Document:

Exhibit 4.2

 

Execution Version

 

WARRANT

 

THIS SECURITY AND THE SECURITIES, IF
ANY, ISSUABLE UPON THE EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM REGISTRATION THEREUNDER.

 

Warrant Certificate No.: W-1

 

Original Issue Date: February 9, 2021

 

FOR VALUE RECEIVED,
Tuesday Morning Corporation, a Delaware corporation (the “Company”), hereby certifies that Osmium Partners (Larkspur
SPV), LP, or its registered assigns (the “Holder”) is entitled to purchase from the Company the Warrant Share
Number of duly authorized, validly issued, fully paid and nonassessable shares of the Common Stock, at a purchase price per share
of $1.65 (the “Exercise Price”), all subject to the terms, conditions and adjustments set forth below in this
Warrant. Certain capitalized terms used herein are defined in Section 1.

 

This Warrant has been
issued pursuant to the terms of the Backstop Commitment Agreement, dated as of November 16, 2020, by among the Company and the
 “Commitment Parties” party thereto (as amended, restated, amended and restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof, the “Commitment Agreement”).

 

1.       Definitions.
As used in this Warrant, the following terms have the respective meanings set forth below:

 

“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question.

 

    

     

    

 

“Aggregate
Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this
Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price.

 

“Board” means the
board of directors of the Company.

 

“Business
Day” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized
or required by law or executive order to close or be closed.

 

“Closing”
has the meaning given such term in the Commitment Agreement.

 

“Closing Date”
has the meaning given such term in the Commitment Agreement.

 

“Commitment
Agreement” has the meaning set forth in the preamble.

 

“Common Stock” means
the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been
converted, exchanged or reclassified following the date hereof.

 

“Company” has
the meaning set forth in the preamble.

 

“Ex-dividend
Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable
market, regular way, without the right to receive the issuance, dividend or distribution in question, from the Company or, if applicable,
from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange
or market; provided that if the Common Stock does not trade on an exchange or market, the “Ex-Dividend date” shall
mean the record date for such issuance, dividend or distribution.

 

“Exercise
Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth
in Section 3 shall have been satisfied at or prior to 5:00 p.m., New York City time, on a Business Day, including, without
limitation, the receipt by the Company of the Notice of Exercise, the Warrant and the Aggregate Exercise Price.

 

“Exercise
Period” means any Business Day after the date hereof and on or before the Expiration Date.

 

“Exercise
Price” has the meaning set forth in the preamble.

 

    2

     

    

 

“Expiration
Date” means December 31, 2025.

 

“Fair Market
Value” means, as of any particular date: (a) the volume weighted average price per share of the Common Stock for
each Business Day referred to below on the principal domestic securities exchange on which the Common Stock may at the time be
listed; (b) if there have been no sales of the Common Stock on any such exchange on any such Business Day referred to below, the
average of the highest bid and lowest asked prices for the Common Stock on such exchanges at the end of such Business Day referred
to below; (c) if on any such Business Day referred to below the Common Stock is not listed on a domestic securities exchange, the
closing sales price of the Common Stock as quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or
association for such Business Day referred to below; or (d) if there have been no sales of the Common Stock on the OTC Bulletin
Board, the Pink OTC Markets or similar quotation system or association on any such Business Day referred to below, the average
of the highest bid and lowest asked prices for the Common Stock quoted on the OTC Bulletin Board, the Pink OTC Markets or similar
quotation system or association at the end of such Business Day referred to below; in each case, averaged over ten (10) consecutive
Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined;
provided, that if the Common Stock is listed on any domestic securities exchange, the term “Business Day” as
used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Stock is not listed
on any domestic securities exchange or quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association,
the “Fair Market Value” of the Common Stock shall be the fair market value per share as determined jointly by the Board
and the Holder. If such parties are unable to reach agreement within ten (10) Business Days after the occurrence of an event requiring
valuation (the “Valuation Event”), the fair market value of such consideration will be determined within ten
(10) Business Days after the tenth (10th) Business Day following the Valuation Event by an independent, reputable appraiser mutually
selected by Holder and the Company. If Holder and the Company are not able to mutually agree upon such an appraiser then each of
Holder and the Company shall promptly select an independent, reputable appraiser and promptly cause such two appraisers to mutually
select a third independent, reputable appraiser to determine Fair Market Value. The determination of such appraiser shall be final
and binding upon all parties, absent manifest error, and the fees and expenses of such appraiser shall be borne by the Company.

 

“Holder” has
the meaning set forth in the preamble.

 

“Notice of
Exercise” has the meaning set forth in Section 3(a)(i).

 

    3

     

    

 

“Original
Issue Date” means February 9, 2021.

 

“OTC Bulletin
Board” means the Financial Industry Regulatory Authority OTC Bulletin Board electronic inter-dealer quotation system.

 

“Person” means
any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, association, incorporated
organization or government or department or agency thereof.

 

“Pink OTC
Markets” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB and OTC
Pink.

 

“Warrant” means
this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.

 

“Warrant Share
Number” means, at any time, the aggregate number of Warrant Shares for which this Warrant is exercisable at such
time, as such number may be adjusted from time to time pursuant to the terms hereof. The Warrant Share Number shall initially be
10,000,000.

 

“Warrant Shares” means
the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with
the terms of this Warrant.

 

2.       Term
of Warrant. Subject to the terms and conditions hereof, the Holder of this Warrant may exercise this Warrant at any time and
from time to time during the Exercise Period and terminating on the Expiration Date.

 

3.       Exercise
of Warrant.

 

(a)       Exercise
Procedure. This Warrant may be exercised for any or all unexercised Warrant Shares upon:

 

(i)       surrender
of this Warrant to the Company at its then principal executive offices (or an indemnification undertaking with respect to this
Warrant in the case of its loss, theft or destruction), together with a notice of exercise (each a “Notice of Exercise”)
substantially in the form attached hereto as Exhibit A, duly completed (including specifying the number of Warrant Shares
to be purchased) and executed; and

 

(ii)       payment
to the Company of the Aggregate Exercise Price.

 

    4

     

    

 

(b)       Delivery
of Stock Certificates and/or Book-Entry Shares. Upon receipt by the Company of a Notice of Exercise, surrender of this Warrant
and payment of the Aggregate Exercise Price, the Company shall, as promptly as practicable, and in any event within three (3) Business
Days thereafter, at the option of the Holder, either (i) execute (or cause to be executed) and deliver (or cause to be delivered)
to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise or (ii) cause to be issued
to such Holder by entry on the books of the Company (or the Company’s transfer agent, if any) the Warrant Shares issuable
upon such exercise, in each case together with cash in lieu of any fraction of a share. The stock certificate or certificates or
book-entry interests of Warrant Shares so delivered or issued, as the case may be, shall be, to the extent possible, in such denomination
or denominations as the exercising Holder shall reasonably request in the Notice of Exercise and shall be registered in the name
of the Holder or, subject to compliance with Section 5 below, such other Person's name as shall be designated in the Notice
of Exercise. This Warrant shall be deemed to have been exercised and such certificate or certificates or book-entry interests of
Warrant Shares shall be deemed to have been issued, and the 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 Exercise Date.

