<PAGE>

                                                                  EXHIBIT 10.38

                                                                  EXECUTION COPY

                               THIRD AMENDMENT TO
                                CREDIT AGREEMENT

      THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") made as of the
26th day of August, 2004, by and among TANDY BRANDS ACCESSORIES, INC.
("Borrower"), WELLS FARGO HSBC TRADE BANK, N. A. ("Agent"), and the lenders
specified herein ("Lenders").

      WHEREAS, Borrower, Agent and certain lenders entered into a Credit
Agreement dated as of June 27, 2001 (the "Original Credit Agreement"), as
amended by that First Amendment to Credit Agreement dated as of June 28, 2002,
(the "First Amendment"; as amended by that Second Amendment to Credit Agreement
dated as of June 26, 2002 (the "Second Amendment") the Original Credit Agreement
and the First Amendment and the Second Amendment together, the "Credit
Agreement"); and

      WHEREAS, Borrower has requested that Agent and Lenders make certain
amendments to the Credit Agreement, and Agent and Lenders are willing to do so
subject to the terms and conditions set forth herein;

      NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

      1.    DEFINED TERMS. All capitalized terms used but not otherwise defined
in this Amendment shall have the meaning ascribed to them in the Credit
Agreement. Unless otherwise specified, all section references herein refer to
sections of the Credit Agreement.

      2.    AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby
amended as follows:

            2.1   Recitals

                  (a)   First Recital

                        The First Recital is revised to read as follows:

                  "WHEREAS, Borrower has requested that Agent and Lenders
                  provide Borrower with a $85,000,000.00 revolving credit
                  facility (the "Revolving Credit Loan") to fund general
                  corporate and working capital needs of Borrower and its
                  Subsidiaries."

            2.2   Definitions

                  (a)   Applicable Commitment Fee

                        The chart in clause (b) in the definition of "Applicable
                  Commitment Fee Percentage" is revised as follows:

Tandy Brands Accessories, Inc. - Third Amendment

                                       1
<PAGE>

<TABLE>
<CAPTION>
                                                                                     APPLICABLE
                                                                                     COMMITMENT
                   TOTAL FUNDED INDEBTEDNESS                                            FEE
                        TO EBITDA RATIO                                              PERCENTAGE
----------------------------------------------------------------                    -----------
<S>                                                                                 <C>
Less than 1.00 to 1.00                                                                  0.20%
Greater than or equal to 1.00 to 1.00 but less than 2.00 to 1.00                        0.25%
Greater than or equal to 2.00 to 1.00, but less than 2.50 to 1.00                       0.30%
Greater than or equal to 2.50 to 1.00                                                  0.375%
</TABLE>

                  (b)   Applicable Margin

                        The chart in clause (b) in the definition of "Applicable
                  Margin" is revised as follows:

<TABLE>
<CAPTION>
                                                                                     APPLICABLE
                                                                                     MARGIN FOR
                     TOTAL FUNDED INDEBTEDNESS                                       EURODOLLAR
                          TO EBITDA RATIO                                            BORROWINGS
------------------------------------------------------------------                   -----------
<S>                                                                                  <C>
Less than 1.00 to 1.00                                                                 1.000%
Greater than or equal to 1.00 to 1.00 but less than 1.50 to 1.00                       1.125%
Greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00                       1.250%
Greater than or equal to 2.00 to 1.00, but less than 2.50 to 1.00                      1.500%
Greater than or equal to 2.50 to 1.00                                                  1.750%
</TABLE>

                  (c)   Fixed Charge Coverage Ratio

                        The definition of "Fixed Charge Coverage Ratio" is
                  amended to read as follows:

Tandy Brands Accessories, Inc. - Third Amendment

                                       2
<PAGE>

                  "`FIXED CHARGE COVERAGE RATIO', means, for the four
                  consecutive fiscal quarterly periods ending on the date of
                  determination for Borrower and its Subsidiaries, the ratio of
                  (a) EBITDA determined on a consolidated basis minus Capital
                  Expenditures minus federal, state, local and foreign income
                  taxes divided by (b) Interest Expense plus payments made in
                  respect of Capitalized Lease Obligations plus any cash
                  dividend made by Borrower or any of its Subsidiaries, plus any
                  payments made by Borrower or any of its Subsidiaries in
                  respect of the redemption, retirement, acquisition, or
                  prepayment of any Borrower's capital stock, or any other
                  equity interest, which are more than $5,000,000 in the
                  aggregate during the term of this Agreement, plus, for any
                  determination based on the quarterly period ending September
                  30, 2004 and thereafter, implied principal payments in an
                  amount equal to one-fifth (1/5th) of Revolving Credit Loans in
                  excess of $20,000,000 outstanding on the last day of each such
                  quarterly period, plus any Investments in Sheldon."

                  (d)   Permitted Acquisitions

                        The definition of "Permitted Acquisition" is revised to
                  read as follows:

                  "`Permitted Acquisition' means an acquisition of a business
                  entity or assets (i) provided the aggregate amount of all
                  consideration for all such acquisitions from the date of the
                  Third Amendment until the Termination Date does not exceed
                  $20,000,000 or (ii) for which Borrower has received the prior
                  written consent of the Required Lenders."

                  (e)   Permitted Liens

                        Clause (d) of the definition of "Permitted Liens" is
                  revised to add the words "or other property" after the words
                  "equipment or machinery" on line 16 of the definition.

                  (f)   Revolving Credit Notes

                        The definition of "Revolving Credit Notes" is revised to
                  read as follows:

                  "`Revolving Credit Notes' means those certain Revolving Credit
                  Promissory Notes dated as of the date of the Third Amendment
                  in the form of Exhibit A attached hereto, executed by
                  Borrower, as maker, and payable to the order of Lenders, as
                  payee, in the aggregate original principal amount of
                  $85,000,000.00, together with any renewals, extensions, or
                  modifications thereof."

Tandy Brands Accessories, Inc. - Third Amendment

                                       3
<PAGE>

                  (g)   Security Documents

                        The definition of "Security Documents" is deleted as is
                  any reference to "Security Documents" in the Loan Documents.

                  (h)   H.A. Sheldon Canada, Ltd.

                        The definition of "Sheldon" is added:

                  " `Sheldon' means H. A. Sheldon Canada, Ltd."

