Document:

Exhibit 10.3

Form of

RENTECH, INC.

WARRANT

	
  

  	
  To Purchase

  	
  Shares of Common Stock

  

 

Warrant No.          

Date of Issuance: 
April      , 2007

VOID AFTER APRIL   , 2012

THIS WARRANT (the “Warran”) CERIFIES
THAT, for value received,                     ,
or permitted registered assigns (the “Holder”),
is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date hereof and on or prior to the close
of business on the fifth anniversary of the Date of Issuance (the “Termination Date”) but not thereafter, to subscribe for and purchase at the Exercise Price
(defined below) from Rentech, Inc., a Colorado corporation (the “Company”), up to             
shares (the “Shares”) of the common stock of
the Company, par value $0.01 per share (the “Common
Stock”) (including the associated right to purchase shares of Series
1998-C Participating Cumulative Preference Stock, $10 par value, under the
Shareholder Rights Plan, dated as of January 18, 2005, as amended, if any. This
Warrant is issued by the Company pursuant to that certain subscription
agreement between the Company and the Holder, dated as of April 19, 2007 (the “Subscription Agreement”) and is one of a
series of Warrants issued by the Company (collectively, “Company April 19 Warrants”).

1.    DEFINITIONS.    Capitalized
terms used herein but not otherwise defined herein shall have their respective
meanings as set forth in the Subscription Agreement. As used herein, the
following terms shall have the following respective meanings:

(A)    ”Exercise
Period” shall mean the period commencing with the date occurring six
months after the date hereof and ending on the Termination Date, unless sooner
terminated as provided below.

(B)    ”Exercise
Price” shall mean $3.28 per share, subject to adjustment pursuant to
Section 4 below.

(C)    ”Trading Day”
shall mean (a) any day on which the Common Stock is listed or quoted and traded
on any eligible Trading Market (meaning any of the NYSE, AMEX or NASDAQ), (b) if
the Common Stock is not then listed or quoted and traded on any eligible Trading
Market, then a day on which trading occurs on the OTC Bulletin Board (or any
successor thereto), or (c) if trading does not occur on the OTC Bulletin Board
(or any successor thereto), any Business Day.

(D)    ”Warrant Agent”
shall mean the Company or an agent, if any, appointed by the Company to
register the Warrants and maintain the records related thereto.  The initial Warrant Agent shall be [        ].

(E)    ”Warrant
Shares” shall mean the Shares issuable upon exercise of this
Warrant.

2.    EXERCISE OF WARRANT.

2.1                  EXERCISE.  Subject to Section 2.3, the rights
represented by this Warrant may be exercised in whole or in part at any time
during the Exercise Period, by delivery of the following to the Company at its
address set forth below (or at such other address as the Company or the Warrant
Agent may designate by notice in writing to the Holder):

(A)    An executed Notice of Exercise in the form
attached hereto;

(B)    Subject to Section 2.3, Payment of the
Exercise Price in cash or by check; and

(C)    This Warrant.

Execution and delivery of the Notice of Exercise shall have the same effect
as cancellation of the original Warrant and issuance of a new Warrant
evidencing the right to purchase the remaining number of Warrant Shares, if
any.

Certificates for shares purchased hereunder shall be transmitted by the
transfer agent of the Company to the Holder by crediting the account of the
Holder’s prime broker with The Depository Trust Company through its Deposit
Withdrawal Agent Commission (“DWAC”) system
if the Company is a participant in such system, and otherwise by physical
delivery to the address specified by the Holder in the Notice of Exercise
within three Trading Days from the delivery to the Company of the Notice of
Exercise, surrender of this Warrant and payment of the aggregate Exercise Price
as set forth above.

2.2                  EFFECT OF
EXERCISE.

(a)           This Warrant shall be
deemed to have been exercised on the date this Warrant is surrendered and the
Exercise Price and Notice of Exercise are received by the Company. The Warrant
Shares shall be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares for all purposes, as of the date this Warrant has
been exercised irrespective of the date of delivery of such certificate or
certificates, except that, if the date of such surrender and payment is a date
when the stock transfer books of the Company are closed, such person shall be
deemed to have become the holder of such shares at the close of business on the
next succeeding date on which the stock transfer books are open.  In the event certificates for Warrant
Shares are to be issued in a name other than the name of the Holder, this
Warrant when surrendered for exercise shall be accompanied by the Assignment Form
attached hereto duly executed by the 

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Holder, and the Company
may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

(b)           To the extent permitted
by law, the Company’s obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any waiver or
consent with respect to any provision hereof, the recovery of any judgment
against any person or entity or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other person or entity of any obligation to the
Company or any violation or alleged violation of law by the Holder or any other
person or entity, and irrespective of any other circumstance which might
otherwise limit such obligation of the Company to the Holder in connection with
the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance or injunctive
relief with respect to the Company’s failure to timely deliver certificates
representing Shares upon exercise of this Warrant as required pursuant to the
terms hereof.

2.3    LIMITATIONS ON EXERCISABILITY; CASHLESS
EXERCISE.

At any time during the Exercise Period when (a) a Restrictive Legend Event
(as defined below) has occurred, , the Holder may only exercise this
Warrant  (or the portion thereof being
canceled) (a) if the “fair market value” (as calculated below) of one Share is
greater than the Exercise Price and (b) in accordance with the next
sentence.  The Holder may exercise this
Warrant by delivery of this Warrant at the principal office of the  Warrant Agent, together with the properly
endorsed Notice of Exercise, in which event the Company shall issue to the
Holder a number of Warrant Shares computed using the following formula (such
exercise pursuant to this Section 2.3, a “Cashless
Exercise”):

X = Y (A-B)  

    A

	
   

  	
  Where X =

  	
  the number of Shares to be issued to the Holder

  
	
   

  	
  Y =

  	
  the number of Shares purchasable under this Warrant or, if only a portion
  of this Warrant is being exercised, the portion of this Warrant being
  canceled (at the date of such calculation)

  
	
   