 

(c)       Delivery
of New Warrant. Unless the purchase rights represented by this Warrant shall have been fully exercised, the Company shall,
at the time of delivery of the certificate or certificates or book-entry interests representing the Warrant Shares being issued
in accordance with Section 3(b) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase
the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical
to this Warrant.

 

(d)       Valid
Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this Warrant, the Company hereby
represents, warrants, covenants and agrees as follows:

 

(i)      This
Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized
and validly issued.

 

(ii)     All
Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company
shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid
and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and
clear of all taxes, liens and charges.

 

(iii)    The
Company shall ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or
governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other
securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance
which shall be immediately delivered by the Company upon each such issuance); provided that the Warrant Shares may not
be sold or transferred in the absence of an effective registration statement under the Securities Act or an available
exemption from registration thereunder.

 

    5

     

    

 

(iv)        The
Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect
to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required
to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery
of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the
Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the
Company that such tax has been paid.

 

(e)       Reservation
of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but
unissued Common Stock or treasury shares constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this
Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall
at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant
Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as
may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

 

4.       Adjustments.
In order to prevent dilution of the purchase rights granted under this Warrant, the Warrant Share Number issuable upon exercise
of this Warrant shall be subject to adjustment (an “Adjustment”) from time to time as provided in this Section
4 (in each case, after taking into consideration any prior Adjustments pursuant to this Section 4).

 

(a)       Adjustment
of Warrant Share Number. The Warrant Share Number shall be subject to adjustment from time to time as follows:

 

(i)       in
the case the Company shall at any time or from time to time after the Original Issue Date:

 

(A)     pay
a dividend or make a distribution on the outstanding shares of Common Stock in capital stock of the Company;

 

    6

     

    

 

(B)      forward
split or subdivide the outstanding shares of Common Stock into a larger number of shares; or

 

(C)      reverse
split or combine the outstanding shares of Common Stock into a smaller number of shares;

 

then, and in each such case (A) through
(C), the Warrant Share Number in effect immediately prior to such event shall be adjusted (and any other appropriate actions shall
be taken by the Company) so that upon exercise thereafter the Holder of this Warrant will be entitled to receive the number of
shares of Common Stock or other securities of the Company which such Holder would have owned or had been entitled to receive upon
or by reason of any of the events described above, had this Warrant been exercised immediately prior to the happening of such event.
An adjustment made pursuant to this Section 4(a)(i) shall become effective retroactively (x) in the case of any such dividend
or distribution, immediately prior to the close of business on the record date for the determination of holders of shares of Common
Stock entitled to receive such dividend or distribution, or (y) in the case of any such split, subdivision, combination or reclassification,
immediately prior to the close of business on the date upon which such corporate action becomes effective.

 

(ii)       Notwithstanding
anything to the contrary contained in this Section 4(a), the Company shall be entitled to make such upward adjustments
in the Warrant Share Number, in addition to those otherwise required by this Section 4(a), as the Board reasonably
determines after consultation with Holder to be advisable in order that any stock dividend, split, subdivision or combination of
shares, distribution of rights or warrants to purchase shares, stock or securities or distribution of securities convertible into
or exchangeable for shares of Common Stock hereafter made by the Company to its stockholders shall not be taxable.

 

(b)        Adjustment
of Exercise Price.

 

(i)       Whenever
the Warrant Share Number is adjusted, as provided in this Section 4, Exercise Price shall be adjusted (to the nearest cent)
by multiplying the Exercise Price in existence immediately prior to such adjustment by a fraction (A) the numerator of which shall
be the Warrant Share Number immediately prior to such adjustment, and (B) the denominator of which shall be the Warrant Share Number
immediately thereafter.

 

(ii)      If
the Company (A) pays any cash dividend or distribution in respect of the Common Stock, (B) purchases or causes any
of its subsidiaries to purchase any shares of Common Stock (excluding transactions by and among the Company and its
subsidiaries, but including a spin-off of the type contemplated by Section 4(c) below) or (C) makes any other
distribution of the assets of the Company to the holders of Common Stock on account of their ownership thereof (other than a
dividend in shares of capital stock), the Exercise Price shall be reduced, but not below the par value of the Common Stock,
by the amount of such dividend, distribution or aggregate purchase price on a per share basis (or in the case of non-cash
dividends, distributions or purchase prices, the Fair Market Value thereof). In the event that the Exercise Price is or has
been reduced to the par value of the Common Stock and the Company declares a dividend or any other distribution, such excess
shall be distributed to the Holders accordance with Section 7.

 

    7

     

    

 

(c)       Adjustment
of Warrant Upon Spin-off. If, at any time after the issuance of this Warrant but prior to the exercise hereof, the Company
shall spin-off another Person (the “Spin-off Entity”), then the Company (a) shall issue to the Holder
a new warrant (the “Spin-Off Warrant”) to purchase, at the Spin-Off Exercise Price (as defined below), the number
of shares of common stock or other equity interest in the Spin-off Entity (and any other consideration) that the Holder would
have owned had the Holder held the number of shares of Common Stock equal to the Warrant Share Number immediately prior to the
consummation of such spin-off and (b) shall make provision therefor in the agreement, if any, relating to such spin-off.
Such Spin-Off Warrant shall provide for rights and obligations which shall be as nearly equivalent as may be practicable to the
rights and obligations provided for in this Warrant. The provisions of this Section 4(c) (and any equivalent thereof in
any such new warrant) shall apply to successive transactions. For purposes of this Section 4(c), the “Spin-off
Entity Exercise Price” shall mean, for each share of common stock or equity interest in the Spin-off Entity subject to
the Spin-Off Warrant, (a) the amount by which the Exercise Price under this Warrant was decreased with respect to the spin-off
pursuant to the terms of Section 4(b)(ii) above, multiplied by the Warrant Share Number, and (b) such product in the foregoing
clause (a) then divided by the number of shares of common stock or other equity interests subject to the Spin-off Warrant.

 

(d)       Certificate
as to Adjustment.

 

(i)       As
promptly as reasonably practicable following any adjustment of the number of Warrant Shares pursuant to the provisions of this
Section 4, but in any event not later than five (5) Business Days thereafter, the Company shall furnish to the Holder a
certificate of an officer of the Company setting forth in reasonable detail such Adjustment and the facts upon which it is based
and certifying the calculation thereof.

