Exhibit 4.3


    EXHIBIT
      4.3

    REGISTRATION
      RIGHTS AGREEMENT

    


    This
      Registration Rights Agreement (the “Agreement”) is made and entered into as of
      the ___ day of May, 2006, by and among Tandy Leather Factory, Inc., a Delaware
      corporation (the “Company”), J. Wray Thompson, Sally Thompson and Ronald C.
      Morgan (collectively, the “Selling Shareholders”) and the Subscribers listed on
      Schedule A attached hereto (individually, an “Subscriber” and collectively, the
“Subscribers”).

    


    RECITALS

    


    A. Each
      of
      the Subscribers, the Company and the Selling Shareholders have entered into
      a
      Subscription Agreement and Letter of Investment Intent (the “Subscription
      Agreements”) pursuant to which the Subscribers are purchasing from the Selling
      Shareholders outstanding shares of the Company’s Common Stock (the
“Shares”).

    


    B. It
      is a
      condition to the transactions contemplated in the Subscription Agreements that
      the Company provide the registration rights provided herein and the parties
      hereto desire to provide for such rights on the terms and conditions contained
      herein.

    


    NOW,
      THEREFORE, in consideration of the premises and covenants contained herein,
      the
      parties hereto agree as follows:

    


    1. Defined
      Terms. Unless otherwise noted, all capitalized terms used herein shall have
      the
      meanings afforded them in the Subscription Agreement. As used in this Agreement,
      the following terms shall have the following meanings:

     

    "Effectiveness
      Deadline"
      means
      the 90th day
      following the date hereof, unless the Registration Statement is reviewed by
      the
      SEC, in which case it means the 120th
      day
      following the date hereof.

     

    "Prospectus"
      means
      the prospectus included in the Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Shares covered by the Registration Statement, and all other
      amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus. 

     

    "Registration
      Statement"
      means
      each registration statement required to be filed hereunder, including the
      Prospectus, amendments and supplements to such registration statement or
      Prospectus, including pre- and post-effective amendments, all exhibits thereto,
      and all material incorporated by reference or deemed to be incorporated by
      reference in such registration statement.

     

    2. Required
      Registration.
      Subject
      to Section 5 below, promptly following the date hereof but no later than the
      earlier to occur of (a) 30 days following the date hereof (the “Filing Date”),
      the Company shall file a Registration Statement under the Securities Act, as
      required by the Securities and Exchange Commission (the “SEC”), covering the
      Subscribers’ resale of the Shares. The Registration Statement required hereunder
      shall contain (except if otherwise directed by the Subscribers) the “Plan of
      Distribution” attached hereto as Annex
      A.
      Subject
      to Section 5 below, the Company will use its best efforts to have such
      Registration Statement become effective with the SEC as soon as possible
      thereafter. 

    


    3. Registration
      - General Provisions.
      In
      connection with the registration of the Shares under the Securities Act, subject
      to Section 5 below, the Company will:

    


    (a) prepare
      and file with the SEC, on or before the Filing Date, a Registration Statement
      covering the Subscribers’ resale of the Shares (in accordance with Section 2
      above), and use its best efforts to cause such Registration Statement to become
      effective as soon as possible thereafter and keep the prospectus, which is
      a
      part of such Registration Statement, current until the earlier of the date
      on
      which: (i) all registered Shares have been sold or otherwise transferred by
      the
      Subscribers, or (ii) two years after the date of this Agreement;

    


    (b) prepare
      and file with the SEC such amendments, including post-effective amendments,
      to
      such Registration Statement and supplements to the prospectus contained therein
      as may be necessary to comply with the provisions of the Securities Act with
      respect to the disposition of all Shares covered by the Registration Statement
      and to keep such Registration Statement effective for the period required by
      Section 3(a) above; respond as promptly as reasonably possible, and in any
      event
      within five business days, to any comments received from the SEC with respect
      to
      a Registration Statement or any amendment thereto and as promptly as reasonably
      possible provide the Subscribers true and complete copies of all correspondence
      from and to the SEC; and comply in all material respects with the provisions
      of
      the Securities Act and the Exchange Act with respect to the disposition of
      all
      Shares covered by the Registration Statement during the applicable period in
      accordance with the intended methods of disposition by the Subscribers as set
      forth in the Registration Statement as so amended or in such Prospectus as
      so
      supplemented;

