TUES Tuesday Morning Corp

On May 14, 2020, Tuesday Morning Corporation (the “Company”) and certain of its subsidiaries (collectively, the “Loan Parties”) entered into a Limited Forbearance Agreement, dated as of May 14, 2020 (the “Forbearance Agreement”) with JPMorgan Chase Bank, N.A., in its capacity as administrative agent for itself and the other secured parties, as issuing bank and as swingline lender (“JPMorgan”), and the other lenders party thereto (the “Lenders”). The Forbearance Agreement relates to the Credit Agreement, dated as of August 18, 2015 and as previously amended (the “Credit Agreement”), among the Loan Parties, JPMorgan and the Lenders, and the related loan documents (collectively, the “Loan Documents”).

Under the terms of the Forbearance Agreement, the Administrative Agent, the Swingline Lender, the Issuing Bank and the Lenders have agreed to not exercise remedies under the Loan Documents and applicable law through May 26, 2020 (or earlier, if certain events occur) based on the event of default resulting from the Loan Parties suspending the operation of their business in the ordinary course and other events of default that may arise during the forbearance period as a result of failing to meet their obligations under certain agreements. The forbearance period will end on May 26, 2020, or earlier if certain events occur.

Pursuant to the Forbearance Agreement, the commitment of the Lenders under the Credit Agreement has been permanently reduced from $180 million to $130 million and new swingline loans will not be advanced. During the forbearance period the Lenders are not obligated to fund further loans or issue or renew letters of credit under the Credit Agreement. The Forbearance Agreement requires loan repayments of $10 million under the Credit Agreement over the next week, and the application of unrestricted and unencumbered cash balances in excess of $32 million to the repayment of outstanding borrowings under the Credit Agreement. The Forbearance Agreement requires daily cash sweeps to the Company’s main concentration account, a deposit account control agreement over such account, the imposition of additional reporting obligations, including a business plan, cash flow forecasts and working capital plan, and adherence to such cash flow forecasts, subject to certain permitted variances. The Forbearance Agreement also requires the Company to retain a liquidation consultant and financial advisor.

The foregoing summary of the Forbearance Agreement is qualified in its entirety to by reference to the full text of the Forbearance Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.