 

(ii)       As
promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event
not later than five (5) Business Days thereafter, the Company shall furnish to the Holder a certificate of an officer of the
Company certifying the number of Warrant Shares or the amount, if any, of other shares of stock, securities or assets then
issuable upon exercise of the Warrant.

 

    8

     

    

 

(e)       Notices.
In the event:

 

(i)       that
the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon
exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution (including
any spin-off);

 

(ii)       of
any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger
of the Company with or into another Person, or sale of all or substantially all of the Company's assets to another Person;

 

(iii)     of
the voluntary or involuntary dissolution, liquidation or winding-up of the Company; or

 

(iv)     any
other event that may cause an Adjustment;

 

then, and in each such case, the Company
shall send or cause to be sent to the Holder at least twenty (20) Business Days prior to the applicable Ex-dividend Date, record
date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may
be, (A) the Ex-dividend Date, the record date for such dividend or distribution, and a description of such dividend or distribution,
or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up or other event is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company
shall close or a record shall be taken with respect to which the holders of record of Common Stock (or such other capital stock
or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or
such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, winding-up or other event, and the amount per share and character of such
exchange applicable to the Warrant and the Warrant Shares.

 

(f)       Multiple
Adjustments. In the event that more than one Adjustment is required to be made in connection with an event or series of events,
the Adjustments pursuant to this Section 4 shall be applied in such order as to provide the holders of the Warrants with
the benefits to which they would have been entitled had the Warrants been exercised immediately prior to the earliest record date
for such events.

 

    9

     

    

 

(g)       Certain
Events. If any event of the type contemplated by the provisions of this Section 4, but not expressly provided for by
such provisions occurs, then the Board shall make an appropriate adjustment in the Exercise Price and / or the Warrant Share Number,
so as to protect the rights of the Holder in a manner consistent with the provisions of this Section 4; provided that no
such adjustment pursuant to this Section 4(g) shall increase the Exercise Price or decrease the Warrant Share Number hereunder.

 

5.       Transfer
of Warrant. Subject to the transfer conditions referred to in the legend endorsed hereon and in Section 8, this Warrant
and all rights hereunder are and will be transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender
of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed assignment agreement
in form and substance reasonably satisfactory to the Company, together with funds sufficient to pay any transfer taxes described
in the proviso to Section 3(d)(iii) in connection with the making of such transfer. Upon such compliance, surrender and
delivery 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 denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.

 

6.       Holder
Not Deemed a Stockholder; Limitations on Liability. Except as expressly set forth herein, this Warrant does not entitle the
Holder to any voting rights or other rights as a shareholder of the Company until the Holder has received Warrant Shares issuable
upon exercise of this Warrant pursuant to the terms hereof, nor shall anything contained in this Warrant be construed to confer
upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends (except as set forth in Section 5) or subscription rights, or otherwise. In
addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company.

 

7.       Replacement
on Loss; Division and Combination.

 

(a)       Replacement
of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it and, in case of mutilation, upon
surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the
Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant
so lost, stolen, mutilated or destroyed.

 

    10

     

    

 

(b)       Division
and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other
assignment which may be involved in such division or combination, including the provisions of Section 8, this Warrant may
be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this
Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names
and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject
to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division
or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered
Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants
so surrendered in accordance with such notice.

 

8.       Compliance
with the Securities Act.

 

(a)       Agreement
to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with
the provisions of this Section 8 and the restrictive legend requirements set forth on the face of this Warrant and further
agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise
hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities
Act”). This Warrant and all Warrant Shares issued upon exercise of this Warrant shall be stamped or imprinted with a
legend in substantially the following form:

 

“THIS SECURITY
AND THE SECURITIES, IF ANY, ISSUABLE UPON THE EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM REGISTRATION THEREUNDER.”

 

In connection with
any transfers, the Holder, by acceptance of this warrant:

 

(i)    represents
that it is an accredited investor within the meaning of Regulation D as promulgated under the securities act, and

 

    11

     

    

 

(ii)    agrees
for the benefit of the company Tuesday Morning Corporation (the “Company”) that it will not offer, sell, pledge
or otherwise transfer this security and the securities, if any, issuable upon exercise of this security or any beneficial interest
herein or therein except:

 

(A) to the
company or any subsidiary thereof, or

 

(B) pursuant
to a registration statement which has become effective under the securities act, or

 

(C) pursuant
to an exemption from registration under the securities act.

 

Prior to the registration
of any transfer of this security or any security issuable upon exercise of this security, if any, the company reserves the right
to require the delivery of such legal opinions, certifications or other evidence as may reasonably be required in order to determine
that the proposed transfer is being made in compliance with the securities act and applicable state securities laws. No representation
is made as to the availability of any exemption from the registration requirements of the securities act.

 

The requirement imposed
by this Section 8 shall cease and terminate as to this Warrant or any particular Warrant Share when, in the written opinion
of counsel reasonably acceptable to the Company, such legend is no longer required in order to assure compliance by the Company
with the Securities Act. Wherever such requirement shall cease and terminate as to this Warrant or any Warrant Share, the Holder
or the holder of such Warrant Share, as the case may be, shall be entitled to receive from the Company, without expense, a new
warrant or a new stock certificate, as the case may be, not bearing the legend set forth in this Section 8.

 

(b)       Representations
of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof,
to the Company by acceptance of this Warrant as follows:

 

(i)       The
Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities
Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own
account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the
Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.

 

    12

     

    

 

(ii)       The
Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted
securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving
a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under
the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144
under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities
Act.

 

(iii)       The
Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge
and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the
Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the
Company.

 

9.       Warrant
Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the
Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register
as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment,
division, combination or other transfer of the Warrant effected in accordance with the provisions of this Warrant.

 

10.       Notices.
All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed
to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent
by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document
(with confirmation of transmission or if no error message is generated), if sent during normal business hours of the recipient,
and on the next Business Day if so sent after normal business hours of the recipient; or (d) on the third day after the date mailed,
by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective
parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance
with this Section 10).

 

    13

     

    

 

	If to the

 Company:	

        Tuesday Morning Corporation

        6250 LBJ Freeway

        Dallas, Texas 75240

        Attn: General Counsel

        Tel: (972) 387-3562

        Email:
        sbecker@tuesdaymorning.com; bzeterberg@tuesdaymorning.com

	 	 
	with a copy to

 (which shall

 not constitute

 notice):	
        Haynes and Boone LLP

        Victory Avenue, Suite 700

        Dallas, Texas 75219

        Attn: Ian T. Peck, Jarom J. Yates, and Jordan E. Chavez

        Tel: (214) 651-5000 ext. 5155

        Email:
        tryan@kirkland.com
	
        Troutman Pepper Hamilton Sanders LLP

        600 Peachtree Street N.E., Suite 3000

        Atlanta, Georgia 30308

        Attn: W. Brinkley Dickerson, Jr., Eric Koontz and Paul Davis
        Fancher.