    


    (c) furnish
      to each Subscriber copies of all documents proposed to be filed, which documents
      (other than those incorporated or deemed to be incorporated by reference) will
      be subject to the review of such Subscribers, and cause its officers and
      directors, counsel and independent certified public accountants to respond
      to
      such inquiries as shall be necessary, in the reasonable opinion of respective
      counsel to conduct a reasonable investigation within the meaning of the
      Securities Act; and provide Subscribers’ counsel with reasonable opportunities
      to review and comment on, and otherwise participate in, the preparation of
      such
      Registration Statement;

    


    (d) furnish
      to the Subscribers participating in such registration and to the underwriters
      of
      the securities being registered, if any, such reasonable number of copies of
      the
      Registration Statement, preliminary prospectus, final prospectus
      and such other documents as the Subscribers and underwriters may reasonably
      request in order to facilitate the public offering of the Shares, and the
      Company hereby consents to the use of such Prospectus and each amendment or
      supplement thereto by each of the selling Subscribers in connection with the
      offering and sale of the Shares covered by such Prospectus and any amendment
      or
      supplement thereto;

    


    (e) use
      its
      diligent, good faith efforts to register or qualify the Shares covered by such
      Registration Statement under such state securities or blue sky laws of such
      jurisdictions as the Subscribers may reasonably request, and to keep such
      registration or qualification in effect for so long as such Registration
      Statement remains in effect, except that the Company shall not for any purpose
      be required to execute a general consent to service of process (which shall
      not
      include a “Uniform Consent to Service of Process” or other similar consent to
      service of process which relates only to actions or proceedings arising out
      of
      or in connection with the sale of securities, or out of a violation of the
      laws
      of the jurisdiction requesting such consent) or to qualify to do business as
      a
      foreign corporation in any jurisdiction wherein it is not so
      qualified;

    


    (f) notify
      the Subscribers, promptly after it shall receive notice thereof, of the time
      when such Registration Statement has become effective or a supplement to any
      prospectus forming a part of such Registration Statement has been filed with
      the
      SEC;

    


    (g) notify
      the Subscribers promptly of any request by the SEC for the amending or
      supplementing of such Registration Statement or prospectus or for additional
      information;

    


    (h) prepare
      and file with the SEC, promptly upon the request of the Subscribers, any
      amendments or supplements to such Registration Statement or prospectus which,
      in
      the opinion of counsel for the Subscribers (and concurred in by counsel for
      the
      Company), is required under the Securities Act or the rules and regulations
      promulgated thereunder in connection with the distribution of the Shares by
      the
      Subscribers;

    


    (i) prepare
      and promptly file with the SEC, and promptly notify the Subscribers of the
      filing of, such amendment or supplement to such Registration Statement or
      prospectus as may be necessary to correct any statements or omissions if, at
      the
      time when a prospectus relating to such securities is required to be delivered
      under the Securities Act, any event shall have occurred as the result of which
      any such prospectus then in effect would include an untrue statement of a
      material fact or omit to state any material fact necessary to make the
      statements therein, in the light of the circumstances in which they were made,
      not misleading;

    


