s (a) fraud,
or (b) dishonesty.

 

Section 13.             Certain Definitions.

 

(a)                                  “Business
Day” means any day when the banks in New York and Zurich are open
for business.

 

(b)           The
“Board” means the board of directors of
the Company.

 

(c)           “Change in Control” shall be deemed to
have occurred if:

 

(1)           any person, as that term is used in Section 13(d) and
Section 14(d)(2) of the Exchange Act, becomes, is discovered to be,
or files a report on Schedule 13D or 14D-1 (or any successor schedule,
form or report) disclosing that such person is a beneficial owner (as defined
in Rule 13d-3 under the Exchange Act or any successor rule or
regulation), directly or indirectly, of securities of the Company representing
20% or more of the total voting power of the Company’s then outstanding Voting
Securities (unless such 

 

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person becomes such a beneficial owner in
connection with the initial public offering of the Company);

 

(2)           during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board and
any new director whose election by the Board or nomination for election by the
Company’s shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof;

 

(3)           the Company, or any material
subsidiary of the Company, is merged, amalgamated, consolidated or reorganized
into or with another company, corporation or other legal person (an “Acquiring
Person”) or securities of the Company are exchanged for securities of an
Acquiring Person, and immediately after such merger, amalgamation,
consolidation, reorganization or exchange less than a majority of the combined
voting power of the then outstanding securities of the Acquiring Person
immediately after such transaction are held, directly or indirectly, in the
aggregate by the holders of Voting Securities immediately prior to such
transaction;

 

(4)           any Group Company, in any transaction
or series of related transactions, sells or otherwise transfers all or
substantially all of its assets to an Acquiring Person, and less than a
majority of the combined voting power of the then outstanding securities of the
Acquiring Person immediately after such sale or transfer is held, directly or
indirectly, in the aggregate by the holders of Voting Securities immediately
prior to such sale or transfer;

 

(5)           any Group Company, in any transaction
or series of related transactions, sells or otherwise transfers business
operations that generated two thirds or more of the consolidated revenues
(determined on the basis of the Group Companies four most recently completed
fiscal quarters) of the Group Company immediately prior thereto;

 

(6)           the Company files a report or proxy
statement with the Securities and Exchange Commission pursuant to the Exchange
Act disclosing that a change in control of the Company has or may have occurred
or will or may occur in the future pursuant to any then existing contract or
transaction; or

 

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(7)           any other transaction or series of
related transactions occur that have substantially the effect of the
transactions specified in any of the preceding clauses in this Section 13(a).

 

Notwithstanding the provisions of Section 13(c)(1) or
13(c)(4), unless otherwise determined in a specific case by majority vote of
the Board, a Change of Control shall not be deemed to have occurred for
purposes of this Agreement solely because (i) the Company, (ii) an
entity in which the Company directly or indirectly beneficially owns 50% or
more of the voting securities or (iii) any Company sponsored employee
stock ownership plan, or any other employee benefit plan of the Company, either
files or becomes obligated to file a report or a proxy statement under or in
response to Schedule 13D, Schedule 14D-1, Form 8-K or
Schedule 14A (or any successor schedule, form or report or item therein)
under the Exchange Act, disclosing beneficial ownership by it of shares of
stock of the Company, or because the Company reports that a Change in Control
of the Company has or may have occurred or will or may occur in the future by
reason of such beneficial ownership.

 

(d) “Claim”
means any threatened, pending or completed action, suit,
proceeding or alternative dispute resolution mechanism, or any inquiry, hearing
or investigation whether conducted by the Company or any other party, whether
civil, criminal, administrative, investigative or other and whether formal or
informal except for one initiated by the Indemnitee pursuant to Section 20
to enforce Indemnitee’s  rights under
this Agreement.

 

(e) “Expense
Advance”  has the meaning
assigned in Section 6(a).

 

(f) “Expenses”
means attorneys’ fees, court and administrative fees or charges
as well as all other costs, fees, expenses, related taxes and obligations of
any nature whatsoever paid or incurred in connection with investigating,
defending, being a witness in or participating in (including appeal), or
preparing to defend, be a witness in or participate in any Claim relating to
any Indemnifiable Event or recovery under an directors’ and officers’ liability
insurance policies maintained by the Company.

 

(g) “Group Companies”
means the Company and each subsidiary of the Company

 

(h) “Indemnifiable
Event” means any event or occurrence (whether before or after
the date hereof) related to the fact that Indemnitee is or was a director,
officer, employee, consultant, agent or fiduciary of or to the Company, or any
subsidiary of the Company, or is or was serving at the request of the Company
as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, or by reason of anything done or not done by Indemnitee in any such
capacity.

 

(i) Potential
Change in Control” will be deemed to have occurred if (i) the
Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control; (ii) any person (including the Company)
publicly announces an intention to take or to consider taking actions which, if
consummated, would constitute a Change in Control; (iii) any person, other
than a trustee or other fiduciary holding securities under an 

 

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employee benefit
plan of the Company or a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of shares of the Company, who is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 9.5% or more
of the combined voting power of the Company’s then outstanding Voting
Securities, increases such person’s beneficial ownership of such securities by
five percentage points or more over the initial percentage of such securities;
or (iv) the Board adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has occurred.

 

(j) “Reviewing
Party” means (i) the Board (provided that a majority of
directors are not parties to the particular Claim for which Indemnitee is
seeking indemnification) or (ii) any other person or body appointed by the
Board, who is not a party to the particular Claim for which Indemnitee is
seeking indemnification, or (iii) if there has been a Change in Control,
the special independent counsel referred to in Section 4 hereof.

 

(k) “SCO”
means the Swiss Code of Obligations (being the fifth part of the Swiss Civil
Code) dated March 30 1911, as amended until at December 31 2008.

 

(l) “Voting
Securities” means any securities of the Company which vote
generally in the election of directors to the Board.

