Summary of ETHAN ALLEN INTERIORS INC

ITEM 1.01 Entry into a Material Definitive Agreement.

On May 29, 2009, Ethan Allen Interiors Inc. and its subsidiaries (collectively, "Ethan Allen" or the "Company") entered into a three-year, $40 million senior secured asset-based revolving credit facility ("the "Facility") with J.P. Morgan Chase Bank N.A., as administrative agent and syndication agent (the "Administrative Agent"), Capitol One Leverage Finance Corp., as documentation agent, and J.P. Morgan Securities, Inc. as sole bookrunner and sole lead arranger.

The Facility provides revolving credit financing of up to $40 million, subject to borrowing base availability, and includes an accordion feature which, if exercised, would provide up to an additional $20 million of financing.

At the Company's option, revolving loans under the Agreement bear interest at an annual rate of either:

(a) a London Interbank Offered ("LIBO") rate plus 3.25% to 4.25%, based on the average availability, or

(b) the higher of (i) a prime rate, (ii) the federal funds effective rate plus 0.50%, or (iii) a LIBO rate plus 1.00% plus, in each case, an additional 2.25% to 3.25%, based on average availability.

The Company will pay a commitment fee of 0.50% per annum on the unused portion of the Facility and participation fees on issued letters of credit at an annual rate of 1.625% to 4.25%, based on the average availability and the letter of credit type, and a fronting fee of 0.125% per annum.

The borrowing base at any time equals the sum of: up to 90% of eligible credit card receivables; plus up to 85% of eligible accounts receivable; plus up to 85% of the net orderly liquidation value of eligible inventory.

The Facility is secured by all property owned, leased or operated by the Company in the United States excluding any real property owned by the Company and also excludes any intellectual property owned by the Company unless availability is less than or equal to $17.5 million.

The Facility contains customary covenants which may limit the Company's ability to incur debt; engage in mergers and consolidations; make restricted payments (including dividends); sell certain assets; and make investments. The Company may make restricted payments (including dividends) as long as availability equals or exceeds the greater of (i) 25% of the aggregate commitment or (ii) $12 million. If the average monthly availability is less than the greater of (i) 15% of the aggregate commitment and (ii) $9 million, The Company is also required to meet a fixed charge coverage ratio financial covenant which may not be less than 1 to 1 for any period of four consecutive fiscal quarters.

The Facility contains customary borrowing conditions and events of default (the occurance of which would entitle the lenders to accelerate the maturity of any outstanding borrowings and terminate their commitment to make future loans).