    (j) promptly
      notify the Subscribers (i) when the SEC notifies the Company whether there
      will
      be a “review” of the Registration Statement and whenever the SEC comments in
      writing on the Registration Statement (the Company shall upon request provide
      true and complete copies thereof and all written responses thereto to each
      of
      the Subscribers), (ii) of the issuance by the SEC or any other federal or state
      governmental authority of any stop order suspending the effectiveness of the
      Registration Statement covering any or all of the Shares or the initiation
      of
      any proceedings for that purpose; (iii) of the receipt by the Company of any
      notification with respect to the suspension of the qualification or exemption
      from qualification of any of the Shares for sale in any jurisdiction, or the
      initiation or threatening of any proceeding for such purpose; and (iv) of the
      occurrence of any event or passage of time that makes the financial statements
      included in the Registration Statement ineligible for inclusion therein or
      any
      statement made in the Registration Statement or Prospectus or any document
      incorporated or deemed to be incorporated therein by reference untrue in any
      material respect or that requires any revisions to the Registration Statement,
      Prospectus or other documents so that, in the case of the Registration Statement
      or the Prospectus, as the case may be, it will not contain any untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading in light
      of
      the circumstances then existing. The Subscribers agree that, upon receipt of
      any
      notice from the Company of the happening of any event of the kind described
      in
      this Section 3(j), the Subscribers will immediately discontinue disposition
      of
      the Shares pursuant to the Registration Statement covering such Shares until
      the
      Subscribers’ receipt of the copies of the supplemented or amended prospectus or
      receipt of notice that no supplement or amendment is required. 

    


    (k) use
      its
      best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
      of
      (i) any order suspending the effectiveness of the Registration Statement, or
      (ii) any suspension of the qualification (or exemption from qualification)
      of
      any of the Shares for sale in any jurisdiction, at the earliest practicable
      moment;

    


    (l) not
      file
      any amendment or supplement to such Registration Statement or prospectus to
      which the Subscribers shall have reasonably objected on the grounds that such
      amendment or supplement does not comply in all material respects with the
      requirements of the Securities Act or the rules and regulations promulgated
      thereunder, after having been furnished with a copy thereof at least two
      business days prior to the filing thereof, unless in the opinion of counsel
      for
      the Company the filing of such amendment or supplement is reasonably necessary
      to protect the Company from any material liabilities under any applicable
      federal or state law and such filing will not violate applicable
      law;

    


    (m) cooperate
      with the selling Subscribers to facilitate the timely preparation and delivery
      of certificates representing the Shares to be sold pursuant to the Registration
      Statement; 

    


    (n) file
      reports in compliance with the Securities Exchange Act of 1934, as amended
      (the
“Exchange Act”), and use its best efforts to comply with all rules and
      regulations of the SEC applicable in connection with use of Rule 144 and take
      such other actions and furnish the Subscribers with such other information
      as
      any such Subscriber may request in order to avail itself of such rule or any
      other rule or regulation of the SEC, allowing such Subscriber to sell any Shares
      without registration. If at any time the Company is not required to file reports
      in compliance with either Section 13 or Section 15(d) of the Exchange Act,
      the
      Company at its expense will, forthwith upon the written request of any
      Subscriber, make available adequate current public information with respect
      to
      the Company within the meaning of paragraph (c)(2) of Rule 144; 

    


    (o) Upon
      the
      earlier of (i) registration for resale pursuant to the Registration Rights
      Agreement or (ii) Rule 144(k) becoming available the Company shall (A) deliver
      to the transfer agent for the Common Stock (the "Transfer Agent") irrevocable
      instructions that the Transfer Agent shall reissue a certificate representing
      shares of Common Stock without legends upon receipt by such Transfer Agent
      of
      the legended certificates for such shares, together with either (1) a customary
      representation by the Subscriber that Rule 144(k) applies to the shares of
      Common Stock represented thereby or (2) a statement by the Subscriber that
      such
      Subscriber has sold the shares of Common Stock represented thereby in accordance
      with the Plan of Distribution contained in the Registration Statement, and
      (B)
      cause its counsel to deliver to the Transfer Agent one or more blanket opinions
      to the effect that the removal of such legends in such circumstances may be
      effected under the Securities Act. From and after the earlier of such dates,
      upon a Subscriber's written request, the Company shall promptly cause
      certificates evidencing the Subscriber's Shares to be replaced with certificates
      which do not bear such restrictive legends. When the Company is required to
      cause unlegended certificates to replace previously issued legended
      certificates, if unlegended certificates are not delivered to a Subscriber
      within five (5) Business Days of submission by that Subscriber of legended
      certificate(s) to the Transfer Agent as provided above, the Company shall be
      liable to the Subscriber for liquidated damages in an amount equal to 1.5%
      of
      the aggregate purchase price of the Shares evidenced by such certificate(s)
      for
      each thirty (30) day period (or portion thereof) beyond such five (5) Business
      Day that the unlegended certificates have not been so delivered;
      and