 

Section 14.             Amendments, Termination and
Waiver.  No supplement, modification, amendment or termination of
this Agreement shall be binding unless executed in writing by both of the
parties hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

 

Section 15.             Contribution.  If the
indemnification provided in Sections 2 et sqq of this Agreement is unavailable,
then, in respect of any Claim in which the Company is jointly liable with
Indemnitee (or would be if joined in the Claim), the Company shall contribute
to the amount of Expenses, judgments, fines, penalties and amounts paid in
settlement as appropriate to reflect: (i) the relative benefits received
by the Company, on the one hand, and Indemnitee, on the other hand, from the
transaction from which the Claim arose, and (ii) the relative fault of the
Company, on the one hand, and of Indemnitee, on the other, in connection with
the events which resulted in such Expenses, judgments, fines, penalties and
amounts paid in settlement, as well as any other relevant equitable
considerations.  The relative fault of
the Company, on the one hand, and of Indemnitee, on the other, shall be
determined by reference to, among other things, the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such Expenses and Liabilities.  The Company agrees that it would not be just
and equitable if contribution pursuant to this Section 15 were determined
by pro rata allocation or any other method of allocation which does not take
account of the equitable considerations described in this Section 15.

 

Section 16.             Subrogation.  In
the event of payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of Indemnitee, who
shall execute all papers required and shall do everything that may be necessary

 

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to secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to enforce such
rights.

 

Section 17.             No Duplication of Payments.  The
Company shall not be liable under this Agreement to make any payment in
connection with any Claim made against Indemnitee to the extent Indemnitee has
otherwise actually received payment (under insurance policy or otherwise) of
the amounts otherwise indemnifiable hereunder.

 

Section 18.             Binding Effect, Etc.  This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors, assigns, including any
direct or indirect successor by purchase, merger, amalgamation, consolidation
or otherwise to all or substantially all of the business or assets of the
Company, spouse, heirs, and personal and legal representatives.  This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as a director or officer of
the Company or of any other enterprise at the Board’s request.

 

Section 19.             Severability.  The
provisions of this Agreement shall be severable in the event that any of the
provisions hereof (including any provision within a single section, paragraph
or sentence) are held by a court of competent jurisdiction to be invalid, void
or otherwise unenforceable, and the remaining provisions shall remain
enforceable to the fullest extent permitted by law.

 

Section 20.             Applicable Law and Consent to
Arbitration.  This Agreement and the
legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of Switzerland, without regard to its
conflict of laws rules. Any dispute, controversy or claim arising out of or in
relation to this contract, including the validity, invalidity, breach or
termination thereof, shall be settled by arbitration in accordance with the
Swiss Rules of International Arbitration of the Swiss Chambers of Commerce
in force on the date when the Notice of Arbitration is submitted in accordance
with these Rules. The number of arbitrators shall be three. The seat of the
arbitration shall be in New York City; The arbitral proceedings shall be
conducted in English.

 

[SPACE INTENTIONALLY LEFT BLANK]

 

11

 

Section 21.             Identical Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement.  Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the
existence of this Agreement.

 

 

	
  Executed.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FOSTER WHEELERAG

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INDEMNITEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

12Exhibit 10.1

 

AMENDMENT NO. 1

 

Dated as of January 29,
2009

 

to

 

CREDIT AGREEMENT

 

Dated as of July 21,
2005

 

THIS AMENDMENT NO. 1 (“Amendment”)
is made as of January 29, 2009 by and among Ethan Allen Global, Inc.
(the “Borrower”), Ethan Allen Interiors Inc. (“Holdings”), the
financial institutions listed on the signature pages hereof and JPMorgan
Chase Bank, N.A., as Administrative Agent (in such capacity, the “Administrative
Agent”) under that certain Credit Agreement dated as of July 21, 2005
by and among the Borrower, Holdings, the Lenders and the Administrative Agent
(as may be further amended, supplemented or otherwise modified from time to
time, 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 and the Administrative Agent agree to certain
amendments to the Credit Agreement;

 

WHEREAS, the Lenders party
hereto and the Administrative Agent have agreed to such amendments 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 party hereto and the Administrative Agent have agreed to enter into
this Amendment.

 

1.                                       Amendments to
Credit Agreement.  Effective
as of the date of satisfaction of the conditions precedent set forth in Section 2
below, the Credit Agreement is hereby amended as follows:

 

(a)                                  Section 1.01
of the Credit Agreement is amended to add the following definitions thereto
and, where applicable, to replace the corresponding previously existing definitions:

 

“Agreement”
means this Credit Agreement, as amended, restated, supplemented or otherwise
modified from time to time.

 

 “Alternate Base Rate” means, for
any day, a rate per annum equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest
Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on the Reuters BBA Libor Rates Page 3750 (or on any successor or
substitute page of such page) at approximately 11:00 

 

 

a.m.
London time on such day.  Any change in
the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date of such change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate, respectively.

 

“Amendment
No. 1 Effective Date” means January 29, 2009.

 

“Applicable Rate” means, for any day, with respect to any
Eurodollar Revolving Loan or any ABR Revolving Loan, or with respect to the
facility fees payable hereunder, as the case may be, the applicable rate per
annum set forth below under the caption “Eurodollar Spread”, “ABR Spread” or “Facility
Fee Rate”, as the case may be, based upon the ratings by Moody’s and S&P,
respectively, applicable on such date to the Index Debt:

 

	
  Index Debt

  Ratings

  	
   

  	
  Eurodollar

  Spread

  	
   

  	
  ABR Spread

  	
   

  	
  Facility Fee

  Rate

  	
   

  
	
  Category
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A3 or A- or higher

  	
   

  	
   

  	
  1.35

  	
  %

  	
  0.35

  	
  %

  	
  0.175

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Baa1 or BBB+

  	
   

  	
   

  	
  1.575

  	
  %

  	
  0.575

  	
  %

  	
  0.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Baa2 or BBB

  	
   

  	
   

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  	
  0.30

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Baa3 or BBB-

  	
   

  	
   

  	
  1.95

  	
  %

  	
  0.95

  	
  %

  	
  0.35

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lower than Baa3 or BBB-

  	
   

  	
   

  	
  2.60

  	
  %

  	
  1.60

  	
  %

  	
  0.40

  	
  %

  

 