  	
  A =

  	
  the fair market value of one share of the Company’s Common Stock (at the
  date of such calculation)

  
	
   

  	
  B =

  	
  Exercise Price (as adjusted to the date of such calculation)

  

 

For purposes of
the above calculation, the “fair market value” of one share of Common Stock
shall mean (i) the volume-weighted average sales price for the Shares on the
American Stock Exchange or other trading market where such security is listed
or traded as reported by Bloomberg Financial Markets (or a comparable reporting
service of national reputation selected by the Company and reasonably
acceptable to the Holder if Bloomberg Financial Markets is not then reporting
sales prices of such security) (collectively, “Bloomberg”) for the ten (10) 

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consecutive Trading Days immediately
preceding (but not including) the Exercise Date, or (ii) if the foregoing does
not apply, the volume-weighted average sales price of the Shares during the
same period in the over-the-counter market on the pink sheets or bulletin board
for such security as reported by Bloomberg, or if no sales price is so reported
for the Shares, the last bid price of the Shares as reported by Bloomberg or
(iii) if none of the foregoing applies, the fair market value shall be as
determined by the Board of Directors of the Company in the exercise of its good
faith judgment.

The Company shall provide to the Holder prompt written
notice of any time that the Company is unable to issue the Warrant Shares via
DWAC transfer (or otherwise without restrictive legend), because (a) the
Securities and Exchange Commission (the “Commission”)
has issued a stop order with respect to the Registration Statement, (b) the
Commission otherwise has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, (c) the Company has
suspended or withdrawn the effectiveness of the Registration Statement, either
temporarily or permanently, or (d) otherwise (each a “Restrictive
Legend Event”).  To the extent
that a Restrictive Legend Event occurs after the Holder has exercised this
Warrant in accordance with Section 2.1 but prior to the delivery of the Warrant
Shares, the Company shall (i) if the fair market value (as calculated above) of
the Warrant Shares is greater than the Exercise Price, deliver that number of
Warrant Shares to the Holder as should be delivered in a Cashless Exercise in
accordance with this Section 2.3, and return to the Holder all consideration
paid to the Company in connection with the Holder’s attempted exercise of this
Warrant pursuant to Section 2.1, or (ii) if the fair market value (as
calculated above) of the Warrant Shares is less than the Exercise Price, rescind
the previously submitted Notice of Exercise and shall return all consideration
paid by Holder for such shares upon such rescission.  The Company shall give prompt written
notice to the Holder of  any cessation of
a Restrictive Legend Event.

If a Restrictive Legend Event has occurred and no exemption
from the registration requirements is available (including, without limitation,
under Section 3(a)(9) of the Securities Act by virtue of a Cashless Exercise),
this Warrant shall not be exercisable. 
Notwithstanding anything herein to the contrary, the Company shall not
be required to make any cash payments to the Holder in lieu of issuance of the
Warrant Shares.

For
purposes of Rule 144(d) promulgated under the Securities Act, as in effect on
the date hereof, it is intended that the Warrant Shares issued in a Cashless
Exercise shall be deemed to have been acquired by the Holder, and the holding
period for the Warrant Shares shall be deemed to have commenced, on the date
this Warrant was originally issued pursuant to the Subscription Agreement.

2.4    ISSUANCE OF NEW WARRANTS.    Upon
any partial exercise of this Warrant, the Company, at its expense, shall
forthwith and, in any event within five business days, issue and deliver to the
Holder a new warrant or warrants of like tenor, registered in the name of the
Holder, exercisable, in the aggregate, for the balance of the number of Shares
remaining available for purchase under this Warrant.

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2.5    PAYMENT OF TAXES AND EXPENSES.    The
Company shall pay any recording, filing, stamp or similar tax imposed by the
U.S. federal government or any state which may be payable in respect of any
transfer involved in the issuance of, and the preparation and delivery of
certificates (if applicable) representing, (i) any Warrant Shares purchased
upon exercise of this Warrant and/or (ii) new or replacement warrants in the
Holder’s name .  The Holder shall be
responsible for any transfer tax incidental to the issuance of Warrant Shares
to a person other than the Holder.  The
Holder shall be responsible for income taxes due under U.S. federal, state or
other law, if any such tax is due.

3.    COVENANTS OF THE COMPANY.   The Company covenants and agrees that:

3.1    COVENANTS AS TO EXERCISE SHARES.   
All Warrant Shares issued upon the exercise of the rights represented by this
Warrant shall, upon issuance and receipt of payment of the applicable Exercise
Price in accordance with the terms hereof, be validly issued, fully paid and
nonassessable. The Company shall at all times during the Exercise Period, have
authorized and reserved, free from preemptive rights, a sufficient number of
Shares to provide for the exercise of the rights represented by the Company
Warrants (taking into account the adjustments of Section 4).

 The Company shall use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to
enable the Company to perform its obligations under this Warrant.

3.2    NOTICES OF RECORD DATE AND CERTAIN OTHER
EVENTS.    In the event of any taking by the Company of
a record of the holders of Common Stock for the purpose of determining the
holders thereof who are entitled to receive any dividend or other distribution
(other than regular quarterly cash dividend or a dividend payable solely in
Shares), the Company shall mail to the Holder, at least ten (10) days prior to
the date on which any such record is to be taken for the purpose of such
dividend or distribution, a notice specifying such date; provided,
however that Company shall not be
required to provide such notice at any time the notice and the contents thereof
shall be deemed to constitute material non-public information.  In the event of any voluntary dissolution, liquidation
or winding up of the Company, the Company or the Warrant Agent shall mail to
the Holder, at least ten (10) days prior to the date of the occurrence of any
such event, a notice specifying such date. In the event the Company authorizes
or approves, enters into any agreement contemplating, or solicits stockholder
approval for any Fundamental Transaction, as defined in Section 6 herein,
the Company shall mail to the Holder, at least ten (10) days prior to the date
of the closing of such Fundamental Transaction, a notice specifying such
anticipated date of closing.  The failure
to deliver notice under this Section 4.2 or any defect therein shall not
affect the validity of the corporate action required to be described in such
notice.