                  (i)   Termination Date

                        Clause (a) in the definition of "Termination Date" is
                  revised to read as follows:

                  "(a) November 30, 2007,"

                  (j)   Third Amendment

                        The definition of "Third Amendment" is added:

                  "`Third Amendment' means the Third Amendment to the Credit
                  Agreement dated August 26, 2004."

                  (k)   Total Funded Indebtedness

                        The following is added to the end of the definition of
                  "Total Funded Indebtedness:"

                  "minus, Indebtedness or obligations to a Bank under letters of
                  credit."

                  (l)   Total Revolving Credit Commitment

                        The definition of "Total Revolving Credit Commitment" is
                  revised to read as follows:

                  "`Total Revolving Credit Commitment' shall mean the sum of the
                  Lenders' Revolving Credit Commitments, as the same may be
                  terminated or reduced from time to time in accordance with the
                  provisions of this Agreement. As of the date of the Third
                  Amendment, the Total Revolving Credit Commitment is
                  $85,000,000.00."

            2.3   Increases in the Total Revolving Credit Commitment

                        Section 2.19, Increases in Total Revolving Credit
                  Commitment, is added to the Credit Agreement as follows:

Tandy Brands Accessories, Inc. - Third Amendment

                                       4
<PAGE>

                  "2.19 INCREASES IN TOTAL REVOLVING CREDIT COMMITMENT. The
                  Borrower may request increases in the Total Revolving Credit
                  Commitment as follows:

                  (a) Provided there exists no Event of Default and subject to
                  the conditions set forth under clause (e) below, upon thirty
                  (30) Business Days notice to the Agent (which shall promptly
                  notify the Lenders), the Borrower may, from time to time,
                  request increases in the Total Revolving Credit Commitment in
                  an amount not to exceed $25,000,000 in the aggregate;
                  provided, that each increase of the Total Revolving Credit
                  Commitment shall be in a minimum amount of $5,000,000, or
                  integral multiples of $1,000,000 in excess thereof. At the
                  time of sending such notice, the Borrower (in consultation
                  with the Agent) shall specify the time period within which
                  each Lender is requested to respond (which shall in no event
                  be less than ten (10) Business Days from the date of delivery
                  of such notice to the Lenders).

                  (b) Each Lender shall notify the Agent within such time period
                  whether or not it agrees to increase its Revolving Credit
                  Commitment and, if so, whether by an amount equal to, greater
                  than, or less than its percentage share of such requested
                  increase. Any Lender not responding within such time period
                  shall be deemed to have declined to increase its Revolving
                  Credit Commitment.

                  (c) The Agent shall notify the Borrower and each Lender of the
                  Lenders' responses to the request made hereunder. To achieve
                  the full amount of a requested increase and subject to the
                  approval of the Agent (which approval shall not be
                  unreasonably withheld), the Borrower may also invite
                  additional lenders to become Lenders pursuant to a joinder
                  agreement in form and substance satisfactory to the Agent and
                  its counsel.

                  (d) If the Total Revolving Credit Commitment is increased in
                  accordance with this subsection, the Agent and the Borrower
                  shall determine the effective date (such date, the "Increase
                  Effective Date) and the final allocation of such increase. The
                  Agent shall promptly notify the Borrower and the Lenders of
                  the final allocation of such increase in the Total Revolving
                  Credit Commitment and the Increase Effective Date.

                  (e) As conditions precedent to such increase, (i) the Borrower
                  shall deliver to the Agent a certificate dated as of the
                  Increase Effective Date signed by an Officer of the Borrower
                  (y) certifying that each of the conditions set forth in
                  Section 7.2 (a), (b), and (d) have been satisfied by the
                  Borrower, and (z) certifying and attaching the resolutions
                  adopted by the Borrower and (ii) the Borrower shall have paid
                  all fees and expenses due and owing to the Agent and the
                  Lenders. To the extent necessary to keep the outstanding
                  Revolving Credit Loans ratable with any revised percentage
                  shares of the Lenders arising from any nonratable increase in

Tandy Brands Accessories, Inc. - Third Amendment

                                       5
<PAGE>

                  the Total Revolving Credit Commitment under this subsection,
                  the Borrower shall prepay Revolving Credit Loans outstanding
                  on the Increase Effective Date and/or Lenders shall make
                  assignments pursuant to arrangements satisfactory to the
                  Agent."

            2.4   Security

                  (a) Section 6.1 is deleted in its entirety. Further, any
                  reference to "security," "security interest," and "security
                  agreement" in the Loan Documents is hereby deleted.

                  (b) Effective as of the effectiveness of this Amendment,
                  Agent, the Lenders and WFB hereby release their security
                  interest in the Collateral owned by the Borrower and its
                  Subsidiaries.

                  (c) As soon as practicable following the effectiveness of this
                  Amendment, the Agent shall file the appropriate UCC Financing
                  Statement Amendments (Form UCC3) terminating the Lenders'
                  security interests in the Collateral and shall terminate any
                  additional security filings.

                  (d) As soon as practicable following the effectiveness of this
                  Amendment, the Agent shall return to the Borrower the shares
                  of stock pledged to the Lenders and the related stock powers.

            2.5   After-Acquired Subsidiaries

                  Section 9.14 is amended by deleting the words "and Security
            Agreement" following the words "Subsidiary Guaranty" on line 5 of
            such Section.

            2.6   Limitations on Indebtedness

                  (a) Clause (c) of Section 10.3 is revised to read as follows:

                  "(c) Purchase money financing not to exceed $3,000,000 in any
                  Fiscal Year;"

                  (b) Clause (h) is added to Section 10.3 as follows:

                  "(h) Indebtedness with respect to letters of credit (not
                  subject to the terms and conditions of this Agreement), issued
                  by a Bank, such letters of credit not to exceed $20,000,000 in
                  amounts available to be drawn thereunder at any time."

