SC 14D9/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14D-9

Solicitation/Recommendation Statement Under
Section 14(d)(4) of the Securities Exchange Act of 1934

(Amendment No. 1)

CRAFTMADE INTERNATIONAL, INC.

(Name of Subject Company)

CRAFTMADE INTERNATIONAL, INC.

(Name of Persons Filing Statement)

Common Stock, Par Value $0.01 Per Share

(Title of Class of Securities)

22413E104
(CUSIP Number of Class of Securities)

C. Brett Burford
Chief Financial Officer
Craftmade International, Inc.
650 South Royal Lane, Suite 100
Coppell, Texas 75019
(972) 393-3800

(Name, address and telephone numbers of person authorized to receive
notices and communications on behalf of the persons filing statement)

Copies To:

Brian D. Barnard
201 Main Street, Suite 2200
Fort Worth, Texas 76102
(817) 347-6600

o Check the box if the filing relates solely to preliminary communications prior to the commencement of a tender offer.

     This Amendment No. 1 to the Schedule 14D-9 (this “Amendment No. 1”) amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 originally filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2010 (together, with the exhibits and annexes thereto, the “Schedule 14D-9”), by Craftmade International, Inc., a Delaware corporation (the “Company”). The Schedule 14D-9 was filed in relation to the unsolicited tender offer by Litex Acquisition #1, LLC (“Purchaser”), a Texas limited liability company and wholly owned subsidiary of Litex Industries, Limited, a Texas limited partnership (“Litex”), to purchase all outstanding shares of the Company’s common stock, par value $0.01 per share, including the associated preferred stock purchase rights, in exchange for $5.25 per share, net to the seller in cash (less any applicable withholding taxes and without interest), and on the terms and subject to the conditions described in the Purchaser’s Tender Offer Statement on Schedule TO originally filed with the SEC on March 2, 2010 (as amended and supplemented by Amendment No. 1 thereto and together with the exhibits thereto, the “Schedule TO”). The value of the consideration offered, together with all of the terms and conditions applicable to the tender offer, is referred to as the “Offer.”

     Except as otherwise set forth below, the information set forth in the Schedule 14D-9 remains unchanged and is incorporated herein by reference as relevant to the items in this Amendment No. 1. Capitalized terms used but not defined herein have the meanings ascribed to them in the Schedule 14D-9.

Item 4. The Solicitation or Recommendation

     Item 4 of the Schedule 14D-9 is hereby amended and supplemented by adding the following sentence as a separate paragraph below the third bullet point on page 17 of the Schedule 14D-9: “Notwithstanding the Board’s belief, Craftmade cannot be assured that (1) the Company will be able to resume the delivery of superior results for its stockholders, (2) the benefits of the Woodard acquisition will be more fully realized as the economy recovers or (3) the Offer price is less than the future value of the Company’s stock price per Share or that the Offer price does not fully reflect the Company’s future prospects.”

     Item 4 of the Schedule 14D-9 is hereby amended and supplemented by adding the following sentence as a separate paragraph below the first full bullet point on page 18 of the Schedule 14D-9: “Notwithstanding the Board’s belief, Craftmade cannot be assured that the Company’s historical growth and success will be indicative of its future performance or that the Company’s efforts will result in future profitability or that Litex, by acquiring the Company, would be able to reap the benefits of such efforts.”

Item 6. Interest in Securities of the Subject Company

     Item 6 of the Schedule 14D-9 is hereby amended and supplemented by deleting the first part of the first sentence (prior to the table) on page 21 and inserting in its place the following: “During the past 60 days, no transactions with respect to the Common Stock have been effected by the Company or by any of its current executive officers, directors, affiliates or subsidiaries, except for the following:”

Item 8. Additional Information

     Item 8 of the Schedule 14D-9 is hereby amended and supplemented by adding the following paragraph immediately prior to the section titled “Forward Looking Statements”:

     Litigation

     On March 22, 2010, stockholder Henry Partners, L.P. filed with the Delaware Court of Chancery a complaint against individual members of the Company’s Board

(collectively, the “Defendants”). The action, styled Henry Partners, L.P. v. James R. Ridings, William E. Bucek, A. Paul Knuckley, R. Don Morris, and Lary C. Snodgrass, Civil Action No. 5366 (the “Henry Complaint”), alleges, among other things, that the Defendants breached their fiduciary duties to the Company’s stockholders in connection with the Offer, and seeks declaratory and injunctive relief, costs and disbursements, and reasonable attorneys’ and experts’ fees. The Company and the Defendants believe that the plaintiff’s allegations in the Henry Complaint lack merit and intend to defend against them vigorously.

     The foregoing summary of the Henry Complaint is qualified in its entirety by reference to the Henry Complaint, which is filed as Exhibit (a)(4) to this Amendment No. 1 and is incorporated in this Amendment No. 1 by reference.

Item 9. Exhibits

     Item 9 of the Schedule 14D-9 is hereby amended and supplemented by adding the following exhibits immediately after exhibit (a)(3):

(a)(4)	Press release, including letter to the Company’s stockholders, issued by the Company on March 31, 2010.
(a)(5)	Letter to the Company’s stockholders dated March 31, 2010.
(a)(6)	Complaint filed on March 22, 2010, in the Delaware Court of Chancery, captioned Henry Partners, L.P. v. James R. Ridings, William E. Bucek, A. Paul Knuckley, R. Don Morris, and Lary C. Snodgrass, Civil Action No. 5366.

SIGNATURE

     After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct.

CRAFTMADE INTERNATIONAL, INC.
By:	/s/ C. Brett Burford
	C. Brett Burford
	Chief Financial Officer

Dated: March 31, 2010

EX-99.A.4

FOR IMMEDIATE RELEASE

Contact Information:
D.F. King & Co., Inc.	Ric DeCastro
(800) 967-5079	Investor Relations
crft@dfking.com	(972) 393-3800
	investorrelations@craftmade.com

CRAFTMADE BOARD REITERATES RECOMMENDATION AGAINST
LITEX’S HOSTILE AND INADEQUATE TENDER OFFER

COPPELL, TEXAS, March 31, 2010 — Craftmade International, Inc. (OTCQX: CRFT) (“Craftmade” or the “Company”) today sent a letter to its stockholders reiterating its recommendation that they not tender their shares to Litex Industries, Limited’s (“Litex”) unsolicited, conditional tender offer to acquire all outstanding common shares of Craftmade at a price of $5.25 per share in cash. The letter addresses the Craftmade Board’s belief that Litex’s offer significantly undervalues the Company, addresses inaccurate statements made by Litex as part of Litex’s campaign to mislead Craftmade stockholders, and outlines Craftmade’s commitment to its long-term strategy and maximization of stockholder value. The text of Craftmade’s letter to its stockholders is set forth below omitting the charts set forth therein.