    


    (p) maintain
      the listing of the Shares covered by the Registration Statement with any
      securities exchange on which the Common Stock of the Company is then listed.
      

    


    (q) Not
      withstanding anything else herein, the Company will not provide any material
      non-public information to any Subscribers as result of a disclosure requirement
      in this agreement. 

    


    4. Registration
      Expense.
      The
      Selling Shareholders shall pay all Registration Expenses (as defined below)
      in
      connection with the inclusion of the Shares in any Registration Statement,
      or
      application to register or qualify such Shares under state securities laws,
      filed by the Company hereunder, other than as set forth herein. For purposes
      of
      this Agreement, the term “Registration Expenses” means the filing fees payable
      to the SEC, any state agency and the NASD; the fees and expenses of the
      Company’s legal counsel and independent certified public accountants in
      connection with the preparation and filing of the Registration Statement (and
      all amendments and supplements thereto) with the SEC; fees of transfer agents
      and registrars; fees and expenses incurred in connection with the maintaining
      the listing of the Shares; and all expenses relating to the printing of the
      Registration Statement, prospectuses and various agreements executed in
      connection with the Registration Statement. 

    


    5. Delays
      in Filing; Liquidated Damages.
      

     

        (a)
      Delays in Filing.  Notwithstanding Section 2 and 3 above, if at the
      time the Registration Statement or an amendment thereto is to be filed, or
      at
      any time while the Registration Statement remains in effect, the Board of
      Directors of the Company determines, in its good faith judgment after
      consultation with Company legal counsel, that there are one or more pending
      material developments that have not been publicly disclosed but would be
      required to be disclosed (either directly or via incorporation by reference)
      in
      such Registration Statement, and that the disclosure of such development at
      such
      time would materially and adversely affect the Company (a "Valid Business
      Reason"), then (i) the Company shall notify the Subscribers that a Valid
      Business Reason exists (without disclosing the specifics thereof), (ii) the
      Company may postpone the filing of such registration statement or amendment
      thereto (or SEC filing incorporated therein) until such Valid Business Reason
      no
      longer exists, and (iii) for so long as such Valid Business Reason exists,
      the
      Subscribers will cease offering or selling shares pursuant to the Registration
      Statement; provided that (x) the total number of days during which the
      Subscribers are prevented pursuant to this section from offering or selling
      shares shall not exceed 60 days during any consective 12 month period, and
      (y)
      during any such period in which the Subscribers are prevented from selling
      shares pursuant to this section, the Company shall prevent its officers and
      directors from effecting any market transactions in the Company's stock. 
The Subscribers will maintain in strict confidence any information provided
      by
      the Company pursuant to this Section and not use such information in violation
      of applicable securities laws.

     