        Tel: (404) 885-3000

        Email:
        brink.dickerson@troutman.com; eric.koontz@troutman.com; paul.fancher@troutman.com

	 	 	 
	If to the

 Holder:	
        Osmium Partners (Larkspur SPV), LP

        c/o Osmium Partners (Equation) LLC

        300 Drakes Landing Road #172

        Greenbrae, CA 94904

        Attn: John H. Lewis; Douglas J. Dossey

        Email:
        jl@osmiumpartners.com; ddossey@tensilecapital.com

	with a copy to 

(which shall

 not constitute

 notice):	
        Kirkland & Ellis LLP

        555 California Street

        San Francisco, CA 94104

        Attn: Noah D. Boyens, P.C.

        Email:
        noah.boyens@kirkland.com
	

         

        Morrison & Foerster LLP

        425 Market Street

        San Francisco, CA 94105

        Attn: Murray A. Indick

        Email: MIndick@mofo.com

	
        Tensile Capital Management

        700 Larkspur Landing Circle #255

        Larkspur, CA 94939

        Attn: Douglas J. Dossey; Dan Katsikas

        Email:
        ddossey@tensilecapital.com; dkatsikas@tensilecapital.com

 

11.       Entire
Agreement. This Warrant, the Commitment Agreement and the Registration Rights Agreement dated as of February 9, 2021 by and
among Company and the Holder, as amended from time to time, constitute the sole and entire agreement of the parties to this Warrant
with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements,
both written and oral, with respect to such subject matter. In the event of any inconsistency between the provisions contained
in this Warrant and the Commitment Agreement, the provisions contained in this Warrant shall control.

 

    14

     

    

 

12.       Successor
and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the successors
of the Company and the successors and permitted assigns of the Holder. Such successors and/or permitted assigns of the Holder shall
be deemed to be a Holder for all purposes hereunder.

 

13.       No
Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors
and, in the case of the Holder, permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon
any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.

 

14.       Headings.
The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.

 

15.       Amendment
and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified or supplemented by
an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall
be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or
be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether
of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising,
any right, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.

 

16.       Severability.
If any term or provision of this Warrant is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term
or provision in any other jurisdiction.

 

17.       Governing
Law; Specific Enforcement; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)       This
Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to agreements
made and to be performed entirely within such state, without regard to the conflicts of law principles of such state.

 

    15

     

    

 

(b)       The
parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Warrant
were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties
hereto shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Warrant and to enforce
specifically the terms and provisions of this Warrant in any court of competent jurisdiction, in each case without proof of damages
or otherwise (and each party hereto hereby waives any requirement for the securing or posting of any bond in connection with such
remedy), this being in addition to any other remedy to which they are entitled at law or in equity. The parties hereto agree not
to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to law or inequitable for any reason, nor to
assert that a remedy of monetary damages would provide an adequate remedy.

 

(c)       Each
of the parties hereto irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State
of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction, any state or federal court
within the State of Delaware), for the purposes of any action or legal proceeding arising out of this Warrant and the rights and
obligations arising hereunder, and irrevocably and unconditionally waives any objection to the laying of venue of any such action
or legal proceeding in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action or legal proceeding has been brought in an inconvenient forum. Each party hereto agrees that service
of any process, summons, notice or document by registered mail to such party’s respective address set forth in Section
10 shall be effective service of process for any such action or legal proceeding.

 

(d)       Each
party hereto hereby waives, to the fullest extent permitted by applicable Law, any right it may have to a trial by jury in respect
of any action, claim or legal proceeding directly or indirectly arising out of, under or in connection with this warrant. Each
party hereto (i) certifies that no Representative of any other party has represented, expressly or otherwise, that such other party
would not, in the event of any action, claim or legal proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that
it and the other parties hereto have been induced to enter into this warrant by, among other things, the mutual waivers and certifications
in this Section 17.

 

18.       Counterparts.
This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed
to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail or other means of

electronic transmission shall be deemed
to have the same legal effect as delivery of an original signed copy of this Warrant.

 

    16

     

    

 

19.       No
Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation
against the party drafting an instrument or causing any instrument to be drafted.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

 

    17

     

    

 

IN WITNESS WHEREOF, the Company has duly
executed this Warrant on the Original Issue Date.

 

	 	TUESDAY MORNING 

CORPORATION
	 	 
	 	By: 	/s/ Stacie R. Shirley 
	 	Name: Stacie R. Shirley
	 	Title: EVP/CFO

 

	Accepted and agreed,
	 
	OSMIUM PARTNERS (LARKSPUR SPV), LP	 
	 	 
	By: 	/s/ John Lewis 	 
	Name: John Lewis	 
	Title: CIO	 

 

    18

     

    

 

EXHIBIT A

NOTICE OF EXERCISE

 

Tuesday Morning Corporation

6250 LBJ Freeway

Dallas, Texas 75240

Attn:

 

Date: [_________]

  

Pursuant to the provisions
set forth in the Warrant (Warrant Certificate No.: W-1), dated as of [_________], 2019 (the “Warrant”), attached
hereto as Annex I, the undersigned hereby irrevocably elects to exercise such Warrant and hereby notifies you of such election
to purchase [_________] Warrant Shares and herewith makes payment of $[_________] (the “Aggregate Exercise Price”)
in accordance with Section 3(a) of the Warrant, representing the full payment of the Aggregate Exercise Price for such Warrant
Shares. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Warrant.

 

Number of Warrant
Shares (check the box that applies).

 

 ̈       This
Notice of Exercise involves fewer than all of the Warrant Shares that are exercisable under the Warrant and I retain the right
to exercise my Warrant for the balance of the Warrant Shares remaining in accordance with the terms and subject to the conditions
of the Warrant. I hereby request that the Company deliver to me a new Warrant evidencing my rights to purchase the unexpired and
unexercised Warrant Shares.

 

 ̈       This
Notice of Exercise involves all of the Warrant Shares that are exercisable under the Warrant, which Warrant is hereby enclosed
herewith and surrendered to the Company hereby (or, in the case of its loss, theft or destruction, the undersigned undertakes to
indemnify the Company from any loss as a result thereof).

 

Payment of Aggregate
Exercise Price (check the box(es) that applies).