For
purposes of the foregoing, (i) during the period from the Closing Date
through September 30, 2005, so long as Moody’s shall not have in effect a
rating for the Index Debt, then the Applicable Rate shall be determined based
on Category 2, (ii) after the earlier to occur of (A) the rating by
Moody’s described in clause (i) and (B) September 30, 2005, if
either Moody’s or S&P shall not have in effect a rating for the Index Debt,
then the Applicable Rate shall be determined based on the rating established by
the remaining rating agency; (iii) if at any time both Moody’s and S&P
shall not have in effect a rating for the Index Debt (other than by reason of
the circumstances referred to in the last sentence of this definition), then
such rating agency shall be deemed to have established a rating in Category 5; (iv) if
the ratings established or deemed to have been established by Moody’s and
S&P for the Index Debt shall fall within different Categories, the
Applicable Rate shall be based on the higher of the two ratings unless one of
the two ratings is two or more Categories lower than the other, in which case
the Applicable Rate shall be determined by reference to the Category next below
that of the higher of the two ratings; and (v) if the ratings established
or deemed to have been established by Moody’s and S&P for the Index Debt
shall be changed (other than as a result of a change in the rating system of
Moody’s or S&P), such change shall be effective as of the date on which it
is first announced by the applicable rating agency, irrespective of when notice
of such change shall have been furnished by the Borrower to the Agent and the
Lenders pursuant 

 

2

 

to
Section 5.01 or otherwise.  Each
change in the Applicable Rate shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change. 
If the rating system of Moody’s or S&P shall change, or if either
such rating agency shall cease to be in the business of rating corporate debt
obligations, the Borrower and the Lenders shall negotiate in good faith to
amend this definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Rate shall be determined by
reference to the rating most recently in effect prior to such change or
cessation.

 

“Banking Services”
means each and any of the following bank services provided to the Borrower or
any Subsidiary by any Lender or any of its Affiliates: (a) commercial
credit cards, (b) stored value cards and (c) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services).

 

“Banking Services
Agreement” means any agreement entered into by the Borrower or any
Subsidiary in connection with Banking Services.

 

“Banking
Services Obligations” means any and all obligations of the Borrower or any
Subsidiary, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.

 

“Collateral”
means the property (i.e., accounts receivable, inventory and related assets
described in the Security Agreement) which is owned by a Loan Party and covered
by the Collateral Documents; provided that “Collateral” shall not
include any Excluded Assets.

 

“Collateral
Documents” means, collectively, the Security Agreement and all other
agreements, instruments and documents executed in connection with this
Agreement that are intended to create, perfect or evidence Liens to secure the
Secured Obligations, and all other related written matter whether heretofore, now,
or hereafter executed by Holdings, the Borrower or any of its Subsidiaries and
delivered to the Administrative Agent.

 

“Defaulting
Lender” means any Lender, as determined by the Administrative Agent, that
has (a) failed to fund any portion of its Loans or participations in
Letters of Credit or Swingline Loans within three (3) Business Days of the
date required to be funded by it hereunder, (b) notified the Borrower, the
Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender in
writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it does
not intend to comply with its funding obligations under this Agreement or under
other agreements in which it commits to extend credit (unless such statement is
limited to specified agreement(s), other than this Agreement), (c) failed,
within three (3) Business Days after request by the Administrative Agent,
to confirm that it will comply with the terms of this Agreement relating to its
obligations to fund prospective Loans and participations in then outstanding
Letters of Credit and Swingline Loans, (d) otherwise failed to pay over to
the Administrative Agent or any other Lender any other amount required to be paid
by it hereunder within three (3) Business Days of the date when due,
unless the subject of a good faith dispute, or (e) (i) become or is 

 

3

 

insolvent
or has a parent company that has become or is insolvent or (ii) become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment or has a parent company that has become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment.

 

“Equity
Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or
other equity ownership interests in a Person, and any warrants, options or
other rights entitling the holder thereof to purchase or acquire any such
equity interest.

 

“Excluded
Assets” means any “Principal Property” as defined in that certain Indenture
dated as of September 27, 2005 by and among certain of the Loan Parties
and U.S. Bank National Association as in effect on the Amendment No. 1
Effective Date and without giving effect to any amendments or modifications
thereto after the Amendment No. 1 Effective Date.

 

“Holders
of Secured Obligations” means the holders of the Secured Obligations from
time to time and shall include (i) each Lender and each Issuing Bank in
respect of its Loans and LC Exposure respectively, (ii) the Administrative
Agent, the Issuing Banks and the Lenders in respect of all other present and
future obligations and liabilities of Holdings, the Borrower and each
Subsidiary of every type and description arising under or in connection with
this Agreement or any other Loan Document, (iii) each Lender and affiliate
of such Lender in respect of Rate Protection Agreements and Banking Services
Agreements entered into with such Person by the Borrower or any Subsidiary, (iv) each
indemnified party under Section 9.03 in respect of the obligations and liabilities
of the Borrower to such Person hereunder and under the other Loan Documents,
and (v) their respective successors and (in the case of a Lender,
permitted) transferees and assigns.

 

“Loan
Documents” means this Agreement, the Collateral Documents, the Guarantee
Agreement and the Indemnity, Subrogation and Contribution Agreement.

 

“Rate
Protection Obligations” means any and all obligations of the Borrower or
any Subsidiary, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
Rate Protection Agreements permitted hereunder with a Lender or an Affiliate of
a Lender, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any such Rate Protection Agreement transaction.

 

“Release
Event” shall have the meaning given to that term in Section 5.11(e).

 

“Restricted
Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in Holdings,
the Borrower or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity 

 

4

 

Interests
in Holdings or the Borrower or any option, warrant or other right to acquire
any such Equity Interests in Holdings or the Borrower.

 

“Secured
Obligations” means all Obligations, together with all Rate Protection
Obligations and Banking Services Obligations owing to one or more Lenders or
their respective Affiliates.

 

“Security
Agreement” means that certain Security Agreement (including any and all
supplements thereto), dated as of the Trigger Date, between the Loan Parties
and the Administrative Agent, for the benefit of the Administrative Agent and
the other Holders of Secured Obligations, and any other pledge or security
agreement entered into, after the date of this Agreement by any other Loan
Party (as required by this Agreement or any other Loan Document), or any other
Person, as the same may be amended, restated or otherwise modified from time to
time.