            2.7   Restricted Payments

                  (a) Section 10.9 is amended to read as follows:

Tandy Brands Accessories, Inc. - Third Amendment

                                       6
<PAGE>

                  "10.9 RESTRICTED PAYMENTS. The Borrower and its Subsidiaries
                  may declare or pay any cash dividend; redeem, retire,
                  otherwise acquire, or prepay, shares of their capital stock or
                  any other equity interest; or make any other distribution of
                  any property or cash to owners of an equity interest in their
                  capacity as such, if, in respect to payments or distributions
                  made by the Borrower, (a) such payment or distribution is in
                  the form of the issuance of the Borrower's own stock, or (b)
                  at the time of making such payment or distribution and as a
                  result thereof there exists or would exist no Event of
                  Default."

            2.8   Investments

                  (a) Section 10.11 beginning at subsection (c) is hereby
                  amended to read in its entirety as follows:

                  "(c)  Investments made in connection with Borrower's Benefit
                        Restoration Plan and Supplemental Employee Retirement
                        Plan; and

                  (d) Investments in Subsidiaries."

            2.9   Capital Expenditures

                        Section 10.13 is deleted in its entirety.

            2.10  Leverage Ratio

                        Section 10.14 is amended to read as follows:

                  "10.14 LEVERAGE RATIO. Borrower shall not permit the ratio of
                  (a) Total Funded Indebtedness, on a consolidated basis, as of
                  the last day of each fiscal quarter of the Borrower beginning
                  September 30, 2004, to (b) EBITDA, on a consolidated basis,
                  for the four (4) fiscal quarters ending on the date of
                  determination to exceed 3:00 to 1:00."

            2.11  Fixed Charge Coverage Ratio

                        Section 10.15 is amended to read as follows:

                  "10.15 FIXED CHARGE COVERAGE RATIO. Borrower shall not permit
                  the Fixed Charge Coverage Ratio as of the last day of each
                  fiscal quarter of Borrower beginning September 30, 2004 to be
                  less than 1.25:1.00."

            2.12  Tangible Net Worth

                        Section 10.16 is amended to read as follows:

Tandy Brands Accessories, Inc. - Third Amendment

                                       7
<PAGE>

                  "10.16 TANGIBLE NET WORTH. The Tangible Net Worth of the
                  Borrower and its Subsidiaries on a consolidated basis shall
                  never be less than the sum of eighty percent (80%) of Tangible
                  Net Worth as of June 30, 2004 plus (a) seventy-five percent
                  (75%) of Consolidated Net Income earned after June 30, 2004
                  during any fiscal quarter, provided, however that fiscal
                  quarters in which Consolidated Net Income is a negative amount
                  will be excluded from the calculation of Consolidated Net
                  Income earned after June 30, 2004, plus (b) an amount equal to
                  100% of the net proceeds of any equity offering by the
                  Borrower or any of its Subsidiaries occurring after June 30,
                  2004."

            2.13  Trading Asset Coverage Ratio

                        Section 10.17 is amended to read as follows:

                  "10.17 TRADING ASSET COVERAGE RATIO. Borrower shall not permit
                  the ratio of (a) Total Funded Indebtedness plus outstanding
                  Commercial Letters of Credit to (b) Trading Assets, as of the
                  last date of each fiscal quarter of Borrower beginning
                  September 30, 2004, to be not less than 1.00 to 1.00. "Trading
                  Assets" means the sum of (i) seventy-five percent (75%) of net
                  accounts receivable, plus (ii) fifty percent (50%) of
                  inventory, plus (iii) 60% of outstanding Commercial Letters of
                  Credit, all as of the date of determination."

            2.14  Hedging

                        Section 10.20 is deleted in its entirety.

            2.15  Exhibit D

                        Exhibit D, Subsidiaries - Tandy Brands Accessories, Inc.
                  is revised as attached to this Amendment.

            2.16  Schedule 2.1

                        Schedule 2.1, Revolving Credit Commitments, is revised
                  as attached to this Amendment.

            2.17  Withdrawal of Lender.

                        On the date of execution of this Amendment by the
                  parties hereto, Compass Bank shall cease to be a Lender under
                  the Credit Agreement and shall have no rights or obligations
                  under the Credit Agreement or the Loan Documents. The Total
                  Revolving Credit Commitment shall be re-allocated among the
                  remaining Lenders as set forth on revised Schedule 2.1
                  attached hereto.

Tandy Brands Accessories, Inc. - Third Amendment

                                       8
<PAGE>

            2.18  Joinder Agreement.

                        As of the effectiveness of this Amendment, Bank of
                  America, N.A. and JPMorgan Chase Bank shall each become a
                  party to the Credit Agreement as a Lender, shall acquire all
                  of the rights, powers and obligations of a Lender under the
                  Credit Agreement, and shall each have a Revolving Credit
                  Commitment equal to $14,000,000. From and after the
                  effectiveness of this Amendment, all references to "Lenders"
                  in the Credit Agreement and the other Loan Documents shall be
                  deemed to include, in any event, Bank of America, N.A. and
                  JPMorgan Chase Bank.

      3.    EFFECTIVENESS OF AMENDMENT. This Amendment shall be effective upon
receipt by Agent of:

                  (a) A copy or copies of this Amendment signed by each of the
                  parties hereto;

                  (b) The Amended and Restated Notes or Notes, as the case may
                  be, executed in favor of each Lender;

                  (c) A Confirmation of Guaranty executed by each Guarantor
                  (other than Sheldon);

                  (d) A release of Sheldon's Guaranty executed by Agent;

                  (e) Additional Subsidiaries Supplements executed by
                  TBAC-Acquisition, Inc. and Superior Merchandise Company;

                  (f) A Compliance Certificate executed by Borrower;

                  (g) A legal opinion to be furnished by counsel to the Borrower
                  in form and substance satisfactory to the Agent;

                  (h) Resolutions from the Borrower and each of the Guarantors,
                  in form and substance satisfactory to the Agent, authorizing
                  the execution and delivery of and performance under this
                  Amendment and any documents or agreements entered into in
                  connection therewith; and

                  (i) Payment for all other fees and expenses due and owing by
                  the Borrower.

      4.    RATIFICATIONS, REPRESENTATIONS AND WARRANTIES.

                  (a) The terms and provisions set forth in this Amendment shall
                  modify and supersede all inconsistent terms and provisions set
                  forth in the Credit Agreement and, except as expressly
                  modified and superseded by this Amendment, the terms and
                  provisions of the Credit Agreement are ratified and confirmed
                  and shall continue in full force and effect. Borrower,

Tandy Brands Accessories, Inc. - Third Amendment

                                       9
<PAGE>

                  Agent and Lenders agree that the Credit Agreement and the Loan
                  Documents, as amended hereby, shall continue to be legal,
                  valid, binding and enforceable in accordance with their
                  respective terms.