March 31, 2010

Dear Fellow Stockholders,

We appreciate the continued support from many of our stockholders, large and small, regarding Craftmade’s long-term strategy and the Board’s unanimous recommendation that our stockholders reject our competitor Litex’s unsolicited tender offer at $5.25 per share. By this letter, we want to reach out directly to all of our stockholders and emphasize why the Board continues to believe you should reject Litex’s offer. In Litex’s most recent SEC filing, Litex states that it believes the $5.25 per share offer price “represents full and fair value for the common stock of Craftmade.” The Craftmade Board believes that Litex’s $5.25 per share offer price is neither full nor fair. We continue to strongly urge you not to tender your Craftmade shares to Litex.

Litex’s Offer Significantly Undervalues the Company

The Board believes that Litex’s offer significantly undervalues the Company by, among other things, not giving full consideration to Craftmade’s furniture business or the significant efforts to successfully emerge from the economic downturn.

Consider the fact that just a little over two months ago, Litex made an unsolicited offer at $3.25 per share, which it told us at the time was a “fair price.” Then on March 2, 2010, Litex launched the tender offer at $5.25 per share, which it has stated “represents full and fair value.” Litex didn’t communicate the $5.25

Page 1 of 6

offer to the Craftmade Board before launching the hostile tender offer and has never explained its basis for this offer, or why its offer price changed by 60% in such a short time period. Does Litex really have a good grasp of Craftmade’s value, or is it simply grasping for a price that might get some traction with stockholders? The Board believes that Litex is trying to buy Craftmade at a bargain price without giving our stockholders the opportunity to reap long-term value.

The Board explored strategic alternatives in 2007 and ultimately determined to continue implementing its long-term strategy, which includes expanding our lighting lines and diversification into the outdoor living arena. Since 2007, the Company has been challenged with a downturn across the entire economy as well as the collapse in the overall housing market. The Board believes that the optimal time to sell is not during the bottom of the market.

Craftmade’s Board Takes Its Responsibility Seriously

Despite Litex’s desire to have you believe the Craftmade Board and management are “entrenched and unwilling to negotiate,” the Board and management team are working hard to protect your interests and maximize your value as described below. Our Board and management have made a significant investment not only in time, but by purchasing Craftmade stock over the years. Every member of the Board and management owns stock in the Company. By reviewing our public filings it’s clear that we have continued to buy significant amounts of stock over the past two years because we truly believe the Company is undervalued by the market. On a combined basis the Board and management team own over 21% of the outstanding common stock, creating strong alignment with the broader stockholder base.

On the other hand, it is important to remember the obvious — that Litex is a direct competitor and its sole motivation is to look after Litex’s best interests, not yours. Craftmade stockholders should be cautious of any attempt by Litex to characterize its motivations as aligned with yours. Please remember that if Litex is successful in its aggressive efforts to obtain Craftmade at a bargain price, Litex, and not our stockholders, will benefit from the long-term value created by our Company during the past few challenging years.

Since January, Litex has attempted to lead our stockholders, customers and employees to falsely believe that a sale of Craftmade to Litex is imminent. Due to Litex’s competitive and aggressive actions, we continue to feel it has been necessary to protect Craftmade’s and its stockholders’ interests by not divulging our uniquely valuable confidential information to Litex. As a competitor, we can understand why Litex is so eager to obtain Craftmade’s confidential information, such as projected sales by category, product and distribution channel, future pricing expectations, the impact of organizational changes, expected changes in key growth drivers and planned new product introductions. Additionally, during any publicly announced negotiation with Litex, Craftmade would likely begin to experience customer and employee attrition, which would leave the Company and its stockholders damaged, and benefit our competitors.

The Board has consistently maintained the position that the right time to sell is not now at the bottom of the worst economy and housing market in many generations. However, despite the Board’s continued assertion that this is a poor time to consider a sale, the Board takes its fiduciary responsibility very seriously and is obligated to consider any serious offer.

Craftmade is Committed to Executing its Long-Term Strategy and
Maximizing Stockholder Value

Craftmade has, since its founding, worked hard to deliver superior results and generated strong returns for our stockholders resulting in 56 consecutive quarterly dividends and 23 consecutive years of profitability.

Page 2 of 6

As Litex concedes, our recent financial results have been impacted by the global recession and the collapse of the housing industry like most other companies in our industry and many other industries. Although no assurance can be given as to future results, the Board strongly believes that our strategic actions will, consistent with past performance, allow us to rebound and deliver greater value to our stockholders than Litex’s $5.25 per share offer price.

Since the Board completed an exploration of strategic alternatives in mid-2007, Craftmade management has worked tirelessly to make Craftmade a better company for you. Among our many accomplishments, Craftmade has:

• acquired Woodard in early 2008 and successfully integrated it, creating synergies in excess of those announced at the time of acquisition

• restructured the organization of our Company, including reducing executive and senior management positions from 11 to 7 (and thereby reducing executive and senior management compensation expense by 38%)

• refinanced the Company’s line of credit under favorable terms, during the worst credit environment in recent history

• reduced overall operational expenses by approximately 25%; in the past three quarters, we have saved over $5 million as a result of these cost-cutting measures, and all savings have not yet been fully realized

• moved the Company’s listing to OTCQX and deregistered with the SEC to save an additional $500-$700 thousand per year

• significantly expanded our product offering by adding 166 new products, including 47 new fans and 23 outdoor furniture collections to take advantage of emerging consumer trends

Litex Has Made Several Misleading Statements In Connection with the Offer

Litex has engaged in an aggressive campaign to buy Craftmade at a bargain price and in doing so has made several misleading statements to our stockholders, including:

• Litex has attempted to confuse Craftmade’s customers: Through a narrowly disseminated press release in January, Litex created the appearance at the home lighting industry’s largest customer event that its purchase of Craftmade was imminent, and “only subject” to a few conditions. Litex had no foundation for this statement. Craftmade believes this was a blatant attempt to confuse our stockholders, customers and sales force and create a disruption in our business.

• Litex has not made a good faith effort to engage Craftmade:While Litex has implied on the one hand that a sale is imminent, Litex has, on the other hand, repeatedly stated that Craftmade is unwilling to enter into any discussions with Litex. In reality, Craftmade has not categorically refused to talk with Litex, but, as one example, when Craftmade simply requested an agenda prior to a meeting requested by Litex in April 2009, Litex refused to provide any sort of agenda. Because Litex is a competitor of the Company that has made what we consider a lowball offer, and filled our industry with misleading information that a sale is imminent, we are extremely cautious about providing any non-public information regarding our business plans to Litex or furthering its apparent agenda to create the illusion that a transaction is imminent. Further,

Page 3 of 6

Craftmade does not think it is productive to engage in exploratory discussions with Litex based on a lowball offer that Litex claims is “full and fair.”