        (b) Liquidated
      Damages.
      If: (i)
      the Registration Statement is not filed on or prior to the Filing Date; (ii)
      the
      Company fails to file with the SEC a request for acceleration in accordance
      with
      Rule 461 promulgated under the Securities Act, within five business days after
      the date that the Company is notified (orally or in writing, whichever is
      earlier) by the SEC that the Registration Statement will not be “reviewed,” or
      is not subject to further review; (iii) prior to its Effectiveness Deadline,
      the
      Company fails to file a pre-effective amendment and otherwise respond in writing
      to comments made by the SEC in respect of the Registration Statement within
      five
      business days after the receipt of comments by or notice from the SEC that
      such
      amendment is required in order for the Registration Statement to be declared
      effective; (iv) the Registration Statement is not declared effective by the
      SEC
      by the Effectiveness Deadline; or (v) after the Registration Statement is filed
      with and declared effective by the SEC, the Registration Statement ceases to
      be
      effective (by suspension or otherwise) for a period of time in excess of 20
      days
      in the aggregate per year or 10 consecutive calendar days, (any such failure
      or
      breach being referred to as an "Event"), then the Selling Shareholders,
      severally and not jointly, shall pay to each Subscriber an amount in cash,
      as
      liquidated damages and not as a penalty, equal to 1.5% of the purchase price
      for
      the Shares, plus, if such Event continues for longer than an initial 30 days,
      an
      additional 1.5% of the purchase price for the Shares for each additional 30-day
      period (prorated on a daily basis for partial periods) that such Event continues
      beyond such initial 30-day period. Notwithstanding the foregoing, (x) no
      liquidated damages shall be paid pursuant to this Section if such Event is
      due
      to acts or omissions of an Subscriber, and (y) if an Event occurs or continues
      at the same time under more than one of clauses (i) through (iv) above, then
      for
      purposes of this subsection (b), only one Event shall be deemed to have
      occurred. While such Event continues, such liquidated damages shall be paid
      not
      less often than each 30 days. Any unpaid liquidated damages as of the date
      when
      an Event has been cured by the Company shall be paid within three days following
      the date on which such Event has been cured by the Company.  If
      a
      Selling Shareholder fails to pay any liquidated damages pursuant to this Section
      in full within seven days after the date payable, such Selling Shareholder
      will
      pay interest thereon at a rate of 18% per annum (or such lesser maximum amount
      that is permitted to be paid by applicable law) to the Subscriber, accruing
      daily from the date such liquidated damages are due until such amounts, plus
      all
      such interest thereon, are paid in full. Notwithsatnding the foregoing, in
      no
      event shall liquidated damages under this Section 5 exceed the gross proceeds
      received by the applicable Selling Shareholder under the Subscription
      Agreements.

    


    6. Indemnification.
      With
      respect to the registration of the resale of the Shares:

    


    (a) to
      the
      fullest extent permitted by law and notwithstanding any termination of this
      Agreement, the Selling Shareholders, severally and not jointly, will indemnify,
      defend and hold harmless each Subscriber, the trustees, partners, officers,
      members, directors and agents of each Subscriber, any underwriter (as defined
      in
      the Securities Act) for such Subscriber and each person, if any, who controls
      such Subscriber or underwriter within the meaning of the Securities Act or
      the
      Exchange Act, against any losses, claims, damages, or liabilities (joint or
      several) to which they may become subject under the Securities Act, the Exchange
      Act or other federal or state law, insofar as such losses, claims, damages
      or
      liabilities (or actions in respect thereof) arise out of or are based upon
      any
      of the following statements, omissions or violations (collectively a
“Violation”) by the Company: (i) any untrue statement or alleged untrue
      statement of a material fact contained in the Registration Statement, including
      any preliminary Prospectus or final Prospectus contained therein or any
      amendments or supplements thereto, (ii) the omission or alleged omission to
      state therein a material fact required to be stated therein, or necessary to
      make the statements therein not misleading, or (iii) any violation or alleged
      violation by the Company of the Securities Act, the Exchange Act, any state
      securities law or any rule or regulation promulgated under the Securities Act,
      the Exchange Act or any state securities law in connection with the offering
      covered by the Registration Statement; and the Selling Shareholders, severally
      and not jointly, will reimburse each such Subscriber, trustee, partner, officer,
      member, director, agent, underwriter or controlling person for any legal or
      other expenses reasonably incurred by them in connection with investigating
      or
      defending any such loss, claim, damage, liability or action; provided, however,
      that the indemnity agreement contained in this Section 6 shall not apply to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of the Selling Shareholders
      (which consent shall not be unreasonably withheld, conditioned or delayed),
      nor
      shall the Selling Shareholders be liable in any such case for any such loss,
      claim, damage, liability or action to the extent that it arises out of or is
      based upon a Violation which occurs in reliance upon and in conformity with
      written information furnished to it expressly for use in connection with such
      registration by an Subscriber, trustee, partner, officer, member, director,
      agent, underwriter or controlling person of an Subscriber; provided further
      that
      in no event shall indemnification under this Section 6 exceed the gross proceeds
      received by the applicable Selling Shareholder under the Subscription
      Agreements.