4.       ADJUSTMENT OF EXERCISE PRICE
AND SHARES.

4.1                STOCK DIVIDENDS AND SPLITS.  In the event of changes in the outstanding
Common Stock of the Company by reason of stock dividends, split-ups,
recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, consolidation, acquisition of the
Company (whether through merger or acquisition of 

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substantially all
the assets or stock of the Company), or the like, the number, class and type of
shares available under this Warrant in the aggregate and the Exercise Price
shall be correspondingly adjusted to give the Holder of this Warrant, upon
exercise for the same aggregate Exercise Price, the total number, class, and
type of shares or other property as the Holder would have owned had this
Warrant been exercised prior to the event and had the Holder continued to hold
such shares until the event requiring adjustment. The form of this Warrant need
not be changed because of any adjustment in the number of Warrant Shares
subject to this Warrant.

4.2                  PRO
RATA DISTRIBUTIONS.    If at any time or from time to
time the holders of Common Stock of the Company (or any shares of stock or
other securities at the time receivable upon the exercise of this Warrant)
shall have received or become entitled to receive, without payment therefor,

(A)    Common
Stock or any shares of stock or other securities which are at any time directly
or indirectly convertible into or exchangeable for Common Stock, (other than a
dividend or distribution covered in Section 4.1 above);

(B)    any
cash paid or payable otherwise than as a cash dividend; or

(C)    Common
Stock or additional stock or other securities or property (including cash) by
way of spinoff, split-up, reclassification, combination of shares or similar
corporate rearrangement (other than Shares pursuant to Section 4.1
above),

then and in each such case, the Holder hereof shall,
upon the exercise of this Warrant, be entitled to receive, in addition to the
number of Shares receivable thereupon, and without payment of any additional
consideration therefor, the amount of stock and other securities and property
(including cash in the cases referred to in clauses (B) and (C) above) which
such Holder would hold on the date of such exercise had such Holder been the
holder of record of such Common Stock as of the date on which holders of Common
Stock received or became entitled to receive such shares or all other
additional stock and other securities and property.

4.3    Upon the occurrence of each adjustment pursuant
to Sections 4.1 and 4.2, the Company shall promptly give notice
thereof to the Holder, which notice shall state the number of Warrant Shares
(and other securities or property) purchasable upon the exercise of this
Warrant and the Exercise Price of such Warrant Shares (and other securities or
property) after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which such
adjustment was made.

5.    FRACTIONAL SHARES.    No
fractional shares shall be issued upon the exercise of this Warrant as a
consequence of any adjustment pursuant hereto. All Warrant Shares (including
fractions) issuable upon exercise of this Warrant may be aggregated for
purposes of determining whether the exercise would result in the issuance of
any fractional share. If, after aggregation, the exercise would result in the
issuance of a fractional share, the Company shall, in lieu of issuance of any
fractional share, pay the Holder otherwise entitled to such fraction a sum in
cash equal to 

 6
 

the product
resulting from multiplying the closing sales price  of a Share on the Trading Day immediately
preceding the Exercise Date by such fraction.

6.    FUNDAMENTAL TRANSACTIONS.    If,
at any time while this Warrant is outstanding, (i) the Company effects any
merger or consolidation of the Company with or into another entity, in which
the shareholders of the Company as of immediately prior to the transaction own
less than a majority of the outstanding stock of the surviving entity, (ii) the
Company effects any sale of all or substantially all of its assets in one or a
series of related transactions, (iii) any tender offer or exchange offer
(whether by the Company or another person or entity) is completed pursuant to
which holders of Common Stock are permitted to tender or exchange their shares
for other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision or
combination of Shares covered by Section 4.1 above) (each, a “Fundamental Transaction”), then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant, the
same amount and kind of securities, cash or property as it would have been
entitled to receive upon the occurrence of such Fundamental Transaction if it
had been, immediately prior to such Fundamental Transaction, the holder of the
number of Warrant Shares then issuable upon exercise in full of this Warrant
(the “Alternate Consideration”).  To the extent necessary to effectuate the
foregoing provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant consistent with
the foregoing provisions and evidencing the Holder’s right to exercise such
warrant into Alternate Consideration. The terms of any agreement pursuant to
which a Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of this Section
6 and ensuring that this Warrant (or any such replacement security) shall
be similarly adjusted upon any subsequent transaction analogous to a
Fundamental Transaction.

7.    NO STOCKHOLDER RIGHTS.    This
Warrant in and of itself shall not entitle the Holder to any voting rights or
other rights as a stockholder of the Company.

8.    TRANSFER OF WARRANT.

8.1                  Subject
to compliance with any applicable securities laws, this Warrant and all rights
hereunder are transferable, in whole or in part, upon surrender of this Warrant
at the principal office of the Warrant Agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled.  A
Warrant, if properly assigned, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant issued.

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8.2                  This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Warrant Agent together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney Subject to compliance with Section 8.1,
as to any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with such notice.

8.3                  The
Company shall prepare, issue and deliver at its own expense the new Warrant or
Warrants under this Section 8.

8.4.                 The Company shall
register this Warrant, upon records to be maintained by the Warrant Agent for
that purpose (the “Warrant Register”), in the name of the record
Holder (which shall include the initial Holder or, as the case may be, any
registered assignee to which this Warrant is permissibly assigned hereunder
from time to time).  The Company may deem and treat the registered Holder
of this Warrant as the absolute owner hereof for the purpose of any exercise
hereof or any distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.

9.    LOST, STOLEN, MUTILATED OR DESTROYED WARRANT.    If
this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such
terms as to indemnity (which may include the posting of a bond) or otherwise as
it may reasonably impose (which shall, in the case of a mutilated Warrant,
include the surrender thereof), issue a new Warrant of like denomination and
tenor as this Warrant so lost, stolen, mutilated or destroyed. Any such new
Warrant shall constitute an original contractual obligation of the Company,
whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall
be at any time enforceable by anyone.