 

 ̈       Payment
of the Aggregate Exercise Price will be made by delivery to the Company of a certified or official bank check payable to the order
of the Company in the amount of $[_________]; or

 

    19

     

    

 

 ̈       Payment
of the Aggregate Exercise Price will be made by wire transfer of immediately available funds to an account designated in writing
by the Company.

 

	 	[HOLDER]
	 	By:	
	 	Name:	
	 	Title:	

 

    20

     

    

 

ANNEX I

WARRANT

[To be attached.]

  

    21Exhibit 10.1

 

Execution Version

 

AGREEMENT

 

This Agreement (this
 "Agreement") is made and entered into as of December 31, 2020 by and between Tuesday Morning Corporation, a Delaware
corporation (the "Company"), Osmium Partners, LLC and the entities and natural persons set forth in the signature
pages hereto (collectively, the "Osmium Group") (each of the Company and the Osmium Group, a "Party"
to this Agreement, and collectively, the "Parties").

 

RECITALS

 

WHEREAS, the Company
has submitted for approval to the United States Bankruptcy Court for the Northern District of Texas (the "Bankruptcy Court")
a Plan of Reorganization (the "Plan");

 

WHEREAS, the Company
and the Osmium Group are Parties to that certain Backstop Agreement (the "Backstop Agreement"), dated as of November
16, 2020;

 

WHEREAS, the Company
intends to undertake an offering to its stockholders and Osmium Group of rights to acquire shares of the Company's common stock
(the "Common Stock") (the "Rights Offering"), whereby, pursuant to the terms and conditions
thereof and the Backstop Agreement, the Osmium Group will acquire and be deemed to beneficially own a significant number of shares
of Common Stock;

 

WHEREAS, as of the date
hereof, the Company and the members of the Osmium Group have determined to come to an agreement relating to the composition of
the Board of Directors of the Company (the "Board") following the successful completion of the Rights Offering
and the purchase of shares of Common Stock by the Osmium Group in connection therewith and as to certain other matters, as provided
in this Agreement, all to become effective as of closing of the transactions contemplated by the of the Company's Plan of Reorganization
and the closing of the transactions contemplated by the Rights Offering and the Backstop Agreement.

 

NOW, THEREFORE, in consideration
of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound hereby, agree
as follows: 

 

1.       Board
Matters and Related Agreements.

 

(a)                
Board Matters. Pursuant to the Plan, at the effective time of the Plan, the terms of all of the current members
of the Board (the "Current Directors") shall expire. Immediately following such expiration, and pursuant to the
Plan, the size of the Board will be set at nine (9) directors and will include the following members: (i) Steven R. Becker,
(ii) four (4) directors selected from the Current Directors to be mutually agreed upon by the Current Directors, the Osmium Group
and the Equity Committee (together with Steven R. Becker, the "Continuing Directors"), (iii) three (3) directors
selected by the Osmium Group (the "Osmium Directors ") and (iv) one director selected by the Equity Committee
(the "EC Director"). Each of the Continuing Directors, the Osmium Directors and the EC Director shall be determined
pursuant to the foregoing, subject to completion of the Company’s standard on-boarding procedures (including background
and conflicts checks) satisfactory to the Company, and shall be named in the plan supplement, which is that certain compilation
of documents and forms of documents, agreements, schedules, and exhibits to the Plan as further detailed in the Plan (the "Plan
Supplement"), to the extent known at the time of filing the Plan Supplement. The Board shall take all necessary actions
to nominate the Continuing Directors, the Osmium Directors and the EC Director for election at the 2021 annual meeting of stockholders
(the "2021 Annual Meeting"). In the event that, prior to the 2021 Annual Meeting, (x) any of the Osmium Directors
or the EC Director are unable to serve as a director, resigns as a director or are removed, the Osmium Group or the Equity Committee,
as the case may be, shall have the right to recommend a replacement director to the Board, and (y) any of the Continuing Directors
are unable to serve as a director, resign as a director or are removed, the Continuing Directors, after reasonable consultation
with the Osmium Group and the Equity Committee, shall have the right to recommend a replacement director to the Board, and the
Board shall appoint such recommended replacement director in each of (x) and (y) to the Board. The Board will recommend, support
and solicit proxies for the election of the Osmium Directors and the EC Director in the same manner as for any other nominees
of the Company at the 2021 Annual Meeting.

 

     

     

    

 

(b)                Triggering
Event. Upon the occurrence of a "Triggering Event" (as defined below), the Board shall take all necessary action
to increase the size of the Board to ten (10) directors, and the Osmium Group shall have the right to appoint one (1) additional
director. A "Triggering Event" means (i) EBIT (as defined below) is below 70% of the EBIT projections for calendar
year 2021, fiscal years 2022 or 2023 as set forth in the Company projections filed with the Bankruptcy Court on November 18, 2020
in the Plan (the "EBIT Test") or (ii) total Company Availability (as defined below) is below the greater of (x)
$25 million and (y) 22.5% of the Line Cap (as defined below) (the "Availability Threshold"). "EBIT"
shall mean the earnings of the Company before interest and taxes. A Triggering Event relating to the EBIT Test shall be measured
based upon a review of the Company's financial results filed with the Securities and Exchange Commission. “Availability”
and “Line Cap” shall have the meanings ascribed to them in that certain Senior Secured Super Priority Debtor-in-Possession
Credit Agreement dated as of May 29, 2020 by and among the Company, Tuesday Morning, Inc., TMI Holdings, Inc., JPMorgan Chase
Bank, N.A., as administrative agent, Well Fargo Bank, N.A., as syndication agent, and the lenders party thereto. A Triggering
Event relating to the Availability Threshold shall only exist if the Availability Threshold is met for 30 (thirty) consecutive
calendar days. The Company agrees to provide the Osmium Group and its representatives with such information as it reasonably requests
in order for the Osmium Group to determine and verify whether a Triggering Event has occurred.

 

(c)                
Committees. At least one (1) Osmium Director shall be appointed to each committee of the Board. Each of the Nominating
and Governance and Compensation Committees of the Board shall be comprised of four members, two (2) Osmium Directors selected
by the Osmium Group and two (2) Continuing Directors selected by the Continuing Directors. One of the Osmium Directors on each
of the Nominating and Governance and Compensation Committees shall be entitled to serve as the chairperson of such committees.

 

(d)                
Voting. Subject to applicable law, (i) all Board action shall be taken by majority vote of all directors present
and (ii) all transactions involving the Osmium Group that have been approved by the Bankruptcy Court may be voted upon by the
Osmium Directors, provided, however, that, with respect to any transaction involving a conflict of interest, the
conflicted director may recuse himself or vote in his discretion after informing the Board of the conflict in accordance with
any Company conflict of interest policies.

 

(e)                 Additional
Agreements.