    


    (b) to
      the
      extent permitted by law, each Subscriber, severally and not jointly, will
      indemnify and hold harmless the Company, each of its directors, each of its
      officers, each person, if any, who controls the Company within the meaning
      of
      the Securities Act and any underwriter against any losses, claims, damages
      or
      liabilities (joint or several) to which the Company or any such director,
      officer, controlling person or underwriter may become subject under the
      Securities Act, the Exchange Act or other federal or state law, insofar as
      such
      losses, claims, damages or liabilities (or actions in respect thereto) arise
      out
      of or are based upon any Violation, in each case to the extent (and only to
      the
      extent) that such Violation occurs in reliance upon and in conformity with
      written information furnished by such Subscriber and stated to be specifically
      for use in connection with such registration; and each such Subscriber will
      reimburse any legal or other expenses reasonably incurred by the Company or
      any
      such director, officer, controlling person or underwriter in connection with
      investigating or defending any such loss, claim, damage, liability or action
      if
      it is judicially determined that there was such a Violation; provided, however,
      that the indemnity agreement contained in this Section 6 shall not apply to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of the Subscriber, which
      consent shall not be unreasonably withheld, conditioned or delayed; provided
      further, that in no event shall any indemnity under this Section 6(b) exceed
      the
      net proceeds received by such Subscriber from sales of such Subscriber’s Shares
      unless the Violation is the result of fraud on the part of such
      Subscriber.

    


    (c) promptly
      after receipt by an indemnified party under this Section of notice of the
      commencement of any action (including any governmental action), such indemnified
      party shall, if a claim in respect thereof is to be made against any
      indemnifying party under this Section, deliver to the indemnifying party a
      written notice of the commencement thereof and the indemnifying party shall
      have
      the right to participate in, and, to the extent the indemnifying party so
      desires, jointly with any other indemnifying party similarly noticed, to assume
      the defense thereof with counsel mutually satisfactory to the parties; provided,
      however, that an indemnified party shall have the right to retain its own
      counsel, with the fees and expenses to be paid by the indemnifying party; and
      provided further, that if there is more than one indemnified party, the
      indemnifying party shall pay for the fees and expenses of one counsel for any
      and all indemnified parties to be mutually agreed upon by such indemnified
      parties, unless representation of an indemnified party by the counsel retained
      by the other indemnified parties would be inappropriate due to actual or
      potential differing interests between such indemnified parties. The failure
      to
      deliver written notice to the indemnifying party within a reasonable time of
      the
      commencement of any such action, if materially prejudicial to its ability to
      defend such action, shall relieve such indemnifying party of any liability
      to
      the indemnified party under this Section, but the omission so to deliver written
      notice to the indemnifying party will not relieve it of any liability that
      it
      may have to any indemnified party otherwise than under this
      Section.

    