                  (b) To induce Agent and Lenders to enter into this Amendment,
                  Borrower ratifies and confirms each representation and
                  warranty set forth in the Credit Agreement as if such
                  representations and warranties were made on the even date
                  herewith, (except to the extent that such representations and
                  warranties related solely to an earlier date and except to the
                  extent that the facts upon which such representations are
                  based have been changed by the transactions contemplated in
                  the Credit Agreement) and further represents and warrants (i)
                  that there has occurred since the date of the last financial
                  statements delivered to Agent and Lenders no event or
                  circumstance that has resulted or could reasonably be expected
                  to result in a Material Adverse Change, (ii) that no Event of
                  Default exists on the date hereof, (iii) that Borrower is
                  fully authorized to enter into this Amendment, and (iv) that
                  the Guarantors signing the Confirmation of Guaranty attached
                  hereto or executing Additional Subsidiaries Supplements are
                  all of the Borrower's Subsidiaries as of the date of this
                  Amendment (other than Sheldon).

      5.    BENEFITS. This Amendment shall be binding upon and inure to the
benefit and Borrower, Agent and Lenders and their respective successors and
assigns; provided, however, that Borrower may not, without the prior written
consent of Agent and Lenders, assign any rights, powers, duties or obligations
under this Amendment, the Credit Agreement or any of the other Loan Documents.

      6.    CONSTRUCTION. This Amendment shall be governed by and construed in
accordance with the laws of the State of Texas.

      7.    INVALID PROVISIONS. If any provision of this Amendment is held to be
illegal, invalid or unenforceable under present or future laws, such provision
shall be fully several and the remaining provisions of this Amendment shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance.

      8.    ENTIRE AGREEMENT. The Credit Agreement, as amended by this
Amendment, contains the entire agreement among the parties regarding the subject
matter hereof and supersedes all prior written and oral agreements and
understandings among the parties hereto regarding same.

      9.    REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and any and all
other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Credit
Agreement, as amended hereby, are hereby amended so that any reference in the
Credit Agreement to the Credit Agreement shall mean a reference to the Credit
Agreement as amended hereby.

Tandy Brands Accessories, Inc. - Third Amendment

                                       10
<PAGE>


      10.   COUNTERPARTS. This Amendment may be separately executed in any
number of counterparts, each of which shall be an original, but all of which,
taken together, shall be deemed to constitute one and the same agreement.

             [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

Tandy Brands Accessories, Inc. - Third Amendment

                                       11

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.

                                    BORROWER:

                                    TANDY BRANDS ACCESSORIES, INC.

                                    By: /s/ Mark J. Flaherty
                                       --------------------------------------
                                    Name:  Mark J. Flaherty
                                    Title: Chief Financial Officer

                                    AGENT:

                                    WELLS FARGO HSBC TRADE
                                    BANK, N.A.

                                    By: /s/ Yousuf Omar
                                       ----------------------------------------
                                    Name:  Yousuf Omar
                                    Title: Senior Relationship Manager

                                    WELLS FARGO BANK, N. A.

                                    By: /s/ John Johnson
                                       ----------------------------------------
                                    Name: /s/ John W. Johnson
                                         --------------------------------------
                                    Title: Vice President
                                          -------------------------------------

Tandy Brands Accessories, Inc. - Third Amendment

<PAGE>

                                    LENDERS:

                                    WELLS FARGO HSBC TRADE BANK, N. A.


                                    By: /s/ Yousuf Omar
                                       ----------------------------------------
                                    Name:      Yousuf Omar
                                    Title:     Senior Relationship Manager
                                    Address:   1445 Ross Avenue, Suite 450
                                               Dallas, TX 75202
                                    Attention: Yousuf Omar
                                    Fax No.:   214-220-1585

Tandy Brands Accessories, Inc. - Third Amendment
<PAGE>

                                    COMERICA BANK

                                    By:    /s/ Corey R. Bailey
                                           -------------------------------------
                                    Name:  Corey R. Bailey
                                           -------------------------------------
                                    Title: Vice - President - Texas Division
                                           -------------------------------------
                                    Address:     8828 Stemmons, Suite 441
                                                 Dallas, TX 75247
                                    Attention:   Corey R. Bailey
                                    Fax No.:     214-589-1360

Tandy Brands Accessories, Inc. - Third Amendment
<PAGE>

                                    COMPASS BANK, as withdrawing Lender

                                    By:  /s/ Michael H. Keith
                                         --------------------------------------
                                    Name: Michael H. Keith
                                         --------------------------------------
                                    Title: Senior Vice President
                                          -------------------------------------
                                    Address:   8080 N. Central Expressway
                                               Suite 250
                                               Dallas, TX 75206
                                    Attention: Michael Keith
                                    Fax No.    214-346-2746

Tandy Brands Accessories, Inc. - Third Amendment
<PAGE>

                                    BANK OF AMERICA, N.A.

                                    By: /s/ Steven A. MacKenzie
                                       -----------------------------------
                                    Name:        Steven A. MacKenzie
                                    Title:       Senior Vice President
                                    Address:     901 Main Street
                                                 67th Floor
                                                 Dallas, Texas  75202
                                    Attention:   Steven A. MacKenzie
                                    Fax No.      214-209-3140

Tandy Brands Accessories, Inc. - Third Amendment
<PAGE>

                                    JPMORGAN CHASE BANK

                                    By:  /s/ Jerry Petrey
                                         ---------------------------------
                                    Name:      Jerry Petrey
                                    Title:     Vice President
                                    Address:   500 E. Border
                                               P.O. Box 250
                                               Arlington, Texas 76004-0250
                                    Attention: Jerry Petrey
                                    Fax No.    817-856-3183

Tandy Brands Accessories, Inc. - Third Amendment
<PAGE>

                                    EXHIBIT D

                  SUBSIDIARIES - TANDY BRANDS ACCESSORIES, INC.