 

(i)                 
Each member of the Osmium Group agrees that it will cause its controlled Affiliates and controlled Associates to comply
with the terms of this Agreement and shall be responsible for any breach of this Agreement by any such controlled Affiliate or
Associate. As used in this Agreement, the terms "Affiliate" and "Associate" shall have the respective meanings
set forth in Rule 12b-2 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended,
or the rules or regulations promulgated thereunder (the "Exchange Act") and shall include all persons or entities
that at any time during the term of this Agreement become Affiliates or Associates of any person or entity referred to in this
Agreement.

 

(ii)               
Each member of the Osmium Group agrees that it will appear in person or by proxy at the 2021 Annual Meeting and vote all
shares of Common Stock of the Company beneficially owned by the Osmium Group at such meeting (x) in favor of the election of the
director nominees recommended by the Board, (y) in favor of all proposals submitted to the Company's stockholders that are recommended
by the Board, and (z) against all proposals submitted to the Company's stockholders that are not recommended by the Board; provided,
however, that to the extent that the recommendation of both Institutional Shareholder Services Inc. ("ISS")
and Glass Lewis & Co., LLC ("Glass Lewis") differs from the Board's recommendation with respect to any matter
other than nominees for election as directors to the Board, the Osmium Group shall have the right to vote in accordance with the
recommendation of ISS and Glass Lewis with respect to such matters.

 

(iii)             
Prior to appointment to the Board, and in a form and substance reasonably acceptable to the Company, the Osmium Directors
and the EC Director will promptly submit to the Company (i) a completed copy of the Company's standard director & officer
questionnaire and (ii) a written acknowledgement that the Osmium Directors and the EC Director agree to comply in all material
respects with all policies, codes and guidelines applicable to all directors of the Company, including those regarding confidentiality,
as such may be amended from time to time.

 

    2 

     

    

 

(iv)              
 The Company agrees that, without the prior approval of the Osmium Group, it will not make any change to the Company's
Certificate of Incorporation, Bylaws or other similar constitutive documents of the Company in order to interpose stockholder
takeover defenses; provided, however, that the Company may take such actions as the Board deems reasonably necessary
in order to maintain and preserve any net operating losses of the Company, including maintaining the Company’s current tax
benefit preservation plan.

 

(v)               
Each of the Osmium Directors and the EC Director shall be compensated for his or her services as a director and shall be
reimbursed for his or her expenses on the same basis as all other non-employee directors of the Company and shall be eligible
to be granted equity-based compensation on the same basis as all other non-employee directors of the Company.

 

(vi)              
Each of the Osmium Directors and the EC Director shall be entitled to the same rights of indemnification and directors’
and officers’ liability insurance coverage as the other non-employee directors of the Company as such rights may exist from
time to time, including entering into the Company’s standard form of indemnification agreement with each of the Osmium Directors
and the EC Director.

 

(vii)            
In the event that the Osmium Group does not acquire at least sixteen million dollars ($16,000,000) of Common Stock by the
conclusion of the Rights Offering pursuant to the Backstop Agreement, (x) one (1) of the Osmium Directors shall immediately tender
his resignation to the Board and (y) Section 1(b) hereof shall be null and void in all respects.

 

2.       Standstill
Provisions.

 

(a) 
For purposes of this Agreement, "Standstill Period" shall mean the period from the date of execution of
this Agreement until the date that is the first day to submit stockholder director nominations for the 2022 annual meeting of
stockholders pursuant to the Company's Bylaws as in effect on the date of execution of this Agreement.

 

(b) 
Each member of the Osmium Group agrees that during the Standstill Period, neither it nor any of its controlled Affiliates
or controlled Associates will, and it will cause each of its controlled Affiliates and controlled Associates not to, directly
or indirectly, in any manner:

 

(i)                 
except as contemplated by the Backstop Agreement, purchase or otherwise acquire beneficial ownership of Common Stock in
excess of the number of shares (including warrants) beneficially owned by the Osmium Group at the time of the Company's emergence
from bankruptcy; provided, that, subject to any restrictions reasonably imposed by the Board in order to maintain
the Company's net operating losses (including maintaining the Company’s current tax benefit preservation plan) and customary
limitations on trading during blackout windows, if the Osmium Group at any time has beneficial ownership of less than 35% of the
issued and outstanding shares of Common Stock, the Osmium Group may purchase up to that number of additional shares of Common
Stock such that its' beneficial ownership (excluding the exercise of any warrants) is equal to 35% of the issued and outstanding
Common Stock of the Company;

 

(ii)               
engage in any solicitation of proxies or consents or become a "participant" in a "solicitation" (as
such terms are defined in Regulation 14A under the Exchange Act) of proxies or consents (including, without limitation, any solicitation
of consents that seeks to call a special meeting of stockholders), in each case, with respect to securities of the Company or
any securities convertible or exchangeable into or exercisable for any such securities;

 

(iii)             
form, join or in any way participate in any "group" (within the meaning of Section 13(d)(3) of the Exchange Act)
with respect to the Common Stock (other than a "group" that includes all or some of the persons identified on Exhibit
A, but does not include any other entities or persons not identified on Exhibit A as of the date hereof); provided,
however, that nothing herein shall limit the ability of an Affiliate of any member of the Osmium Group to join the Osmium
Group following the execution of this Agreement, so long as any such Affiliate agrees to be bound by the terms and conditions
of this Agreement;

 

    3 

     

    

 

(iv)              
deposit any Common Stock in any voting trust or subject any Common Stock to any arrangement or agreement with respect to
the voting of any Common Stock, other than any such voting trust, arrangement or agreement solely among the members of the Osmium
Group and otherwise in accordance with this Agreement;

 

(v)               
other than as set forth in Section 2(b)(i), engage in any short sale or purchase, sale or grant of any option, warrant,
convertible security, stock appreciation right or other similar right (including, without limitation, any put or call option or
swap transaction) with respect to any security (other than a board-based market basket or index) that includes, related to or
derives any significant part of its value from a decline in the market price or value of the securities of the Company;

 

(vi)              
seek, or encourage any person, to submit nominations in furtherance of a "contested solicitation" for the election
or removal of directors with respect to the Company or seek, encourage or take any other action with respect to the election or
removal of any directors (except as provided for in Section 1);

 

