Exhibit
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