 

“Trigger
Date” means, on or after the Amendment No. 1 Effective Date, the
earliest date on which either of following events shall occur: (a) the
Consolidated Fixed Charge Coverage Ratio (calculated in accordance with Section 6.06)
is less than 2.00 to 1.00 or (b) the first to occur of receipt by the
Borrower of a Corporate Credit Rating or Senior Unsecured Rating of BB+ or
lower from S&P or a Senior Unsecured Rating of Ba1 or lower from Moody’s.

 

“UCC”
means the Uniform Commercial Code as in effect from time to time in the State
of New York or any other state the laws of which are required to be applied in
connection with the perfection of security interests in the Collateral.

 

“Unliquidated
Obligations” means, at any time, any Secured Obligations (or portion thereof)
that are contingent in nature or unliquidated at such time, including any
Secured Obligation that is: (i) an obligation to reimburse a bank for
drawings not yet made under a letter of credit issued by it; (ii) any
other obligation (including any guarantee) that is contingent in nature at such
time; or (iii) an obligation to provide collateral to secure any of the
foregoing types of obligations.

 

(b)                                 Section 1.01
of the Credit Agreement is amended to delete the defined terms “Assessment Rate”,
“Base CD Rate” and “Three Month Secondary CD Rate” appearing therein.

 

(c)                                  The definition
of “Commitment” appearing in Section 1.01 of the Credit Agreement is
amended to delete the last sentence thereof and to replace such sentence with
the following sentence:

 

As
of the Amendment No. 1 Effective Date, the aggregate amount of the Lenders’
Commitments is $100,000,000.

 

(d)                                 The definition
of “Statutory Reserve Rate” appearing in Section 1.01 of the Credit
Agreement is amended to delete clauses (a) and (b) appearing therein.

 

(e)                                  Section 2.06(b)(i) of
the Credit Agreement is amended to delete the amount “$100,000,000” appearing
therein and to replace such amount with the amount “25,000,000”.

 

(f)                                    Section 2.18
of the Credit Agreement is amended to (1) add the phrase “; Allocations
of Proceeds” to the end of the heading thereof, (2) change clause (e) thereto
to a new clause (f) thereto and (3) to add the following as a new
clause (e) thereto:

 

5

 

(e)                                  Any proceeds of Collateral received by the
Administrative Agent (i) not constituting a specific payment of principal,
interest, fees or other sum payable under the Loan Documents (which shall be
applied as specified by the Borrower) or (ii) after an Event of Default
has occurred and is continuing and the Administrative Agent so elects or the
Required Lenders so direct, such funds shall be applied ratably first,
to pay any fees, indemnities, or expense reimbursements including amounts then
due to the Administrative Agent and the Issuing Bank from the Borrower (other
than in connection with Banking Services Obligations and Rate Protection
Obligations), second, to pay any fees or expense reimbursements then due
to the Lenders from the Borrower (other than in connection with Banking
Services Obligations and Rate Protection Obligations), third, to pay
interest then due and payable on the Loans ratably, fourth, to prepay
principal on the Loans and unreimbursed LC Disbursements ratably, fifth,
to pay an amount to the Administrative Agent equal to one hundred two percent
(102%) of the aggregate undrawn face amount of all outstanding Letters of
Credit and the aggregate amount of any unpaid LC Disbursements, to be held as
cash collateral for such Obligations, sixth, to payment of any amounts
owing with respect to Banking Services Obligations and Rate Protection
Obligations, and seventh, to the payment of any other Secured Obligation
due to the Administrative Agent or any Lender by the Borrower.  Notwithstanding anything to the contrary
contained in this Agreement, unless so directed by the Borrower, or unless a
Default is in existence, none of the Administrative Agent or any Lender shall
apply any payment which it receives to any Eurodollar Loan of a Class, except (a) on
the expiration date of the Interest Period applicable to any such Eurodollar
Loan or (b) in the event, and only to the extent, that there are no
outstanding ABR Loans of the same Class and, in any event, the Borrower
shall pay the break funding payment required in accordance with Section 2.16.  The Administrative Agent and the Lenders
shall have the continuing and exclusive right to apply and reverse and reapply
any and all such proceeds and payments to any portion of the Secured
Obligations.

 

(g)                                 Section 2.19(b) of
the Credit Agreement is amended to (1) delete the phrase “defaults in its
obligation to fund Loans hereunder” appearing in the first sentence thereof and
to replace such phrase with the phrase “becomes a Defaulting Lender” and (2) add
the parenthetical “(and if a Commitment is being assigned, each Issuing Bank)”
immediately after the reference “Administrative Agent” appearing in clause (i) of
the proviso therein.

 

(h)                                 Section 2.20(a) of
the Credit Agreement is amended to (1) add the phrase “, on or after the
Amendment No. 1 Effective Date,” immediately after the phrase “the sum of
the total Commitments shall not” appearing therein and (2) delete the
amount “$300,000,000” appearing therein and to replace such amount with the
amount “$100,000,000”.

 

(i)                                     Article II
of the Credit Agreement is amended to add each of the following as a new Section 2.21
and Section 2.22 thereof, respectively:

 

SECTION 2.21  Defaulting Lenders.  Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

 

(a)                                  if any
Swingline Exposure or LC Exposure exists at the time a Lender is a Defaulting
Lender, the Borrower shall within one (1) Business Day following notice by
the Administrative Agent (i) prepay such Swingline Exposure or, if agreed
by the Swingline Lender, cash collateralize the Swingline Exposure of the
Defaulting Lender on terms satisfactory to the Swingline Lender and (ii) cash
collateralize such Defaulting 

 

6

 

Lender’s LC Exposure in
accordance with the procedures set forth in Section 2.06(k) for so
long as such LC Exposure is outstanding; and

 

(b)                                 the Swingline
Lender shall not be required to fund any Swingline Loan and no Issuing Bank
shall not be required to issue, amend or increase any Letter of Credit unless
it is satisfied that cash collateral will be provided by the Borrower in
accordance with Section 2.21(a).