(vii)             
(A) call or seek to call or request the call of any meeting of stockholders, including by written consent, (B) seek, alone
or in concert with others, representation on, or nominate or publicly recommend any candidate to, the Board, except as specifically
set forth in Section 1, (C) seek the removal of any member of the Board, (D) solicit consents from stockholders or otherwise
act or seek to act by written consent, (E) conduct a referendum of stockholders, (F) make a request for any stockholder list or
other similar Company books and records, (G) make any proposal for consideration by stockholders at any meeting of stockholders,
or by written consent, (H) make any offer or proposal (with or without conditions) with respect to any tender offer, merger, acquisition,
recapitalization, restructuring, liquidation, disposition, distribution, spin-off, asset sale, joint venture or other business
combination involving the Company (an "Extraordinary Transaction"), or encourage, initiate or support any other
third party with respect to any of the foregoing, (I) make any public communication in opposition to any Extraordinary Transaction
approved by the Board or (J) otherwise acting alone, or in concert with others, seek to control the governance or policies of
the Company; provided, however, that nonpublic proposals or communications may be made to the Board without violating
the provisions of this Section 2; and provided, further, that, notwithstanding anything herein to the contrary,
if stockholders of the Company, other than the Osmium Group and its Affiliates, submit written consents to the Company with respect
to matters permitted by written consent of stockholders, and such holders own a sufficient number of shares of Common Stock that,
if taken together with the shares of Common Stock owned by the Osmium Group, would constitute a majority of the outstanding shares
of Common Stock, then the Osmium Group, at its election, also may submit written consents and take other action otherwise prohibited
by the provisions of subparagraphs (vii) and (viii) in support of such action by the other stockholders;

 

(viii)            
seek to advise, encourage, support or influence any person with respect to the voting or disposition of any securities
of the Company at any annual or special meeting of stockholders or by written consent, except in accordance with Section 1;

 

(ix)               
make any public statement other than in support of the recommendations of the Board regarding how any member of the Osmium
Group intends to vote or instructing other stockholders how to vote;

 

(x)                
make any public disclosure regarding any intent or proposal with respect to the Board, the Company, its management or policies,
any of its securities or assets or agreement that is inconsistent with the provisions of this Agreement;

 

(xi)               
institute, solicit or join, as a party, any litigation, arbitration or other proceeding against the Company or any of its
current or former directors or officers (including derivative actions), other than (A) litigation by the Osmium Group to enforce
the provisions of this Agreement, (B) counterclaims with respect to any proceeding initiated by, or on behalf of, the Company
or its Affiliates against the Osmium Group, and (C) the exercise of statutory appraisal rights; provided, that the foregoing
shall not prevent any member of the Osmium Group from responding to or complying with a validly issued legal process;

 

    4 

     

    

 

(xii)            
enter into any negotiations, arrangements, understanding or agreements (whether written or oral) with, or advise, finance,
assist, seek to persuade or knowingly encourage, any third party to take any action or make any statement in connection with any
of the foregoing, or make any investment in or enter into any arrangement with any other person that engages, or offers or proposes
to engage, in any of the foregoing, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing;

 

(xiii)          
take any action challenging the validity or enforceability of this Section 2 or this Agreement, or make any request
or submit any proposal to amend the terms of this Agreement other than through non-public communications with the Company that
would not be reasonably determined to trigger public disclosure obligations for any Party; or

 

(xiv)          
disclose any intention, plan or arrangement inconsistent with any provision of this Section 2.

 

(c) 
Notwithstanding anything herein to the contrary, nothing in this Section 2 shall be deemed to in any way restrict
or limit the Osmium Directors or the EC Director from, in their capacities as members of the Board, privately expressing or advocating
for their views to the Company, other members of the Board or during Board meetings.

 

3.       Representations
and Warranties of the Company.

 

The Company represents
and warrants to the Osmium Group that (a) the Company has the corporate power and authority to execute this Agreement and to bind
it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid
and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except
as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or similar laws generally affecting the rights of creditors and subject to general equity principles and (c) the execution, delivery
and performance of this Agreement by the Company does not and will not violate or conflict with (i) any law, rule, regulation,
order, judgment or decree applicable to the Company, or (ii) result in any breach or violation of or constitute a default (or
an event which with notice or lapse of time or both could constitute such a breach, violation or default) under or pursuant to,
or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of,
any organizational document, agreement, contract, commitment, understanding or arrangement to which the Company is a party or
by which it is bound.

 

4.         Representations
and Warranties of the Osmium Group.

 

Each member of the Osmium
Group represents and warrants, severally and not jointly, to the Company that (a) the authorized signatory of such member of the
Osmium Group set forth on the signature page hereto has the power and authority to execute this Agreement and any other documents
or agreements to be entered into in connection with this Agreement and to bind such member thereto, (b) this Agreement has been
duly authorized, executed and delivered by such member of the Osmium Group, and is a valid and binding obligation, enforceable
against such member of the Osmium Group in accordance with its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors
and subject to general equity principles, (c) the execution of this Agreement, the consummation of any of the transactions contemplated
hereby, and the fulfillment of the terms hereof, in each case in accordance with the terms hereof, will not conflict with, or
result in a breach or violation of the organizational documents of such member of the Osmium Group as currently in effect, (d)
the execution, delivery and performance of this Agreement by such member of the Osmium Group does not and will not violate or
conflict with (i) any law, rule, regulation, order, judgment or decree applicable to such member of the Osmium Group, or (ii)
result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could constitute
such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right
of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding
or arrangement to which such member is a party or by which it is bound, (e) as of the date of this Agreement, the Osmium Group
is deemed to beneficially own in the aggregate 2,050,000 shares of Common Stock, and (f) as of the date hereof, except as contemplated
by the Backstop Agreement, the Osmium Group does not currently have, and does not currently have any right to acquire or any interest
in any other securities of the Company (or any rights, options or other securities convertible into or exercisable or exchangeable
(whether or not convertible, exercisable or exchangeable immediately or only after the passage of time or the occurrence of a
specified event) for such securities or any obligations measured by the price or value of any securities of the Company or any
of its controlled Affiliates, including any swaps or other derivative arrangements designed to produce economic benefits and risks
that correspond to the ownership of Common Stock, whether or not any of the foregoing would give rise to beneficial ownership
(as determined under Rule 13d-3 promulgated under the Exchange Act), and whether or not to be settled by delivery of Common Stock,
payment of cash or by other consideration, and without regard to any short position under any such contract or arrangement), and
(g) the Osmium Group will not, directly or indirectly, compensate or agree to compensate the Osmium Directors for their service
as nominees or directors of the Company with any cash, securities (including any rights or options convertible into or exercisable
for or exchangeable into securities or any profit sharing agreement or arrangement), or other form of compensation directly or
indirectly related to the Company or its securities.

 

    5 

     

    

 

5.       Expenses.

 

Except for such fees
and expenses agreed to be paid by the Company to the Osmium Group pursuant to the Plan and the Backstop Agreement, each Party
shall be responsible for its own fees and expenses in connection with the negotiation and execution of this Agreement and the
transactions contemplated hereby.