    (d) if
      the
      indemnification provided for in this Section is held by a court of competent
      jurisdiction to be unavailable to an indemnified party with respect to any
      losses, claims, damages or liabilities referred to herein, the indemnifying
      party, in lieu of indemnifying such indemnified party thereunder, shall to
      the
      extent permitted by applicable law, contribute to the amount paid or payable
      by
      such indemnified party as a result of such loss, claim, damage or liability
      in
      such proportion as is appropriate to reflect the relative fault of the
      indemnifying party on the one hand and of the indemnified party on the other
      in
      connection with the Violation(s) that resulted in such loss, claim, damage
      or
      liability, as well as any other relevant equitable considerations. The relative
      fault of the indemnifying party and of the indemnified party shall be determined
      by reference to, among other things, whether the untrue or alleged untrue
      statement of a material fact or the omission or alleged omission to state a
      material fact relates to information supplied by the indemnifying party or
      by
      the indemnified party and the parties’ relative intent, knowledge, access to
      information and opportunity to correct or prevent such statement or omission.
      No
      Subscriber will not be required to contribute any amount in excess of the amount
      of the proceeds actually received by such Subscriber from the sale of its
      Shares. No person or entity guilty of fraudulent misrepresentation (within
      the
      meaning of Section 11 of the Securities Act) shall be entitled to contribution
      from any person or entity who shall not have been guilty of such fraudulent
      misrepresentation.

    


    (e) the
      obligation of the Company and the Subscribers under this Section shall survive
      the completion of any offering for resale of Shares in the Registration
      Statement, and otherwise.

    


    7. Miscellaneous.

    


    (a) The
      Company shall not hereafter enter into any agreement with respect to its
      securities that is inconsistent with the rights granted to the Subscribers
      in
      this Agreement.

    


    (b) Except
      as
      otherwise provided herein, the provisions of this Agreement may not be amended,
      modified or supplemented, and waivers or consents to or departures from the
      provisions hereof may not be given or made, unless in writing signed by the
      Selling Shareholders, the Company and Subscribers holding at least 75% of the
      Shares sold pursuant to the Subscription Agreements.

    


    (c) All
      notices and other communications provided for or permitted hereunder shall
      be
      made by hand delivery, telex, facsimile, overnight courier or registered
      first-class mail:

    


    
      	 	
              (i)

            	
              if
                to an Subscriber, at the address set forth on Schedule A attached
                hereto;

            


    

    


    
      	 	
              (ii)

            	
              if
                to the Company, at the address set forth in the Subscription Agreement;
                and

            


    

    


    
      	 	
              (iii)

            	
              if
                to the Selling Shareholders, at the address set forth in the Subscription
                Agreement. 

            


    

    


    All
      such
      notices and communications shall be deemed to have been duly given: when
      delivered, if by hand, overnight courier or mail; when the appropriate answer
      back is received, if by telex; when transmission is confirmed by the sending
      unit, if by facsimile.

    


    (d) This
      Agreement may be executed in any number of counterparts and by the parties
      hereto in separate counterparts, each of which when so executed shall be deemed
      to be an original and all of which taken together shall constitute one an the
      same agreement.

    


    (e) The
      headings to this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

    


    (f) This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware without giving effect to the principles of choice or conflict
      of law thereof. Each of the Company, the Selling Shareholders and the
      Subscribers irrevocably consent to the exclusive jurisdiction of the United
      States Federal courts and state courts, located in Tarrant County, Texas, in
      any
      suit or proceeding relating to, based on or arising under this Agreement and
      irrevocably agree that all claims in respect of such suit or proceeding may
      be
      determined in such courts. Nothing herein shall affect the right of any
      Subscriber to serve process in any manner permitted by law.

    


    (g) In
      the
      event that any one or more of the provisions contained herein, or the
      application thereof in any circumstances, is held invalid, illegal or
      unenforceable in any respect for any reason, the validity, legality and
      enforceability of such provision in every other respect and of the remaining
      provisions contained herein shall not be in any way impaired thereby, it being
      intended that all of the rights and privileges of the Subscribers, the Selling
      Shareholders and the Company shall be enforceable to the fullest extent
      permitted by law.

    


    (h) The
      remedies provided for in this Agreement shall be cumulative and in addition
      to
      all other remedies available, at law or in equity, and nothing herein shall
      limit an Subscriber’s right to pursue actual damages for any failure by the
      Company to comply with the terms of this Agreement.

    


    [SIGNATURE
      PAGES FOLLOW]

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
      as
      of the date first written above.

    


    Company:

    


    TANDY
      LEATHER FACTORY, INC.