<TABLE>
<CAPTION>
                                                           Number of
                                  Jurisdiction        Outstanding Shares
                                       of              of Each Class of               Owner of               Jurisdictions
                                 Incorporation         Capital Stock or          Outstanding Shares       Qualified as Foreign
                                       or            Partnership Interest       or Interests of Each         Corporation or
          Subsidiary              Organization               Owned                Such Class Owned            Partnership
----------------------------    ----------------   -------------------------  ------------------------- ------------------------
<S>                             <C>                <C>                        <C>                      <C>
TBAC Prince Gardner, Inc.        Delaware            1,000                             Tandy Brands        Texas
                                                                                    Accessories, Inc.
Amity/Rolfs, Inc.                Delaware            1,000                             Tandy Brands        Wisconsin
                                                                                    Accessories, Inc.
TBAC Investments, Inc.           Nevada              1,000                             Tandy Brands
                                                                                    Accessories, Inc.
TBAC General Management Company  Nevada              1,000                             Tandy Brands        Texas
                                                                                    Accessories, Inc.
Accessory Design Group, Inc.     Delaware            1,000                             Tandy Brands        Texas
                                                                                    Accessories, Inc.
TBAC - Torel, Inc.               Delaware            1,000                             Tandy Brands
                                                                                    Accessories, Inc.
Tandy Brands Accessories         Delaware            1,000                             Tandy Brands
Handbags, Inc.                                                                      Accessories, Inc.
Stagg Industries, Inc.           Alabama             4,700 Class A common              Tandy Brands
                                                     4,700 Class B common           Accessories, Inc.
H.A. Sheldon Canada, Ltd.        Ontario, Canada     1,000                             Tandy Brands
                                                                                    Accessories, Inc.
TBAC Investment Trust            Pennsylvania        100                        TBAC Investments, Inc.
TBAC Management Company, LP      Delaware            1% partnership interest        General Partner -
                                                                                TBAC General Management
                                                                                         Company
                                                     99% partnership interest       Limited Partner -
                                                                                           TBAC
                                                                                    Investments, Inc.
TBAC-Mass Merchant Quality       Delaware            1,000                       Accessory Design Group,   Texas
Control, Inc.                                                                              Inc.
TBAC-Acquisition, Inc.           Delaware            1,000                             Tandy Brands        Texas
                                                                                    Accessories, Inc.
Superior Merchandise Company     Louisiana           250                          TBAC-Acquisition, Inc.
</TABLE>

Tandy Brands Accessories, Inc. - Third Amendment
<PAGE>

                                  SCHEDULE 2.1

                          Revolving Credit Commitments

<TABLE>
<CAPTION>
                                                     Amount of                    Percentage of
                                                    Commitment                     Commitment
<S>                                                 <C>                           <C>
Wells Fargo HSBC Trade Bank, N. A.                     $35,000,000.00               41.176470588%
Comerica Bank                                          $22,000,000.00               25.882352941%
Bank of America, N.A.                                  $14,000,000.00               16.470588235%
JPMorgan Chase Bank                                    $14,000,000.00               16.470588235%

                                              Total:   $85,000,000.00                 100.00%
</TABLE>

Tandy Brands Accessories, Inc. - Third Amendment
<PAGE>

                            CONFIRMATION OF GUARANTY

      Reference is made to the Credit Agreement dated as of June 27, 2001, as
amended (the "Credit Agreement") among Tandy Brands Accessories, Inc.
("Borrower"), Wells Fargo HSBC Trade Bank, N. A. ("Agent"), and the lenders
specified therein ("Lenders"). The undersigned Guarantors hereby confirm that
their guaranty under the Subsidiary Guaranty dated as of June 27, 2001 for the
benefit of Agent, Lenders, and Wells Fargo Bank, N. A., continues in full force
and effect notwithstanding the Third Amendment to Credit Agreement dated as of
August 26, 2004, which Third Amendment is hereby accepted and consented to by
each Guarantor. In accordance herewith, the aforesaid guaranty shall be deemed
to cover and support the Obligations at any time due from Borrower to Lenders
pursuant to the Credit Agreement as the latter has been modified by the Third
Amendment. This Confirmation of Guaranty shall be governed by and construed in
accordance with the laws of the State of Texas.

Dated this 26th day of August, 2004.

                                 ACCESSORY DESIGN GROUP, INC.

                                 By:__________________________________________
                                 Name:________________________________________
                                 Title:_______________________________________

                                 AMITY/ROLFS, INC.

                                 By:__________________________________________
                                 Name:________________________________________
                                 Title:_______________________________________

Tandy Brands Accessories, Inc. - Third Amendment
<PAGE>

                                        TANDY BRANDS ACCESSORIES HANDBAGS, INC.

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                        TBAC INVESTMENTS, INC.

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                        TBAC GENERAL MANAGEMENT COMPANY

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                        TBAC MANAGEMENT COMPANY L.P.
                                            BY: TBAC GENERAL MANAGEMENT COMPANY,
                                                ITS GENERAL PARTNER

                                            By: ________________________________
                                            Name: ______________________________
                                            Title: _____________________________

                                        TBAC PRINCE GARDNER, INC.

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

Tandy Brands Accessories, Inc. - Third Amendment
<PAGE>

                                        STAGG INDUSTRIES, INC.

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                        TBAC - TOREL, INC.

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                        TBAC - MASS MERCHANT QUALITY CONTROL,
                                        INC.

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                        TBAC INVESTMENT TRUST

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

ACCEPTED as of the date first written above.

BORROWER:

TANDY BRANDS ACCESSORIES, INC.

By: _________________________________
Name: _______________________________
Title: ______________________________

Tandy Brands Accessories, Inc. - Third Amendment
<PAGE>

                             COMPLIANCE CERTIFICATE

                                 August 26, 2004

      Reference is made to that certain Credit Agreement dated as of June 27,
2001 among Tandy Brands Accessories, Inc. ("Borrower"), Wells Fargo HSBC Trade
Bank, N. A. ("Agent"), and the lenders specified therein ("Lenders"), as amended
by and among Borrower, Agent, and Lenders (the "Credit Agreement"). Terms which
are defined in the Credit Agreement and which are used but not defined herein
shall have the meanings given them in the Credit Agreement. The undersigned,
______________, Borrower's _________, hereby certifies in the name, and on
behalf, of Borrower that Borrower has made a thorough inquiry into all matters
certified herein and based upon such inquiry, experience, and the advice of
counsel, does hereby further certify that:

      1.    All representations and warranties made by Borrower in any Loan
Document delivered on or before the date hereof (including, without limitation,
the representations and warranties contained in Section 4 of the Third Amendment
to Credit Agreement of even date herewith) are true in all material respects on
and as of the date hereof (except to the extent that such representations and
warranties related solely to an earlier date and except to the extent that the
facts upon which such representations are based have been changed by the
transactions contemplated in the Credit Agreement) as if such representations
and warranties had been made as of the date hereof.