10.    NOTICES, ETC.    All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified, (b)
when sent by confirmed telex or facsimile if sent during normal business hours
of the recipient, if not, then on the next business day, (c) five days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the Company at the address listed
on the signature page hereto and to Holder at the applicable address set forth
on the applicable signature page to the Subscription Agreement or at such other
address as the Company or Holder may designate by ten (10) days advance written
notice to the other parties hereto.

11.    ACCEPTANCE.    Receipt
of this Warrant by the Holder shall constitute acceptance of and agreement to
all of the terms and conditions contained herein.

12.    GOVERNING LAW.    This
Warrant shall be governed by, and construed in accordance with, the laws of the
State of New York.  The Holder hereby submits
to the non-exclusive jurisdiction of the Federal and state courts in the
Borough of Manhattan in The City of New York in any suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated thereby.  The Holder irrevocably and unconditionally
waives any 

 8
 

objection to the
laying of venue of any suit or proceeding arising out of or relating to this
Warrant in Federal and state courts in the Borough of Manhattan in The City of
New York and irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such suit or proceeding in any such court has
been brought in an inconvenient forum.

13.    AMENDMENT OR WAIVER.    Any
term of this Warrant may be amended or waived (either generally or in a
particular instance and either retroactively or prospectively) with the written
consent of the Company and the holders of Company Warrants representing at
least two-thirds of the number of Shares subject to then outstanding Company
Warrants. Notwithstanding the foregoing, (a) this Warrant may be amended and
the observance of any term hereunder may be waived without the written consent
of the Holder only in a manner which applies to all Company Warrants in the
same fashion and (b) any decrease of the number of Warrant Shares subject to
this Warrant, any adjustment to the Exercise Price (except for any adjustment
(or waiver thereof) made pursuant to Section 4 hereof) of this Warrant,
or waiver of any right to exercise this Warrant a, shall require the prior
written consent of the Holder. The Company shall give prompt written notice to
the Holder of any amendment hereof or waiver hereunder that was effected
without the Holder’s written consent. No waivers of any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

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IN WITNESS
WHEREOF, the Company has caused this Warrant to be executed by its duly
authorized officer as of             ,
2007.

	
   

  	
  RENTECH, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 10
 

NOTICE OF EXERCISE

TO:    RENTECH,
INC. / WARRANT AGENT

Subject to 2.3 of the Warrant, the undersigned hereby elects to purchase                   
shares (the “Shares”) of the common stock, par
value $0.01 (the “Common Stock”)
(including the associated right to purchase shares of Series 1998-C
Participating Cumulative Preference Stock, $10 par value under the Shareholder
Rights Plan, dated as of January 18, 2005, if any, of Rentech, Inc. (the “Company”) pursuant to the terms of the
attached Warrant, and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

(2)    Please issue the certificate for Shares in the
name of, and pay any cash for any fractional Share to:

	
  

  	
   

  	
   

  
	
  Print or
  type name

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security or other Identifying
  Number

  
	
   

  
	
   

  	
   

  	
   

  
	
  Street Address

  
	
   

  
	
   

  	
   

  	
   

  
	
  City State Zip Code

  

 

(3)    If such number of Shares shall not be all the
Shares purchasable upon the exercise of the Warrants evidenced by this Warrant,
a new warrant certificate for the balance of such Warrants remaining
unexercised shall be registered in the name of and delivered to:

	
  Please
  insert Social Security or other identifying number:

  
	
   

  	
   

  
	
   

  
	
   

  
	
  (Please print name and address)

  
	
   

  
	
   

  
	
  Dated:

  	
   

  	
   

  
	
  

  
	
   

  	
   

  
	
  (Date)

  	
   

  
	
   

  	
  (Signature)

  
				

 

 11
 

 

 

	
  

  	
   

  
	
   

  	
  (Print name)

  
	
   

  	
   

  
	
  SIGNATURE GUARANTY:

  

 

 12
 

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to

	
  Name:

  	
   

  	
   

  
	
   

  	
  (Please Print)

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Please Print)

  	
   

  
	
  Dated:             ,
  200[     ]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Holder’s 

  	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Holder’s
  Address:

  	
   

  	
   

  	
   

  
					

 

NOTE: The
signature to this Assignment Form must correspond with the name as it appears
on the face of the Warrant, without alteration or enlargement or any change
whatever. Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign the
foregoing Warrant.

SIGNATURE GUARANTY:

 13Exhibit
10.1

FIRST
AMENDMENT TO CREDIT AGREEMENT

This FIRST AMENDMENT TO CREDIT
AGREEMENT (this “Amendment”) dated as of April 18, 2007, with an
effective date determined in accordance with Section 4 below (the “Effective
Date”), is entered into by and among
TUESDAY MORNING, INC., a Texas corporation (the “Borrower”), TUESDAY
MORNING CORPORATION, a Delaware corporation (“TMC”), TMI HOLDINGS, INC.,
a Delaware corporation (“Holdings”, together with TMC, the “Parental
Entities”), the Lenders party to the Credit Agreement (as defined below)
and WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative
Agent”).

STATEMENT OF PURPOSE

The Borrower, the Parental
Entities, the Lenders and the Administrative Agent are parties to that certain
Credit Agreement dated as of December 22, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
pursuant to which the Lenders have extended certain credit facilities to the
Borrower.  Capitalized terms used in this
Amendment which are not otherwise defined herein have the respective meanings
attributed to such terms in the Credit Agreement.

The
Borrower has requested that the Credit Agreement be amended in the manner set
forth herein and the Lenders are willing to agree to the requested amendment,
but only upon the terms and conditions of this Amendment.