•

Litex wants stockholders to believe that their offer represents a generous premium: While Litex’s offer represents a premium to recent trading prices, Craftmade has historically traded well above current levels, even before the acquisition of Woodard. While there can be no assurances about reaching previous levels of profitability, Craftmade’s underlying business, including its customers, products and distribution channels remains intact.

Litex’s Offer Relative to Craftmade’s Historical Stock Price

• Litex has misrepresented Craftmade’s delisting and deregistration: Litex has attempted to portray the SEC deregistration process as being “accelerated” and depriving our stockholders of information needed to evaluate our performance. Craftmade announced its plans to deregister in November and completed the required filings in January. Not only was this process not accelerated, but it actually took a few weeks longer than originally anticipated. Additionally, once Craftmade decided to delist from Nasdaq and deregister under the federal securities laws, Craftmade specifically chose to list its shares on OTCQX which has the highest reporting requirements of the OTC market. Under OTCQX regulations, the Company is required to file quarterly reports, annual reports and current reports, as well as continue to have an annual audit — all very similar to SEC level requirements in the pre-Sarbanes-Oxley environment. Since filing its first quarterly report with OTCQX in February of 2010, not a single stockholder has expressed any concern with the level of disclosure provided in that report. On the contrary, we have received several favorable comments related to the format, reporting and disclosures that the Company continues to make.

• Litex does not seem to understand Craftmade’s balance sheet: Litex recently referred to the Company’s “ever increasing secured debt balance” in an attempt to portray our Company negatively. This statement shows a fundamental lack of understanding of our business cycle and revolving debt. As we have explained, it is customary for us to increase our borrowings on a seasonal basis. The springtime is the height of the market for our outdoor furniture business, and the increase in revolving debt reflects positive business activity. Craftmade’s debt levels increase and decrease due to the seasonal nature of our business, but average debt levels have decreased in the past year. On an “apples to apples” basis our secured debt at December 31, 2009 shows a $4 million decrease from the same period in the prior year.

• Litex misrepresents Craftmade executive compensation: Litex claims that executive compensation has not been impacted during the recent cost cutting but their own, selectively chosen, data show an 18% decrease in executive and board compensation in the most recent year. By looking at the full picture, we can see that overall senior management positions have been reduced from 11 to 7 in the past two years, driving an annual savings of over $1,000,000, or 38% - almost twice the rate that other expenses were cut. As the management team has shrunk, the remaining executives have picked up additional work and responsibility. Additionally, as with most of our employees, management salaries have been frozen and no current member of management has received a cash bonus in over three years.

Does Litex Have Sufficient Funds to Complete the Offer and Pay Off the Company’s Debt?

Litex refuses to provide Craftmade or the stockholders with basic, customary information that would provide reasonable assurance that Litex has the ability to close the offer and pay off the Company’s debt

Page 4 of 6

that may be accelerated as a result of the closing of the offer, including describing the nature of their “liquid assets”, or how and when it plans to convert such assets to cash to consummate this offer.

We are Working for You

While we’ve worked hard to do an outstanding job for you, we understand your expectations of us to improve your return on equity and provide liquidity for you. As fellow stockholders, we firmly believe that Litex’s offer significantly undervalues our Company’s worth and recommend that you refrain from tendering your shares. We do not believe that this is the right time to sell.

We appreciate your support of Craftmade and will continue to fight to protect your interests.

Sincerely,

/s/ James R. Ridings James R. Ridings	/s/ J. Marcus Scrudder J. Marcus Scrudder
Chairman	Chief Executive Officer

This letter contains statements that are forward looking. These forward-looking statements include, but are not limited to, (i) statements concerning future financial condition and operations, including future cash flows, revenues, gross margins, earnings and variations in quarterly results, (ii) statements relating to future performance and stock price and (iii) other statements identified by words such as “may,” “will,” “should,” “could,” “might,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “forecasts,” “intends,” “potential,” “continue,” and similar words or phrases. All forward-looking statements are based on current expectations regarding important risk factors and should not be regarded as a representation by us or any other person that the results expressed therein will be achieved. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law. Important factors that could cause actual results to differ materially from those contained in any forward-looking statement can be found in the risk factors section of our Annual Report on Form 10-K for the fiscal year ended June 30, 2009, filed with the SEC on September 28, 2009. The Company notes that forward-looking statements made in connection with a tender offer are not subject to the safe harbors created by the Private Securities Litigation Reform Act of 1995, as amended, although other legal protections may apply.

About Craftmade

Founded in 1985, Craftmade is engaged in the design, manufacturing, distribution, and marketing of a broad range of home décor products, including proprietary ceiling fans, lighting products, and outdoor furniture. The Company distributes its premium products through a network of independent showrooms and mass retail customers through its headquarters and distribution facility in Coppell, Texas and manufacturing plant in Owosso, Michigan. More information about Craftmade can be found at www.craftmade.com.

# # #

Page 5 of 6

ADDITIONAL INFORMATION

In response to the tender offer commenced by Litex Acquisition #1, LLC, a wholly-owned subsidiary of Litex, Craftmade filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the U.S. Securities and Exchange Commission (“SEC”). INVESTORS AND SECURITY HOLDERS OF CRAFTMADE ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THESE AND OTHER DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC by Craftmade through the web site maintained by the SEC at http://www.sec.gov.

Page 6 of 6

EX-99.A.5

March 31, 2010

Dear Fellow Stockholders,

We appreciate the continued support from many of our stockholders, large and small, regarding Craftmade’s long-term strategy and the Board’s unanimous recommendation that our stockholders reject our competitor Litex’s unsolicited tender offer at $5.25 per share. By this letter, we want to reach out directly to all of our stockholders and emphasize why the Board continues to believe you should reject Litex’s offer. In Litex’s most recent SEC filing, Litex states that it believes the $5.25 per share offer price “represents full and fair value for the common stock of Craftmade.” The Craftmade Board believes that Litex’s $5.25 per share offer price is neither full nor fair. We continue to strongly urge you not to tender your Craftmade shares to Litex.

Litex’s Offer Significantly Undervalues the Company

The Board believes that Litex’s offer significantly undervalues the Company by, among other things, not giving full consideration to Craftmade’s furniture business or the significant efforts to successfully emerge from the economic downturn.

Consider the fact that just a little over two months ago, Litex made an unsolicited offer at $3.25 per share, which it told us at the time was a “fair price.” Then on March 2, 2010, Litex launched the tender offer at $5.25 per share, which it has stated “represents full and fair value.” Litex didn’t communicate the $5.25 offer to the Craftmade Board before launching the hostile tender offer and has never explained its basis for this offer, or why its offer price changed by 60% in such a short time period. Does Litex really have a good grasp of Craftmade’s value, or is it simply grasping for a price that might get some traction with stockholders? The Board believes that Litex is trying to buy Craftmade at a bargain price without giving our stockholders the opportunity to reap long-term value.