      2.    No Event of Default exists on the date hereof.

      3.    Borrower has performed and complied with all agreements and
conditions required in the Loan Documents to be performed or complied with by it
on or prior to the date hereof.

      IN WITNESS WHEREOF, this instrument is executed by the undersigned as of
the date first above written.

                                        TANDY BRANDS ACCESSORIES, INC.

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

Tandy Brands Accessories, Inc. - Third Amendment
<PAGE>

                              AMENDED AND RESTATED
                                 PROMISSORY NOTE

U.S. $35,000,000.00                                              August 26, 2004

FOR VALUE RECEIVED, the undersigned, TANDY BRANDS ACCESSORIES, INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of WELLS FARGO
HSBC TRADE BANK, N. A., a national banking association (the "Lender"), for the
account of its Applicable Lending Office (as defined in that certain Credit
Agreement, dated as of June 27, 2001, as amended, by and among the Borrower, the
Lender, certain other lenders from time to time parties thereto (collectively,
the "Lenders"), Wells Fargo HSBC Trade Bank, N.A., a national banking
association, as agent for the Lenders (the "Agent"), and Wells Fargo Bank, N.A.,
a national banking association, as arranger (as amended, modified or
supplemented from time to time, the "Credit Agreement") (capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the Credit
Agreement) or any other office designated by the Agent, the lesser of (i) the
principal sum of THIRTY FIVE MILLION DOLLARS ($35,000,000.00), or (ii) the
aggregate unpaid principal amount of all Advances made by the Lender to the
Borrower under the Revolving Credit Commitment.

The Borrower promises to pay interest on the unpaid principal amount of each
such Advance from the date of such Advance until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Credit Agreement.

Both principal and interest are payable in lawful money of the United States of
America to Wells Fargo HSBC Trade Bank, N.A., as Agent, at San Francisco Loan
Center, 201 3rd Street, 8th floor, San Francisco, California 94103, in same day
funds. Each Advance under the Revolving Credit Commitment made by the Lender to
the Borrower and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Amended and Restated Promissory Note (this
"Note"), provided, however, that failure of the Lender to make such notation or
any error therein shall not in any manner affect the obligation of the Borrower
to repay such Advances in accordance with the terms of this Note.

This Note is one of the Revolving Credit Notes referred to in, and is subject to
and entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of Advances under the Revolving
Credit Commitment by the Lender to the Borrower from time to time pursuant to
Section 2.1 of the Credit Agreement in an aggregate outstanding amount not to
exceed at any time the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Advance being evidenced by
this Note, and (ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.

<PAGE>

The Borrower hereby waives presentment, demand, protest, notice of intent to
accelerate, notice of acceleration and any other notice of any kind, except as
provided in the Credit Agreement. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of such rights.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF TEXAS.

This Note is in renewal and extension, but not in extinguishment or novation, of
that certain promissory note dated as of June 26, 2003, made by Borrower payable
to the order of Lender in the principal amount of $27,500,000.00.

                                        TANDY BRANDS ACCESSORIES, INC.

                                        By:  /s/ Mark J. Flaherty
                                            ------------------------------------
                                        Name:  Mark J. Flaherty
                                              ----------------------------------
                                        Title:  Chief Financial Officer
                                               ---------------------------------

<PAGE>

                              AMENDED AND RESTATED
                                 PROMISSORY NOTE

U.S. $22,000,000.00                                              August 26, 2004

FOR VALUE RECEIVED, the undersigned, TANDY BRANDS ACCESSORIES, INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of COMERICA
BANK, a Michigan banking corporation (the "Lender"), for the account of its
Applicable Lending Office (as defined in that certain Credit Agreement, dated as
of June 27, 2001, as amended, by and among the Borrower, the Lender, certain
other lenders from time to time parties thereto (collectively, the "Lenders"),
Wells Fargo HSBC Trade Bank, N.A., a national banking association, as agent for
the Lenders (the "Agent"), and Wells Fargo Bank, N.A., a national banking
association, as arranger (as amended, modified or supplemented from time to
time, the "Credit Agreement") (capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the Credit Agreement) or any other
office designated by the Agent, the lesser of (i) the principal sum of TWENTY
TWO MILLION DOLLARS ($22,000,000.00), or (ii) the aggregate unpaid principal
amount of all Advances made by the Lender to the Borrower under the Revolving
Credit Commitment.

The Borrower promises to pay interest on the unpaid principal amount of each
such Advance from the date of such Advance until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Credit Agreement.

Both principal and interest are payable in lawful money of the United States of
America to Wells Fargo HSBC Trade Bank, N.A., as Agent, at San Francisco Loan
Center, 201 3rd Street, 8th floor, San Francisco, California 94103, in same day
funds. Each Advance under the Revolving Credit Commitment made by the Lender to
the Borrower and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Amended and Restated Promissory Note (this
"Note"), provided, however, that failure of the Lender to make such notation or
any error therein shall not in any manner affect the obligation of the Borrower
to repay such Advances in accordance with the terms of this Note.

This Note is one of the Revolving Credit Notes referred to in, and is subject to
and entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of Advances under the Revolving
Credit Commitment by the Lender to the Borrower from time to time pursuant to
Section 2.1 of the Credit Agreement in an aggregate outstanding amount not to
exceed at any time the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Advance being evidenced by
this Note, and (ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.

<PAGE>

The Borrower hereby waives presentment, demand, protest, notice of intent to
accelerate, notice of acceleration and any other notice of any kind, except as
provided in the Credit Agreement. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of such rights.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF TEXAS.

This Note is in renewal and extension, but not in extinguishment or novation, of
that certain promissory note dated as of June 26, 2003, made by Borrower payable
to the order of Lender in the principal amount of $18,500,000.00.

