Exhibit 10.2

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

This First Amendment to Credit Agreement is made as of this 17 day of October,
2003 by and among

 

TUESDAY MORNING CORPORATION, a Delaware corporation, and

 

the GUARANTORS party to the Credit Agreement, and

 

each of the REVOLVING CREDIT LENDERS party to the Credit Agreement, and

 

FLEET NATIONAL BANK, as the issuer of Letters of Credit and as Administrative
Agent for the Revolving Credit Lenders

 

in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.

 

W I T N E S S E T H

 

A.                                   Reference is made to the Credit Agreement
(as amended and in effect, the “Credit Agreement”) dated as of September 27,
2002 by and between, among others, the Borrower, the Guarantors, the Revolving
Credit Lenders, and the Administrative Agent.

 

B.                                     The Borrower, the Guarantors, the
Revolving Credit Lenders, and the Administrative Agent desire to modify and
amend certain provisions of the Credit Agreement.

 

Accordingly, the Administrative Agent, the Revolving Credit Lenders, the
Borrower and the Guarantors agree as follows:

 

1.                                       Definitions.  Capitalized terms used
herein and not other­wise defined herein shall have the meanings assigned to
such terms in the Credit Agreement.

 

2.                                       Amendments to Section 1 of the Credit
Agreement.  The provisions of Section 1 of the Credit Agreement are hereby
amended as follows:

 

(a)                                  by deleting the definition of “Borrowing
Base” and substituting the following in its stead:

 

“Borrowing Base” shall mean, as at any date, (i) the lesser of (A) up to the
Inventory Advance Rate of the aggregate value of Eligible Inventory (net of
Inventory Reserves) at said date or (B) up to the Appraisal Percentage Rate of
the Appraised Inventory Liquidation Value of Eligible Inventory, minus (ii)
Availability Reserves.

 

(b)                                 by deleting the definitions of “Normal
Advance Rate”, “Increased Advance Rate” and “Overadvance Period” in their
entirety.

 

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(c)                                  by adding the following new definitions in
appropriate alphabetical order:

 

“Appraisal Percentage Rate” shall mean (a) 95% through December 31, 2004, and
(b) 90% at all times thereafter.

 

“Inventory Advance Rate” shall mean (a) 75% through December 31, 2004, and (b)
70% at all times thereafter.

 

“Utilization Fee” shall have the meaning set forth in Section 2.6(c).

 

3.                                       Amendments to Section 2 of the Credit
Agreement.  The provisions of Section 2 of the Credit Agreement are hereby
amended as follows:

 

(a)                                  The provisions of Section 2.5(c) of the
Credit Agreement are hereby deleted in their entirety and the following
substituted in their stead:

 

(c)   Intentionally Omitted.

 

(b)                                 The words “and/or Overadvance Period, as
applicable” are hereby deleted from Section 2.5(d) of the Credit Agreement.

 

(c)                                  The following new subsection is hereby
added at the end of Section 2.6 of the Credit Agreement:

 

(c)    Borrower shall pay to the Administrative Agent for the account of each
Revolving Credit Lender a utilization fee (the “Utilization Fee”) on, and to the
extent that, the daily amount of the outstanding Loans and Letter of Credit
Liabilities exceeds 50% of the Revolving Credit Commitments, such Utilization
Fee to accrue and be payable at a rate per annum equal to 0.125% of such excess
until all Obligations have been repaid in full and all Revolving Credit
Commitments terminated.  Any accrued Utilization Fee under this Section 2.6(c)
shall be payable in arrears on each Quarterly Date and upon repayment in full of
the Obligations.

 

(d)                                 The provisions of Section 2.13 of the Credit
Agreement are hereby deleted in their entirety and the following substituted in
their stead:

 

2.13  Annual Cleandown.  For a consecutive fifteen-day period between the first
day of November and the last day of December of each calendar year, the sum of
the aggregate principal amount of Revolving Credit Loans outstanding, plus the
aggregate outstanding principal amount of Swing Loans, shall not exceed
$20,000,000.

