EXHIBIT 4.4
WAIVER XX. 0 XXX XXXXXXXXX XX. 0
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Waiver No. 2 and AMENDMENT NO. 1 (the "Waiver and Amendment"),
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dated as of March 29, 1999, to that certain Credit Agreement, dated as of
December 29, 1997 (the "Credit Agreement"; capitalized terms used herein and not
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defined shall have the meaning set forth in the Credit Agreement), among TUESDAY
MORNING CORPORATION, a Delaware corporation ("Borrower"), the guarantors party
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thereto (the "Guarantors"), the lenders party thereto (the "Lenders"), XXXXXXX
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XXXXX & CO., XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, as arranger and
syndication agent (the "Arranger"), and FLEET NATIONAL BANK, as administrative
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agent (the "Administrative Agent").
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W I T N E S S E T H:
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WHEREAS, Borrower has informed the Agent and the Lenders that
it intends to effect a registered initial public offering of its common stock
(the "IPO") pursuant to a registration statement on Form S-1 (the "Form S-1")
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filed with the Securities and Exchange Commission (a draft copy of which is
attached hereto as Annex I) which will generate not less than $80,000,000 of
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gross proceeds to Borrower;
WHEREAS, Borrower has informed the Agent and Lenders that it
desires to utilize the net proceeds of the IPO to (i) redeem (the "Senior
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Subordinated Note Redemption") $35,000,000 principal amount of its existing 11%
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Senior Subordinated Notes due December 2007 (the "Senior Subordinated Notes") at
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a purchase price of 111% of the face amount thereof, (ii) redeem (the "Senior
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Preferred Redemption") all of its outstanding Senior Exchangeable Preferred
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Stock (the "Senior Preferred") at a redemption price not to exceed the sum of
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the liquidation preference thereof at the date of redemption calculated in
accordance with the documentation governing the Senior Preferred as in effect on
the date hereof (which, assuming a redemption date of May 15, 1999, would
aggregate approximately $29,996,000) plus a premium of 13.25% (which, assuming a
redemption date of May 15, 1999, would aggregate approximately $3,974,000) and
(iii) redeem (the "Junior Preferred Redemption" and together with the Senior
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Subordinated Note Redemption and the Senior Preferred Redemption, the
"Redemptions") certain shares of its existing Junior Redeemable Preferred Stock
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(the "Junior Preferred") at a redemption price not to exceed approximately
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$7,400,000 (which redemption price assumes a redemption on May 15, 1999 and is
calculated based on the documentation for the Junior Preferred as in effect on
the date hereof);
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WHEREAS, in connection with the consummation of the IPO and
the Junior Preferred Redemption, all remaining Junior Preferred will be
exchanged for common stock of Borrower (the "Junior Preferred Conversion");
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WHEREAS, Borrower desires that the Lenders waive those
provisions of the Credit Agreement that would prevent the Redemptions;
WHEREAS, Borrower desires that certain other provisions of the
Credit Agreement not relating to the Redemptions be waived or amended;
WHEREAS, pursuant to Section 12.04 of the Credit Agreement,
Borrower and each of the undersigned Lenders hereby agree to waive or amend
certain provisions of the Credit Agreement as set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
SECTION ONE - Waivers and Amendments.
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1.1 Waivers for Redemptions. Subject to (A) the IPO generating
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gross cash proceeds to Borrower of not less than $80,000,000, (B) the IPO being
consummated within 120 days of the date hereof, (C) each call for Redemption
being effected within two Business Days of the consummation of the IPO in
accordance with the documentation for the Senior Subordinated Notes, the Senior
Preferred and the Junior Preferred, as the case may be, as in effect in the date
hereof, (D) the Junior Preferred Conversion being consummated within two
Business Days of the consummation of the IPO, (E) the aggregate amount of the
gross proceeds of the IPO used to effect the Senior Subordinated Note Redemption
not exceeding $38,850,000 and to effect the other Redemptions not exceeding the
respective accreted amount of each of the Senior Preferred and Junior Preferred
as of the date of redemption plus premium (if any) required by the documentation
therefor as in effect on the date hereof, in each case calculated in accordance
with the documentation therefor as in effect on the date hereof, (F) no
Redemption violating any provision of any Indebtedness or other agreement or
instrument binding upon Borrower or any Subsidiary or any Requirement of Law
applicable to Borrower or any Subsidiary, (G) the material terms of the
Redemptions being effected substantially on the terms described herein and in
the Form S-1, and (H) all
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conditions set forth in Section Two hereof having been satisfied, the Lenders
hereby waive:
(I) the requirement of Section 2.10(a)(ii) of the Credit
Agreement in respect of the first $100,000,000 of gross proceeds of the IPO, and
(II) the restrictions set forth in the following provisions of
the Credit Agreement to the extent such provision would prohibit the
consummation of the Redemptions:
(1) Section 9.08,
(2) Section 9.09,
(3) Section 9.10,
(4) Section 9.15,
(5) Section 9.16, and
(6) Section 9.18.