                                        TANDY BRANDS ACCESSORIES, INC.

                                        By:  /s/ Mark J. Flaherty
                                            ------------------------------------
                                        Name:  Mark J. Flaherty
                                              ----------------------------------
                                        Title:  Chief Financial Officer
                                               ---------------------------------

<PAGE>

                        REVOLVING CREDIT PROMISSORY NOTE

U.S. $14,000,000.00                                              August 26, 2004

FOR VALUE RECEIVED, the undersigned, TANDY BRANDS ACCESSORIES, INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of BANK OF
AMERICA, N.A., a national banking association (the "Lender"), for the account of
its Applicable Lending Office (as defined in that certain Credit Agreement,
dated as of June 27, 2001, as amended, by and among the Borrower, the Lender,
certain other lenders from time to time parties thereto (collectively, the
"Lenders"), Wells Fargo HSBC Trade Bank, N.A., a national banking association,
as agent for the Lenders (the "Agent"), and Wells Fargo Bank, N.A., a national
banking association, as arranger (as amended, modified or supplemented from time
to time, the "Credit Agreement") (capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement) or
any other office designated by the Agent, the lesser of (i) the principal sum of
FOURTEEN MILLION DOLLARS ($14,000,000.00), or (ii) the aggregate unpaid
principal amount of all Advances made by the Lender to the Borrower under the
Revolving Credit Commitment.

The Borrower promises to pay interest on the unpaid principal amount of each
such Advance from the date of such Advance until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Credit Agreement.

Both principal and interest are payable in lawful money of the United States of
America to Wells Fargo HSBC Trade Bank, N.A., as Agent, at San Francisco Loan
Center, 201 3rd Street, 8th floor, San Francisco, California 94103, in same day
funds. Each Advance under the Revolving Credit Commitment made by the Lender to
the Borrower and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Revolving Credit Promissory Note (this
"Note"), provided, however, that failure of the Lender to make such notation or
any error therein shall not in any manner affect the obligation of the Borrower
to repay such Advances in accordance with the terms of this Note.

This Note is one of the Revolving Credit Notes referred to in, and is subject to
and entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of Advances under the Revolving
Credit Commitment by the Lender to the Borrower from time to time pursuant to
Section 2.1 of the Credit Agreement in an aggregate outstanding amount not to
exceed at any time the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Advance being evidenced by
this Note, and (ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.

The Borrower hereby waives presentment, demand, protest, notice of intent to
accelerate, notice of acceleration and any other notice of any kind, except as
provided in the Credit Agreement.

<PAGE>

No failure to exercise, and no delay in exercising, any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF TEXAS.

                                        TANDY BRANDS ACCESSORIES, INC.

                                        By:  /s/ Mark J. Flaherty
                                            ------------------------------------
                                        Name:  Mark J. Flaherty
                                              ----------------------------------
                                        Title:  Chief Financial Officer
                                               ---------------------------------

<PAGE>

                        REVOLVING CREDIT PROMISSORY NOTE

U.S. $14,000,000.00                                              August 26, 2004

FOR VALUE RECEIVED, the undersigned, TANDY BRANDS ACCESSORIES, INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of JPMORGAN
CHASE BANK, a New York banking corporation (the "Lender"), for the account of
its Applicable Lending Office (as defined in that certain Credit Agreement,
dated as of June 27, 2001, as amended, by and among the Borrower, the Lender,
certain other lenders from time to time parties thereto (collectively, the
"Lenders"), Wells Fargo HSBC Trade Bank, N.A., a national banking association,
as agent for the Lenders (the "Agent"), and Wells Fargo Bank, N.A., a national
banking association, as arranger (as amended, modified or supplemented from time
to time, the "Credit Agreement") (capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement) or
any other office designated by the Agent, the lesser of (i) the principal sum of
FOURTEEN MILLION DOLLARS ($14,000,000.00), or (ii) the aggregate unpaid
principal amount of all Advances made by the Lender to the Borrower under the
Revolving Credit Commitment.

The Borrower promises to pay interest on the unpaid principal amount of each
such Advance from the date of such Advance until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Credit Agreement.

Both principal and interest are payable in lawful money of the United States of
America to Wells Fargo HSBC Trade Bank, N.A., as Agent, at San Francisco Loan
Center, 201 3rd Street, 8th floor, San Francisco, California 94103, in same day
funds. Each Advance under the Revolving Credit Commitment made by the Lender to
the Borrower and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Revolving Credit Promissory Note (this
"Note"), provided, however, that failure of the Lender to make such notation or
any error therein shall not in any manner affect the obligation of the Borrower
to repay such Advances in accordance with the terms of this Note.

This Note is one of the Revolving Credit Notes referred to in, and is subject to
and entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of Advances under the Revolving
Credit Commitment by the Lender to the Borrower from time to time pursuant to
Section 2.1 of the Credit Agreement in an aggregate outstanding amount not to
exceed at any time the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Advance being evidenced by
this Note, and (ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.

<PAGE>

The Borrower hereby waives presentment, demand, protest, notice of intent to
accelerate, notice of acceleration and any other notice of any kind, except as
provided in the Credit Agreement. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of such rights.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF TEXAS.

                                        TANDY BRANDS ACCESSORIES, INC.

                                        By:  /s/ Mark J. Flaherty
                                            ------------------------------------
                                        Name:  Mark J. Flaherty
                                              ----------------------------------
                                        Title:  Chief Financial Officer
                                               ---------------------------------

<PAGE>

                                 August 26, 2004

H.A. Sheldon Canada, Ltd.
c/o Tandy Brands Accessories, Inc.
690 E. Lamar, Suite 200
Arlington, Texas  76011-3862

Re:   Release of Sheldon as a Guarantor under the Guaranty (each as hereinafter
defined)

Gentlemen:

      Reference is hereby made to (i) that certain Subsidiary Guaranty dated as
of June 27, 2001 (as amended, supplemented and otherwise modified, the
"Guaranty"), executed by certain Subsidiaries of Tandy Brands Accessories, Inc.,
a Delaware corporation ("Borrower"), from time to time party thereto (each a
"Guarantor") including, without limitation, H.A. Sheldon Canada, Ltd., an
Ontario, Canada corporation ("Sheldon"), for the benefit of Wells Fargo HSBC
Trade Bank, N.A., a national banking association, in its capacity as Agent for
the Lenders party to the Credit Agreement described below ("Agent") and Banks;
and (ii) that certain Credit Agreement, dated as of June 27, 2001, by and among
Borrower, Agent, WFB and the other Lenders signatory thereto from time to time
(as amended from time to time, the "Credit Agreement"). Unless otherwise
indicated, all terms used herein shall have the same meanings as in the Credit
Agreement.

