CONSENT AND MODIFICATION AGREEMENT
THIS CONSENT AND MODIFICATION AGREEMENT is made and entered into effective as of September
26, 2001 by and between TUESDAY MORNING CORPORATION, a Delaware corporation ("Borrower"),
and COMPASS BANK, a state banking association formerly known as Compass Bank - Dallas ("Lender").
A. Borrower and Lender entered into a Loan Agreement on June 20, 1995, as amended by that certain Consent
and Modification Agreement dated December 29, 1997 (the "Loan Agreement"), pursuant to which Lender
made a loan in the amount of $7,146,293 to Borrower (the "Loan").
B. The Loan is evidenced by a Promissory Note in the original principal amount of $7,146,293 dated June 20,
1995 executed by Borrower payable to the order of Lender (the "Note").
C. The Note is secured, inter alia, by (i) a Deed of Trust and Security Agreement of even date therewith from
Tuesday Morning, Inc., a Texas corporation, to Thomas J. Mastor, Trustee (the "TMI Deed of Trust"), covering
certain real property in Dallas and Denton Counties, Texas more particularly described therein and (ii) a Deed of
Trust and Security Agreement from Friday Morning, Inc., a Texas corporation, to Thomas J. Mastor, Trustee
(the "FMI Deed of Trust"), covering certain real property in Dallas County, Texas more particularly described
therein. The TMI Deed of Trust has been recorded in the Real Property Records of Dallas County, Texas and
the Real Property Records of Denton County, Texas, and the FMI Deed of Trust has been recorded in the Real
Property Records of Denton County, Texas.
D. Borrower, Merrill Lynch & Co., Merrill Lynch Pierce Fenner & Smith Incorporated ("Merrill"), Fleet
National Bank ("Fleet"), the Guarantors party thereto and certain lenders (collectively "New Lenders") executed
a Credit Agreement dated as of December 29, 1997, and amended and restated as of July 7, 2000 (the "Credit
Agreement"), pursuant to which New Lenders have agreed to make certain loans in the aggre