 

SECTION 2.22  Occurrence of Trigger Date.  Each of Holdings and the Borrower hereby
acknowledge and agree that, effective as of the Trigger Date, (i) all
signature pages, documents, instruments and all other deliveries related to the
Collateral Documents that have been provided to the Administrative Agent by
Holdings, the Borrower or any of its Subsidiaries in accordance with the terms
of Amendment No. 1 to this Agreement, dated as of the Amendment No. 1
Effective Date, are automatically and irrevocably released, and (ii) the
Administrative Agent is hereby authorized to (a) date all such items the
date of the Trigger Date, (b) attach the applicable signature pages of
the Loan Parties thereto and (c) make all filings and take any other
actions contemplated thereby in connection with creating and perfecting Liens
in favor of the Administrative Agent for the benefit of itself and the other
Holders of Secured Obligations.

 

(j)                                     Section 3.02
of the Credit Agreement is amended to add the phrase “other than Liens created
under the Loan Documents” before the period, and immediately following the
reference to “Subsidiary”, at the end of the last sentence thereof.

 

(k)                                  Section 3.06
of the Credit Agreement is amended to (1) delete the phrase “As of the
Effective Date, there” appearing therein and to replace such phrase with the
word “There” and (2) delete the year “2004” appearing therein and to
replace such year with the year “2008”.

 

(l)                                     Article III
of the Credit Agreement is amended to add the following as a new Section 3.21
thereof:

 

SECTION 3.21.  Security Interest in Collateral.  On and after the Trigger Date, the provisions
of this Agreement and the other Loan Documents create legal and valid  Liens on all the Collateral in favor of the
Administrative Agent, for the benefit of the Holders of Secured Obligations,
and upon the filing of required financing statements by the Administration
Agent such Liens will constitute perfected Liens on the Collateral, securing
the Secured Obligations, enforceable against the applicable Loan Party and all
third parties, and having priority over all other Liens on the Collateral
except in the case of (a) Liens permitted by Section 6.02, to the
extent any such Liens would have priority over the Liens in favor of the
Administrative Agent pursuant to any applicable law and (b) Liens
perfected only by possession (including possession of any certificate of title)
or control to the extent the Administrative Agent has not obtained or does not
maintain possession or control of such Collateral.

 

(m)                               Section 5.02
of the Credit Agreement is amended to (1) change the first paragraph
thereof to a new clause (a) thereof and (2) to add the following as a
new clause (b) thereto:

 

(b)                                 On the Trigger Date (or such later date as
may be agreed upon by the Administrative Agent), the Borrower will furnish to
the Lenders, upon request of the Administrative Agent, information in
reasonable detail as to the insurance so maintained.  The Borrower shall deliver to the
Administrative Agent endorsements to all physical 

 

7

 

damage
insurance policies on all of the Inventory naming the Administrative Agent as
lender loss payee.  In the event the
Borrower or any of its Subsidiaries at any time or times hereafter shall fail
to obtain or maintain any of the policies or insurance required herein or to
pay any premium in whole or in part relating thereto, then the Administrative
Agent, without waiving or releasing any obligations or resulting Default
hereunder, may at any time or times thereafter (but shall be under no
obligation to do so) obtain and maintain such policies of insurance and pay
such premiums and take any other action with respect thereto which the
Administrative Agent deems advisable. 
All sums so disbursed by the Administrative Agent shall constitute part
of the Obligations, payable as provided in this Agreement.  The Borrower will furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of the Inventory or the commencement
of any action or proceeding for the taking of any material portion of the
Inventory or interest therein under power of eminent domain or by condemnation
or similar proceeding.

 

(n)                                 Section 5.09(ii) of
the Credit Agreement is amended to (i) add the phrase “, within 30 days of
such Person becoming a Subsidiary (in the case of a new Subsidiary) or no
longer qualifying for exclusion pursuant to the preceding parenthetical (in the
case of an existing Subsidiary),” immediately prior to the reference to “undertake”
appearing therein and (ii) add the phrase “, to be accompanied by
appropriate corporate resolutions, other corporate organizational and
authorization documentation and legal opinions (consistent with the legal
opinion delivered on the Effective Date)” immediately after the phrase “one
or  more instruments or agreements”
appearing therein.

 

(o)                                 Article V
of the Credit Agreement is amended to add the following as a new Section 5.11
thereto:

 

SECTION 5.11  Collateral.

 

(a)                                  Within one (1) Business Day following
the Trigger Date (or such later date as may be agreed upon by the
Administrative Agent), the Borrower will deliver to the Administrative Agent: (i) complete
and correct schedules to each of the Collateral Documents and (ii) legal
opinion(s) in form and substance reasonably satisfactory to the
Administrative Agent in respect of the Collateral Documents.

 

(b)                                 Following the Trigger Date, on the date on
which a Subsidiary (that was not a Subsidiary Guarantor as of the Trigger Date)
becomes a Subsidiary Guarantor pursuant to Section 5.09 (or such later
date as may be agreed upon by the Administrative Agent), the Borrower shall
provide the Administrative Agent with written notice thereof and shall cause
each such Subsidiary Guarantor to deliver to the Administrative Agent a joinder
to the Security Agreement (in the form contemplated thereby) pursuant to which
such Subsidiary agrees to be bound by the terms and provisions thereof, such
joinder to be accompanied by appropriate corporate resolutions, other corporate
organizational and authorization documentation and legal opinions in form and
substance reasonably satisfactory to the Administrative Agent.

 

(c)                                  On the Trigger Date (or such later date as
may be agreed upon by the Administrative Agent), the Borrower will cause, and
will cause each other Loan Party to cause, all of its owned property (to the
extent constituting accounts receivable, inventory and related assets covered
by the Security Agreement) to be subject at all times to first priority, perfected
Liens in favor of the Administrative Agent for the benefit of the Holders of
Secured Obligations to secure the Secured Obligations in accordance with the 

 

8

 

terms
and conditions of the Collateral Documents, subject in any case to Liens
permitted by Section 6.02.