      Sheldon has unconditionally guaranteed the Obligations of Borrower in
favor of Agent, for itself and the benefit of Lenders, and WFB, pursuant to the
Guaranty. Sheldon has requested that Agent, on behalf of itself and Lenders, and
WFB each release Sheldon from any obligations it may have under the Guaranty and
Agent, on behalf of itself and Lenders, and WFB are each willing to do so.

      Effective as of the date hereof, Agent, on behalf of itself and Lenders,
and WFB each hereby releases Sheldon from any obligations it may have under the
Guaranty and any and all claims, actions, and demands whatsoever thereunder and
from any and all responsibilities and obligations which were created under the
Credit Agreement and Loan Documents. Nothing herein shall release any other
Guarantor from all or any portion of its obligations under the Guaranty, the
Credit Agreement or any other Loan Document.

      This letter agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement.

      This letter agreement shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of Texas, without
regard to conflicts of laws principals.

<PAGE>

                                        Very truly yours,

                                        WELLS FARGO HSBC TRADE BANK, N.A.,
                                        individually and in its capacity as
                                        Agent for the Lenders party to the
                                        Credit Agreement

                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________

                                        WELLS FARGO BANK, N.A.

                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________

<PAGE>

ACCEPTED AND AGREED TO BY:

WELLS FARGO HSBC TRADE BANK, N.A.

By:__________________________________
Name:________________________________
Title:_______________________________

COMERICA BANK

By:__________________________________
Name:________________________________
Title:_______________________________

BANK OF AMERICA, N.A.

By:__________________________________
Name:________________________________
Title:_______________________________

JPMORGAN CHASE BANK

By:__________________________________
Name:________________________________
Title:_______________________________

<PAGE>

ACCEPTED AND RELIED UPON:

H.A. SHELDON CANADA, LTD.

By:__________________________________

<PAGE>

                       ADDITIONAL SUBSIDIARIES SUPPLEMENT

      This ADDITIONAL SUBSIDIARIES SUPPLEMENT, dated August 26, 2004 to the
Subsidiary Guaranty, dated as of June 27, 2001 (as amended, supplemented and
otherwise modified, the "Guaranty", attached hereto as Exhibit A), made by
certain Subsidiaries of Tandy Brands Accessories, Inc., a Delaware corporation
("Borrower"), from time to time parties thereto (collectively, the
"Guarantors").

                                    RECITALS:

      WHEREAS, the Guaranty provides that any Subsidiary of Borrower, although
not a Guarantor thereunder at the time of the initial execution thereof, may
become a Guarantor under the Guaranty upon the delivery to the Agent of a
supplement in substantially the form of this Additional Subsidiaries Supplement;
and

      WHEREAS, the undersigned was not a Subsidiary of Borrower on the date of
the Guaranty and, therefore, was not a party to the Guaranty but now desires to
become a Guarantor thereunder;

      NOW, THEREFORE, the undersigned hereby agrees as follows:

      The undersigned agrees to be bound by all of the provisions of the
Guaranty applicable to a Guarantor thereunder and agrees that it shall, on the
date this Additional Subsidiaries Supplement is accepted by the Agent, become a
Guarantor, for all purposes of the Guaranty to the same extent as if originally
a party thereto with the representations and warranties contained therein being
deemed to be made by the undersigned as of the date hereof.

      Unless otherwise defined herein, capitalized terms which are defined in
the Guaranty are used herein as so defined.

      IN WITNESS WHEREOF, the undersigned has caused this Additional
Subsidiaries Supplement to be executed and delivered by a duly authorized
officer on the date first above written.

                                        SUPERIOR MERCHANDISE COMPANY,
                                        a Louisiana corporation

                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________
                                        Address: 690 E. Lamar
                                                 Suite 200
                                                 Arlington, Texas  76011-3862

<PAGE>

                       ADDITIONAL SUBSIDIARIES SUPPLEMENT

      This ADDITIONAL SUBSIDIARIES SUPPLEMENT, dated August 26, 2004 to the
Subsidiary Guaranty, dated as of June 27, 2001 (as amended, supplemented and
otherwise modified, the "Guaranty", attached hereto as Exhibit A), made by
certain Subsidiaries of Tandy Brands Accessories, Inc., a Delaware corporation
("Borrower"), from time to time parties thereto (collectively, the
"Guarantors").

                                    RECITALS:

      WHEREAS, the Guaranty provides that any Subsidiary of Borrower, although
not a Guarantor thereunder at the time of the initial execution thereof, may
become a Guarantor under the Guaranty upon the delivery to the Agent of a
supplement in substantially the form of this Additional Subsidiaries Supplement;
and

      WHEREAS, the undersigned was not a Subsidiary of Borrower on the date of
the Guaranty and, therefore, was not a party to the Guaranty but now desires to
become a Guarantor thereunder;

      NOW, THEREFORE, the undersigned hereby agrees as follows:

      The undersigned agrees to be bound by all of the provisions of the
Guaranty applicable to a Guarantor thereunder and agrees that it shall, on the
date this Additional Subsidiaries Supplement is accepted by the Agent, become a
Guarantor, for all purposes of the Guaranty to the same extent as if originally
a party thereto with the representations and warranties contained therein being
deemed to be made by the undersigned as of the date hereof.

      Unless otherwise defined herein, capitalized terms which are defined in
the Guaranty are used herein as so defined.

      IN WITNESS WHEREOF, the undersigned has caused this Additional
Subsidiaries Supplement to be executed and delivered by a duly authorized
officer on the date first above written.

                                        TBAC-ACQUISITION, INC.,
                                        a Delaware corporation

                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________
                                        Address: 690 E. Lamar
                                                 Suite 200
                                                 Arlington, Texas  76011-3862