The Board explored strategic alternatives in 2007 and ultimately determined to continue implementing its long-term strategy, which includes expanding our lighting lines and diversification into the outdoor living arena. Since 2007, the Company has been challenged with a downturn across the entire economy as well as the collapse in the overall housing market. The Board believes that the optimal time to sell is not during the bottom of the market.

Craftmade’s Board Takes Its Responsibility Seriously

Despite Litex’s desire to have you believe the Craftmade Board and management are “entrenched and unwilling to negotiate,” the Board and management team are working hard to protect your interests and maximize your value as described below. Our Board and management have made a significant investment not only in time, but by purchasing Craftmade stock over the years. Every member of the Board and management owns stock in the Company. By reviewing our public filings it’s clear that we have continued to buy significant amounts of stock over the past two years because we truly believe the Company is undervalued by the market. On a combined basis

the Board and management team own over 21% of the outstanding common stock, creating strong alignment with the broader stockholder base.

On the other hand, it is important to remember the obvious — that Litex is a direct competitor and its sole motivation is to look after Litex’s best interests, not yours. Craftmade stockholders should be cautious of any attempt by Litex to characterize its motivations as aligned with yours. Please remember that if Litex is successful in its aggressive efforts to obtain Craftmade at a bargain price, Litex, and not our stockholders, will benefit from the long-term value created by our Company during the past few challenging years.

Since January, Litex has attempted to lead our stockholders, customers and employees to falsely believe that a sale of Craftmade to Litex is imminent. Due to Litex’s competitive and aggressive actions, we continue to feel it has been necessary to protect Craftmade’s and its stockholders’ interests by not divulging our uniquely valuable confidential information to Litex. As a competitor, we can understand why Litex is so eager to obtain Craftmade’s confidential information, such as projected sales by category, product and distribution channel, future pricing expectations, the impact of organizational changes, expected changes in key growth drivers and planned new product introductions. Additionally, during any publicly announced negotiation with Litex, Craftmade would likely begin to experience customer and employee attrition, which would leave the Company and its stockholders damaged, and benefit our competitors.

The Board has consistently maintained the position that the right time to sell is not now at the bottom of the worst economy and housing market in many generations. However, despite the Board’s continued assertion that this is a poor time to consider a sale, the Board takes its fiduciary responsibility very seriously and is obligated to consider any serious offer.

Craftmade is Committed to Executing its Long-Term Strategy and

Maximizing Stockholder Value

Craftmade has, since its founding, worked hard to deliver superior results and generated strong returns for our stockholders resulting in 56 consecutive quarterly dividends and 23 consecutive years of profitability. As Litex concedes, our recent financial results have been impacted by the global recession and the collapse of the housing industry like most other companies in our industry and many other industries. Although no assurance can be given as to future results, the Board strongly believes that our strategic actions will, consistent with past performance, allow us to rebound and deliver greater value to our stockholders than Litex’s $5.25 per share offer price.

Since the Board completed an exploration of strategic alternatives in mid-2007, Craftmade management has worked tirelessly to make Craftmade a better company for you. Among our many accomplishments, Craftmade has:

• acquired Woodard in early 2008 and successfully integrated it, creating synergies in excess of those announced at the time of acquisition

• restructured the organization of our Company, including reducing executive and senior management positions from 11 to 7 (and thereby reducing executive and senior management compensation expense by 38%)

- 2 -

• refinanced the Company’s line of credit under favorable terms, during the worst credit environment in recent history

• reduced overall operational expenses by approximately 25%; in the past three quarters, we have saved over $5 million as a result of these cost-cutting measures, and all savings have not yet been fully realized

• moved the Company’s listing to OTCQX and deregistered with the SEC to save an additional $500-$700 thousand per year

• significantly expanded our product offering by adding 166 new products, including 47 new fans and 23 outdoor furniture collections to take advantage of emerging consumer trends

Litex Has Made Several Misleading Statements In Connection with the Offer

Litex has engaged in an aggressive campaign to buy Craftmade at a bargain price and in doing so has made several misleading statements to our stockholders, including:

• Litex has attempted to confuse Craftmade’s customers: Through a narrowly disseminated press release in January, Litex created the appearance at the home lighting industry’s largest customer event that its purchase of Craftmade was imminent, and “only subject” to a few conditions. Litex had no foundation for this statement. Craftmade believes this was a blatant attempt to confuse our stockholders, customers and sales force and create a disruption in our business.

• Litex has not made a good faith effort to engage Craftmade: While Litex has implied on the one hand that a sale is imminent, Litex has, on the other hand, repeatedly stated that Craftmade is unwilling to enter into any discussions with Litex. In reality, Craftmade has not categorically refused to talk with Litex, but, as one example, when Craftmade simply requested an agenda prior to a meeting requested by Litex in April 2009, Litex refused to provide any sort of agenda. Because Litex is a competitor of the Company that has made what we consider a lowball offer, and filled our industry with misleading information that a sale is imminent, we are extremely cautious about providing any non-public information regarding our business plans to Litex or furthering its apparent agenda to create the illusion that a transaction is imminent. Further, Craftmade does not think it is productive to engage in exploratory discussions with Litex based on a lowball offer that Litex claims is “full and fair.”

• Litex wants stockholders to believe that their offer represents a generous premium: While Litex’s offer represents a premium to recent trading prices, Craftmade has historically traded well above current levels, even before the acquisition of Woodard (see chart below). While there can be no assurances about reaching previous levels of profitability, Craftmade’s underlying business, including its customers, products and distribution channels remains intact.

- 3 -

• Litex has misrepresented Craftmade’s delisting and deregistration: Litex has attempted to portray the SEC deregistration process as being “accelerated” and depriving our stockholders of information needed to evaluate our performance. Craftmade announced its plans to deregister in November and completed the required filings in January. Not only was this process not accelerated, but it actually took a few weeks longer than originally anticipated. Additionally, once Craftmade decided to delist from Nasdaq and deregister under the federal securities laws, Craftmade specifically chose to list its shares on OTCQX which has the highest reporting requirements of the OTC market. Under OTCQX regulations, the Company is required to file quarterly reports, annual reports and current reports, as well as continue to have an annual audit — all very similar to SEC level requirements in the pre-Sarbanes-Oxley environment. Since filing its first quarterly report with OTCQX in February of 2010, not a single stockholder has expressed any concern with the level of disclosure provided in that report. On the contrary, we have received several favorable comments related to the format, reporting and disclosures that the Company continues to make.

• Litex does not seem to understand Craftmade’s balance sheet: Litex recently referred to the Company’s “ever increasing secured debt balance” in an attempt to portray our Company negatively. This statement shows a fundamental lack of understanding of our business cycle and revolving debt. As we have explained, it is customary for us to increase our borrowings on a seasonal basis. The springtime is the height of the market for our outdoor furniture business, and the increase in revolving debt reflects positive business activity (see the chart below). Craftmade’s debt levels increase and decrease due to the seasonal nature of our business, but average debt levels have decreased in the past year. On an “apples to apples” basis our secured debt at December 31, 2009 shows a $4 million decrease from the same period in the prior year.