 

(d)                                 Without limiting the foregoing, the Borrower
will, and will cause each other Loan Party to, execute and deliver, or cause to
be executed and delivered, to the Administrative Agent such documents,
agreements and instruments, and will take or cause to be taken such further
actions (including the filing and recording of financing statements, fixture
filings and other documents and such other actions or deliveries of the type
required by Section 4.01, as applicable), which may be required by law or
which the Administrative Agent may, from time to time, reasonably request to
carry out the terms and conditions of this Agreement and the other Loan
Documents and to ensure perfection and priority of the Liens created or
intended to be created by the Collateral Documents, all at the expense of the
Borrower.

 

(e)                                  Notwithstanding the foregoing or anything
else contained in this Agreement or any other Loan Document to the contrary,
the parties hereto acknowledge and agree that in the event that (i) the
Index Debt receives, after the Trigger Date, investment grade ratings (without
third-party credit enhancement) from both S&P (at least BBB- with stable
outlook) and Moody’s (at least Baa3 with stable outlook), (ii) Consolidated
EBITDA (as certified in the most recent certificate delivered pursuant to Section 5.04(c))
for each of the two most recently ended periods of four consecutive fiscal
quarters is not less than $125,000,000 and (iii) the Consolidated Fixed Charge
Coverage Ratio for each such period is greater than 2.5 to 1.0, the security
interests granted pursuant to the Collateral Documents will be released (the “Release
Event”); provided that if either such investment grade rating from
S&P or Moody’s subsequently falls below BBB- or Baa3 respectively,
Holdings, the Borrower and its applicable Subsidiaries will re-grant the
security interests in the Collateral pursuant to comparable Collateral
Documents and no further ratings-based collateral releases will be permissible.

 

(p)                                 Section 6.02
of the Credit Agreement is amended to (1) delete the word “and” appearing
at the end of clause (l) thereof, (2) delete the period appearing at
the end of clause (m) thereof and to replace such period with the phrase “;
and” and (3) to add the following as a new clause (n) thereto:

 

(n)                                 Liens created pursuant to any Loan Document.

 

(q)                                 Section 6.03
of the Credit Agreement is amended and restated in its entirety to read as
follows:

 

SECTION 6.03.  Certain Acquisitions.  Neither Holdings nor the Borrower will, nor
will they permit any Subsidiary to, purchase, lease or otherwise acquire (in
one transaction or a series of related transactions) any property or assets
constituting all or a majority of the Equity Interests in a Person or all or
substantially all of a division or line of business of a Person, except
acquisitions by the Borrower of the Equity Interests in a Person (the “Issuer”)
or of such division or line of business so long as (i) the aggregate
consideration paid in connection with all such acquisitions on and after the
Amendment No. 1 Effective Date does not exceed $60,000,000; (ii) the
Issuer shall be engaged in, or the property and assets acquired shall be used
in connection with, the same or related (ancillary or complementary) line of
business as the Borrower; (iii) all necessary governmental approvals and
third party consents for the acquisition have been obtained without imposing
burdensome conditions, all appeal periods have expired and there shall 

 

9

 

be
no governmental or judicial action, pending or threatened, restraining or
imposing burdensome conditions on such acquisition; (iv) after giving
effect to the acquisition, and on a pro forma basis (including the financial
results of the Borrower and the Subsidiaries and the Issuer or the property and
assets to be acquired, as the case may be, and giving pro forma effect to any
Indebtedness to be incurred in connection with such acquisition) for the period
of four consecutive fiscal quarters ending immediately prior to such
acquisition, no Event of Default or Default shall have occurred and be
continuing and the Borrower shall have delivered to the Administrative Agent a
certificate of a Financial Officer certifying compliance with the conditions
set forth in this clause (iv) and setting forth pro forma calculations
demonstrating such compliance; and (v) in the case of any such acquisition
of capital stock, the Issuer shall become a Subsidiary Guarantor under the
Guarantee Agreement and shall comply with the terms and conditions of Section 5.11.

 

(r)                                    Section 6.04(a) of
the Credit Agreement is amended to delete the phrase “all or any substantial
part” appearing therein and to replace such phrase with the word “any”.

 

(s)                                  Section 6.04(b) of
the Credit Agreement is amended and restated in its entirety to read as
follows:

 

(b)                                 Notwithstanding the provisions of paragraph (a) above:

 

(i)                                     the Borrower and its Subsidiaries may sell,
transfer or otherwise dispose of assets to each other;

 

(ii)                                  Holdings, the Borrower and the Subsidiaries
may (A) sell inventory in the ordinary course of business, (B) effect
sales, trade-ins or dispositions of used equipment for value in the ordinary
course of business consistent with past practice and (C) enter into
licenses of intellectual property or technology in the ordinary course of
business; and

 

(iii)                               the Borrower and its Subsidiaries may sell,
transfer or otherwise dispose of real property, machinery and equipment and
other assets; provided that (A) such dispositions are made for fair
value and (B) after giving effect to any such sale, transfer or
disposition the aggregate book value of all such assets disposed of on and
after the Amendment No. 1 Effective Date in reliance upon this clause (ii) would
not exceed $60,000,000.

 

(t)                                    Section 6.06
of the Credit Agreement is amended to (1) delete the date “June 30,
2005” appearing therein and to replace such date with the date “December 31,
2008” and (2) delete the ratio “3.00 to 1” appearing therein and to
replace such ratio with the ratio “1.75 to 1.00”.

 

(u)                                 Section 6.07
of the Credit Agreement is amended to delete the ratio “3.00 to 1” appearing
therein and to replace such ratio with the ratio “3.25 to 1.00”.