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1.                                            Amendments
to Credit Agreement. The Credit Agreement is, effective
as of the Effective Date, hereby amended as follows:

(a)                                       Section
1.1 of the Credit Agreement is hereby amended as follows:

(i)                                     The
definition of “Applicable Margin” is hereby amended by deleting the pricing
grid therein in its entirety and replacing it with the following:

	
  Pricing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Revolving Credit Loans

  	
   

  
	
  Level

  	
   

  	
  Average Total Leverage Ratio

  	
   

  	
  Commitment Fee

  	
   

  	
  LIBOR +

  	
   

  	
  Base Rate +

  	
   

  
	
  I

  	
   

  	
  Greater than or equal
  to 2.50 to 1.00

  	
   

  	
  0.250

  	
  %

  	
  1.550

  	
  %

  	
  0.250

  	
  %

  
	
  II

  	
   

  	
  Greater than or equal
  to 2.00 to 1.00, but less than 2.50 to 1.00

  	
   

  	
  0.225

  	
  %

  	
  1.300

  	
  %

  	
  0.000

  	
  %

  
	
  III

  	
   

  	
  Greater than or equal
  to 1.50 to 1.00, but less than 2.00 to 1.00

  	
   

  	
  0.200

  	
  %

  	
  1.050

  	
  %

  	
  0.000

  	
  %

  
	
  IV

  	
   

  	
  Greater than or equal
  to 1.00 to 1.00, but less than 1.50 to 1.00

  	
   

  	
  0.175

  	
  %

  	
  0.925

  	
  %

  	
  0.000

  	
  %

  
	
  V

  	
   

  	
  Less than 1.00 to 1.00

  	
   

  	
  0.150

  	
  %

  	
  0.800

  	
  %

  	
  0.000

  	
  %

  

 

 

(ii)                                  The
following new definition is hereby added in proper alphabetical order:

“First
Amendment” means the First Amendment to Credit Agreement by and among the
Borrower, the Parental Entities, the Administrative Agent and the Lenders dated
as of April 18, 2007.”

(iii)                               The
definition of “Revolving Credit Commitment” is hereby amended by deleting the
last sentence of such definition in its entirety and replacing it with the
following:

“The
Revolving Credit Commitment of all Lenders as of the Effective Date (as defined
in the First Amendment) of the First Amendment shall be Two Hundred Million
Dollars ($200,000,000).”

(iv)                              The
definition of “Revolving Credit Maturity Date” is hereby amended by replacing
the date “December 22, 2009” with the date “December 22, 2010”.

(b)                                 Article
II of the Credit Agreement is hereby amended by adding the following new
Section 2.8:

“SECTION
2.8                    Clean-Down
Period.  For a consecutive
fifteen-day period between the first day of December of each calendar year and
the last day of January of the immediately following calendar year (the “Clean-Down
Period”), beginning in December 2007, the sum of the aggregate principal
amount of all Revolving Credit Loans outstanding, plus the aggregate
outstanding principal amount of Swingline Loans, shall not exceed thirty
million dollars ($30,000,000) during such Clean-Down Period.”

(c)                                  Section
9.1 of the Credit Agreement is hereby amended by replacing the ratio “3.00 to
1.0” with the ratio “2.50 to 1.0”.

(d)                                 Section
10.3(b) of the Credit Agreement is hereby amended by deleting the word “or”
which appears immediately preceding clause (iv) and adding the following phrase
immediately prior to the semicolon at the end of such subsection:

“or
(v) domestic money market and similar funds (A) having assets of at least
$1,000,000,000 and (B) having a credit rating of at least AA or its
equivalent from Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc. or
other national recognized rating agency.”

 2
 

(e)                                  Section
10.9(a) of the Credit Agreement is hereby amended by deleting the proviso in
subsection (a) in its entirety and replacing it with the following:

“provided
that upon thirty (30) days prior notice to the Administrative Agent, the Credit
Parties and their Subsidiaries may all change their Fiscal Year ends from
December 31 to June 30; provided  further, that the financial
statements, business plan and compliance certificate required to be delivered
pursuant to Section 7.1(b), Section 7.1(c) and Section 7.2,
respectively, shall be delivered to the Administrative Agent in accordance with
such sections on a no-less-frequent basis than that existing prior to any such
change in Fiscal Year end,”

(f)                                    The
cover page of the Credit Agreement and the preamble of the Credit Agreement are
hereby amended by deleting the references to “U.S. Bank National Association”
as a Documentation Agent and substituting in lieu thereof “Capital One, N.A.”.

Section
2.                                            Waiver
and Consent.  The Administrative
Agent and the Lenders hereby waive any Default or Event of Default that may
have been caused by the Borrower’s failure to deliver the updated lists of
inventory locations and deposit accounts required pursuant to Sections 4.3(ii)
and 4.4(b), respectively, of the Collateral Agreement on the anniversary of the
Closing Date.

Section 3.                                            Reduction/Assignments
of Commitments of Exiting Lenders.

(a)                                  Each
of The Royal Bank of Scotland plc (“RBS”) and U.S. Bank National
Association (“US Bank”, collectively with RBS, the “Exiting Lenders”)
has approached the Administrative Agent and indicated that it wishes to exit
the Credit Facility and no longer be a “Lender” thereunder.  Certain existing Lenders have agreed to increase
their Commitments to absorb RBS’s Commitment (each such Lender, an “Increasing
Lender”) and First Tennessee Bank, National Association (“First
Tennessee”) has agreed to join the Credit Facility and take $15,000,000 of
US Bank’s Commitment, such that the amount of the Credit Facility and the
aggregate Commitment shall be, after giving effect to the non-pro rata
Commitment reduction set forth below, $200,000,000.

(b)                                 Accordingly
and notwithstanding any provision to the contrary contained in the Credit
Agreement, the Administrative Agent, the Borrower, RBS and the Lenders hereby
agree that, upon the Effective Date hereof, RBS shall have assigned, without
recourse, its Commitment and the Loans owing to it (including RBS’s rights and
obligations under the L/C Facility and the Swingline Facility) to each
Increasing Lender in the amount set forth on such Increasing Lender’s signature
page attached hereto and RBS shall cease to be a Lender under the Credit
Facility.  Upon their respective
execution of this Amendment, each Increasing Lender hereby agrees to and
accepts such assignments.