- 4 -

• Litex misrepresents Craftmade executive compensation: Litex claims that executive compensation has not been impacted during the recent cost cutting but their own, selectively chosen, data show an 18% decrease in executive and board compensation in the most recent year. By looking at the full picture, we can see that overall senior management positions have been reduced from 11 to 7 in the past two years, driving an annual savings of over $1,000,000, or 38% - almost twice the rate that other expenses were cut. As the management team has shrunk, the remaining executives have picked up additional work and responsibility. Additionally, as with most of our employees, management salaries have been frozen and no current member of management has received a cash bonus in over three years.

Does Litex Have Sufficient Funds to Complete the Offer and Pay Off the Company’s Debt?

Litex refuses to provide Craftmade or the stockholders with basic, customary information that would provide reasonable assurance that Litex has the ability to close the offer and pay off the Company’s debt that may be accelerated as a result of the closing of the offer, including describing the nature of their “liquid assets”, or how and when it plans to convert such assets to cash to consummate this offer.

We are Working for You

While we’ve worked hard to do an outstanding job for you, we understand your expectations of us to improve your return on equity and provide liquidity for you. As fellow stockholders, we firmly believe that Litex’s offer significantly undervalues our Company’s worth and recommend that you refrain from tendering your shares. We do not believe that this is the right time to sell.

- 5 -

We appreciate your support of Craftmade and will continue to fight to protect your interests.

Sincerely,

/s/ James R. Ridings	/s/ J. Marcus Scrudder
James R. Ridings	J. Marcus Scrudder
Chairman	Chief Executive Officer

This letter contains statements that are forward looking. These forward-looking statements include, but are not limited to, (i) statements concerning future financial condition and operations, including future cash flows, revenues, gross margins, earnings and variations in quarterly results, (ii) statements relating to future performance and stock price and (iii) other statements identified by words such as “may,” “will,” “should,” “could,” “might,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “forecasts,” “intends,” “potential,” “continue,” and similar words or phrases. All forward-looking statements are based on current expectations regarding important risk factors and should not be regarded as a representation by us or any other person that the results expressed therein will be achieved. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law. Important factors that could cause actual results to differ materially from those contained in any forward-looking statement can be found in the risk factors section of our Annual Report on Form 10-K for the fiscal year ended June 30, 2009, filed with the SEC on September 28, 2009. The Company notes that forward-looking statements made in connection with a tender offer are not subject to the safe harbors created by the Private Securities Litigation Reform Act of 1995, as amended, although other legal protections may apply.

Contact Information:	Ric DeCastro
D.F. King & Co., Inc.	Investor Relations
(800) 967-5079	(972) 393-3800
crft@dfking.com	investorrelations@craftmade.com

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EX-99.A.6

Exhibit (a)(6)

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

HENRY PARTNERS, L.P.,	)
	)
Plaintiff,	)
	)
v.	)	C. A. No.
	)
JAMES R. RIDINGS, WILLIAM E.	)
BUCEK, A. PAUL KNUCKLEY, R. DON	)
MORRIS, and LARY C., SNODGRASS,	)
	)
Defendants.	)

VERIFIED COMPLAINT

     Plaintiff Henry Partners, L.P., (“Henry Partners”), by and through its undersigned attorneys, as and for its Verified Complaint for Declaratory and Injunctive Relief against defendants James R. Ridings (“Ridings”), William E. Bucek (“Bucek”), A. Paul Knuckley (“Knuckley”), R. Don Morris (“Morris”), and Lary C. Snodgrass (“Snodgrass”), who collectively comprise the Board of Directors (the “Board”) of Craftmade International, Inc., a Delaware corporation (“Craftmade” or the “Company”), upon knowledge as to matters relating to itself and upon information and belief as to all other matters, alleges as follows:

NATURE OF THE ACTION

     1. This action is brought to remedy breaches of fiduciary duties by the members of the Board in connection with the tender offer made by Litex Industries, Ltd. (“Litex”) on March 2, 2010, to acquire the outstanding common stock of Craftmade at $5.25 per share (the “Tender Offer”). The Tender Offer price of $5.25 per share represents a 124.4% premium over the average closing price of Craftmade common stock of $2.34 for the 60 trading days prior to the announcement of Litex’s first offer to acquire Craftmade common stock at $3.25 per share, which offer Litex made public on January 14, 2010. Plaintiff brings this action for declaratory

and injunctive relief to prevent the Board from unreasonably utilizing Craftmade’s Stockholder Rights Agreement (the “Poison Pill”) to preclude or deter the Tender Offer. Plaintiff also seeks to disable debt acceleration provisions in two debt instruments of the Company triggered by a change of control (the “Poison Puts”).

PARTIES

     2. Plaintiff Henry Partners is, and at all times relevant hereto was, a Craftmade shareholder. As of the date of filing of this complaint, Henry Partners is the beneficial owner of 75,000 shares of Craftmade common stock. On March 11, 2010, prior to instituting this litigation, Henry Partners sent a letter to the Board requesting it to “either engage in good faith negotiations with Litex to obtain the highest price possible for Craftmade shareholders now or to allow the owners to tender their shares to Litex without your interference.” Nonetheless, the Company’s antitakeover defenses remain in place, unreasonably precluding Plaintiff from participating in the Tender Offer.

     3. Defendant James R. Ridings (“Ridings”) is the Chairman of the Board of Directors (“Board”) of Craftmade and has been a Director since 1985. Ridings is the co-founder of Craftmade, took the Company public in 1990 and served as its Chief Executive Officer from 1986 until July 30, 2008. In addition, Ridings owns 10.2% of the common stock of Craftmade. Furthermore, Ridings’ son-in-law, Brad Dale Heimann, serves as Craftmade’s President and Chief Operating Officer.

     4. Defendant William E. Bucek (“Bucek”) has been a Craftmade director since 2002.

     5. Defendant A. Paul Knuckley (“Knuckley”) has been a Craftmade director since 1996. Knuckley beneficially owns 1.9% of Craftmade’s common stock.

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     6. Defendant R. Don Morris (“Morris”) has been a Craftmade director since 2002.

     7. Defendant Lary C. Snodgrass (“Snodgrass”) has been a Craftmade director since 1998. Snodgrass beneficially owns 5.5% of Craftmade’s common stock.

     8. Collectively, Defendants Ridings, Bucek and Snodgrass own 17.6% of the common stock of Craftmade and, for all intents and purposes, control the actions of the Board and the senior management of Craftmade.