 

(v)                                 Article VI
of the Credit Agreement is amended to add the following as a new Section 6.09
thereto:

 

SECTION 6.09.  Restricted Payments.  Neither Holdings nor the Borrower will, nor
will they permit any Subsidiary to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except (a) Holdings may
declare and pay dividends 

 

10

 

with
respect to its Equity Interests payable solely in additional shares of its
common stock, (b) the Borrower and the Subsidiaries may declare and pay
dividends ratably with respect to their Equity Interests, (c) Holdings and
the Borrower may make Restricted Payments pursuant to and in accordance with
stock option plans or other benefit plans for management or employees of
Holdings, the Borrower and the Subsidiaries and (d) Holdings, the Borrower
and its Subsidiaries may make any Restricted Payment so long as no Default or
Event of Default has occurred and is continuing prior to making such Restricted
Payment or would arise after giving effect (including pro forma effect) thereto
(provided that, no such Restricted Payment shall be permitted if the
Consolidated Fixed Charge Coverage Ratio at the time such Restricted Payment is
declared or after giving effect to such Restricted Payment is or would be less
than 2.0 to 1.0, other than dividends declared in an aggregate amount not to
exceed $4,000,000 and paid during the subsequent fiscal quarter of the
Borrower).

 

(w)                               Clause (d) of
Article VII of the Credit Agreement is amended to delete the reference “Section 5.01(a),
or 5.08 or in Article VI” appearing therein and to replace such reference
with the reference “Section 5.01(a), 5.08, 5.09 or 5.11 or in Article VI”.

 

(x)                                   Clause (g) of
Article VII of the Credit Agreement is amended to delete the phrase “windingup”
appearing therein and to replace such phrase with the phrase “winding up”.

 

(y)                                 Article VII
of the Credit Agreement is amended to (1) delete the word “or” appearing
at the end of clause (m) thereof, (2) add the word “or” immediately
after the semicolon appearing at the end of clause (n) thereof and (3) to
add the following as a new clause (o) thereto:

 

(o)                                 at any time after the Trigger Date, any
Collateral Document shall for any reason fail to create a valid and perfected
first priority security interest in any material portion of the Collateral
purported to be covered thereby, except as permitted by the terms of any Loan
Document;

 

(z)                                   The final
paragraph of Article VII of the Credit Agreement is amended to add the
following as a new final sentence thereto:

 

Upon
the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, and at the request of the Required Lenders shall,
exercise any rights and remedies provided to the Administrative Agent under the
Loan Documents or at law or equity, including all remedies provided under the
UCC.

 

(aa)                            Article VIII
of the Credit Agreement is amended to (1) add the phrase “(iv)”
immediately before the phrase “the validity, enforceability, effectiveness or
genuineness” appearing in clause (iii) of the third paragraph thereof, (2) delete
the word “or” appearing immediately before clause (v) of the third
paragraph thereof, (3) add the phrase “or (vi) the creation,
perfection or priority of Liens on the Collateral or the existence of the
Collateral” before the period, and immediately following the reference to “Administrative
Agent”, at the end of clause (v) of the third paragraph thereof and (4) add
the following as a new final paragraph thereof:

 

In
its capacity, the Administrative Agent is a “representative” of the Holders of
Secured Obligations within the meaning of the term “secured party” as defined
in the New York Uniform Commercial Code. 
Each Lender authorizes the Administrative Agent to enter into each of
the Collateral Documents to which it is a party and to take all action
contemplated by such documents.  Each
Lender agrees that no Holder of Secured 

 

11

 

Obligations
(other than the Administrative Agent) shall have the right individually to seek
to realize upon the security granted by any Collateral Document, it being
understood and agreed that such rights and remedies may be exercised solely by
the Administrative Agent for the benefit of the Holders of Secured Obligations
upon the terms of the Collateral Documents. 
In the event that any Collateral is hereafter pledged by any Person as
collateral security for the Secured Obligations, the Administrative Agent is
hereby authorized, and hereby granted a power of attorney, to execute and
deliver on behalf of the Holders of Secured Obligations any Loan Documents
necessary or appropriate to grant and perfect a Lien on such Collateral in
favor of the Administrative Agent on behalf of the Holders of Secured
Obligations.  The Lenders hereby
authorize the Administrative Agent, and the Administrative Agent hereby agrees,
to release any Lien granted to or held by the Administrative Agent upon any
Collateral (i) upon the occurrence of the Release Event, (ii) upon
the termination of the all Commitments, payment and satisfaction in full in
cash of all Secured Obligations (other than Unliquidated Obligations, and
Banking Services Obligations and Rate Protection Obligations not yet due and
payable), and the cash collateralization of all Unliquidated Obligations in a
manner reasonably satisfactory to the Administrative Agent; (iii) constituting
property being sold or disposed of if the Borrower certifies to the
Administrative Agent that the sale or disposition is permitted by the terms of
this Agreement (and the Administrative Agent may rely conclusively on any such
certificate, without further inquiry); (iv) as required to effect any sale
or other disposition of such Collateral in connection with any exercise of
remedies of the Administrative Agent and the Lenders pursuant to Article VII;
(v) as permitted by, but only in accordance with, the terms of the
applicable Loan Document; or (vi) if approved, authorized or ratified in
writing by the Required Lenders, provided that, except as set forth in
the foregoing clauses (i) and (ii), the Administrative Agent shall not
release all or substantially all of the Collateral without the consent of all
of the Lenders hereunder.  Upon request
by the Administrative Agent at any time, the Lenders will confirm in writing
the Administrative Agent’s authority to release particular types or items of
Collateral pursuant hereto.  Upon any
sale or transfer of assets constituting Collateral which is permitted pursuant
to the terms of any Loan Document, or consented to in writing by the Required
Lenders or all of the Lenders, as applicable, and upon at least five (5) Business
Days’ prior written request by the Borrower to the Administrative Agent, the
Administrative Agent shall (and is hereby irrevocably authorized by the Lenders
to) execute such documents as may be necessary to evidence the release of the
Liens granted to the Administrative Agent for the benefit of the Holders of
Secured Obligations herein or pursuant hereto upon the Collateral that was sold
or transferred; provided, however, that (i) the
Administrative Agent shall not be required to execute any such document on
terms which, in the Administrative Agent’s opinion, would expose the
Administrative Agent to liability or create any obligation or entail any consequence
other than the release of such Liens without recourse or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the Secured
Obligations or any Liens upon (or obligations of the Borrower or any Subsidiary
in respect of) all interests retained by the Borrower or any Subsidiary,
including (without limitation) the proceeds of the sale, all of which shall
continue to constitute part of the Collateral.