 

4.                                       Amendments to Section 9 of the Credit
Agreement.  The provisions of Section 9

 

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of the Credit Agreement are hereby amended as follows:

 

(a)                                  The provisions of Sections 9.1(j)(i) are
hereby deleted in their entirety and the following substituted in their stead:

 

(i) Intentionally Omitted.

 

(b)                                 The provisions of Sections 9.1(j)(ii) are
hereby deleted in their entirety and the following substituted in their stead:

 

(ii)   As soon as available and in any event within ten (10) calendar days after
the end of each monthly accounting period (ending on the last day of each
calendar month), a Borrowing Base Certificate as of the last day of such monthly
accounting period; if Borrower fails to deliver any such Borrowing Base
Certificate within the (10) calendar days after the end of any such month, then
the Borrowing Base shall be deemed to be $0 until such time as Borrower shall
deliver such required Borrowing Base Certificate;

 

(c)                                  Section 9.10(c) of the Credit Agreement is
hereby deleted in its entirety and the following is substituted in its stead:

 

(c)   so long as no Default or Event of Default then exists or would arise
therefrom, Borrower may make repurchases, redemptions or other acquisitions of
its Equity Interests and may declare and make Dividend Payments to the extent
made pro rata to the holders of all Equity Interests thereof; provided, however,
that, after giving pro forma effect to each such repurchase, redemption, other
acquisition or Dividend Payment:

 

(i)   the amount of all such repurchases, redemptions, other acquisitions and
Dividend Payments shall not exceed, in the aggregate, $40,000,000 in any twelve
month period;

 

(ii)  Borrower shall be in compliance with all covenants and agreements set
forth herein (including Section 9.11); and

 

(iii) within two Business Days of each such repurchase, redemption, other
acquisition, or Dividend Payment, Borrower shall deliver to the Administrative
Agent an Officers’ Certificate stating compliance with this Section 9.10(c).

 

(d)                                 The provisions of Sections 9.15(a) are
hereby deleted in their entirety and the following substituted in their stead:

 

(a) Intentionally Omitted.

 

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5.                                       Amendments to Section 12 of the Credit
Agreement.  The provisions of Section 12.4(a)(i)(X) of the Credit Agreement are
hereby deleted in their entirety and the following substituted in their stead:

 

(X)  increase the applicable Inventory Advance Rate or the Appraisal Percentage
Rate, it being understood, however, that the foregoing shall not prevent the
Administrative Agent, in its administration of the Revolving Credit Loans, from
restoring any component of the Borrowing Base which had been lowered by the
Administrative Agent back to the value of such component, as stated in this
Agreement or to an intermediate value.

 

6.                                       Miscellaneous.

 

(a)                                  This First Amendment may be executed in
several counterparts and by each party on a separate counterpart, each of which
when so executed and delivered shall be an original, and all of which together
shall constitute one instrument.

 

(b)                                 This First Amendment expresses the entire
understanding of the parties with respect to the transactions contemplated
hereby.  No prior negotiations or discussions shall limit, modify, or otherwise
affect the provisions hereof.

 

(c)                                  Any determination that any provision of
this First Amendment or any application hereof is invalid, illegal or
unenforceable in any respect and in any instance shall not effect the validity,
legality, or enforceability of such provision in any other instance, or the
validity, legality or enforceability of any other provisions of this First
Amendment.

 

(d)                                 The Borrower shall pay on demand all costs
and expenses of the Administrative Agent, including, without limitation,
reasonable attorneys’ fees in connection with the preparation, negotiation,
execution and delivery of this First Amendment.

 

(e)                                  The Borrower warrants and represents that
the Borrower has consulted with independent legal counsel of the Borrower’s
selection in connection with this First Amendment and is not relying on any
representations or warranties of the Administrative Agent or its counsel in
entering into this First Amendment.

 

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties have duly executed this First Amendment as of
the day and year first above written.

 

 

TUESDAY MORNING CORPORATION

 

 

 

 

 

By:

/s/ Terry L. Crump

 

 

Name:

Terry L. Crump

 

Title:

Vice President, Finance

 

 

 

 

 

TUESDAY MORNING, INC.