BACKGROUND ALLEGATIONS

     9. Craftmade has not performed well. On May 9, 2007, Craftmade issued a press release announcing that it had retained Mazzone & Associates “to assist the Company in evaluating its strategic alternatives to enhance shareholder value . . . [including] a potential sale of the Company.” A committee of the Board was purportedly formed to evaluate strategic alternatives. At this time, shares of Craftmade common stock traded at $16.72.

     10. In response to the Company’s announcement that it had put itself up for sale, Litex, a competitor, expressed an interest in acquiring Craftmade. Litex signed a confidentially agreement, which contained an 18 month standstill agreement, and performed due diligence on Craftmade. On August 15, 2007, Litex sent a letter indicating its interest in acquiring the Company. Defendants, however, responded to Litex by stating the Company was no longer for sale. One week later, on August 23, 2007, Craftmade announced that the Board had determined it was not the appropriate time to seek the sale of the Company and that the Company was now evaluating several acquisition candidates.

Defendants’ Strategic Plan Sends
Company Into A Downward Spiral

     11. Defendants pursued their alternative strategic plan, and acquired certain assets of Woodard LLC in January 2008 for a purchase price of approximately $20 million comprised of

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cash and Craftmade common stock. Woodard had $55.4 million in sales and on a consolidated basis, the acquisition made it appear as if Craftmade’s revenues had actually grown during the period of decline in its industry. In addition, the Woodard acquisition had the beneficial effect, to Defendants, of placing 12.3% of Craftmade’s common stock in “friendly hands.”

     12. The acquisition, however, did nothing to create shareholder value. Indeed, within a matter of months the Company announced that it had suspended its quarterly dividend. Moreover, net income for the quarter ended March 31, 2008 was down more than 12%.

     13. During the remainder of 2008 and first half of 2009, Craftmade fared worse. As noted in Craftmade’s 2009 Form 10-K filed with the SEC on September 28, 2009, “this economic environment and the corresponding decline in home-related spending have significantly impacted both our Specialty and Mass retail segments.” For the fiscal year ended June 30, 2009, Craftmade reported a net loss of $1 million, its first loss in the past five years.

Defendants Build Defenses Rather Than Value

     14. Notwithstanding defendants’ failure to develop and implement a plan to create value for Craftmade’s stockholders, they continued to rebuff Litex’s expressions of interest and focused on entrenching their positions as directors of the Company.

     15. Although the Company already had the Poison Pill in place, Defendants sought reinforcements. On July 8, 2009, the Company entered into a $40 million dollar Revolving Loan Agreement with Bank of America, N.A (the “Revolving Loan Agreement”). Among other things, the Revolving Loan Agreement was used to refinance a Third Amended and Restated Loan Agreement with The Frost National Bank, dated December 31, 2007 (the “Loan Agreement”). But unlike the terms of the Loan Agreement, which provided for a negative covenant requiring the Company and its subsidiaries not to change two or more of the persons comprising senior

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management, the Revolving Loan Agreement included a change of control provision focused on stock ownership and the composition of the Board.

     16. Specifically, under Section 11.1(m) of the Revolving Loan Agreement, a change of control is an event of default remedied by, among other things, declaring outstanding obligations of the Company immediately due and payable. The Revolving Loan Agreement defines “Change of Control” as:

(a) any “person” or “group” (as such terms are used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, but excluding any employee benefit plan of such person and its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), excluding the Permitted Holders, shall become the “beneficial owner” (as defined in rules 13(d)-3 and 13(d)-5 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than the greater of (x) 30% or more of the then outstanding equity securities of Borrower entitled to vote for members of the board of directors or equivalent governing body or (y) the percentage of equity securities of Borrower entitled to vote for members of the board of directors or equivalent governing body, or (b) the board of directors of Borrower ceases to consist of a majority of the Continuing Directors.

17. The Revolving Loan Agreement defines “Continuing Directors” as the directors of Borrower on the Closing Date and each other director, if, in each case, such other directors’ nomination for election to the board of directors of Borrower is recommended by a majority of the then Continuing Directors of such other director receives the vote of the Permitted Holders in his or her election by the stockholders of Borrower

As a whole, the provisions are incomprehensible. For example, it appears that the definition of Continuing Directors should have been written to allow for nominations elected (i) by a majority of the Board or (ii) by Permitted Holders. In other words, the definition is probably intended to read in part “... such other directors’ nomination ... is recommended by a majority of the then Continuing Directors or such other director receives the vote of the Permitted Holders....” Thus,

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together the provisions seem to contemplate an exemption from a Change of Control when involving a Permitted Holder. Incredibly, however, “Permitted Holders” is not defined.

     18. Presumably, Permitted Holder is a stockholder or group of stockholders blessed by the Continuing Directors. But because the term is not defined, certainty as to the intended meaning of the term is impossible to know from the face of the agreement, making the Change of Control provision impossible to understand in operation.

     19. Thus, the Revolving Loan Agreement effectively precludes a stockholder or group of stockholders from accumulating more than 30% of the Company’s outstanding stock without the risk of substantial cost to the Company. Likewise, the Revolving Loan Agreement precludes a stockholder or group of stockholders from voting shares in favor of director nominees who have not been blessed by the Continuing Directors without the risk of substantial cost to the Company.

     20. Even assuming that the Change of Control provision provides an exemption for Permitted Holders (whoever they might be), the Revolving Loan Agreement still impermissibly interferes with the stockholders’ fundamental rights to sell and vote their shares and serves as an improper entrenchment device that coerces stockholders into voting only for those blessed by the incumbent board. Moreover, such a construction of the Revolving Loan Agreement conflicts with statements made by Defendants in response to the Tender Offer and would render their disclosures in connection with the Tender Offer materially false and misleading.

     21. Furthermore, a Change of Control under the Revolving Loan Agreement causes a waterfall effect on a peripheral Term Loan Agreement the Company entered on the same date as the Revolving Loan Agreement with The Frost National Bank (the “Term Loan Agreement”).

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Under Section 8.1(g) of the Term Loan Agreement, a default is triggered if Bank of America declares a default of the Revolving Loan Agreement.

     22. These Poison Puts were no doubt prompted by Litex’s continued expressions of interest. Indeed, Litex’s legal counsel had as recently as April 9, 2009 sent a letter to Defendant Ridings stating that it was still interested in exploring a potential business combination. The Board, however, refused to even meet with Litex and only again gruffly responded that that the Company was not for sale.

     23. All the while, rather than focusing on implementing a successful business plan or researching other strategic alternatives that would create value for the stockholders, the Board was reinforcing its takeover defense devices. As an initial matter, the Company’s Poison Pill was set to expire on June 23, 2009. The Board therefore amended the Poison Pill on June 9, 2009 to extend its term for five years. On that same day, June 9, 2009, the Company also announced that it had amended and restated its bylaws. Specifically, the Board unilaterally amended and restated the Company’s bylaws to include an onerous advance notice provision for action to be taken at annual meetings, and also the Board unilaterally amended and restated the Company’s bylaws to include an advance notice provision for action to be taken by written consent.. One month later, on July 8, 2009, the Board negotiated and caused the Company to enter into the Revolving Loan Agreement and the Term Loan Agreement.