 

(bb)                          Section 9.01(a) of
the Credit Agreement is amended to (1) change fax number for CFO Treasurer
to “(203) 743-8469” in clause (i) thereof, (2) add the phrase “Attention
of Clifford Trapani (Telephone No. (713) 750-2938); and” to the end of
clause (iii) thereof and (3) to delete the phrase “Attention of
Clifford Trapani (Telephone No. (713) 750-2938); and” appearing in clause (iv) thereof.

 

12

 

(cc)                            Article IX
of the Credit Agreement is amended to add the following as a new Section 9.15
thereto:

 

SECTION 9.15.  Appointment for Perfection.  Each Lender hereby appoints each other Lender
as its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the Holders of Secured Obligations, in assets which,
in accordance with Article 9 of the UCC or any other applicable law can be
perfected only by possession.  Should any
Lender (other than the Administrative Agent) obtain possession of any such
Collateral, such Lender shall notify the Administrative Agent thereof, and,
promptly upon the Administrative Agent’s request therefor shall deliver such
Collateral to the Administrative Agent or otherwise deal with such Collateral
in accordance with the Administrative Agent’s instructions.

 

(dd)                          The Commitments
of the Lenders are reduced to the amounts set forth on Schedule 2.01 attached
hereto.

 

2.                                       Conditions of
Effectiveness.  The
effectiveness of this Amendment is subject to the conditions precedent that (a) the
Administrative Agent shall have received counterparts of this Amendment duly
executed by the Borrower, Holdings, the Required Lenders and the Administrative
Agent and the Consent and Reaffirmation attached hereto duly executed by the
Subsidiary Guarantors, (b) the Borrower shall have paid to the
Administrative Agent, for the account of each Lender that executes and delivers
its signature page hereto by such time as is requested by the
Administrative Agent, an amendment fee equal to a percentage specified by the
Administrative Agent to such Lender in respect of such Lender’s Commitment, (c) the
Borrower shall have paid all of the fees of the Administrative Agent and its
affiliates (including, to the extent invoiced, reasonable attorneys’ fees and
expenses of the Administrative Agent) in connection with this Amendment and the
other Loan Documents and (d) the Borrower and its Subsidiaries shall have
delivered to the Administrative Agent all Collateral Documents and related
instruments, legal opinions and documents requested by the Administrative Agent
in connection with the effectiveness of this Amendment (all such items in final
form but for the insertion of the Trigger Date as the effective date thereof
and the attachment of the relevant signature pages thereto) and, as
applicable, signature pages thereto.

 

3.                                       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.

 

4.                                       Reference to
and Effect on the Credit Agreement.

 

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

 

13

 

(b)                                 Except as
specifically amended above, the Credit 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 or any other
documents, instruments and agreements executed and/or delivered in connection
therewith.

 

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

 

6.                                       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.

 

7.                                       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]

 

14

 

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. 1

Ethan Allen Global, Inc.

Credit Agreement dated as
of July 21, 2005

 

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A.,

  
	
   

  	
  individually
  and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

Signature Page to
Amendment No. 1

Ethan Allen Global, Inc.

Credit Agreement dated as
of July 21, 2005

 

 

	
   

  	
  RBS
  CITIZENS, NATIONAL ASSOCIATION (successor by merger to Citizens Bank of
  Massachusetts), individually and as Co-Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

Signature Page to
Amendment No. 1

Ethan Allen Global, Inc.

Credit Agreement dated as
of July 21, 2005

 

 

	
   

  	
  WACHOVIA
  BANK NATIONAL ASSOCIATION, individually and as Co-Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

Signature Page to
Amendment No. 1

Ethan Allen Global, Inc.

Credit Agreement dated as
of July 21, 2005

 

 

	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

Signature Page to
Amendment No. 1

Ethan Allen Global, Inc.

Credit Agreement dated as
of July 21, 2005

 

 

	
   

  	
  PNC
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

Signature Page to
Amendment No. 1

Ethan Allen Global, Inc.

Credit Agreement dated as
of July 21, 2005

 

 

	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

Signature Page to
Amendment No. 1

Ethan Allen Global, Inc.

Credit Agreement dated as
of July 21, 2005

 

 

CONSENT AND REAFFIRMATION

 

Each of the undersigned
hereby acknowledges receipt of a copy of the foregoing Amendment No. 1 to
the Credit Agreement dated as of July 21, 2005 (as may be further amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”)
by and among Ethan Allen Global, Inc. (the “Borrower”), Ethan Allen
Interiors Inc. (“Holdings”), 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. 1
is dated as of January 29, 2009 (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 and as the
same may from time to time hereafter be amended, modified or restated.

 

Each of the undersigned
hereby acknowledges and agrees that any deliveries made by it to the
Administrative Agent in connection with the Amendment (including, without
limitation, signature pages to Loan Documents) shall be automatically and
irrevocably released pursuant to Section 2.22 of the Credit Agreement (as
amended by the Amendment) in accordance with the terms and conditions of such Section 2.22
without any further action or consent by any of the undersigned.

 

Dated:  January 29, 2009

 

[Signature
Page Follows]

 

 

	
   

  	
  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:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ETHAN
  ALLEN CARRIAGE HOUSE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ETHAN
  ALLEN RETAIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

Signature Page to Consent
and Reaffirmation to Amendment No. 1

Ethan Allen Global, Inc.

Credit Agreement dated as
of July 21, 2005

 

 

SCHEDULE 2.01

 

COMMITMENTS

 

	
  LENDER

  	
   

  	
  COMMITMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JPMORGAN CHASE
  BANK, N.A.

  	
   

  	
  $

  	
  22,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  RBS CITIZENS,
  NATIONAL ASSOCIATION

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WACHOVIA BANK,
  NATIONAL ASSOCIATION

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PNC BANK,
  NATIONAL ASSOCIATION

  	
   

  	
  $

  	
  12,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BANK OF AMERICA,
  N.A.

  	
   

  	
  $

  	
  12,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  U.S. BANK
  NATIONAL ASSOCIATION

  	
   

  	
  $

  	
  12,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL
  COMMITMENTS

  	
   

  	
  $

  	
  100,000,000

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