 

 

 

 

 

By:

/s/ Terry L. Crump

 

 

Name:

Terry L. Crump

 

Title:

Vice President, Finance

 

 

 

 

 

FRIDAY MORNING, INC.

 

 

 

 

 

By:

/s/ Terry L. Crump

 

 

Name:

Terry L. Crump

 

Title:

Vice President, Finance

 

 

 

 

 

DAYS OF THE WEEK, INC.

 

 

 

 

 

By:

/s/ Terry L. Crump

 

 

Name:

Terry L. Crump

 

Title:

Vice President, Finance

 

 

 

 

 

TUESDAY MORNING PARTNERS, LTD.

 

 

 

By:

Days of the Week, Inc., its General Partner

 

 

 

 

 

By:

/s/ Terry L. Crump

 

 

Name:

Terry L. Crump

 

Title:

Vice President, Finance

 

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NIGHTS OF THE WEEK, INC.

 

 

 

 

 

By:

/s/ Alan Oppenheimer

 

 

Name:

Alan Oppenheimer

 

Title:

President

 

 

 

 

 

TMI HOLDINGS, INC.

 

 

 

 

 

By:

/s/ Alan Oppenheimer

 

 

Name:

Alan Oppenheimer

 

Title:

President

 

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FLEET NATIONAL BANK, as Administrative
Agent and Issuing Lender

 

 

 

 

 

By:

/s/ Judith C.E. Kelly

 

 

Name:  Judith C.E. Kelly

 

Title:  Managing Director

 

 

 

REVOLVING CREDIT LENDERS

 

 

 

FLEET NATIONAL BANK, as a Revolving Credit
Lender

 

 

 

 

 

By:

/s/ Judith C.E. Kelly

 

 

Name:  Judith C.E. Kelly

 

Title:  Managing Director

 

 

 

WELLS FARGO BANK, N.A., as a Revolving
Credit Lender and Syndication Agent

 

 

 

 

 

By:

/s/ Jason Weighter

 

 

Name:  Jason Weighter

 

Title:  Assistant Vice President

 

 

 

 

 

LASALLE BANK NATIONAL ASSOCIATION,
as a Revolving Credit Lender and Documentation
Agent

 

 

 

 

 

By:

/s/ Keith Cable

 

 

Name: Keith Cable

 

Title: Assistant Vice President

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as a
Revolving Credit Lender and Documentation Agent

 

 

 

 

 

By:

/s/ Amanda Schmitt

 

 

Name: Amanda Schmitt

 

Title: Assistant Vice President

 

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WACHOVIA BANK, NATIONAL
ASSOCIATION, as a Revolving Credit Lender and
Documentation Agent

 

 

 

 

 

By:

/s/ William F. Fox

 

 

Name:  William F. Fox

 

Title: Vice President

 

 

 

BANK LEUMI USA, as a Revolving Credit Lender

 

 

 

 

 

By:

/s/ Gloria Bucher

 

 

Name: Gloria Bucher

 

Title: Senior Vice President

 

 

 

FLEET NATIONAL BANK, successor by
assignment to First American Bank, as a Revolving
Credit Lender

 

 

 

 

 

By:

/s/ Judith C.E. Kelly

 

 

Name:  Judith C.E. Kelly

 

Title:  Managing Director

 

 

 

GENERAL ELECTRIC CAPITAL
CORPORATION, as a Revolving Credit Lender

 

 

 

 

 

By:

/s/ Robert M. Kadlick

 

 

Name:  Robert M. Kadlick

 

Title: Duly Authorized Signatory

 

 

 

NATIONAL CITY BANK, as a Revolving Credit
Lender

 

 

 

 

 

By:

/s/ Michael J. Durbin

 

 

Name:  Michael J. Durbin

 

Title: Senior Vice President

 

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PB CAPITAL CORPORATION, as a Revolving
Credit Lender

 

 

 

 

 

By:

/s/ Maria C. Levy / Steven Alexander

 

 

Name:

Maria C. Levy / Steven Alexander

 

Title:

Vice President / Vice President

 

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