     24. Finally, Defendants took the extraordinary step of deregistering Craftmade’s common stock with the SEC and delisting it from the NASDAQ Global Market. This enabled Defendants to, in effect, run a public company in the dark and as if it were, again, the private company Defendant Ridings had founded.

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     25. For stockholders, however, rather than creating value, the deregistration decimated the market capitalization of the Company. After the deregistration, the Company’s common stock was listed on the over-the-counter market (OTCQX) which, inter alia, further reduced greatly the trading in the stock as well as analyst coverage of the stock. And as expected, Craftmade continued to decline, both financially and operationally.

Craftmade’s Current Financial Condition

     26. Today, Craftmade is in dire financial and operational straits. For the first quarter of 2010, ended September 30, 2009, and reported on SEC Form 10-Q, filed November 16, 2009, Craftmade reported net sales of only $21 million, a net loss of $377,000, cash of $126,000 and total current assets of only $47.5 million, most of which are secured by loans. In Item 2, of the Company’s SEC Form 10-Q, Craftmade stated that:

“[m]anagement believes that the decline in the housing market and the overall economic downturn will continue to negatively impact the sales of the Company’s various product lines .... The Company continues to pursue its strategic growth plans, while also being highly focused on developing and implementing more immediate plans to mitigate the impact of the current economic downturn. The Company believes it is well situated to benefit from an economic recovery, but the timing of such recovery remains highly uncertain.”

(SEC Form 10-Q, page 23) In apparent recognition of the fact that financial results from ongoing operations would not increase shareholder value, Craftmade further stated that “it is in the best interest of long-term stockholder value for management to continue to evaluate selective and opportunistic acquisitions,” but cautioned that “[t]here can be no assurances, however, that any agreement regarding any such acquisition will be consummated.” (SEC Form 10-Q, page 27) Craftmade common stock closed at $2.28 per share on November 16, 2009, a dramatic decline in value from the $16.72 closing price at the time when Defendants refused to negotiate with Litex in the wake of their having put Craftmade up for sale in May 2007.

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     27. Nonetheless, Litex has continued its attempt to engage Defendants in a meaningful discussion for a business combination transaction. Its most recent efforts were on January 8, 2010, when Litex sent a letter to Defendants offering to acquire the common stock of Craftmade for $3.25, specifically stating that it may offer a higher price after conducting due diligence, and requesting a meeting with the Company. Regardless, the following day Defendants “unanimously concluded that the Litex unsolicited proposal undervalued the Company and was opportunistic.”

     28. Although Defendants agreed to have members of management and the board meet with representatives of Litex, prior to this meeting, Defendants repeated their mantra to Litex — that Craftmade was not for sale.

     29. Plainly frustrated with Defendants conduct, on January 15, 2010, Litex issued a press release announcing its offer for the Company. Without even the benefit of hiring an advisor to opine on the proposal, Defendants issued a press release disclosing that in response to the all-cash offer from Litex to acquire all of the common stock of Craftmade for $3.25 per share, Defendants were rejecting it out of hand, and without any considered dialogue with Litex or any financial advisor, because the offer “significantly undervalue[d] Craftmade and [wa]s not in the best interests of the Craftmade shareholders.”

     30. Moreover, Defendants touted the Woodard acquisition as proof of the effectiveness of their “strategic plan” to acquire companies in an effort to increase shareholder value. However, Defendants did not disclose that Craftmade lacked the financial wherewithal to make additional comparable acquisitions in the foreseeable future, offered no acquisition targets and offered no explanation for the Company’s dismal financial performance and languishing stock price, a clear indication that the Defendants’ strategy has been a failure.

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Litex Offers $5.25 Per Share

     31. On March 2, 2010, Litex, having heard nothing further from Defendants with respect to its offer, increased its offer to $5.25 per share and commenced the Tender Offer. The Tender Offer is not subject to any financing condition.

     32. Although faced with the continuing and worsening reality of a failing company with no business plan to enhance shareholder value except through vague statements concerning unspecified, hoped-for acquisitions, Defendants, in true knee-jerk fashion, immediately issued a press release advising its stockholders to take no action in response to the Tender Offer, despite the fact that the Tender Offer would expire on April 7, 2010. Defendants did not support their position with any meaningful data, nor did they not disclose any sound competing financial or business plan that would increase shareholder value.

     33. Defendants filed with the SEC their response to the Tender Offer on March 15, 2010, reiterating their position that the Tender Offer was inadequate from a financial point of view towards the Company’s stockholders and significantly undervalues the Company — this time including an opinion from the Company’s financial advisor. Defendants, however, failed to disclose the full nature of their relationship with the Company’s financial advisor.

     34. Apparently, on March 3, 2010, Defendants agreed to engage B. Riley & Co. (“Riley”) as its financial advisor in connection with the Tender Offer. Nine days later, the Board met to review the terms of the Tender Offer with the assistance of its legal advisor and Riley during which meeting Riley rendered an opinion that the consideration proposed to be paid to the Company’s common stockholders was inadequate. Riley also confirmed this opinion in writing and this opinion is attached to Craftmade’s SEC filing (the “Riley Opinion”). What is not disclosed is that when the Company had deregistered, Riley was to provide the designated advisor for disclosure (DAD) services for OTCQX-member companies. Accordingly, the

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Defendants had an on-going relationship with Riley. No mention is made of Riley’s previous engagement by Defendants as the DAD for Craftmade. Nor is there any disclosure regarding the specific financial analysis or methodology performed by Riley.

     35. Moreover, Defendants attack the Tender Offer, stating that Litex has inadequate funds to discharge the Company’s indebtedness. Specifically, Defendants disclose to the stockholders that “the indebtedness under two of [the Company’s] financing agreements could be accelerated, at the option of the lenders thereunder, if Litex of Purchaser acquires control of the Company.” Defendants further state that if the Company goes into default “lenders could foreclose upon substantially all of the Company’s assets constituting collateral thereunder.” Defendants make no mention of Permitted Holders; rather, Defendants state plainly that “a change of control of the Company occurs if any person or entity becomes the beneficial owner of 30% or more of the outstanding securities of the Company entitled to vote for the Board.”

     36. Defendants refer both to the Revolving Loan Agreement and the Term Loan Agreement. Specifically, Litex had estimated and had disclosed in its Tender Offer that approximately $29,000,000 would be required to consummate the Offer. Litex further estimated that approximately $35,053,000 may be required to assume or discharge the Company’s debt.

     37. Defendants state that just under the Revolving Loan Agreement it was “probable that between now and the current expiration date of the [Tender] Offer, the outstanding balance under this facility will increase further in the ordinary course of business to approximately $35,000,000.” The balance of the Revolving Loan Agreement as of December 31, 2009, however, was $21,549,000.