(c)                                  Accordingly
and notwithstanding any provision to the contrary contained in the Credit
Agreement, the Administrative Agent, the Borrower, US Bank and the Lenders
hereby agree that, upon the Effective Date hereof, (i) US Bank shall have
assigned, without recourse, $15,000,000 of its Commitment and the Loans owing
to it (including US Bank’s rights and 

 3
 

obligations
under the L/C Facility and the Swingline Facility) to First Tennessee, (ii) the
remaining $10,000,000 Commitment of US Bank shall be permanently reduced to
zero ($0) and (iii) US Bank shall cease to be a Lender under the Credit
Facility.  Upon its execution of this
Amendment, First Tennessee hereby agrees to and accepts the foregoing
assignment.

(d)                                 Notwithstanding
the foregoing, the Exiting Lenders shall continue to be entitled to the
benefits of Section 4.8, Section 4.9, Section 4.11 and Section 13.3 of the
Credit Agreement with respect to facts and circumstances occurring prior to the
Effective Date hereof.  The Increasing
Lenders shall purchase and assume any outstanding principal Loan amounts owed
to RBS in accordance with their allocation of RBS’s Commitment on the Effective
Date hereof.  The aggregate principal amount
of all such outstanding Loans owed to RBS to be purchased and assumed on the
Effective Date is $3,707,928.57.  First
Tennessee shall purchase and assume the outstanding principal Loan amounts owed
to US Bank in proportion with its $15,000,000 Commitment on the Effective
Date.  All remaining outstanding
principal Loan amounts owed to US Bank (i.e., the
outstanding principal Loans related to the $10,000,000 Commitment reduction)
shall be purchased and assumed by the Lenders (including First Tennessee and
excluding the Exiting Lenders) on a pro rata basis among all Lenders on the
Effective Date.  The aggregate principal
amount of all such outstanding Loans owed to US Bank to be purchased and
assumed on the Effective Date is $6,179,880.96. 
All commitment and other fees and interest accrued and owed to the
Exiting Lenders and the Lenders in connection with the Credit Facility will be
paid to the applicable Exiting Lender and the Lenders on the Effective Date.

(e)                                  Each
Exiting Lender hereby makes each representation and warranty set forth in
Section 1.1 of Annex I to Exhibit G (Assignment and Assumption) to the Credit
Agreement.  Each Increasing Lender and
First Tennessee hereby makes each representation and warranty set forth in
Section 1.2 of Annex I to Exhibit G (Assignment and Assumption) to the Credit
Agreement.

(f)                                    The
Administrative Agent shall adjust the Register to reflect the foregoing
Commitment reduction and assignments and reallocation of outstanding
Loans.  Each Exiting Lender shall return
any and all original notes it may have received in connection with the Credit
Facility and, to the extent requested by any Increasing Lender or First
Tennessee, the Borrower shall execute and deliver Notes evidencing such Lender’s
increased/new Commitment.

(g)                                 Each
Exiting Lender and each other party to this Amendment acknowledges and agrees
that each Exiting Lender is signing this Amendment solely to effect the
foregoing assignments and shall not be considered a “Lender” for purposes of
determining and calculating approval of this Amendment.  The Exiting Lenders shall not be entitled to
any fees that may be paid in connection with the execution and delivery of this
Amendment, including, without limitation, the fees noted in Section 4(b).  Each Increasing Lender shall be entitled to
fees based upon its Commitment as increased pursuant to this Section 3 and
First Tennessee shall be entitled to fees based upon its Commitment acquired
pursuant to this Section 3.

(h)                                 The
events and transactions described and contemplated in this Section 3 are not
intended to, and shall not, constitute a novation of the Credit Agreement or of
any indebtedness incurred in connection therewith, including, without
limitation, any Obligations.

 4
 

Section 4.                                            Conditions
of Effectiveness.  This Amendment
shall become effective when, and only when, the Administrative Agent shall have
received the following, in form and substance satisfactory to the
Administrative Agent:

(a)                                  Amendment
Documents.  The Administrative Agent
shall have received counterparts of this Amendment executed by each of the
Borrower, the Parental Entities, each Lender, each Exiting Lender, First
Tennessee, the Administrative Agent and the Subsidiary Guarantors.

(b)                                 Fees
and Expenses.

(i)                                     The
Administrative Agent shall have been reimbursed by the Borrower for all
reasonable fees and out-of-pocket charges and other expenses incurred in
connection with this Amendment, including, without limitation, the fees and
expenses referred to in Section 7 of this Amendment, the Credit Agreement and
the transactions contemplated thereby, including, without limitation, the
reasonable fees and expenses of counsel to the Administrative Agent.

(ii)                                  The
Borrower shall have paid to the Administrative Agent (or its applicable
affiliates), for the account of each Lender (including the Administrative
Agent, each Increasing Lender and First Tennessee), an amendment fee in an
amount equal to 12.5 basis points times the sum of each Lender’s
Revolving Credit Commitment under the Credit Agreement (in each case, as of the
Effective Date and after giving effect to the assignments set forth in Section
3 hereof).

(iii)                               The
Borrower shall have paid to the Administrative Agent, for the account of each
Exiting Lender and each Lender, all commitment and other fees and interest
accrued through and including the Effective Date.

(c)                                  Control
Agreement.  The Administrative Agent
shall have received a control agreement providing the Administrative Agent with
Control (as such term is defined in the Collateral Agreement) over the
securities account numbered 12830618 with Wells Fargo Brokerage Services, LLC.

(d)                                 Opinion
of Counsel.                                     The
Administrative Agent shall have received a favorable opinion of counsel to the
Borrower and the Guarantors addressed to the Administrative Agent and the
Lenders with respect to the Credit Parties, this Amendment and such other
matters as the Administrative Agent shall request.