    


    By:
       

    


    Name:
       

    


    Title:
       

    


    


    Selling
      Shareholders:

    


    


     

    J.
      Wray
      Thompson

    


     

    Sally
      Thompson

    


     

    Ronald
      C.
      Morgan

    


    


    [SIGNATURE
      PAGE OF SUBSCRIBER TO FOLLOW]

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    [SIGNATURE
      PAGE OF SUBSCRIBER]

    


    


    Entity
      Subscriber:

    


     

    


    By: 

    


    Name: 

    


    Title: 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    SCHEDULE
      A

    


    
      	
              Subscriber
                Name and Address

               

            
	 
	 


    

    


     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    Annex
      A

    


    Plan
      of Distribution

     

    The
      selling stockholders and any of their pledgees, assignees and
      successors-in-interest may, from time to time, sell any or all of their shares
      of common stock on any stock exchange, market or trading facility on which
      the
      shares are traded or in private transactions. These sales may be at fixed or
      negotiated prices. The selling stockholders may use any one or more of the
      following methods when selling shares:

     

    	·  	
            ordinary
              brokerage transactions and transactions in which the broker-dealer
              solicits purchasers;

          


     

    	·  	
            block
              trades in which the broker-dealer will attempt to sell the shares as
              agent
              but may position and resell a portion of the block as principal to
              facilitate the transaction;

          


     

    	·  	
            purchases
              by a broker-dealer as principal and resale by the broker-dealer for
              its
              account;

          


     

    	·  	
            an
              exchange distribution in accordance with the rules of the applicable
              exchange;

          


     

    	·  	
            privately
              negotiated transactions;

          


     

    	·  	
            settlement
              of short sales;

          


     

    	·  	
            broker-dealers
              may agree with the selling stockholders to sell a specified number
              of such
              shares at a stipulated price per share;

          


     

    	·  	
            a
              combination of any such methods of sale;
              and

          


     

    	·  	
            any
              other method permitted pursuant to applicable
              law.

          


     

    The
      selling stockholders may also sell shares under Rule 144 under the Securities
      Act, if available, rather than under this prospectus. Broker-dealers engaged
      by
      the selling stockholders may arrange for other brokers-dealers to participate
      in
      sales. Broker-dealers may receive commissions or discounts from the selling
      stockholders (or, if any broker-dealer acts as agent for the purchaser of
      shares, from the purchaser) in amounts to be negotiated. The selling
      stockholders do not expect these commissions and discounts to exceed what is
      customary in the types of transactions involved.

    


    The
      selling stockholder may from time to time pledge or grant a security interest
      in
      some or all of the Shares or common stock owned by them and, if they default
      in
      the performance of their secured obligations, the pledgees or secured parties
      may offer and sell the shares of common stock from time to time under this
      prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
      other applicable provision of the Securities Act of 1933 amending the list
      of
      selling stockholders to include the pledgee, transferee or other successors
      in
      interest as selling stockholders under this prospectus.

     

    The
      selling stockholders also may transfer the shares of common stock in other
      circumstances, in which case the transferees, pledgees or other successors
      in
      interest will be the selling beneficial owners for purposes of this
      prospectus.

     

    The
      selling stockholders and any broker-dealers or agents that are involved in
      selling the shares may be deemed to be "underwriters" within the meaning of
      the
      Securities Act in connection with such sales. In such event, any commissions
      received by such broker-dealers or agents and any profit on the resale of the
      shares purchased by them may be deemed to be underwriting commissions or
      discounts under the Securities Act. The selling stockholders have informed
      the
      Company that none of them have any agreement or understanding, directly or
      indirectly, with any person to distribute the common stock.

     

    The
      former affiliates of the Company from whom the selling shareholders acquired
      the
      Shares are required to reimburse the Company for all fees and expenses incurred
      by the Company incident to the registration of the shares. The Company has
      agreed to indemnify the selling stockholders against certain losses, claims,
      damages and liabilities, including liabilities under the Securities
      Act.