     38. Defendants are improperly using the Change of Control provision under the Poison Puts to drive the cost of the Tender Offer up. The additional $14 million amounts to 48%

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of the $29 million required to purchase the Company’s equity, and, at $35 million dollars, the Revolving Loan Agreement increases the cost of consummating the Tender Offer by 220%.

     39. The Litex all-cash Tender Offer, without any financing condition, presents an opportune time and mechanism for Craftmade public shareholders to increase the value of their stockholdings and receive all cash for their shares which otherwise are extremely illiquid and will have virtually no market value.

     40. By abusing their power as directors, particularly glaring in light of the impoverished financial condition of Craftmade, the lack of any credible business plan to enhance shareholder value in the foreseeable future, the concentrated effort to create insurmountable takeover defenses to both tender offers and proxy contests, and the utter failure to engage Litex in a dialogue to further increase its offering price, Defendants have subjected the interests of Craftmade and its stockholders to their own self-interests, in violation of their fiduciary duties.

COUNT I

Breach of Fiduciary Duties — Entrenchment

     41. Plaintiff repeats and realleges each and every allegation above as if set forth in full herein.

     42. As directors of the Company, the Defendants owe fiduciary duties to the Company’s stockholders, including the duties to act with due care and the utmost good faith and loyalty.

     43. Litex’s Tender Offer is an all-cash, non-discriminatory offer for all of the Company’s shares. It is not subject to financing or due diligence conditions, represents a substantial (124.4%) premium over the average closing price of Craftmade stock for the 60 trading days prior to its announcement, is non-coercive, is fair to the Company’s stockholders, and poses no threat to the Company’s policy or effectiveness. The only threat presented by the

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Tender Offer is a threat to the Defendants’ ability to retain their positions as directors of the Company. Delaware law, however, does not allow directors to deploy anti-takeover devises for the purpose of entrenching management. Rather, directors of Delaware corporations are duty bound not to preclude an all-cash premium noncoercive tender offer at a fair price. Yet, the Defendants summarily rejected Litex’s offer and efforts to open a dialogue.

     44. Instead, the Defendants deeply entrenched themselves with an arsenal of take-over defenses. Defendants refuse to redeem or amend the Poison Pill. Defendants are actively driving-up the cost of the Poison Puts. Defendants have unilaterally adopted onerous advance notice bylaws for action to be taken at annual meetings. Defendants have unilaterally adopted advance notice bylaws for action to be taken by written consent. The list goes on to include, among other things, change of control provisions in employment agreements that will provide up to 2 years in severance payments.

     45. These self-serving entrenchment devices are being employed to preclude the Tender Offer in plain breach of Defendants’ fiduciary duties of care, loyalty, candor, good faith, and independence owed to Craftmade’s public shareholders. Defendants are obligated to serve Craftmade’s interests above their own self-interest and to enhance shareholder value and, accordingly, assess in a reasonable and prudent manner the Tender Offer from Litex to acquire the common stock of Craftmade at a substantial premium. Defendants are not permitted to put their personal interests ahead of their fiduciary duties and to refuse to engage in a dialogue with Litex, particularly at a time when Defendants have publicly stated that shareholder value can only be served only by extraordinary business measures, including acquisitions, in clear recognition that business as usual at Craftmade has ceased.

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     46. Accordingly, Plaintiff seeks an order that declares the adoption, maintenance or implementation of any defensive measure by Defendants against Litex or the Tender Offer, or of any measure that would prevent a future board of directors from exercising its fiduciary duties, including the Poison Pill and Poison Puts, would constitute a breach of fiduciary duties owed to the Company’s stockholders.

     47. Plaintiff has no remedy at law.

COUNT II

Breach of Fiduciary Duties — Implementation of Poison Puts

     48. Plaintiff repeats and realleges each and every allegation above as if set forth in full herein.

     49. The Defendants owe the Plaintiff the utmost fiduciary duties of care and loyalty, including the obligation to act in good faith.

     50. In violation of their fiduciary duties, the Defendants adopted the Poison Puts in the Revolving Credit Agreement and the Term Loan Agreement in response to Litex’s overtures for the sole purpose of entrenching themselves as directors of the Company and preventing their removal by shareholder vote. The adoption of these measures was in violation of the fundamental rights of the Plaintiff to sell its shares, impedes the fundamental franchise rights of the Plaintiff to vote in a contested election, was not entirely fair to the Plaintiff, and constitutes an unreasonable response to the possibility of a takeover of the Company. Moreover, the Change of Control provision set forth in the Revolving Credit Agreement is incomprehensible on its face and subjects the Company’s stockholders to extraordinary ambiguity and risk in exercising their fundamental rights to sell and vote their shares. Thus, adoption of the provision was not only a self-interested act of entrenchment by the Defendants, but also a plain breach of their duty of care.

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     51. Defendants’ breaches of fiduciary duties have caused and are continuing to cause harm to Plaintiff by, inter alia, depriving it of the opportunity to sell its shares, and will cause Plaintiff harm by depriving it of the opportunity to exercise its franchise rights free of coercion and to elect a new board majority if it sees fit.

     52. Plaintiff has no adequate remedy at law.

PRAYER FOR RELIEF

     WHEREFORE, Plaintiff demands judgment and preliminary and permanent relief, in its favor and against Defendants as follows:

     A. Declare that the Defendants have breached their fiduciary duties to the Company’s stockholders by refusing to negotiate with Litex and to reasonably inform themselves of the terms on which Litex was prepared to enter into a business combination transaction;

     B. B. Enjoin the Defendants from engaging in any action or inaction that has the effect of improperly impeding, thwarting, frustrating or interfering with the consideration or acceptance of the Tender Offer;

     C. Compel the Defendants to remove the Poison Pill, exempt Litex’s Tender Offer and remove the impediments of any other anti-takeover device;

     D. Declare that the Defendants have breached their fiduciary duties to Plaintiff by implementing the Poison Puts;

     E. Declare that the Poison Puts are invalid and unenforceable;

     F. Award Plaintiff the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees; and

     G. Grant such other and further equitable relief as this Court may deem just and proper.

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	PRICKETT, JONES & ELLIOTT, P.A.
OF COUNSEL:	By:	/s/ Ronald A. Brown, Jr.
		Ronald A. Brown, Jr. (DE Bar No. 2849)
Bernard M. Gross		Marcus E. Montejo (DE Bar No. 4890)
Deborah R. Goss		1310 King Street
LAW OFFICES OF BERNARD M. GROSS,		Wilmington, Delaware 19801
P.C.		(302) 888-6500
Suite 450, Wanamaker Bldg.
100 Penn Square East	Attorneys for Plaintiff
Philadelphia, PA 19107
Telephone: 215-561-3600
Fax: 215-561-3000
DATED: March 22, 2010

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