1.2 Amendments. 1.2.1. The Lenders hereby amend, subject to
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the satisfaction of the conditions set forth in Section Two hereof, Section
2.01(d) of the Credit Agreement by replacing the word "eight" in the first
sentence thereof, with the number "10".
1.2.2. The Obligors and the Lenders hereby amend, subject to
the satisfaction of the conditions set forth in Section Two hereof, Section 1.01
of the Credit Agreement by (A) adding the following definitions, each in the
appropriate alphabetical order with respect to the existing defined terms:
""Permitted Warehouse" shall mean the warehouse identified in
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the definition of "Permitted Warehouse Purchase.""
""Permitted Warehouse Purchase" shall mean the purchase by
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Borrower of its leased warehouse at 14325 & 00000 Xxxxxx Xxxx, Xxxxxxx
Xxxxxx, Xxxxx 00000-0000 for cash in the amount of not more than
$6,500,000 so long as such purchase is effected by September 30, 1999."
""Permitted Warehouse Purchase Indebtedness" shall mean any
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Indebtedness incurred by Borrower, so long as no
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Default or Event of Default shall have occurred and be continuing at
the time of incurrence thereof, in an amount not to exceed $6,500,000,
the proceeds of which shall be used solely to effect the Permitted
Warehouse Purchase."
(B) amending the definition of "Capital Expenditures" by deleting the word
"and" immediately prior to clause (vi) and by adding immediately following
clause (vi) the following: "; and (vii) the Permitted Warehouse Purchase so long
as purchased solely with the proceeds of the Permitted Warehouse Purchase
Indebtedness and/or cash from operations and/or Revolving Loans and/or the
proceeds of any Equity Issuance not required to be applied to the prepayment of
the Loans," and (C) adding immediately at the end of the definition of
"Consolidated Interest Expense" the following: "and other than amortization of
financing fees."
1.2.3 The Obligors and the Lenders hereby amend, subject to
the satisfaction of the conditions set forth in Section Two hereof, the
following sections of the Credit Agreement as follows:
(I) Section 9.06(a) is amended by adding immediately preceding
the semicolon at the end of such clause the following: "and any
expenditures that would otherwise be a Capital Expenditure but for the
exclusions in clauses (i) through (vii) in the definition of "Capital
Expenditures""
(II) Section 9.07 is amended by deleting the word "and"
immediately prior to clause (w), by deleting the period at the end of
clause (w) and replacing it with "; and" and by adding a new subsection
as follows: " (x) Liens securing the Permitted Warehouse Purchase on
the Permitted Warehouse, so long as no Default or Event of Default
shall have occurred and be continuing."
(II) Section 9.08 is amended by deleting the word "and"
immediately prior to clause (t), by deleting the period at the end of
clause (t) and replacing it with "; and" and by adding a new subsection
as follows: " (u) the Permitted Warehouse Indebtedness."
(III) Section 9.12 is amended by adding immediately after the
current paragraph and immediately prior to the current third paragraph
a new third paragraph as follows: "Notwithstanding the foregoing,
Borrower shall not be required to grant to the Administrative Agent a
Lien or
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Mortgage on the Permitted Warehouse if pledged to secure the Permitted
Warehouse Purchase Indebtedness."
SECTION TWO - Conditions to Effectiveness. This Waiver and
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Amendment shall become effective as of the date first above written when, and
only when, the Administrative Agent shall have received counterparts of this
Waiver and Amendment executed by each Obligor and the Majority Lenders or, as to
any of the Lenders, advice satisfactory to the Administrative Agent that such
Lender has executed this Waiver and Amendment. The effectiveness of this Waiver
and Amendment (other than Sections 5, 6 and 7 hereof) is conditioned upon the
accuracy of the representations and warranties set forth in Section Three
hereof.
SECTION THREE - Representations, Warranties and Covenants. In
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order to induce the Lenders and the Agents to enter into this Waiver and
Amendment, each Obligor represents and warrants to each of the Lenders and the
Agents that after giving effect to this Waiver and Amendment, (x) no Default or
Event of Default has occurred and is continuing; and (y) all of the
representations and warranties in the Credit Agreement, after giving effect to
this Waiver and Amendment, are true and complete in all material respects on and
as of the date hereof as if made on the date hereof (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date). The Company will not effect any
Redemption that is materially different from that described herein or in the
Form S-1.
SECTION FOUR - Reference to and Effect on the Credit Agreement
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and the Notes. On and after the effectiveness of this Waiver and Amendment, each
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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 Notes and each of the other Credit 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 modified by
this Waiver and Amendment. The Credit Documents, as specifically modified by
this Waiver and Amendment, are and shall continue to be in full force and effect
and are hereby in all respects ratified and confirmed. Without limiting the
generality of the foregoing, the Security Documents and all of the Collateral
described therein do and shall continue to secure the payment of all Obligations
of the Obligors under the Credit Documents, in each case as modified by this
Waiver and Amendment. The execution, delivery and effectiveness of this Waiver
and Amendment
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shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender or any Agent under any of the Credit
Documents, nor constitute a waiver of any provision of any of the Credit
Documents. Each Guarantor ratifies and confirms its Guarantee as in full force
and effect after giving effect to the waiver herein set forth.