(e)                                  Certificate
of Responsible Officer.  The Administrative Agent shall have received
(in form and substance reasonably satisfactory thereto) from each Credit Party,
a certificate of a Responsible Officer of such Credit Party (i) certifying as
to the incumbency and genuineness of the signature of each officer of such
Credit Party executing the documents required pursuant to this Section 4 to
which such Credit Party is a party; (ii) containing a representation that the
articles of incorporation and bylaws (or 

 5
 

equivalent documentation) of
such Credit Party delivered on December 22, 2004 in connection with the Credit
Agreement remain unchanged as of the Effective Date (or attaching such
applicable amendments thereto), (iii) attaching resolutions duly adopted by the
respective governing body of such Credit Party authorizing, as applicable, the
execution, delivery and performance of this Amendment and approving the
transactions contemplated hereby and (iv) attaching a certificate as of a
recent date of the good standing of such Credit Party from its jurisdiction of
incorporation or organization;

(f)                                    Other
Documents.  The Administrative Agent
shall have received any other documents or instruments reasonably requested by
the Administrative Agent in connection with the execution of this Amendment.

Section
5.                                            Representations
and Warranties of the Borrower and Guarantors.  Each of the Borrower and the Guarantors
represents and warrants as follows:

(a)                                  The
execution, delivery and performance of this Amendment by the Borrower and each
Guarantor are within such entity’s corporate powers, have been duly authorized
by all necessary corporate action and do not contravene (i) such entity’s
charter or by-laws, (ii) any law or any contractual restriction binding on or
affecting such entity, or result in, or require, the creation or imposition of
any mortgage, deed of trust, pledge, lien, security interest or other charge,
encumbrance or preferential arrangement of any nature upon or with respect to
any of the properties now owned or hereafter acquired by the such entity (other
than as contemplated hereby).

(b)                                 No
authorization, approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for the due
execution, delivery and performance of this Amendment.

(c)                                  This
Amendment constitutes the legal, valid and binding obligation of each of the
Borrower, the Parental Entities and their respective Subsidiaries, as the case
may be, enforceable against each such entity, as the case may be, in accordance
with its terms.

(d)                                 There
is no pending or overtly threatened action or proceeding affecting the Borrower,
any Parental Entity or any of their respective Subsidiaries before any court,
governmental agency or arbitrator, which may materially adversely affect the
financial condition or operations of the Borrower, any Parental Entity or any
Subsidiary or which purports to affect the legality, validity or enforceability
of this Amendment.

(e)                                  The
representations and warranties made by the Borrower and the Parental Entities
pursuant to Article VI of the Credit Agreement are true and correct in all
material respects (provided, that to the extent that any such representation
and warranty is qualified by materiality or Material Adverse Effect, each such
representation and warranty is true and correct in all respects) with the same
effect as if made on and as of the date hereof, except for any representation
and warranty made as of an earlier date, which such representation and warranty
shall remain true and correct in all material respects (provided, that to the
extent that any such representation and warranty is 

 6
 

qualified by materiality or Material Adverse Effect,
each such representation and warranty is true and correct in all respects) as
of such earlier date and, after giving effect to the waiver and consent set
forth in Section 2 hereof, no Default or Event of Default has occurred and is
continuing.

(f)                                    The
representations and warranties made by the Subsidiary Guarantors as set forth
in Article III of the Subsidiary Guaranty Agreement are true and correct in all
material respects (provided, that to the extent that any such representation
and warranty is qualified by materiality or Material Adverse Effect, each such
representation and warranty is true and correct in all respects) on the
Effective Date, except for representations and warranties made as of an earlier
date which such representations and warranties shall remain true and correct in
all material respects (provided, that to the extent that any such
representation and warranty is qualified by materiality or Material Adverse
Effect, each such representation and warranty is true and correct in all
respects) as of such earlier date.

Section
6.                                            Reference
to and Effect on the Loan Documents.

(g)                                 On
and following the Effective Date, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof” or words of like import referring to the
Credit Agreement, and each reference in the other Loan Documents to “the Credit
Agreement”, “thereunder”, “thereof” or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended hereby.

(h)                                 The
Credit Agreement, except as specifically amended by this Amendment, and all
other Loan Documents are, and shall continue to be, in full force and effect
and are hereby in all respects ratified and confirmed.

(i)                                     The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
any Lender or the Administrative Agent under any of the Loan Documents, nor
constitute a waiver or amendment of any provision of any of the Loan Documents.

Section
7.                                            Costs,
Expenses and Taxes.  The Borrower
agrees to pay on demand all costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of this Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent with respect thereto and with respect to advising the Administrative
Agent as to its rights and responsibilities hereunder and thereunder.  The Borrower further agrees to pay on demand
all costs and expenses, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Amendment and the other
instruments and documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 7. 
In addition, the Borrower shall pay any and all stamp and other taxes
payable or determined to be payable in connection with the execution and delivery
of this Amendment and the other instruments and documents to be delivered
hereunder, 

 7
 

and agrees to save
the Administrative Agent and each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to pay such
taxes.

Section
8.                                            Execution
in Counterparts.  This Amendment may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.

Section
9.                                            Governing
Law.  This Amendment shall be governed by, construed and enforced in accordance
with under the laws of the State of New York, including Section 5-1401 and
Section 5-1402 of the General Obligations Law of the State of New York, without
reference to any the other conflicts of law principles thereof.

Section
10.                                      Fax
Transmission.  A facsimile, telecopy
or other reproduction of this Amendment may be executed by one or more parties
hereto, and an executed copy of this Amendment may be delivered by one or more
parties hereto by facsimile or similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such party can be
seen, and such execution and delivery shall be considered valid, binding and
effective for all purposes.  At the
request of any party hereto, all parties hereto agree to execute an original of
this Amendment as well as any facsimile, telecopy or other reproduction hereof.

Section
11.                                      Entire Agreement.  This Amendment is the entire agreement, and
supersedes any prior agreements and contemporaneous oral agreements, of the
parties concerning its subject matter.

Section
12.                                      Successors and Assigns.  This Amendment shall be binding on and inure
to the benefit of the parties and their heirs, beneficiaries, successors and
assigns.

Section 13.                                      Further Assurances.  The parties hereto shall execute and deliver
such additional documents and take such additional action as may be necessary
or desirable to effectuate the provisions and purposes of this Amendment.

[Signature Pages Follow]

 8

IN WITNESS WHEREOF, the parties
hereto have caused this Amendment to be executed by their respective officers
thereunto duly authorized, as of the date first above written.

	
   

  	
  TUESDAY MORNING, INC., as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elizabeth Schroeder

  
	
   

  	
   

  	
  Name: 

  	
  Elizabeth Schroeder

  
	
   

  	
   

  	
  Title: 

  	
  EVP & CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TUESDAY MORNING CORPORATION, as
  a

  Parental Entity

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elizabeth Schroeder

  
	
   

  	
   

  	
  Name: 

  	
  Elizabeth Schroeder

  
	
   

  	
   

  	
  Title: 

  	
  CFO, Secretary,
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TMI HOLDINGS, INC., as a
  Parental Entity

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan Johnson

  
	
   

  	
   

  	
  Name: 

  	
  Susan Johnson

  
	
   

  	
   

  	
  Title: 

  	
  President

  
					

 

[Signature Pages
Continue]

 

	
  

  	
  WACHOVIA
  BANK, NATIONAL

  
	
   

  	
  ASSOCIATION,
  as Administrative Agent,

  
	
   

  	
  Swingline
  Lender, Issuing Lender, a Lender and an

  Increasing Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas M.
  Harper

  
	
   

  	
   

  	
  Name: 

  	
  Thomas M. Harper

  
	
   

  	
   

  	
  Title: 

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Increase in
  Commitment Amount: $2,500,000

  
					

 

 

 

	
  

  	
  WELLS FARGO
  BANK, N.A., as a Lender and an

  Increasing Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jason L.
  Weighter

  
	
   

  	
   

  	
  Name: 

  	
  Jason L. Weighter

  
	
   

  	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Increase in
  Commitment Amount: $2,500,000

  
					

 

 

	
  

  	
  LASALLE BANK,
  NATIONAL ASSOCIATION,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Terrence
  Ward

  
	
   

  	
   

  	
  Name: 

  	
  Terrence Ward

  
	
   

  	
   

  	
  Title: 

  	
  Senior Vice President

  
					

 

 

	
  

  	
  SOVEREIGN BANK,
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Judith C.E.
  Kelly

  
	
   

  	
   

  	
  Name: 

  	
  Judith C.E. Kelly

  
	
   

  	
   

  	
  Title: 

  	
  Senior Vice President

  
					

 

 

	
  

  	
  FIRST
  TENNESSEE BANK, NATIONAL

  
	
   

  	
  ASSOCIATION,
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R.
  Deaton

  
	
   

  	
   

  	
  Name: 

  	
  Stephen R. Deaton

  
	
   

  	
   

  	
  Title: 

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Commitment
  Amount: $15,000,000

  
					

 

 

	
  

  	
  CAPITAL ONE,
  N.A., as a Lender and an Increasing

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Seth P.
  Allen

  
	
   

  	
   

  	
  Name: 

  	
  Seth P. Allen

  
	
   

  	
   

  	
  Title: 

  	
  S.V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  Increase in
  Commitment Amount: $10,000,000

  
					

 

 

	
  

  	
  U.S. BANK
  NATIONAL ASSOCIATION,

  
	
   

  	
  as an Exiting
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Veronica
  Morrissette

  
	
   

  	
   

  	
  Name: 

  	
  Veronica Morrissette

  
	
   

  	
   

  	
  Title: 

  	
  Vice President

  
					

 

 

	
  

  	
  THE ROYAL BANK
  OF SCOTLAND PLC, as an

  Exiting Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Belinda
  Tucker

  
	
   

  	
   

  	
  Name: 

  	
  /s/ Belinda Tucker

  
	
   

  	
   

  	
  Title: 

  	
  Senior Vice President

  
					

 

ACKNOWLEDGEMENT
AND CONSENT

To

FIRST AMENDMENT TO CREDIT AGREEMENT

Dated as of April
18, 2007

The
undersigned, as (a) Guarantors under the Subsidiary Guaranty Agreement and the
Parental Entity Guaranty Agreement, each dated December 22, 2004 (as amended or
supplemented, the “Guaranty Agreements”) and (b) as Grantors (as defined
in the Collateral Agreement) under the Collateral Agreement dated as of
December 22, 2004, each hereby acknowledge and consent to the foregoing
Amendment and hereby confirm and agree that (i) the Guaranty Agreements and the
Collateral Agreement are, and shall continue to be, in full force and effect
and are hereby ratified and confirmed in all respects and (ii) all of the
Collateral described in the Collateral Agreement does, and shall continue to,
secure the payment of all of the Obligations (as defined therein).

	
   

  	
  TUESDAY MORNING CORPORATION, as

  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elizabeth Schroeder

  
	
   

  	
   

  	
  Name: 

  	
  Elizabeth Schroeder

  
	
   

  	
   

  	
  Title: 

  	
  CFO, Secretary,
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TMI HOLDINGS, INC., as
  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan Johnson

  
	
   

  	
   

  	
  Name: 

  	
  Susan Johnson

  
	
   

  	
   

  	
  Title: 

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FRIDAY MORNING, INC., as
  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elizabeth Schroeder

  
	
   

  	
   

  	
  Name: 

  	
  Elizabeth Schroeder

  
	
   

  	
   

  	
  Title: 

  	
  EVP & Secretary

  
					

 

 

	
  

  	
  DAYS OF THE WEEK, INC., as
  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan Johnson

  
	
   

  	
   

  	
  Name: 

  	
  Susan Johnson

  
	
   

  	
   

  	
  Title: 

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NIGHTS OF THE WEEK, INC., as
  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan Johnson

  
	
   

  	
   

  	
  Name: 

  	
  Susan Johnson

  
	
   

  	
   

  	
  Title: 

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TUESDAY MORNING PARTNERS, LTD.,
  as

  Guarantor

  
	
   

  	
   

  
	
   

  	
  By: Days of the Week, Inc., its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan Johnson

  
	
   

  	
   

  	
  Name: 

  	
  Susan Johnson

  
	
   

  	
   

  	
  Title: 

  	
  Treasurer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}]]