 

6.        Specific
Performance.

 

The Osmium Group, on
the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other Party hereto would
occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were
otherwise breached and that such injury would not be adequately compensable by the remedies available at law (including the payment
of money damages). It is accordingly agreed that the Osmium Group (or any of the entities and natural persons listed in the signature
pages hereto), on the one hand, and the Company, on the other hand (the "Moving Party"), shall each be entitled
to specific enforcement of, and injunctive relief to prevent any violation of, the terms hereof, and the other Party hereto will
not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy
or relief is available at law or in equity. This Section 6 is not the exclusive remedy for any violation of this Agreement.

 

7.          Severability.

 

If any term, provision,
covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the Parties that the
Parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable. In addition, the Parties agree to use their best efforts to agree upon and
substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or enforceable
by a court of competent jurisdiction.

 

8.         Notices.

 

Any notices, consents,
determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending Party);
(iii) upon confirmation of receipt, when sent by email (provided such confirmation is not automatically generated); or (iv) one
(1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the
Party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

 

    6 

     

    

 

	If to the Company: 	Tuesday Morning Corporation
	 	6250 LBJ Freeway
	 	Dallas, TX 75240
	 	Attn: General Counsel
	 	Telephone: (972) 387-3562
	 	Facsimile: (972) 934-7231
	 	Email: BZeterberg@TuesdayMorning.com

 

	With copies (which shall not constitute notice) to: 	Skadden, Arps, Slate, Meagher & Flom LLP
	 	300 South Grand Ave., Suite 3400
	 	Los Angeles, CA 90071

    Attn: Brian J. McCarthy

    Telephone: (213) 687-5070
	 	Facsimile: (213) 621-5070
	 	Email: Brian.McCarthy@skadden.com
	 	 

	If to the Osmium Group or any member thereof: 	

    Osmium Partners, LLC

    Attn: John H. Lewis
	 	Telephone: (415) 747-8698
	 	Email: jl@osmiumpartners.com

 

	With a copy (which shall not constitute notice) to: 	Morrison & Foerster LLP

    425 Market St.
	 	San Francisco, CA 94105

    Attn: Murray Indick
	 	Telephone: (415) 268-7096
	 	 
	

          	 Email: MIndick@mofo.com

 

	 	Kirkland & Ellis LLP
	 	555 California Street
	 	San Francisco, California 94104
	 	Tel: (415) 439-1400
	 	Facsimile: (415) 439-1500
	 	Attn: Noah D. Boyens
	 	Email: noah.boyens@kirkland.com

 

9.       Applicable
Law.

 

This Agreement shall
be governed by and construed and enforced in accordance with the laws of the State of Delaware without reference to the conflict
of laws principles thereof. Each of the Parties hereto irrevocably agrees that any legal action or proceeding with respect to
this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect
of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors or assigns,
shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the
State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any federal
court within the State of Delaware). Each of the Parties hereto hereby irrevocably submits with regard to any such action or proceeding
for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts
and agrees that it will not bring any action relating to this Agreement in any court other than the aforesaid courts. Each of
the Parties hereto hereby irrevocably waives, and agrees not to assert in any action or proceeding with respect to this Agreement,
(i) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (ii) any claim that
it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts
(whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment
or otherwise) and (iii) to the fullest extent permitted by applicable legal requirements, any claim that (A) the suit, action
or proceeding in such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper
or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

    7 

     

    

 

10.       Counterparts.

 

This Agreement may be
executed in two or more counterparts, each of which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each of the Parties and delivered to the other Party (including by means of electronic delivery
or facsimile).

 

11.       Mutual
Non-Disparagement.

 

Subject to applicable
law, each of the Parties covenants and agrees that, during the Standstill Period, or, if earlier, until such time as the other
Party or any of its subsidiaries, affiliates (not including portfolio companies of the Osmium Group for all purposes of this Section
11 (provided, however, that such portfolio companies may not take any action prohibited by this Section 11 at the direction of
a Party restricted under this Section 11 if such Party would otherwise be restricted from taking such action directly)), successors,
assigns, officers, key employees or directors shall have breached this Section 11, neither it nor any of its respective,
subsidiaries, affiliates, successors, assigns, officers, key employees or directors, shall in any way publicly disparage, defame
or slander the other Parties or such other Parties' subsidiaries, affiliates, successors, assigns, officers (including any current
officer of a Party or a Party's subsidiaries who no longer serves in such capacity following the execution of this Agreement),
directors (including any current director of a Party or a Party's subsidiaries who no longer serves in such capacity following
the execution of this Agreement), or employees, or any of such other Parties’ businesses, products or services, in any manner
that would reasonably be expected to damage the business or reputation of such other Parties, their businesses, products or services
or their subsidiaries, affiliates, successors, assigns, officers (or former officers), directors (or former directors), or employees,.
This Section 11 shall not limit the ability of any director of the Company to act in accordance with his or her fiduciary
duties or otherwise in accordance with applicable law.

 

12.       Entire
Agreement; Amendment and Waiver; Successors and Assigns; Third Party Beneficiaries.

 

   This
Agreement and the Backstop Agreement contains the entire understanding of the Parties hereto with respect to their subject matter.
There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between the Parties other
than those expressly set forth herein and in the Backstop Agreement. No modifications of this Agreement can be made except in
writing signed by an authorized representative of each of the Company and the Osmium Group. No failure on the part of any Party
to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies
provided by law. The terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable
by the Parties hereto and their respective successors, heirs, executors, legal representatives, and permitted assigns. No Party
shall assign this Agreement or any rights or obligations hereunder without, with respect to any member of the Osmium Group, the
prior written consent of the Company, and with respect to the Company, the prior written consent of an authorized representative
of the Osmium Group. This Agreement is solely for the benefit of the Parties hereto and is not enforceable by any other persons.

 

[The remainder of this page intentionally
left blank]

 

    8 

     

    

 

IN WITNESS WHEREOF, this Agreement has
been duly executed and delivered by the duly authorized signatories of the Parties as of the date hereof.

 

	TUESDAY MORNING CORPORATION	 
	 	 
	By:	/s/ Steven R. Becker		
	Name:	Steven R. Becker		
	Title:	Chief Executive Officer		

 

[Signature Page to Agreement]

 

     

     

    

  

	OSMIUM PARTNERS, LLC	 
	 	 
	By:	/s/ John H. Lewis	 
	 	Name: John H. Lewis	 
	 	Title: CEO/CIO	 

 

	OSMIUM PARTNERS (LARKSPUR SPV), LP	 
	 	 
	By:	Osmium Partners, LLC,	 
	 	its General Partners	 

 

	By:	/s/ John H. Lewis	 
	 	Name: John H. Lewis	 
	 	Title: CEO/CIO	 

 

[Signature Page to
Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00321-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00321-of-00352.parquet"}]]