SECTION FIVE - Costs, Expenses and Taxes. Borrower agrees to
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pay all reasonable costs and expenses of the Agents in connection with the
preparation, execution and delivery of this Waiver and Amendment and the other
instruments and documents to be delivered hereunder, if any (including, without
limitation, the reasonable fees and expenses of Xxxxxx Xxxxxx & Xxxxxxx) in
accordance with the terms of Section 12.03 of the Credit Agreement. In addition,
Borrower shall pay or reimburse any and all stamp and other taxes payable or
determined to be payable in connection with the execution and delivery of this
Waiver and Amendment and the other instruments and documents to be delivered
hereunder, if any, and agrees to save each Agent and each Lender harmless from
and against any and all liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes.
SECTION SIX - Execution in Counterparts. This Waiver and
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Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute but one and
the same agreement. Delivery of an executed counterpart of a signature page to
this Waiver and Amendment by telecopier shall be effective as delivery of a
manually executed counterpart of this Waiver and Amendment.
SECTION SEVEN - Governing Law. This Waiver shall be governed
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by, and construed in accordance with, the laws of the State of New York (without
giving effect to any provisions thereof relating to conflicts of law).
[Signature Pages Follow]
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Waiver
and Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
TUESDAY MORNING CORPORATION
By: /s/ XXXX X. XXXXXX
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Name: Xxxx X. Xxxxxx
Title: Senior Vice President
TMI HOLDINGS, INC.
By: /s/ XXXX XXXXXXX
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Name: Xxxx Xxxxxxx
Title: Secretary and Treasurer
TUESDAY MORNING, INC.
By: /s/ XXXX X. XXXXXX
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Name: Xxxx X. Xxxxxx
Title: Senior Vice President
FRIDAY MORNING, INC.
By: /s/ XXXX X. XXXXXX
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Name: Xxxx X. Xxxxxx
Title: Senior Vice President
DAYS OF THE WEEK, INC.
By: /s/ XXXXX X. XXXXXXX
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Name: Xxxxx X. Xxxxxxx
Title: VP Finance
S-2
NIGHTS OF THE WEEK, INC.
By: /s/ XXXX XXXXXXX
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Name: Xxxx Xxxxxxx
Title: Secretary and Treasurer
TUESDAY MORNING PARTNERS, LTD.
By: /s/ XXXXX X. XXXXXXX
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Name: Xxxxx X. Xxxxxxx
Title: President of General Partner
S-3
Agents
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XXXXXXX XXXXX & CO., XXXXXXX
LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED,
as Arranger and Syndication Agent
By: /s/ X. XxXxxxxxxxxx
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Name: X. XxXxxxxxxxxx
Title: Director
FLEET NATIONAL BANK,
as Administrative Agent
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: VP
S-4
Lenders
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XXXXXXX XXXXX CAPITAL CORPORATION
By: /s/ X. XxXxxxxxxxxx
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Name: X. XxXxxxxxxxxx
Title: VP
FLEET NATIONAL BANK
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: XX
XXXXXX FINANCIAL, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Senior Vice President
CREDIT LYONNAIS, New York Branch
By: [ILLEGIBLE SIGNATURE APPEARS HERE]
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Name: [ILLEGIBLE NAME APPEARS HERE]
Title: SUP
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:
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Name:
Title:
S-5
CREDIT AGRICOLE INDOSUEZ
By:
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Name:
Title:
By:
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Name:
Title:
BANK LEUMI
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: First Vice President
BHF-BANK AKTIENGESELLSCHAFT
By:
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Name:
Title:
By:
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Name:
Title:
BALANCED HIGH-YIELD FUND LTD.,
By: BHF-BANK AKTIENGESELLSCHAFT, acting
through its New York Branch as
attorney-in-fact
By:
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Name:
Title:
By:
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Name: Xxxx Xxxxx
Title: Vice President
S-6
LASALLE NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Eichenhorm
Title: First Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ J. Xxxxxxx Xxxxxx
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Name: J. Xxxxxxx Xxxxxx
Title: Vice President
XXXXXX XXXXXXX XXXX XXXXXX
PRIME INCOME TRUST
By:
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Name:
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By: /s/ Xxxxx X. Page
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Name: Xxxxx X. Page
Title: Vice President
ML CLO XV PILGRIM AMERICA
(CAYMAN) LTD.
By: Pilgrim America Investments, Inc.,
as its Investment Manager
By:
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Name:
Title:
S-7
KZH PAMCO LLC
By:
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Name:
Title:
KZH STERLING LLC
By: /s/ Xxxxxxxx Xxxxxx
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Name: Xxxxxxxx Xxxxxx
Title: Authorized Agent
XXX CAPITAL FUNDING LP
By:
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Name:
Title:
